Go Get Your New Car!

Your neighbor just bought the brand spanking latest car of his “dreams”.  How long did he dream of it, the thing just came out?   He will probably trade it in within three years for his upgraded “dream” ride.

You don’t need to do him one better. Forget about keeping up with the Joneses. They don’t pay your mortgage, car note or any other bill for that matter. Forget about impressing them because that is the real reason for keeping up.

Not saying you should trade-in your car for a bike, or drive your car until it becomes a rust bucket, but a new car every two or three years is a terrible financial move.

Buy certified pre-owned with factory backed warranty. This is like buying new, with the added benefit of saving thousands of dollars and ride it until you can ride it no more.  No plug here, just a little smarts!  .

Go ahead and buy that car.   Every summer while you are stuck in rush-hour traffic in your new car, dreaming about lounging in paradise; St Lucia, Cancun or Tenerife. I am there toes in the sand, refreshing beverage in hand, while you wish you could. It’s OK you are sitting in your NEW car.

Essays From A Moron – Saving For Retirement

Over the last few days I spoke to many friends and co-workers about saving for retirement. What many shared stuck a nerve.  Pretty scary that many had almost nothing saved.  Even worse they had no idea where to start.

All works of life. A high school drop-out, many college graduates, there was even a doctor in the group. From minimum wage earners to one with a six-figure salary. The commonality was that they had no clue whatsoever

Many feel that between social security and whatever pension they may have will be more than enough. Most of us have seen what is going on many pension plans are being mismanaged into oblivion and most fear that whatever we receive from social security will be no more than what would be considered a supplement.

Some had invested in the market, but after the most recent collapse circa 2009, they cashed out when the market was low and took a substantial loss. Lack of knowledge, fear and misinformation has led many to never again invest in the stock market. That fear is real.

There are other options for those that may be afraid of the stock market.  Keeping your money in a savings account is like keeping it under the mattress; your savings can’t even keep up with inflation so look elsewhere.

The tools and information are freely available. I typed “investment information” into my scroll bar and I received about 706,000,000 results and all it took was 0.53 seconds. A few minutes reading some of the links and conducting some research is time well spent. Due diligence will get you very far.

There is no need to spend our “golden” years living in poverty. Getting started is much easier than many think. It is never to late to start.

The Pennies Do Count

Over the last several weeks I have been listening to personal finance podcasts and reading many other personal finance blogs.  All offer suggestions on how to save money and what to do so that it grows.  They all extol the benefits of 401K, IRAs, and other traditional methods to save for retirement.

That is where the likeness ends for many.  Same endgame, different routes.

Some believe that being frugal is the path. That having 25 pairs of shoes, or a closet full of dresses, suits or jeans is unnecessary as we can do with less than that.  Many go to extremes with this.  Eating boiled noodles every day because they only cost $2. One buys two-ply toilet tissue and separates them into two and cuts open the toothpaste tube to get the last bit. Wearing faded, full-of-hole t-shirts are the norm.

Many use The Latte Factor, how small daily expenditures add up, as an example of how small savings over time add up. Those that disagree with this say that saving such a small amount does nothing and you should focus on the bigger gains.  like getting a high paying job and only focus on big wins. Want that large $7 cup of coffee, go ahead.  it only costs $7.

My thinking, take the what works best for you and disregard what does not. some of the things I started with:

• I did not cut the cable, but got rid of every channel we did not watch.

• Still buy the latte, just not every day.

• I de-cluttered my house one room at a time and stopped wasting money on stuff that just cluttered my life.

• I don’t buy bottled water; a reusable bottle that has a carbon filter does the trick.

Remember these three simple rules:

1. Spend less than you earn.

2. Eliminate debt.

3. Save, save, save…

No one wants to end up poor and in debt, do your part and help yourself. There are many ways to cut out unnecessary expenses. Please share any that have worked for you.

Essays From A Moron-Eliminating Debt

When it com

When it comes to eliminating debt there are Several ways to approach the situation. Two of the more common . ,.are “snowball” and “avalanche” methods.

1. Snowball·

Create a list of all debts. This list is prioritized from smallest amount to largest. You make minimum payments on all. All available funds go towards that first, smallest gets paid off first regardless of the interest rate charged.  Once the first item is eliminated, you move to the second item and so on.

2. Avalanche

Create a list of all debts. This list is prioritized from highest interest rate to lowest.  Here the minimum payment on each debt is made, but all remaining funds go towards repaying the debt with the highest interest rate. Like with the snowball method, once the first item is completely paid off, you tackle the next item. This process continues until all the debts are paid off. The benefits of the snowball method are primarily psychological; when you eliminate that first debt, regardless of how small; you see progress.  There is a sense of accomplishment. This approach works for those that need a quick “win” to stay motivated. I am a proponent of utilizing the avalanche method because it saves both time and money, making it the more logical way to pay off your debts.Whatever method you choose, stay the course.  Eliminating debt is one of the pillars of financial freedom. You can now start the next phase-saving for retirement. Getting started is much easier than many think.es to eliminating debt there are Several ways to approach the situation. Two of the more common are “snowball” and “avalanche” methods.

1. Snowball·

Create a list of all debts. This list is prioritized from smallest amount to largest. You make minimum payments on all. All available funds go towards that first, smallest gets paid off first regardless of the interest rate charged.  Once the first item is eliminated, you move to the second item and so on.

2. Avalanche

Create a list of all debts. This list is prioritized from highest interest rate to lowest.  Here the minimum payment on each debt is made, but all remaining funds go towards repaying the debt with the highest interest rate. Like with the snowball method, once the first item is completely paid off, you tackle the next item. This process continues until all the debts are paid off.  The benefits of the snowball method are primarily psychological; when you eliminate that first debt, regardless of how small; you see progress.  There is a sense of accomplishment. This approach works for those that need a quick “win” to stay motivated. I am a proponent of utilizing the avalanche method because it saves both time and money, making it the more logical way to pay off your debts.Whatever method you choose, stay the course.

 Eliminating debt is one of the pillars of financial freedom. You can now start the next phase-saving for retirement. Getting started is much easier than many think.