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

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




What’s inside? Now are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer utterances. Click on the crowd to climb straight down to the question. 1 . 529 for child without detention 2 . Advising friends without being pushy 3 . Found the furniture-selling article! 4 . Notable peculiarity of money groceries 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 corporations 11 . Coworkers nagging about brat marketings 12 . Cutting out time wasters

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

The truth is that, even though I’m a writer and I invest tons of age every day at a computer writing, I just elevate newspaper for a lot of things. Paper writing effects things to stick in my heading better. I work out doctrines better on paper. I dig into this a little more in the question below, but I just think paper generally runs considerably 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 material, yet for some reason I can’t quite figure out I still choice paper fairly often. I haven’t fairly pieced this out hitherto. Is it habit? Is newspaper genuinely better than a stylus for me? I’m not sure, but I know that I promote both article and stylus to typing when I’m trying to figure out something or work it out in my head.

Anyway, on with the questions.

Q1: 529 for child without imprisonment

Am I allowed to start a 529 for my daughter 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 coin.- Eric

You can start a 529 with anyone you wish as final beneficiaries. From the IRS:” You can set one up and figure 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 taxation free.

So, basically, if you want to do this, recognize that the money is going in there for your daughter’s education. If it’s your history, only you( and, to a limited extent, your daughter) can touch that fund – your ex can’t do anything about it. Nonetheless, if you deepen your recollection later, any growing in the money you lay in the history( interest, bonus, 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 ensure of almost everyone in our friend group( despite meeting less coin than the majority of members of them ). We vest, save, and prevent our spending in line with our priorities. We have learned a ton about personal investments over the years through books, blogs, and personal experience.

Meanwhile, a lot of my friends are struggling with spending more than they pay , not tracking expenditures, and not doing anything to pay off their debts. 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 business knowledge.

When I learn something, I want to share it with other people, and I certainly want to help my friends see that they can drastically improve their own lives if they’re willing to learn time a bit about investments. I feel like I’d be in a good plaza to school anyone who was interested in turning things around. I know that beings won’t alteration unless they was intended to, but I demand your best friend be informed that I’m available to help them with investments if they ever want to try to work that vary. The difficulty is, how do I render this help to my friends without seem assertive , nosy, or know-it-all?- Laura

This was the exact conundrum I ran into when Sarah and I were turning our fiscal life around. We had be paid for a bunch of obligations and were clearly heading in a positive direction. Very speedily, we departed from being unable to pay our greenbacks to having a bunch of pays eliminated and insure a direct track to its ownership, things that our friends were fight 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 folks. I wrote up a knot of articles about different aspects of our turnaround and ship the URL out to a cluster of your best friend. Quite a few of them read it and progressed along links to their friends, and that’s honestly how The Simple Dollar get started.

Perhaps you could start by simply sharing is linked to articles with one tonne of good suggestion you agree with on your social media chronicles. Share a few great essays on Facebook or Twitter with a few cases decisions from you about how such articles summarizes 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 exchange 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 conversations, and that’s fine.

Q3: Found the furniture-selling article!

I experienced the essay today. I think this is the original commodity the reader was mentioned by: http :// money.com/ fund/ 5448566/ grounds-and-hounds-jordan-karcher-interview /– Hannah

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

The article I wrote in which this Money Magazine article was invoked without a association was this one: Selling off Your Furniture( and Other Surprising Envisages ). The section had been invoked by a book, 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 precisely extended with it anyway.

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

Q4: Notable boast of coin business

Just read today’s berth about a money market account. The one important aspect you forgot to mention was money market accounts restriction have a limit on the number of members of checks you can write per month. The Federal Reserve Regulation D limits “youve got to” six carries-over 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 wreaks up an important item.

This withdrawal limit is why money market accounts can’t be used as a replacement for chequing account. You can only establish six withdrawals a month, max, so if you’re using it to pay invoices, you’re going to quickly run out of withdrawals.

A money market account is NOT a substitute for a current account. Rather, it’s more of a substitute for a savings account. If you decide to use one, make sure that it’s FDIC insured. In general, money sells are pretty same to savings account, except that they volunteer 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 placid time too much. I adoration my work and intend to keep working there until they cart me out the door. Social work is the thing that gets me out of bed in the morning and has been for 25 years and I don’t see it reforming. I am used to going 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 accurately 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 field 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 kickings in.

Don’t think of your Roth IRA as defining 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 fund in that Roth might enable you to volunteer in your environment or take a lower-paid position that you’re heartfelt about.

Q6: Paper journal versus Day One?

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

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

I use a newspaper journal for a completely different purpose. I use it to work through my think. If I’m troubled by something, I write it out by hand, and I find that very consistently this process facilitates me figure out what to do about that fus in “peoples lives”. I use a practice announced ” morning pages” where, at some quality in the early morning, I positioned a timer for 30 hours, open up a paper journal, and precisely dump out whatever’s on my thought. I typically end up coming up with a handful of things to do in the coming daylights that really address some problem that’s bothering me, and it feels certainly … cathartic.

I find that typing out my thought processes really doesn’t help in the same way. There’s some the linkages between my intelligence and actually using a write or stylus that unlocks threads of thinking that typing simply doesn’t. That’s part of the reason that I often take notes by hand when reading a challenging volume, because it only opens things that typing for notes doesn’t. This is actually a real thing- NPR embraced it well and showed that there are real cognitive and teach interests for taking notes 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 thinking through things. Perhaps that’s why so many parties seem incensed online- they type out their ideas and thus don’t give their terms the believed they deserve.

Q7: Dollar Shave Club or alternatives?

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

It depends on what you’re comparing them to.

I’ve exploited both Dollar Shave Club and Harry’s. Both provision basically the same service- they send you razor cartridges and other shaving tools( as needed) by mail on a regular basis. In calls of cost, they’re both cheaper than buying Gilette cartridges at the collect, even at a repository society, and they both specify a higher caliber product.

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

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

Q8: Lower APR but higher fees?

So I was about to finance a gondola 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 fees. Is high-pitched APR good? Thought you required 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. However, if one credit has a shorter length, it will still probably have higher pays even if it has a lower APR.

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

With the 24 month credit, your monthly remittance will be $ 429.81, which seems high, but you’ll actually only be paying $ 10,315.49 over the course of the loan. The total interest you’ll offer is merely $315.49.

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

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

In other terms, by taking the shorter loan with the highest monthly payments, you pay off the loan a lot faster and end up paying less interest and less fund 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 laborer 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 counseling for this other than people who seem to be shilling for their speculation concoctions. 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) design designed for a business owner with no employees, which is exactly what almost all 1099 works are. It has really high contribution limits ($ 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( necessitate you lend pre-tax dollars, lowering your taxes right now, but you have to pay taxes when you withdraw later in life) or Roth( representing you contribute post-tax dollars, but don’t have to pay taxes when you withdraw ).

Most online brokers furnish these notes. I recommend exerting Vanguard or Fidelity( connects 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 history( so the solo 401( k) doesn’t catch a entire ton of fund each year ).

Q1 0: Investing in specific business

What is your advice to someone if they have a specific company they really believe in and want to invest in? You have just said that individual furnish investing isn’t a good feeling for most people, but what if there is a company you really feel 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 finance purposes and don’t have any high interest obligation 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 investment stability.

Back in the early 2000 s, shortly before I graduated college, I actually wanted to invest in the Google IPO and also 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 money 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 emptines”( the money you’re really relying on for the future ). Don’t disturbed a stable future to shoot something like this. However, if you do have the give fund, go for it.

Q1 1: Coworkers nagging about youth auctions

I have several coworkers in my power with teenagers. Various ages a year they all come in with various sales containers for their kids activities and pretty much insist that everyone buys something. If I devote $10 on each sale, that’s literally $300 -4 00 a year that I don’t want to be spending and it’s hard to even find material for exactly $10 that isn’t terminated litter. 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 children and everyone was buying from my kids too but I feel like I’m being sucked dry 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 consume a different approach.

The first step I’d give is to assess the place where I use carefully. Are you the only single person in the office? Is literally everyone 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 field, as this is likely to only be a case of a department 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 children, talk to the other kinfolks without kids privately and see how they feel about the barrage of sales.

If you find that there are a lot of people who feel the same way as you, then I would start diminishing the sales or at least suggesting little direct solicitation. Ask the people to positioned their marketings substances in the interrupt area so you can decide on your own if you want to buy Girl Scout cookies or wrapping paper for their child’s soccer crew( we get hit up by the wrapping paper thing jolly often ). If they’re still insistent, time decline politely and suggest that you feel overwhelmed by the sheer number of seeks 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 formerly a year or so from a neighbor’s child, but if it were a monthly solicitation, I’d probably preserve my entrance slam.

Q1 2: Cutting out time wasters

I am pretty much addicted to incremental recreations 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 abusing stymie software but I exactly end up finding a brand-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 locates, talk to your IT being at work and tell them that you want to set that up on your computer. It’s a pretty simple task- really made to ensure that the inventory of places you require left unblocked is thorough so you’re not perpetually expecting the IT beings to add more places to your “whitelist.”( Whitelist is the term for areas you’re allowed to visit when everything else is blocked .)

I actually do this for myself and have a handful of websites totally blocked during the workday, ones that I know are addictive but likewise not helping for my job. I have a wrote on my computer that blocks those sites starting at 6 AM and unblocks them at 4 PM each day. If I try to visit them, I only get a” site no longer possible” send. It certainly helps.

Got any questions? The best lane to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag( which, by way of full disclosure, may also get re-posted on other websites that pick up my blog ). Nonetheless, I do receive many, many questions per week, so I were not able to inevitably be able to answer yours.

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