I got a message from a friend the other day saying how cheap it was to buy a vehicle nowadays. It seems that everyone is offering zero percent financing for up to six years!!! Even the almighty Toyota brands are offering discounts and financing options, this was unheard of for them up to even six months ago. So basically is question to me was, “is this a good time to buy now?”
So I then proceeded to go out to the car lots and do some investigating. First stop, the local Toyota dealership. As I looked around I saw very few new vehicles and many used vehicles for sale. I talked to the salesman about the only new Highlander that was on the lot. I looked at the price and then proceeded to bargain with him as if I was going to buy it. In true Toyota fashion he didn’t budge much on the price saying that he doesn’t have to bargain on the price because Toyotas are a high demand vehicle and someone will buy it soon. I was tempted to tell him to wake up and look around. People are not buying vehicles when they are worried about their retirement, savings and mortgages. This isn’t 2005 anymore when everyone just refinanced and spent money at will. So I left the lot shaking my head wondering what person is going to pony up full price for that vehicle with options out the wazzoo.
My next stop was the local Ford dealership. I’ll tell you what; I hardly saw one new car on the lot. 99% of the car lot was used vehicles. I talked to the manager and he said that he was more than willing to deal with me on a used car and if I really wanted something new he could order me one. The fact is that they just couldn’t afford to keep a new stock of cars on the lot that they knew they couldn’t move. The only new vehicles on the lot were the F-150’s and F-250’s. Even most of those were 2008’s which would be going off the lot at a big discount in order to make room for the 2009’s.
So that’s my tale of two dealerships. One that realized the economic times and the other that was still living on past sales. I didn’t go to Chevy, Dodge or Honda because those two case studies were all that I was looking for. Here’s something to gnaw on though. Even if you want a new vehicle you better have the finances to do it because lenders are getting pretty weary of anyone that needs any type of credit…especially for new vehicles.
My advice to my friend was to wait until 2009. I’m predicting a crash for the auto industry as a whole due to the fallout of the current economy. Even if the economy improves by then the industry will feel the effects of the past year and it will become a trickle down effect…a delayed reaction if you may. If you have the money saved up and really want a new vehicle I would suggest to wait. The offers will get better and the discounts will get larger by early 2009 which will save you tons of money.
17 October 2008
13 October 2008
Saving Money; 3 Easy Steps
Everyone wants extra money in their pockets and web searches show this fact everyday. Why are the same people searching for ways to save money when they already know the answer? Simple, they have the answer and they don't like what it says. What people really want is to make more money in order to live the lifestyle that they are currently living. But get this...once people attain a higher wage they end up spending more money and are AGAIN living paycheck to paycheck. Unless people reprogram their brains on what needs to be saved and how, they will always end up in the same place no matter what the pay stub reads at the end of the day.
Must Do's:
1. Stop drinking the expensive coffees and eating the expensive meals when you could make pretty much the same things at home. I used to love going to Starbucks but I changed that. I did splurge and buy a Cuisinart Grind 'n Brew coffeemaker and now buy the Starbucks or Millstone whole beans and make it myself in the morning. Sure it's still expensive coffee but I don't want to drink junk in the morning. So I save money by not buying it by the cup everyday but I don't take away my morning enjoyment. Food is the same way, invest in a dang cookbook. Cutting down an eat out or two a week and gradually making it a special treat instead of something common will save you hundreds per month.
2. Credit Card Killer. You can get the best saving advice in the world from refinancing to getting lower rates to opening CD's. The fact is that nothing of that matters if you can't get your credit cards under control. You could solve many of life's problems without that dang bill every month correct? Try and consolidate your credit card bills with those cheap transfer rates to your lowest rate credit card. Don't use the other cards!!! Focus on paying off that one credit card bill every month. Paying just the minimum is a killer too but not as bad as your credit rating taking a nosedive into the crapper.
3. Open a separate savings account. Is it really that hard to put 10% of your paycheck into a savings account and leaving it there until you have enough to take your vacation, buy your car or whatever??? It really isn't. If you physically took out a pen and paper and wrote down what you spend money on daily and did this for a whole month without cheating I'm sure you could come up with that 10% somewhere. When you're tempted to splurge think to yourself if what you're splurging on is worth putting off that towel on the beach in Maui.
Stop looking for instant gratification and take in the whole picture. Just doing these three things will put you on the right path to taking back your financial freedom.
Must Do's:
1. Stop drinking the expensive coffees and eating the expensive meals when you could make pretty much the same things at home. I used to love going to Starbucks but I changed that. I did splurge and buy a Cuisinart Grind 'n Brew coffeemaker and now buy the Starbucks or Millstone whole beans and make it myself in the morning. Sure it's still expensive coffee but I don't want to drink junk in the morning. So I save money by not buying it by the cup everyday but I don't take away my morning enjoyment. Food is the same way, invest in a dang cookbook. Cutting down an eat out or two a week and gradually making it a special treat instead of something common will save you hundreds per month.
2. Credit Card Killer. You can get the best saving advice in the world from refinancing to getting lower rates to opening CD's. The fact is that nothing of that matters if you can't get your credit cards under control. You could solve many of life's problems without that dang bill every month correct? Try and consolidate your credit card bills with those cheap transfer rates to your lowest rate credit card. Don't use the other cards!!! Focus on paying off that one credit card bill every month. Paying just the minimum is a killer too but not as bad as your credit rating taking a nosedive into the crapper.
3. Open a separate savings account. Is it really that hard to put 10% of your paycheck into a savings account and leaving it there until you have enough to take your vacation, buy your car or whatever??? It really isn't. If you physically took out a pen and paper and wrote down what you spend money on daily and did this for a whole month without cheating I'm sure you could come up with that 10% somewhere. When you're tempted to splurge think to yourself if what you're splurging on is worth putting off that towel on the beach in Maui.
Stop looking for instant gratification and take in the whole picture. Just doing these three things will put you on the right path to taking back your financial freedom.
10 October 2008
How To Protect Your Investments And Still Make Money
Unless you’re living in a dungeon you know what the market it looking like right now. I’m sure that all of you are diversified in your investments. If you’re not diversified then you’re getting smoked in a very bad way right now. Unless of course you own lots of index put options.
I was talking with some novice investors yesterday and I couldn’t believe that they didn’t realize that you can play the downside of the market just as easily as you can play the upside. I guess I just take it for granted that not everyone has the time and energy to follow the markets as closely as some of us do. With some simple technical strategies you could make a very good living off of trading only the indexes with a solid exit strategy, but I’ll save that for another article or our newsletter.
I didn’t have much time to fully educate them on the various nuances of investing but I did give them this advice. If they were nervous and wanted to stay in the market AND liked the companies that they had, then they should buy some protective puts against their stock positions. The online brokers that I deal with all allow you to do this because you’re not buying naked calls/puts but just hedging a position that you already own. This helps to protect your position in the stock while making up for some of the losses to the downside (Selling calls achieves a similar affect). I also informed them that they could buy puts on the S&P (SPY), Dow Jones (DIA) and the NASDAQ (QQQQ). Also with the NASDAQ I like to protect myself by buying the QID’s which, in a nutshell, makes money when the NASDAQ dives.
Now these are the plays I do but looking at the bewildered looks on their faces and noticing their anxiety on the markets I told them to look into Municipal Bonds which are very attractive (I wrote an article on that subject a few weeks ago). Of course Muni’s are not the only course of action; you could also look into other high rate bonds like Treasury notes/bonds but personally I like Muni’s right now.
I almost exclusively invest in stock derivatives but if you’re not comfortable doing so then there are other investment vehicles that you can take advantage of in tough times such as these. At the very least I informed my captive audience to look into options plays and paper trade them (it cost no money and you can see the consequences of your actions).
I was talking with some novice investors yesterday and I couldn’t believe that they didn’t realize that you can play the downside of the market just as easily as you can play the upside. I guess I just take it for granted that not everyone has the time and energy to follow the markets as closely as some of us do. With some simple technical strategies you could make a very good living off of trading only the indexes with a solid exit strategy, but I’ll save that for another article or our newsletter.
I didn’t have much time to fully educate them on the various nuances of investing but I did give them this advice. If they were nervous and wanted to stay in the market AND liked the companies that they had, then they should buy some protective puts against their stock positions. The online brokers that I deal with all allow you to do this because you’re not buying naked calls/puts but just hedging a position that you already own. This helps to protect your position in the stock while making up for some of the losses to the downside (Selling calls achieves a similar affect). I also informed them that they could buy puts on the S&P (SPY), Dow Jones (DIA) and the NASDAQ (QQQQ). Also with the NASDAQ I like to protect myself by buying the QID’s which, in a nutshell, makes money when the NASDAQ dives.
Now these are the plays I do but looking at the bewildered looks on their faces and noticing their anxiety on the markets I told them to look into Municipal Bonds which are very attractive (I wrote an article on that subject a few weeks ago). Of course Muni’s are not the only course of action; you could also look into other high rate bonds like Treasury notes/bonds but personally I like Muni’s right now.
I almost exclusively invest in stock derivatives but if you’re not comfortable doing so then there are other investment vehicles that you can take advantage of in tough times such as these. At the very least I informed my captive audience to look into options plays and paper trade them (it cost no money and you can see the consequences of your actions).
Subscribe to:
Posts (Atom)
Posts
