How To Be A Sucessful Adult – Buying Your First Car

Buying your first car

Buying your first car can be a daunting task but now that you’re an adult and understand your pay cheque, you probably want to buy yourself a car. Hopefully you planned your budget accordingly! Buying a car is often one of the first big purchases people make. Lots of high school students save up a few grand and buy an old clunker to escape whenever they want.

Don’t write off buying used because you “can” afford new

I don’t know your financial situation but if you’re still in school or freshly out of school, or still have student loans you might want to go the used car route. Used cars don’t get enough credit as a possible money saving device. Used cars allow you to avoid immediately losing 11% of the purchase price after driving it off the lot. This basically means if you buy a car with a 10% or less down payment, you immediately own no equity. It’s basically like throwing away 10% of the purchase price. Here’s an infographic from Edmunds.com(They’re car people)

buying your first car
Source:  How Fast Does A New Car Lose Value

This is all of course based on average driving. Low mileage cars will be worth more, higher mileage worth less. Then of course the condition of them matters, if you don’t look after it and keep up on the maintenance the value drops even faster.

The Pros are obvious of a used car but what are the cons?

Well along with being cheaper, used cars are older and their history can be unknown. Unless you know the owner of the car you’ll have to rely on 3rd verifications. CarProof is a great source that many dealerships will provide you with. It’s essentially a service that tracks the insurance history of a vehicle. This will tell you if it’s had an insurance claim and a brief description with the estimated cost of damage. It also tells you when it was registered and other minor details.

Another downside to buying used is a chance it doesn’t have a warranty. There’s plenty of dealer programs out there that do offer warranties on their models. There’s also third party warranty offers that you’ll most likely get from the dealership for models that aren’t theirs. These can be worth it but you’ll want to go through them in great detail. Make sure you know everything that’s included because like everything else, some sound too good to be true and they usually are.

Financing costs are usually a lot higher on used cars compared to new. Dealerships don’t usually give the really low interest rates like 0% or 0.9% that is often found on new cars these days.  Instead you’re going to be paying interest up around the 3-5% range. This of course depends on your credit, financing terms, and of course where you’re getting the loan.

So why would I ever consider a new car?

Because who doesn’t love that new car smell? Am I right? I have no idea what that new car smell is to be honest.  I’ve never bought a new car and never have I noticed a smell when test driving new ones. What’s up with that phrase anyway?

Ok so new cars aren’t just an immediate depreciating asset. They definitely have some upsides. New cars come with pretty solid warranties. The warranties usually cover in the range of 75,000 to 150,000km or 5-7 years, whichever comes first. Not to mention you might get free oil changes and possibly minor maintenance during this period. Things like free oil changes and tire rotations are not out of the ordinary with a lot of dealerships.

You’re also going to get a better financing rate for a new vehicle purchase. As mentioned above new cars often come with <1% financing, which is almost like free money! They may of course factor that low financing into the purchase price or it could be just part of a special dealer incentive to move inventory. Either way, you may be able to offset some of the depreciation with such a low rate when you compare to buying used.

On top of the above pros to buying new, you have a better chance at getting a more reliable vehicle as well. Provided the vehicle you’re buying isn’t the first year of a redesigned generation they should break down less and be easier to maintain. I’d recommend looking into studies that show the most reliable brands before jumping into something to make sure you’re getting the best value for your money.

So when buying your first car is new or used better?

Ultimately, that’s a personal preference, but both have their pros and cons. The used vehicle is cheaper, but may come with some minor issues you wouldn’t identify on a test drive. The new vehicle will depreciate the moment you drive it off the lot. The bottom line is both choices depreciate and both get you from point A to point B. It’s just your own decision on whether or not you want to stretch your finances for the new model and maybe a little more peace of mind or stick with a used vehicle and save some money.

Personally, I stick with buying used. Cars over the last decade have been extremely reliable and you can save a lot of money to get you jump started on other financial goals.

How to actually purchase the vehicle?

Once you know whether you want to purchase new or used and the model of vehicle the rest is pretty easy.  After that you can visit the dealer and start your shopping. Once you’ve decided on the car the dealer will walk you through the process. The dealership will offer you financing through their preferred bank(or loan shark depending how shady of an establishment you’re shopping).  They’ll also give you a few days to arrange for insurance. The few days to arrange finance and insurance is the most crucial, make sure you shop around for as good of a rate as you can get.

How To Make The Most Money In Professional Sports

How To Make The Most Money In Professional Sports

How to make the most money in professional sports

Do you know how to make the most money in professional sports? I think by now everyone probably knows by now that athletes make a TON of money compared to the average person. They also happen to go broke way more often than they should. So that’s why I’ve built this handy guide for any athletic people that want to make the most money possible! This is clearly not to be taken too seriously, but if you’re an athlete and make a ton of money off this guide, holla back at your boy!

For this article, I scoured the internet to find out the average salary and median salary in most professional sports in North America. I have the English and Indian Premier leagues as well because they’re also insanely popular around the world. Unfortunately for the fans of professional soccer (football for you non-North American readers) I had to limit the number of leagues. I had no idea there were so many until I started researching this article, it’s seemingly endless! For kicks I also included the CFL, because I’m Canadian and it’s almost comical to see what an average salary in the CFL is compared to the NFL.  Read more

These Four Fintech Companies Are Changing Personal Finance Right Now

These Four Fintech Companies Are Changing Personal Finance Right Now

Remember what the internet did for travel? It opened it up to more people and made it easier. Instead of needing to hire a travel agent to plan a trip, we can do it ourselves for free. That’s what financial technology, or fintech, is doing for a lot of areas of personal finance.

We don’t have to spend hours on the phone to find the best student loan refinancing or insurance rates. We don’t have to give our friends cash or gasp! write a check to them when we split the dinner bill, and now instead of having to read dry books or hire a financial advisor to teach us how to manage our money, there are great resources right at our finger tips, just a click away.

These are four companies making a big splash in the fintech world. Read more

How To Be An Adult Part 2: Simple Budgeting Guidelines

Simple budgeting guidelines

How to be an adult part 2: Simple Budgeting Guidelines

Now that you understand how your pay cheques work let’s talk about budgeting that money.

What is a budget?

So what exactly is a budget? Well according to the smart people over at Merriam Webster(the dictionary people) Budget as a noun is defined as:

a :  a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them
b
 :  a plan for the coordination of resources and expenditures
c
 :  the amount of money that is available for, required for, or assigned to a particular purpose

And as a Verb:
1a :  to put or allow for in a budget
b :  to require to adhere to a budget

2a :  to allocate funds for in a budget <budget a new hospital>
b :  to plan or provide for the use of in detail <budgeting manpower>

So basically, for our purposes of personal finance a budget is the plan you give yourself on how you’re going to allocate your money. It doesn’t have to be spending, if you’re budgeting your pay cheque it should certainly have savings in it. Also you may want to include something towards an emergency fund.

How does one go about making a budget?

Read more

8 money tips from Johnny Depp’s finances

Johnny Depp




8 money tips from Johnny Depp’s finances

Well in case you have more of a life than me or just don’t care for celebrity gossip, Johnny Depp is (allegedly) going broke. Last year he finalized a divorce settlement for 7 million dollars, which is pennies for an actor that made $55 million for ONE Pirates of the Caribbean movie right? Well it seems that might not be the case! He also recently filed a $25 million lawsuit against his business managers. He claims his funds were mismanaged. We’d really have no way of knowing how mismanaged they were because we don’t have his spending history. (….or do we?)

Depp’s management group of course doesn’t think they mismanaged his funds. They’re so against this idea that they’ve now launched a counter-suit. In the details of this counter-suit they’ve revealed some details of his spending. They’ve also revealed that his monthly expenditures are ASTRONOMICAL. 

After hearing about his monthly expenditures, I asked a few people how much they think Johnny Depp spends each month.  A few guesses were in the tens of thousands of dollars, the majority were in the $100,000 to $300,000 range both of these ranges aren’t enough for ol’ Johnny(that’s what his friends call him…). The highest guess was a million dollars, A MILLION DOLLARS EACH MONTH?!?!  Well that’s not even close!  Read more

Year end update – Q4 2016

Q4 2016 update

Another year is over and so here’s another update, this time for Q4 2016. As I mentioned in my last quarterly update I was jamming all of my trips into the last half of this year, so we’ll say I was on vacation…even though I probably wasn’t.

I’ll do a quick brag about my trips to start this off and get it out of the way.   Read more

3 simple financial resolutions you need to start

3 simple financial resolutions

Happy New year everyone!  

I hope 2016 was better to you than the media portrayed it to be. For the last few months of the year you’d swear nothing good happened. I think those people just didn’t have time to look at their retirement savings. The year was pretty solid overall for the markets, the Dow Jones was up 14.4% as of closing just before Christmas.

3 simple financial resolutions you need to start

Very solid year for the Dow Jones

For Canadians, the TSX composite index was up 17.8% over the same time period! So, if your investments are close or matching these indexes you’re looking at a possible 14-18% return for one year.  To put that into perspective you’ll double your portfolio in 5 years without any additional contributions! Read more

How to make money in real estate

make money in real estate





How to make money in real estate? That’s a very popular question and has tons of answers! You can literally make money with lots of different options, and each option has multiple ways to execute them. On top of that, you can apply each of those options to different areas of real estate like residential, commercial, industrial, etc. I could go on for a while with these but I won’t. Soooo see ya next week!?

NAAA! I’m just kidding…had ya for a minute though didn’t I? You thought I was going to take my dozens of blog dollars and disappear for ever didn’t you?  Actually, I’m just going to touch on a few popular options and a few lesser known options on a higher level. In a future post I’ll break each of them down in greater detail, but for now we’re just going to dip our toes in the water on how to make money in real estate.  Read more

Why aren’t Canadians saving money with comparison sites?

why-arent-canadians-saving-money-with-comparison-sites





Comparison sites have been around a long time; you’ve almost certainly used some yourself. Have you ever searched for a trip on Expedia or Kayak? I do it all the time, you can usually save a few hundred dollars on trips you’re planning.  They’re also great research tools to help plan and budget your trips.

Have you ever bought anything on Amazon or eBay? Me too! You’d be foolish to buy something online and not consult these sites for price comparisons. You’d also be foolish to not check a site like Ebates to get an even further discount on your trips or products or money back.

While the above-mentioned sites work great for 90% of our purchasing. They unfortunately don’t help us with big ticket items like insurance and mortgages. Insurance typically is worth thousands of dollars and mortgages are often in the hundreds of thousands. You can save more on these than you would on almost any other purchase, besides the houses and cars themselves. Apparently, Canadians just don’t do this. According to a recent study by LowestRates.ca only 8% of respondents used a comparison site to source their most recent mortgage! WHAT?!?

Why would no one use these financial comparison sites?

Read more

Money tips for any age

4 of the best money tips for any age




Money tips for any age

Here are four money tips that you will either have success with, or you will regret not following. The choice is yours!

Never finance depreciating assets

If you’re borrowing money and the asset depreciates in value you’re paying much more than you think.  Debt is not a bad thing if used correctly. If you use it to purchase properties that increase in value it can be worth it. You can borrow at 3% on a mortgage and you gain 4% each year on average on that house value, your net worth will still be increasing. If you buy stocks on a margin and they gain more than the cost to service your debt, you’re still ahead.

It’s when you buy everyday products on a credit card and don’t pay it off before you incur interest when you fall behind. With a depreciating asset you’re losing money over time on owning the asset and you’re also paying interest to own it. Look at owning a new car for an example. Buying a new car at 0.9% interest is a pretty good deal as far as finance rates go, but you’ll still pay more to lose money. Buying one at 0% is even better, the car will depreciate but you won’t be on the hook for any interest.  Read more

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