**Update: 2/22/17: T-Mobile not only removed its HD video throttling but increased its free hotspot data to 10GB!
But wait there’s more: T-Mobile is now offering two unlimited T-Mobile One lines for $100/month!
Want to learn how traditional car rental companies get you? Check out this great find below:
So what are the top 3 ways a smart person gets rid of their current car before obtaining a new one?
To find this answer, we will use a hypothetical 2010 Honda Accord LX with 85,000 miles with a TrueCar Market price of $11k.
Path #1: Sell through private party (direct)
The most money you’ll get is from doing the work yourself to list and sell via private party. This is where you can expect to get the $11k market value + or – 5%.
>Best sites to sell private party: Craigslist.org, Cars.com, Autotrader.com, 5 Miles app
But alas….most people are too lazy to sell private party and/or to research how to even do it correctly. Therefore that leads us to…
Path #2: Sell through private party (indirect)
There are new services coming online every year that are bridging the gap between your laziness and their know how. These sites are set up to do the heavy lifting of selling private party, for a fee of course.
> Best site hands down is http://www.shift.com.
For instance, on a Honda Accord with a market value of $11k, you will get a Shift guaranteed quote for $9,500. Though the guaranteed quote of $9,500 is what you will make from the car regardless of what it ends up being sold to someone for, Shift will attempt to sell it at that $11k market and split the difference with you for how much over the guaranteed price that they can sell it for.
You can check out reviews on how this generally works here: https://www.yelp.com/biz/shift-los-angeles-2
Note that Shift.com is currently available in Los Angeles, Orange County, Sacramento, San Diego, San Francisco & Washington, D.C.
Side-note: for buyers of cars through Shift.com, you have 5 days or 200 miles to return it with no questions asked too. (But never buy a car from the same place you sold yours to.)
Path #3: CarMax
> Know that your local CarMax should always be a last result. Where a trade in offer may give you $4,500, CarMax buys at wholesoale and will give you about $6,500 for your Honda Accord.
You should also know the two golden rules of CarMax: 1. there are locations with appraisers who are more generous than others. For instance, in California, the Burbank CarMax gives much higher purchase quotes than the LAX location. 2. You are never ever to buy a regular car from Car Max. They are overpriced AF. Which of course they are, they’re paying you more than a typical dealer, so they’re going to inflate the car price on the back end as well.
But what you never ever ever want to do is trade in your car at any dealership for a new one. Wrote a song about it, like to hear it hear it go: https://thisiswhyubroke.wordpress.com/2012/01/02/the-lost-decade/
**Bonus option**: don’t sell it at all and use it to generate income from Turo.com. For those who are interested in giving Turo a spin, use my code to receive $25 for a free car rental: https://turo.com/referral?code=833269rcY47f
Learn more about cars in general by reading the book:
This year’s TIWYB #1 Tax Tip:
Stay away from “RAC”s!
Marketing of “Refund Advance Checks” will be at an all time high. And equally at an all time high? The number of people who think these products are 0% loans without any fees or penalties.
The truth is buried in the fine print. You generally will be pushed into opening up a separate account where the tax refund anticipation check will be deposited into. The fee just for that deposit is $35.
If you elect to place that amount on a card that the issuer provides you, then you are dealing with a host of other fees such as $3 ATM use charges (one charge on the front end and another on the back end), fees simply to check balances and more.
These “advances” are provided in an amount of $500, $750 or $1,250 amounts to your account which triggers at minimum, the $35 fee for deposit. The account then deducts the advance from the tax refund that is forwarded to the account as well, generally within a month.
If you take a $1,250 amount and apply a $35 fee payable for a month of using that money, you’re looking at an annualized amount of 40% interest.
But it gets worse. Maybe I shouldn’t tell you this but if you opted for the lower $500 amount, you’re still going to have to pay that $35 fee. Mathematically that equates to an 85% APR on that money.
Refund Anticipation LOANS have been made illegal. But they have been replaced by Refund Anticipation CHECKs. The latter is what we’ve been discussing here.
You’re still getting screwed, but now you you are forced to open an account that makes you a candidate for a list of ongoing fees when you inevitably slip up with use of that account.
And the reason they know they can screw you is because the IRS just notified everyone that those who claim the Earned income Tax Credit as well as the Additional Child Tax Credit will likely have their tax returns held unprocessed until February 15th. This means that many won’t be receiving their refunds until February 27th at the earliest this year.
But at the end of the day, just look at all the complaints about the H&R Block version of this here: https://www.consumeraffairs.com/finance/hr_block_ral.html
This has to stop.
BKF University has teamed up with South Los Angeles Saves to bring you the 4th Annual South LA saves conference!
When: Saturday, March 4, 2017 | 11:00 AM – 3:00 PM PST
Where: DoubleTree by Hilton Torrance
21333 Hawthorne Boulevard
Torrance, CA 90503
We have assembled our “Power & Purpose” Panel with you in mind! Our panel is sure to inspire you, motivate you, and ENCOURAGE you as 2017 gets in Full Swing!
The Panel features seasoned professionals sharing Real ~ Honest ~ Stories of their Successes and Failures. Our panel will share some of their greatest lessons in BUSINESS, RELATIONSHIPS, and LIFE!
I will be joining as one of the Keynote Speakers for the day ready to help YOU get on track with your 2017 Financial Goals! You do not want to miss, this talk!
Tickets and more info are available here:
Please share with your folks!
See you there!
Some people won the location lottery and bought houses where the PRICE appreciation far outpaced the country average.
Others won the business lottery and placed money in companies they used on a daily basis.
Which would you choose?
Lets see…carry the 1…divide the 2…add the 3….what is that: $4million dollars for the Netflix owner?
Here’s one thing you should know about this poll as well: It actually is far far worse.
The difference the Netflix owner would have paid for rent instead of buying averaged out to be $17,530/year since 2002.
If he/she invested that $17,530/year in Netflix (just like the homeowner did into their house) NFLX owner would have gained an additional $8,892,053 over those 15 years.
Investing isnt a lump sum game. Its about cash flow.
Oh & the second thing i didn’t tell you?I padded the SF property’s cost.That residence is actually only worth $850k as SF real estate has softened a bit.
FOMO in Los Angeles
There are a lot of people in L.A. who basically tie their entire hopes and dreams in life to what mortgage they’ve either qualified or been denied for.
Though it is stupid simple to get a mortgage when you have the appropriate down and income – regardless of your credit – many are fearing they are missing out on a great property investment boom of some sort in Los Angeles.
This is called FOMO (or fear of missing out), is based on manipulated emotions and gets significantly worse when we refuse to do math.
The median home price in West Adams is $638,000
The median home price in Los Angeles is $603,900.
The median home price in Inglewood is $441,600
Lets take the median for L.A. for a second.
First – the 5 year holding costs on a $603,900 house with 4% down:
PMI – $476/month
Insurance – $67/month
Taxes – $554/month
Maintenance, repairs and upgrades – $1,509/month going into a MRU fund
Principal and Interest (mostly interest) – $2,918/month
– mortgage tax deduction ($554)
= $4969 total holding costs each month.
$4969 x 60 months = $298,140 over 5 years.
$298,140 IS THE PRICE OF AN ENTIRE HOUSE IN OTHER AREAS.
AND ALL YOU DID WAS PAY INTO INTEREST OVER 5 YEARS WITH LITTLE PRINCIPAL.
What about initial out-of-pocket costs on a $603,900 house?
1) $21,137 downpayment
2) $18,117 closing costs
= $39,254 total ($18,117 of which you will never get back)
Opportunity cost on a $39,254 out of pocket sum:
$39,254 invested by itself with no other additions would have grown to $62,361 over 5 years. In other words, applying the out-of-pocket costs to a house alone cost you over $20k over 5 years.
Credit card interest:
The average L.A. household with credit card debt owes $11,042.
If over the course of owning a home, half of your expenses from the Maintenance, repairs and upgrades portion of your real estate expenses are placed on a credit card instead, that balance can balloon to $20,096 per household.
Average credit card interest rate is 15.07%.
This means that a household would pay an additional $8,633 over 5 years in credit card interest payments.
By having low liquidity, you’re much more likely to take out car loans, personal loans and even grad school loans.
This is an entire other level of principal and interest added to your load.
“Now that I just bought this $600k house, I’m free to quit my job!” – said noone ever. Its actually quite the opposite.
Psychological effects of being tied to 13 hour days at the office to afford housing costs are incalculable. Add that to being tied to offices you may want to desperately break free from, and there isn’t an amount of money on earth worth years of your life you cant get back.
When the bubble bursts:
You know all the costs we mentioned above? Well outside of property taxes which can be adjusted on falling property values, these costs are yours and yours to bear alone regardless if your house drops in market price.
In other words – real estate costs can’t keep going up forever, its simple economics. The median individual income in L.A. is just $27,749.
You’re already paying significantly more than you’re earning from buying primary residences in L.a.
What happens when even the price appreciate stagnates…or gulp…decreases…
Now again, just like the latest edition of Brass Knuckle Finance says – none of this is about NOT buying a house. This, specifically for L.A. is about knowing WHY you’re buying said house. Buy whatever the hell you want when you can afford it and know why you’re doing so.
But chasing any price – regardless of what it is – is the quickest way to fool town.
Thinking a house $600k house is an investment when it costs over $300k over 5 years, aka HALF of the damn price of the house – is a quick way to fool town.
Now what about buying rental property?
Well thats an entirely different set of circumstances and benefits and for another post.
This is about your primary residence.
www.BrassKnuckleFinance.com | 3rd Edition | “Home Loanership”
Ps: real estate agent fees to sell the house in 5 years or income taxes if house is sold in less time has been included in these numbers.