Questions About 529s, Dollar Shave Club, Solo 401(okay), Nagging Coworkers, and More!

Posted On Aug 14, 2019 By admin With Comments Off

What’s inside? Now are the questions answered in today’s reader mailbag, boiled down to epitomes of five or fewer messages. Click on the number to climb straight down to the question. 1 . 529 for child without imprisonment 2 . Advising friends without being pushy 3 . Found the furniture-selling article! 4 . Notable aspect of fund markets 5 . Never want to retire? 6 . Paper journal versus Day One? 7 . Dollar Shave Club or alternatives? 8 . Lower APR but higher remittances? 9 . Maxed out Roth without 401( k) 10 . Investing in specific companies 11 . Coworkers nagging about babe sales 12 . Cutting out time wasters

One of the questions in this week’s mailbag deals with using paper versus digital, and it actually shaped me reflect on that comparison quite a lot this week. I actually reached the end of a 500 page journal that I had literally filled with writing, compelling me to switch to a brand-new journal, so I spent some time thinking about the times when I use article to write things down and when I use digital tools.

The truth is that, even though I’m a writer and I deplete tons of epoch each day at a computer writing, I just favor newspaper for a lot of things. Paper writing stimulates things to stick in my thought better. I work out impressions better on paper. I dig into this a little more in the issues below, but I just think article generally succeeds far better for me for most things.

The question I’m really dealing with now is the use of a stylus. I use an Apple Pencil on my iPad for a lot of things and I feel like it gets me about 90% of the benefits of using paper and it’s definitely easier to save and place trash, yet for some reason I can’t relatively figure out I still pick article reasonably often. I haven’t fairly pieced this out hitherto. Is it habit? Is paper really better than a stylus for me? I’m not sure, but I know that I wish both article and stylus to typing when I’m trying to figure out something or working here out in my head.

Anyway, on with the questions.

Q1: 529 “for childrens” without detention

Am I allowed to start a 529 for two daughters if I don’t have custody of her? Or does one have to be started in my ex’s name? I don’t want her to have control over that money.- Eric

You can start a 529 with anyone you wish as final beneficiaries. From the IRS:” You can set one up and specify anyone as a beneficiary — a relative, a friend, even yourself .”

You are the owner, so you maintain full control over the money in the history. You are always free to withdraw your contributions. However, if you withdraw earnings for purposes that aren’t related to the education of the beneficiary, you will owe taxes on the earnings plus an additional 10% sanction. If you withdraw earnings for educational purposes for the beneficiary, it’s duty free.

So, mostly, if you want to do this, recognise that the money is going in there for your daughter’s education. If it’s your report, only you( and, to an extent, your daughter) can touch that fund – your ex can’t do anything about it. However, if you reform your imagination later, any raise in the money you put in the history( interest, dividends, etc .) is not only fully taxable, but also has an additional 10% disadvantage, and you’re going to be on the hook for that.

Q2: Advising friends without being pushy

My husband and I are by far the most financially fasten of almost everyone in our friend group( despite realise less coin than most of them ). We devote, save, and continue our spending in line with our priorities. We have learned a ton about personal investments over the years through diaries, blogs, and personal experience.

Meanwhile, a lot of my friends are struggling with spending more than they earn , not tracking overheads, and not doing anything to pay off their obligations. They tell me that I’m lucky to be able to travel and do other things that I want to do, but I’m only able to do that because of my monetary knowledge.

When I be learned, I want to share it with other beings, and I really want to help my friends see that they can drastically improve their own lives if they’re willing to learn just a bit about commerces. I feel like I’d be in a good plaza to teach anyone who was interested in turning things around. I know that parties won’t modify unless they want to, but I crave my friends to know that I’m available to help them with finances if they ever want to try to work that vary. The difficulty is, how do I render this help to my friends without look pushy , nosy, or know-it-all?- Laura

This was the exact conundrum I ran into when Sarah and I were turning our financial life around. We had be paid for a assortment of debts and were clearly heading in a positive guidance. Very abruptly, we started from being unable to pay our statutes to having a bunch of debts eliminated and check a direct direction to its ownership, things that our friends were struggling with, and we wanted to tell them about it without feeling like we were bragging or being pushy.

The Simple Dollar effectively started as a newsletter to those kinfolks. I wrote up a assortment of articles about different aspects of our turnaround and sent the URL out to a bunch of my friends. Quite a few of them read it and passed along links to their friends, and that’s honestly how The Simple Dollar went started.

Perhaps you could start by simply sharing links to clauses with one tonne of good opinion you is in agreement with on your social media accounts. Share a few great essays on Facebook or Twitter with a few convicts from you about how this article sums up what’s working for you. Don’t overload on it, but post various over a period of time.

You’ll probably is of the view that a friend or two wants to engage in more discourse on the subject, and those are the ones to really direct your efforts toward. Your other friends are either not interested , not ready to make changes, or don’t feel cozy having those communications, and that’s fine.

Q3: Found the furniture-selling article!

I experienced the commodity today. I think this is the original article the book was referring to: http :// money.com/ fund/ 5448566/ grounds-and-hounds-jordan-karcher-interview /– Hannah

Thank you! The other book who wrote in didn’t include the publication. I did some Google searching and even protruded around on that Money Magazine site, but didn’t find it.

The article I wrote in which this Money Magazine article was referenced without a connection was this one: Selling off Your Furniture( and Other Surprising Foresees ). The clause had been referenced by a reader, but I couldn’t actually find the reader’s source. The actual essay itself wasn’t particularly important to what I was writing, so I exactly exited with it anyway.

Still, the Money article is worth a speak. It’s interesting to see how something like selling off furniture can become seed money for an entrepreneurial venture.

Q4: Remarkable facet of money business

Just read today’s affix about a money market account. The one important piece you forgot to mention was money market accounts restriction have a limit on the number of checks you can write per month. The Federal Reserve Regulation D limits “youve got to” six transmits and electronic fees out of each MMDA or savings account each month.- Angela

This was from the first question in last week’s mailbag, and Angela draws up an important point.

This withdrawal limit is why money market accounts can’t be used as a replacement for checking accounts. You can only meet six withdrawals a few months, max, so if you’re using it to pay statutes, you’re going to quickly run out of withdrawals.

A money market account is NOT a substitute for a checking account. Rather, it’s more of a substitute for a savings account. If you decide to use one, make sure that it’s FDIC protected. In general, fund groceries are pretty same to savings account, except that they offer a higher interest rate that tends to be more variable over time.

Q5: Never want to retire?

I’m 46 and single and never intend to marry or be in a long term relationship. I like my quiet time too much. I adore my job and intend to keep working there until they cart me out the door. Social work is the thing that does me out of bed in the morning and has been for 25 years and I don’t see it altering. I am used to get by on a small salary and I am sure I can make it on Social Security and a little bit of Roth IRA that I have saved up. What is the rationale for saving any more than that, especially when my income is low and I want to work forever?- Renee

Here’s my sole counterargument for retirement savings. What precisely do you do if you reach age 60 and they tell you that you’re no longer needed? Are you able to get another social work job readily at that point? Are there fresh hires in your battleground in their 50 s and 60 s? That’s the picture you need to be considering.

In that situation, money in your Roth IRA will help you bridge the gap until Social security systems knocks in.

Don’t think of your Roth IRA as rectifying you up to quit your job. Think of it as a security blanket for when your job doesn’t exist and you’re unable to secure a new one in the field you’d like. The coin in that Roth might enable you to volunteer in your arena or take a lower-paid position that you’re fierce about.

Q6: Paper journal versus Day One?

Is there any reason to use a paper journal these days when you have tools like Day One on your telephone that can sync between maneuvers and is password protected?- Danny

I use Day One to record life occurrences that I want to remember in the future. Usually, it’s silly things like going to go for ice cream with the babies or odd highlights of our vacations or things like that, things I’ll be happy to see in five years. If that’s your purpose, as something of a” life log ,” Day One is great.

I use a newspaper journal for a completely different purpose. I use it to work through my gues. If I’m troubled by something, I write it out by hand, and I find that very consistently this process promotions me figure out what to do about that perturb in my life. I use work practices called ” morning sheets” where, at some spot in the early morning, I gave a timer for 30 minutes, open up a paper journal, and merely dump out whatever’s on my intellect. I generally end up coming up with a handful of things to do in the coming days that really address some problem that’s bothering me, and it feels truly … cathartic.

I find that typing out my thought processes really doesn’t help in the same way. There’s some the linkages between my brain and actually working a write or stylus that unlocks words of thinking that typing simply doesn’t. That’s part of the reason that I often take notes by hand when reading a challenging journal, because it just unlocks things that typing for notes doesn’t. This is actually a real thing- NPR plowed it well and showed that there are real cognitive and learning helps for taken due note and writing things out by hand versus typing if you’re aiming to learn. Typing is better for simply recording things, whereas writing by hand is better for envisioning through things. Perhaps that’s why so many parties seem irritable online- they type out their thoughts and thus don’t give their commands the believed they deserve.

Q7: Dollar Shave Club or alternatives?

Does Dollar Shave Club or any of the other razor subscriptions actually save money?- Jarrett

It depends on what you’re comparing them to.

I’ve put-upon both Dollar Shave Club and Harry’s. Both cater basically the same service- they carry you razor cartridges and other shaving tools( as is necessary) by mail on a regular basis. In words of costs, they’re both cheaper than buying Gilette cartridges at the collect, even at a storehouse squad, and they both add a higher character product.

However, they’re both more expensive than exercising an old-fashioned safety razor. Also, at least with Dollar Shave Club, most of the products you get are actually manufactured by Dorco, and you can get the same accurate produces from the Dorco website for less money( and different branding, of course ). Harry’s appears to use rebranded versions of Schick commodities, but I can’t find an online root for them.

If you shave daily with a cartridge razor, use the cartridges for less than a few weeks, and are buying them at the collect, DSC and Harry’s are both going to save you some fund while at the same time ensuring mostly the same shaving experience. However, if you use another kind of razor or take more than a couple of weeks to been through a cartridge for your razor, you probably won’t save money with them.

Q8: Lower APR but higher remittances?

So I was about to finance a auto last week and they offered me several different loan options that didn’t make any sense. Lower APR is supposed to be better, right, but the loan with the lowest APR had the higher remittances. Is high-pitched APR good? Thought you missed interest rates to be low on credits.- Chris

If you have two loans of the same length- 48 months, 60 months, whatever- the one with the lower APR will have lower pays. Nonetheless, if one credit has a shorter length, it will still probably have higher remittances even if it has a lower APR.

Let’s say you need to borrow $10,000. You are offered a 24 month credit at a 3% APR and a 48 month loan at a 5% APR.

With the 24 month loan, your monthly fee is likely to be $ 429.81, which seems high-pitched, but you’ll actually exclusively be paying $ 10,315.49 over the course of the loan. The total interest you’ll fee is only $315.49.

With the 48 month lend, your monthly payment will only be $ 230.49, which seems much lower, but you’ll actually to pay off $ 11,054.06 over the course of the loan. The total interest you’ll salary with this plan is $1,054.06.

With the longer lend, though, you’re making twice as many payments. Every two fees on the 48 month loan is the equivalent of one remittance on the 24 month loan in terms of getting rid of the debt. With the 24 month credit, a single payment is $429.81, but with the 48 month loan, if you lend two payments together( so that it’s kind of equivalent to a 24 month loan ), it’s $460.98. In other terms, you save about $30 per pay by participating in the 24 month loan.

In other words, by taking the shorter loan with the highest monthly payments, you paid for the credit a lot faster and end up paying less interest and less coin overall, but the monthly payments are a lot bigger. If you can handle those higher pays, you will save money over the long run.

Q9: Maxed out Roth without 401( k)

I am a 1099 work and have maxed out my Roth IRA in both 2018 and 2019. I want to save more for retirement but don’t know what to do next. No clear online guidance for this other than people who seem to be shilling for their asset products. Advice?- Vincent

My recommendation, if this is your exact situation, is to use a Solo 401( k ).

A Solo 401( k) is mostly designed for you. It’s an individual 401( k) programme designed for a business owner with no employees, which is exactly what almost all 1099 workers are. It should certainly high-pitched contribution restrictions ($ 56,000 per year as of this year, with an additional $ 6,000 if 50 or over ). You can close whether to make it traditional( intend you lend pre-tax dollars, lowering your taxes right now, but you have to pay taxes when you withdraw later in life) or Roth( wanting you lend post-tax dollars, but don’t have to pay taxes when you withdraw ).

Most online intermediaries furnish these notes. I recommend exploiting Vanguard or Fidelity( relation go straight to their solo 401( k) pages ).

I have one for myself for fund that is beyond my Roth IRA, Sarah’s Roth IRA, Sarah’s workplace 403( b ), our children’s 529 accounts, and a taxable report( so the solo 401( k) doesn’t catch a whole ton of coin each year ).

Q1 0: Investing in specific companies

What is your advice to someone if they have a specific company they actually believes in and want to invest in? You have just said that individual furnish investing isn’t a good mind for most people, but what if there is a company you really reckon has a strong future and the stock is undervalued?- Davis

I don’t have any objection to this provided that you are saving adequately for your personal commerce destinations and don’t have any high interest indebtednes before you invest in this way. This kind of investing should be done with money that you’re not relying on and from a position of personal commerce stability.

Back in the early 2000 s, shortly before I graduated college, I really wanted to invest in the Google IPO and too buy Amazon and Apple stock. I felt, right then, in about 2001 or 2002, that those companies were going to dominate the tech future, but I didn’t have any fund. If I had some fund then, I would have thrown fund at those companies because I believed in them.( I wouldn’t do this now, as those companies are already fairly enormous .) So, I do understand the desire to invest in such companies.

Having said that, such a move is inherently risky. It’s not the kind of risk you want to add to your” fortress of solitude”( the money you’re really relying on for the future ). Don’t disturb a stable future to shoot something like this. However, if you do have the save fund, go for it.

Q1 1: Coworkers nagging about offspring auctions

I have various coworkers in my agency with girls. Several days a year they all come in with various auctions containers for their minors activities and pretty much insist that everyone buys something. If I waste $10 on each marketing, that’s literally $300 -4 00 a year that I don’t want to be spending and it’s hard to even find substance for time $10 that isn’t terminated debris. My boss makes a big deal out of it and acts like this is a big way to build office camaraderie. I wouldn’t mind it so much if I had babies and everyone was buying from my kids too but I feel like I’m being sucked cool by the parents.- Dawn

If this were not being so strongly am in favour of your boss, I would suggest talking to HR about it. However, doing so in this situation might generate some workplace issues that you don’t want to deal with, so I’d abuse a different approach.

The first step I’d do is to assess the place where I make carefully. Are you the only single person in the part? Is literally everybody else a mother who is engaging in this behavior? If that’s the case, you might want to consider looking for other work in your orbit, as this may just be a case of a position culture mismatch.

On the other hand, if this is just a portion of the people in your workplace and there are a lot of other single people or married people without adolescents, talk to the other kinfolks without girls privately and see how they feel about the barrage of auctions.

If you find that there are a lot of people who feel the same way as you, then I would start refusing the sales or at least suggesting little direct solicitation. Ask the people to kept their sales materials in the break area so you can decide on your own if you want to buy Girl Scout cookies or wrapping paper for their child’s soccer unit( we get hit up by the wrapping paper thing reasonably often ). If they’re still insistent, exactly refuse politely and suggest that you feel overwhelmed by the sheer number of requests and that other non-parents likely feel the same way.

A good coming might be to say that you’ll buy one thing a year from each coworker’s child, but that you’re simply not interested in everything. I have no problem buying a box of Girl Scout cookies or some wrapping paper once a year or so from a neighbor’s child, but if it were a monthly solicitation, I’d probably remain my door slam.

Q1 2: Cutting out time wasters

I am pretty much addicted to incremental games that can be played in a web browser like Cookie Clicker and Sandcastle Builder. I intend to just let them run in the background but I end up toy them for hours. I tried exercising impede software but I exactly end up finding a new one and” playing it for a while .” Advice? It’s eating severely into my job.- Barry

My first question would be whether you need a web browser at all for your work. If you don’t need one, then delete it entirely.

If you do need it but simply for a handful of places, talk to your IT party at work and tell them that you want to set that up on your computer. It’s a pretty simple task- time made to ensure that the schedule of websites you miss left unblocked is thorough so you’re not perpetually asking the IT people to add more locates to your “whitelist.”( Whitelist is the term for sites you’re allowed to visit when everything else is blocked .)

I actually do this for myself and have a handful of areas totally blocked during the workday, ones that I know are addictive but also not helpful for my job. I have a wrote on my computer that blocks those websites starting at 6 AM and unblocks them at 4 PM each day. If I try to visit them, I merely get a” site not available” send. It truly helps.

Got any questions? The best route to ask is to follow me on Facebook and ask questions immediately 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 countless, many questions per week, so I were not able to undoubtedly be able to answer yours.

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