Family Cabin Lost in One Easy Step

Now, I want to start with the next, the first segment of my show is watch your step. Watch your step. And today, I actually want to share a series. I have enough of them. I am going to share a series of my own personal mistakes. My own personal missteps. So, you can hopefully benefit from those missteps that I have taken and I call those lessons learned and I am so tired. So many times I am tired, tired, tired of learning lessons but you gotta keep learning, right? That's it. You just gotta keep learning. So, I am going to share some of my personal mistakes in the watch your step series if you will, I do not know. I have got so many personal financial mistakes. I want you to know as the listener. I want you to know that I am absolutely human just like everybody else. If you have got a financial planner out there that does not admit to his or her mistakes, they are not being genuine. Everyone of us are human beings, we are susceptible to making mistakes. So, I want to share some of my personal mistakes so that these are things that I considered to be mistakes. right? I considered these to be my mistakes. Some folks may not look at them in the same way and they might not think of them as mistakes. I will do just that. 

So the first one I want to share is actually one that came up recently with a personal client. Let us say a personal client where he had actually reached out to me regarding buying a car versus leasing a car. Buying a car versus leasing a car.. Now, there are situations where leasing a car makes sense from the business perspective most of the time. I am saying business perspective is usually when it makes sense. It is not always right whether it is a business transaction or not. I am not a fan of leasing a car. Essentially renting a car long term in a really expensive and complicated confusing manner that is set up to benefit the dealership. That is just rot with problems, right? There are pitfalls all through there. So this client called and we talked and I encouraged him to avoid his situation. Avoid leasing a car. I encouraged him to seek a low interest rate certified pre owned purchase of a car perhaps. Well, what he did was he went to the dealership on a weekend. Got all excited about a car. Got completely hornswoggled into a lease and now has himself a 3 year lease on a vehicle and a lease that he completely does not understand. Has no idea what he signed, he does not know anything about lease negotiations. Now, full disclosure? Neither do I. I have a car dealership license. Means I can buy and sell cars at dealer auctions and I really have a passion for cars. If you asked me to guide you through leasing a car? ohhh! I would have to seriously sit down and put on my thinking cap and really go through and be very careful about studying lease 101. Because leasing is an extremely specific type of car or vehicle acquisition. It is essentially set up to benefit the dealerships and the finance companies. That has got all kinds of pitfalls in a lease contract and this guy called me, I said, woah! You should not lease. The payments are so high if I finance it. Well, he went in and got. How am I going to say it? He got suckered hornswoggled into a lease because it sounded good and we will give money for your trading and yada yada yada and a low payment and sounds good. Well now that he looks at his lease and he came back and we touched base on it and I asked him some questions about his lease that he did not know. He went back and looked at anyone, oh! oh! oh! right? So, he did not understand the full scope of what he had signed. 

Now, I mentioned that this is my personal mistake section of watch your step and that is exactly what it is because the second vehicle purchase of my life. Long time ago when I was young, I did the exact same thing. I went into a Honda dealership. A Honda dealership, Norm Reeves Honda in California and I got so sold into a lease on a Honda Civic LX. The lease is full of things that you can negotiate. That is the part that most people do not understand that a lease is a contract you can negotiate. You can specifically negotiate certain aspects of the contract. But you have to understand leasing. You have to really understand leasing to make sure that you know what you can and what you can't negotiate. I knew nothing. Just like my client recently, I knew nothing. I went in. I had signed my oh my gosh I get to drive out of here with this car for $250 a month, this is amazing! Well, I did not understand the mileage. I did not understand the built in interest rate. I did not understand various different components. I did not understand the gap coverage. I did not understand anything. The lease turned out to be a terrible terrible thing and I ended up having that car like a weight around my neck for a number of years beyond the lease because it was so terrible. It was good for the dealer and terrible for the actual customer. So, my first watch your step is if you are going to purchase a vehicle. Remember that leasing a vehicle is not purchasing a vehicle. It is essentially renting a car and it could be an extremely expensive rental. If you are the type of person who really likes to have a new car every 2 to 3 years you know that you want to keep that look in that image and maybe you want to run it through your business as an expense, leasing can work. What I would encourage you to do though is Google it. Really Google it. You can actually go to YouTube and there are some really detailed videos from car experts on how to negotiate a lease on a car. Learn that and negotiate the lease.

Now, one really important thing that I would encourage you to always remember whether you are buying your lease is negotiate with the dealership on the price of the car first. Do not negotiate whether you are financing, plain cash or leasing. That is not your first negotiation. Your first negotiation number one priority is to settle and agree on the sale price of the vehicle regardless of how you are going to buy it and then you talk about maybe a trade in. Never bring up the idea of a trading until you have settled on the actual purchase price of the vehicle then talk about trading then discuss lease then discuss finance. Now that you have settled on the established value of the vehicle. So, that is my watch your step. I will have some more because goodness knows I have got a ton of personal mistakes that I can share and I want to share those that you can watch your step as well. 

Now, listener questions actually came in but before I did that, last time I had tons of questions. I had tons of questions about living trust and powers of attorneys and estate plans and what it all means. I went through a pretty deep dive in episode 239 on the last episode. If you have questions about living trust and wills and powers of attorney and which is which and why should you get this or that, please listen to episode 239 and send me an email anytime (see video end for email address) I am happy to help and as a paralegal, I love that I can actually help take people through the estate planning process and get your wills and powers of attorney all done. It is truly one of the things that I enjoy about my work. Now this time, listener Jeff hello and thank you Jeff for this question. Listener Jeff said this, I am going to read it off on my screen here behind the camera. Says, my parents own a cabin on a big piece of land in Northern California. Well, first of all that is awesome. There are not too many big pieces of land available in California. So, when I first read this I thought it must be rustic and of course then he goes on to say this. It was passed down from my grandparents to my mom and dad and they planned to leave it to my sister now. It is very rustic and the cabin is all original. So, it sounds like it's been there for a long time. I have listened to your show for a long time and I have heard you, thank you by the way for listening. I really, I have met a number of people on Zoom and email lately that have listened from the very early days of my show. So, thank you, thank you, thank you. 

So, the idea here is the cabin has been around for a long time. This person says, I've heard you talk about protection. So Jeff says, I've heard you talk about protection as a first priority. I asked my parents about the insurance they have on the cabin and I was surprised to find out that they do not have it insured at all. They have no insurance at all. My dad said that his parents never had insurance because it was paid for and they were not in a fire danger area. Okay. Little side note for me, I did not know that there was a place in Southern California or Northern California that was not a fire danger area. The sad running joke when people call me from you know family back east and such is that yes we are on fire, right? In California run fire and it was not a riot, it was just the river bed near my home burning or up the near Los Angeles optimum canyon burning. We are always on fire. So, sorry that was so little Southern California or California side note. So Jeff had said that his parents did not have it covered because the house was paid for and it was not in a fire danger area, right? So, I find that hard to believe personally on the fire damage area or fire risk area, right? But Jeff goes on to say this, it is kind of off grid but do you think I should encourage my parents to get insurance on the property? Okay. Now that is good, thank you Jeff by the way for the question. This is an excellent question and I have seen it sadly way too many times. Way too many times with something similar to this.