In a previous post, we spoke about ways to get out of an “underwater” car loan.
In this post, we will discuss a few ways to avoid getting into an “underwater” situation in the first place.
When you become interested in purchasing a vehicle, the first step you should make is to check your credit. This will help you determine what interest rate you may qualify for. You want to shoot for an optimal rate. If you have a credit score over 720, this will put you in a better tier and you could expect to pay a rate of 3.724% or less. Consumers whose credit scores are sub 720 can expect to pay an average of 5.098% or higher according to creditdonkey.com. A high interest rate is almost a sure fire way to end up underwater in your auto loan. Check with your local credit union or bank, as they will often have rates and terms that will match or beat the terms of a dealership.
Do your research! Shop around. Check out what the average selling price is of the car(s) that you are interested in to ensure you get a decent deal. KelleyBlueBook, TrueCar, and Cargurus can help with this. This will help you know what to expect when you walk on a dealer’s lot.
Factor In Depreciation. Cars are depreciating assets, but some cars depreciate faster than others. You want to purchase a car that doesn’t depreciate at a fast rate to ensure that as you pay the balance down on the loan, the value will be in line with it.
(*There will be a future post on vehicles that you may want to avoid purchasing due to rapid depreciation.)
Make a down payment. This will immediately cut down the loan balance and help you get ahead of the depreciation curve.
You don’t need the “add-ons”. When you are finalizing your auto purchase and signing the paperwork, you will be offered myriad of upgrades, warranties, protections, and insurances. Most of these you will not need. I am not totally opposed to some of these items, but keep in mind that they will increase the cost of your vehicle and loan balance. It will be enticing because stretched out over the term of the loan will minimally increase your monthly payment.
The shorter the loan term, the better. Don’t be tempted to extend the term of your loan over a longer period of time in order the get a lower payment. This is very enticing, but it is accompanied by a higher interest rate. This will prohibit the loan principal from being paid down as fast; therefore, leaving you with a higher risk of ending up underwater.
Buy used vs. new- Cars depreciate the most in the first two years. Consider purchasing a 1-2 year preowned certified vehicle. It will be less expensive than purchasing a new one, and it will have absorbed the largest depreciation hits already.
Avoid taking on the balance of your trade-in on your “new” car. If you are already underwater in a car and decide to trade it in on another vehicle, that balance has to go somewhere. It gets added into the cost of the vehicle you are purchasing. When you bring negative equity into a new loan, you are burying yourself in the loan from the start. Make sure to start off on the right foot.
Good luck on your next vehicle purchase!
You might have heard the phrases “upside down” or “underwater” when it comes to real estate.The same can apply to your vehicle.The meaning of this phrase refers to owing more on the loan balance than what your home or car is worth.For the purposes of the writing, we are discussing auto loans.The very first thing you have to do is find out whether or not you are actually “underwater”. If you happen to be “underwater”, you need to know by how much. Finally, we will discuss how to remedy this situation.Find out the balance of your auto loan. Review your most recent loan statement. If you don’t have one available, contact the financial institution that financed your vehicle and request the balance. Also, take note of your interest rate. (We will go into more detail about interest rates in another post.)Find out the value of your vehicle. This can be easily found online with sites such as KellyBlueBook.com, Autotrader.com, Edmunds.com, and NADAguide.comCompare the value vs. the balance. If your balance is lower than the value of your car or around the same amount, you are in good shape. If the balance is higher than the value, you are considered to be “upside down” or “underwater”. If you fall into this category, don’t fret. Here are a few ways to turn that upside down loan right side up:Make principal payments: Any time you have extra funds, make a payment towards the principal of the loan. Ex. If your monthly payment is $400, try to pay $100-$150 extra towards the principal.Whenever you receive bonuses, birthday money, income tax refunds, make an even larger principal payment.*This will also assist you in paying the loan off faster.Refinance your vehicle: Your credit may have improved since your loan was originated. Refinancing with different terms could bring the balance more in line with the value.*Don’t stretch the term too far out, though. The longer the term, the chances of you going underwater again increases, as the value of the vehicle continues to decrease.Sell your vehicle: If you have funds saved, you could sell the car and start fresh. Try to get the highest amount for it. Keep in mind that you will have to cover the difference between the sale price and loan balance, hence the need for funds saved.I hope this was helpful in assisting you with identifying whether or not you are upside down on your auto loan. If you happen to find yourself in that situation, I hope that one of the suggestions mentioned will be a good solution for you.
It’s that time of year….
Income tax returns will be in the mail or in our accounts very soon. Make sure to spend it wisely so that it can put you ahead in a few ways for the months and years to come. Below, I have listed 5 good ways to spend your upcoming income tax refund.
1. Start or add to your Emergency fund. We all need to put something away for a rainy day. Trust me, rainy days will come. It’s good to have funds available when an unexpected event arises, such as car or home repairs, or even the loss of a job.
2. Pay off debts. Especially high interest debt, such as credit cards or any high interest loans. Paying off high interest debt is extremely difficult when you are only making the minimum payment. This is because the majority of your payment is paying off interest and only a small percentage of it is actually paying down the principal payment.
3.Open Retirement Accounts. Open an IRA(individual retirement account) or add to an existing one. Max out on your annual contribution if possible. This will help keep you on track with your retirement goals.
4. Invest in the stock market. There is a wide variety of investments that you could invest in to grow your funds. Make sure to do plenty of research prior to investing.
5. Give! This is the most important tip. Give to your local church and/or organizations that speak to your heart. It is more blessed to give than to receive. Acts 20:35
When you receive your refund this year, implement 1,2 or all of the tips below. You will thank yourself later!
“Always plan ahead. It wasn’t raining when Noah built the ark.” ― Richard Cushing
Since it is the beginning of the year, I’m sure you have several goals….Perhaps fitness, financial, spiritual or otherwise. I have a question…
Are you putting your goals in writing or are they just in your head? Goals that are only in your head are just dreams. While dreams are awesome, and they are the inception of goals, there are additional steps that have and need to be taken in order to manifest those dreams into existence.
Here are a few of my thoughts and experiences regarding goal setting.
Write down your goals…There is POWER in seeing written goals. It incites action!
Revisit your goals often. This will serve as a reminder to keep you on track to achieving those goals. Don’t let them become an afterthought. You may become tired at times during this journey and you will also probably encounter distractions or deterrents.
I like to post my goals on sticky notes and place them in locations where I have to see them at least daily.(i.e. My bathroom medicine cabinet)
This helps me with holding myself accountable. In the morning, I ask myself what can I do today that he get me one step closer to reaching my goal? At night, I ask the question, what did I do today to bring me closer to my goal? If I don’t like the answers, that means that I have to work harder and be more intentional the following day.
Keeping my goals visible allows me to pray and meditate on them often as well. I usually place an inspiring Bible verse or verses near the goals. I am acutely aware that I cannot accomplish my goals on my own.
I encourage you to try this practice of writing down your goals for at least 90 days and see how it goes. I am willing to bet that if you have never done this before, you will see a significant difference in your goal achievement results.
Don’t just make a resolution and let it fade away in a few weeks. Set goals and crush them!
About 3 years ago, I had the pleasure of meeting Ryan Corey, the owner of Autoline
Preowned, a local car dealership located near Jacksonville Beaches. We contacted Ryan
recently, to pick his brain on entrepreneurship, building a business at a young age,
balancing friends and family while working extremely hard. Also, we wanted to discuss how
spirituality impacts his life and business.
I have to preface the interview with this. When I met with Ryan, he asked me what Total
Integration Fitness was all about and what was our vision for it. When I explained TIF’s
vision to him, he expressed how glad he was to help and share his story and experiences
with our audience. Very quickly, it became evident how much our Lord Jesus Christ meant
to him. Not only how much He means to Ryan, but how much He means to his business as
well. This transcript does not give our interview full justice. I wish I was able to convey the
excitement and light in Ryan’s eyes when he talked about the Lord. He credits his brother,
Joey, sister Kelli, and Mom, with bringing him to Christ. He said a while back that he
noticed that Joey was visibly different, when he asked him about it, Joey shared why. Hats
off to you, Joey.
Q: What made you want to become an
A: I had to help out and provide for my family. Actually, I began working at the age of 13.
Since I am a third generation car guy, I was able to sell my first car at 16. I started going to
auto auctions at age 16 & 17. My friends and I were really into the skateboard culture when
I was a teen. We were actually into competitive skateboarding, but to enter some of the
bigger contests, you had to be sponsored by a company. To remedy this problem, we started a company named Flatline; and sold skateboards. I was selling cars and skateboards at the same time; however, the selling of cars began to really take off.
Q: You just returned from vacation. How
important is time away from work to you?
A: I feel it is very important. I have had a challenge with actually putting work on hold while
on vacation, as I am still working a little. I am getting better about it though.
Q: What is it like working with your family?
A: Working with my family at one point was my
greatest challenge. It was never easy for me to tell someone in my family that they were
not meeting my expectations. Looking back now it’s easy for me to see how essential
working with my family has contributed to the success of the company. My family has
always taken ownership and pride in the business and has had my back since day one and
because of that I wouldn’t want it any other way.
Q: What drives you? What makes you get out of bed in the morning?
A: Being saved. My relationship with God has changed my life in all aspects. My morals are
the same. I still try to do the right thing, but my purpose is different now. I focus more on
pouring into people and relationships.
Q: Who do you admire most in business?
A: Any business owner who is honest, cares about their people, and tries to find a purpose
for their business outside of financial gain.
Q: What do you attribute your success to?
A: I used to think it was because of my hard work, people around me, and being
different. I know now that all of my success comes from God.
Q: What advice do you have for entrepreneurs just starting out?
A: Have good intentions. Have a purpose for your business besides making money.
-Do what you say you are going to do.
-Look at things from someone else’s perspective
-Focus on making everyone around you better
Q: What is your daily routine?
A: This is where I wish I could say I wake up every morning at
5:30 and run 3 miles but that’s just not the case lol. Most days I’m up and working by 7am
preparing for the auto auctions, I never skip breakfast or throwing the frisbee with my dogs,
I work every weekday but I always try to be outside for sunset and then work again after
dinner if needed.
Q: What do you do in your down time?
A: Spend time with my wife, family and friends.
I still skateboard a little and ride motocross. I spend time growing my relationship with
God; that fills me up more than anything.
Q: What is something that most people don’t know about you?
A: I am a HUGE animal and music lover. I am an owner of three dogs, and I love Bob
Marley and Christian music.
Q: Who did you get you entrepreneurial skills from?
A: My dad and grandfather. When I was really young, I told my mom I wanted to become a
skateboarder and own Disney World.
Q: How can we reach you or Autoline on Social Media?
A: I’m personally not on social Media but
Autoline of course is! Facebook: https://www.facebook.com/autolinepreowned/ Instagram:
I have known Ryan for a little while professionally, and have always thought highly of him, not only because of his accomplishments, but how he carries himself and treats others.
Success can bring out the best or the worst in a person. As I stated earlier, it is evident who Ryan attributes his success to. By conducting this interview and getting to know him a littlebetter, it has only raised my opinion of him.
Over the past few years there has been a resurgence of podcasts. Right now you can find a number of podcasts out there on any given subject. As my life has become increasingly busy, I have found that podcasts are a great source of information and entertainment. With efficiency being a main goal, podcasts and audio books are are a great way to learn new things while on the go. I have listed below my current favorite podcasts. They feature topics ranging from personal finance, real estate, to entrepreneurship in general. There is a wealth of information in these podcasts. On your daily commute, I would invite you to give these podcasts a listen.
Side Hustle School – I have found this podcast to be super inspiring. Real stories from real people are being shared. Side Hustle School features stories on how people have started profitable side businesses while maintaining their day job. It is awesome to learn how creative some people are. The business ideas on this podcast are so clever! One of the key things I like about this podcast is each episode only lasts an average of ten minutes. It is a great way to keep your entrepreneurial side motivated. The narrator of the podcast is Chris Guillebeau, who is an author and speaker.
Bigger Pockets – Bigger Pockets is about all things real estate. If you are a real estate investor or thinking about real estate investing, you should definitely be listening to this podcast. The interviewees are very knowledgeable and the hosts do a great job of dissecting the information that the guests provide. The guests are very transparent on how they were able to get started as well as current projects. They share the challenges they have encountered along with the successes they have experienced. My advice is to keep a notepad close when listening to this podcast…lots of gems to capture.
School of Greatness – One word…gratitude. Lewis Howes, an author and speaker, does a great job emphasizing the importance of gratitude while interviewing intriguing high profile guests, such as Tony Robbins, Marie Forleo, and Michael Hyatt, who is mentioned later in this post. If you are looking for motivation as an entrepreneur or just a self-help podcast, you should definitely give this podcast a listen.
This is your Life-Michael Hyatt – Michael is a great host, who is all about teaching you the dos and don’ts of building your platform as well as being intentional about the things you do in business and in life. This is a great podcast to learn best practices and “how-tos” to be more efficient and successful in business and life.
His and Her Money – His and Her Money is a personal finance podcast. Married couple, Talid and T, share their own stories as well as others on how they were able to pay off large amounts of debt and how to build good savings/investing habits. The stories and interviews are ultra inspiring and motivating. No matter how much debt you are in, it is definitely possible to get out of it.
Business Boutique – Business Boutique is a podcast targeted towards female entrepreneurs. I stumbled upon it by reading a blog post that was sent to me. The host, Christy Wright, shares tips and how-tos that any entrepreneur can put into practice.
When you apply for a loan, lending institutions consider a few factors when making the decision whether to approve or decline a loan.
The following is a breakdown of the criteria, also known as the 5 c’s:
Collateral: This is basically what secures the loan. For instance, physical property would be the collateral for a real estate loan, or a vehicle for an auto loan. There are even cases where you can borrow against your own money, which would be secured by a CD(Certificate of Deposit) or savings account.(This is an excellent way to build or repair credit). I will talk about this in more detail in a later post.
Capital: This is what would be what is used to repay the loan, such as your primary income. Investments, CD’s, or other liquid assets could be considered capital in the event of a loss of the primary source of income.
Capacity: This would be what your level of comfort is for repaying the debt. In other words, your ability to afford the loan repayment. This is where your debt to income ration comes into play. How does your monthly debt stack up against monthly income…
Character: Two words…Credit History. How has your payment performance been in regards to previous debts. Did you have late payments? Do you have any delinquent accounts? This history typically goes back 7 seven years.
Conditions: This is the final piece. What is the purpose of the loan or what will the funds be used for. Loan terms, interest, and fees are part of the conditions. The current state of the economy at the time of the loan is a condition as well.
When all of these factors are viewed as satisfactory, this is when your loan will been approved. Before applying for your next loan, underwrite yourself and answer the 5 c’s, that way when you walk into the lending institution, you can apply with confidence.
A little over a week ago Jay-Z released his 13th solo album entitled 4:44. In typical Jay-Z fashion, the lyrics and wordplay are phenomenal. What intrigued me the most was that he shared what he learned about finance and business over the years with his listeners. As I thought more about it, he has shared this information throughout most of his albums. I will share a few lyrics that resonated with me and the meaning behind them.
Full Disclosure: The lyrics quoted may contain profanity, which Total Integration Fitness does not condone, but we would encourage you to take a look past some of the profane language to obtain the essence of the message.
“I coulda bought a place in Dumbo before it was Dumbo
For like 2 million
That same building today is worth 25 million
Guess how I’m feelin’? Dumbo”
“The Story of O.J.”
In the previous line Jay talks of buying V12 engines, or expensive cars, which are depreciating assets.
Key Takeaway: Invest in real estate or something that has a good return on investment.
“I don’t got the bright watch, I got the right watch
I don’t buy out the bar, I bought the night spot
I got the right stock”
Jay is saying invest, instead of frivolous spending. Invest in a time piece instead of a trendy watch. Stop spending so much money in bars perhaps think of owning one.
Key Takeaway: Invest in the future. Spend wisely on something that could possibly generate income later.
“My stake in Roc Nation should go to you
Leave a piece for your siblings to give to their children too”. “Legacy”
Leave something for your children and their children.
Key Takeaway: Build generational wealth.
“I bought some artwork for 1 million
2 years later, that s**t worth 2 million
Few years later, that s**t worth 8 million
I can’t wait to give this s**t to my children”
“The Story of O.J.”
He bought a piece of art that doubled its worth in just one year. How much will it be worth when his children are older?
Key Takeaway: Resale value is everything! Think long term.
“I’m not a businessman; I’m a business, man!”
One of Jay’s most quoted lines. He saying that he is his own conglomerate.
Key Takeaway: We should think the same way. We are the CEO’s of our lives…
There are many more jewels that Jay-Z gives us regarding business throughout his discography. These were just a few that really resonated with us.
Spend wisely, invest in yourself and your family’s future, constantly think about return on investment(ROI)…