1/16/2007

01-16-07 - 1

Four things I didn't know as a young adult that could've saved/made me a lot of money :

1) Never buy a new car. In general, avoid all things with huge markups, such as luxury items, CD's, etc. If possible avoid driving altogether; cars have tons of hidden costs in terms of maintenance, tickets, parking, gas, insurance, registration fees, etc. etc. OTOH buying a $500 car is a terrible idea because the downtime and service costs will make it more expensive than if you'd just bought a $4000 car to begin with.

2) Try to avoid renting. With most things, buying and reselling when you're done with it is a much much cheaper form of temporary ownership, and if you're a good purchaser/seller it can even be free to buy a car or trailer and resell it.

3) Avoid insurance / get lawyers. Once you have enough money to cover problems, you should have the minimum insurance possible. With car insurance, you should never ever get a point on your license - hire a lawyer & get the violation reduced to a no-points fine. The savings in insurance is much greater than the cost of the lawyer.

4) Cheat on your taxes. Even if you think you have no deductions, there are things a good CPA can do (eg. basically cheat), and he can advise you on investments to avoid taxes. Everyone does it, so if you don't you're just wasting a ton of money. If you've got some clout in your business, ask for payment forms that void taxes, such as "business expense" comps rather than salary.

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