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By Kevin M
Have you ever decided to buy something—furniture, an appliance, even clothing—but walked out of the store thinking “I can get that same item in another store for less”?
Why is it then that so often we don’t shop around when buying a car? I can think of a few valid sounding reasons: 
- We don’t feel qualified to make the purchase so we throw ourselves on the mercy of the dealer
- We think, “it’s the same car; all dealers charge mostly the same price”—then hope we’re right!
- We’re overwhelmed and thankful for anyone who will step in and make it easy for us
- Your friend Fred bought his car at this dealership and they took care of him, so they’ll take care of you
- You need a car now and don’t have time to shop
- You just want to get it over with so you can get on with your life
Now at a given time and place each of these may satisfy us that we’re making the right choice by relying on a single dealer to get us a fair deal, but each also has the potential to put us right where the dealer wants us. And that can cost us thousands of dollars more than we need to pay.
Job One in working with car dealers: make it clear that you have options!
Continue reading Never Lock Yourself into Working With One Car Dealer →
Beyond Buy-and-Hold #3
By Rob Bennett
I explained in last week’s column that Valuation-Informed Indexing offers long-term investors both higher returns and less risk than what they can expect following a Buy-and-Hold strategy. It sounds good, of course. The trouble is — It sounds too good.
Higher returns and lower risk both? If there really were a way to pull that off, everyone would be doing it. No?
I think that’s right. Eventually, everyone will be doing it.
The reason why everyone is not already doing it today is that the Valuation-Informed Indexing option has only been available to us for a few decades. John Bogle founded Vanguard in the mid-1970s and it was Vanguard that put index funds on the map. You cannot practice Valuation-Informed Indexing without index funds. So we have only had this possibility available to us for about 35 years.
Continue reading Stocks Are A Lot Less Risky Than You Think →
By Kevin M
What’s old is new again—there is risk in carrying a mortgage on your home! The foreclosure wave and forced short sales of the past few years have shown that paying down—and ultimately paying off—your mortgage isn’t just desirable, but perhaps even a completely necessary step toward securing you financial future.
The risk of not paying off your mortgage
The people who are in the biggest hole right now aren’t the ones who’s property values dropped so much as the ones where the value dropped below the amount of the mortgage securing the property.
Let’s say we have two neighbors, each owning a near identical home worth $200,000. Home Owner A has a $50,000 mortgage on his home, while Home Owner B owes $180,000. A recession hits, bringing a 25% drop in home values, and lowers the value of each home owners property to $150,000.
Continue reading Why Paying Down Your Mortgage is More Important Than Ever →
By Kevin M
Twitter, Facebook, blogs, Digg, Stumbleupon. When we think of the social media, we often think of it as mostly a toy to be used to connect with others and to entertain ourselves, or as a place to peddle income producing wares. But what about using it to drive ideas that are important to us, even if they won’t win us any friends or earn us any money?
For the same reasons the social media is effective in enabling people to connect with others or sell products and services, it’s also an outstanding venue in which to promote ideas. What kind of ideas? How about politics, faith, health, environmental concerns, legal issues, public debates—you name it. If you can tweet, text or blog about your social and private lives, you can do the same about issues with wide public appeal.
The mainstream media have conditioned us to assume that all the great ideas will come from the appropriate “they” or “somebody”—as in “they” should do this, and “someone” should do something about that. The social media has opened up the field, and now WE can participate in the formation and promotion of ideas.
Continue reading Using the Social Media to Drive Ideas →
By Kevin M
When ever we buy a car, a process known as “haggling” is set in motion. From a car dealer’s perspective, this process has two over-riding objectives:
a) To charge as much as possible for the vehicle they’re selling us, and
b) To pay as little as possible for the vehicle we’re trading in.
Our job in the exchange is to bring about the exact opposite outcome in both cases.
As simple as that may sound on the surface, making it happen is anything but! The dealer has the cars, the slick marketing campaigns, the fast talking staff and, in most cases, superior knowledge.
We can’t do much to counter their fleet of cars and in-your-face marketing, but one area where we can level the playing field is with knowledge, particularly as it pertains to valuations. Value is, after all, mostly a function of simple math that most of us can have even if we aren’t automotive experts. It’s often a matter of knowing where to find it.
If you know the value of the car you’re buying, and the car you’re trading or selling, you’ll know when it’s time to close the deal—or when it’s time to pick up and walk.
Continue reading Know the Value of the Car You’re Buying – and the One You’re Selling →
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General: Any information in regard to money, credit, personal finance, or in regard to any other monetary topic, provided or shared on OutOfYourRut.com is presented for information and entertainment purposes only and does not constitute financial advice. It is intended to provide general information only and does not constitute personal financial advice in regard to your specific circumstances...MORE-->
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