Report: 1 in 5 Car Dealerships Will Close Soon?
continued from car week…
“Nearly one in every five car dealerships in the U.S. will close this fall, consulting firm Grant Thornton said.”
“An estimated 3,800 auto dealers will go out of business in coming months, Melville said, up from a previous estimate of 2,700.”
The article also includes year-over-year September sales for major brands.
I’m wondering where all that inventory re-appears and at what cost basis?
Eventually, does the bottom fall out for new car prices?
Or does the top flatten out while the bottom firms up?
Time To Run The Numbers On Car Buying, For Real
photo credit: footloosiety
DW’s fully-depreciated car finally racked up a four-figure repair estimate.
Time to look for a newer vehicle… and take inventory of our experiences.
My experience: bought a new Saturn sedan in 1997. Saturn = I did not negotiate. I also did not consider 3rd-party financing. Basically, I was a huge fish. The only things I did right, money-wise, were driving it for 10+ years and considering MPG when it was unfashionable. Looking back, part of me would have liked to try the “beater strategy” out of college, and part of me wishes I bought the more reliable Honda Accord.
DW’s experience: bought several used cars. The prior one was a LeBaron convertible. It did exactly what you’d expect: total meltdown, rolled to a nearby dealer, zero resale, zero leverage. From that bad situation, against all odds, she hit the reliability jackpot with a late-model Oldsmobile Alero, racking up 178,000 miles (lots of driving for work). However, I don’t know if we can push our luck with cars not known for reliability…
Priorities: highest reliability at lowest total cost.
Neither of us wants more than basic “A to B” transportation. Out of college, I got all the silly stuff, like a moonroof for $900. I probably used it 10x before it stopped working = $90 per use! Similarly, DW got the itch for a convertible out of her system. We just want one more stupid car before either a) the next generation of smarter vehicles b) we move to a city with more non-car mobility, i.e. Chicago, Tokyo, San Francisco…
Questions:
- Do the old rules-of-thumb still apply?
- Is it always cheaper to buy used cars?
- Do recent market trends favor new cars?
Time for internet research and number crunching…
(more soon)
Waste Less Food With A “Nearly Expired” Container
Quick "GTD" Hack…
Is there anybody who does not waste any food? Not us.
We try and be good. And we might not be bad, relatively.
But hope to do better by implementing a smarter system.
The old system required us to remember everything that needed be used soon. Unfortunately, that adds up to a lot of re-remembering… and some forgetting.
Can we even call that a system?!?
Enter GTD (Getting Things Done)
We already use a basket system for organization and it saves a lot of time and trouble. The new system involves creating a basket for food in the "red zone" of expiration. Once identified, offending food goes straight to this basket, freeing up mental RAM.
the old way:
- Notice an item is getting close to expiration.
- Vow to remember when it needs to be used.
- Notice again. Vow again. Repeat a few times.
the new way:
- Notice an item is getting close to expiration.
- Move it to the container and forget about it.
- Check the container every so often.
In theory. 
Do you have a system to keep food from expiring? If so, how is it working?
Redesign and Refocus
FinancialRamblings.com has a new look with an emphasis on THINGS YOU CAN DO ($). The goal is to give more visibility to the most useful resources — no matter where you enter the site. Eventually, I want to fine-tune more spreadsheets and run them down the right side. I’m also thinking on a blog with diverse subjects, I should preface more posts with a descriptive keywords. This way you can scan the titles in your feedreader and know which posts to ignore, i.e. Expenses: yada yada, Investing: yada yada, Economy: yada yada, Energy: yada yada…
If you are viewing this post on-site (not via RSS) what changes would you make?
Ramblings on Information Efficiency (Why We Need a “Google” For Everything)
Did the U.S. economy really move from manufacturing to services?
I think the U.S. economy forked into services and information.
We think of economies in terms of agricultural, manufacturing, service, information, etc… but they have been with us since the beginning. We classify an economy by what is surging and what is lagging. None of the “old” economies goes away. Instead, they are multiplied by the “new” economies. And the information economy is the ultimate “multiplier” economy.
We routinely and dramatically underestimate the “multiplier” from information efficiency, even those of us who deal with it every day and should know better. (Guilty!)
All we need to do is look at Google. Not as someone who has been using the web since the beginning, but as someone 30 years ago who stumbles upon a 2008 model Google. We can do things today we could not no matter what using old technology.
- views on Maps
- charts on Finance
- prices on Shopping
- channels on Video
Most importantly, all the ways to combine keywords on advanced operators on SEARCH. We have come a long way since the days of lists and directories, online and offline. Thank goodness. More data requires better lenses. Much better lenses. If we had 10 Googles that were 1/10 as useful, they would not equal one real Google. The same goes for 100 non-Googles, or any number you care to mention. As an info-gatherer society, we are limited only by the power of our best lenses. They are the ultimate limitation on our efficiency. (Other inefficiencies are up to the individual… not using the best lenses, not using the best searches, etc.)
How does this relate to personal finance?
Tools can help us do everything more effectively and efficiently. They can multiply our best efforts. There is no comparison in an 80% efficient tool and a 20% efficient tool. The problem is many of our best tools suck. More than limiting our productive capacity. Bad tools can be so frustrating and overwhelming that we never start.
consider a tool that helps save X% (money or energy),
and the better it is, the more people decide to use it…
2% saved X 10% used = 0.2% global savings
4% saved X 30% used = 1.2% global savings
8% saved X 50% used = 4.0% global savings
bottom line: any task worth doing deserves its own Google-grade tool.
Not a search engine per se… whatever is needed for the job (.xls, .pdf, www)
I was thinking of this when I proposed The “Save Money on Heating Costs” Worksheet. I’m sick and tired of tips. Without tools, tips only let us know what -could- be done, if only we had the time. We still need tips, but we need to integrate them into tools. The only questions are what problems do we want to SOLVE, what tools do we NEED, how do we make them USABLE, and who wants in on the ACTION?
I can do a lot of legwork, all I need is feedback…
I Love Contrarian Comments, Two Recent Readers Share Theirs
Everyone likes when people agree with them, but too much agreement is unhealthy.
“If two people agree on everything, one of them is superfluous”
- source?“If two men agree on everything, you can be sure one of them is doing the thinking.”
- Lyndon Johnson
Anyway, here are two recent comments that 100% blindsided me with their logic.
+ + +
On Do Your Future Real Estate Commissions Count Against Net Worth?, UncommonAdvice said:
There is an easy way to get round this - never sell. Just make sure the property stays rented for ever, and remortgage to take equity out every couple of years.
Now… I honestly don’t know if this is 100% serious. Why add major risks — and potentially lock in larger losses — to avoid minor fees? I don’t think about real estate with the same fire as ecommerce. Maybe thinking like this makes sense in certain situations?
+ + +
On Should I Replace My Light Bulbs With Compact Fluorescent Lamps (CFLs) Today, Rudy said:
“As someone who sells light bulbs for a living, I am constantly bombarded with questions about how much energy is actually being saved by using compact fluorescents and whether they live up to all of the hype that they receive. It seems to me that a lot of the negative things said about incandescent bulbs and their energy usage is borne out of a poor understanding of basic physics. The law of conservation of energy states that energy cannot be created or destroyed, just changed from one form to another. So many people speak of incandescent bulbs “wasting” energy as though they are defying the laws of physics and destroying energy. I live in a fairly cool climate and during the winter I use an electric heater to heat the particular room that I am in. If I use an incandescent bulb and 90% of its energy usage is for the production of heat, then it is simply generating heat that I would have to generate anyway with my 1000W heater. It’s June here and we are still dealing with cold and rainy weather, so there is a significant portion of the year where the heat energy produced by incandescent bulbs indoors is useful and not “wasted.” For me, it is an obvious choice given the mercury content and poor light quality that comes from compact fluorescents.”
Now… this assumes that I want heat as much as I want light. No way. My situation is largely the opposite. I want to minimize heat for six-plus months. So this only intensifies my love for CFLs. Maybe my tradeoff between electricity, heat and light would be different if I lived in a very cold environment.
+ + +
p.s. - thanks for sharing, enjoy the links.
p.p.s. - I love my non-contrarians, too… it takes all types to make the world to ’round…
The Warren Buffet Paradox, Part 1 (The Bailout)
“Warren Buffet does XYZ — so take that! — end of story.”
People use Buffet not to win debates, but to avoid the critical thinking of debates. This creates latent problems, however, when he goes against people’s pet positions.
Solutions to this dissonance are awkward. When Buffet appears to support someone’s position (even if he does not) he is the without a doubt the smartest person on the planet. Then when he goes against the same person’s positions, he is no more insightful than a bum on a street corner.
Sorry, it does not work that way. Logically, it cannot work that way.
Either he is one of the smartest people in the room when discussing things in his “wheelhouse” or he is not. It is not hyperbole to ask if Warren Buffet has spent more time on financial problems than anyone who ever lived. His biography is so revealing. Why do people only accept his caricature?
NEWS FLASH: Warren Buffet on the on the proposed bailouts…
…from CNNMoney.com:
Legendary investor Warren Buffett warned Congressional leaders Saturday night of “the biggest financial meltdown in American history” if they did not act to secure the financial system.
also…
Buffett also warned that the financial crisis is "everybody’s problem," not just Wall Street’s. The potential collapse of financial institutions would cause industry to grind to a halt,
Hey, who the heck is this Warren Buffet guy?
Shouldn’t he be 100% free market, the invisible hand is never wrong, liquidate everything if necessary, depressions fix everything, we can live in peace & anarchy, etc?
If only the world was so simple.
Anyway, now the average person has a choice. They can continue to look at the world in the most simple terms possible — I would say, simplistic – or declare that they understand the global financial system better than Warren Buffet.
No offense to any pfbloggers, but I’m listening to Warren Buffet.
Of course, any major player is going to talk their book, but I think Buffet has talked beyond his book more than most. Nobody wins by neglecting the bigger picture. Especially not the person who made the largest charitable donation in history.
+ + +
…stay tuned for the Warren Buffet Paradox, Part 2 to Part 100.
Preview: The “Save Money on Heating Costs” Worksheet
Okay, enough with feeling frustrated about the state of the world today.
I want to change it. In a big way. Here’s one idea:
A spreadsheet worksheet to save real money on home heating costs.
(While we’re at it, we can conserve some energy.)
The idea here is to make the best heating tips as actionable as possible.
I organized ideas from one article to see if I could improve its usability. The initial plan was to save money on my own heating bills. However, if it works, why not share with the world? There is so much great information scattered all over the web, but it can be overwhelming. (Agree? Disagree?) If there is enough interest, I can research this to the nth degree. Basically, try and build the most useful heat-saving resource on the web, using .gov sites.
If you have Micrososft Excel, click the link below to download:
The "Save Money on Heating Costs" Worksheet (rough draft)
You tell me… is it a good idea?
Buy when there is blood in the streets…
I see young(er) people who think the stock market is a video game. Don’t worry if you crash your sports car at 200 MPH, or get shot up by all manner of firearms. Just hit the reset button and try to run up the score again. Yet I have to reflect on the true nature of the “blood in the street” quote.
1. “Be greedy when others are fearful.”
2. “Buy when there is blood in the streets.”
These quotes are used interchangeably, but I don’t think they are identical.
…continuing the “in the street” analogy, literally, you have people with money walking down a street. In the first quote, some people get spooked, rush to leave the street, and leave their money behind. Maybe it is getting dark, maybe they saw a sketchy stranger, whatever. In the second quote, there is blood. People do not bleed for no reason. Maybe the person in the first quote was not deterred by the sketchy stranger, and the stranger started stabbing them. In practical terms, I think it speaks to the difference in a financial crises and an economic crisis. Not every sale of stock is between a willing buyer and willing seller. I think that could account for some of what we are seeing these days.
“When there is blood in the street, avoid getting stabbed!“
I Apologize
I have a hard time ignoring economics.
It is challenging.
It is fascinating.
Sometimes, it is infuriating.
It is never, ever boring (to me.)
But is it practical? I think it is, and it is not. (From what I gather, economists love to give those kinds of answers.) Consider an analogy to fuel economy. In the short run, you can only tweak so many more MPGs from your current vehicle. But in the long run, you can switch to a radically different vehicle, or move so you can use altogether different forms of transportation: subways, bicyling, walking, etc. In the same way, I’m betting the more you understand economic reality, the more you can shape your own economic reality.
Anyway, if you are just here for the tips & tools you can use today, don’t despair. Our baby is due to be born in the next few weeks, and there won’t be as much time for economic ramblings. I’ll try and organize most of my economic thoughts in one more big post, and then we are back to tips & tools. *
(* unless I can present economics in a way that is immediately practical to everyone.)
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