Oct 30 2017

Life Lessons: The Fatal Financial Trap.

The best balance to carry on a credit card, these cards, ruin some people, they almost ruined me back in 2007.

Notice how they call it check spending power, smh, translated, it really means useless debt.

Know how to play the game with these cards, if you can’t, cut them up before it’s too late

Jul 12 2015

Spend Wisely.

Subject A buys a new vehicle for 23k because they assume a new car with no miles and a warranty is better than a used one that runs very good and it’s a better investment than the older car they were driving. It’s brand new, and you know, that is supposed to feel good.

Subject B keeps driving their vehicle they paid off, sure it’s older but they kept up the general maintenance and if the car needs some maintenance that’s a trade off for the expense of a monthly loan payment for it.

Subject A buys the new car and feels great driving it off the lot. But the car just looses a couple grand of its value with being driven off the lot. It also loses over 30% of its value within the first 3 years.

Yet Subject A is paying a 5 year loan for this privilege of owing A BRAND NEW vehicle, that, ummmm, loses damn near half it’s value before the loan is paid off.

Subject B invests their former car loan payment of $450 in a Roth IRA or Traditional IRA which equals out to $5400 a year.

The average return of investment of their IRA is 9% annually with that compound interest their money is growing at a healthy rate.

After 5 years the time Subject A has finished paying off their so called smart investment they have lost a considerable amount of money, on their now used car.

Subject B looks at their IRA, sees it exceeds well over 33k and is stoked on how compound interest is rolling into a much bigger snow ball of gains than when they first opened it. At such a rate that the interest made yearly is neering exceeding their yearly contributions to it. They shake their head at the thought of a few of their friends who have just purchased brand new loaded SUV vehicles for 30k, vehicles they didn’t need.

Subject B HAS the investment. Subject A has a problem if they thought theirs was one.