Monthly Archives: September 2011

Buying a Car – Test Drives (1)

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So instead of just blogging about the financial aspect of buying a car (see New vs. Used) I figured why not have a little fun and write about the test drives as well. If nothing else it will help me keep a record of what I liked or disliked about each car and ultimately help me chose what to buy.

Dodge Challenger RT – 2009

Now, I drove this car over a year ago (I wasn’t lying when I said I had been thinking about buying a car for a looooong time) so my memory may be a little rusty but I’ll do my best.

What I liked: The power, this guy had a kick! With a V8 hemi it would certainly be fun to drive. The exterior styling, this is one mean looking car, I especially like the front.

What I disliked: The interior styling, it’s just very bland, all one color, and nothing really to get excited about. No additional features beyond the standard power windows, locks, and a CD player. It might have had an AUX (iPod) input but I can’t remember, I’m sure it’s at least an option. The price, you are paying for great power and exterior styling in an otherwise ordinary car.

Other notes: The test drive was lackluster and I pretty much was only able to drive in a straight line, I would need to drive again to judge handling and overall drivability

BMW 328i Coupe – 2010

I was looking for a 2008 or 2009 model but, unfortunately the dealer did not have any in stock. However, he told me the 2008 – 2011 models of the 328i were all pretty much the same except for some options and small exterior styling cues.

What I liked: This is one sexy machine, I am a huge fan of the exterior styling of both the coupe and convertible 3 series models, the sedan is OK until you see its backside (wtf happened…). The interior was very nice, leather seats, nice trim, dual zone climate control, sunroof, power everything, etc. It just felt good to be sitting in the drivers’ seat, and actually got me excited about the car. The car itself just felt solid, I don’t know how else to explain it, perhaps it’s the build quality, but when you shut the door there is a solid thud, opposed to an echoy slam like some other cars. Immediate power when the gas was pressed, no waiting for the engine to rev up for the power to kick in.

What I disliked: For some reason I couldn’t figure out the damn radio, I kept turning it to AM and couldn’t switch back, I’m sure the sales guy was laughing at me in his head. Actually the whole control panel for the A/C – radio was a little confusing…maybe I’m too used to my simple controls. I thought the car would be a little peppier than it was, I didn’t feel the umpfh of being pushed back in my seat when I punched it. It was hard to tell how fast I was going.

Other notes: At first I wasn’t too impressed with the test drive but the more I think about it the more I like the car, I would certainly need to give it another test drive before I could say I would buy one.

Buying a Car – New vs. Used Part Un

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I have been playing around with the idea of buying a car for probably over a year and a half now. I still own my very 1st car – a 1998 Saturn SC2 with approx 105,000 miles on it. I just hit the glorious 100k mile mark a few months back. I took pictures and all! I purchased the car in 2003 and will have owned it for eight years come October. My delay in purchasing a car hasn’t been affordability, it’s that I can’t justify spending tens of thousands of dollars when I have a car that still runs. The name of my blog is 100% true; I really am bad at spending money.

However, over the past six months I have come to terms with the fact that I will eventually have to buy a car, as much as I don’t want to spend the money. I have also decided that it is better to be prepared and know what I want to buy and actually buy it before my current car dies. So, I have begun the long process of researching potential replacement cars, thus commencing the whole car buying process. In the midst of all of my research, I have come across many articles on new vs. used cars. The general consensus from a financial stand point is that a used car is always a better choice than a new car – this is something that I also agree with. Mainly because a new car, once driven off the lot, immediately begins losing value; where a used car already took that deprecation hit allowing you to buy it at a discount. Well, at least that used to be the general consensus. Over the past few weeks, I’ve seen a few articles from “financial pros” (looking at you Clark Howard) stating that now it is actually better to buy new. This doesn’t quite make sense to me, but the logic behind this idea states that due to the crappy economy, buying new is actually cheaper than buying used. They claim that the demand for used cars is at an all time high (because of low supply), thus driving up the prices.

I don’t buy it. So I decided I am going to do my own pricing research and post the results here. To keep myself accountable, I will be posting this before completing any price specific research so my opinion is loud and clear. I shall conduct my research over the next few weeks or so; then, I will either claim victory over the “pros” or walk home humbled.

So what do you think, will the finance pros be right, are new cars currently a better bargain than used?

$100 > $1,000,000 (not a typo…)

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I fully intend to have $1,000,000 in the bank one day. Not literally in one bank, spread across many types of investments and accounts, but you get the point. One day, I will be a millionaire.

So many people spend a lifetime chasing what seems to be the elusive goal of becoming a millionaire, only to fail in the end. The thought process usually becomes “if I only made more money” and while making more money certainly helps achieve the goal, it is only half (or less) of the equation. The other half, which is usually widely neglected, is your personal spending habits.

Now, this isn’t going to turn into some published for the thousandth time article that tells you to cut down on the frappucinos, which I’m sure you have read more than once. Instead I am going to share with you one of my personal philosophies on how I think about money.

Regard $100 more than you do $1,000,000

That’s right; treat one hundred dollars today as more than one million in the future. Many people tend to spend $100 without much thought, and a good portion of those will drop $1,000 without much more. And let’s face it, one million is kind of an arbitrary goal to have and probably won’t be enough for you to retire with anyway. Don’t treat saving $1,000,000 like it is impossible and something you will never achieve, think of it in terms of a lifetime and it is actually pretty small.

Millions of people will bring home probably twice that amount during their working lifetime. Think about it, if you bring home a net income of $50,000 a year working for 20 years, you will have made one million dollars. Most people work more than 20 years before they retire and eventually end up bringing home more than $50,000 net per year. Couple this with any income provided by a spouse, and suddenly your earning power doesn’t seem to be the problem.

Read the 1st two paragraphs of this article as some food for thought: http://usgovinfo.about.com/od/moneymatters/a/edandearnings.htm

I could probably make the argument that spending habits actually matter more than income when used to measure a person’s wealth. However, I don’t have any academic studies to reference proving my point…all I need to do is look at the many celebrity actors and music stars who once had millions and are now broke.

Remember when you were a little kid and thought $100 was almost an unimaginable amount of money, what happened to that feeling as we got older? Somewhere along the line it was lost, and the ability to spend freely took over. The next time you are about to make a purchase over $100, do your best to remember that feeling and give the purchase a little extra thought. Is it an item you really need, or really really want*? If you do this, I bet you will see that ever elusive $1,000,000 much sooner.


*Quick Tip: Before buying something you want, wait a week. Or better yet, wait a month before actually buying it. Most of the time the feeling will wear off and you will either not want the item anymore, or want it much less. If you still want it after that time frame and you can justify it, go ahead and buy it. Using this little trick will help you save and cut down on impulse purchases.