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Take Your First Car Home With The Help Of These Car Loans Tips

Take Your First Car Home With The Help Of These Car Loans Tips

Since the very first car rolled out on the streets, cars have gone through tremendous transformation in the form of power, comfort, safety, fuel efficiency, interiors, and exteriors.

Today, cars are the most common form of transportation and have become a compulsion rather than a requirement. Besides being a compulsory vehicle for office and household works, cars have made traveling less hectic and more convenient. There are cars for the super rich and there are cars for a daily commute. There are cars designed and developed for every purpose. You can buy whatever car you like, but only if you have enough bank balance to do so. If you are concerned finances will keep your first car out of reach, you need not worry. There are easy finance options available to buy your preferred car.

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Want to know the whole process?

There are many loan companies, as well as dealers, that have tie-ups with money-lending companies to make the car buying process easy for people who do not have hard cash available. Car loans are the easiest ones to obtain because there is no compulsion to provide income proof, credit scores, asset proof, employment status, insurance, bank statement, etc. as automobile lenders know that not every person meet all the qualifications. All in all, getting a car loan is less painful than a home loan or business loan.

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Having a helping hand in terms of an easy car loan has made it possible for people to afford a new car. Here are some insights about how to get the best car loan that you must consider.

What loan amount are you eligible for?

In general terms, the car loan depends on the actual cost of the car, in addition with down payment from your side that you can invest from your pocket. And also with the amount, you can conveniently pay for the monthly repayments. So, all you have to do is to look at your monthly budget, and the savings, so that lenders can figure out the base to lend you the loan for your car purchase.

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What type of loan can you opt for?

There are different types of easy car loans to help you opt for the best-suited loan type that meets all your requirements. The four most important ones are a variable loan, a fixed loan, a secured loan, and an unsecured loan.

  • Variable loan: In this type of loan, the loan amount varies as per the interest rate adopted by the lender. If they lower the interest rate, the repayment also decreases, and vice versa. But these interest rates are always lower than fixed rates.
  • Fixed loan: As the name suggests, the interest rate is fixed for the complete loan tenure. The monthly loan repayment remains the same irrespective of the market rates.
  • Secured loan: This loan is more like a bet because it means that you put your desired car at risk. If you don’t repay the loan amount on time, the lender will take back the car. In this loan, the car is used as an asset.
  • Unsecured loan: With unsecured loans, there is no compulsion of putting the car at risk, but you have to prove that you are capable of repaying the loan amount on time by showing your credit repayment history or credit card history.

What car brand do you want to buy?

The type of car brand you buy depends on whether you are opting for a new car or if you have selected a used car. For new car loans, refer to the above-mentioned loan types to get a better idea of the kind of loan that works for your budget, lifestyle, and overall financial plans. For used cars, you first have to see whether the car is not too old to pass the car loan eligibility.

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What special features are you looking for?

There is an array of various features attached to a car loan, all of which should be considered before purchasing the car you want. Some of these special features include:

  • Additional repayment: This loan feature allows you to make additional repayments of your car loan and save money by making complete loan repayment sooner.
  • No early repayment penalty: This loan feature allows you to pay off your complete car loan when you have excess money without getting penalized or charged a higher interest rate for early repayment.

You have gone through the types of loans, eligibility, and special features of car loans available to you, now all you have to do is make a final checklist of documents you will need to make the car buying process less painful. Keep your identification documents, proof of income, car details (if you are using it as security for a loan), and credit history record, to see your repayment capability.

Having all these documents on file will help you clear the car buying process and get you in your first car without any additional hassle.

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Erick Clifford

Journalist

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

Reference

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