Q&A – V: The Women of Amphissa

92f409_5deed81001904bf0b70658dbf9dc1303The Women of Amphissa

An original painting by Alex Ferrar

Welcome to the fifth post in the Q&A Series where we take a look at some of the more interesting and entertaining questions and answers found in the post comments around here. As with the first four, it is named after the featured painting above.

In this edition we talk about:

  • Identity Theft
  • Emergency Funds (twice!)
  • How I am a “beautiful unicorn”
  • Employer Retirement Plans
  • How I sound in a podcast
  • Rock Stars v. Gurus
  • Obsessing obsessively

As you’ll see, not all dry financial stuff. 😉



Debt – The Unacceptable Burden

Sometimes my readers have better answers than I do…
December 5, 2015 at 11:15 am

Dear Jim,

A few months ago I finished repaying $212,000 in federal student loans from medical school. I am 31 and have a low net worth and hardly any retirement savings, but at least I am debt free. I was never foolish enough to carry credit card debt or the like, but I could have made better choices to get a cheaper education. Dealing with the student loan debt was so difficult and bitterly unpleasant that I have no plans to have any type of debt again – none of that “good” debt you talked about either.

Not long ago, I received a notice from the Office of Personnel Management (the federal government’s HR department). I was one of some 21 million people whose social security number, fingerprints, and other biographical data were stolen by hackers. My information was stolen because I had been credentialed for practice at a VA hospital. The government offered me three years of free identity theft protection.

No one has tried to steal my identity so far, but I worry about it happening someday. The thought that someone could take out more student loans in my name, credit card debt, mortgages, undergo medical treatment in my name, etc., and push me back into wrongful debt is a nightmare. This makes me feel hopeless again because I know how hard it was to repay student loans that were rightfully mine (the loan servicing system does NOT want you to repay early). To get rid of fraudulent student loans or other debts would probably take a lawsuit and a lot of time, if my past experience is any indication.

It seems like ID theft could be a major impediment to any plan for financial independence. Do you have any thoughts or encouragement on how to deal with this type of risk?


  • Bill
     December 5, 2015 at 5:32 pm

    Andrew, my partner has also been in the security rodeo with the federal government. He also works at one of the local VA hospitals here in St. Louis. Like you, we’ve received the notification saying his PII (P)ersonally (I)dentifiable (I)nformation) may have been compromised.
    I urge you to get a credit freeze on your credit file at all major credit bureaus asap. With this action, no one will be able to check your credit much less open a new line of credit without this information. It can be temporarily lifted when applying for mortgages, auto loans, a new credit card, etc. I believe it’s around $5.00 per agency to initially set it and $5.00 to lift it for a short amount of time based on a request from you. You will be assigned a personal pin when requesting the freeze that you’ll need it in the future for a temporarily lift.

    Keep it confidential in a safe place. The credit bureaus also offer Identity Theft Protection if you decide to go that next step. We have chosen the security freeze as our preventative action so far. I’ve added the freeze links to the three major reporting agencies are below:

    Experian Credit Freeze – https://www.experian.com/freeze/center.html
    Trans Union Freeze – http://www.transunion.com/personal-credit/credit-disputes/credit-freezes.page?
    Equifax Freeze – https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

    It’s unfortunate that stories like yours are becoming common place. It could have been much worse for you but you’re taking proactive next steps to prevent tragedy. The bad guys are always looking for new ways to obtain this type of information. Once your information is stolen, it’s sold to other hackers for profit. Everyone needs to have credit freezes in place in order to protect their personal data.

    I’ve been in the IT Security career for 17 years. One more thing everyone should be doing is making sure they’re running up to date AV and malware protections on their computer. Malware comes in all forms but keyloggers and botnet clients on our computers are the most vicious. You can inadvertently download these from infected web pages and you will never know it. They record information while you type it and send it off to the bad guys without your knowledge. Personal information protection should be multi-layered. If you take care of these two items, you’re off to a good start. Hope it helps.

    December 8, 2015 at 12:00 pm

    Hi Andrew…

    Fortunately, Bill has provided a great primer on ID theft for you.

    Thanks Bill!

    So all that is left for me to do is the fun part of offering my congratulations on your successful debt slaying efforts!

    Now you are in a perfect position to turn that cash flow stream to your benefit by investing it.

    ID fraud is certainly a risk and a pain if you need to deal with it, but it is no reason not to pursue your financial freedom.



Stocks — Part 5

we touch on Emergency Funds


Hi Jim,

I am a new follower of yours and recently started taking action on my 401k, and savings plan.

I just changed my contribution of 3% to my 401k to max of 50%. Btw, my 401k has horrible options. I placed 80% in (large/multicap) Putnam S&P 500 Index Fund (No Ticker symbol), expense ratio of 0.35% and 20% in (midcap) VEXAX, expense ratio of 0.10%.

My next step is starting a Vanguard account, VTSAX.

Aside from this, I have an emergency fund of $10,000.

Should I go ahead and use that $10,000 to open up the VTSAX account? Or just save up another $10,000, which will take a long time. Probably a year.

Thank you.

  • November 30, 2015 at 10:47 pm

    Welcome Richard….

    Glad you found your way here.

    How big an emergency fund do you need? This depends on a range of personal factors:

    —Is your job secure?
    —Do you own a house? (houses are prone to require unexpected and expensive repairs)
    —Do you own an older car?

    Unless your job is at risk, $10,000 seems a very large EF to me. Maybe something less and the rest into VTSAX.

    If you don’t have the initial $10,000 for VTSAX, you can open an account using VTSMX which has only a $3000 minimum. It is exactly the same portfolio with a bit higher ER (expense ratio). Once you hit 10k Vanguard will roll it into the lower cost VTSAX for you.

    Also see: Stocks Part XVII: What if you can’t buy VTSAX



When you write about F-you Money

…you just might get called a “beautiful unicorn” This was a first!

 October 25, 2015 at 5:43 pm

Hi Jim!

Long time reader, first time caller… 🙂

Quick question as Brian and I fully digest the Chautauqua and are looking at our budget in YNAB and are coming up with ways to be even more badass. We were told a while back that your FU money/Emergency Fund should be kept out of the market and not thought of as investment money and should rather be thought of as insurance. We’ve kept ours in a bank account just sitting there and it stings when we think of the opportunity cost of not having it in the market. Should we keep it out? Put it in? Curious of your thoughts.

Also, we keep our emergency fund at 6 months of our monthly budget so it’s a hefty amount. Are we going overboard? Right on target?

Thanks so much for the insight! You are a beautiful unicorn, sir.


  • November 10, 2015 at 5:20 pm


    I’m honored to see you commenting here and I’ve never been called a unicorn (or beautiful) before. That’s a good thing, right??

    Emergency funds are one of those things that financial writers love to issue pronouncements upon:
    –Have six months worth of expenses!
    –Hold it all in cash!

    I (as usual) beg to differ. ????

    It depends on your situation.

    –Do you own a house (with the likelihood of sudden large expensive repair needs)?
    –Is your job secure?
    –Are you living paycheck to paycheck or do you have substantial investments to draw upon?

    These are the kind of questions you should ask in deciding if you need a EF and if so, how much.

    If your situation is such that sudden expenses are likely and would jam you up; keep 6 months in cash. If not, you can play a bit.

    Personally, I don’t have one at all. But none of those risk factors apply to me.

    As a middle ground, you could use a conservative Betterment portfolio of 50/50 or 75/25 or more bonds/stocks. This would outperform cash and be more stable than your long-term stock investments.

    Great meeting you and Brian in Ecuador! Hope to see you soon!



Stocks Part XVII

Employer retirement plans are a frequent topic:

December 9, 2015 at 3:40 pm

Hi Jim,
First of all, I have no words to express gratitude for you putting all this information on this blog for us (for free). You and your advice have been an eye opener and my spouse and I are excited to finally take control of our finances.

I’m relatively new to your website but have already read quite a bit of it. I have also just recently woken up to the fact that I am making many mistakes and at this rate, I will end up working till 65. My biggest mistake has been ignorance; and thanks to you and others alike, I hope to correct that asap. I do not yet have a retirement plan available to me at work, but my spouse does, and I would like to make smarter decisions.

Currently she has 14k in her 403b, and she is not contributing to the max (which we will quickly fix) but I also do not like the investment choices she has (that due to our ignorance, were simply assigned to her). She is 34 years old btw.

This is what her portfolio looks like:

  • BlackRock LifePath® Index 2045 Fund Class K Shares (LIHKX ) – about 10k (70%)
  • Vanguard Balanced Index Fund Institutional Shares (VBAIX ) – about 4k (29%)
  • BlackRock LifePath® Index Retirement Fund Class K Shares (LIRKX ) – 0.05%

Here are the Vanguard options in her plan:

  • Vanguard Balanced Index Fund Institutional Shares (VBAIX);
  • Vanguard Institutional Index Fund Institutional Shares (VINIX);
  • Vanguard Extended Market Index Fun Institutional Shares;
  • Vanguard Total International Stock Index Fund Institutional Shares (VTSNX);
  • Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX).

My questions to you are:
1. Should we leave whatever she already has invested in those 3 funds and simply assign all new contributions to other Vanguard Funds such as VINIX?
2. Should we exchange all the existing Black Rock and eliminate it from the Portfolio and substitute it for Vanguard instead? And if we do that, are there any fees or taxes we need to pay in order to do that? She has held those funds for about 5 years.
3. Which of the above Vanguard funds that are available to her would you recommend?

  •  December 9, 2015 at 11:39 pm

    Hi Bianca…

    Your words say it wonderfully well. Thanks!

    1. I’d move it all to Vanguard

    2. Because these are all in a 403 (b) there will be no tax consequences. There should also be no fees unless Black Rock charges a backend load (sales charge to exit the fund). Such things are despicable and hopefully going extinct. Should your funds have one, all the more reason to dump them. You’ll just have to bite the bullet and chalk it up to buying freedom.

    3. Depends on the allocation you want.
    VBAIX will give you 60/40 stocks/bonds
    VINIX = Total Stock Market Index
    VBTIX = Total Bond Market Index

    With those last two you can customize whatever allocation works best for you. This will help you decide: Selecting your Asset Allocation

    I don’t see the need for International for reasons I outline here: International Funds

    But if you do, VTSNX is a fine option.

    Her plan has some great choices!




Rent v. Owning Your Home
Of course, I always love ones like these two from DJ
December 9, 2015 at 2:48 pm

Great article, I have been reading a lot on this site and it is a literal treasure trove. My wife and I are going to be making some big decisions in our immediate future and articles like this are invaluable.

Also James sounds exactly like how I imagined him

December 10, 2015 at 12:42 pm

I listened to the podcast included on this article, addendum 4.

Since you already have me typing I want to throw my praise in for the Stock Series as well.


Thanks DJ. Praise is always welcome!



Why you need F-you Money

Or this one from Cameron

December 10, 2015 at 5:30 am

Love the subliminal message of the far queue pic…

Here from MMM also (UraniumC!). He’s like the rock star of early retirement, but to me you’re the guru. Thanks (to you both) for sharing your wisdom.



personal capital

Personal Capital

And some are just fun….

Posted December 8, 2015 at 1:16 pm

I started using Personal Capital and I find it depressing. I used to get such joy logging into all of my accounts. Now, it’s just so easy. I really don’t get it. I’m able to do the same amount of ‘work’ I was doing before, the market is just fine, yet it makes me want to go back and do everything manually… I don’t know why I’m so weird about it!

 jlcollinsnh December 8, 2015 at 1:21 pm
It may be you are obsessing obsessively over your holdings. 🙂
I can relate. I still like my old cumbersome self created spreadsheets….
 So, that’s what I had to say. How about you?


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:

Mike and Psmith

Psmith Journalist

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.

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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. Steve Fallert says

    Just a quick suggestion to Richard on maxing out his 401(k) contribution at 50%. Congrats, keep up the good saving work, but proceed with a little caution. Assuming that your company has a match, you may reach the maximum annual contribution limit of $18,000 ($24,000 if you are 50 or older) before you’ve benefited completely from matching contributions. I’m expressing this poorly, and I’m not an expert, but many companies pay out the match in paycheck installments spread out over the entire year. So check your paystub to see how this is being handled or check with your human resources department at work. I’m currently contributing at the 50% max to my 401(k) to take advantage of the current stock market slump and frontload my contributions (gambling – a little – that the stock market recovers as the year progresses), but in March or April as I begin to approach the max contribution level, I’m going to ratchet my contribution percentage way down so that I can continue to make contributions for the entire year and continue to receive the corporate matching contributions.

  2. Jian says

    Lucas/Mr. Collins,
    Just an fyi – I got the new posting via email, but the format looks exactly as it was before and is not very readable as before, unfortunately. Thought the redesign has fixed that problem. Please take another look. Thank!

    • jlcollinsnh says

      Hi Jian…

      We’ve looked into this and seems it is because you have subscribed thru Feedburner and they control what the email that goes out looks like.

      If you prefer the new version, please use the button at the top of the sidebar to re-subscribe thru WordPress.

      Thanks for bringing this to our attention!

  3. Mike W says

    Hi, first time commenter here on your lovely blog, been reading (and then digesting and sometimes acting) on you writings for about the last 6 months. I haven’t had time to read this whole post yet, but I wanted to let you know your affiliate link(s) for Personal Capital do not seem to be working. Really enjoy your writing style and (most) of your messages. I have learned a lot from reading your posts, and have also been inspired to research more myself, so I wanted to say thanks: ‘Thanks!’ -Mike (hopefully useful / productive comments to follow in future)

    • jlcollinsnh says

      Welcome Mike…

      Glad you are hear and I look forward to more of your comments.

      I just checked the PC links and they seem to be working fine. There are four altogether: Two in the sidebar and two in the post. In both cases one goes to PC and the other to my post about them.

      Can you tell me which gave you the problem?


      • Mike says

        Hi Jim, sorry for the slow reply. It is the side bar link on this page and the one located right above these comments that do not seem to be working, the affiliate links within your article reviewing PC itself do work so there is a work around. You can see the links are going to different locations when mousing over them, the ones which do not work point to “http://personalcapital.go2cloud.org/aff_c?offer_id=4&aff_id=1432”

      • jlcollinsnh says

        Thanks Mike….

        All of the links are working for us, including the ones in the sidebar and at the end of posts.

        Could it be an adblocker or something at your end?

  4. Dollar Flipper says

    If anyone is wondering, my blog is Flipping A Dollar… Not Flipping A D! Lol there’s a text limit on the name field. Maybe I’ll just use Dollar Flipper next time. 🙂

    Please keep up the great advice. You’re like a Zen master and we are all attentive pupils who are still trying to answer questions like “am I conscious now?”

  5. Aretina says

    Thank you for publishing the discussion about OPM cyber-breach. I, too, got one of the dreaded letters. My sister was a victim of identity theft several years ago, and her experience and now this have me fearful of using online resources (automated bill-pay, FI apps) which may put my information at risk again. OPM has offered an identity and credit-monitoring program to victims but I believe its only good for 2 years. I just picture some cyber-terrorist holding on to my information for years- like a Packer fan with lifetime season tickets at Lambeau- before they sell it at a premium to someone else. I really appreciate the additional information about credit-freezes and would love to get more input from the community on when they feel the benefits outweigh the risks of online banking. Some perspective would help; like the song goes : “there’s no thief like Fear”.

  6. Mr. FC says

    As a victim of a certain movie studio’s cyber attack, I second everything that was said above in securing your PII. Freeze your credit immediately and make sure you keep those passwords in a safe place, because it is damn difficult to get them unfrozen without those passwords (as it should be) and more than likely you’ll want to unfreeze it quickly when you need it. We also took the extra precaution of making sure our kids’ information hadn’t been used to open accounts. The credit agencies will check to see if they have anything on file for your kids, and if they don’t the assumption is that nothing has been opened in their name.

    It may also be worthwhile to spend a little money on a credit monitoring service like All Clear ID or Lifelock. These will monitor your credit and give you a heads-up if someone checks your credit. We recently completed a refi, and while it was a pain in the butt to unfreeze our credit, once the bank ran our credit I got an email from All Clear that my credit had been checked (so it works!) Depending on what service the government offered, it may also have insurance to deal with losses associated with ID theft, in addition to providing assistance with cleaning up the mess that an ID theft leaves in your credit report.

    Good luck and always practice safe internet!

  7. Mike S says


    Like many, I came here via MMM and your stock series changed how I viewed my investments. My wife and I have always been savers, but before we came to the US we were plowing all of our money into the mortgage. Canadian mutual funds are generally terrible with high MERs and front / back end loads, and there is no mortgage investment credit. Since we moved from an area with very high housing prices to one that was more affordable, we found ourselves in the happy predicament of having no mortgage left to save into.

    That meant that I needed to understand what to invest in. Thank you for the good work you do here.

    I’m fortunate that my 403b has Vanguard options similar to those in Bianca’s question. I started with a target date fund, but switched to an aggressively weighted balance of VINIX and VBTIX. I am very appreciative of the simple portfolio you lay out here. I assume that even if a more unwieldy portfolio would do better, savings rate is a far more important factor.

    My only comment on what you’ve written here is that my understanding is that VINIX tracks the SP500, not the total market. I wish I had a broad index to choose from that also included small cap, but I get that from VTSAX in my IRA.

    • jlcollinsnh says

      Thanks, Mike…

      I appreciate the kind words and am glad to hear this blog has been helpful to you.

      As for VINIX, it does track the S&P 500 and with only a .04 ER is even cheaper than VTSAX. As it is the “institutional shares” version it is found only in 401k-type plans.

      I would be entirely comfortable holding it as I say in Addendum 1 of this post:

      • Mike S says

        Thanks Jim.

        I figured that VINIX was the best choice for me in my 401k. I also took your advice on the international index. We have a Vanguard institutional index for international stocks as well, but I buy into your argument that the companies in the SP500 have a bunch of international exposure already and the MER on VINIX is lower than the international index.

        Last year, my employer also made a Roth 401k option available. What are your thoughts on using this?

        On one hand, I think that the future tax savings will be significant.

        On the other, I work in NY State and the tax savings would be significant if I took the traditional 401k. I think we are disciplined enough to save the return.

        Also, if we moved back to Canada and had to move money from a Roth 401k, is the withdrawal treated in the same way as a Roth IRA (can withdraw the contribution w/o tax or penalty)?

      • jlcollinsnh says

        If you can benefit from the tax savings, traditional is definitely the way to go. I discuss this toward the end of this post: https://jlcollinsnh.com/2015/06/02/stocks-part-viii-the-401k-403b-tsp-ira-roth-buckets/

        I’m afraid I have no idea as to what happens if you move back to Canada. But if you read thru the comments on this post you might find an answer: https://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/

        If not, you can pose the question there.

        Good luck!

  8. John says

    Hello Jim,

    Bianca’s post mentioning the BlackRock LifePath funds prompted me to take a closer look at my employer-sponsored plan and investment options. Currently I’ve got over $200k invested in a BlackRock LifePath 2040 plan, I’m maxing out my contributions annually, receiving a 50% match from my employer, and directing it all into this LifePath plan. The plan website informs me the Expense Ratio is .09% and the Management Fee is .08%.

    The Vanguard plans available to me are these:
    Vanguard Russell 1000 Growth Index Trust
    Vanguard Russell 1000 Value Index Trust
    Vanguard Russell 2000 Growth Index Trust
    Vanguard S&P 500 Index Trust
    Vanguard Short-term Bond Index Institutional Plus Shares

    Even if I don’t currently have the Vanguard Total Market options available to me, are there one or two in the list above you’d suggest I consider using to replace the BlackRock LifePath 2040 plan I’m currently investing in?

    I’ve already rolled over my previous employer 401(k)s to VTSAX and contribute regularly to a non-retirement account I opened a year ago and direct those investments to VTSAX as well.

    Thanks, as always, Jim!

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