What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Audiobooks for success
2. Sarah’s clothes routines
3. Do slow cookers save money?
4. Changing wants
5. Super cheap hobby
6. Spoiling entertainment for cheaper bills
7. Dividends pride
8. Paying off mortgage or investing
9. Beans in the slow cooker?
10. Expensive pocket notebooks?
11. Business and self-employment help
12. Reasonable “sweet sixteen” for daughter
Recently, one of my friends told me that she had started a new initiative in her life. Her plan was to fit as many “random acts of kindness” as possible into each of her day, both for people she knew and people she didn’t know at all.
Her natural tendency is a bit like mine and a bit like many people. She often chooses to stay quiet and mind her own business and sometimes even look away from someone else’s struggles.
But then she thought about the way in which unexpected acts from her friends and from people she didn’t know has really helped her life, and so she’s decided to push through that sense of reservedness and make an honest effort to fill her life with random acts of kindness for others.
Most of those random acts don’t cost anything at all. Some only cost a moment or two of your time. Yet most of them have a profound positive impact on people’s lives.
Today, take on that challenge. Spend some of your time today doing something kind for the people you meet today. Let the person with just an item or two in front of you in the grocery line. Return someone’s cart for them at the store. Send someone you don’t know real well a text telling them that they’re awesome at something and that you appreciate it.
The vast majority of the time, they’ll feel good and so will you. Give it a try.
Q1: Audiobooks for success
My job requires a decent amount of driving. What audiobooks do you recommend me listen to for building my net worth and useful skill sets?
– Darren
There are a lot of good audiobooks out there. If you go to your library and look at the personal finance section of audiobooks, most of them will be worthwhile choices. Audiobook versions of the books I’ve often lauded on The Simple Dollar, like Your Money or Your Life or Early Retirement Extreme or Raising Financially Fit Kids, are all great choices.
I think that many books that focus on productivity and personal organization are also surprisingly useful and tied strongly into building net worth. Books like Getting Things Done and The Power of Habit and Never Eat Alone are great for improving personal productivity and rethinking your daily actions and routines, which can help a ton with building net worth as well as building marketable professional skills.
I often listen to podcasts when I’m driving. I listen to a big rotating cast of them, but several are definitely related to personal productivity and personal finance – Planet Money, Getting Things Done, and The Productivity Show come immediately to mind. Almost any smartphone or portable music player makes podcasts easy to listen to.
Q2: Sarah’s clothes routines
A question for the mailbag: How does Sarah buy clothes? What kind of things does she look for in an article of clothing and does she mostly buy from thrift stores as well?
– Nadine
Sarah does many of the same things I do for casual clothing. She prefers to buy well-made but simple things that will last and last and last. On the weekends, we’re both often wearing t-shirts and denim.
However, she has professional wardrobe needs while I do not. Her workplace has a “strongly encouraged” dress code that she sticks to, which means that she does need to own some professional clothing. She uses the same procedures to buy that, starting with thrift shops, but she rarely finds things there that meet her code.
Her philosophy with her work clothes is to buy stuff that matches in different arrangements and stuff that’s really well made. She wears a ton of earth tones – browns, dark greens, and the like – and they all tend to match each other. That way, if there’s a problem with just one item, it’s not a big deal.
Q3: Do slow cookers save money?
It seems to me that slow cookers really aren’t that much of a money saver. I read that slow cookers usually have heating elements that are on the order of 250 watts, which means that if you turn one on and leave it for 10 hours, you’re gobbling down 2,500 watt-hours of energy. That’s going to hit your energy bill! Why not just cook it yourself when you get home?
– Megan
That’s not too different than what an oven gobbles down. Ovens typically eat up 2,400 watts, so if your oven coil is on for an hour, that’s 2,400 watt-hours. When you pre-heat your oven and then cook something for, say, an hour, your coil is on all the time during preheating and something around 25% of the time during cooking, so during that hour, you’re using 1,200 watt-hours just using the oven. If something cooks longer, it’s higher than that.
Microwaves vary a lot, but many of them are 1200 watts. If you’re cooking a full dinner just using the microwave, you’re definitely using a lot of time in the microwave. Even if we’re eating leftovers, the microwave will run for at least ten minutes at our house.
On top of that, you’re probably using a burner to help prepare dinner. These vary widely depending on your oven type, but they definitely gobble down more energy.
I’d say that you’re probably using a little less energy using your oven, stovetop, and microwave when preparing dinner, but it’s not a ton less. On top of that, 2,500 watt-hours isn’t that bad. 2,500 watt-hours is the same as 2.5 kWh, and energy companies usually charge somewhere around $0.12 per kWh, so the cost is $0.30. Of course, if you’re comparing that to preparing food using other appliances, you’re probably eating $0.20 or so in energy there, so the slow cooker is costing you roughly another dime. For me, the massive convenience is worth that dime.
Q4: Changing wants
I have been reading through the archives of your writings and I have really enjoyed them. Thank you for posting and sharing them.
The biggest change I noticed in my own life over the years is that the things I wanted changed a lot. Early on I wanted the sweet car and the big house and I put us in a bad financial pickle to get them but by the time the car was paid off I realized I wanted different things. I wanted good friends and respect in the community and not much stress.
That’s the stuff that matters at least for me but everyone is different. I think that good financial success is a lot easier if the things you want aren’t about spending money though, but I don’t think you can just change what you want. It has to come from you changing and growing as a person.
– Steven
The same thing has happened for me. I look back at the stuff I wanted when I was younger and I just kind of shake my head at it. I just had different values at that point in my life.
Right now, the things I want the most are more free time, strong relationships, and lots of friends. I want things to think about and work that I enjoy. I don’t really care much about buying stuff or spending money or going to the coolest restaurant or even eating out at all. I’m perfectly happy doing about anything as long as it’s physically or mentally or socially engaging, and there is a wide variety of things that check those boxes.
My political views and beliefs have changed. My relationships have changed. The ways I want to spend my time have changed. It makes perfect sense that the ways I want to spend my money have also changed.
Q5: Super cheap hobby
Just wanted to drop you a line and talk about how inexpensive tabletop role playing games can be as a hobby. I have been the DM (guy who runs the game) for about 14 years for a group of players. We meet once a week for about five hours on Wednesday and meet probably 50 times a year. So, if we do the math there, that’s 3,500 hours (250 hours a year times 14 years).
My expenses have included probably a ream of printer paper and printing that many pages out of a cheap desktop printer (let’s say $20), a small bag of cheap dice ($10), and two hardback books (one for $30 and one for $20). So, total cost for those 3,500 hours of entertainment has been $80. I’m not including stuff like snacks in there because the other guys bring the snacks. I have a few other items, like some wet erase markers and a huge erasable blank map and some miniatures, but people in my game group gifted those to me. For the gamers, their cost has been a copy of the rulebook ($30) and maybe a little bit of paper and pens ($5 maybe) and they’ve also given me really nice gifts over the years (maybe $20 a year).
3,500 hours doesn’t even cover the time, because I’m the game runner which means that I come up with adventures and stuff in between the games.
This hobby as been incredibly inexpensive for me. It’s enabled me to make some lifelong friends and meet a lot of interesting people. I have a regular “thing” on Wednesdays, too. Highly recommended.
– Stan
I completely agree. Tabletop role playing games can provide almost infinite hours of entertainment and the actual equipment you need involve just a book, some dice, some paper, and some imagination.
The trick I’ve found is finding that group. Once you’ve found the group, it’s spectacular. But finding people who are interested and who are willing and able to meet regularly to play can be a real challenge.
If this sounds like fun to you, I suggest looking at the bulletin boards at local stores that sell role playing books, the local library, and Meetup.com.
Q6: Spoiling entertainment for cheaper bills
Rather than paying for cable and spending hours watching shows so that I can keep up with the talk in the break room, I just visit a few television websites the next morning and read the summaries of the new episodes. I do the same thing with sporting events. That way I don’t have to have cable and I can spend my evenings doing other things I enjoy without feeling like an outcast in the break room at work.
– Olivia
Honestly, I did the same thing back in the day when I worked in an office environment. My tastes in entertainment diverged a lot from what many of the other people liked, so I would do the exact same thing.
The big one for me was football. I’ve never been a big football fan, so on Mondays and Tuesdays I’d just catch the highlights by reading ESPN.com or some other sports site on my way to work.
I don’t think there’s anything at all wrong with doing things this way. It’s a good way to maintain social inclusion at work without actually watching stuff you don’t want to watch in your spare time.
Q7: The joy of dividends
In 2009, my husband and I finished paying off our student loans, leaving us debt free. We decided to start saving for a house down payment, putting away $600 each month which was how much we were paying on our student loans. We have gradually ratcheted that up to $1,000 a month.
We decided to invest that money into Vanguard Total Stock Market Index because we were okay with some risk on this money and also knew that this was a long term goal. We didn’t plan to buy a house until we were in our late thirties and had a child and we’re still not there yet.
We now have about $120,000 in there, which is amazing. That’s more than enough for a 20% down payment on the house we would buy!
But the best part is that every three months, they pay us a dividend. The last dividend we received was about $600.
They paid us $600 just for being smart with our money. Since we’re rolling the money back into the fund, that’s like an extra month’s worth of stock purchases that they’re just giving us and it happens every three months.
It feels great!
– Tara
I agree completely! Dividends and interest payment and any income from passive investments are all just wonderful to receive. There’s nothing better than getting money without any active effort whatsoever when you know that money is coming in due to hard work you did in the past.
Like you, Sarah and I are just reinvesting our dividends as we go along. That means that we don’t receive a dividend check, but it does mean that our investments take a nice little bump when dividends are paid.
Our dream, of course, is for those dividends to eventually replace our income. I can’t wait for that day to come.
Q8: Paying off mortgage or investing
Why would I pay off my mortgage early when I could invest in the stock market? The stock market gets a better average annual rate of return (about 7%) than my mortgage interest rate and my interest is tax deductible. Stocks are more liquid as I can sell them quickly through my brokerage. Why pay off a house early?
– Dan
First of all, early payments on your home mortgage essentially offer a guaranteed rate of return. If your mortgage has a 5.5% interest rate, you’re getting that 5.5% return at the end of your mortgage, period. There are no market swings with that. With the stock market, next year could see a 40% drop and if you need the money then, you’re in a pickle.
Not only that, that 5.5% return is post-tax return. You don’t have to pay taxes on that benefit. Sure, some of it is offset by being able to deduct mortgage interest, but you need to have a pretty hefty mortgage to beat the standard deduction you already get.
Another thing to consider is diversification. If you have almost all of your net worth in the stock market and the stock market swoons, you could lose 30% or more of your net worth very quickly. Having some of that money in real estate in the form of your home means that your money is more diversified.
There’s also some risk in keeping that mortgage around – things like job loss and other events – but I consider that factor to be pretty minor.
I think there are arguments for both approaches and I don’t think either one is absolutely right. It comes down to which factors are more important to you.
Q9: Beans in the slow cooker?
You’ve mentioned that sometimes you will cook a couple pounds of dry beans all at once in the slow cooker which would make six or seven pounds of cooked beans. What do you do with them? I don’t think you really just eat several pounds of beans.
– Patty
When I do this, I usually cook a big batch on Mondays and then store them in a few containers in the fridge to use throughout the week. For example, I’ll use some in a chili on Monday, use some more scrambled with some eggs for breakfast on Tuesday, and then make a triple batch of enchiladas on Wednesday, eating one batch for supper and freezing the other two.
With things like black beans that work well in a lot of different dishes and with a lot of different preparations, cooking a big batch in advance ends up just being a time saver. Plus, I like the taste of beans that I cooked myself from their dry state rather than the beans in a can.
You can do the same thing with any flexible ingredient. One of my old friends from college used to do it with brown rice. He always had a big container of brown rice in his refrigerator. Pretty much any vegetable or meat that you would use in multiple ways throughout the week could be a good target for cooking ahead.
Q10: Expensive pocket notebooks?
I looked at the Field Notes pocket notebooks you recommended and they’re really expensive. $10 for three of them? Really? You can get the Mead ones way cheaper.
– Dana
I used to use the Mead notebooks, but I found that they fell apart easily in my pocket and the spiral wire would sometimes jab into my leg. They ended up being a big mess.
The Field Notes notebooks are staple-bound on the side, meaning they hold together really well. They’re also available in grid and dot grid, which I prefer for jotting down notes because it compresses my writing a little more and makes it easier for many kinds of sketching if needed.
I don’t actually buy many Field Notes. I usually receive a few packs for Christmas from friends and relatives (who know a lot of little things that I like for gifts, like this and little bottles of fountain pen ink and so on). Those get me through part of the year, at least. I also watch for any and all opportunities to get them on sale and stock up on them.
For me, they’re worth it. They just hold up in my pocket really well and work perfectly for quick notes. They’re not used for some sort of archival thing, at least not for me. I use them to jot down something that’s on my mind so that I can deal with it in twenty minutes when I’m done focusing on the task at hand. Reading through one of my Field Notes looks like a jumbled mess, but it makes sense to me. It’s like an external brain.
Q11: Business and self-employment help
I found this article by you and had some questions.
During my last year in college, I started posting Youtube videos where I offered commentary on computer games. I’d play a game and record it, then I would add a commentary track and post it to Youtube. Simple enough.
I have been posting 1-2 games a day now for about two years and the channel has gotten popular. I now get about a million views a month and am making more from the Youtube channel than I do at work.
So how do I know when it is time to switch to doing this full time? If I do it full time I could easily do 4-5 videos per day most days which would ramp up my income big time. But I would also lose income from my other job. How did you know when to make the jump?
– Kevin
I made the jump as soon as the numbers added up and showed us that we could live on my income from The Simple Dollar and my wife’s salary combined while still saving a little for the future.
For you, I’d suggest sitting down and running the numbers on your own situation. Could you live off of your current income from your video channel and still have a little left over at the end of the month? If that’s true, is this something you’d want to do full time? If that’s true, then I’d make the leap.
I think this is even easier for you as you’re single and don’t have any dependents. You could personally rebound from this pretty easily if you make the leap and this doesn’t work out.
If I were in your shoes, the number one thing I would worry about is whether or not I would actually want to do this full time. I can’t really answer that question for you.
Q12: Reasonable “sweet sixteen” for daughter
Many of my daughter’s friends have had huge parties for their sixteenth birthdays where they get a car from their parents as a gift and a bunch of the girls dress up. This seems ridiculous to me and I have no interest in doing this. My daughter seems to agree but on the other hand I don’t want her to be a social outcast just because I am cheap. Thoughts?
– Maryann
I’m not big on giant birthday parties for children of any age. I understand the reasoning for buying a car for a child when they turn sixteen, especially when that child is the oldest child and can take on some errand running with that car available, but I don’t understand the reasoning for a big party.
We have always had small parties for our children, but those parties were usually either simple affairs at our own home with a cake and children playing together or else a simple excursion with just a friend or two. I don’t see any reason for that to change.
The thing that worries me most about parties like that is that it begins to build an association in a child’s mind between getting material items and celebrating. When that link becomes firmly established, it can lead to some horrendous buying patterns in their adult life, ones that can be very difficult to break.
Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.
The post Questions About Pocket Notebooks, Beans, Audiobooks, Birthday Parties and More! appeared first on The Simple Dollar.
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