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Tess Vigeland: All right, as you know, we have a weekly mailbag to answer your burning financial questions. Well every month, we also have a letters segment for your comments about the show. So here we go.
A couple of weeks ago in our speedround mailbag, Chris and I chewed over a question from a listener asking what to do about a $5,000 debt that he'd forgotten about from 15 years ago. We suggested he hang up on the collection agency, check out the statute of limitations and document everything in writing.
Well, a public radio colleague, Lisa Simeone of Baltimore, Md., caught us failing to give the most basic advice of all:
Lisa Simeone: Nowhere was it mentioned that maybe he should, uh, pay the debt! What a concept: responsible borrowing entails responsible payment. It's common sense.
We've received many responses to our year-long series profiling three investment clubs. Most of you want to know how to start your own. But Imad Libbus of St. Paul, Minn., added a cautionary note:
Imad Libbus: I realize that your series on Investment Clubs makes for interesting radio, but I think that you're missing an opportunity when you feature, without comment, a slew of behaviors that go against your ordinarily sound financial device. You should at least mention that the vast majority of clubs would have been better off investing in a low-cost index fund -- a conclusion I have no doubt the data would support.
It's true that most investors would do well to put their money in index funds.
But the point of investment clubs -- at least the ones we've been working with this year -- is to learn about the stock market. And index funds aren't going to teach them how to evaluate a company's price to earnings ratio, or how to read the fine print in an annual report. They're also well aware of the risks involved in stocks, and they're not playing with education or retirement money.
That said, it is good to remind everyone that these folks are not experts, and unless you're part of their club, you shouldn't be investing based on what they're doing.
And finally, Ethan Munson of Milwaukee, Wis., contacted us after hearing a Straight Story segment about the trend in higher education to charge more tuition for students in certain majors. Chris didn't like that idea at all. But Ethan has a different perspective as a state university engineering professor:
Ethan Munson: I have great sympathy for his position. But at my school, it's just not practical. Educating an engineer costs 25 to 50 percent more than educating a typical liberal arts major. Faculty salaries are one cost, but expensive laboratory equipment is another. So we either have to try something to raise more money, or decide that we will provide mediocre facilities. Which would you prefer that we choose?
If you'd like to answer to Professor Munson's question, or just want to give us your opinion about the show, drop us a line.