Category Archives: Saving Money

We Bought a Mercedes-Benz?

I first discovered Mercedes-Benz diesels on our trip to Europe and fell in love. On that trip I found out that the Mercedes w123 engine is considered to be one of the most reliable engines ever manufactured.

Fast forward 2 years and for some reason I start looking for one again. Well…we bought one. It’s a 1979 Mercedes 300CD, diesel (non-turbo).

My initial plan was to sell the Prius and drive the Mercedes to further extend the longevity of our transportation. But since I got such a good deal, we may end up just fixing it up and re-selling it for a profit.

Jackie’s $1000 Beater Car

2 months ago we had Jackie on our live show to help her decide whether or not she should buy a car used from craigslist or a dealer. At the end of the discussion, she decided she wanted to save extra money to buy something a little nicer.

Well things changed and she found a 1995 Toyota Camry for $1000 bucks. It runs great, has newer tires, and had the timing belt replaced.

We video interview her to ask how the transaction went and to shed light on some questions you had from the live show.

Retiring Before 59.5 – What About Penalties?

Ever wonder how you can access your retirement accounts without paying the 10% penalty? In this video we share our plan for avoiding IRA and 401k penalties by setting up a Roth Conversion Ladder.

Credit is due to the MadFientist who introduced us to the idea. Basically you rollover your old 401k into a traditional IRA, then convert that to a Roth IRA. The converted funds are considered “income” and therefore “contributions” so you may withdraw them at any time (after 5 years has passed) without tax or penalty.

More information can be found on his website:
http://www.madfientist.com/after-tax-contributions/
http://www.madfientist.com/retire-even-earlier/

Interestingly, President Obama’s 2016 budget proposal might close that loophole despite the IRS just putting out notice 2014-54 which seemed to confirm this is a viable and lawful strategy.

Link to the IRS Notice 2014-54:
http://www.irs.gov/pub/irs-drop/n-14-54.pdf

Lessons Learned from the Great Depression w/ Grandma Billie! | Mike and Lauren LIVE

UPDATES:

1. Grandma wanted to add that people without jobs during the Great Depression (like her dad) had a tough time receiving handouts. They felt that since they didn’t earn them through work, they didn’t deserve it.

She then explained it was recommended that she go on welfare when she was raising the kids alone, but she wanted to go back to work instead.

2. She wanted to stress how a strong work ethic is important for your well being, health, and self worth.

3. Try to be independent and not rely on others to do what you can do for yourself.

4. Most importantly she relied on her faith heavily to help her through good and bad times.

5. Someone asked how smoking had effected her health. She said that she smoked about a pack per week, because that’s all she could afford. What I didn’t know is that she quit because my dad asked her to stop when he was young. She said she would quit if he would never start. They both kept their promise.

As for long term effects, five years ago she was told she has the beginning stages of Chronic Obstructive Pulmonary Disease (COPD), presumably from smoking. She didn’t mention if this has affected her quality of life.

Mike’s 87 year old grandma is on the show tonight to talk about life during and after the Great Depression. Topics include quality of life, frugal habits, and tips for longevity.

Be sure to tune in LIVE January 13th at 8:30PM EST.

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The Worst Car Detailing Tutorial on YouTube

I swear Alex is able to compound, buff, polish, and wax some of the crappiest cars back to life. He recently bought a 1995 Honda Civic for $900 and I thought it would be the perfect time for him to teach me (and you) how to do it.

The results were a bit underwhelming…We still had a lot of fun, and the information is still accurate. If you’re thinking about getting your own car detailing kit together, you can do it for under $100 bucks.

The car really did look a lot better in person and he probably added $500 dollars of value to the car, just by cleaning it up. It just wasn’t the extreme transformation I was hoping for in the video.

Why I Love My Scooter | Scooter vs. Motorcycle vs. Car

I drive a 2011 Honda PCX125 scooter as my primary mode of transportation. Here’s why I love it even more than my Harley Davidson or any other motorcycle.

To recap:
1. No warm up time.
2. Easier to park and maneuver.
3. Lots of storage under seat.
4. Cheaper
5. No smelling like gas and exhaust.

I also talk about how I deal with safety and weather issues. Is a scooter a viable alternative to a car? Let me know in the comments!

Car Payments are NOT OK

Warning: This is a rant about car loans. My sister Jackie has been told her whole life that having a car loan is a normal and acceptable. This video is me telling her it’s not OK to make car payments if you don’t have the money in the bank to pay cash for the car.

UPDATE: Jackie accepted the challenge! Mission accomplished. More to come.

UPDATE 2: Our friend Jim Collins liked this video so much he included it in his own MANIFESTO!! What an honor, thank you Jim. Check it out:
http://jlcollinsnh.com/manifesto

Disclaimer: I don’t mean car payments are never an option. If you have the cash to pay for a car and choose to invest it somewhere else that’s fine.

Here’s a video by Dave Ramsey that explains the “pay yourself car payments” a little more clearly:

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How to Buy a Used Car (Without Getting Ripped Off)

Looking for the ultimate car buying guide? This probably isn’t it. This is just our opinion about the best used car you can buy and how much you should pay for it. Are all dealers scams? What about the craigslist killer?

We quickly review consumer report’s most reliable cars and then talk about where to buy one. We include 4 tips and tricks for buying a used car from a dealer without getting ripped off.

BONUS INFO:
We want to start adding more information about each video in our blog posts, so this video will be our first attempt at that.

Are the best deals really on craigslist?
Something that didn’t make the video was the fact that I actually have my dealers license in the state of Florida. We got it when we were buying and selling motorcycles last year, but never used it for cars. But, it did give me access to the auctions that all the car dealers buy their cars from. And I actually bought Lauren a Honda Insight when we got back from Europe to see what the process was like.

You can imagine the excitement and chaos on the auction floor as 5 rows with hundreds of cars crept through the building all at once. Each lane had an auctioneer just like you hear on TV, all competing with each other over the loudspeaker.

To my disappointment, all of the cars were being sold for just about exactly their KBB trade in value. Not only that, but most of the cars “sent to auction” were the junkers that dealers had a hard time selling on their lot.

Fortunately, the auction I went to had a “lane” for off-lease Hondas. They were mostly late model civics and accords in excellent shape. We paid $12,000 for our Insight, and then an additional “fee” of $475 on top of it. The trade in value was $12,000. I went inside and paid cash on the spot.

Lauren drove the car for a few months and then we sold it for $12,000 and bought the Prius for $6,000 off craigslist. Comparing those 2 cars, it’s easy to see which was the better deal. At the auction we spent $475 over trade-in, on craigslist we spent $3,000 UNDER trade-in value.

Yes it’s convenient to have a stream of hundreds of cars all in one place for you to choose from. But, if I couldn’t beat a craigslist deal at a dealer auction, there’s no way you’ll beat it once a dealer tacks on all the profit and fees.