Achieve Financial Freedom With Simply Smart Investment


The promise from Tony Robbins in his book, Money: Master the Game, is to create an income for life without having to work again.

The idea is to create an extraordinary quality of life on your own terms.

Start rich with gratitude.

Achieve your dreams by (1) unleashing your desire or focus; (2) taking massive and effective action; and, (3) good luck!

With the strategies summarized below, the only thing that could hold you back is a defeated story based on beliefs you will fail.


Establish an automated plan for savings and investments. Spend at least 10-15% of your income on yourself, before any day-to-day expenses, to benefit from compound savings. Every time you get a raise, put a portion toward a higher percentage of income invested.

Protect yourself from marketing myths. Analyze your current portfolio at Choose low-cost index funds over mutual funds. The (likely tax-deductible) cost of a large fee-only independent registered investment advisor (through a third-party custodian) plus the cost of the investments should be under 1.25%. Risk a little to make a lot with structured notes, market-linked certificates of deposit, and fixed indexed annuities.

Set realistic goals to achieve financial dreams at The calculator will guide you on how much you need to save (and how long it will take) for five levels of financial freedom. For instance, a moderate outlook shows me never having to work another day starting 13 years from now – much better than the standard age of 65+. To get there even sooner: (1) Save, i.e. minimize fees, pay next month’s mortgage principal this month; (2) Earn, i.e. add more value in your job or business; (3) Reduce taxes, i.e. run a not-for-profit, defer, invest in a Roth; (4) Find investments with a risk:reward ratio of 1:5, i.e. real estate investment trusts; or, (5) consider moving cities for greater purchase power.

Make investment decisions with proven asset allocations. Decide what portion you will invest in growth (i.e. high risk, high yield) and what portion (i.e. 60%) in security. Divide a big win from growth investments to reinvest in both growth and security, and save some for a luxury. Diversify across markets, classes, and time with dollar-cost averaging: making equal contributions to all investments monthly or quarterly. Rebalance your portfolio annually. Tax-loss harvesting uses losses to lower taxes.

Develop a guaranteed lifetime income plan. Balance your portfolio in terms of risk rather than by amount of money. “Every investment has an ideal environment in which it flourishes,” so have 25% of your risk in each season: (1) high inflation (commodities/gold, TIPS i.e. inflation-linked bonds); (2) deflation (treasury bonds, stocks); (3) high growth (stocks, corporate bonds, commodities/gold); and (4) low growth (treasury bonds, TIPS). This translates to 30% in stock indexes, 15% in 7-10 year Treasuries, 40% in 20-25 year Treasuries, 7.5% in commodities, and 7.5% in gold. Upon retirement, invest in deferred fixed indexed lifetime income annuities with a guaranteed lifetime income rider. Private placement life insurance protects from growth tax, allows loans, and death benefits are tax-free too. Also consider a living revocable trust.

Learn how billionaires invest. The book details the expert interviews with Carl Icahn, David Swensen, John C. Bogle, Warren Buffett, Paul Tudor Jones, Ray Dalio, Mary Callahan Erdoes, T. Boone Pickens, Kyle Bass, Marc Faber, Charles Schwab, and Sir John Templeton. Here, I’ll summarize: anticipated and diversify; high achievers are never done.

Follow an action plan. Decide to focus on what you can control and find empowering meaning in what you see. This creates the emotional state to take action, to grow, and to contribute. Increase happiness by investing in experiences, buying time for yourself, and investing in others. Most of the billionaires interviewed give most of their money away. You can donate a fraction of a dollar every time you use your credit card to end hunger, slavery, and disease through SwipeOut.

Clearly, there is a huge amount of detail you’d get from reading the full book (and all proceeds go to charity), but above are all the main points as I see them.

Lender Lingo – What To Know When Applying For A Mortgage

The fact of the matter is no one likes talking about borrowing money, but for many of us there comes a time when it’s unavoidable. This inevitability doesn’t have to be a heart-pumping, palm sweating nightmare. With the proper mindset and planning, going to a lender for a mortgage can be an easy process with minimal stress, and you’ll come out knowing every possible answer. When preparing for the big day, here are some things to keep in mind.

Type A or B?

A good first step is getting to know the types of financing offered by your lender and which of those loans they believe will best suit your personal and financial situation. For instance, if you’re buying a house that is in a less than perfect state, an FHA 203k may be the best choice. An FHA (or Fair Housing Administration) mortgage allows for the renovations, repairs, and the cost of the house all in one. On the other hand, if your future home is in a higher than normal cost bracket, then you may need a “jumbo mortgage”, which comes with some added complications. Discussing the pros and cons of each type of advance and how they may best fit your needs will bring you to the next step.

Act of Faith

Obtaining what’s called a GFE or Good Faith Estimate is a must when applying for financing. After you gain, preapproval is the best time to ask for your GFE. This mandatory document is created by the U.S. Department of Housing and Development, also known as HUD, and will provide you with information about the cost to close your mortgage, as well as the terms of the credit and the settlement charges. This form also has important dates, escrow account information, tradeoff table, and a shopping chart. You should bring any questions or concerns about your GFE to your loan officer. If you’re still not sure, asking your realtor could also shed some light on any uncertainties.

Avoiding the Tar Pit

It is important to know what will slow your loan down. Many don’t know that preapproval does not guarantee you to a line of credit. Make no mistake, until the full process is finalized, they don’t have to give you anything. When it comes time to pony up the dough, a lender will go back through your employment status, credit scores, financial status, and other background information before concluding the transaction. Best thing to do is keep the pace. If you can help it, don’t move around large sums of money, switch jobs, or start shopping for a new car after being preapproved. Take the time to go over your credit report, be available if the loan officer has any questions or concerns during the approval process, and always make sure to fill out every document to completion.

Showing your lender that you are making every possible effort to find the best mortgage for your situation, helps them gain confidence that you’re a good match for their money. The loan officer is as much a person with a goal as you are, a common goal that you both share. Both of you want to see your application approved and getting all the information possible and keeping your life on a stable path ensures the best outcome.

Price Negotiation Tips for Homebuyers

How to buy a house the right way involves making sure that you get the best value for your budget. After all, a home is probably the biggest single expense you will ever make in your entire lifetime. Following are a few price negotiation tips.

Respond quickly – It is important that you promptly respond to counteroffers and to avoid counteroffers with terms that can possible break the deal. If you delay your response, another buyer might step in, and this can result to a bidding war, and worse, it may give the seller the idea that there could be more serious and better buyers out there. Remember that a bidding war will never be good for you when in the process on how to buy a house.

Utilize a middleman – If you need to ask or say something to the seller, never do it directly. Let your real estate agent relay it to the seller through his agent. This is to make sure that you avoid rookie mistakes in terms of legal concerns and terminology. Your real estate is in a better position to spot red flags as any minor changes to the agreement might create issues with your lender.

Assess the situation when dealing with a builder/developer – If you are in the market for a newly-built structure, negotiating on the price and terms, among others, may be moot and academic. This is because the developer usually dictates the terms and you can only take the offer or leave it. However, if there is a lot of inventory, they may be willing to negotiate just to keep their inventory down.

Make your realtor earn his keep – In cases where there are other buyers interested in the property you are eyeing, your realtor’s preparation and presentation of your offer can spell the difference between your success and failure. So it is best that you talk to several real estate agents first before deciding on which one to hire. Go for someone you can trust and communicate with all the time. Be sure you are always on the same page as far as expectations and deal breakers are concerned.

Analyze the numbers – Before deciding on the final amount to offer, have a mortgage broker compute your monthly amortization as well as the taxes and insurance you have to pay. There are times when in the process of how to buy a house, you may need to increase your offer, and you have to make sure that you can afford the corresponding costs.

The Hard and Easy Way To Calculate Accrued Interest

When doing a real estate closing or figuring an interest payment due a lender, the amount of days since the original purchase to the date payable can be calculated only if you know the number of days in between. Because there are different numbers of days in different months and an occasional leap year, it can be easy to miscalculate the numbers of days. It’s important that a borrower know how to calculate a payoff so the lender, especially hard money lenders, do not over charge you.

In the financial arena, Treasury bonds use a 365 day year while almost all other interest-bearing bonds and notes have an arbitrary 360 day year. The reason is simple – to make it easier for lenders to calculate the accrued interest on bonds. However, the US Treasury sells trillions of dollars of bills, notes and bonds and a few days interest can mean billions of dollars in no time.

In this exercise we will look at how to calculate the amount of interest due when you borrow or lend for a specific time period. For this example we will use a deal I closed recently.

I loaned $50,000 for a property on February 26, and it sold and closed on April 3. The interest rate was 10% and it had a pre-payment penalty of $834 if it was closed before May 26. Here is an example of a no-money deal for this Student because I privately funded it.

Typically, private money borrowing is very simple. You get a mortgage, Quitclaim Deed or deed of trust in exchange for the money you loan the buyer of the property. Typically, a borrower would pay a much lower interest rate on private money instead of hard money.

Private money comes from casual lenders who opt to loan to investors instead of getting low interest rates on their savings accounts or Certificates of Deposits (CDs). The interest rates they charge are mostly dictated by the borrower (investor) and should be well below “commercial” or hard money rates.

Hard money comes from lenders who charge points to close, junk fees, high interest rates and require strict loan requirements. Private lenders might get 5% on a specific loan with no closing points while a hard money lender giving the same loan will get 3 points (3%) to close, $750 in fees and 15% until the loan is paid off.

Just before any closing, the closing agent will send the lender a “payoff letter”. It may come in the form of a Payoff Authorization Letter for the borrower to sign. The bottom line is that the lender must stipulate to the closing agent how much is owed in principal, interest and any other charges due at closing. If the deal doesn’t close on that date, the closing agent will need a “per diem” which is a daily interest charge.

For the above example here is the more complicated way of arriving at the payoff amount that is used by most lenders:

1. You calculate the number of days between 2/26 and 4/3. I did this online at Hint – you should count the day of closing day as one of the days in the calculation if you are charging interest.

The result for the above example shows that I had loaned the money for 37 days to the investor Student).

2. I then did a calculation to determine the amount of interest I would earn for the entire year => $50,000 x 10% = $5,000.

3. Next I divided the $5,000 interest for the year by 365 days to determine the “per-diem” or daily amount accrued from the property owner. This looked like $5,000/365 = $13.69863 or I called it $13.70 per day.
If the amount owed was in the millions, the actual last 4 or 5 digits would be used in the calculation to determine the accrued interest but a round off to $13.70 is fine for these calculations.

4. Finally, I multiplied the number of days the money was on loan (37) times the daily interest charge = 37 x $13.70 = $506.85.

5. The pre-payment penalty was $834 so there is no calculation needed for this amount.

6. Total income on the loan for 37 days was $506.85 + $834 = $1,340.85.

In summary, 10% on an investor loan may not sound very good if you are getting hard money rates. I have seen some hard money lenders charge as little as 8% interest on their loans to well-qualified borrowers. However, the more expensive cost is the prepayment penalties, points, junk fees (property inspection, etc.) and document prep charges.

In summary, it is important that you understand how to calculate accrued interest because you will be paying it or receiving it in the future. Double check the closing agent’s calculations prior to closing and you may be surprised that mistakes do happen even with people who do this repeatedly.

If the amount of interest and pre-payment penalty you at looking at paying seem expensive, first shop around more. But always remember that if you lose the deal because you didn’t have money to close, you will make no money at all. In this case the Student made over $30,000 on the transaction.

The simple way to get this calculation done quickly, accurately and efficiently is with my “Loan Payoff Calculator” located on my website at There is no cost or obligation to get it and it will save you tons of money the more often you borrow. I don’t’ even ask for your email address to get it!

To your limitless success!

How Does Your College Rate – And How Can You Trust the Rating System?

Not a day goes by when I don’t have a conversation or hear a conversation about high tuition costs. Then the question emerges; Is College Worth it? Most will say, that depends on your major, the job market, the tuition costs, and the college. A perplexing thing for students heading off to school and parents trying to figure out how on Earth to pay for it, all the while wondering if the money paid will be worth the cost (aka: ROI or Return on Investment). Let’s talk about this shall we?

There was an interesting piece in the media recently about College Rating published in The New York Times titled; “With Website to Research Colleges, Obama Abandons Ranking System” written by Michael D Shear on September 12, 2015 which stated:

“President Obama on Saturday abandoned his two-year effort to have the government create a system that explicitly rates the quality of the nation’s colleges and universities, a plan that was bitterly opposed by presidents at many of those institutions. Under the original idea, announced by Mr. Obama with fanfare in 2013, all of the nation’s 7,000 institutions of higher education would have been assigned a ranking by the government, with the aim of publicly shaming low-rated schools that saddle students with high debt and poor earning potential.”

Can a website really tell you if your college investment will garner a decent ROI for your blood, sweat, and tears, and cold hard cash or economic enslavement to borrow that money? Probably not, but the abandoned effort by the Obama Administration in my view was worse.

Personally, I see it as just another ‘populist talking point’ to garner political support from the masses, I see it as yet another stupid idea to try to control and protect academic institutions and to pretend to solve a problem that government cannot solve, for instance the rapid deployment of new technologies, and how that affects job markets and thus, student loan paybacks at least a % of them which isn’t the real problem with just a symptom of ever rising costs, also caused by socialist thinking.

In fact, I remember how the Obama and Company attacked the “For-Profit-Colleges” Industry and did so in a devious manner. That didn’t solve anything rather it caused fewer ways to get an education thus, supply and demand challenges – thus, again higher prices. Am I surprised, oh heavens no, as so often socialists just do not understand economics or reality, which is why today we have nearly $1.3 Trillion in outstanding college debt with default rates nearing 50%. Just another bubble ready to pop I fear, please think on this.

What You Need to Know About Lead Generation

In today’s world of the marketing-driven sales funnel, many marketing teams live and die by the phrase “lead generation.” Are you being asked to produce more qualified leads? Here are 10 tips to optimize lead generation efforts and tweak your lead gen campaigns for better results.

1) Define a Target Demographic

The first step of any successful lead-gen campaign is defining who it appeals to and how they’ll be reached. Even if you segment to different consumer pools, campaigns should be designed specific to the end user. Ask yourself: What do customers need? What do they want? Where do they get their information? What devices do they use to find it? How does this campaign mesh with these criteria? Is the brand’s value proposition clear? The answers to these questions are the basic foundation of a marketing-driven sales strategy so make sure your campaign aligns to them.

2) Vary Formats to Increase Viewership

Your ideal consumer may use social media more than email or opt to access information from their desktop rather than their mobile device. While this information should be considered when deploying campaigns, there’s no harm in using several media formats to convey your message. Not only does varied media strengthen your brand awareness, but it also gives you the opportunity to potentially capitalize on an unexpected buyer that gravitates to a different interface than your key demographic. Plus, you might gain a new perspective on your campaign message when re-creating your content for new channels.

3) Monitor With a Reliable Tracking Platform

A huge component of effective lead generation is tracing the source. Tracking platforms have several functionalities and are more affordable than some might think. They not only help a company see the kind of engagement they’re getting, but they can also see which sources have the highest ROI and which should receive less resources to minimize waste. Additionally, having a dependable platform to gather lead data and report accurate sales numbers helps with accountability.

4) Target Market Various Stages of the Buying Process

Not all consumers are ready to buy the product or service they moment they begin researching. Some want more information; others need a greater incentive to complete the sale. Creating campaigns for the same product or service that appeal to same audience but at different points of the buying process will cover a larger spectrum of the customer pool. For example, say you have a company that sells custom bicycles. You could create a campaign to aggregate emails for people who may want a bike eventually, those looking for a quote on the model they like, and even those that are ready to buy but are waiting for a seasonal price. Segmenting campaigns in this way increases lead-conversion opportunities.

5) Keep Content Fresh

All content, especially keywords, need to be refreshed regularly, especially for email campaigns. A promotion using trigger words could go straight to the spam box, essentially wasting the opportunity for a potential sale. Even more, consumers are less trusting of brands that use too many salesy words in their ads. Staying up-to-date with trending phrases and top-ranked SEO terms is a great way to refresh content without losing exposure.

6) Make the Submission Process Easy

Don’t make the form submission or purchase process on your site too involved. People might close out the webpage before they complete the sale or be so deterred by the amount of information requested that they opt out of something they would have otherwise pursued. Create forms that are legible, short in length and request a minimal amount of personal info.

7) Include a Clear and Concise CTA

Call-to-action buttons work best when they have a clear, specific message in as few words as needed. There’s a fine line between too much and too little when it comes to phrases used. For example, a site offering an informative e-book to readers could get users to download using ‘download e-book’, ‘download free e-book’ or ‘click here to download your free e-book’. Similarly, someone providing quotes on a product or service could use ‘more info’, ‘get a free quote’ or ‘contact us for more information’. The truth is that there’s no way of knowing what will or won’t work until you’ve A/B tested several possibilities and honed your CTA based on real customer engagement. Regardless, the call to action should be clear, should communicate the value proposition, and should set an expectation or meet a need the consumer wants to fill.

8) Leverage the ‘Thank You’ Page

Your newest customer may also be your hottest lead. Using a thank you page to get customers to sign up for other offers, show them additional or complimentary features to a product they just bought, or simply sign up for your newsletter so that you remain relevant can be incredibly effective. If someone has already converted to your brand, using the ‘thank you’ page as additional ad real estate is a smart way to encourage repeat engagement without exhausting more resources.

9) Make More Landing Pages to Get More Leads

A landing page is essentially the webpage that influences the consumer to initiate a lead submission or buying process. Having multiple landers allow you to test which perform well and which need to be optimized. It will also allow you to segment across audience pools and use multiple sources (or affiliates) as traffic drivers. In terms of page design, ‘less is more ‘might hold true, but increasing the number of pages that exist will almost always lead to more opportunities. If you extend the reach of your net in the right ways, you will likely generate more leads than you ever would have with only one webpage available for lead gen purposes.

10) Email has the Highest ROI (in the digital world… )

Email is currently the top contender for ROI in the digital marketing space – with an ROI of as much as 4000% for those executing campaigns properly. While marketers struggle to adapt to target mobile devices, many are forgetting that almost everyone reads email on those devices these days. You may not need to spend money developing a custom app to deliver special promotions to your potential clients, because an email will put that information in the exact same place. If you’re looking to maximize leads and you have yet to break into email advertising, start now.

Commercial Real Estate Financing – What Are Cognovits?

When dealing with real estate finance there are a number of legal issues that you will always need to be aware of. Many of these will be explained by any professionals that you are working with and are vital to the transaction itself.

However, in some cases there are some legal issues that will only arise in certain cases. This means that you will often not have the information you require to deal with them straight of the bat and will be entirely reliant on your legal professional to guide you through them and ensure that everything about the transaction remains above board.

One of these issues is cognovits. The odds are pretty good that you will encounter these at some point during your investment career, but you may not be aware of what they are and their function in a real estate transaction.

What Are Cognovits?

It is important to note that cognovits will only ever become an issue in commercial transactions, so those of you who are dealing with private and personal properties will likely never have to worry about them or what they could mean for a transaction.

The cognovit provision basically allows a loan creditor to take a judgement, whatever that may be, against a borrower. It usually arises if the borrower has failed to pay back the money they owe to a creditor in some form.

Upon the borrower’s default, cognovits allow the judgement to be made without the creditor having to spend time and money on other legal proceedings to claim back the property they provided the loan for. It also means that the creditor is able to take away the risk of a lawsuit for taking back a property that they are owed money for that the borrower is unable to pay.

In most real estate transactions you will not have to worry about them unless the creditor specifically asks for the clause to be placed in the contract. In these cases it is best to speak to your legal professional and find out what can be done about it and whether or not it is a necessity, as they can leave you in a disadvantageous position should you happen to default on the loan.

Are They Enforceable?

In recent years a lot of states have moved away from cognovits being fully enforceable, particularly under certain circumstances. As such, a creditor does not have carte blanche to enforce a cognitive unless there are specific circumstances that justify its use and all other options have been attempted and shown wanting.

It really depends upon the state in which the transaction is taking place. For example, in Ohio it is much easier for a creditor to enforce a cognovit clause than it is in many others.

As such, you need to be aware of exactly what they are and how they may affect you in the transaction. Of course, you can avoid the issue entirely by always making sure that you have the budget to cover any loans that you take out against the commercial property.

Planning a Big Investment? Here’s Why You Should Trust a Hard Money Lender

So you’ve found the perfect investment and you’re ready to make a purchase. The problem is that you don’t have the cash on hand. You could go to a second-rate financier who only wants to earn money off the interest of your loan. But there’s a better alternative: hard money lenders. Their collateral-based loaning program and low rates always make them a better option, and here’s why.

No Credit Discrimination

Most loan rates are based off the applicant’s credit score. That means if you’ve made a few mistakes or haven’t built the proper history, you’ll be paying more over time. There’s no way to avoid a multi-month or even multi-year loan term with most big investments. Inevitably, you’ll be paying interest in some form or another. And that’s not to mention all the additional fees that are affixed to the process.

A hard money lender isn’t interested in your credit rating. They base their decision off the collateral offered and the project you are trying to fund. If you have a great idea, their team of investors will recognize this potential and seek a way to help you succeed. They aren’t concerned with shutting down your ability to borrow, but more with the way in which you plan on successfully investing their funds.

Incredibly Low Fees

A hard money lender is well aware of the inordinate fees you will pay at a typical bank or other institution. That’s why they not only offer competitive rates that are based off of a flat percentage, but they also eliminate a great deal of the “hidden” fees you would pay elsewhere. They aren’t interested in taking your money or crippling your ability to succeed. In fact, they aim to do quite the opposite.

Let’s say you’re a property developer and you’re ready to expand into an area of your city that you feel has untapped potential. You’ve done your research and you have a solid business proposal for an entire complex that would create jobs and businesses in the area. Your dedication and efforts to contribute to the economy already give you an edge, but your solid idea will win you a loan amount that correlates to your needs. Not only are these private companies much more interested in your business success, but they will also give you honest criticism if they feel your plan has potential holes or failings. Even the process of discussing funding with a hard money lender could be exactly what you need to get your project off the ground.

Collateral Determines Loan Amount

Your collateral is a big part of the way a hard money lender will address your needs as a borrower. If you have high-value real estate in your portfolio, you have a great opportunity to borrow an amount that correlates to its value. Even high-value property like precious metals, minerals, or even cars and collector’s items will all be considered as a solid support for your request.

Some institutions have more elaborate requests as your loan amount exceeds 100,000. Your assets and holdings in the form of stocks and bonds, as well as your business itself, might be used as collateral. Just keep in mind that if you’re borrowing the money for the right reasons, these institutions want you to succeed. There’s no reason to fear you’ll lose any of your collateral.

Video SEO – The Secret Sauce to Rank on the Front Page Each Time

Five Steps to success:

1. Identify your targeted niche and keywords. Google AdWords is the best way to do this. Take a look at how difficult it is going to be to rank in your chosen niche. Drill down until you find a sub-niche that you can dominate. For example if you want to dominate the keyword California Real Estate you are probably going to have a hard time. If you select San Francisco Bay area real estate – it probably is still not easy. But if you decided to rank for San Francisco Bay area waterfront condos you can likely be the dominant player. You can also see how much competition you have in that niche by conducting a simple search on YouTube.

2. Decide on the title and name the video file identically. – BIG TIP. Your title should carry your “long tail keyword” for example San Francisco Bay area waterfront condos – how to find the best value. Then name your video file exactly the same.

3. Write a great description. 300-500 words is ideal. Pepper the text with your chosen keywords (tags) and be sure you include the long tail keyword from your title in the first paragraph and then approximately every 100 words or so. Also include the keywords (tags) as a list in your description. Make sure your text reads and flows well… keyword stuffing is not something that will assist you in this process.

4. Select your keywords. You are going to rank for your long tail keyword first so choose carefully.

Finally get down to broad keywords which you will rank for over time.

5. Backlink. Make sure you are linking to the video from your websites, blogs, social media sites and get lots of sharing going on. It is up to you to create traffic initially with a solid back linking strategy. There are cloud based apps and programs that can assist with this activity.

With these 5 steps you can rank on the front page every time.

What you will find is that you can rank very quickly for a long tail keyword – the type you should use in your video title and then after a few days you will start ranking for the broad keywords.

Ultimately your backlink strategy should include press releases, articles social media posts, blogs and even something as simple as a link to your video in your email signature can generate valuable traffic for you.

The goal of course is to market a product, brand or company in the videos and so often times once we have ranked a video we are also looking to convert the video in to a sale or enquiry.

Thanks for reading.

The Advantages of Working With Car Dealers Vs Private Parties

Close relatives and friends usually play a major role in first automobile purchases. Looking for a deal? Then you might feel inclined to ask a friend, who in return will respond with, “Well I know a guy.” This “guy” as it turns out, will most likely be a private owner selling a used car. On the surface, this may seem like an easy option. After all, it involves less paperwork, you have more negotiating power, and the price for the vehicle is comparatively lower than most car dealers. However, that referral from your well-meaning friend may have unknown consequences.

Regulations Protect Buyers

There is a level of risk involved in doing business with a private seller. Most private owners will give you the automobile in its current condition, there is no guaranteed warranty.

Most privately owned vehicles will have one set low price in order to get it to sell, that price is typically calculated based on the amount of wear and tear, plus mileage. The price, however, may not reflect the vehicle’s actually worth. In other words, you may be paying a higher price if the owner fails to factor in depreciation. This blatant dishonesty cannot be held accountable because private owners are not bound by Federal Trade Commission rules. Therefore, if you’re new property stops working and the old owner decides to skip town and refuses to answer phone calls, then you have little to no recourse.

Professional dealers, on the other hand, are bound by regulations to not give you a product that is considered a “lemon” – or simply a vehicle that won’t work right out of the gate. If this does occur they have to return your money or repair and replace your product. The chances of this occurring, however, are less likely in comparison to working with a private party because car dealers must have their entire inventory certified by a licensed technician.

Financing Plans

Another advantage worth considering is car dealers in-house financing options. With a financing contract, you do not have to pay for the vehicle in one large lump sum. Under a private transaction, full payment is due on the date of purchase. Car dealers can also offer a financing plans with a third party loan company. The company will even assist you with filling out the majority of the paperwork, including helping you file your title and registration paperwork. So, yes, you may have less paperwork involved when working with a private owner, but you’ll be solely responsible to do the legwork on your own, which can be a complicated task.

If you’re someone who prefers the comfort of a security net, then a car dealer may be the best option for you. With legally binding regulations, financing options, and correctly filed paperwork, you can drive away in your new ride feeling confident you’ve made a good investment.