A free car?!

Clever video by the Dave Ramsey ‘marketing machine’ … really shows you the anti-power of financing a car. Watch it and you may never finance another car again!

The greatest advice from the Oracle of Omaha

As the latest in my ‘videos on sundays’ series, I offer some advice from the man billed as the ‘greatest investor who ever lived’.

 In 7 minutes you will have ALL of Warren Buffet’s secrets

… maybe not, but you WILL have some insights into his life (the first three minutes) followed by some of the best investing advice that I have seen.

Warning: some of these slides flash across your screen so fast that you will have trouble following them, so pay attention to the very last two slides if you are not an expert investor:

http://youtube.com/watch?v=iW1eg9p5wq4

BUT …

If you are a student of investing, have a long-term view and are willing to dedicate some time and effort, take note that Warren offers exactly the opposite advice for you …

Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett

… he also points to this time in history as being possibly a great time to make your fortune:

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
Warren Buffett

I see a lot of doom and gloom … I bet that Warren Buffet is gearing up for something big …

What are you doing right now?

To buy a new(er) car … or not?

If it is simply ‘transport’ then by hanging on to your old ‘rust bucket’ (within reason), you have made a GREAT choice!

Why?

A car is NOT an asset, it’s clearly a liability … as Robert Kiyosaki says in Rich Dad, Poor Dad, the definition of an:

ASSET is simply something that puts money INTO your pocket, and a

LIABILITY is something that takes money OUT of your pocket.

The ‘rule of thumb’ is that you should INVEST (into real long-term ASSETS) 75% of your Net Worth: a max. of 20% into your house, and the remaining 5% into your ‘stuff’ …

Never buy a new car … really.

[pro-player width='530' height='253' type='video']http://www.youtube.com/watch?v=Pev892H_dCs[/pro-player]

A quick tip for you …

… never buy new, this is more true for cars and even more true the higher the price of the car.

For example, the sticker price on my car, was $120k, but I looked around (actually, I just did a quick google search or two) and found the exact make/model/year (2007) that I wanted at a specialist dealer.

I found a car, in my own city no less, that was just 6 months old with only 1,700 miles on the clock in perfect condition for less than $90k … $30k buys a lot of enchiladas in anybody’s book!

I don’t think that I just got lucky …

I have found that the higher in price you go, the more fickle the customer … they buy cars on a whim and churn them quickly when they find out they would have rather had a boring ol’ Merc!

This works at pretty much any price range, too. If you want a more standard car, check out the leasing company sales (maybe at auction) for executive vehicles … a downturn means executive redundancies … redundancies means near-new cars available cheap!

The effect is even more pronounced when you buy imports (except for top line Italian sports cars, and certain Mercedes and BMW’s) because they depreciate by as much as 20% the minute that you drive them out of the showroom!

[Hint: next time don't even go into the dealer's showroom to buy that new car, just wait for the 'other guy' to drive their's out, then offer him 85% of what he paid ... give the poor sap your card ... you just might get a call].

I once had a SAAB and every time I tried to sell it the price dropped more than I could accept: the first time I tried to sell it, I wanted $45,000 for it, but was only offered $35,000. So I waited a year …

Then when I tried to sell it for $35,000 I was only offered $25,000; the next year I got sick of waiting and just sold it for only $15,000!

I would rather have been the guy offering $15,000 than the guy selling.

Happy bargain hunting!