What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Term life insurance decisions
2. Buying the family home
3. Selling books for money
4. Investing in individual companies
5. Alternatives to stock investment
6. Assistance for ill pets
7. Personal finance and maturity
8. Math on energy drink habit
9. Frugal eating is unhealthy
10. Hand soap suggestion
11. Body weight exercising
12. Ethics of pricing mistake
During the first couple of weeks of nice weather each spring, I practically live outside. I spend ten times as much time outside in the spring than I do in the winter.
Of course, this always coincides with high pollen counts, which means that I’m usually whacked hard with the allergy hammer. Stuffy nose, red eyes, a vaguely sore throat – it’s what life is like for me at the start of spring each season.
I can’t wait for allergy season to be over, but I’m also not staying inside for it, either.
On with the questions!
Q1: Term life insurance decisions
I am a 34 year old female and was given a $500k term life insurance plan as a perk in my previous job. I am no longer with this job and am trying to decide if I want to take over the plan ie: pay my monthly premiums. I am about 10 years into a 20 year plan and, since beginning this plan, I have been diagnosed with an autoimmune disease. I am still, and should continue to be, in really good health as I was diagnosed early, but I worry any future life insurance plan with come at a much higher premium due to my health condition. Obviously this plan is going to expire in 10 years anyway. I also don’t have children – not sure if I’m going to. I’m not married but am in a relationship. I don’t have any huge expenses that would need covering at this point. What would you do? Any alternatives you might recommend?
– Tammy
Does your current relationship seem strong enough that marriage seems like a high possibility? If so, I’d take over the policy. If not, and you think it’s more likely you will remain single without children for the next several years, then the policy probably isn’t worth it.
Life insurance beyond the cost of a funeral is really only worth it if you have dependents, and right now you don’t have any. If you get married, you might have a dependent some of the time, depending on career choices, but that person might also be fully independent on their own; the risk is usually enough to make a low cost policy worthwhile.
I would simply evaluate your relationship with this person. What is the honest likelihood that this relationship results in marriage and children? If it’s pretty low, I wouldn’t keep the policy. If it’s high, I’d keep the policy.
Q2: Buying the family home
I live in our family home, co-owned with two other siblings. I will soon be faced with the decision to either purchase the entire house, or force a sale and buy something else. The house is paid off, and I have paid for maintenance and taxes etc. for the past 20 years, so my portion will be enough to fund a down payment on another residence. The dilemma is to stay or go. The house is old and needs some repair (think roof, electrical, etc), but it’s definitely livable and I am comfortable here. But having a chunk of cash would mean the freedom to find something more updated or maybe even in another area of the country. I’ve been weighing this for quite a long time and would appreciate your input.
– Jana
This comes down to what you want more than anything else.
If you are happy living in that house – you like the location, you have work nearby, you like the house itself – then there’s no reason to move. Just stick with it. You’ll save on all of the costs associated with moving, if nothing else.
However, if you’re unhappy with some element of the situation, enough so that you want to completely change it, then sell and move, whether it’s to stay in the area or move to another area.
This isn’t really a financial decision. This is a “what do you want from your life” decision. I can’t answer that for you. You have the resources right now to explore a few different paths. Which one looks like the best fit for you?
If you’re not sure, trust your gut instinct on it. If your gut is telling you to move on, move on. If your gut is telling you to stay put, stay put.
Q3: Selling books for money
Please do a column on how to get money for books. I’ve hauled bags full of books to used books stores and come away with hardly anything. Not worth gas money and time to get there. Would post some on amazon but fear it’s too complicated. Maybe you could present it more clearly? Or just say, haul them to Goodwill and forget it. But on tight budget and every little bit helps!
– Annie
The best way to get rid of gently used books that still have some value is to sell them on Amazon. If you have a lot of them, you can actually have them handle all the shipping for you using the Fulfilled by Amazon program. This will get you the most return on your books, but it will take quite a bit of time to deal with all of the packaging and shipping and so on, and you won’t get much for old dusty paperbacks (a few pennies for ten minutes of effort isn’t worthwhile, but a few dollars for ten minutes is).
For lesser value books, consider having a yard sale where you not only sell the books, but other stuff you have around the house. In the past, we’ve found success at initially listing books at a certain price – say, $1 each – and then gradually lowering the price throughout the weekend, down to $0.50, then $0.25, then two for $0.25. The advantage here is that the work is minimal – you just put them out on a table, they disappear, and you have money.
Almost every other tactic I’ve found for actually turning books into money doesn’t really work all that well. There are some specific situations where it can work, like when you’re reselling a textbook or something akin to that, but those are unusual.
Q4: Investing in individual companies
Can you guide me to invest my money in trusted reputable companies?
– Stan
I generally do not advocate for individual investors investing in the stocks of individual companies unless they are doing it with money they can easily afford to lose without strongly affecting their financial future.
The reason is the risk-reward ratio is too high. While you can earn a really good return sometimes by investing in an individual company, you can also lose everything, even when investing in what appears to be very stable companies. That’s not a financial path that the vast majority of Americans can afford because they simply don’t have the financial foundation in order to be able to weather losing a significant investment.
Given that, I can’t recommend investments to my readers that involve genuine risk of losing a significant part of their investment in an irrecoverable fashion, which is what investing in single companies is like. Instead, I usually push people toward index funds, which spread out the risk – if one or two companies die, it’s not the end of the world.
Another reader, Kenny, has a great follow up question to this.
Q5: Alternatives to stock investment
I just read your article on the 12 things you need to know before investing in stock. in the article you have also stated some other ventures one can invest in. Just want to know from your own opinion what is the best avenue/channel to invest.
– Kenny
There are many, many things that a person can invest their money in besides stocks. Stocks just get all of the attention because they’re flashy, honestly, and because some people perceive stock values to be an indication of the health of America’s economy.
You can invest in real estate, either by buying undeveloped land and holding it or developing property on that land (for rent or to sell), or buying developed properties that you can rent or lease and sell later on. You can invest in bonds of all types – bonds are essentially how businesses and governments borrow money for big projects. Those two types of investments have a risk level that’s often less than stocks, though the long term average annual return might not be as high.
If you’re seeking more risk – and I would only do so if you can afford to lose all of the money – you can invest in all kinds of things. You can be an angel investor for companies. You can invest in collectibles. You can invest in foreign currency. You can invest in cryptocurrency. All of those things come with different levels of risk, but many are much higher than investing in stocks.
To recommend something would require a deep understanding of your own financial state and risk tolerance. However, there are a lot of options out there beyond stocks.
Q6: Assistance for ill pets
Is there such a thing as pet financial aid or assistance for people living with disabilities and low income? My pet dog, Bellas, was just diagnosed with a crushing disease. For now and for the rest of her life, she has to be on medication. The medication is $130 monthly. After two weeks, she has to take more lab tests and blood work to see if the medication is working. The total cost of the procedure is $500 and they have to do four tests per year.
– Molly
There are a lot of organizations that offer financial assistance for low income pet owners who are struggling to provide adequate care for a pet. However, most of them are state-based organizations, so you’ll have to look for one in your area.
To get started, here’s a giant list of such organizations.
Here in Iowa, we have the Brown Dog Foundation, for example, which helps out people in your exact situation. However, BDF only serves Iowa, Illinois, and Tennessee.
Q7: Personal finance and maturity
Not only are our young people uneducated on finances, they simply don’t care about it and that’s the bigger issue than the education part. I’m a 47 yr old male married to a women with two kids from her previous marriage. One is 24 and one is almost 28. They both dropped out of high school and both have petty jobs and are struggling and broke all the time. Not my problem. Just mentioning to them to get a second job is crazy talk in their minds. I bought my first house when i was 20 yrs old with no financial help from anybody. These two think I’m crazy when i talk about sacrifices with money and discipline and working hard. They think they are so smart when all I see is ignorance. The consequences of financial neglect will eventually take it’s toll on them and i refuse to bail them out. Nobody bails me out. This is just a tiny view of what’s taking place here and in other families as well. It’s very unfortunate that these young people are so blind. I’m just glad i can see. What a very long road of regrets for not listening to someone who knows the path to avoid living in poverty for simply being lazy and not willing to LISTEN.
– Andrew
Where you see ignorance, I see immaturity and different values. I see kids who haven’t had a reason to do any of the financial stuff in their life aside from some older people preaching at them. They do not see a better life for themselves through that second job, not one that they would value more than their current life, that is.
You can’t expect someone with a different value set to listen to you when you think of them as “blind” and “simply lazy” and that they think they are “so smart” when you see them as “ignorant.” That feeling seeps through into the conversation, and no one is going to listen to someone who thinks of them that way. Would you? If someone came to you with a tone that would come from their impression of you as a blind and lazy and ignorant person who thinks they’re smarter than they actually are, would you even listen to that person for a moment?
It might feel good to vent against their perceptions, but doing so isn’t going to get them to change. They’re going to look at you as the crazy ranting stepdad until the moment comes in their own life when they internally feel the reasons for saving and preparing for the future. Maybe it will happen. Maybe it won’t. In either case, if their impression of you is someone who ranted at them for being lazy and ignorant, they’re likely still not turning to you.
Some people are born with it. Others grow into it. Some never do.
Your best route is to shut your mouth, be successful on your own, and let them sink or swim on their own. If they realize they need help, they’ll look for it. If they’re not looking for help, all the preaching in the world isn’t going to make a difference.
You can lead a horse to water but you can’t make him drink. Your email sounds like you are trying to kick and shove the horse toward a lake while shouting at it and it keeps running away from you. Don’t waste your energy until the horse is actually thirsty.
Q8: Math on energy drink habit
My husband drinks like 4 Monster energy drinks a day. He buys them by the case, drinks one before work, takes two with him, and drinks another when he gets home usually.
I’ve been trying to tell him that this is really expensive but he says they’re like less than $1 each. How can I spell out the math to him that this is a problem? I am having a hard time with the math and want to get it straight.
– Olivia
I looked around for prices on energy drinks and one of the best ones I could find was $32.98 for 24 cans. Most energy drinks, even in bulk, seem to be notably more than that.
If you divide $32.98 by 24, you get a cost of $1.38 per can. You’re charged sales tax on those cans, so let’s add another 7%, giving you $1.48 per can.
If he drinks four cans a day, that’s $5.92 a day. If he does this every single day for a 30 day month, that’s $177.60. For a 365 day year, that’s $2,160.80. Yep, two grand a year on energy drinks.
This doesn’t even include the long term health cost of drinking that much energy drink. It will have lasting health consequences if you keep that up for the long haul, and that will have financial consequences.
Q9: Frugal eating is unhealthy
I can’t believe you suggest being frugal with your food. There is nothing more valuable than your health and putting cheap garbage into your body is dangerous and expensive long term.
– Anna
I… don’t think you’ve been reading The Simple Dollar for very long. I am personally a vegetarian, and while I don’t advocate for vegetarianism on the site, I do advocate for including many more fruits and vegetables in one’s diet.
My typical starting suggestion for being frugal when eating is to eat at restaurants less and eat at home more. I tell people to make a meal plan based on the fresh produce and other fresh items that are on discount this week in their grocery store flyer.
Most of the “staples” I encourage people to eat are straight-up plant products, like rice and beans. I don’t encourage people to eat things like ramen noodles or frozen prepackaged foods – they may be cheap, but they’re expensive over the long term.
In short, being frugal with your food money doesn’t mean eating off the dollar menu at McDonalds or eating a steady diet of ramen noodles, at least not on The Simple Dollar.
Q10: Hand soap suggestion
Saw your comments about buying hand soap in bulk and refilling smaller containers. One thing you might want to try is castile soap. We use it in foam hand soap pumps at our house. We fill up the soap dispenser 1/4 full with castile soap and then fill it to about 3/4 full with water. This makes great foamy hand soap. Castile soap can be expensive but you have to water it down or else it’s really strong and this works great in a foam hand soap dispenser.
– Daniel
This is a good idea. Castile soap works really well as a general cleaner, but it can be expensive and when you dilute it down to the point where it’s not so strong that it almost damages things, it’s very watery, which can make it hard to use.
Of course, “rather watery” is almost exactly what you want in a foam hand soap dispenser. It’s almost perfect for that!
I haven’t fully run the numbers yet to figure out if this is cheaper than buying bulk hand soap and using normal dispensers, but I will say that my back of the envelope math puts them in the same ball park.
Q11: Body weight exercising
How do you do body weight exercising to stay in shape?
– Alex
It should be noted here that the reason I do a lot of body weight exercising is because I have somewhat specific goals for what I want to accomplish.
First, I want a lot of core strength, mostly for balance and martial arts. I am less interested in huge biceps. I don’t need to bench press a couch. Second, I’m interested in cardio health so I can keep up on long hikes and when participating in some sporting activities like kicking a soccer ball around – in other words, I want to either be doing stuff I enjoy or doing stuff that translates to a better time doing things I enjoy. Third, I just want to be generally healthy.
No matter what you do for exercises, you should define some specific goals as to what you want out of them.
So, what do I do? I basically stick to a bodyweight regimen that’s focused on core strength and upper leg strength and balance and stretching. Lots of planks and push-ups and crunches and things like that for the core, and things like squats for the legs. I do some stretching and balance exercises like a very slow side kick. I do some cardio stuff, too, but honestly, a rapidly paced core exercise workout leaves me panting like a dog.
You may have different goals – muscular arms or being able to run long distances or something like that.
Q12: Ethics of pricing mistake
Recently, the grocery store in my town had a pricing error that I noticed. A huge package of 160 diapers was on sale for $2.99. I bought three boxes and used coupons and walked out of the store with almost 500 diapers and paid less than $2 total. The cash register lady thought something was wrong but didn’t call the manager or anything.
I got home and felt bad about this. Did I rip the store off? Is it okay to tell my friends about it?
– Danielle
This is a sticky area. First of all, stores have no legal obligation to stand by an erroneous price unless you can show it was intentional deception. This really looks like an issue where something should have been $29.99 or something instead of 2.99, where someone misplaced a decimal, so it probably was an error and you’d be hard pressed to claim they were deceptive. If it was a mistake, they’re well within their rights to notice that mistake and correct the price, which may have happened had the cashier called her manager. Most likely, the manager would have allowed your purchase and then had someone clear those items off the shelves until the issue was fixed.
Now, what should you do as a customer? If this is a store you’ve frequented and they’ve treated you well in the past, you should probably tell the manager about it. This type of issue can actually end up really hurting the business, as they’re losing $27 on every box they sell until the price is fixed. You expect honest pricing from the store, but you shouldn’t expect them to just give you stuff.
In your shoes, I don’t think you did anything wrong. If the store is a place you shop at regularly and this seems way out of line, I would probably give the store a ring and ask to talk to the manager. If this isn’t a store you shop at regularly, I’d probably just say nothing. If this is a store that’s constantly engaging in loss leaders and other such marketing tricks, this very well might be legit and it’s fine to tell your friends about it. In any case, I don’t think you did something wrong by taking three boxes to the checkout and paying what they charged you.
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.
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