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WHAT YOU CAN DO TODAY TO HELP YOURSELF AND YOUR NATION:
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A Common-Sense/Consumer-Friendly Financial Perspective
I've received hundreds of e-mails from readers-viewers-listeners around the country asking me about the state of the world, post-September 11 terrorist strikes in New York City and Washington D.C. Many deal with concerns about traveling, others focus on charitable giving...so let's address both:
As Americans that are more determined than ever to beat our enemies on all fronts, now's the time to come to the table and flex our muscles. You want my opinion on what to do? Easy. Here's 5 suggestions to help you increase your net worth, give you more bang for your buck and even help our national economy while you're at it:
#1 Don't dump your stocks or mutual funds because their prices are down! All this will do is fuel the downward pressure. If you're smart, you'll recognize that some of the best companies and mutual funds are "on sale" thanks to the turn of events over the last month. Show your true colors and cash in on the investing opportunity presenting itself to all of us! [Hey, it's the most capitalistic and American thing I can think of!!!]
Fort Worth's Bass Brothers dumped $2 billion worth of Disney stock in mid-September 2001: Disney's a great company; besidesowning instantly-recognizable theme-parks,they also know a little about the entertainment business. Between their movie production operations and that little TV network known as ABC, they're not going anywhere. Their stock price is down...and that spells o-p-p-o-r-t-u-n-i-t-y in my book.
#2 Don't be afraid of traveling! We're the most mobile society in the history of the world...now's not the time to let a bunch of gutless terrorists deflate your travel plans. The American skies have never been safer...and re-taking to the friendly skies and patronizing the many rental car companies, hotels and resorts gladly waiting to make you a deal you can't refuse. Want some great deals on airfares and hotel rooms? Piece of cake...here's my favorite resources:
– Tom Parsons' BestFares.com is still the most comprehensive source for travel-related needs
– Hotels.com is another terrific resource for fantastic deals on hotel rooms across the country and around the world
– I likeusing Travelocity to be my eyes-and-ears and keep a look out for airfare deals as they're announced. Their Fare Watcher feature is the best around.
#3 If you haven't bought a home, now's the time to own a piece of America! Home prices are more affordable than any other time over the last few years. Interest rates are coming down to encourage spending and once again, making a smart financial decision like home ownership is just one more sign to the bad guys that we don't scare that easily...and that we're committed to a future that's bound to be rosier than theirs!
One more thought about home ownership: If you currently own a home financed at a rate higher than the 7.5%-range, now's the time to look into refinancing, or even cashing out some of that home equity you've accrued over the years to pay off those high-interest [non-deductible] credit card balances. I've compiled a list of things we can do TODAY to help ourselves as well as our nation, from a common-sense/consumer perspective...including:
•A calculator that'll help you make the should I refinance my current mortgage or not? decision
•Should I go with a fixed or adjustable mortgage?
•Should I go with a 15 or a 30-year term?
•How much in tax savings will a cash out/refinance/pay off of credit cards will I benefit?
Here's an offer you can't refuse: In my quest to prepare you for the financial responsibility that comes with the pride (and sometimes, shock) of home ownership and avoid some of the land-mines that have surprised many others, e-mail me your name and physical/mailing address and I'll send you a free copy of the information I give away at my semi-annual Home Buyers Seminars.
#4 Interest rates are coming down fast. Time to buy a pre-owned car! Or lease one, but in times of financial uncertainty, more and more consumers like the security of owning their car once they've made all of their payments.
Shop around for the best deal: If you're going to put that many miles on your vehicles, consider buying [not leasing, BUYING] one that's already taken a depreciation hit, known in the industry as a "lease return." If mileage is going to be a potential problem and if you do choose to lease again, contract for more miles per year/for the life of the contract than you have in the past.
Remember, lease companies will contract for higher miles–but you'll end with a higher monthly payment. Why? Because higher miles mean higher depreciation and a lower residual value [expected value of the vehicle at the end of the lease term] meaning a higher monthly lease payment for the lessee. Throw in the fact that some of the nation's biggest car lease financing banks have taken some major financial hits over the last year due to deflating values and demand in the SUV market, and it all boils down to one simple point: Leasing could be a more expensive proposition for consumers now than it has been in years.
Worth repeating one more time: In almost every case, you won't need to worry about being over your miles unless you keep the vehicle to the very end of the lease. Get out/trade out early and you should be in the clear.
And if you want to run the numbers until you're blue in the face, I'll fix you up...pick your poison:
•Which is better? New or Used?
•Should you lease or purchase?
•How much will your monthly payments be?
•Should you pay cash or finance your new ride?
•How much car can you afford?
#5 Get smart and cut your pharmaceutical costs! A recent study from the Archive of Internal Medicine revealed that 80% of the physicians they surveyed said they often do not know how much their patients actually pay for their prescriptions. And when they were asked to estimate the cost of 33 common drugs, they underestimated the price 40% of the time. I'm not trying to pick on doctors–they've got enough heartache in their lives from the insurance industry–but I want to help you help them help your pocketbook.
Consumers can now save more than ever thanks to the expanding availability of popular [and many times expensive] medications by switching to alternative or generic drugs. Detroit cardiologist Joseph Rogers could be your budget's newest ally; his website www.rxaminer.com generates a customized report of alternate (in some cases, generic) medications for your doctor to review. This alternative medications resource has the potential to save you hundreds–even thousands of dollars a year.
Some consumers have seen their pharmaceutical costs drop by as much as 75%, making the $10 evaluation fee charged by the website combined with a little doctor-supervised experimentation seem like a reasonable avenue to explore.
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