Taking out loans are like any other purchase. I have taken loans out for many reasons. Loans are in general never the first choice. The first choice should always be to save for what you need. Of course there will come a time when you need something you just don’t have the cash for and you have to get a loan… A car… A house or some other large purchase. When you find yourself in this condition, the simple rule is the same rule you apply to the purchase of any commodity. Pay the least you can. Loan fees come in three forms. 1. Initiation fees, 2. points to get a better rate, and 3. the interest you pay. You should always take the second two and average them to an annual interest rate you compare from loan to loan. Pick the loan with the lowest Annual Percentage Rate (APR) Do not be fooled with teaser rates or rates which are not put in terms of the APR. The initiation fees are fees you pay someone to get you a loan or process the paper work. Try to avoid these if at all possible by obtaining the loan yourself.
One final thing it is always good to establish your credit before you need it. Get a credit card, use it slightly and pay it off every month. This process establishes your good credit for when you really need it.
Wednesday, May 16, 2007
Thursday, May 10, 2007
Owning a home
To many the dream of owning a home seems unreachable. I think however one may need to realize that the first home will not look anything like their parents and perhaps you might even have to buy something that needs some tender loving care. I bought my first house when I was still in college, if you could call it a house.
It was a 3 room cabin in the hills above the college. It was heated by a wood stove and to get water I had to clean out and replumb to an underground spring. It was on 3/4 of an acre of the hardest hard pan you have ever seen and the only thing growing on it was prickly brush. I spent $12,000 and it was every cent I could beg or borrow from friends and family. The place was so bad, my mom only visited once and her nose was in the air the entire time.
But and here it the big but, I was able to put in a bit of elbow grease, fix it up, slap some paint on it and when I graduated I was able to sell it for $27,500. Sure small numbers now, but the principle still holds. This gave me the money for a down payment when I went to my first job in Seattle and ever since then I was able to buy a house where ever I went.
So my advice is hold you nose and buy what ever you can afford, fix it up and move up. In a few years you will look back on those times fondly and proudly and you will have achieved the American dream of owning a house.
It was a 3 room cabin in the hills above the college. It was heated by a wood stove and to get water I had to clean out and replumb to an underground spring. It was on 3/4 of an acre of the hardest hard pan you have ever seen and the only thing growing on it was prickly brush. I spent $12,000 and it was every cent I could beg or borrow from friends and family. The place was so bad, my mom only visited once and her nose was in the air the entire time.
But and here it the big but, I was able to put in a bit of elbow grease, fix it up, slap some paint on it and when I graduated I was able to sell it for $27,500. Sure small numbers now, but the principle still holds. This gave me the money for a down payment when I went to my first job in Seattle and ever since then I was able to buy a house where ever I went.
So my advice is hold you nose and buy what ever you can afford, fix it up and move up. In a few years you will look back on those times fondly and proudly and you will have achieved the American dream of owning a house.
How the heck do you figure out your taxes? Do you do them yourself or do you take them to a friend or service?
Taxes, the evil IRS, how do I cope. I have always been a believer in doing my own taxes. I believe I am the one who cares the most about me and with the inexpensive tax packages available today it is just not that tough.
When doing the taxes I always end up explaining to someone the difference between tax avoidance (a right you should exercise to the extreme) and tax evasion which is illegal and unethical.
The American tax system is extremely complex. But this means you can probably find a clause that works to your advantage. Understanding the code allows you to transfer this knowledge to your business life and makes you sensitive to what others are going through and paying.
While I will always try to avoid taxes, when the time comes to pay what I owe, I do it with a bit of pride. First you have to make money to have to pay taxes and second, my taxes are what help to pay for the American lifestyle and all you have to do is look around a little to know that we have it pretty darn good.
When doing the taxes I always end up explaining to someone the difference between tax avoidance (a right you should exercise to the extreme) and tax evasion which is illegal and unethical.
The American tax system is extremely complex. But this means you can probably find a clause that works to your advantage. Understanding the code allows you to transfer this knowledge to your business life and makes you sensitive to what others are going through and paying.
While I will always try to avoid taxes, when the time comes to pay what I owe, I do it with a bit of pride. First you have to make money to have to pay taxes and second, my taxes are what help to pay for the American lifestyle and all you have to do is look around a little to know that we have it pretty darn good.
Wednesday, May 2, 2007
Open questions
Hi there! New blogs will be uploaded soon. In the mean time, as a graduating student, are there any questions you'd like me to address in an upcoming blog? It’s easy, just post a comment (staying anonymous is OK too) to ask a question!
Thursday, April 19, 2007
Dude, where's my money? What to expect when first starting your career.
Wow, we are on a thread here and again it seems like the wrong question to me, but perhaps I am not being fair.
The standard scale for any job is available from many sources, whether it is an engineer or a teacher. Expectations should be established on that basis.
I have seen young folks that worked for me that got out of college and forgot they still had limitations. They bought a new car, new clothes, a big screen etc., then would come in and complain they did not make enough money. Somehow they felt the employer was short changing them. They forgot what the going value was for what they did. Many times they became bitter because they thought after 4 or 5 years of college they would be on easy street.
So the key is to understand what money you will get and just like you did in college budget your expenses and live within your budget. Be prepared to buy the used car and perhaps still eat at home. Understand you are starting out and the big bucks come when you have paid your dues and bring exceptional value to your job.
The standard scale for any job is available from many sources, whether it is an engineer or a teacher. Expectations should be established on that basis.
I have seen young folks that worked for me that got out of college and forgot they still had limitations. They bought a new car, new clothes, a big screen etc., then would come in and complain they did not make enough money. Somehow they felt the employer was short changing them. They forgot what the going value was for what they did. Many times they became bitter because they thought after 4 or 5 years of college they would be on easy street.
So the key is to understand what money you will get and just like you did in college budget your expenses and live within your budget. Be prepared to buy the used car and perhaps still eat at home. Understand you are starting out and the big bucks come when you have paid your dues and bring exceptional value to your job.
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