Being smart with $$ - Easy to be fooled when buying a car

Car buyers: We are all so easily fooled by things car salespeople say. Key points to remember: 1. How much your old car is worth has nothing to do with what you should pay for a new car; 2. Indicating a monthly payment you can afford will rarely get you the best deal; 3. The sticker price is meaningless. --> Shop at multiple dealers...they will be aggressive on price when they know someone else might be doing the same. 

Larry Pike, CFA

www.clientpriority.com 

Being smart with $$ -- Never a good time to buy stocks?

There is never a good time to buy stocks. Or so it often seems. They are either falling and who wants to buy something that is going down? Or they have just gone up and who wants to buy AFTER you missed the increase? But if you believe stocks can continue to provide historical average annual returns above 8%, then worrying about short-term moves can keep you from investing and cost you. 8% annual returns would double your money in 9 years and quadruple it in 18.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Don't extend when you refinance!

More on refis? Extending the payoff date kills your long-term financial plans. People tend to spend the money in their pockets. If you refi back to another 30 year mortgage you have more money in your pocket but now you will be making that mortgage payment forever.  Win-Lose.  Instead of refinancing a 15 year old mortgage into a new 30 year mortgage, refi into a new 15 year loan.  The rate will be even lower, your payments will fall and a bigger portion of your payments will now be going towards principal which builds your wealth. Win-Win.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Refis can make you poorer

The problem with refis... When you refi a 300k mortgage 10 years into it, going from 4% to 3%, you may lower your monthly payments from $1430 to $990. BUT---> only $200 of that is saved interest. $240 is from paying less principal because you extended your maturity by 10 years. When you go spend that $440 you saved, your net worth is now LOWER than if you didn't refi.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Don't reduce your mortgage payment

The Fed hinted today they might raise short-term rates at some point. That doesn't necessarily mean mortgage rates will rise anytime soon but if you refi to grab today's low rates, DON'T start paying less per month just because you can. Pay the same amount as before and you'll get your mortgage paid off sooner and save thousands on interest.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Acquire assets, not liabilities

Rich people acquire assets and poor people acquire liabilities says Robert Kiyosaki in his book "Rich Dad, Poor Dad." It's probably true most of the time.  Acquiring an asset (buying an investment) means your wealth grows with investment returns.  Acquiring a liability (such as getting a loan to buy a luxury car) means you keep making payments of principal plus interest on the loan.  Assets snowball into more and more wealth.  Liabilities snowball into a bigger and bigger drain on your paycheck.  Acquire wisely.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Shop for that best rate!

Are you looking at refinancing and thinking the rate you were offered seems "good enough?"  It may seem like too much trouble to shop around, but laziness can be costly.   If you can find a rate that's just 1/8 point better, that will save you about $375 this year on a $300k mortgage.  And $375 next year.  And $375 the year after.  And so on.  And if the lender knows you're not shopping around, they might not feel inclined to step up with their best rate.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Brew coffee and save $80k

In the news: The inventor of the Keurig K-Cup regrets inventing it due to the environmental impact. But what about the financial impact?  Brew two cups of coffee per day instead of using K-Cups, save the difference from graduation to retirement, and you will likely have $80,000 more in your retirement account. $80k and better coffee! Again, the little things do count.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ -- Choosing how to spend money

As overheard in LL Bean (a mother to her daughter when looking at a price tag): "Well, you can either buy quality or you can buy food." She makes a great point. We have limited resources that need to be allocated appropriately.  You have to pay for housing, buy basic groceries and fund your retirement account. Then figure out how to spend the rest without going over.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com