I like saving. The great thing about saving is that what you save is tax free! If you make a dollar, your take home is less than a dollar after taxes. But when you save a dollar, you get to keep it all. Maybe the adage should be a penny saved, two pennies earned? But let’s face it. If you want to grow your net worth, saving will only get you so far. If you made $50k a year and had no expenses (if you know how to do this, please teach me, master), you’ll still need 20 years to get to become a millionaire. So if you want to build real wealth, you’ll need to increase your income. And one of the best ways to do that is to use education to make more money.
So you’ve decided to lease. I’ve discussed before how leases don’t make sense from a financial perspective. But there are a lot of benefits that come from leasing (that you pay for). This article helps you understand the costs of a car lease, with a handy lease payment calculator below.
Buying a new car can be a frustrating process. Cars have an MSRP (Manufacturer Suggested Retail Price), but nobody pays that. Remember, if the manufacturer is suggesting a price, it’s definitely too much. I’ve suggested how much my employer should pay me, but you can guess how that turned out. So how do you know you’re actually getting a great deal? This article provides advice on where to research so you’re prepared when you visit the dealership and tips on how to buy a new car for the lowest price possible.
I’ve always been a handy person. It’s one of the reasons why I studied engineering in college. Not everybody is like that, so I understand why some people are hesitant to try DIY ideas, especially for things that can seem scary or intimidating. However, you can’t learn unless you try.
I like DIY ideas that can save a lot of money. Experts can charge over $100/hr and in many cases they totally deserve it. Like brain surgery, although you may want a second opinion if your surgeon is only charging $100/hr. But there are many tasks where experts still charge a lot, but what they’re doing isn’t that difficult. I also like DIY ideas because it’s a great feeling when you’re finished. Well, if you do it correctly. If you mess up, it’s more a sense of abject failure, cursing, and embarrassingly calling a professional to fix what you messed up. But I promise these tasks are fairly easy, so the odds of that happening are slim!
Some of you may be wondering what is a 529 savings plan? A 529 savings plan is like an 401(k), but for education expenses. I know, it’s a really horrible name for the plan. It doesn’t tell you anything about what it does, just like a 401(k). Both are named after the section of the IRS code that allows for the tax incentives. If you ask me, I think the government could use some marketers to come up with better names for these things. Or maybe a twitter feed or a video to help these plans go viral.
People ask me whether they should invest in active funds or passive funds. The answer is simple: Passive! Active manager fees are higher and performance usually trails the market, which is why you should invest in ETFs. What is an ETF, you ask?
If you haven’t noticed already, I hate spending money. I don’t know why people buy stuff they don’t need, only to throw it out a few months later because the quality is junk. Wow, why does it feel like I’m starting to sound like my grandpa? Don’t get me started on how many miles I used to walk to school, uphill both ways, in constant snowstorms. But what really upsets me is paying taxes! Not paying taxes is not an option (I’ve checked). So the next best option is minimizing what you need to legally pay. A 401k benefits you by deferring taxes. Note that there’s no way to avoid taxes (only corporations are allowed to do that). Deferring taxes is great because even though you’re deferring the payment, you benefit from the power of compounding. Below, I have some examples to answer the question, “How much money will a 401(k) save me?” Continue reading “How a 401k Benefits You Now and in the Future”
It doesn’t seem like light bulbs could be a big money saver, like with a refi, which could save tens of thousands of dollars, or buying a used car, which could save thousands. However, you’d be surprised by how much you can actually save. I also like this move because it’s so easy and most of all, it saves time! Below I calculate the total cost of different bulbs to answer the question, CFL vs LED bulbs. Continue reading “CFL vs LED: How to Save Thousands”
To save money, I focus on large purchases, as even a small percentage savings can add up to large dollars. This is why I started with analyzing how much I could save with a refi. The next largest purchase for most people is a car. One of the most common questions I get asked is, “Should I lease or finance a car?” You could also purchase with cash, but when rates are low, it may still make sense to finance as you get to use somebody else’s money! Vehicle financing doesn’t have the favorable tax treatment like mortgages, but cheap money is still cheap money. Especially if a manufacturer is offering a low rate to drive vehicle sales! Continue reading “Should I Lease or Finance a Car?”
The best things in life are free, like sunshine. Love and friendship are free too. Well, for most people too. I’ve had to pay for both of those, and for some reason the price goes up after spending 5 minutes with me. What’s the second best thing? Other people’s money! Most people think of debt as being bad, but there is good debt. People focus too much on bad debt, like credit card debt and payday loans. However, there are many kinds of good debt, and if used correctly, they can be used to increase your net worth. Continue reading “Good Debt: How Leverage Can Be Used to Increase Your Net Worth”