LIVING OFF DIVIDENDS & PASSIVE INCOME

About a week ago I picked up a 2005 Acura TSX. According to KBB.com, the private party value for it would have been about $24,500. The seller was leaving the country and wanted $23,500. I was able to use my awesome negotiating skills to lower the price to $21,250.

Its a pretty sweet ride. Even though its a 4 cylinder it has 200 HP and although the torque is a bit low in the low gears, it drives better than my 1999 V6 Honda Accord Coupe. The turning radius is also very tight and it corners extremely well, especially at high speed. The only problem is that it uses premium fuel. I tried mixing in regular on a half tank (reasoning that the blend of 87 and 91 would work out to mid-grade) and didn’t notice a major difference in performance. The mileage didn’t go down either.

Buying a 2 year old used car is always better than driving a new car. The first owner always has the worst depreciation in the first 2 years. If you can get a low mileage car in good condition, its almost as good as a new car anyway. You pay a lot less for it and if you keep it for 6 years before you sell, you shouldn’t experience major repair costs either.

My ‘99 Accord (which I must confess I bought new) should last me another 2-3 years easily. I has about 100,000 miles on it and I haven’t had any major repairs. Just tires, brakes and regular maintenance.

• Bear fund managers warn against short sales Here's an interesting article from Bloomberg. I don't agree with it, but then again I didn't make 74% returns last year, nor do I run a multi-billion dollar fund. Steven Leuthold, whose Grizzly Short Fund makes money for investors by betting companies will fail, says he wouldn't invest in his......
• Renting Vs Buying: How To Live Beyond Your Means! The debate over renting versus owning isn't dead. According to the WSJ, you can buy a 2 bedroom condo in Miami with a  wrap-around  balcony and stunning, jaw-dropping views for $400,000 (and this is after the market has already correctedly significantly). Apparently they come fully loaded too! "You'll have at......
• Byron Wien's 2008 Annual Top Ten Surprizes List Byron Wien, chief investment strategist for Pequot Capital, has once again published his annual list of economic, market and political surprises. Last year, he got about half of his predictions right. He predicted gold bullion at $800, oil at $80, surging grain prices, and the rise in Latin America's economies.......

• The Weakonomist Pays Off His Car Yeah that's right. If you haven't been with me since the beginning this won't look like much of an accomplishment. You might think differently when I tell you I paid for the car in less than a year. I drive no piece of crap either, this car was brand new......
• Creating a Plan for Guaranteed Retirement Income Regular readers of this blog may recall that I have been studying the work of Zvi Bodie, a professor of finance at Boston University. (I mentioned Prof. Bodie in my post on Retirement Income and the Myth of Equity Risk.) After much consideration, I've decided to adopt Prof. Bodie's concepts......
• Vanguard Star Fund (VGSTX): The Ultimate Fund For Beginners? One of the most difficult stumbling blocks for new investors is determining an appropriate asset allocation.  Should you invest in stock?  Bonds?  Real estate?  Gold?  Pork bellies?  There are so many asset classes out there and so many different ways to combine them, it's easy to see how beginners might......

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