You’re a curious bunch. And I love it.
We’ve received so much feedback, it’s time for another mailbag. These are real questions you’ve been asking, sparked by articles you’ve read in your daily issues.
It’s impossible to get to all of them, but we do try. Even if we don’t have time and space to publish yours, I promise we read every single one.
If you’d like to ask a question or leave us a comment, drop a line at firstname.lastname@example.org. You just might make the next reader mailbag.
But we’ve got a lot to cover, so enough talk! Time to dig in…
One thing I really dislike is that cancelling a credit card you no longer use gives you a negative hit on your credit rating!! This makes no sense at all! If you haven’t used it in years and it has a low credit max, like $500, why should it affect anything?
— Steve T.
Hi, Steve! I’m so glad you asked this question. Credit score calculations can be very opaque and difficult to understand, especially since — as you rightly point out — many times they are counterintuitive.
Part of the reason for that is the credit rating agencies are dealing with literally hundreds of millions of scores. So most of the scoring has to be automated.
Which means they sometimes overgeneralize based on some measures. Like length of credit history.
How long you’ve been using credit is a big part of calculating your credit score. Taken to an extreme, it seems obvious that someone who has had a credit card for a month is less trustworthy with it than someone who has been making on-time payments for the past 40 years.
One of the easiest, simplest ways to measure how long you’ve been using credit is to look at the average time you’ve held all of your accounts.
It’s a very rough approximation of how long you’ve used credit, but it’s an easy calculation to automate over hundreds of millions of people.
That’s why your credit score dips when you drop a credit card. The average age of your credit accounts dips as well — especially if it’s a credit card you’ve had for a long time.
You can also see a dip as the amount of your overall credit goes down, and your credit card utilization number may go up (if you are charging the same amount, but it’s coming out of a smaller pool of credit).
In your case — with only a $500 credit limit — that doesn’t sound like a factor. But it can be if you drop a credit card with a much higher limit.
I know it’s frustrating, but I hope this helps. And — good news — average length of credit is one of the smaller factors in calculating your score. It should recover fairly quickly.
I drive for Uber and occasionally for Lyft. The best thing about it, besides the great customers I get to serve, is the fact that I get to choose my own hours and even whether I work or not. I know what benefits I receive and knowingly accept the reduction in benefits for the freedom of being my own boss and the ability to choose whether and when I drive. My work complies with the federal definition of independent contractor and I am very happy to accept the level of benefits that allows me. Again, to me, the greatest benefit is serving my riders at a reasonable price for the service provided. My riders are happy and I am happy.
Redefining the status of independent contractor and employee as California has just done will dramatically increase the cost of Uber and Lyft rides and will have a very negative effect on our riders, likely making our on-call transportation service out of the reach of many, if not most, of our rider base, thus eliminating a major transportation option for a large portion of our rider base, and making our ability to receive an adequate return on our investment in time, fuel, wear and tear on our vehicles and other intangibles more difficult.
We love what we do to serve the public with great transportation options at a reasonable price, and the benefits of having a happy ridership that contributes to our ability to bring in a reasonable income at a time of our choosing.
— Mark K.
Mark, you’re not alone.
Plenty of people choose to be independent contractors for the freedom. What you lose in benefits you gain in the abilities to choose with whom you work… when you work… how much you work… and to “fire” any client who treats you poorly.
That said, as more and more work becomes gig-based, we probably do need to start thinking about how that works in practice as well. Because employers also get a lot of benefits from working with contractors — and most of them aren’t good for the worker.
To name just a few — if a contractor gets laid off, there’s no unemployment insurance… no COBRA options for health insurance… no worker protections, either, come to think of it.
You simply aren’t protected by labor laws to the same degree.
The new California law will likely play out as too extreme. But if you view it as the beginning of a conversation about the gig economy, it’s not quite as scary.
We’ll find a balance somewhere — though this probably isn’t it.
I have a 1982 bottle of Dom and wonder if it has any value.
— Jack B.
Yes! Congrats, Jack! Without doubt — assuming you’ve stored it well and it’s in good condition — your bottle of Dom absolutely has value.
There are a few different kinds of Dom out there, so the exact price will depend on which you’ve got. But most bottles are over $400, with some special ones breaking $1,100 a bottle.
Just let me know what you decide to do with it — whether you sell it or save it and drink it for a special celebration.
You can reach me at email@example.com with more questions — or to share your own treasures!
Editor-in-chief, Unconventional Wealth
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Ryan Cole is the editor-in-chief of Unconventional Wealth. He’s been covering the alternative investment space for nearly a decade and writing about finance and investment for almost 20 years.
Ryan has walked the walk for years, living a very unconventional life. He’s led snowmobile tours through the mountains of Colorado, settled in Japan for five...