Get Your Money Questions Answered At Moolanomy

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Every has questions about money every now and again. I hoped people might make use of the contact button under my logo, but it seems most would rather have a root canal. That's fine. You still aren't going to get away without getting your questions answered. Moolanomy Answers is here to make sure of that.

You might know Moolanomy from his very popular personal finance blog... or one of several hundred concurrent projects he runs. Those projects range from Personal Finance Buzz, a place to vote up your favorite personal finance posts, to Blogthority, a resource dedicated to all things blogging. To be brutally honest, his lack of Laziness bugged the poop right out of me. He is very much Bizarro Lazy Man. I got over this bitterness though. We are on the same team - trying to help people better manage their money to live well and be happy.

Getting back to Moolanomy Answers, you can either ask questions, or if you think you are Mr. Smarty Pants, give a shot at answering questions. By answering questions you'll earn points. For a limited time the points could win you an iPod Shuffle. Help people out and get a chance at free music? That sounds like a win to me.

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Money Question

Posted on June 26, 2009.

Reader Email: Help Me, I’ve Been Evicted!

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Every now and again, I get e-mails from readers asking for advice. I always stress that I'm licensed to give individual financial advice. However, I often opine with what steps I would take if I found myself in a similar situation.

This week's e-mail comes from Candi (as always names have been changed for anonymity and to stimulate readers' imaginations). I've paraphrased it to put a focus on the important information:

Hi, I briefly read some of your articles. I need financial help and don't know if you can help. I have made poor financial choices in the past. I am in debt and can't seem to get a helping hand.

  • I was a Prosper client in the past, but never was able to get funded. My credit score has dropped and therefore couldn't continue w/Prosper.
  • I am married w/ three children and a baby due in a couple of months.
  • I have foreclosed on an investment property and gotten evicted on the home lived in. I have no home of my own to live in and I'm very stressed out about this.
  • I am now trying to get a home to live in, but because of my past history can't even rent something. I was looking itno rent to own programs in my area and they want big down payments because of my eviction/foreclosure. I need $5,000-$8,000 for a down payment and would like to consolidate my debt.
  • My biggest debt is the family van w/ a balance of $17,000 and my husband's work car w a balance of $1,800. Both monthly payments equal to $680
  • I have various other personal loans, totaling $5,000.

If someone could just fund me what I owed and let me borrow the down payment for my home, I know I can get back in track. Ideally I want to only worry about a house payment and repaying whoever can consolidate my debts. I have a stable job working for the state I live in. I worked there for nine years. My husband also has a stable job as a wheelchair/elevator installer. I am very trustworthy and though my credit history might say something else. Please let me know if any help is available.

This e-mail hit me like a ton of bricks. Though the desperation seems obvious here, the unedited e-mail was even more explicit.

Often times I write about why America needs to wake up financially, but I don't typically have the pulse of the problems. They usually come to me in statistical form, not from a real person with a very real problem.

Here is my response to Candi (edited for "publishability"):

  • Transportation - How much is the family van worth now? What could you get if it were sold? I know you owe $17,000 on it, but perhaps if you talk to the dealership, you can trade it in for used Kia Sportage. If your current van is worth $14,000 to the dealer, perhaps you'll only owe $3,000 plus the price of the Kia. I'm seeing a 1999 Kia Sportage on Ebay for $1,600. This would take the total cost of your family van from $17,000 to $4,600. If your husband's work car is worth more than the $1,800 you might be able to sell it and buy a cheaper. If it's worth $6,000, you can sell it, pay off the $1800 you owe on it and have $4200 left over, enough for the Sportage or a good chunk of down payment. If nothing else these two moves should help you look better to landlords. It shows that you are willing to make moves to turn things around. I think at that point, with two steady jobs, I think you could draft up a very convincing piece of paper of income and debts that may make you seem like a better person to rent to. Here are some hints to Save Money on Cars, but in your unique circumstance, I wouldn't necessarily look to stick with the car you own.
  • Focus on the Basics - From the desperation and lack of home, I think Candi should focus on the basics like food, shelter, clothing, etc. Anything extra (like the cars) has to protect their income and that's all.
  • Sell Anything Extra of Value - This is much like the above advice. If you are homeless, you won't have a place for the stuff, so you might as well sell it. As George Carlin once said, "A house is just a pile of stuff with a cover on it - That's what your house is, a place to keep your stuff while you go out and get - more stuff!" If you have less stuff, you can get a "smaller cover" which will be cheaper. It's a financial win-win - you make money from your stuff and save money storing it.
  • Look for Outside Help (community/friends/employers) - Religious institutions can help in situations like this. Other times a friend can help. Perhaps one of your employers can front you some money for a place to live. You'll then have to live on limited income for a bit, but if you reduce your monthly expenses, you could do okay.
  • Look to Eat Cheaply - There are a lot of cheap foods. A diet of beans and rice might not be ideal, but people have historically lived on much less. Just be sure to add a little fruit and maybe some cheap meats to get more nutrition. I know a lot of people who get a lot of expensive junk food.
  • Make a Game of It - It's going to be tough with 3.8 children. When I was little, my mom used to include me in the bargain shopping. She'd have me on a treasure hunt to find coupons that could save money. I'm the first to admit that I was weird, but this was FUN. The best part was the receipt at the end that showed how much we saved. Using simple division to determine the percentage of savings, I had two scores (net and percentage savings) to try to beat the next time we went shopping. I got very good at math as an added bonus. One might also draw a similar parallel to some parenting tactics displayed in Life is Beautiful.
  • Day Care? - If you have three kids (and the fourth one coming), it may make sense not have a job and save on day-care expenses. I don't know if you have this expense. If you are making $24,000 after-tax on your job and require a car, professional clothes, etc... and day care is costing you $20,000 it may make sense not to work.
  • Exercise (though check with your doctor since you are pregnant) - This sounds extremely bizarre. However, in the situation you are in, it's
    easy to get depressed. Exercise is very good at making you feel better than yourself. Many times it's free. Plus if you are eating cheap foods, exercising may help maintain your overall health - again check with your doctor. (This message was brought to you by Lazy Man and Health.)

So there you have it? Did I miss any obvious things? What would you recommend?

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Money Question

Posted on July 23, 2008.

Chat Live With Lazy Man Today

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[Update: You'll need to be a member of the site to join the chat. Sorry about that. I didn't know this going in and don't like it any more than you do. Perhaps you use Bug Me Not for quick access.]

For those of you who can't get enough of my near daily postings, I'll be serving up an hour of live chat today - from 7-8PM ET. I'm answering questions for Grab.com's Live Monthly Chat. For more information you can see please check out this page. If you'd like to join the chat, click on this direct link. The direct link might not work since you have to sign up. It's best to refer to these full instructions. It my first time experimenting with anything like this; I don't know how successful it will be.

If you aren't in your 40's, that's fine, simply come anyway - the page says it's for all pages. I'll be co-hosting with Jeremy of Generation X Finance. Since he is the expert, I'm going to defer any tough questions to him. I'll be jumping on any easy pitches down the middle in an attempt to knock it out of the park. Also, I'm not a financial expert, I don't even play one on TV. Just because I like to throw a football every now and again, it doesn't mean that I'm going to be complete 26 of 28 passes in the AFC Divisional Game. Enough of the sports analogies. If your question is important to you, I suggest you see a professional.

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Money Question

Last updated on August 1, 2011.

Money Question: What Would you do with a Windfall? Part 4

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Money QuestionsThis is the final part of this Money Question series. If you missed it, catch part 1, part 2, and part 3. I asked several bloggers the following question:

Where is the single best place to invest a $50K after-tax windfall now? Assume the following: you don't need the money for at least 10 years, you've already max out 401k and Roth IRAs. Pretend that the windfall came under a couple conditions... 1) You can only invest it in one area. 2) If your investment doesn't make 6% a year you lose it all.

I had a purpose with the stipulations. I was hoping to coerce the bloggers into coming up with a typical investment that might be a bargain right now. In my opinion many investments are currently getting too "expensive" for their prices. I have no interest in many stocks and sectors as they are near the top of the market. Gold has had a huge run-up over the last few years. The dollar seems to be getting weaker every day. Median home prices in my area are 870K. That eliminates any real estate investment for me, because I already do the long distance landlord thing and I'd probably get out of that game if it wouldn't cost me thousands of dollars. Commodity prices seem to be soaring by all accounts.

I had been teasing with the answer that I would give. I'd be tempted to invest with Prosper basically because there seems to be a lot of demand from overextended Americans. I've also done much better when I've reviewed my strategy over the last 6 months. However, I'm not quite that confident to put 50K to work in Prosper. When I originally planned the question, Pharmaceutical HOLDRS (symbol: PPH), was looking like a bargain. It's had a run-up in the last couple of months, and it's now looking expensive like many other companies. I then looked at Vanguard's Healthcare ETF (symbol:VHT) and that looks more promising to me. It's still up around 19.5% this year, so it doesn't fit my bargain hunting criteria. They say the third try is the charm. I found Biotech Holders (Biotech HOLDRS:BBH). It's up only around 2% this year, so there's reason to believe that there's to grow. Over the last three years it's up 23% compared to the S&P500's 42%. The clincher was it's holdings - Amgen, Genzyme, I think these companies, and the sector in general, is well positioned for the next ten years.

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Last updated on June 16, 2007.

Money Question: What Would you do with a Windfall? Part 3

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Money QuestionsYesterday, I published part 2 of What Would You Do With a Windfall. If you missed that, it might be worth clicking on that link back there to catch up. What did I ask the bloggers? Simply this:

Where is the single best place to invest a $50K after-tax windfall now? Assume the following: you don't need the money for at least 10 years, you've already max out 401k and Roth IRAs. Pretend that the windfall came under a couple conditions (like Brewster's Millions)... 1) You can only invest it in one area. 2) If your investment doesn't make 6% a year you lose it all.

Sun from The Sun's Financial Diary responded with the following two possibilities:

Right now, I don't have any big plan (like owning my own business) in my mind, but if I could get a windfall of $50,000 or even $100,000, then I will use the money as part of the down payment to get a bigger house. Now that we have two children, our three-bedroom townhouse is kind of small. Though they can still share a room for a while (we have two daughters), we will have to buy a bigger one at some point and the extra money can definitely help. We'd love to get a single house with basement so the children can have space to play. Also, both my wife and I like to play table tennis a lot. We could setup a table in the basement for ourselves and that's like dreams come true.

If there's any money left after we buy the house, I plan to invest it for the future. Actually, I already have a target and that's Vanguard Total Stock Market Fund (VTI). I don't mind to invest in a lump sum as it's almost impossible that the market will be down in the next 20 or 30 years. Thus, if the money is available, making a lump sum investment is the best choice for the long term. Also, since the fund covers the entire US stock market, I will get the maximum diversification with a single fund, which is also very cheap.

Sun, I think you might lose your home, due to the Brewster's Million's clause. However, if you can sell it off at the end of 10 years for the 6% a year gain, it could work out - leverage is an amazing thing. As for VTI, I own it and can't recommend it highly enough. The only problem I have right now, is that I think the stock market (on a whole at least) is over-valued.

Golbguru of Money, Matter, and More Musings has a couple of ideas of his own.

Here are some of a few not-so-concrete thoughts I had since I started working on the question:

Option 1: I would love to use that money to start a *good* restaurant on campus (or very near to campus). A few semesters ago, we (me and some of my classmates) did some ground work (for a class) on what would be required to open a restaurant in our town ~ I would like to see some realization of those ideas. With the kind of numbers we played at the time, we estimated that we would break-even (with respect to the initial capital) in about 3 years ~ and the earning rate will increase more with increasing popularity (and increasing enrollment of new students). Plus, it's a university town - students are busy - they tend to eat out a lot and that works in our favor.

Option 2: Invest it in energy in a sort of "hedging" manner - gasoline, sun, wind, hydrogen, and nuclear. Like Henry (from Binary Dollar mentions in his answer - the demand for energy is never going to head down - gasoline may be replaced by hydrogen in the time to come - but you will need something to keep those millions of cars running. I don't know what kind of a returns this will give me...but since it's an unexpected windfall, I would be willing to take risks with it.

Going from 50K to 100K would definitely make me think more - although I don't think it will affect my choice much (if it were $1 million, that would certainly make me change my choices). The time factor will also matter a lot - technologies become old and new ones attract more attention - accordingly, I wouldn't want to stay rigid on the energy investment options. I would stay in the broad "energy" field, but my options would depend on what's hot at the time. With the restaurant, it doesn't matter if the time frame is 10 years or 50 years - if it's a good restaurant, it will be etched on people stomachs for ever. :)

The restaurant idea is pretty interesting. There are a lot of restaurants out there, so I've always discounted the idea. I figured the competition is too high and the audience is limited (by geography). The other side of the coin is that there are so many restaurants, they must be doing something right - right? As for the energy, I like the idea overall, but I'm glad you are willing to take some risks with it. That was the spirit of the exercise. I should have probably asked for more than 6%, but I didn't want to limit too much and I wanted to eliminate the high interest savings accounts.

Let me know in the comments, what would you invest in? Can you guess what I would invest in? I'll give a hint, it's not Prosper (at least under these restrictions). Expect my answer later today... or Saturday.

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Last updated on June 16, 2007.

Money Question: What Would you do with a Windfall? Part 2

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Money QuestionsEarlier today, I published part 1 of What Would You Do With a Windfall. If you missed that it might be worth catching up. What did I ask the bloggers? Simply this:

Where is the single best place to invest a $50K after-tax windfall now? Assume the following: you don't need the money for at least 10 years, you've already max out 401k and Roth IRAs. Pretend that the windfall came under a couple conditions... 1) You can only invest it in one area. 2) If your investment doesn't make 6% a year you lose it all.

Silicon Valley Blogger at The Digerati Life responded with the following two possibilities:

For our particular case, I have two options that come to mind with regards to what I can do with an extra $50,000 or even $100,000. The first is to follow in the footsteps of Ben @ MoneySmartLife with a similar strategy [editor's note: see part 1]: use the money to help continue financing the startup our family is trying to build at the moment. It would help us delay having to acquire any additional external investments that would dilute our ownership: self-financing would potentially allow us to reach a critical mass that could keep the business running on its own with positive cash flow. Of course, that's a dream at this point, but that additional $50K would get us there!

Secondly, I could also consider using the windfall to fund my second child's 529 account. Since my child is still very young, we would have almost 18 years before we would draw on this money. By virtue of a lump sum investment into a more aggressive area of the stock market, such as US small cap stocks or a combination of US small caps/emerging market exposure/foreign REITs, we may possibly fund his entire education on this one lump sum investment if the markets continue to be favorable.

Those are two great answers. What happens if markets don't continue to be favorable though? Well Henry from Binary Dollar has a plan for that:

I would invest my money into energy and various fuels. People really like driving cars and heated homes. The demand has never gone down for it. Another thing I would invest in would be lumber/wood. People sure love their toilet paper...

If that isn't some recession proofing, I'm not sure what is. It would offset the costs of his own use of those products as well. I wonder about the growth in such industries though.

Don't miss part 3 of this series.

Let me know in the comments, what would you invest in? Can you guess what I would invest in? I'll let you know in the conclusion of the series.

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Money Question

Last updated on June 3, 2007.

Money Question: What Would you do with a Windfall?

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Money QuestionsOver the past couple of weeks, I decided to go out and ask a few of prominent bloggers a question that's been on my weighing on my mind lately:

Where is the single best place to invest a $50K after-tax windfall now? Assume the following: you don't need the money for at least 10 years, you've already max out 401k and Roth IRAs. Pretend that the windfall came under a couple conditions (like Brewster's Millions)... 1) You can only invest it in one area. 2) If your investment doesn't make 6% a year you lose it all.

Why would I pick this one question of all the possible questions? Lately I have noticed that the typical places to invest seem "expensive." The Dow is setting new records each day. Recently it was up 22 of 25 days - something that hadn't happened since the 1955. With stocks at an all-time high, I would typically turn my attention to real estate. I like to buy out-of-favor assets at a bargain and real estate doesn't fit the bill - especially in northern California where I am.

Ben from Money Smart Life had this to say:

How someone should invest a $50K windfall depends on their current financial situation. Since we're pretty much squared away on the personal finance basics and have built a solid base of investments, I'd take a risk with the money and start my own company. It would definitely be more work than passively investing in the stock market, but I think the potential returns would be far greater.

How I'd use the money is best introduced with a short story. My dad is an avid jogger and an even more avid pack rat. Almost every day he finds something during the course of his run that someone has left on the curb for the trash man. His back porch is overflowing with "throw-away" items that someone, somewhere, might likely be able to use.

I think this story reveals that our country buys too much stuff which later translates into too much junk. If I had $50K fall in my lap I'd rent a warehouse with a storefront, buy some trucks, hire some drivers, and market our services. I'd charge people and businesses money to come pick up their junk and then I'd sell it off through eBay, craigslist, the storefront, and any other appropriate sales channel I could find. There are already companies that do similar things such as 1-800-GOT-JUNK but their franchise fees are over $50K. If I had $100K I might consider buying a GOT JUNK franchise, there just happens to be one available in my area. So if I happen upon a windfall, I'd likely use it to turn trash into cash!

I think Ben's idea is a terrific one and could set him on the road to freedom. In the process, he would make the world a cleaner place.

Don't miss part 2 of this series.

Let me know in the comments, what would you invest in? Can you guess what I would invest in? I'll let you know in the conclusion of the series.

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Last updated on June 3, 2007.

Money Question Bonanza

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I'm not sure what sum counts as an official bonanza, but for the purposes of this article, I'm going to go with two. A couple of other bloggers had been taking questions and took a couple of my answers.

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Money Question

Posted on May 21, 2007.

Miscellaneous Articles to Read this Week and An Announcement

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I wanted to call your attention to a few things this week:

Finally, it's time for the announcement... Lazy Man and Money is celebrating it's first anniversary today. I'll probably have more on this in the upcoming week or weeks when Compound Interest Week is over.

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Announcements, Carnival, Money Question

Posted on May 8, 2007.

Lazy Man Answers a Money Question

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First, I started giving a weekly review of my finances, soon after came guest posts and Personal Finance Weekend Reviews. Today, I've been included in the debut of the Money Question.

The concept is pretty simple. Someone submits a question and a few personal finance bloggers tackle it the best we can. By the end of the article the person asking the question has lot of ideas to explore. All the usual disclaimers apply, such as seek out a financial professional. This may be more true than usual because often the questions will come with only half the information.

So be sure you check out this week's Money Question. If you need a question asked send it to lazymanandmoneysignature.png

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Money Question

Posted on April 12, 2007.

 
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