Monthly Archives: November 2017

Car Finance Tips That You Should Know About

Planning is the best idea to do before buying a new car especially in paying for it. One of the biggest mistakes of most car buyers is when they use the finance deal offered by the car dealer. Compared to the average interest rate on dealer’s car finance, personal loan on the market is much better. It is because the average rate on a dealer’s car finance is 3% higher. In addition, personal loans that can be found in the market are 7.4% available. To know more about car finance, here are some helpful tips that can provide you a better idea before purchasing a new car.

The first hint is to KNOW WHAT TYPE OF CAR OTHERS ARE PAYING FOR. One should search what car models are most people are buying. With this, you can gather ideas about the average price that such individuals are paying for.

Second is to LOOK OUT FOR FINANCE. Search all the companies that are offering loans, remortgaging, and credit cards. You must also know their advantages and disadvantages. After doing this, choose one of them which is the best.

Third is to GET YOUR FINANCE WELL ORGANIZED BEFORE LOOKING FOR A CAR. Prior to checking out cars, it is important to know your highest budget. The buyer is in a good situation to bargain if he already knows his maximum budget.

The fourth hint is to NEGOTIATE. Trying to negotiate the price of a car is not bad. Actually, this is one of the best things to do in purchasing a new car. If the buyer gets the price as low as the dealer goes, he can try to get a little extras like mats and GPS.

Fifth is to BE BRAVE ENOUGH TO WALK AWAY. Do not hesitate to walk away if you feel that you do not get a great deal. There are lots of companies that are offering cars so there is a big chance that you can get a good deal. Make sure that you do a good decision because you are paying a big amount of money for a new car.

The last is to KNOW THE RIGHT TIME. There are times when a car dealer is not concerned about making a huge profit and searching to achieve their bonus targets. This time only happens at the end of the month. This is the right time to look for a new car.

Three Essential Personal Finance

Personal finance is extremely important in today’s society. Whether you are looking to purchase a new home, pay for college or take a trip of a lifetime, personal finance can help you achieve these goals. While there are many ways to benefit from good money management, here are three essential personal finance tips that can truly help you achieve your goals.

Save and Invest

It is absolutely essential that you save as much money as possible and then invest it so that it can work hard for you. Saving money is vital to having a nest egg in the future for the purchases you desire. Saving requires a plan and usually lots of time. One of things that you should do once you receive your paycheck is to pay yourself first. Take a set amount of your pay check and put it away. Once you have money saved, the next step is to invest it and make it work hard for you. Over the years, you can earn hundreds of thousands of dollars off of just $30K to 50K in savings using the power of compound interest. There is no magic involved. In order to create a nest egg in 10, 20 or 30 years save money and invest it.

Create a Budget

Creating a budget is essential for anyone that has an income and expenses. Many of us are usually carefree and do not keep a record of all our purchases, however if we knew just how much we spent each year on junk or impulse purchases we would be aghast. Creating a budget is a great way to understand what we spend our income on, reduce spending on non essential items and discipline ourselves to save and invest our money for the long term. Creating a budget is extremely simple and requires only a few hours of time each month. A simple budget can literally save you thousands of dollars a year and give you true piece of mind.

Use Credit Wisely

Credit cards can be extremely convenient, but many times they are equally destructive. A credit card is not a license to spend; it is in effect a loan. Understanding how credit works and how to use it responsibly can make your life much easier. Credit cards can be a great option in certain situations, however using them properly is essential to proper money management.

Using Personal Finance Tips

Every business guru states that you should keep your personal finances separate from your business finances. And, we could not agree more.

However, separating your business life from your personal life should only be about monetary transactions. We all learn life lessons (knowledge) that not only work in our personal lives but can easily translate to our business lives as well.

Knowledge is power after all and if it can help get you get ahead in your business then it really does not matter where that knowledge originated from.

To that note, there are many personal finance tips that relate very well to managing the financial aspect of your business.

Let’s review a few of them:

1) What You Need vs. What You Want:

You may want a Lamborghini but know that it is not a good vehicle for a small, growing family – it’s not good on gas, has no room for groceries and cannot take the kids to soccer practice. It just does not make sense for you – even though you would really like to have it.

The same goes for our business. You may want that 50,000 square foot building or that $50,000 piece of equipment. But, if your business cannot use those items to generate more revenue then they cost – then those types of purchases just do not make sense for your business.

And, it is just not capital purchases either. Do your employees really need a foosball table in the break room? Or, does your business really need that $500 per month T-1 line when a simple $50 per month DLS line would work just fine.

Being in business is not about satisfying what you want but taking asset that you need and leveraging them to grow the business – by bring in more revenue then that revenue costs to get.

If you don’t need it for your core business – then don’t waste your scarce money on it!

2) Living Pay Check To Pay Check:

If you over spend in your personal life, you usually run out of money before that next pay check comes in.

What happens is as soon as you get your pay check, you immediately look for ways to spend it – most of the time for things that leave you little or nothing to show for it. Some even spend their pay before they get it in their hands. Sure you had a great time, but that money runs out and runs out quickly.

Then, about half way between pay checks, a week after your last pay period and a week before your next pay day – you have an opportunity to do something really amazing – something that would either improve your life or maybe even bring in more money for your personal use.

But, you have to decline because you have no money to take advantage of it and the opportunity will not wait for you to get your next check.

This is a great lesson for business. Far too many businesses spend their revenue before or immediately after they get it – regardless if that spending does anything to perpetuate the business.

Example: I worked with a brand new business owner who was helping doctors and other medical professionals collect payments from insurance companies. I took this business owner around to all the independent doctor offices I could find and helped him pitch his services. One of these contacts bit and gave him some business. The doctor provided him with about $10,000 worth of claims to collect on. Immediately, this business owner was able to get about 90% of those claims to pay from which he received a 10% commission.

Now, instead of taking that $900 and putting it into his business – to grow his business or setting some of it aside for new opportunities – he used those funds, for personal reasons like a new gym membership, took his friends out to dinner and purchased the latest cell phone with a very expensive plan, not for his business, but for his personal use only.

What happened is that this doctor, who was really impressed with this business owner’s ability to collect, referred him to a college friend and colleague in a town about 85 miles away. However, this business owner had to decline the new business, not because he couldn’t do it or because he was too busy, but because he did not have the cash to drive to the other town.

Not only did this mean that the business owner missed out on new business, but the referring doctor, feeling let down, did not give him any additional business after this incident.

3) More Money Will Improve Your Life:

In our personal lives, if we find ourselves short of cash, we tend to look for more money. Get a bank loan or maybe even a payday loan. While this may work temporarily, giving us more money to spend, if we don’t change what we spend our money on, very quickly we end up right back in the same situation – short of cash and a life that is not improved but maybe worse off as we still have to pay for that new money.

In business, many entrepreneurs find that their expenses outweigh their revenue – especially if revenue is slipping. But, instead of looking at the business – what it is spending its money on or why it is losing or not growing revenue – the business owner thinks that just getting more money is the only answer.

If the business owner goes out and gets a business loan or brings in new partners or outside investors yet does not fix the problems that cause the cash flow issues in the first place, not only will more money not help the business but could drive it further into its financial hole – causing more problems and maybe even resulting in the business being shut down.

4) If It Doesn’t Work, Don’t Keep Doing It:

Too many people throw good money after bad. It is OK to make mistakes. You learn from them and move on. But, if you don’t learn and continue to do the same thing, you are destined to fail again.

I have a neighbor that did not want to purchase a $1,000 riding lawn mower – he had other things to spend his money on. So, he found a used mower in the paper and paid $500 for it. Two weeks later it broke down and would cost about $200 to fix it. Instead of fixing it, he went back to the paper and purchased another used mower for $500. Again, this one broke down and he did not want to spend the money to fix it – said it was a waste. However, this time, he went to Craig’s list and found another used mower – but this one was only $400. And, boy was he happy.

But, in the end, he spent $1,400 and a lot of time instead of buying a brand new $1,000 mower. Plus, I don’t think this $400 mower is working anymore as he has not mowed his grass for months.

In business I see companies throw tons of money at their advertising but never get any additional results from it – they just think that is what they should be doing.

So, instead of finding out where their potential customers are they stick with the same old thing – throwing good money after bad.

Thus, they advertise in the same paper each month but see no new revenue for that expense.

All things in business should be measurable. If they measure up to expectation, then continue to do them. If they don’t, scrap them and try something else.

If you spend a $1,000 a month in print advertising and it is not bringing in at least $1,000 in new revenue – then why keep doing it. Try something else, like advertising online (in places your customers hang out) or on TV during a show your customers watch. Then, measure the results. If they are better then what you were doing, your business is just that much better off.

There are things in business that should be keep separate like your business bank account, business expenses, financial statements and business credit cards. This just keeps your records more easy to manage and by not co-mingling funds, can keep you out of trouble with the IRS.

Home Financing Tips For Buying

If you are thinking about buying a home, one of the first things to do is find out what price range you can afford. Getting pre-approved for home financing can determine the maximum price and loan amount that you can get, based on your credit scores, income, and down payment. A mortgage pre-approval can save time and effort in your home search, and tells others that you are ready and able to buy a home.

Here’s a Collection of Other Home Financing Tips:

Need flexibility on credit issues?

In addition to a low down payment, an FHA mortgage allows lower credit scores than conventional home financing. A bankruptcy only needs to be discharged for 2 years, and 3 years on a foreclosure.

Need payment choices for a tight budget?

Some lenders offers flexible mortgage terms with a 30 year fixed rate that gives you a payment choice each month for interest only or a fully amortized payment, which could help when money is tight.

Do you want an option for lower closing costs?

If you need to reduce your closing costs, you typically have the choice of decreasing the points by increasing the rate. Mortgage rates are priced to allow you to buy the interest rate up or down.

How long will you keep your mortgage?

If you plan to keep your mortgage for less than five years, you may be able to save money on your payments with a 5 year fixed rate plan. Also consider financing your home with zero points.

What debts are counted in your debt ratio?

Monthly debt payments are added to a mortgage to calculate a back-end debt ratio, including: credit card minimum payments, car loans, student loan, personal loan, alimony, child support, tax liens.

Are you required to have an impound account?

An impound account is money collected with the monthly loan payment to be set aside in reserve to pay property taxes and insurance. It’s usually required on mortgages with less than 20% down payment.

Buying a condo with an FHA mortgage?

A condominium project must be FHA approved in order to get an FHA loan. If the project is not approved, the FHA spot loan program is designed to provide financing for an individual unit.

What about opening new credit accounts?

Applying for a new credit card, or financing the purchase of anything, just before or during the mortgage process can drop your credit scores, and lower credit scores can cause a higher rate or worse.

Are you planning a job or career change?