Piedmont Street Management: Registered Investment Adviser
85 Piedmont Street
San Francisco, CA 94117
(415) 731-2944
JimEyres@pstmgt.com
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For Beginners Only?

At what point do you say, "The house that we have now is big enough for us in our current circumstances. It keeps us warm and dry. Even if we could afford a bigger house in a nicer neighborhood, weíre not going to buy it." You might also say, "The car that Iím driving now gets me reliably from point A to point B. Even if I can afford a more expensive car, Iím simply not going to buy it. Iím driving my stake lifestyle-wise."

Here are some more money-saving ideas by category:

Housing

  • If thereís a good chance you will move in a year or two, then renting may be appropriate.
  • Beware of basing a mortgage on two incomes.
  • Exercise extreme caution with regard to home equity loans; they are rapidly becoming the ultimate credit card.
  • Consider an extended household; do you have an empty bedroom that you can rent out at a reasonable rate, thus reducing expenses?

Cars

  • The least expensive car that you own is the car you own now. The average reliable life of any car is 10+ years and 120,000 miles. The average car is traded in after less than four years and under 50,000 miles. Sell your used car only when the maintenance expenses on it are more than the value.
  • Pay cash for your next car. When your current car payment is done, make the payment into a money market fund. The next time you need a car, your savings, interest, and trade-in value will let you buy it without a loan.
  • There are no economic advantages to leasing. The payments are lower, but you end up owning nothing at the end. There can be significant extra charges if you exceed the mileage allocation or have excessive wear and tear on the vehicle.
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