Financial Samurai

Slicing Through Money's Mysteries

The 1/10th Rule For Car Buying Everyone Must Follow

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Old Car In EstoniaIn 2009, I watched in horror as a total of 690,000 new vehicles averaging $24,000 each were sold under the Cash For Clunkers program in 2009.

The government’s $4,000 rebate for trading in your car ended up hurting hundred of thousands of people’s finances instead.

Your $20,000 invested in 2009 in the S&P 500 index would now be worth over $50,000 today given the stock markets are now at record highs.

Buying too much car is one of the easiest and biggest financial mistakes someone can make. Besides the purchase price of a car, you’ve got to also pay car insurance, maintenance, parking tickets, and traffic tickets.

When you add everything up, I’m pretty sure you’ll be shocked at how much it really costs to own a car and hurl.

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How Uber Sold The False Dream Of Riches And Enriched Itself Instead

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How Uber Sold The False Dream Of Financial Freedom And Enriched Itself
My first tip

The sun was just starting to peek over the mountains so I pulled over to stretch my legs. It was 6 am.

I had only been driving for about an hour, but I had never come to this part of the Bay Area before. Right over the Golden Gate Bridge and down towards Stinson Beach I had dropped off a passenger.

Perhaps it was his “ride of shame” after a late night of partying? Or maybe he was going to some secret yoga studio retreat before the stock market opened at 6:30 am.

As an Uber driver, what my passengers did at unusual hours was always left up to the imagination.



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How To Avoid Buyer’s Remorse When Purchasing An Expensive Luxury Vehicle

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How to overcome buyer's remorse when purchasing a luxury vehicleWhen it comes to cars, buyer’s remorse is the worst because there’s no return policy.

My first experience with buyer’s remorse was when I had purchased a new vehicle when I was 24 after receiving a lucky break. Within two months I regretted my decision.

A year and a half later, I sold the vehicle for a $10,000 loss because it couldn’t fit in the garage of the condo I wanted to buy. After realizing how much better it was to own an asset that could go up in value, I decided to stop wasting money on cars.

After driving an old $8,000 Land Rover from 2005 – 2014 and a $230/month business lease Honda Fit from 2014-2017, I finally stepped up and bought a two-year-old Range Rover Sport with 10,500 miles for $60,000 after tax. It would have cost $81,000 new after tax.

It’s been two years since I purchased the Range and I have zero regrets. The car runs perfectly and is fun to drive. I also like how it looks with 22″ rims, black tinted windows, black leather, and a metallic black exterior.

If you’re afraid of experiencing buyer’s remorse when purchasing a luxury vehicle, here are some tips that helped me eradicate all guilt.

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A Car Fanatic’s Drive Down Memory Lane: Lessons Following The 1/10th Rule

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One of my most financially helpful, but polarizing articles is The 1/10th Rule For Car Buying Everyone Must Follow. I wrote this post to help mostly younger folks not blow their money on the most common financial destroyer. We all know that almost all cars are guaranteed to lose value.

As a young man, I used to view my Toyota Corolla Hatchback as an asset because I didn’t know better. How could a car be a liability when I could take girls out on dates, drive to William & Mary from the DC-area to get a solid education, and take a nice midnight jaunt along the Jamestown river during final exams?

Now I view my vehicle as a liability. All I see in my garage is a large heap of metal necessary to transport my family safely. I’ve got to keep feeding it money in order for it to run – gas, new tires, maintenance, tax, tickets, accidents, and insurance. I’d much rather have the money sunk in my car producing passive income for financial freedom.

For those of you curious about what it’s like to follow the 1/10th Rule For Car Buying for the past 15 years, let me give you an honest assessment as an ex-car fanatic who has owned a dozen cars in his lifetime. The journey just might save you a lot of money and bring you more happiness in the process.

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Tax Rules For Buying A SUV Or Truck To Deduct As A Business Expense

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As you may have read from my Net Worth Rule For Car Buying post, I’m looking into buying the latest Range Rover Sport HSE to replace Moose, a 15 year old Land Rover Discovery II. The 2018 Range Rover Sport can be had for roughly $73,500 MSRP, an exorbitant amount of money for a vehicle.

SUVs are an anathema to eco friendly San Francisco. But I’ve long argued that if you don’t completely destroy your car before buying a new car, you are still ADDING pollution to the world. I like SUVs because they ride high so I can see what’s going on in traffic. They can go through snowstorms with ease, a necessity for when I go up to Tahoe in winter. Furthermore, I’d rather be in a larger vehicle vs. a smaller vehicle during accidents.

SUVs have become more fuel efficient thankfully. The new Range Rover Sport V6 engine produces 345 hp at 17 city / 23 highway. Just 10 years ago such an SUV would be a V8 and run around 12 city / 17 highway mpg with only 185 hp. But this is not a post to defend purchasing a large vehicle. This post’s purpose is to discuss the aspect of purchasing a vehicle for your business in order to deduct the expense!

With the tax reform act passed at the end of 2017, buying a truck or an SUV that is over 6000 pounds has become more favorable for 2018 and beyond.

RULES FOR SUV / TRUCK PURCHASE FOR A BUSINESS

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How To Make Over $100 An Hour Driving For Uber

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Uber $100 an hour wageFor those of you who would like to join the Six Figure Club (SFC), it’s relatively straight forward. Charge $50 an hour for 40 hours a week for 52 weeks in a row and you’ll get the SFC invite in the mail! Of course, you’ve first got to develop some valuable skills, but that’s what college and all those extra hours side hustling were for.

If you make $100 an hour working 40 hours a week, you will make $17,333 a month and $208,000 a year. That’s when you’ll really be able to live comfortably in any expensive city in the world.

With my most recent Uber pay stub, I just might have found a way to get there after only three months of driving. The great thing is that if you have a car, a relatively clean record, a smartphone, and a willingness to hustle, you can probably earn six figures from Uber as well.

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Safety First: Finally Bought A Family Car And It’s Not A Minivan

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My new mid-life crisis car: a Range Rover Sport HSEAfter deep deliberation, I decided to pass on buying the $550,000 Mercedes G650 Maybach. It just felt like too much to spend on a family car when I could invest the money and earn $20,000 a year in passive income forever! Thank you all for your advice.

I ended up buying a late model 2015 Range Rover Sport V6 HSE with 11,200 miles in Santorini black with black leather interior. It’s in perfect condition with a warranty until July 2019. The original sticker was $76,000 before tax or roughly $83,000 out the door. Such good value compared to the G650 Maybach right?

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Car Insurance Basics For Dummies: Comprehensive To Collision

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Car Wreck

Make sure you have insurance because accidents happen!

One of the key decisions in deciding what car to buy is assessing how much all the other costs are that come with ownership.  The purchase price and/or the car payments are just the most obvious of costs.

There are two main ownership costs to consider: maintenance and insurance.  For new cars, maintenance costs are quite minimal, unless you have a lemon and have to waste all your time going to and from the dealer.  For used cars, maintenance costs are a much bigger issue that can quickly eat into any savings you’ve made from not buying new.  We can talk about maintenance costs in more detail in another post.  For now, let’s talk about insurance costs.

I received my semi-annual car insurance premium bill the other day, and I was pleasantly surprised to discover it only costs $285 every 6 months to cover Moose. However, by not telling you the full details of what $285 gets, it’s hard to understand whether $285 really is good value. Let’s breakdown the line-items to better understand what car insurance options I get for my money.

UNDERSTANDING CAR INSURANCE OPTIONS

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Post Brexit: Couldn’t Buy A Range Rover, Bought An SUV Worth Of Stocks Instead

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After BrexitThe day after Brexit, I decided to be supportive of the British people and headed over to the British Motor Car dealership to check out if there were any deals. After all, the FTSE 250 had collapsed by 12% the first day of trading after the vote. Moose, my beloved Discovery II that I had driven between 2005 – 2014 was part of the Land Rover family. He was great and I kinda miss him.

As a person who worked in Equities his entire career, I have this Pavlov’s Dog instinct of always wanting to spend money when I see opportunity. This instinct can sometimes get me in trouble as it’s very similar to the “buy more, save more” mentality where you end up buying things you don’t need. During times of financial chaos, financial discipline is paramount!

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Multiple Options For Terminating A Car Lease Early

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What if you want to terminate a car lease early?During my latest car hunting process, one of the questions I had was what to do with my three-year lease agreement with 20 months remaining. In September 2014, I decided to lease a Honda Fit for my business for only $235/month after tax. About 80% of the cost is deductible since I primarily use Rhino for going to conferences, visiting consulting clients, and giving the occasional Uber ride when they are going my way.

When I was in my 20s, I’d always just pay cash for a vehicle and flip it a year or two later for even money or a small profit. I loved the hunt and the negotiation process. As I got wealthier, I put more value on time and simplicity. I wanted minimal maintenance headaches. I also wanted the option of just handing the keys in when my lease term was up.

But due to the desire of owning a mid-life crisis car and only having one indoor parking spot, I wanted to learn what my options were for an early lease termination. Perhaps some of you want to terminate your car lease because you are bored with your car. Or maybe you’re relocating for a job or just can’t comfortably afford the payments anymore. Here are your options after speaking at length with a couple vehicle leasing department personnel.

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