Car Talk Dear Car Talk:
My wife and I have differing opinions on how fast to drive. I think driving 5-7 mph under a speed limit is not being discourteous to other drivers. I also like to drive slower when approaching a signal. — Richard
If you’re able to drive at the speed limit and do so safely, that’s what you should do. I’d never criticize anyone for driving at the speed limit, even though many people drive faster than that. But I don’t recommend being the guy moseying along at 23 in a 30 zone. It is discourteous to drivers behind you, especially on a road where people can’t legally or easily pass you.
You may be in no hurry whatsoever. But most people aren’t in that situation and get frustrated behind someone who appears to be slowing down traffic on a shared, public road for no reason.
While it would be nice to live in a world where everybody slows down and enjoys scenery more, in this world your driving behavior leads to tailgating, road rage and potentially dangerous behavior in other drivers, like trying to pass you while flipping you the bird at the same time.
There also are studies that show that speed differential leads to collisions on highways. So if you’re going 48 mph and someone else is driving 62, that’s a recipe for a crash, regardless of who’s right and who’s wrong.
Now, if you simply feel like you can’t drive safely when doing the speed limit, then it’s time to consider whether you should still be driving at all. And whether it’s time to enjoy the passenger seat and let your wife do the driving. I know that’s a tough pill to swallow, Richard, but it happens to everyone at some point.
Dear Car Talk: Years ago, my uncle told me to always buy a vehicle in the even-numbered years. He said that most changes were done in the odd-numbered years, and the even numbered years were when they worked out the bugs from the changes the year before. Not sure if whoever told him that had all their fries in one basket or if that really was the truth then, or ... if it still applies. What do you think? — Christine
I’d file this under Old Husbands’ Tales, Christine, but I’m not sure an uncle qualifies. I may need to start a whole new category.
Our mission: To inform, to amuse, and to help you make money
Q
What’s a dividend? — N.R., Glens Falls, New York
AWhen a company pays out part of its earnings to shareholders, that’s a dividend.
Imagine that Monster Gene Inc. (ticker: FSTEIN) earns $4 per share and pays out $1 per share annually — $0.25 per quarter. So someone owning, say, 100 shares will get $25 each quarter and $100 over the year. Healthy and growing dividendpaying companies tend to increase their payouts over time, too, so in the future, that shareholder could collect $150 and then $200 and more each year. The share price of the stock is likely to increase over time, too.
A related term you’ll hear often is the “dividend yield.” This is a company’s annual dividend amount divided by its current share price. So if Monster Gene was priced at $20 per share, divide $1 by $20 to get 0.05, or a 5% yield.
Companies can use their earnings in other ways than by paying dividends. They may, for instance, pay down debt or buy back shares of their stock. Companies trying to grow rapidly frequently won’t pay dividends, as they prefer to spend all available funds to further their growth — perhaps by hiring more people or building more factories.
Q
Is it better to sell a stock that has lost value or one that’s gained value?
— P.T., Bellevue,
Washington
A
How a stock has done in the past doesn’t matter that much. You should care most about how it will perform in the future. It can be helpful to try to rank your holdings by how confident you are in their financial health and growth potential — and then, if you need to sell shares, start with the ones at the bottom.
out on a lot of further growth. But you also cashed out with a solid gain, and that money helped you afford a car you needed. What you might do next time is to buy a less costly car, so that you can keep more money in your portfolio.