Reader Mailbag: Local Flavor
What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Investing for five year goals
2. Music career crossroads
3. The price of fame
4. First steps with no credit
5. Buying a foreclosed home
6. Which retirement option is best?
7. Pet allergies and family
8. Budgeting and saving
9. Roll over or pocket?
10. Planning for a big change
I love the local flavor of an area that I’ve never been to before, even in the United States. The word choices. The accent. The local culture. The food. The selection at the grocery store. It’s all similar, but just a bit different, like a different spice hidden in a familiar dish.
My husband and I bought (what we think) is a starter home last year and we think that we’ll want to sell it in 5-7 years since the public school system isn’t great in the area (no kids yet, but trying to think ahead). Anyway, in case we sell the house for around the same price we bought it, I am thinking of ways to make our money work for us in the next 5ish years to help us with a potential larger down payment. I have about $7,000 in a couple of stocks (Johnson & Johnson and Schlumberger) and have about $3,000 in cash that I would like to put in a Vanguard account (and then plan on adding to it monthly). Since most of this is based on speculation and the future, it is tough to plan. All I know is I want to make this $9,000-$10,000 work to its full potential in the next 5-7 years and was wondering what your thoughts were on the matter.
- Krissy
Well, you have a choice. You can either take on a considerable amount of risk and put it into stocks with the potential of a good return (and the potential of returning nothing at all or losing some) or you can put it into something conservative and lock down a small return.
That’s really the investment choice we’re all faced with. There is no “best” answer. It depends on our goals and our needs and our personal risk tolerance.
The longer your timeframe, the better the stock market option is because it gives you more time to make up for the inevitable bad years (like 2008). Five to seven years is just about the perfect time to go through one bear market and one bull market, and depending on how strong the bull is and how strong the bear is, it could be a net gain or a break even or a net loss. If you can invest for longer – fifteen years or longer – you can ride multiple bears and multiple bulls and, over the history of the stock market, the average bull gains more than the average bear loses. It’s just that you can’t bet on that from individual bears and individual bulls.
If I were you, I’d probably put the money someplace conservative and focus on squeezing a few more dollars from my standard of living.
I am twenty four years old, and I just got married back in October 2009. I am by trade what you would call a “Professional Musician” or “Hired Gun” or “Artist”. I’m a drummer, and song writer. This is all I have done since I was a kid. I have had a record deal, had a national release, and some radio success. The difficulty with being a musician, outside the realm of it being a “hobby”, is that work comes then it goes, and success is not solely based in being good or even great, it comes through connections and who-you-know. Not to mention that living in a town like Nashville where there are a lot of other people doing the exact same things, it makes it even more difficult to get in the door, EVEN if you a extremely talented! My wife has been unemployed for almost a year, but is furiously looking for a new job. I have been playing music and working as a server at a restaurant since my wife and I married, but our lack of income is constantly frustrating! The problem is that if I go get a great paying job or go to school to get a better paying job and then an awesome tour comes up, I have to quit. My heart and all my passion surround playing music, but it ain’t paying the bills? We live off a budget, have some emergency savings, and are paying off the remaining 4,000 in debt we have. Do you have any suggestions?
- Caleb
You’re asking about a field that I know little about aside from some friends that have dabbled in the alternative music scene. I asked them what they knew and they gave me a few things to pass along to you.
First, they suggest that you tour, tour, tour. Play as many live shows as you possibly can, even if they’re free. When you’re there, make sure you have t-shirts and copies of your album and bumper stickers to sell to the people that are there. Gigs build a reputation and keep income coming in, so get as many as you possibly can.
Second, if you’re a drummer, seek out at least a singer and a guitarist you can partner with so that you’re in this together. You’re in Nashville – it shouldn’t be too hard to find others who are trying to find a break. Even if you eventually go your separate ways, you’ll have built a resume. Tour with these people and split the proceeds from the t-shirts and albums and bumper stickers among you.
Third, make sure you do have some sort of album recorded so that you can sell it at your shows, even if it’s recorded in your basement using a laptop and a couple cheap microphones. Learn how to use GarageBand (that was their suggestion for software). Give away some tracks online. Do some online promotion, too, like with a Facebook fan page for your band.
They seem to largely think that if your love is music, then you should be focused on that, especially if you’ve seen some degree of success with it already. Just live as lean as possible for now and see where it goes.
The thing that bothers me most is when I see famous people complaining about how hard their life is when they have everything they could ever want.
- Kathy
What you’ve got to keep in mind is that there is no life without problems. There is virtually no one who does not want something different.
People who have financial wealth have often traded other kinds of riches to acquire it. Perhaps they didn’t build a great relationship with their family. Maybe they broke off their friendships with a lot of people to get where they’re at. Maybe they had to abandon a dream. Maybe they had to work in a field that made them feel empty inside. Perhaps their career path led them to fame that they didn’t really expect which restricts their freedom to just walk down the street when they want to.
No one on this earth has the perfect life. They may have elements of their life that you wish you had in your life, but I’m willing to bet there are elements of their life that you would absolutely not want in your own. I would imagine they feel the same way about you.
It could be that the richest person in your neighborhood looks at a poor but close-knit family and thinks to himself that he would trade all of his riches for that. Meanwhile, the close-knit family looks at the rich man’s big house and the shiny car and thinks to themselves that they would give anything for that.
Everyone has riches in different ways and we all sometimes wish we had more in some areas of our life.
I’m a 27yr old married guy with a 6yr old daughter and another on the way any day now. I’ve never borrowed any money from anybody in my life – not a loan, not a credit card, not a pay day cash advance, nothing. I love it this way – my friends and family have paid thousands upon thousands of dollars over the years in interest payments, while my wife and I have lived relatively debt-free. The problem is, I’m a credit ghost. I’ve tried to get some low-limit credit cards or loans to start to raise my credit score, but no one will approve someone my age who has never had a spot of credit in their life. Apparently, being a 27yr old with no credit raises all kinds of flags in banking computer systems due to the high statistical probability of my being a faked identity trying to pull some kind of scam. I even had to bring my ID, Social Security Card, and Birth Certificate to the bank just to be added to my wife’s 15yr old pre-existing checking account! I want to try and build my credit up a bit because I’m interested in buying a house around my 30th birthday. Do you have any suggestions about what I can do to get started down that path?
- Brad
The first place I would start ...
