Finance – How To Beat The Auto Dealers
Finance. Pretty broad term. If you look up the word finance in the dictionary you will find the following definitions.
Noun
1. The science of the management of money and other assets. 2. The management of money, banking, investments, and credit. 3. finances Monetary resources; funds, especially those of a government or corporate body. 4. The supplying of funds or capital.
Verb
1. To provide or raise the funds or capital for: financed a new car. 2. To supply funds to: financing a daughter through law school. 3. To furnish credit to.
Certainly more than enough material to cover. An associate of mine in the early years of his career after graduating college with a finance degree spent a good number of years in this field. He certainly has a wealth of knowledge to share on a variety of financial topics. So in this first of a 3 part series he is going to enlighten you on the verb side of this equation. More specifically definition number 1. To provide or raise the funds or capital for. Like financing that brand new car of yours. He offers this observation and advice.
Financing anything can be a costly proposition especially if you don’t know what you’re doing. This is especially prevalent in one area especially, financing a new car.
Rather than bore you with a lot of information that you don’t need I am going to provide you with what information you DO need so that when going to finance that brand new luxury sedan it doesn’t end up costing you a fortune.
1. The first thing you have to do is determine your financial situation. How much can you afford to pay each month? Financing a car is a long term proposition. Most new car loans run for about 60 months, or 5 years. That’s 5 years of your life that you need to be prepared to meet a financial obligation or your car ends up repossessed So don’t finance a payment that is more than what you can afford each month.
2. Decide what car you want and what you’d be willing to accept. Maybe you want that new Lexus but at $1200 a month financing it’s just way beyond your means. Maybe that $500 a month Chrysler is more in your pocket book range. Sometimes we have to settle for what we can afford. Remember, a car is a means of transportation. You spend less time in your car than in your place of employment or your home. Maybe you just want to get something that will get you to where you want to go.
3. Do your homework. There are a boat load of car dealerships out there. Don’t just settle for the first one you see. Shop around. Compare prices of competing dealers. Many times if you bring an ad in from a dealer that is offering the car you want for less money you can get an even better deal from the second dealership. Don’t worry. Everybody does it.
4. Don’t settle for the rate the dealer gives you when financing your car. Ask him what the buy rate is from the finance company. If you think that rate is too high tell him you want him to try another finance company. If you’re still not happy with the rate then try your local bank. Many times you can get a better rate just by looking around.
Why Early-Stage Startup Companies Should Hire a Lawyer
Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.
The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?
They Know What’s Best for You
Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.
Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.
They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.
Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.
They Contribute to the Increase in the Value of Your Business
Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.
They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.
Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.
Wrapping Up
All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.
Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.
Think Twice Before Getting Financial Advice From Your Bank
This startling figure comes from a recent review of the financial advice offered from the big four banks by the Australian Securities and Investment Commission (ASIC).
Even more startling: 10% of advice was found to leave investors in an even worse financial position.
Through a “vertically integrated business model”, Commonwealth Bank, National Australia Bank, Westpac, ANZ and AMP offer ‘in house’ financial advice, and collectively, control more than half of Australia’s financial planners.
It’s no surprise ASIC’s review found advisers at these banks favoured financial products that connected to their parent company, with 68% of client’s funds invested in ‘in house’ products as oppose to external products that may have been on the firms list.
Why the banks integrated financial advice model is flawed
It’s hard to believe the banks can keep a straight face and say they can abide by the duty for advisers to act absolutely in the best interests of a client.
Under the integrated financial advice model, there are layers of different fees including adviser fees, platform fees and investment management fees adding up to 2.5-3.5%
The typical breakdown of fees is usually as follows: an adviser charge of 0.8% to 1.1%, a platform fee of between 0.4% and 0.8%, and a managed fund fee of between 0.7% and 2.1%. These fees are not only opaque, but are sufficiently high to limit the ability of the client to quickly earn real rates of return.
Layers of fees placed into the business model used by the banks means there is not necessarily an incentive for the financial advice arm to make a profit, because the profits can be made in the upstream parts of the supply chain through the banks promoting their own products.
This business model, however, is flawed, and cannot survive in a world where people are demanding greater accountability for their investments, increased transparency in relation to fees and increased control over their investments.
It is noteworthy that the truly independent financial advisory firms in Australia that offer separately managed accounts have done everything in their power to avoid using managed funds and keep fee’s competitive.
The banks have refused to admit their integrated approach to advice is fatally flawed. When the Australian Financial Review approached the Financial Services Council (FSC), a peak body that represents the ‘for-profit’ wealth managers, for a defence if the layered fee arrangements, a spokesman said no generalisations could be made.
There are fundamental flaws in the advice model, and it will be interesting to see what the upcoming royal commission into banking will do to change some of the contentious issues surround integrated financial advice.
Many financial commentators are calling for a separation of financial advice attached to banks, with obvious bias and failure to meet the best interests of clients becoming more apparent.
Chris Brycki, CEO of Stockspot, says “investors should receive fair and unbiased financial advice from experts who will act in the best interests of their client. What Australians currently get is product pushing from salespeople who are paid by the banks.”
Brycki is calling for structural reform to fix the problems caused by the dominant market power of the banks to ensure that consumers are protected, advisers are better educated and incentives are aligned.
Stockspot’s annual research into high-fee-charging funds shows thousands of customers of banks are being recommended bank aligned investment products despite the potential of more appropriate alternatives being available.