This blog is a way for me to share hard learned lessons about money with those who are just starting out on their own. I hope it's a way for you to avoid making the mistakes I made, and to benefit from my experiences

Wednesday, March 28, 2007

Car Buying experience part 1

It's been about 28 years since I last bought a new car. Since then I've always bought used. Anyway, you go into these things expecting all the stereotypes you like you saw on Fargo, or see in the news and magazines. High Pressure, smarmy sales guys ready to pounce on you and sell you a bunch of extras you don't want, etc.

So today I went down to the local Chevy dealer during lunch time to take a look at some Impalas and get some info. A very pleasant experience. This particular dealership told me up front they are a no haggle dealership, and the experience was very low pressure. The sales guy was helpful, asking what I was looking for in the car, trying to show me what they had in stock that might be helpful. I had to look at 4 different Impalas to see various features I was interested in, as they had not 1 even close to what I wanted.

Still, I spent some time talking with Medy, the sales rep, and he said they could always get one from somewhere else or even order one from the factory if I chose to. He gave me a quote on my ideal Impala based on the options I wanted. I matched what they quoted vs. Edmunds was spot on! The MSRP was exactly what Edmunds quoted, the dealer invoice was what Edmunds said it was, and the average selling price that Edmunds had was very close to what the dealer offered me, with the dealer beating it by a hair. The deal had a tag in the front window with how much they were discounting off of MSRP. That amount left them about $650 $560 in dealer profit on a car they sell for $22,500. I think that's a fair deal, if not an outstanding one.

Still researching. Need to check out the Ford Five Hundred and also Chevy's at another dealership not too far away.

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Free ID Theft Monitoring from Paypal and Equifax

Paypal and Equifax have teamed up to provide a free ID theft monitoring system. Here's what it says it does
Early warnings. Automatic notification through email, in the event there’s a new account opened that impacts your credit file or a significant balance change to one of your existing accounts.
To sign up, go to Paypal and then find the link on the page that reads "Free Alerts to Help Protect You From ID Theft." You'll be taken to another page where you'll see the icon to Get Equifax Credit Alerts. Click on that and then fill out the forms and create an account at Equifax. Again, this is free, although they do offer a full featured credit monitoring system option that you are free to turn down.

Seems like a good service that will cost you nothing.

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Tuesday, March 27, 2007

Cars. Then and Now

I've had new car itch, and I've been looking up new cars like crazy on the web. I've noticed two things:

1. Cars are like cell phones. They keep adding on more features to keep the price up.
2. You basically get more car now then before for the same money, after inflation.

In November 1979, my dad and my 16 year old self went out car shopping for my first car. We both knew I needed something cheap and reliable. We settled on, and don't laugh, a brand new 1979 Ford Pinto. The sticker price was $5,800, but my dad being the former car salesman knew that this particular vehicle had been on the lot a long time as they were well into the 1980 year sales, so he bargained them down to $5,000. Thus I was the lucky recipient of a Ford Pinto with luxuries of automatic transmission, Power Steering, Power Brakes and AC. Well, recipient wasn't the word. I paid for almost all of it over the next 3 years. I drove that car to death selling it 10 years later with 138k on the odometer.

Anyway today using internet searches I looked for the most likely equivalent of a Ford Pinto and settled on a Ford Focus hatchback. I went on Edmunds and equipped it with at least what the Pinto had, including Automatic Transmission. Of course it comes with much more standard than the Pinto ever did. The Average selling price was $14,228.

Next, I went to the governments CPI calculator and asked what $5,000 is 1979 is equivalent to today. It came out to $14,015.

I think we can all agree that the Focus is a far superior vehicle. I've rented one and was satisfied with it. It also has more luxurious standard features. So the lesson here folks is we are getting much better equipped cars, better performing (trust me, the Focus performs far better than my gutless Pinto ever did), and safer (remember the infamous exploding Pinto gas tanks) cars than at least in the late 1970s, for roughly the same price.

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Friday, March 16, 2007

Microfinance and

There is a very interesting article in today's Mercury News about microfinance or microlending and a web site that can help arrange it called Make sure to check out the graphic of how it all works.

What is microfinance? It's the lending of small amounts of money to people in impoverished nations or poor areas, so they can buy tools or assets, that they can use to earn a better life for themselves. It helps a poor woman in Africa buy chickens so she can sell eggs, or a cobbler in Bangladesh new tools so he can repair or make new shoes much faster, etc.

Usually this is done through very small banks or finance institutions set up for this very purpose. The entrepeneurs then pay the loans back from their increased earnings. That money is then lent to another poor entrepeneur, etc.

I dislike many charities, because they aren't geared toward helping people become self-sufficient, but here's a great alternative. In the past, this was done as a charitable donation. The money was given to these microbanks and it was then lent.

The beauty of Kiva, is that instead of given money to charity to make these micro-loans, you can do so directly. And if the entrepeneur is successful, you get your money back so you can lend it out again. It's a lot like, but only geared towards micro-lending for poor entrepeneurs. You can start with amounts as low as $25.

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Wednesday, March 14, 2007

Zoho Applications for Small Groups or Businesses

There's a little known company out there providing a whole host of useful online applications called Zoho. Like Google that offers online word processing and spreadsheet programs, Zoho offers them, and much much more. Their additions include a Presentation program, Wiki, Notebook, Project Management, Database, Planner, polls, tests, and Chat.

But best of all, they offer a CRM application called Zoho CRM. It's an online Customer Relations Manager that is very similar to It's not as polished, but it has virtually all the same functionality.

What I love about Zoho is that all of these programs, including the CRM, are free to use to individuals, small groups or small businesses. It's not until you start signing on 4 or more people to these applications that they start to charge anything. Even the CRM is only $12 per month after you've gone past the first 3 free users. Cheap compared to If you have need of online applications for individuals, small groups or need small business tools, for free or very cheap, check out Zoho. I can't believe they haven't been bought out yet by the likes of Yahoo or Google.

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Monday, March 12, 2007

IRS gets it bass ackwards

Every year this irritates me, as if having to spend hours preparing my taxes isn't enough. I'm talking about the IRS's E-File program. What is the purpose of the E-File program? Why was it even created? Was it to help taxpayers get their refunds faster? No! That's the incentive to encourage people to e-file.

The E-File program was created to accomplish two goals. To reduce data entry error and to eliminate the extra labor and hassle of handling paper returns. For every paper return filed, the IRS has to deal with handling the mail, opening it, scanning the forms, seperating out the checks, W-2s, etc. On many it has to do manual data entry. It's much more efficient and accurate to have them filed electronically.

So why does the IRS insist on making those who have the largest returns pay a fee to efile? If you've got a simple return, like a 1040A or 1040EZ, it's usually 1 or 2 pages, and it's pretty much free to file. If you have a return like mine this year, it's 8 pages, with a lot of numbers. Wouldn't it be in the best interest of the IRS to make longer more complicated returns Free to file?

If I wasn't getting back very much, or god forbid had to pay, I wouldn't pay $16 to e-file. And my home state of California is just as bad. In their case, I'm not getting much back, so I am not paying the additional $16 to e-file with them. So what if it takes an extra couple of weeks to get my return. They can just do the extra work in dealing with my paper return.

None of this makes sense. They've got a program in place, and it works! Now they just need to implement so all want to participate and save the government money. But we're supposed to pay for the privilege of saving the gov't money when doing the most hated of gov't requirements. Screw that! But I guess that shouldn't surprise me, because it's the government.

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