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Own One Car For Show And Another Car For Dough

Posted by Financial Samurai 83 Comments

There’s an old saying in golf, “drive for show, putt for dough.” Hitting a massive 300-yard bomb looks beautiful, but what really counts is accurate putting.

I can’t tell you how many times I’ve lost money on the golf course because I three-putted instead of two-putted. I’ve also occasionally won money squeezing in an eight-footer. Those knee-knockers, when all is on the line during an Aloha bet, are intense!

Give me a regular 250-yard drive and incredible putting accuracy over a 300-yard drive and putting yips all day long. The same goes for cars.

I’m a one car type of guy. Owning a car is expensive, especially if you don’t follow my 1/10th rule. With the proliferation of cheap ridesharing options that have emerged since 2009, not owning a car is making more and more sense.

But over the years, I’ve had a tremendous number of complaints that my 1/10th rule is too restrictive. Instead of limiting the median American household to only spending $6,200 on a car, many people feel the typical American should be able to spend much more.

If you want to spend more, it’s totally up to you. Don’t let me tell you what to do. I’m just offering a simple rule to follow to help you achieve financial independence sooner, rather than later.

For those of you who love cars and want to own two or more cars, I suggest owning at least a Dough Car. If you do, you might build your net worth quicker than the rest. You might even better keep yourself out of trouble.

Disclosure: Financial Samurai has partnered with CardRatings for our coverage of credit card products. Financial Samurai and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.



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The Best Way To Save On Car Maintenance: Know Your Car Warranty

Posted by Financial Samurai 25 Comments

Ugh. I just realized something incredibly stupid that only spending hours writing a post could have made me realize.

I *think* I missed taking my car to the dealer to get my clicking noise fixed under warranty for free!

I mentioned in my post on paying for repairs by cash or credit that the clicking noise had been progressively getting worse for about six months. If true, that means my clicking noise began in April 2019.

My car was originally purchased on July 6, 2015. I bought it from a private party on December 28, 2016, so I could get a larger car in preparation for the birth of our baby in 2017.

For some reason, I had assumed my car only had a 3-year/40,000, transferrable bumper-to-bumper warranty. So I just assumed that I had missed the window to get the problem fixed by 15 months.

But as I was doing research online, oddly enough on my own tax rules for deducting an SUV for a business post, I discovered my SUV has a 4-year/ 50,000 mile warranty!

If I was simply understood my car warranty and what it covered, I could have taken my car into the shop by July 6, 2019, gotten the clicking sound taken care of for free, plus anything else the computer found wrong.

Damn it!

Disclosure: Financial Samurai has partnered with CardRatings for our coverage of credit card products. Financial Samurai and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.



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Pay By Cash Or Credit? Deciding The Best Way To Save Money

Posted by Financial Samurai 55 Comments

After six months of a progressively louder clicking sound emitting from my engine, I decided to take my car in for a free inspection.

After only about five minutes, the auto-mechanic mentioned that he was sure my fan unit was broken and needed replacing. Great. “How much?” I asked.

His brother, the operations manager, got back to me and said, “$925 before tax, which is about $1,004 after tax.” Sales tax is 8.5% in San Francisco.

Phew! I was mentally preparing for some $3,000+ bill because the clicking sound was near the engine. When you go on the car forums, you always read about the worst situations. Here’s a short recording if you’re curious.

https://www.financialsamurai.com/wp-content/uploads/2019/10/Range-Rover-ticking-sound.m4a

Disclosure: Financial Samurai has partnered with CardRatings for our coverage of credit card products. Financial Samurai and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

The operations manager told me I’d have to come back next week because he’d have to order the entire fan unit. No problem. In the meantime, I decided to do what any rational person would do and check what fan units would cost online.

A bunch of options came up that were 30% lower than the shop’s quoted price. The next week, I gave the shop owner a ring and asked why such a huge price difference. He said the difference was between an original part from the manufacturer and a replica without a warranty.

Sensing his weakness over the phone, I asked him if there was any way we could get the price down. After stumbling through some umms and awws, he responded, “Why yes, if you pay ‘cash cash,’ not check, I’ll knock the price down to $750 out the door.“

“Will I still get a receipt and the warranty?” I asked.

“Absolutely,” he replied.

Enticing! What would you do?



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

Posted by Financial Samurai 164 Comments

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 2020 Range Rover Sport can be had for roughly $75,000 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.

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

Posted by Financial Samurai 1,065 Comments

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.

Disclosure: Financial Samurai has partnered with CardRatings for our coverage of credit card products. Financial Samurai and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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

Posted by Financial Samurai 49 Comments

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

Posted by Financial Samurai 76 Comments

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

Posted by Financial Samurai 86 Comments

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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Should I Get Roadside Assistance Coverage Insurance? Hell Yeah!

Posted by Financial Samurai 22 Comments

1989 BMW 335i CoupeRoadside assistance is important.

Every winter, I make the 180 mile trek from San Francisco to Squaw Valley, Lake Tahoe to enjoy the epic snow. There is truly nothing more magical than spending hours riding on powder and having a beer or two in the outdoor hot tub when you’re finished! Oh, the stories I could tell you about what happens in the hot tub.

On the other hand, there’s nothing more frustrating than getting a flat tire at night in the mountains while it’s snowing. I know how to change a tire, but I sure as hell don’t plan to risk my life changing a tire in darkness on a one lane road in the mountains while cars zoom by. I might get a nice settlement if I do get into an accident. But, I also might lose a leg in the process!

Every month, I spend 98 cents to get roadside assistance insurance for Moose. Add up the cost over 84 months of ownership, and we’re talking $83 worth of premiums. And you know what? My roadside assistance insurance is worth every penny! I already mentioned how my alternator died just as I was pulling into my garage thank goodness. A tow truck came when I got back from vacation to follow me to my mechanic thanks to roadside assistance. What I haven’t told you about are my other more traumatic incidences!

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How To Make Over $100 An Hour Driving For Uber

Posted by Financial Samurai 107 Comments

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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