One topic that believe it or not comes up with nearly every client and prospective new client, no matter their age or level of wealth, is cars.
The conversation touches upon the following:
- Buy or lease?
- If buying, buy for cash or take out a car loan?
- New or used? (I nearly always suggest used, a.k.a. “certified pre-owned”. Remember the book, The Millionaire Next Door?)
- If buying, how often to replace?
- If leasing* or taking out a car loan, what is a sensible payment amount? With a lease, buy at the end of the lease?
- For younger people perhaps living in or near a city, is it possible to not even own a car? And take advantage of excellent (cheaper) alternatives as needed such as renting a car, Uber, or Zipcar?
* Leasing is not often my recommendation for first cars, mostly because I prefer not to add another sizable monthly outflow of cash early on in life. Early on, own a car you can afford for cash or a small loan. The future will look brighter.
But we are coming to the end of tax time — when the idea of having access to a little extra cash would come in real handy! At some point in our lives sooner or more likely later — due to needing to pay for healthcare, caring for an aging parent, investing in a business or simply wanting a more secure “cushion” or “rainy day fund” — we will seek out ways to get our hands on more cash.