June 7, 2020 Finance makes the world a new place

Buying A Car? Make Sure You Get the Best Vehicle Finance Deal

Remember getting presents as a kid? You’re so overwhelmed with excitement and joy to the point that you’re literally jumping up and down on the spot- most likely screaming and probably speaking a language that nobody can understand. Now you’re older. And you’ve just bought a new car. You jump up and down again. People turn and look at you. You don’t care. You experience the same feelings you did as a child, except with a dash of P.P.R. (What’s that?)

When we buy something that’s slightly more expensive and requires us to splash a little more cash we experience something called post purchase regret (P.P.R).

You’ll start to wonder whether you made the right decision and if the money could have been better spent. At some point you’ll inevitably ask yourself: “Could I have gotten a better deal?”

I think the last thing anybody wants to experience when it comes to vehicle finance and buying a new car is regret. With a bit of research and preparation you can ensure that when that dreaded P.P.R pops up, you send it packing.

Here’s how it’s done:

Set yourself a realistic budget

We all like to dream. Yes you may be able to stretch your cash a little bit, but try not to. Spending only according to what you can afford will mean less financial strain. Sit down and work out all your monthly expenses. There are a number of vehicle finance repayment calculators online that will allow you to determine what your monthly repayments will be, based on factors such as purchase price, value of extras, deposit and interest rate. Make use of them to get a basic idea of what you can afford.

Cash is King

Paying cash for a car may not be a realistic option for many people. However, if you do have some cash saved up and you can afford it, paying cash for a car is the best option. If you pay cash you only end up paying the listed price. So if the car costs R150 000 you pay exactly R150 000, whereas if you took out a payment plan you would have to pay interest on top of that amount.

Review your credit history

Taking the time to review your credit history will ensure that you get the best vehicle finance deal. If your history is bad then you may not be able to get a loan. If there are one or two outstanding payments or unresolved issues, sort them out before you apply for your loan. This will paint you in a more positive light with the banks and dealerships because they will notice that you made an effort to resolve these issues. If you have kept a good credit history there is a good chance you’ll get prime or one below prime interest.…

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$1 Quadrillion Worth of US Derivatives

$1 quadrillion, this is the value of the U.S derivatives. $1 quadrillion tied up in totally unregulated markets and the only information we can get about this pile of “money” is what bankers are willing to tell us. The value of derivatives market is more than 20 times the global economy as Jeff Nielsen mentions in his speech. This is the main reason why the U.S economy is struggling to get back on its feed and gain the investors trust again.

In 2008 when the state of the global economy was uncovered, Walls Street banks had to get the U.S accounting regulations changed in order to access these assets without letting the markets know the actual value of these papers. Without these changes the banks would have been reporting their own bankruptcies not record breaking profits, says Nielsen.

According to Nielsen there is no solution to the U.S economic problems and deflation or hyperinflation, is almost inevitable. This causes investors to face a dilemma since both of the outcomes are possible and preparation for both at the same time is difficult.

This kind of defensive investing tactic is known as wealth preservation. The most common wealth preservation asset is physical gold since it is seen as the ultimate save heaven. The value of gold cannot be weakened by inflation or rising debt. The value of “paper assets” can be easily influenced by governments, which makes them risky in economic stress situations when governments are trying to save the economy. This is not the case with gold since there is a clear limit of gold production and the amount of physical gold in the fiscal circulation can be easily defined.

In both situations, inflation or deflation, the final outcome is likely to be a collapse in the value of paper currencies and the only successful way out of this is to hold “good money” as Nielsen calls it. By “Good money” he means precious metals, which are known as the best assets to keep their value in economic turmoil.

Looking at market data over the last ten years we can observe that gold has been the best performing asset, outperforming the second best, government bonds, by 240%. Gold has been producing 14.3% annual profit compared to 5.9% return from bonds. Gold is the least volatile asset class and this explains why its value has been going up even before the recession. As the amount of debt in the markets is increasing all the time, investors must add more gold in their portfolios since gold, along with other precious metals, acts as a buffer in high economic stress situations.

When considering to the recent drop in the gold price, it is important to keep in mind the difference between trading and investing. Trading is short-term strategy where you purchase as asset with intention to sell it relatively quickly. The time scale could be anything from 30 seconds up to 3 months depending on your strategy. Investing is a long-term plan …

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