Some New Wheels

You’re at the dealership and some pushy sales person is giving you the speech about how safe and reliable a car is. Then all of a sudden….

Sales Person: “If the price was right would you buy today?”
Customer: “Uh, I don’t know. I would have to (insert defense mechanism here)”
Sales Person: “Ok, I understand. Let me see if there is something we can do to earn your business.”

This happens every single day at dealerships across the country. I know this because I am the sales manager of two decently sized new car dealerships. The car buying process can be very scary for people who are not prepared or intelligent. People in the car business prey off of people when their guard is down. The saying in most sales positions is “You make %80 of your income from %20 of your customers.” To make sure you are not part of that %20 keep some of these tips in mind next time you go shopping.

1: Most manufactures that have a credit facility often offer %0 for some of their vehicles. In the case of import cars like Toyota, Honda or Nissan; these rates will help save you thousands. In the case of many domestics you may be better going through “an outside bank” and using the cash rebate. Yes you may pay some interest but a lot of domestic vehicles have some beefy cash rebates available.

2: Yes going at the end of the month does help you. I suggest starting your shopping early on in the month and finalize your deal towards the last week or so. A good sales person would have followed up with you multiple times by now.

3: If you want a very big discount you MUST be flexible with color choices and some options. Dealerships have to move what is on the lot. Switching color choices could save you tons of money.

4: KBB.Com is a great resource for having a rough estimate of what your car is worth, but only if you sold it privately. Their trade in number is usually about %20 higher than actual book value of your car. Do not be surprised when this happens.

5: Sales people are humans too. Do not forget that they are on your side and most only live off of commissions. Their job is to get an offer of any type. If you are going to hate any one person, hate the sales manager behind the glass (ie me)

6: Truecar is also a good resource however, it is under a lot of fire from manufactures for having false information. Many will not use Truecar any more or some dealer groups have left the Truecar affiliated system all together. If you do use Truecar make sure your vehicle is built properly with the right options and MSRP. Also make sure you are applying the correct rebates. The site automatically includes the cash rebate for some brands.

7: The best deals are on demos or rental fleet vehicles. Those cars with under 10k miles and are only one year old (or newer) are the best deals on the lot. They usually can be negotiated pretty heavily and sometimes they are eligible for new car incentives. It all depends on if the car was previously registered.

These are just some tips to help you along your car buying process.

Happy shopping!


401k: The Ultimate retirement vehicle

The days of pensions being handed out at corporations is a dying trend. In its place came the 401k or 403b for you government employees. Congress passed the Revenue Act of 1978 which included a provision saying that employees could save their money with pretax dollars (aka deferred compensation). It was a huge step in the right direction for millions of Americans. Today we will cover some of the best known benefits of the 401k to maximize your returns.

1: Not receiving your match is lost money. If your company offers any sort of match, make sure you at the very minimum contribute what is needed to get the match. Consider it free money for your hard work.

2: Tax Sheltering. This is probably my favorite part of the 401k/403b. It effectively lowers your tax rate by a substantial amount. Meanwhile all the money will grow tax free for the next 30+ years. Most likely your tax bracket will be lower during retirement than your prime earning years. Maximizing the 401k also drops any capital gains tax as long as you do not withdraw money.

3: You can start taking distributions at 59 1/2 without any penalties. You will incur income taxes and state taxes depending on where you live. Anything prior to that is subject to a %10 penalty and is also taxed as income. Some plans offer a loan which you would pay back with interest for a determined amount of time. In some extreme cases you can take a hardship loan which could be used to pay for hospital expenses, back mortgage payments or funeral services. If at all possible you should never withdraw money from your 401k. You will miss out on years of compounding growth.

4: Diversify. Most 401k’s are managed by some financial planner that your employer uses. While these people are professionals remember that they also get paid on commissions which depends on where your money is allocated. Check your 401k often to make sure the performance is up to par with what is happening in the market.

5: Fees. Unfortunately this is something you cannot escape. The only thing you could possibly do is pick funds with lower expense ratios. Vanguard has the largest selection of mutual funds with extremely low expense ratios. Over many years this can save you $10,000-$100,000+. Definitely not chump change by any amount. Aim for funds with an expense ratio of less than %1.

6: Auto Escalations. Some 401k plans offer an auto escalation setup. If at all possible sign up for this. Set it up for %1- %2 increases every year until it maxes out. This should keep pace with your yearly raises due to inflation.

These are just some of the great things about 401k’s. Before pumping all of your money into these accounts do make sure your financial house is all in order first. I would advise not to increase contributions if you are saddled with high interest debt of any sort.

Feel free to post any questions below!


Welcome all!

This being our very first post I just wanted to first say thank you for visiting our site.  I know personal finance can be a very tricky (and scary) topic for people of all ages.  If you are a millennial the words “personal finance” probably did not enter your vocabulary until your first rent check was due in one week and you had zero groceries in the fridge.  My goal is to help you not have that happen again.  Our site is written by a millennial who has 15 years experience in the stock market as well as other financial knowledge (insurance, real estate) that can be used by anyone regardless of age.  Some articles may pertain to the Baby Boomers that follow us, and some may be more suitable for millennials.  I will try to spread evenly the contributions for both.  You will hear us mention one key phrase all the time and it is the ultimate gauge of your financial health.  Net Worth.  All your assets minus your debts.  Pretty simple, but can get complicated when taking multiple accounts and people into equation.  This number is used by many as a tool to see when they can “comfortably” retire.  However, the rules have changed in the last ten years for what it means to retire. People are living longer, having fewer children, remaining in the workforce, transitioning careers later in life, etc.  Our goal here is to make your net worth grow through all channels and help guide you to an early retirement!