What kind of blogs do you read? I like to read a wide variety of blogs from writing blogs, travel, photography to personal finance. One of my favorite blogs is The Simple Dollar: Financial Talk For the Rest of Us. Some of you already know him. Some of you never heard of him. His name is Trent Hamm, and he writes about finance and self-development from a personal angle. I was lucky to get his time and attention. Trent is a busy family man, a writer, a blogger and much more.
Trent, thank you so much for agreeing to this interview and finding time to answer my questions. I know it wasn’t easy. Your blog idea was born out of your personal struggle with finances. Your desire to be a writer and desire to share your story created The Simple Dollar. You could have realized your desire to be a writer in some other different way. Why a blog?
Two reasons. First, the production costs of starting a blog are very low, much lower than publishing a book. Second, blogging is such a flexible format, allowing you to write anything from a single paragraph five times a day to a book-length article once every few months.
Fair enough. We all have plans with our blogs. What did you expect out of your blog initially?
I expected it to be read by a few of my friends, nothing more. I was mostly seeking a way of telling them about the personal finance material I was discovering in a non-confrontational way.
Why The Simple Dollar? I don’t think that a “dollar” is that simple after all.
It was the best name out of the ones my wife and I brainstormed one afternoon. We wanted it to seem accessible and non-confrontational and not confusing to people who aren’t confident about their finances.
You openly told your readers your personal financial life story. Have you ever regretted doing it?
I don’t regret telling my story. I do regret how I have told it at times in the past, mostly when my story overlaps with the privacy of people I care about. I don’t want to violate their privacy, and I’ve had to make some difficult and awkward decisions because of that, and readers have become angry with me over such issues more than once. They see an incomplete story where a particular piece has been excised and get quite angry!
You talk and write about being frugal and frugality a lot. Why do you think this word has a negative connotation for a lot of people?
For a lot of people, frugality means not having the things that you enjoy in life. They think of cutting back, and they imagine the knife plunging into the things that they value. Of course, that’s not how it works at all – you actually focus the cuts on the areas you don’t care about, like the specific brand of detergent you use.
Do you think students loans exist to help students or to drown them in debt?
The idea of student loans is great. In practice, they’re not so great. America’s obsession with the idea that everyone needs a college degree is the real problem. What America needs is more skilled tradespeople that take pride in their craft.
The biggest mistake that people commit with their finances is that they spend more than they earn. I am guilty of it! Is there a second biggest mistake that we all do with our money?
We spend to please other people instead of pleasing ourselves. We buy things to impress others and to prop up our own feelings for a short time, but it’s a fragile prop and we find ourselves right back where we started except with more debt.
People write to you asking for your financial advice. How comfortable do you feel giving your advice to them? Have you ever had anyone come back blaming you for their financial debacles?
I typically don’t like giving advice. When I do, I stick to a handful of core principles that I reiterate all the time. Keep costs low. Seek debt freedom. Spend less than you earn. Give to others when you can. Those principles have worked for me and for many others. I’ve never had someone come back at me with rage over bad advice because I don’t ever give advice that goes outside of those guidelines.
I believe that behind every successful person there is a talent and a huge amount of hard work. What do you think made your blog so popular?
My guess is that it’s popular because there’s a constant flow of solid material that pushes people to think about their own situation and to improve it. That’s what I focus on with every single post and I think others find value in it, warts and all.
I have to ask you this – it came to me as a shock (in a good way) when you recommended my articleInvesting Fiasco or Reminiscences on the Past for your blog readers. Why did you pick it as one of your recommendations?
The story it told was interesting, particularly in how it related social concerns and social changes to the personal finance moves that people choose to make. We all do that, and it’s brave to recognize it in yourself.
What are your thoughts on 401K?
It’s a good investment vehicle for retirement purposes. The big advantages it has is the ease of use because it’s facilitated through the workplace and the fact that many employers offer matching contributions, which amount to free money for the retirement saver.
My last question but definitely not the least… Can you share with us the best financial advice you ever heard?
For me, it was the idea that every dollar you earn represents some amount of your life invested – five minutes, ten minutes, an hour. When you spend that dollar, you’re essentially trading some chunk of your life for whatever you’re buying. So, if I earn $10 an hour and then go out for a $60 meal, I’m trading at least six hours of my life for that meal. Is that a trade I want to make?