Free Money Finance

FMF Reader Shares Success Story

Here's an email I received this morning:

I know you like getting emails like this and wanted to share another "glad we made this decision" story with you.  About a year ago, I was evaluating our personal finances.  From your posts, I saw how much you liked the American Express Blue Cash Card.  It made me question whether we should continue with our Visa United card (which earned us frequent flyer points). 

My husband and I talked it over and we decided that it was time to make a switch.  We believed that a) airlines would eventually cancel the frequent flyer programs as they are looking for ways to save costs, b) with two small children, we only fly about once every two years and that's to Europe to see our families and c) we'd prefer to have the cash and the flexibility to decide what to spend it on.

We took your recommendation and set up the combo system of American Express Blue Cash Card and Chase Freedom Cash Visa which has worked really well.  My husband is a general contractor and we discovered that there is also a Chase Contractor Cash Rewards Card so we signed up for that too to really maximize both our personal and business spending.  (I've got a business version of Chase Freedom Cash Visa as well for my consultancy business.)

But the best bit is not the cash rewards (much as we like them)!  Last week, I received an email from United letting me know that the number of frequent flyer points required to book a Standard Award seat from the US to Europe was going up from 50,000 currently to 110,000 in 2009!  http://www.united.com/page/article/0,,59,00.html (Note:  they've already increased it from 50,000 to 100,000 for the rest of 2008.)  So, while they have not canceled the program, they are making it harder to use the flights internationally (the number of points for US flights stays the same).

Luckily, we had booked our 2009 trip to Europe in August 2008 and had already used up the majority of our points earned before we switched the cards.  In the meantime, we are grateful that we are not having to spend twice as much money (in reality, wait twice as long) to save up the required points to have enough for our next trip to Europe in 2011.

Yes, I LOVE stories like this! That's what this site is about -- giving ideas that people can use to improve their finances. I'm glad she sent me this testimony -- it made my day!

The Three "As Much as You Cans"

Here's an interesting comment left on my post titled The Importance of Being Earnest (In Saving):

Thanks for the reminder. The Millionaire Next Door is a great book, and I love the idea of being frugal as a starting point. My favorite is the philosophy of John Wesley, the English preacher from the 1700s. He believed you should 1. Make as much as you can, 2. Save as much as you can (frugal), and 3. give away as much as you can.

Sounds like a good philosophy to me. How about to you?

Good Ways to Deal with a Gift Card You Don't Like?

Two readers left similar comments on my post titled Review: Macy's (And the Problem with Gift Cards). They both offered comparable solutions on how to deal with a gift card you don't want/like. Here's the first comment:

Here's an experience I had with a gift card. Very little in that store appealed to me, but the card had an expiration date, and I didn't want its value to disappear.

I finally selected some curtains. After the sales tax, they ended up costing a bit more than the card's value. So I paid with both the gift card and a little extra cash.

But after taking them home, they didn't match very well with the rest of the room, so I took them back.

They gave me a refund all in cash! This meant there was no more expiration date to worry about, and I could go spend it elsewhere. So perhaps that's another alternative.

And the second has a bit of a twist:

Here is what I do if I have a GC from Macy's, and this only works if you have a Macy's CC also. Purchase an item with your GC, then return it and but the credit on your CC. Then call to get a credit balance refund, and ta da...cash.

I don't have a Macy's credit card, so I can't use that method, but the "buy something and return it for cash" method seems like it would work for almost any gift card you might have. But my question is this -- aren't stores on to this sort of activity? When you return the item, won't the see that the purchase was on a gift card and give you your refund back on a gift card (or in store credit)?

Comment from Extreme Makeover Home Edition Worker

Here's a comment left yesterday on my post titled Two More Extreme Makeover Home Edition Homes in Trouble I thought it was very insightful and worth sharing with you all:

I worked as a seamstress on an episode of EMHE a few years ago. The excesses were awful; one of the teenagers got SIX flatscreen television sets in his bedroom. Why?? My task was making bedding for a round bed in a basketball-themed bedroom. Again, how practical is that?!? Have you priced sheets for round beds lately? They provided ONE set of sheets with the bed, and they were black. I felt really bad for them. The stuff we were asked to make was done very quickly, with completely inappropriate materials. It was going to fall apart as soon as the crews left. None of it was going to survive being laundered. But hey, that wasn't the point, was it? I haven't been able to stomach watching the show since then. Another home was done near me and I refused to participate this time.

I hope this isn't a widespread issue with the show, but I'm afraid it might be.

Sometimes Realtors Make Things Worse

Here's an interesting comment I received on my post titled Is Selling Your Own Home Worth It?:

I've purchased two houses. Both were cases where I did not shop around for a house, but a house I liked went up for sale. One was sold by owner, and the other owner already had a sellers agent. The sellers agent insisted that I have a realtor, so I went through ZipRealty and used an agent that would refund some of that 3%.

I had always figured that using an agent would make things easier, since the first time I bought without one. You know what? The annoyances were really the same and having two realtors as middlemen didn't help all that much. In fact, it made things slower, and some of the stress higher. I wish the seller had at least tried putting up a for sale by owner sign. I would have bit. (and the realtor initially didn't want me putting in an offer since there was already a contract and a backup offer. Funny, in the end it was me who bought it. The same realtor who poo-pooed me got money despite that. What the heck kind of system is this to reward such behavior????)

I don't think we really need to be paying agents 6% to sell our house. That can be a ridiculously high amount of money. Hire your own people to market, fix up, and photograph your house, and you'll probably do a better job than a lot of sellers agents. Even if you don't want to bother with all that, just dropping the price by up to 6% could get you a lot of people interested pretty quickly.

That middle paragraph is the one that really hit home with me. We have one property that we've bid on and the seller's agent has been a real pain in the you know what. It's almost as if he doesn't want us (or anyone?) to buy the place. Sure, I understand that he's trying to get the best price for his client, but isn't a "good" price now better than a "better" price a year from now (which is reasonable to expect given the market conditions)? Apparently not. And not only that, his attitude has been very antagonistic from the get-go.

I guess what I'm trying to say is that if you're going to use a real estate agent to buy or sell a home, be sure you pick a good one. But that begs the question -- how do you find a good one? Sales results? Interviews? Referrals?

Perspective on an MBA

Here's a recent comment on my post titled The Value of an MBA that I thought you all would want to see. It provides some interesting insights/opinions -- especially for those of you considering an MBA:

I think there is a lot of misinformation conveyed above. There are really 2 distinct issues at hand when evaluating getting an MBA. First, improved/incremented knowledge and performance in your job. Second, increased job and career opportunities. In the first instance, getting an MBA if you are NOT educated about business AND work in a business/administrative capacity should clearly provide a benefit AND over time performance improvement and progress simply because you can do your job better. That will probably not propel your career at a vastly accelerated rate BUT should be helpful unless your company has no appreciation for improved work quality. You will still be impacted by all the other work processes/idiosyncrasies like politics, openings, growth or lack thereof creating opportunities etc. You also have to look at the culture of the company and see if having advanced business skills and knowledge are appreciated, acknowledged, utilized and rewarded. In some companies they are not due to size, family ownership etc. There is generally some opportunity cost to getting an MBA, whether time, money etc. You need to look and see objectively if you can get ahead with whatever degree you have or whether there is an "opportunity" premium associated with the degree.

In the second case, getting increased opportunities to really impact your career is probably reflective of going to a Top 10-20 school. However, you have to look at who recruits at the school, where their graduates focus and who they work for. National schools still have their niches. The cost is high for attending if you have to pay BUT generally you will leverage your pay significantly AND also the range of opportunities available to you. If, however, you are past 40 AND not say an ex military officer the benefit might be minimal. In many cases, at that point your career is established and the MBA is like frosting vs. flour. One finishes you off vs. being a core piece of development. The ideal MBA candidate is in the mid 20s-30 with at least 3-5 years of large business or organization experience. There is more appreciation for small company experiences than when I went to get my MBA at the University of Michigan in 1980. Then it was all large corporation focused...GM, GE, IBM, P & G etc. Now with the growth of venture capital, entrepreneurship, high growth companies etc the view is different. Getting a top 5 MBA like I did, opened doors which would not have otherwise been open especially with a BA in history and economics. It enabled me to move out of field sales into consulting, financial and strategic planning then marketing and general management. It gave me the background to do all those things successfully and the confidence to believe in myself due to increased skills and knowledge. It gave me a very good network of graduates to tap into. That especially is of very high value over the long run. Ultimately, 10 years out you have to be able to deliver but the MBA can open doors, enable you to perform and give you momentum with a good earnings stream. It also gives you the ability to be adaptive, deal with change, understand it in a broader context and should make you better able to be strategic and more objective and hopefully more flexible. Those are all key attributes in the business world. In terms of ROI, the payout is not just immediate but also in terms of momentum, that received and that which you can develop yourself due to the skills from the degree.

Realistically, you can also develop many of these skills by attending a good BBA program like Michigan, Wharton etc. Getting a law degree with lots of business courses also prepares you very well for business, especially in terms of critical thinking. The MBA will give you more soft business courses but a JD with accounting, finance, and some management courses will do good things too if the rest of the focus is business law. In today’s environment, the legal requirements and government involvement are omnipresent.

BTW, if you have a top BA many investment banks, consulting firms, and some other firms, all large, Fortune 500 types will provide you outstanding training that is as good as an MBA, mostly because the teachers are all MBA school profs doing "Exec" education. But that will not provide you the network of contacts, the degree, prestige etc but will give you good knowledge.

Good Luck.

Any additional thoughts on this?

The Keys to Getting Rich

Here's a comments I love -- left on my post titled Inside The Millionaire Mind of Mush—How We Became Millionaires:

High income is not the key, though it certainly helps. Saving a significant portion of your income, investing it wisely, spending less than you earn and having a plan are the keys.

My father-in-law is a lawyer in private practice, and is about 30 years older than I am. He is a good and kind man to his family, and very kind to me. I am certain that if properly focused, his income could be 1.5 to 2 times mine, very easily. Yet at age 33, I easily have 5-8 times the amount of savings he has available for retirement, and my retirement savings are in the five-figure range, not six. Why?

• He has never met a splurge he could pass up to put away dollars for tomorrow.

• He does not invest.

• He does not try to learn new ways to spend and save to be more efficient with his money. If it requires a new habit, or behavior change, he's not interested. I could run his office for half the money he spends running it, but he would have to learn new ways of doing things, which he simply doesn't want to do.

His house currently has a broken window on the first floor- it's nothing but a screen, no glass. His monthly oil heating bills this winter were much higher than usual. Does he think to fix the glass and reduce the amount of heat escaping his house? No, but he does take spur-of-the-moment trips to cities on the East Coast.

At certain levels of poverty and lower-income earning, it is extremely hard, if not impossible to get out of the "poverty trap" even with courageous frugality and positive financial behaviors. But for others, like my father-in-law, the long march from paycheck-to-paycheck to comfortable financial security can be significantly influenced by personal behaviors.

Hard for me to argue with this!

Good Suggestions for Selling Your House in a Tough Market

Lots of good comments to my post titled Is It Worth It to Pay Your Real Estate Agent a HIGHER Commission? The post itself wondered if it was worth it to pay real estate brokers more than the going rate in order to sell your house faster. Here are a few of the comments that I thought were worth highlighting, starting with this one:

Your readers might be interested in reading all the pieces by the Freakonomics guys. I first read about this in the book, Freakonomics, but they go on and on in their blog about the value (or lack thereof) a real estate agent brings to a transaction...worth the read.

I've read the book and basically they say hiring a real estate agent doesn't help you get a better price on your home. But what if you paid a higher commission than everyone else? Would that help you break through the clutter and get your house sold faster and at a higher price? Here's what another commenter said:

As a RE investor and defense contractor that moves around frequently, I've sold many houses, and learned this lesson the hard way. IT WORKS.

The biggest bang for the buck is on the Buyers Agent side. Ask your listing agent what the going rate is in that area for buyers agents, then up your buyers agent commission by one half to a full point above the going rate. Above that is probably excessive, and brings diminishing returns. The typical buyers agent is usually on the lighter side experience-wise, and the extra commission could mean a lot to them. When they pull a list of homes for the buyers to see, your house will be near the top of the list if the commission is extra in most cases.

On the Listing Agent side, it's important to be at the going rate, but not really above it. The agent you select is probably going to use his/her existing marketing program. Do some research, find the listing(selling) agent who is the Superstar in your market. They make a lot of money, and usually are not going to work any harder for an extra half or one point commission. In a slow market you don't want to undercut them, but paying the extra isn't likely to change much here.

You can try the conditions as others have mentioned with dates and prices, but I've found Superstar agents are EXTREMELY BUSY, and do not want to be bothered or spend the time on it. Upping the Buyers Agent commission is simple, takes only a minute and they usually don't have a problem with it.

One similar note, I've had good luck with www.Iggyshouse.com. (I have no affiliation with them, just a customer). It let's you list your house and pay NO LISTING COMMISSION. It puts your house in MLS the same as an agent, the buyers agents will call you for showing instructions. You can set the buyers agent commission to what you want, I recommend putting it a little above the going rate for your area. See the site, it has all the details.

Finally, here's a useful tip -- one that says the key to getting your house sold is to find the right agent:

Great topic, esp in this real estate climate. I like the idea of doing SOMETHING different to sell your house in this market, and a bigger commission might be a nice motivator for real estate agents. Or would it? In the book Freakonomics, the authors make the point that agents would rather sell MORE houses at lower prices (and lower commissions). The volume of sales is what truly drives their incomes. This makes sense. Would an agent rather sell three $200,000 houses at 6% or two at 8% ($36K vs. $32K)? Hmmm.

So what to do? Well I just finished a year long process of selling my father in law's house. And I have some learnings. We started off trying to sell it without an agent. That turned out to be penny-wise and pound foolish because, yes, we would have saved on real estate commission, but ultimately we were unsuccessful in selling it, and we wasted a couple months. Next we hired a family friend to be our agent. And this was just dumb. We wasted 8 months with him. Turns out he's a great guy, but not much of a real estate salesman. We couldn't sell the house, and we may have ruined the friendship. Plus he had us lower the price a couple times--he kept saying, "We'll just bring it down, _,000 and that's really where it needs to be to sell." Stupidly, we listened to him, even though my spider sense was telling me that we were priced correctly and that wasn't the problem.

So finally, I decided we needed a fresh start, and that meant a new agent. This time I wasn't messing around, so I did a little research and sought out the best agent in town--and by best I mean the one who sells more real estate than anyone else. Nothing speaks like results, I figured. So I found a list of the top selling agents in town, interviewed three of them, and chose one. We made the switch, had an offer within three weeks and were closed three weeks later.

So what did this agent do differently? She doesn't charge any more. But she does understand that getting this done quickly is in EVERYONE's best interest, oh and she actually markets and doesn't just hope--what a concept.

So my $0.02 is to skip directly to this step. In my market, the Business Journal has a list of top selling agents, so finding them wasn't hard. Unlike in many parts of the market, it won't cost you anymore, and the results will likely be much better.

So maybe finding the best agent is the key to success.

What do you think?

Thoughts on the Bible, Tithing, Giving, and Faith

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Today we have a "guest post" from smr, a person who left several recent comments to my post titled Tithe or Pay Off Debt -- Which One Should You Do First? I'm posting all of the comments together as I thought they made quite a unique and interesting post.

Why is everyone using the excuse that since tithing came from the Old Testament, it does not apply to us anymore?

Remember what Jesus Himself said in the New Testament in Matthew 5:

17"DO NOT THINK I HAVE COME TO ABOLISH THE LAW or the Prophets; I have not come to abolish them but to FULFILL them. 18 I tell you the truth, until heaven and earth disappear, not the smallest letter, not the least stroke of a pen, will by any means disappear from the Law until everything is accomplished."

Jesus also said...

"19 ANYONE who BREAK ONE of the LEAST of these commandments and TEACHES OTHERS to do the same will be called least in the kingdom of heaven, but whoever practices and teaches these commands will be called great in the kingdom of heaven."

Jesus said He came to FULFILL the LAW, because He knows that it is impossible for humans to PERFECTLY observe the laws such as failing to give back to God or by tithing by Him dying on the cross for you and me, so that even though we fail over and over again and regardless of the weight of our sins - be it murder or failing to tithe, He is faithful and just to forgive us if we confess our sins and repent.

Now, if you CAREFULLY read the teachings of Jesus in the four Gospels, you'll notice that Jesus in fact spent more time in discussing about the importance of FAITH and EARTHLY TREASURES than He did on sexual immorality, homosexuality, murder, etc, which the Pharisees thought were "weightier" sins. why? because God knows that money is the hardest thing to let go! He even said, you can't serve two gods: the other "god" is usually our money and/or physical resources and indulgences.

In the law of giving, tithing or 10 percent may be "outdated" because in fact, the New Testament commands us to give even MORE THAN 10 PERCENT of everything we have.

Jesus said in Luke 12:48:

48 When someone has been given much, much will be required in return; and when someone has been entrusted with much, even more will be required.

And Paul said:

“Each one should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver” (2 Corinthians 9:7)

It's all about FAITH and honoring and glorifying God with everything you have: with your family, with your hobbies, with your relationships, with your jobs, with your time, with your money, etc.

Now for those people who feel like they have been "victimized" by their churches' get-rich-quick scams, remember that nonetheless, the Word of God remains unchanged and because I know about His Word, especially about giving to church, I am even more accountable to obey. I don't give my tithes and offerings because I want to please my church organization. I give because God said so; I give out of love and obedience to my God who died the most imhumane, humiliating death on the cross just so I can spend eternity with Him.

Yes, I agree that some pastors abused the teaching of generosity for self-interests but let them be held accountable for their own sins, but as for me and my family, we will continue to obey God's Word... because the Bible also says that there will be a judgment day when we will be asked to give account of our each and every deed, and when God asks you, why didn't you give, we cannot given Him an excuse that our pastors abused or duped us because He'll say to you in return, "but you heard and know MY Word."

Therefore, once I drop that offering in that basket, i really could care less where that money goes or whether it is used responsibly coz that is not the point of God when He asks us to give; instead, I trust God that He knows the motive of my heart: to please and obey Him.

Also, remember that God's blessings are normally hindered due to many factors, not just whether you tithe or not. this is exactly what Jesus pointed out among the Pharisees who were careful to observe the law of tithing yet fail to observe God's two greatest commandments: (1) love your God above all (2) love your neighbors as you love yourself.

So if you're tithing faithfully and still don’t seem to be "blessed," carefully evaluate the other areas of your life. Remember that SIN is the biggest hindrance to God's presence and blessing (greatest example is when Adam & Eve disobeyed God, they were kicked out of the Garden of Eden)

Do you have a bondage of sin(s) in your life or in your household? have you forgiven others lovingly and gracefully as Jesus have done for you? if you can honestly say sin is not a factor, it could be very well because God is simply testing your faith as He did on Job.

Remember that "FAITH is being sure of what we hope for and certain of WHAT WE DO NOT SEE." (Hebrews 11:1) how can you have FAITH if you're so certain? yet, without faith, it is impossible to please God (Hebrews 11:6).

So when you give your tithe, don't give because your church/pastors said so or you want to get rich; give because you have faith in God and, therefore, will obey His Word.

By the way, just to clarify, our SALVATION or GETTING INTO HEAVEN is NOT DEPENDENT on our faithful TITHING or HOW MUCH YOU GIVE.

Nonetheless, as a Christ-follower, we are called to obey to His commands. plus, as an incentive, our rewards and crowns in heaven ARE dependent on your OBEDIENCE to GOD'S Word.

Consider College Debt Carefully

Here's a good comment left on my post titled Stuck about taking on (and dealing with) substantial college debt:

I just want to comment on the education debt that Sarah and Jesse brought up. For those who are already in that situation, well, yes, I suppose that's one case where both parents would have to work. No argument there.

But for those who are at an earlier stage of their lives, there's a lesson to take from this. To take on that much debt is to make the choice to work--possibly for decades--after school to pay it back no matter what else might come up in your life that would otherwise be more important to you. Now, that's not to say don't get an education, or even to say don't go into debt to get it if that's what you have to do. But do choose your major wisely and think twice about picking that fancy private school. This is particularly true for people whose inclinations lead them to fields that are not reliably well compensated, like the arts or politics to name just a couple.

Sometimes it seems to me that people have lost their minds when it comes to education costs, in much the same way as people who drop 20 grand and up on their weddings.

This is in agreement with what I've written in posts like How to Get the Most Financially Out of College and Go to Law School Without Racking Up Tons of Debt (this isn't just for readers thinking about law school.) In particular, here's what I said on the latter post:

"The point is that you need to look at a college degree (including a law school degree) as an investment. What will it cost and what will you get out of it? Look at the best way to maximize this investment, and you'll be able to find a school that meets your needs and won't leave you in a ton of debt relative to your income. Ignore these factors and select a school based on considerations like campus feel, nearness to home, the popularity of the football team, one great professor, and so on, and you may be setting yourself up for a bad financial decision."

To me, college debt can be "good debt" as long as it's kept under control. And the main way to keep it under control is to compare it to what you'll be earning once you graduate. For instance, consider the following:

• A teacher who will make $30,000 per year who leaves college with $30,000 in debt.
• An engineer who will make $70,000 per year who leaves college with $30,000 in debt.

Any question about who is in better shape to deal with their college debt?

More Great Ways to Save on Wedding Costs

Here's a comment full of tips on saving on wedding costs. It was left on my post titled How to Have Half a Million Dollars at Retirement by Controlling Wedding Costs:

My wife's parents paid for our wedding. I don't know the exact numbers, but I know the budget was $3,000 and they went slightly over. This was a wedding with 200 guests, and it was definitely a nice event -- the quality didn't suffer for the cost.

Ways we saved:

1) Her dad is a pastor. He performed the ceremony, and we used their church.

2) We got married just before noon on a Saturday. We served a tasty brunch (without alcohol) rather than an expensive dinner.

3) Her mom and several friends prepared and froze most of the food in the 2 months prior to the wedding. We didn't have a caterer at all.

4) We decorated with colorful origami paper cranes (1001, from 2 to 36 inch wingspan, folded by us) rather than flowers. Her mother grew some vines, so the only flowers we paid for were the bouquets and corsages.

5) A family friend/baker made the cake.

6) We found a photographer whose rates AND portfolio we liked a year before the wedding. (Our engagement was nearly 3 years long, due to college and the fact that she was 17 when I proposed. This gave us time for things like that.)

7) We used several other decorations the church, her family, or friends already had available.

8) A close friend managed a nearby hotel's banquet setup and such. He coordinated the church youth group, who set up all of the tables and such. (We did give a fairly generous donation to the youth group.)

We probably could have come up with a way to throw a more expensive party... but I'm not sure we could've thrown a better party.

Good tips. What I'm getting out of this is to "use your connections" to try and cut wedding costs. Many of the tips above were simply friends or family that pitched in one way or another and thus saved the couple a ton of money.

Another Interesting Idea for Teaching Kids About Money

Here's a very interesting/compelling idea someone suggested on my post titled Interesting Ideas for Teaching Kids About Money:

I say give them (kids) an allowance of $500 bucks a month. At the end of the month give them an itemized statement (like a paycheck) deducting $480 for boarding, food and clothes and let [them] spend the $20 as they like. That should get them in the real world mindset.

Ha! I couldn't help but think this might actually work. What do you think?

Has a Charity Ever Turned You Off?

Here's an interesting comment I received on my post titled Let the Rich Man Go:

I'm not sure that this is the kind of comment you wanted from Let the Rich Man Go, but here is my 17% worth.

I sent an e-mail last night asking to be removed from a well known charitable organization's mailing list while offering a suggestion to them.

We started a new tradition at Christmas time a couple of years ago with our daughters. We give them a certain amount of money to give to whomever they choose, instead of buying each other lots of stuff. We still give gifts, just cheaper ones. And fewer. One of the girls chose _____ this past year. I made an online donation. We didn't get the 'free' gift that went with the donation, because that would actually mean a lower net donation would go to the organization. I liked it that we could opt out of the free gift as I made the donation.

Since then, we have received at least two mailings requesting another donation. Here is my problem with that practice. We were not on their mailing list before the donation, and as far as I am concerned, it was probably a one time thing. When I give $__, I want that amount to go to the cause. Their latest mailing informs that in 2006, "83% of all gifts and donations to _____ goes directly to our vital programs". The pie chart shows that 83% was Program Related Expenses, while the smaller piece of the pie went to Administrative and Fundraising Expenses. That may just be a fabulous percentage; I don't know because I haven't compared them with others.

The fact remains that if 17% of my donation is for Administrative and Fundraising Expenses, that is either salaries, free gifts, mailings, advertising or other operating expenses that I haven't considered. How much of 17% is for mailings? Probably not much, but I don't want to receive the mailings. Valuable resources are being wasted. __% of 17% of my donation is being thrown in the trash.

Here was my suggestion. Let people opt out of mailings when they make a donation, just like they can opt out of the 'free' gift. I'm calling it The 17% Solution.

A few thoughts on this from me:

1. Generally, 83% of the money going directly to programming is pretty good (my rule-of-thumb is that if it's 80% or higher, the charity is pretty efficient.) However, that needs to be compared with like charities. If similar charities are at 90%, then 83% isn't good. Likewise, if other charities are at 70%, then 83% is great!

2. I know what she means about getting on mailing lists. I've made one-time donations to many charities and now receive a TON of solicitations on a regular basis. One of them send me something monthly after I only made one $25 donation about four years ago. What a waste!

3. I serve on the board of a charity, so I know that competition for donors is tough. And the fact is, the more mail that goes out, the more donations come in.

4. That said, I like the idea she offers about letting people opt out of mailings. If there's no chance that the person will ever give again to the charity, don't you think the charity would want to know that?

What's your experience in this area? Have you ever been put off by being placed on a mailing/call list after what you thought was a one-time contact/donation?

Examples of How Poor People Can Get Ahead Financially

Several of the comments on my post titled Before You List Your Excuses, Read This were, well, excuses. I was surprised at the number of people who simply think it's impossible to improve your financial lot significantly. Now many of these comments were probably left by those who watch the "average" amount of TV per day -- something like six hours or so -- but I'm sure there's no correlation between wasting so much time and getting ahead financially. ;-)

But a couple of commenters caught the essence of what I was trying to get at and left some great, real-life stories to serve as examples. Here's the first one:

Both of my inlaws came from such poverty that my father-in-law only owned one pair of blue jeans. They put themselves through college while working, ate bread and canned tomatoes, and used whatever public assistance was available. They abstained from alcohol, tobacco and illegal drugs. They never wasted a moment. They never paid for something they could do themselves. Most of all they worked hard every day. Today they live in a 1/2 million dollar home. I guess they were just lucky in the lottery of life.

Ha! Exactly. Most of the nay-sayers talk about how it can't be done. The people in the comment above prove that it CAN be done. The difference? Attitude, determination, and hard work. Of course many people want to be financially successful without any hard work and determination and while having a bad, "I can't make it" attitude. Sorry, financial independence isn't handed to anyone on a silver platter.

Here's the next comment:

The American dream is still alive for those who want to work for it. My grandfather came straight out of Appalachia. We're talking tin roofs, dirt floors, and (during my grandfather's time) no formal schooling to speak of. There were no jobs (still aren't any), so he went to work in a factory in a different state. His family lived a lower middle class lifestyle, but they were able to afford to send my dad to college for an associate's degree. My dad and mom lived a middle class lifestyle, and all three of their children obtained undergraduate and graduate degrees. When my father and I talk about poverty, I usually take the more liberal view that people need some help in order to leave poverty. Dad can't stand that because he remembers grandpa's stories of going down to the welfare office to "beg" and "look poor" for a government handout. My grandfather did not want to live that way, so he did the best he could as a seventeen year-old father. He certainly had the deck stacked against him, but he sacrificed and worked hard to overcome his circumstances and provide more opportunities for his family.

Notice the theme? Hard work, determination, and a can-do attitude. Oh yeah, and time. You can't build wealth overnight. But if the principles described in these two comments are applied, ANYONE can improve their financial lot significantly. The choice of whether or not you want to do it is up to you.

Now let the nay-sayers have at it. I'm sure many will spend their comments here saying why they CAN'T get ahead. They're right. With that attitude, they can't.

Wisdom from Readers: Saving Money and Performance of Index Funds

One of the great parts of Free Money Finance is the comments. Readers leave hundreds of comments every month and many of them offer some exceptionally good advice/suggestions. But I know that many people don't have/take the time to read the comments, so I thought I'd share a couple good ones in one big post.

We'll start with a money saving tip left on my post titled Another Example of Asking for a Discount Saving Money:

I'm at the point in my life where I am constantly attending weddings, and many of them require travel. More often than not, when the couple has a "preferred guest rate" at a hotel, it's not always the lowest rate. Last week I called a Courtyard Marriott and found that the wedding rate was $175. I asked if they had a lower rate, such as AAA, and they did - for $116! So I booked the lower rate and told my friends to do the same. I very often ask for the AAA rate, even though we aren't AAA members. I have never, ever, been asked to show my AAA card upon check-in.

I do have a AAA membership and often get the discount. Come to think of it, I've never been asked to show my card either. Is this honest though?

Next is a great comment left on my post titled What Will Happen to the Stock Market in 2008. I am regularly surprised when people comment that investing in index funds simply gets you an average return. This commenter responded to such a thought from someone else -- and he responded just the way I would have:

Jake, good points except you got one little thing wrong: investing in an index fund will lock in above-average returns over the long run, not merely average returns. It's counter-intuitive at first that the average return can be above-average but when you take expenses and transaction costs into account, it's evident that index funds must mathematically have above-average returns.

Exactly. Right on the money!

FMF Reader Takes Advice, Saves over $400 Per Year on Comcast

I love to hear when people take a tip from Free Money Finance, apply it, and they improve their finances. Here's a recent example left as a comment on my post titled Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount:

I took the advice of this entry and called up Comcast to have my rate reduced. I am paying $35 less a month now AND I get tons of extra channels.

Saving $420 per year PLUS getting more channels is a pretty good deal, don't you think?

A Good Reason to Pre-Pay Your Mortgage?

In Wondering About Pre-Paying a Mortgage Versus Investing I talked about my past disposition towards pre-paying a mortgage over investing but how my view might be changing. A thought-provoking comment was left on that post as follows:

Something to chalk up to pro-prepaying a mortgage that I don't see mentioned as often on PF blogs as it should is that if you have kids in college, the equity in your primary residence does not count toward your FAFSA basis for need-based scholarships and grants. Nonetheless, it does matter for many private schools. So, I could see primarily investing in a mortgage pre-payment if you had a kid going to school and you thought it might make the difference in their getting some grants and such.

A good point, but for us I doubt we'll qualify for any need-based scholarships or grants. That said, for people who do qualify for such options, pre-paying a mortgage might be a better option. Then again, if you're qualifying based on need, isn't it likely that you won't have much extra left over to make additional mortgage payments?

Don't Assume Quantity Purchases Are Always Best

In the past, I've noted that you should calculate the per use/per item cost on products because the bigger size isn't always the best value (despite what marketers have trained us to believe.) And when I posted Quantity Purchases Aren't Always a Better Deal last week, I received several good comments on the issue and wanted to share these with you all. Here's the first:

Perhaps the very reason the marketing companies have taught us that we always save by buying in bulk is this: They know a WHOLE LOT of people can't DO the math!!

I have gone shopping with a bargain loving friend who says things like. "OK, this item usually costs $12.00. Today, it's 10% off. So, how much would that make it?" I am not kidding. A smart girl in many ways, but since she wasn't taught math, she can be taken to the bank.

Yep. I've seen this happen as well. For those of you who can't do the math, carry a small calculator with you. Or better yet, use one that's ion your phone (that's what I do.)

Here's the next comment:

In some grocery stores, the shelf label will tell you (in superfine print) the cost PER UNIT. So I compare, say, cereal boxes, one large and one smaller of the same kind, and usually the price PER UNIT of the smaller box is LESS than the price per unit of the larger box. You would THINK that the price per unit of the larger box would be less, but that is not the case...but I bet more people buy the larger box because they think it's a better deal.

I've had people leave comments here saying that the small per unit information found on those tags isn't always correct. Anyone else experienced this?

Finally, here's one last comment:

The other thing to keep in mind is that buying in quantity only does you good for items that you will actually use. I used to buy bagels from a warehouse store because they were cheaper, but I had to buy 9 at a time. However, I only would get a chance to eat 5 or 6 of the bagels before they started getting moldy, so that really made the price more expensive for the ones that I was able to use. I can buy them individually at a grocery store for a few cents more, but since they don't go bad before I eat them, I actually save money.

True, very true. Costco is the master at getting people to buy huge amounts of various products, and we sometimes get close to falling into that trap. Then one of us will say something like "can we really use all of this?" or "do we really need so much of this?" and this is enough to know us back to our senses.

Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount

Here are two new examples of saving money by asking for a discount. They were left as comments on my post titled Two Examples of Saving Money by Asking for a Discount. The first deals with saving on a Comcast cable package:

I was able to get Comcast to agree to lower my rates for my combined Internet/Cable package by $30/month for an entire year. I just called them up after the 1st of the year and asked. I wasn't getting anywhere until I mentioned the (apparently dreaded) word "satellite" and then I got promptly forwarded to someone in retention who made me the offer right away. Not only will I save $360 this year...it will give FIOS another year to roll out in my area so I can jump ship. :)

$360 savings a year for 10 minutes work isn't bad at all!

The next comment offers a similar idea:

My dad did this at Sears with a HDTV. He ended up getting a 60" for the price of the 50" he went in for because they were out of the 50" and they wanted the sale. I also recently kept asking for discounts when I upgraded to HD service with DirecTV. Originally their HD-DVR was listed at $300. Long story short, after a couple emails and calls, I got the price cut in half, plus got my HD service ($10 per month) free for a year, plus an additional $10 a month for a year off regular programming. So basically I "saved" $390 for about a hour of my time. A good deal in my opinion. The magic words I kept using were "can't you do better than that" and "Dish Network is still cheaper than that".

These stories prove once again that it never hurts to ask (for a discount.)

Saving on American Girl Doll Clothes

In my post titled What We Got for Christmas, I noted that my daughter got an American Girl (AG) doll for Christmas and we were now into the "what (expensive) clothes can I buy for her" phase. I had one reader leave the following comment in response:

I had an AG doll growing up - but my mom refused to let me spend money on the "official" clothes and accessories (she'd make an exception every once in a while, but even then, I had to spend my own money). Instead, we made a lot (my mom bought the official patterns for "my" doll and sewed up many of the clothes herself, my dad helped me make a period-style bed) or bought from craft shows (not just clothes, but a desk, a bench, a closet/chest, etc.). There's lots out there for 18" dolls that's just as good as AG for much less money. You can also get more variety that way. I'd steer your daughter in that direction, if I were you.

My daughter had another 18" doll (not AG) before she got her AG doll, and my wife made some very simple clothes for her. They looked "fine", but they're not as nice as the AG clothes. Hence my daughter wants the AG clothes or something that at least looks like them.

Another reader (thanks, Blaine) pointed me to an eBay store that sells AG replica clothes for about 25-30% below AG costs. But they don't have the "Just Like You" clothes my daughter wants. Arrrrgh!

Anyone know of a good source that sells a broad line of AG replica clothes at good prices?

Save Thousands of Dollars Doing Your Own Body Work

Little did I know how easy it is to save a boatload of money by doing the bodywork on your own car after an accident (assuming of course that you're at least a bit handy and the damage isn't too great.) But then I wrote Minor Minivan Fender-Benders Can Cost You a Fortune and some commenters enlightened me to the fact that a "$2,000 repair" could costs a fraction of that if you do it yourself. Here's the first comment:

A year or two ago someone backed into me in a parking lot, so we're talking under 5 mph here.

He broke my front left turn signal cover and left a minor dent in the bumper. I was very mad with him because i had been honking my horn all the time as he backed up so i decided to claim from his insurance. (luckily i also had a witness)

The insurance rep told me to bring the car in for repair and submit the bill for reimbursement. Over a month went by and i hadn't brought the car in for repairs cos the damage was so minor. I ended up buying a light cover online for $30 and a patch kit for the dent may $60 and did the repair myself.

I then called the insurance company and told the rep it was too much hassle to bring the car in for repairs cos then i would have to rent a car and the damage was so minor anyway i just wanted the $90 back that i had spent.

The rep said "No, no we want to make sure you are compensated appropriately for this, Ill sent out an assessor"

So a few days later the assessor arrives and does his thing. I was thinking ok this isn't so bad, maybe I'll get a check for a few hundred outta this! Then he handed me the report which had a total of $1400 on it.

He said you'll get a check in the mail in a few days.

He must have seen the shock on my face and knew exactly what i was thinking cos then he says "Go and have a nice weekend in Tahoe or something"

...So i did!! :-)

So a $1,400 repair really costs $90?

Here's another one:

Back when I had to park on the street, someone side-swiped my car in the middle of the night - breaking the side mirror housing, and causing minor dents/paint damage in the driver's door. I called my insurance about it, who sent me to a local body shop - I don't remember the quote exactly, but it was something between $1,500 and $2,500 to bang out the dent and completely match the paint, as well as replacing the mirror. I have a high deductible, and I figured that it was pointless to pay that much money to have my car look like new (not to mention that my premiums would go up), so I let it go.

I held the mirror on with duct tape for several months, until my husband pushed me to go to the local Ford dealer's parts division. A brand-new, complete mirror housing was less than $50. It took me 1/2 hour to get the remains of the old housing off and put the new one on - in the dark!

I think the key is understanding which repairs are necessary for the car to work right (mirror, body damage, etc) and which are merely cosmetic, but costly (dented door).

Ok, so she probably has some minor dents left, but still -- $1,500 to $2,000 or $50. Which would you rather pay?

A motorcycle was riding the lane during commute hours. All traffic was stopped except for him. He claimed that someone swiped his back wheel and he hit the car next to me and fell on my car, the heavy motorcycle pinning him to my car. Two guys had to help move the bike off him. I only have a ding on my car. I wasn't going to claim it, but I had to wait around for the highway patrol and then spend time talking to his insurance and they wanted to send out an adjuster. All said and done, it wasted 6 hours of my time. When they decided to send me the check for $700, I took my husband out to a nice dinner.

Is it just me or is something really out of whack here? Why is there such a big difference between what it really costs to repair some body damage and what is actually charged? Is it the insurance companies who are messed up? The auto body places simply charging too much? Or what? Where else is there such a high mark-up on such services?

A Couple More Ways to Make Extra Money

Here are two additional money making suggestions left as comments on my post titled 11 Great Ways to Earn More Money. The first suggests renting out a portion of your home:

I live alone in a large house. I'll rent out rooms to people from my company who are visiting from over seas for a few months. It's cheaper for the company than a hotel and the employee gets a more cultural experience living in a real American neighborhood.

BTW, you can also rent out a portion of the home to allow people to store their stuff. There's big business in those storage lockers you see all over the place!

Next, here's a tip I love:

I would suggest becoming a referee (youth or adult) in a sport you enjoy. There is always a need. The pay is usually a bit higher than minimum wage, and the time commitment is totally up to you.

A bit above minimum wage? The refs for my son's basketball team get paid $35 per game for less than an hour's work. They can ref three games a night at the same facility, so they can make some good income if they ref several nights each season.

BTW, being an official also helps you physically as you're running/walking for much of the time. (Especially at the end, when you have to run from upset parents!) ;-)

Finally, here's a testimony for the missing money site I noted in the post:

I was bored at work, so I went to the link for Missing Money and searched for me--nothing. You DID help my sister out a lot, though. She lived in New Orleans during the hurricane and as it turns out, never got her last check from her employer. She just got back an extra $900 owed to her thanks to your post. :-)

Wow! $900 for about two-minutes of work! Not bad at all!

How to Earn 3% Cash Back on Your Credit Cards

On my post titled Over $700: I'm Going to Earn More Credit Card Rewards This Year, I had one reader state the following:

In 2007, we spent a little over $40K total with cards and earned $1,233 for an average of about 3%.

I asked him about how he did this as 3% is a pretty good return. He responded:

It's a hybrid approach and yes, there is a grandfathered 5% g/g/d Chase card involved that's no longer available--and I'm sure it's only a matter of time before Chase converts this to a 3% (3.75% if you wait to redeem) card. But even when that happens, I don't think it won't affect my % all that much.

So, here's the entire run-down:

• Chase Visa Rewards: 5% on g/g/d

• Discover: 5% on changing categories (currently airlines, hotels, car rentals this quarter)

• Costco Amex: 3% on dining out (all types of restaurants)/2% travel. We also did all our online holiday shopping with this card, as they had a special offer in December giving back 3% on all online purchases. (Watch your junk mail carefully, I almost threw this offer out.)

• Costco Business Amex: Don't have this one yet, but I'll be replacing the above Costco card with this when Chase kills my 5% card, as this will add 5% gas to above Amex categories.

• Chase Professional MasterCard: 3% on dining out (all types of restaurants), gas, office supplies, hardware/home improvement.

• Orchard Bank/HSBC MasterCard: This is the card of last resort since it offers 2% on EVERYTHING ELSE, but limits the rebate to $400/year ($20K in charges). So we're careful about using up our rebate on this one when we can get 2% (or more) on another card.

• We also have a few store-specific cards with rewards programs that offer 5% back in store gift cards/certificates that are essentially same as cash, since we'd be shopping at those stores anyway.

Most of the cards I've listed give back 1% for categories not listed, but I only charge appropriately with each card to earn the maximum available. Since I got the Orchard/HSBC card, NOTHING earns less than a 2% rebate.

I could do a little better by adding a 3(.75)% Chase card to cover a few more categories like cell-phone bills, but at this point that's probably overkill. When Chase forces me into that card, I'll make that work.

Anybody who's not averaging 2% on up to $20K of charges ought to seriously re-examine their "strategy" since that can be easily attained using just one card.

A few thoughts from me on this:

1. Yes, you can certainly earn a good return if you have a high-rate, grandfathered card that's no longer available to new users. Unfortunately, the rest of us can't get in on this action.

2. Personally, there's a "hassle factor" that I don't want to deal with. Two cards is the maximum I'm willing to deal with. Having, managing, and using an extra 5-10 cards to get a bit more back, simply isn't worth the effort.

3. He's right on the 2% issue. Personally, I think I can get to 2.6% with two cards. I'd probably be higher if I had $40k in charges like he has.

4. I wonder what his return would be without the grandfathered cards. I'm guessing it's probably somewhere near the 2.6% I'm shooting for with two cards.

More on Why You Shouldn't Quit Your Job Until You Have a New One

There were several good comments left on my post titled Career Reminder: Very Few Jobs are Worse than Unemployment including a few real-life examples of what can happen when you do quit without a job. Here's the first:

True. Very true. I quit my first job out of college "Johnny Paycheck" style. It felt great for about a day or two, and then I kicked myself the next 178 days for walking away without any good options. The real kicker: the new job was at a 20%+ reduction in salary! You've been warned: stick it out, no matter what.

Yep, that's exactly my point. If you leave without another job, it's likely that 1) it will take longer that you thought it would to find a new job and 2) your pay will be lower than it was before (as time goes on, you're willing to accept less and less pay.)

Here's a comment that proves these points again (though he didn't quit -- the position ended):

This is quite simply, excellent advice. Your best chance of getting a large increase is to give the perception that you are happy in your current job.

I was working for a startup making $145 k a year and the job folded. I looked and another company offered me $95K per year. Turned that down. Another company offered $100K. Turned that down. 10 months went by and I started feeling frustrated. I finally accepted a job at $115K a year which hurt but no choices left. It took nearly 3 years to get back up to where I was before the previous job folded.

Let's turn now to someone who took my advice and worked through a tough situation:

That reminds me, I owe you a belated thank-you. Your September 6th post convinced me around that time not to quit my HORRIBLE job without something definite in the works. It was really hard to grit my teeth and bear it, but I did, and I'm glad. So, thank you!

Good for him/her!

Of course, not everyone who leaves a job without another one ends up in worse shape. Consider this comment:

Having done exactly what you tell people not to do, and been very successful, I still agree with the general notion that you should not quit your job without another one. I found a job FASTER than I wanted to, but for most people that won't happen.

I do make a lot of money, and was fearful of not finding something that paid as much, but I was certain I wouldn't take a huge pay cut (I actually make a good bit more now).

I was very secure financially though. I could go years without a job and probably still be OK. So I knew I wouldn't fall into the trap of having to take something less than I wanted.

My thoughts on this:

1. Yes, there are always exceptions to any rule, but in my experience quitting without another job is a recipe for a rough financial time.

2. "I still agree with the general notion that you should not quit your job without another one." He did otherwise, but agrees with the advice. Good.

3. "I found a job FASTER than I wanted to, but for most people that won't happen." Exactly -- for most people that won't happen.

4. "I could go years without a job and probably still be OK." Yes, if you can go years without an income, you have a lot more options available to you. Most people don't have this sort of cushion.

Sell Drugs, Make a Fortune

Here are some comments left on my post titled Top 10 Overpaid Jobs:

Add pharmacists to this list. Yeah, I know I'll probably get a lot of flack from this comment but I feel it's true. Twenty-five year old PharmD's, fresh out of school, are making up to $60/hour plus TRIPLE time for working major holidays (such as Christmas). I have a coworker who's son graduated as a pharmacist in June, 2007 and began working for CVS at $55/hour!!! Not to mention his son received a $30,000 sign-on incentive!!! It's ridiculous how much money they make (at least for retail pharmacists).

I'm a bit jealous, because my coworker's son was only in school for five calendar years to earn his PharmD (he's a bit of an overachiever) -- but still, my jealously aside it is a ridiculous amount of money for a profession that can easily be automated.

Oh, I forgot to mention that CVS retail pharmacists that work the overnight shift can earn 20% more!!

Maybe I'll go back to school to earn a PharmD and ride the gravy train.

Wow! I knew pharmacists earned a good living, but I didn't know it was this good. That's a GREAT starting salary! But I wonder if it kind of levels off as the years go on. Is there lots of upside in this position?

Another reader left this in response to the original comment:

The reason pharmacists make what they do is because there is a LACK OF SUPPLY. If tons of students were going into pharmacy the pay would obviously drop. I went to a school that had a big pharmacy program (Rutgers). What you typically saw was the people who went into pharmacy were people who wanted to go into medicine but not put in the work or want to deal with the competition of going to med school or dental school (which was typically the next choice for people who couldn't get into med school).

Also people think that pharmacists just dispense medicine but that is extremely naive and an uneducated assertion. I know a number of pharmacists (my family and friends circle is full of them) and they really have to know and understand every single drug and all its interactions with other medicines, etc. Pharmacists are correcting erroneous prescriptions written by doctors all the time. The fact that the person who is responsible for giving you the right medicine and making sure it is safe for you given your profile and other medicines you take is making a fairly typical middle to upper-middle class salary shouldn't upset anyone. $60/hour works out to $120,000 per year - big whoops. Not exactly raking in the dough.

Ok, I agree that you want someone who knows what they're doing dispensing medicine, and it's worth the high pay. I'd disagree that $120k is not that high. It's a good salary -- especially for someone right out of college.

Finally, the first commenter left this response:

Yeah, I knew I'd get dinged on the pharmacist comment I made. "I know a number of pharmacists . . . and they really have to know and understand every single drug and all its interactions with other medicines, etc. Pharmacists are correcting erroneous prescriptions written by doctors all the time . . . [and] giving you the right medicine and making sure it is safe for you given your profile." Pharmacists provide a valuable service, please don't get me wrong. I just think the compensation far, far outweighs the job. But, as the above commenter suggested, it is all about supply and demand. Demand for retail pharmacists is very high and supply is very low.

So, what's your take on the issue? Anything to add?

Make Money by Selling Your Old Coins

I've previously suggested that you can make money by selling stuff you own. A reader of my post titled $10k Challenge: Make Money at Auctions just did this. Here's what she had to say:

I actually made over $400 in a month by selling stuff on ebay from around my house that I simply wasn't using anymore. But I did research first to see if similar items were getting bids and how much they were selling for so I wouldn't be out any seller fees. It pays to do your homework.

Think of all the stuff you have in your house that you're not using. Why not sell it, clear out some space, and earn yourself some extra cash to boot?

One idea I particularly like is looking at your old coins and seeing if they are worth anything above face value. Flexo details how to determine the value of a coin and this is something I'm definitely going to be looking into this year. I have several old coins that I collected as a kid/teenager as well as some coins we received from my wife's father when he died. I think a few of them have some potential. Who knows, maybe there's a half-year of college for one of my kids waiting for me in a box downstairs. ;-)

Simple Trick to Help You Save Money

Here's a useful tip left as a comment on my post titled Idea for Saving: Put Your Change in "Savings" Every Night:

If you keep close tabs on your expenditures in a tool like Quicken, there is a way that you can simulate a loose-change piggybank. First, create a rolling transaction in your checking account dated a month in the future and with a category of "Loose change". Every time you enter a transaction, determine how much change would be required to take you to the next dollar. For example, if your grocery bill is $92.73, your "change" is $0.27. Add $0.27 to your rolling "Change" transaction to set it aside for investment and make sure it won't be spent. Then, once a month, take all the money you've set aside as "Change" and move it to your savings account or some other investment vehicle. I haven't tried this yet but it's pretty tempting and I might do it at some point.

I'm not big on "tricks" like this to make me save (I don't have any trouble saving on my own), but I do understand that many people need/could use something like this to help them accumulate a good amount of money during the course of a year.

How Much Would You Need to Quit Your Job?

Well, the verdict is in and it looks as if most readers would quit their jobs if they won the lottery.  I'm not really surprised by that -- having lots of money opens up completely new doors that allow some pretty cool decisions to be made/considered.

One reader put a spin on my original question and came up with an intriguing question of his own:

Perhaps the better question is what amount (after tax) is your tipping point. I'm 42 and have four girls ages 2-10. Without getting into to the detail, $2.5MM (rounded to the nearest half million).

Good question, huh? I'd follow it up with, "And how close are you to reaching that goal?"

For me, I think I'd need $2.5-$3 million. I'm not going to go into great detail in this section on how close I am to reaching that goal since I'll be covering that issue in my year-end net worth wrap-up. But I will say that I think it's possible for me to significantly downsize (if not quit work completely) in the next 7-10 years (somewhere between age 50 and 53.)

How about you? How much would you need to have to be able to quit your job? And how close are you to reaching that goal?

Government Welfare Versus Personal Charity

Here's a thought-provoking comment left on my post titled Welfare "Joke":

I think we should take care of the poor as well, but it should be through charitable organizations, not the government. The government is a wasteful organization. Twenty dollars to the government would probably provide $10 in welfare benefits. The same $20 to a charitable organization would provide $15 to the needy.

Wow! How did he pack so many thoughts into four sentences?

So here are a few questions for you all to consider/comment on:

1. What's your take on government welfare versus personal charity? Should it be the role of government to help the poor and needy or should individuals do it?

2. If you think individuals should care for the poor, do you think such a system is practical in today's society?

3. Should people be forced to help the poor at all?

4. Is the government really wasteful? Would charities be more efficient? Would businesses?

Chime in with your thoughts. I think this can lead to some interesting and worthwhile discussion.