(MONEY Magazine) – Q. My wife and I retired three years ago, at age 50. Now we spend most of our time cruising the East Coast and the Bahamas in our sailboat. We love the itinerant life so much that we plan to sell our house and hit the road in a motor home. As U.S. citizens, I realize we'll owe federal taxes no matter what. But, if we have no permanent address, can we call ourselves "freelance Americans" and avoid all state and local taxes? ROBERT FLEMMING Rochester, N.Y.

A. You can call yourselves RV refugees, domestic dropouts or "Me and Bobby McGee," but unless you stake out a single legal address, you may find several states competing for the pleasure of taxing you. If you apply for a driver's license in New Hampshire, for instance, tax authorities could expect something from you in April. Spending four months at an Ohio campground can put you on that state's tax rolls. And registering and insuring your motor home is catnip to a tax man in just about any state. The surest way to defend yourself against multiple claims on your income is to demonstrate allegiance to one state by using it for all of your personal business, such as voting, banking and registering your motor home. You don't have to own property there, other than your RV, but you should at least have a mailing address.

You will save the most if you choose one of the seven states--Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming--that have neither personal income tax nor tax on interest and dividends. You'll still have to pay some kind of local taxes, such as property tax on your RV, sales tax on your purchases or user fees on campground or other licenses. But remember: Your RV is a vehicle for recreation, not for avoiding taxation. (For more about life on the road, see One Family's Finances, MONEY, September.)

Q. My mortgage company offered me a program in which, instead of paying $1,292 a month on my $140,000 mortgage, I can pay $650 every two weeks. The company says the extra cash will pay off my loan nearly eight years sooner, saving me more than $60,000 in interest. The program costs $9 a month. Sounds good. Is it? RICH CICCHILLO Avondale Estates, GA.

A. Paying off your mortgage early is an excellent way to save on interest, but you don't need a formal program to do it. What you do need is discipline. If you have that, then think about sending the company biweekly checks for half the monthly payment on your own. You may even be able to arrange automatic deductions from your checking account through your bank. If that's not possible, and you feel you don't have the commitment to send out regular payments on your own, the mortgage company's program, which automatically debits your checking account, seems worth the $108 a year. And if you find out later that you can't afford the extra payments, there's no penalty for dropping out.

Q. I'm 10 years old, and my dad is going to give me $100 a month to invest so that I'll be able to afford a car by the time I'm 16 and old enough to drive. I'd like to invest in Tyco Toys, which makes my favorite radio-controlled miniature cars. But my dad thinks a mutual fund is better. What should I do? SSALI MUKASA Gainesville, Fla.

A. It's obvious from your smart question that you're a future MONEY subscriber, so I'd love to flatter you. But...listen to your dad. Because you need your money relatively soon, buying a single stock is too risky. The reason: If the price of Tyco shares dives just as you're ready to sell them and buy a car, you could be looking at a few more years on the old bikester. Putting your money in a mutual fund makes more sense. It pools your money with that of other investors, so the fund manager can buy a diversified portfolio of stocks, bonds or other investments. This reduces your risk, since it's unlikely that all of the investments will lose value at once.

Also, it's easy to find funds that won't charge you big fees. One good bet is the Stein Roe Young Investor Fund (800-338-2550, up on average 31.8% annually since its inception in April 1994). It carries no sales charge and buys stock in companies that children and teenagers can relate to, such as Mattel, Coca-Cola and McDonald's. An added bonus: Four times a year, investors, 85% of whom are under 21, receive the Dollar Digest, a newsletter that teaches them about finance and money management. So by the time you're ready to drive, you'll also be prepared to wheel and deal in the stock market. Generally, kids need $1,000 to open an account (your mom or dad will need to sign for you), but if you sign an agreement to add at least $50 a month--half your $100 allowance--you can start with just $100.

Q. In 1994, an Atlanta company named Trend Star Development offered me a deal. For $7,000, they'd help me get Federal Communications Commission licenses for Specialized Mobile Radio systems--the frequencies that cabs and limos use to communicate with dispatchers--and then help me lease them at a big profit to phone companies, such as Nynex, who are eager to expand their cellular networks. I got my licenses, but Trend Star went out of business before getting me any leases. Soon, however, another company, called Link-Up Services, phoned and offered to help me lease my licenses for a fee of $250. I paid but heard nothing from them either. Now my licenses have expired. Was I taken? SCOTT SAYERS Austin

A. Affirmative, good buddy. For openers, you could have gotten your SMR licenses directly from the FCC for $45 each. But you still wouldn't have made any money. That's because the license simply grants you the right to build a facility for SMR transmissions. Once you have a broadcast station, you're allowed to sell transmission rights. If you had communicated with the FCC, you would have been warned about this. You also would have learned that Trend Star is well known to the FCC and the Federal Trade Commission, both of which have been trying to warn consumers against get-rich-quick deals in wireless technology.

Link-Up's owner, James O' Brien, is familiar to consumer-protection authorities in Georgia and Florida, who have investigated him in connection with wireless schemes. In Georgia, he has agreed to refrain from making contact with state residents on such deals. O'Brien, whom we reached after four phone calls, says that he didn't promise you anything and that he simply runs a "listing service" that circulates available leases to prospective buyers. Unfortunately, there's no way to recover your $7,250. But you can profit from a good lesson: The next time someone offers you the opportunity to make money out of thin air--even if that air seems marketable--don't sign on until you've done your homework. Do you copy?

Q. I am leaving my job with the Siemens Co. in Bangor, Maine to take a graduate fellowship that includes working for Honeywell in Phoenix. It's only a part-time job, so I won't qualify for the company's full package of benefits, including its 401(k). My Siemens 401(k) is worth $8,000, and the money is in some really good funds. My question: Where can I move my 401(k) money, and what are the proper procedures for such a transfer? NIKOLAY GUENOV Phoenix

A. Why move your money at all? Leave it at Siemens where you are happy with your investment choices. Later on, when you do have a job with full benefits, you could transfer the money into your new employer's 401(k). If you become dissatisfied with the performance of Siemens' 401(k) before you have a full-time job, you can always roll that money into an Individual Retirement Account. In that case, you must instruct Siemens to send the money directly to an IRA in your name at a bank, mutual fund or other financial institution. Do not have Siemens make out a check to you or send you the money directly, or the company will have to withhold 20% of it for income taxes, even if you plan to put that money in an IRA immediately. For now, I say: Sit tight, and keep your mind on your work. Your money's doing fine.

Reporter associate: Barbara Solomon