For new car drivers: Leasing is now killing owning

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What they won’t tell you: Leasing car a car is now the smartest car choice for most people

Allow me to explain.

Americans are keeping their cars longer these days – this we know. The average we keep our financed cars before running back to a dealership is going on almost 6 years.

But you know whats also true? A. New cars are getting more expensive and B. we’re taking out longer loans than ever, to pay for them.

This means that those who buy new cars are paying on average $472/month over…you guessed it….72 months. (6 years)

Yes, that car you were so dead set on owning has been going down in value over those same 6 years while newer cars are going up in value every year.

So once its time to trade up, years after your warranty and maintenance plans have expired, the car you trade in is worth less (not “worthless”) and your payments become, again, $472/month. (we’re going to give you the benefit of the doubt and say you aren’t one of the many actually trading up with negative equity in your current car, read about that here –> http://thisiswhyubroke.wordpress.com/2012/01/02/the-lost-decade/ )

Now lets take the average lease for a lower mid priced sedan on the other hand: $270/month (with down and taxes factored in).

Quick math shows us we’re dealing with about a loss of about $200 in cash-flow for “owner” vs the lease.

We’re not factoring in the effect of having a more fuel efficient car every 3 years (data shows autos get more efficient yearly), not factoring in lack of maintenance (this is huge) and not factoring in the intangable mental benefits of mostly always driving a worry free car….

But guess what investment gain that translates into for the lease holder?

**$1,074,171.90 over 40 years.**

Yes, thats a million you’re giving away for listening to what others tell you without doing the math for yourself.

The secret is and always has been monthly cash-flow.

Not necessarily time, but cash-flow.

A couple caveats -

  • As you’ll always hear us say, a creative mix of public transportation is the best transportation.
  • For those who must have cars however, and you are purchasing cars every 6 years, financially you’d be better off leasing. Leasing a car that holds its value is literally whipping that a$$ right now.
  • The best way to lease a car is to pre-pay the lease for those 36 months in advance (commanding a discount and forcing you to only buy what you can afford).
  • You do not need credit cards, mortgage loans or any other tricks for generating a FICO score.
  • Simply do the first lease (which you will pay more initially – you can do as little as 24 months if you like) and the second, third, fourth lease is based on keeping that lease in good standing.
  • If you are paying on student loans consistently and without deferment, then its that much easier for that first lease.
  • Absolute smartest way to lease is through a business entity you operate so its not attached to your name in the first place.
  • None of this applies if you keep your car for 10 -15 years. *But then again, no matter what you say to yourself at the car dealer, the data shows you’re not keeping your cars for 10 -15 years.

    And that is why you’ll find in the title of this post – “most people”.

Now you know.

Introducing the Winner’s Circle Investing School Program (for book owners)!

Attention all BKF Investing School eBook or Hardcopy owners!

You are now eligible to join Our Winner’s Circle Investing School Program ($20/year).

What does it include?

Includes the following 1 on 1 benefits:
– Unlimited questions on investing, directly from J.P. Lynn (using online chat)
– Investment portfolio creation and hand holding.
– Be the first to know when the market is in correction or crash mode to make the most of the BKF market crash strategy.
– Accountability: get harassed at 4 different points during the year to remind you that your quarterly investment contribution is approaching and how to complete it.

Learn why investment accountability is super important here: https://news.fiu.edu/2011/03/second-thoughts-on-the-american-dream-of-home-ownership-study-reveals-that-renting-can-be-a-better-financial-choice/22483

Don’t let the rest of the people in your community become deca-millionaires while you look back on when you started that brokerage account but never made any purchases (or the correct ones).

Visit www.BKFInvestingSchool.com to sign up!

Winners Circle Investing School Program

No, Your Employer Can’t Check Your Credit Score — But Here’s What It Can See

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Business Insider By Libby Kane 18 hours ago

Flickr / Frédéric BISSON

Your three-digit credit score is a go-to indication of your trustworthiness that banks, credit card issuers, and car dealerships all use to help predict the likelihood of you repaying a loan.

But it’s of little use to the company that wants to give you a job.

“That a potential employer can check your credit score is probably the most common myth out there when it comes to credit, and unfortunately, it’s one of the most problematic,” says John Ulzheimer, credit expert at CreditSesame.com. “In my 23-plus years in the credit industry, there has never been a verified example of this happening.” In fact, he says, the three credit agencies have all gone on record saying that they don’t supply a credit score to employers.

Ulzheimer believes this myth is so pervasive for two reasons:

1. People are using “credit score” and “credit report” interchangeably. While your credit score is based on the contents of your credit report — which details your credit activity and history — they are not the same thing. As an illustration of their independence, consider the fact that while you can get your credit score for free at sites like Credit Sesame, you can’t get your report. And while you can get your free report from each bureau once per year from annualcreditreport.com, you must pay for your score.

2. Employers can pull a credit report. But the credit report available to employers is not the same one that your lenders see. “When an employer checks your credit, it’s called an ‘employment screening,’ and the credit bureaus have a separate product available for this purpose,” explains Ulzheimer. “A lot of the data is the same, but not everything. For instance, your date of birth isn’t on it. Plus, when an employer screens your report, not only does the inquiry have no effect at all on your credit score, but you, the consumer, are the only person able to see that it ever happened.”

It’s also worth noting, says Ulzheimer, that a potential employer isn’t going to secretly check your credit behind your back. Unlike with the credit check that comes with applying for a mortgage or car loan, you must give explicit written permission for an employer to check your credit. And it’s not as though it’s your interviewer looking into your credit, he explains. “Normally the employer outsources the process to a third-party company, one that does things like verify your background and education.”

The bottom line is that while employers can check your credit, they can’t see your credit score, their inquiry doesn’t affect it, and the credit report they can pull isn’t the same one used to evaluate your trustworthiness as a borrower. While some states restrict the cases in which an employer can check your credit at all, “certain professions, like law enforcement or other government positions, should expect that credit checks are fair game,” Ulzheimer says. “You should assume a report is going to be pulled.”

http://finance.yahoo.com/news/no-employer-cant-check-credit-194739945.html

 

Your passion or your poison?

Even though the new age American dream is to do what you’re most passionate about for a living, sometimes doing what you’re most passionate about in career form can turn that passion into a hatred.

See, when you’re now forced to do something and put up with certain ancillary things or components of the job, you can quickly find yourself in a worst position & mental state than if you were just doing a menial job to keep busy.

Here’s real talk that no one will tell you: for many many people, the quickest way to turn a passion into something you dread is to force yourself to monetize it.

Now I’m not sayingto ignore what you’re most passionate about. I’m saying in the pursuit of those things, its important you not pursue them like a stalker.

Allow the relationship to blossom by not being so needy. This is one reason why its so important to keep a solid income from some form of legitimate work while you live out your dreams in another area.

Yes you can do this. Don’t let anyone ever tell you differently.

Because when you do this, you take the “I need to make income from this thing I love asap” factor out of the equation and it more times than not allows you to sidestep ruin.

There’s nothing more sad than a person who found their reason to be here and then begins to loathe it due to unnecessary financial and professional strain.

I mean that is your purpose. What else are you doing here? Pretending to be here for other things is just going to turn you into a very miserable person with a poorly created facade.

In the end, doing what you’re passionate about can take many forms. Not everyone has to do what they’re passionate about as a 9-5 job or a business they started. The key for some is to enjoy or at least not loathe whatever they’ve chosen to produce income and do what they’re most passionate about with as few constraints as possible.

This is how art becomes art. How music becomes music. How technology that really helps people is born.

What we teach is hard work up front to get yourself financially in position to not have to depend on anything for an income – let alone those delicate things you’re most passionate about.

This is why we in BKF invest for tomorrow while everyone else parties today.

You’d be straight up amazed at how life changes when you technically don’t ”need” to produce income from anything.