FINANCIAL TIPS

BUYING A NEW CAR

     Buying a new car can be one of the worst decisions you could make. A new car can depreciate about 15% of its value when you sign the contract.

     If you tried to sell your new car the very next day you would not get what you paid for it. Now it is considered a used car. If you buy a used car and try to sell it the next day, you will probably get what you paid for it, maybe even more. Always buy used cars and pay cash for them.

STARTING YOUR OWN BUSINESS

     Before you quit your day job and start your own business, you should be debt free and have at least enough money saved, to pay for one year of living expenses.

     The first year, you will probably go without a paycheck, and you do not want to borrow money and go back into debt. Stay with your current job for as long as you can, and start your business on a part time basis. If your business is a flop, you will still have a job and a paycheck. If your business is a success then you are a lot farther ahead by not taking on any debt.

AVOIDING DEBT

     People get into debt because they spend everything that they earn without saving or investing. This is the reason that most people do not become wealthy.

     When rich people get a raise they look for a way to invest. When poor people get a raise they look for a way to spend. Rich people make their money work for them. Poor people work for their money. You will never get rich if you do not learn to control your money.

      Do not invest in something just because a friend said it was a good investment. If you educate yourself, that alone is an investment that will save you money on commissions, brokers fees, and management fees.

EMERGENCY FUND:

One of the most important things to have is an emergency fund. What is an emergency fund? An emergency fund is an accumulated amount of money with easy access. This money will only be used for an emergency. Do not spend your emergency fund unless it is an emergency. An emergency is defined as: a sudden, urgent, “unforeseen occurrence” requiring immediate action. So if you want a new car, boat, or clothes, these are not an emergency, these are wants. An emergency would be losing your job or having to relocate because of a hurricane or forest fire.

BANKRUPTCY:

It is often said that bankruptcy gives a debtor a fresh start, but filing bankruptcy is not a panacea for all financial problems. Declaring bankruptcy can seriously damage a person's credit rating, making it difficult to establish credit or take out loans in the future. Many people can work themselves out of even very serious debt without ever going near a bankruptcy court, so declaring bankruptcy should not be an automatic first step for someone experiencing financial problems.

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