Q&A – IV: Strawberry Patch


Strawberry Patch

An original painting by Alex Ferrar

On display at his restaurant Sobremesa, Antigua, Guatemala

In this Q&A Edition IV we talk about:

  • Setting up kids financially (and get to hear my own daughter’s take)
  • Newsweek’s article on the whistleblower v. Vanguard lawsuit
  • Explore the idea of getting a mortgage interest tax deduction by making a much larger mortgage payment before the sale of the property
  • Celebrate a reader’s victory
  • An embarrassing (to me) question from Kevin on my long-promised book
  • Take on a mini-Case Study with Tom
  • Accept Hahna’s invitation to contribute to her 41 experts post and my answer to her question: What one major limiting investing belief hindered my financial success?
  • Currencies and international bank CDs at 7-8%

All these are drawn from the Ask jlcollinsnh page. Next time in Q&A-V we’ll look at some that have cropped up on other posts throughout the blog.

This year I put up only 18 new posts. Part of the reason is that virtually everyday I answer questions in the comments here on the blog. When readers take the time to comment if they ask a question or two I very much like to be able to respond.

But buried in the comments section of whatever post they’ve chosen, our conversation is unlikely to be seen and enjoyed by other readers. In fact, when answering I can’t really even be sure the original commentator has subscribed to the comments and will see the response. It is tempting to blow off these questions and simply move on to writing new posts more readers will see.

But the calibre of most of the questions is excellent and, as I’ve often contended, the comment section on this blog has some of the best, most interesting content.

Back in the Spring of 2014 I ran a series of posts highlighting some of these questions:

Q&A I: Gaijin Shogun

 Q&A II: Salamat

Q&A III: Vamos

These posts were very well received and so, at long last, here is the fourth in this series.  As with the first three, it is named after the featured painting above. Of course these posts are only the tip of the comment/question/answer material here, so if you like reading them I encourage you to poke around in the comment sections a bit more on your own.

OK, let’s get started…

Todd asks about setting up kids financially

Posted December 5, 2015 at 11:53 am

Hi Jim Collins ~

As slightly older parents of a four year old, I am wondering how best to set the child up for her future. You’ve done well writing about your experience(s) in posts about your daughter (regardless of the misleading titles) and I am looking for your thoughts.

I’ve gleaned more useful information from you that it is a ‘given’ when I have a question, I check your blog (and MMM, GCC, MF, as well). Thank you, in advance, for being such an incredibly kind, patient and pleasant voice of genuine concern when it comes to financial matters.

Our Background:

I am self-employed & my wife is part of the company (and a stay-at-home mother). We are each funding our SD401K (index funds), receive profit sharing from the company and contribute to our Family HSA. We each have a ROTH account – many years old, and without much in them. We “might” be able to contribute to these, however we may be ineligible (yet to be determined, for certain).

We save 50 to 70% of our income monthly, and are fortunate enough to do so. This is the first year of being this “savings / investment aggressive” for us, and we feel that we can maintain these goals, all things considered.

My wife & I have worked diligently to get to where we are – and we want to instill this work ethic in our little one. We do expect that our child will have to work / struggle to fund some of her own education – however, we also want to allow her the freedom to pursue her interests.

With that said, I want to begin saving for my child, and would appreciate your suggestions. I’d like to start her path to FIRE, as well as start contributing toward her college savings. Presently, I don’t know if she will want to go to college, but it seems a wise & prudent plan to save for such, regardless.

The 529 plans have limitations as to what can be done with the monies if she chooses to forego higher education – this makes me a bit nervous. We don’t have other children, nor other “qualified individuals” to give / gift this to – and neither my wife nor I will attend college again. (Tax rate + 10% penalties on withdrawals IF not used for purpose).

I would consider a trust, if that would be a better choice? (I am not sure what the rules / tax regulations are surrounding this idea).

You have “F-You” monies set up for your child – what did you do / set up for her? What would your plan be today, if you were doing this again? The same? Something different? If so…what?

Much like you, I’ve been blessed with a little gift from God: I want to make sure I do right.

Thank You,


Posted December 8, 2015 at 12:29 pm

Hi Todd…

Well, that’s a HUGE question. 🙂

It sounds like you are in a very similar situation as we were: Namely our child was born after we’d reached FI and so missed out on witnessing the effort it took. Kids, of course, learn by example.

One of the key factors in success is having grit. And just this week I finally came across this short Ted Talk that supports my opinion on this: https://www.ted.com/talks/angela_lee_duckworth_the_key_to_success_grit#t-173597

My wife and I came by our grit by facing some tough times when we were young. So the question becomes, how do we instill grit into our children who, because of our success, won’t have the benefit of their own tough times?

For that matter, is it even possible to instill grit?

Now 23, our daughter seems to have a fair share and her current life in the Peace Corp is testing it well.

I’m not sure how much any of this helped (how your kid turns out is at least in part due to the genetic lottery), but here’s some of what we did:

  • Living modestly and below our means she never really grew up “rich”
  • While we lived in a fairly wealthy town (for the school system) we never indulged her by buying brand name, fashionable stuff.
  • Unlike many of her friends, she didn’t get a car for her 16th birthday. (although we allowed her fairly liberal use of the family car)
  • While we paid for her college (tuition, books, room & board) she had to work for any extras (clothes, entertainment). She was a waitress.

So, not as tough as we had it, but much tougher than many of her peers.

Once she started working, each year I funded a Roth IRA for her.

Like you, I’m not a fan of 529 plans and never used one.

Trusts have always struck me as overly complex and expensive. Maybe if you come to see your child as immature and irresponsible the complexity and expense might be worth it. But fortunately, we don’t have that problem.

In the end, the best you can do is to love them and guide them and hope they use the benefits you are able to provide to become (rather than weaker) stronger and more successful.

And, yes, I’d do it pretty much the same way if I had it to do over.

Hope this helps!

Jessica Collins
Posted December 8, 2015 at 8:18 pm

Hi there Todd,

I was reading your question to my dad, as well as his response, and thought I could add a bit from my own experience.

While I can’t give you details behind his mastermind plans (only he knows what’s going on in his brain), I can share a bit about how he and my mom taught me about money.

When I was very little, my parents started giving me an allowance. I don’t remember exactly how old I was, or how much it was, but for as long as I can remember, they gave me an allowance, until I started working.

Anyways, when I received my allowance, my parents always encouraged me to divide my allowance into three parts: a college fund, savings and personal use. When I was very young, my parents told me how much to put in each, but once I got a bit older (maybe around middle school?) they started leaving the choice up to me. I would also do this with birthday money and Christmas money.

Now I will admit (and I ofter joke with my dad about this), at a young age I did not really understand this concept. Let’s say my allowance was $1. I would put 25 cents into my college fund and 25 cents to my savings, so I would have 50 cents for myself to spend. At the time, I didn’t realize what I was doing. I just thought I had 50 cents and the other 50 cents disappeared and I would never see it again.

Eventually, I began to understand what I was actually doing with my money was investing it in my future. Yes, I went years not understanding why my parents would give me an allowance, only to take half of it away. 🙂

But, by the time all this clicked, I was already in the habit of putting money aside. I was in the habit of saving. Even while I’m here in the PeaceCorps I am still putting aside money from my tiny monthly allowance every month, in hopes of saving even a small amount while here.

Another thing my parents would was to sit with me and go over my finances. I know, sounds really intense, especially for a little girl (and it was- I hated these talks!).

We would sit at the kitchen table and go over my money: how much I had saved, and how much I had personally to spend.

When I was old enough to have a bank account, we would go over my bank statements as well.

We would discuss what I had spent my money on. They never lectured me on how to spend my money but just talking about it brought to my attention what I was spending money on and how much. Over time, this helped me prioritize what I value and would prefer to spend money on.

My parents also kept me very involved in my own finances. When it was time to open a bank account, my dad took me to the bank, where I talked to the nice bank lady about my options. Of course I didn’t make the decision on my own, but being involved helped me feel more in control of my finances.

Sorry to ramble on, just wanted to share my side!

I think as long as you keep your child involved in their own finances (whatever that may look like), then they will be ok. They may not enjoy it and they may push against it ( I know I did!) but they will come around.

It’s better to start them young and have to kind of force them; at least when they realize it’s importance, they will be prepared with the necessary tools.

I think the thing that made understanding money so difficult for me, was that, in order to understand money, one must have life experience. Most little kids don’t have life experience.

However, it’s once those life experiences start to come, those things start to clink into place. And although they may not understand right away, they will remember.

Hope this helps!


 December 6, 2015 at 7:27 pm

I have read about Vanguard being at risk of losing upcoming state and federal lawsuits about its tax-free status. Vanguard would then owe billions in back taxes.

I assume the expense ratio for the funds would skyrocket.

What will happen immediately to the value of Vanguard ETFs if Vanguard loses these lawsuits?

Are the ETF values tied to the market, or can Vanguard choose to devalue its ETFs in order to raise money to pay back taxes?

If the value of my Vanguard ETFs is at risk, should I sell out before the lawsuits are decided?


December 8, 2015 at 12:49 pm

Hi Chris…

Thanks for bring this to my attention.

So everyone else is up to speed, here is the article:


I reached out to my Vanguard contact and here is her response:

“Hi James.

“I understand why your readers are concerned about the highly speculative Newsweek article. We have not issued a public statement on the article, but let me give you some background so that you can get your arms around the issue.

“First, the New York Supreme Court dismissed the suit in question last month. The Court agreed with Vanguard’s position that the former employee violated attorney-client privilege and New York state ethics rules in bringing the claim. We are not aware of any other lawsuits on these issues.

“Second, there have been many inaccuracies in news accounts on this matter and pure conjecture about payments and the potential for rising expense ratios. The tax payment we have paid to Texas—the result of a routine, unrelated audit—will not change any fund’s expense ratio or performance, nor the account balance or tax obligation of any client.

“The Newsweek article also speculates about the potential for higher fees for Vanguard clients. Given our strong cash inflows and solid financial markets, we expect to continue to lower the cost of investing for our clients.

“Finally, we remain confident in our approach to paying our fair and appropriate amount of taxes.

“Let me know if you or your readers have further questions.”

Here’s my take:

This sounds to me like a despicable money grab on the part of this “whistleblower” and the idea of punishing a company (Vanguard) for doing right by their customers is outrageous. I would have been stunned if this suit had been successful.

But even if it had, the worst outcome I can imagine is that Vanguard would be forced to raise their expense ratios to the level of the rest of the other fund companies. Initially this cash flow would be used to pay any back taxes and penalties. After that it would flow back to us shareholders because, thru owning the funds, we are the owners of Vanguard.

This might then be taxable income to us which, while not ideal, is hardly the end of the world. ????

In short, even in the worst case scenario (which is not happening), there is nothing here that would cause me to sell.

Hope this helps!

December 2, 2015 at 1:04 pm

Hi Mr. Collins,

It’s so good to have you back and laboring on the blog again! I have a tax-related question and hope to hear what you think.

I’ve decided to sell my rental property which has doubled its value since I bought it in 2011 (crazy area that I live in!), but wonder if I can take full advantage of the mortgage interest tax deduction by making a much larger mortgage payment before the sale?

It seems like a tax gimmick to me, but also perfectly legal after some google research. You are way knowledgeable in our depressingly convoluted tax rules, and mentioned in previous posts that you volunteer with VITA each year, so I’m really hoping to hear your thoughts on my tax loophole “scheme”. Thanks again for keeping up this wonderful, sometimes life-changing blog!

December 2, 2015 at 10:44 pm
Hi Jian…
Always a pleasure to hear from you!

I think your question actually has more to do with how mortgages work than taxes.

Any mortgage interest paid is deductible in the year you pay it, assuming you itemize your deductions.

But if you pay extra on your mortgage, that money would go to paying down your principle. But you wouldn’t owe any more interest with the extra payment, so nothing deductible would happen. Just like when you sell and pay off the mortgage, interest stops accruing.

This is really not an area of expertise for me, but that’s my take!

Hope it helps!


December 2, 2015 at 11:01 pm

Dear sir,
You are right, again and of course. I actually knew extra payments would count against principle rather than interests; somehow, wishful thinking came over me! 🙂

In my defense, lots have happened and I just made “the leap” of getting myself unemployed LOL. Now selling the condo, debating where to travel to in my new found freedom, what volunteer work/”do-gooder” stuff I can attempt, …, it’s all a bit too much to handle at once. Anyways, that’s my excuse for coming up with stupid schemes!

Again, I can’t thank you enough for this blog and your always cool-headed advice. I can’t say I’d never have done it without your wonderful blog, but am sure it would have taken me much longer and more detours. So, thank you again from my heart!!

December 4, 2015 at 8:46 pm

Dear Mr. Collins,

I’ve been meaning to write and tell you my small victory, while still basking in the afterglow of saying goodbye to the 9-to-5 life :).

There’s nothing extraordinary here, just a somewhat independent and contrarian disposition, distaste for wastefulness and mindless consumption, a few lucky breaks, plus wise advice from bloggers like you and MMM.

The only thing that might stand out is I’m an immigrant who only came to the US in my late 20s. After getting an MBA, I worked as a software engineer/project manager for 12 years at rather modest salary (under $100k/year, VERY modest by Bay Area standard :D). Took a break for a year and half, then came back and worked another 2 years.

Basically after ~15 years of working decent but not really high-paying jobs, I’ve accumulated enough (according to the 4% rule) to no longer having to depend on regular pay checks. I didn’t even save that hard to be honest, with the biggest savings being maxing out 401k contributions. Also made plenty of mistakes along the way, picking individual stocks, buying a brand new VW sedan AND a 3-bedroom 2.5 -bath townhouse (all for one-person household!).

If I, overall a pretty average person, can do it, everyone can if they choose to. Everyone who’s got a decent education, average intelligence, and a bit of luck, that is.

Of course I’m also a bit terrified! The stock market is very much over-valued, so is my net worth naturally. But obviously I’m not going to be dogmatic about the 4% rule and will adapt. I could always free-lance for supplemental income. There are a few ideas I’ve been tossing around in my head that have to do with promoting local businesses, building communities, etc., etc. Geographic arbitrage will also play a role.

Anyways, I’m probably in a too excited state to write intelligently; except that I truly want to thank you for your excellent blog, your unfailing patience and sage advice! It’s rather lonely to be financially intelligent, oddly enough, as the Bay Area is full of super smart people. I’m so glad I can always count on you, MMM, GCC, and Mad Fientist for a sense of community and fellowship. So thank you again and looking forward to your next post.

Yours ever-grateful,

December 4, 2015 at 11:50 pm

Hi Jian…

Anybody referring to my “excellent blog, unfailing patience and sage advice” is clearly writing intelligently. ????

Congratulations on reaching FI! I’m deeply honored to hear my blog has played some small roll.

Well played.

Well deserved.

You are right: Financial intelligence is rare and the path to FI is lonely. That fact is always brought home to me at our Chautauquas where attendees invariably report that the best part is finally being sounded by like-minded people.

Enjoy your new found freedom!

Warm Regards

 December 1, 2015 at 9:24 pm

Book update?

When will it be available and what can you tell us about it?

I was hoping it would be released by now so I could send it as Xmas gifts to family and friends.


December 1, 2015 at 10:45 pm
Thanks for your interest, Kevin!

Unfortunately for both of us, it won’t be out in time for Christmas.

I got burned out on the project over the summer, my editor entered a monastery and it has been sitting since then.

The good news is the manuscript is nearly done, but I gather there is a lot more to do after that before it gets published.


Some call for a fairly extensive review and are like mini Case Studies
December 1, 2015 at 11:01 am

Hi Jim,

Hope your enjoyed your time in Ecuador. This is a reposting from Oct., sorry about that. I’m trying to get an opinion on what to do.

Recently my wife was laid off of her job after 18 years.. She has a chance of continuing to work for them but would have to move which we do not want to do at this time.

Anyway, we have 310K in a 401k, 170k in a pension which will pay approx, $1500 a month for 20 years starting at 65 years of age, and finally 70k in the government TSP.

At this time I thought about rolling everything over to Vanguard VTSAX in a IRA. The 401k is limited Vanguard funds, the annuity is something I’m not a fan of. I like the idea of having control of our money and being able to help the kids out later.

The TSP is 80% C and 20% S funds. And I’m just letting it sit there until 701/2 years of age.

My wife plans to retire at 66, but since losing her position her income and benefits have dropped dramatically. And who knows when she will be able to find permanent work. Regardless of what anyone says, when your in your late 50″s, jobs are harder to find.

Right now she’s working temp jobs on a regular basis. I retired after 32 years with the Federal government. I have some serious spine issues so I’m limited in what I can do.

Right now we have 300k in equity of a 400K home. My idea is to sell the home and buy something for cash, then use the money saved to continue to invest in the 401k.

It’s not going to be anyway near possible for my wife to get the same pay or benefits she was getting before. Were trying to be realistic at this point.

Once she reaches age 66, we will move to a more affordable city and closer to family. I have a pension of 30k per year, and my wife SS will be approx 27-30K per year.

Bottom line, is it a good idea to roll over everything to VSTAX, or because my wife is not investment savvy, I would consider using Betterment, which would make it maybe easier for her to understand and get help when I pass on.

My first and foremost concern is too make sure she will be ok. Thanks for your help.

December 8, 2015 at 5:26 pm

Hey jlcollinsnh,

I’ve been following your blog for a few years now after first being introduced to it by Mr. Money Mustache and, as a result, I have achieved a six-figure investment portfolio and net worth using your advice.

I’m creating an expert roundup post for my blog, hahnakane.com. My mission is to interview financially successful people and share their knowledge with college-educated millennials to help them master their money, so that they can achieve the lifestyle they truly desire. I would love to include your insights on the following topic:

What was one major limiting belief that hindered your success with investing and how did you overcome it?

There’s no maximum limitation on the length of your answer, but a minimum of 50–100 words on this topic would be fantastic.

Several influential bloggers have also contributed like Financial Samurai, Healthy Wealthy Income, Money After Graduation and many others!

Deadline for submissions is December 19th, 2015 – hope you are able to participate.

Keep being awesome!






Note: I am aware of and apologize for the formatting glitches in this post. My guess is they hitchhiked on in as I cut and pasted the comments. Clearly I’ve been unable to correct these but, after hours of trying, it is what it is!

Important Resources:

  • Vanguard.com (unfortunately Vanguard doesn’t have an affiliate program)
  • Empower* is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you’ll see what’s working and what you might want to change. Here’s my full review.
  • Betterment* is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • YNAB* has the best budgeting tools going and just might be the Best Place to Work Ever.
  • Tuft & Needle helps me sleep at night. Unfortunately they are no longer an affiliate, but still a very cool company and a great product.

*These are affiliate links and should you chose to do business with them, this blog will earn a small commission.

Unrelated, but here’s what I’m currently or have just finished reading and enjoyed:

Leave it to Psmith

“Crime not objected to.”

One of my favorite characters from a favorite author. If you like it, here are two more:

Jack Reacher roams around the country carrying only a folding toothbrush. When his clothes get dirty he buys new ones. Oh, and he kills lots of bad guys. “Make Me” is the most recent in the series, but not the best. That might be this one:

First line: “People do not give it credence that a fourteen-year-old girl could leave home and go off in the wintertime to avenge her father’s blood but it did not seem so strange then, although I will say it did not happen every day.”

Last Line: “This ends my true account of how I avenged Frank Ross’s blood over in the Choctaw Nation when snow was on the ground.”

How we came to be what we are, behave the way we do and believe what we believe. My favorite in this group.

Where people who live to be 100+ live, how they live and what they eat.

Bad monkeys are Sapiens that need killing, and Jane is on the job. If you are already paranoid, you might want to skip chapter: white room (iv)

Why the future might be incredibly good. Unless the grey goo gets us.

This might be the most enlightening and entertaining take on American history I’ve yet to read.

And here are some of my all time favorites:

The book that has most influenced how I live my life.

Deceptively simple, but really all you need to know about becoming wealthy.

Very possibly my all-time favorite novel.

“The Fall of Edward Barnard” is very possibly my all-time favorite short story.

Perfect for the readers of this blog.

“Bartleby the Scrivener” is very possibly my all-time favorite novella. Don’t be put off if you struggled with Melville’s “Moby Dick.” This is a much better and easier read. Plus it will teach you the most important phrase in the English language:

“I would prefer not to.”

*If you click on the books you’ll go to Amazon, an affiliate partner. Should you choose buy them, or anything else while you there, this blog will receive a small commission. This doesn’t affect what you pay.

Here’s to a

Happy, Healthy and Prosperous New Year!

Subscribe to JL’s Newsletter

Important Resources

  • Talent Stacker is a resource that I learned about through my work with Jonathan and Brad at ChooseFI, and first heard about Salesforce as a career option in an episode where they featured Bradley Rice on the Podcast. In that episode, Bradley shared how he reached FI quickly thanks to his huge paychecks and discipline in keeping his expenses low. Jonathan teamed up with Bradley to build Talent Stacker, and they have helped more than 1,000 students from all walks of life complete the program and land jobs like clockwork, earning double or even triple their old salaries using a Salesforce certification to break into a no-code tech career.
  • Credit Cards are like chain saws. Incredibly useful. Incredibly dangerous. Resolve to pay in full each month and never carry a balance. Do that and they can be great tools. Here are some of the very best for travel hacking, cash back and small business rewards.
  • Empower is a free tool to manage and evaluate your investments. With great visuals you can track your net worth, asset allocation, and portfolio performance, including costs. At a glance you'll see what's working and what you might want to change. Here's my full review.
  • Betterment is my recommendation for hands-off investors who prefer a DIFM (Do It For Me) approach. It is also a great tool for reaching short-term savings goals. Here is my Betterment Review
  • NewRetirement offers cool tools to help guide you in answering the question: Do I have enough money to retire? And getting started is free. Sign up and you will be offered two paths into their retirement planner. I was also on their podcast and you can check that out here:Video version, Podcast version.
  • Tuft & Needle (T&N) helps me sleep at night. They are a very cool company with a great product. Here’s my review of what we are currently sleeping on: Our Walnut Frame and Mint Mattress.
  • Vanguard.com


  1. ElephantEater says


    I am younger than you, but unfortunately not nearly as young as Jessica. I have a 3 year old daughter who will be only 4 when we take the plunge into ER in about 18 months and we talk a lot about how we will teach her that “grit” that we both required to get where we are. It is one of our true concerns with ER as I believe that much more is caught than taught.

    I appreciate you taking the time to write about your experiences and answer these questions and it is cool to hear from Jessica making it out the other side seemingly pretty OK.

    Happy New Year!

  2. Jennifer says

    Hi Jim,

    I recently found your blog via another financial blog and was so thrilled to have done so! I’m sure you hear it all the time, but your sound advice has changed my life in the short period of time I’ve been reading it. There’s something soothing and encouraging about your writing style- I feel like I can trust you with my finances- (and I don’t even know you! 🙂 )

    I especially like your posts that talk about how you raised your daughter. I myself have a 9 year old and now a 9 month old (yup, starting all over again). Regarding setting up kids financially, I was wondering if you could offer your advice on college planning- specifically whether one should contribute to a state’s prepaid plan? I know you mentioned you don’t really like 529s, but what about if your state offered what seems like a decent prepaid plan?

    I live in Florida, and currently, it will cost us about $25K total to prepay 4 years of college for our baby, (paid monthly over 5 years). My 9 year old already has the same plan, paid in full. I purchased it for her back in 2008 and paid it lump sum- $14K ( I was fortuntate enough to have enough savings to do so at that time).

    My husband and I are now debating whether we should buy this plan for our baby, as we’ve now heard many mixed reviews on prepaid plans. Some negatives we’ve heard – it will affect the amount of aid/scholarship they can receive, it’s not worth the low return rate compared to regular investing, your kid may not even go to college, etc.

    What is your take on this? For reference, the Florida Prepaid Plan will return back the market value of the plan if your child ends up getting a scholarship (we are being hopeful on this).
    Any advice and maybe other perspectives you can spare would be appreciated tremendously!

    Again, thanks for your great writing and valuable advice. I will continue to read it for inspiration in the years to come.

    • Jennifer says

      Sorry Jim, I was so excited to ask my question above that I forgot to thank you also for your Stock Series. It was an eye opener for me- I’ve been investing in mutual funds for the last 18 years of my life, come from a relatively “financially savvy” family, and never really realized how simple investing could, and should truly be. All these years of researching fund compositions, expense ratios, managers, etc.. and all I really needed to know was captured in your series. I read all of your Stock Series posts all in one sitting.
      I only wish I would have found it sooner! Better late than never, I guess. Truly amazing and wonderfully articulated! No one has ever explained investing in stocks to me better. Period.
      Thank you, again.

      • jlcollinsnh says

        Welcome Jennifer…

        I’m glad you found your way here.

        Of course you can trust me with all your money. Just gather it all up and send it to me and I’ll get back to you…. 😉

        But seriously, thanks for your kind words on my writing style. On another forum I recently noticed someone say: “It takes a while to get used to the writing style.” 🙂

        Unfortunately, I’m not going to be much help on your question. I never used any of the various college saving programs, preferring instead to simply focus on growing my own net worth so I’d have the money needed. The programs at the time seemed too complex and restrictive for my taste. They might be better now.

        I’m not surprised you’re reading mixed reviews on the pre-paid plans. The negatives you listed would be enough to put me off. Plus my experience is once a company or organization has your money in hand, their enthusiasm for meeting your needs drops. 🙂

        More generally on college, you might like this post:


        • Jennifer says

          Good Morning Jim, and Happy 2016! Thank you for taking the time to reply. I hope you and your family have a healthy and happy new year.

  3. Reepekg says

    No offense, but as a fellow owner of Vanguard, I’m glad we’re not spending my money on frills like affiliate links.

    Back to basics business and rock bottom expense ratios, thankyouverymuch!

    • jlcollinsnh says

      None taken, and in fact I agree. 🙂

      Indeed, over the past year or two I’ve noticed Vanguard doing more and more advertising, spending I’d prefer they cease.

      When I chat with the Vanguard reps at FinCon I tell them:

      “From a selfish blogger point of view, I’d love to see you start an affiliate program. I write about Vanguard all the time and it would be a nice source of revenue.

      “From a Vanguard investor point of view, save your (our!) money. Us bloggers will still write about Vanguard just ’cause it’s so damn good!”

      That said, should they start one, I’ll sign up!

  4. Jenni says

    My dad finally retired & is looking at putting all 401k, IRA, etc in one place. He has several 100k in Vanguard but is concerned about the no frills customer service for when (most likely) my mom outlives him. My brother sells insurance and is affiliated with American Funds, so he wants them to talk to ‘his guy’. This guy is in another state so all would be over the phone. He can get them whatever break he gets. Then there’s the now grown up neighbor girl who works for an Edward Jones-type deal. Gah! I’m hoping they’ll go with the Vanguard service that you pay more for but would still be much cheaper than the other options.
    *I want to be fair to my bro and point out this is what he has his investments in, he genuinely is drinking the koolaid here.

    • jlcollinsnh says

      Hi Jenni…

      The simplicity, honesty and service are key reasons I have all our assets at

      I fully expect my wife to outlive me, probably by a couple of decades. I definitely want our (her) money at a place where their interests and hers are aligned: https://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

      The last thing I’d want is her in the hands of the “his guy” of a relative at a firm that makes its money by extracting fees and commissions from the suckers,…er customers. The fact that my relative might be a true believer and drinking the koolaid helps not a bit.

      I’ve seen, heard and read (scattered around this blog in the comments) too many horror stories. Many you’ll find in the comments in this post: https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/

      As for Vanguard’s service, personally I’ve been very pleased and am comfortable with the idea of my widow dealing with them when that time comes.

      This is a guide to the various service levels they offer: https://investor.vanguard.com/what-we-offer/personal-services/view-benefits-at-a-glance

      If you invest simply as I describe in the Stock Series, you’ll have no need of customer service beyond these options. Indeed, mostly that “service” is a ruse to sell you more high-profit crap.

      Good luck to your parents. Sound like they are about to make a very, very critical decision.

      • Jenni says

        Hi Jim, just wanted to update you on my parents- they did put it all in Vanguard so I am really pleased. Thanks for your thoughts and input!

  5. Chris says

    Any reason you didn’t ask the mid-50 year old why he wants to buy a house in cash? He can live off the equity and pay rent for a while. Even assume 250k after the sale and that would be something like 15 years of rent (assuming 1500).

    • jlcollinsnh says

      You are referring to Tom, right?

      Maybe because there was already a lot going on in that question and I would have needed more info on the housing situation.

      Maybe because I didn’t think of it. 😉

      Your suggestion is certainly one he should consider.

      Thanks for filling in the blanks!

  6. Mark says

    Jim –

    Excited to hear that the book is still on track — even if it’s taken an unexpected delay. I’m confident it will be worth it: both for the multitude of readers as well as a personal accomplishment.

    Can’t wait! (And besides,… there’s always Christmas 2017 to buy gifts for, right?!) 🙂


    • jlcollinsnh says

      Thanks Mark…

      I am pleased with how it has come together so far and so hopefully it will find an audience. And hopefully before Christmas 2017! 🙂

  7. Brian T. says

    Hi Jim,

    I’d like to start by saying that I am an avid reader of your blog and especially love your stock series.

    As a 25 year old currently looking to move out from my parent’s home I have a few important questions I wanted to get your opinion on. Before going into detail on the questions I will give you a quick background on me:

    I am a 25 year old (almost 26 yr old) male living in South Florida. I currently work at an advertising company making $50k a year plus ~$3-5k annual bonus. At this point I currently have $10k saved in my bank account (I just started working 6 months ago after finishing my grad degree in international relations). My current fixed monthly bills are very low – just the usual cell phone bill, car insurance, gas, etc. I have no student loans, no car loan (my car is paid off), or any kind of debt (thank god!).

    My questions to you are the following (and let me apologize in advance if it is not as cohesively written as it should be):

    1. Should I rent or buy an apt/condo/house? The reason I ask is because I am under the impression now that I will not be staying in my current area for very long – I like to travel and don’t see myself getting tied down in one area for the foreseeable future (until I get married). While my follow-up would make it seem that renting is the right answer, I could at the same time purchase a home and then rent it out (although Dave Ramsey would say it is a risky proposition to rent out a home that isn’t sold because the rent income could be volatile).

    2. Once i make the decision to rent/buy I’d like to know what you feel is the best allocation of my income to rent/utilities? Also please let me know if you are referring to income before/after taxes. My current understanding is that rent should be no more than 25%-30% of your take home pay (not including utilities). My other fixed expenses are minimal but at the same time I’d like to save as much money as possible so that I have the freedom to move or leave my job at any moment.

    3. Lastly, the thing that gnaws on me most is the importance of starting to save while you are young vs. taking chances early in your life and not settling into a 9-5 slug that I, personally, am not too thrilled about doing. In general, I don’t think I would be happy if my life was spent at a desk everyday from 9-5 until I save up the “F YOU” money needed to retire. My question is the following: what do you think of this dichotomy that I have paused above in terms of saving early vs. figuring out your life and spending what is needed to get that done.

    Thank you very much for your time! I am sorry if this post wasn’t as cohesive as it should be.


    Brian T.

    • Brian T. says

      *Forgot to add that whether I rent or buy, I’d like to live alone. 1 bedroom apts for rent in my area (in a good neighborhood) range from $950-1200 (rent only).

      If I’d have to live with roommates, like I’ve done before, then I’d rather just save the money and live at home!

    • jlcollinsnh says

      Hi Brian…

      If financial independence is your #1 goal (and if it is not #1 you are unlikely to reach it early) you shouldn’t worry about the percent you spend on rent. You should focus on your saving rate. It should be at least 50%. Then, figure out how to live on what is left.

      Check out the chart in this post: https://jlcollinsnh.com/2012/05/16/stocks-part-vii-can-everyone-really-retire-a-millionaire/

      1. Houses are mostly an expensive indulgence and a terrible investment:

      There is no way I’d want that albatross around my neck as a single guy in his twenties. The only exception is if I KNEW I’d be in the same area for at least five years and houses were a screaming bargain compared to rent. Here’s how to figure that: https://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

      2. As little as possible. There are better (investments) and more fun (travel) ways to spend money than on rent. If you can live at home and save the money, I’d do that hands down. Be sure to throw some cash your parents way occasionally and/or take them out to dinner.

      3. I think you are thinking about this wrong. Your assumption is life with a high saving rate is deprivation.

      Having F-you money is very liberating even if it is not enough to be fully FI: https://jlcollinsnh.com/2011/06/06/why-you-need-f-you-money/

      You need to learn to be a badass about this and nobody teaches badassity better than this guy: http://www.mrmoneymustache.com

      You are very well positioned to make a great start. Good luck!

      • Brian T. says


        Thank you for the detailed response! much appreciated.

        Only one thing I’d like to clear up – in reference to point #3: It wasn’t in regard to being deprived living on a 50% savings rate. My question was more geared towards being more liberal with my money now (as i am still figuring out what to do with my life) vs. being strict immediately and saving for retirement.

        Again, thank you for your help!

  8. Jeremy says

    Thanks Jim and Jessica for sharing your parent/child wisdom on childhood financial education.

    This is something I’ve been thinking a lot about for…. oh, 8.5 months now.

    • jlcollinsnh says

      Glad it resonated Jeremy.

      Just as you and Winnie are leading an adventurous life, your little guy is on track to have the childhood I wish I’d had. Indeed, if Jessica knew more about it she’d be saying to me:

      “Dad! Why didn’t I get to grow that way!!” 🙂

  9. Simon Kenton says

    Here are some things I did to start my kids financially:

    — Started a debt board at the same time I started allowances (age 4 or 5). This lets you say “Yes” to every request or desire. Then you teach them 1) mental math – “Of course you can have it! Let’s figure out how many allowances you need to give up to pay for that,”

    2) credit limits – “Well, but the dance is tonight.” “Sorry, honey, you have not made a payment in months,”

    3) other debt concepts as necessary – “What! My rifle? I have to give you my rifle in order to borrow the money?!” “Yes, and if you don’t pay me back, I will have to sell it.” “My rifle? This is terrible, daddy!” “Oh honey, it’s worse than you know. If I don’t keep paying for this house, every month, the bank can take it and sell it. That’s how the world works.”

    — Started a family 401(k), where I matched dollar for dollar up to 10% of what they earned and invested. I put this in a mutual fund (the old Babson Value fund, now long gone, but run by an interesting and conservative man who was also a literary scholar) that paid dividends every quarter.

    I graphed their positions in Quicken for investment meetings every quarter – sort of like your daughter describes – where I could tell them, “Yes. The dividend this quarter is $0.95 and it only bought you a little tiny piece of a share. Soon it will be $2.00. Pretty soon the dividend will buy you a whole share.

    The time will come before you know it, when the annual dividend is as much as your monthly contribution. Then as much as your yearly contribution. Then as much as your salary. Then if you want you can be free.”

    I had not heard of index funds then, but might not have used one even if I had, because I liked the immediate reinforcement of the dividends accruing and the graphs showing what was happening.

    Now index funds are what I am recommending to them, and what I have my daughter in.

    The kids all came out pretty frugal. All are debt-free. One (age < 40) has around a million and will have 2 rentals paid off by age 50; one (age ~ 36) has about a half million in investment, federal savings plan, and rental home equity; one (~30) has about 55K in investments/retirement plans and a house.

    You never quite get over worrying about how things will come out during their time, but they seem pretty well adapted to a range of possible future conditions. Better than I am.

    • jlcollinsnh says

      Great stuff, Simon!

      I especially liked:

      “Oh honey, it’s worse than you know. If I don’t keep paying for this house, every month, the bank can take it and sell it. That’s how the world works.”

      Wish I’d had that line back in the day.


      “The time will come before you know it, when the annual dividend is as much as your monthly contribution. Then as much as your yearly contribution. Then as much as your salary. Then if you want you can be free.”

      That’s it, exactly!

  10. Jeremy E. says

    Didn’t realize you were almost done writing your book, fantastic! Can’t wait to read it when it comes out!

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