#170. Tips On Saving Money For Your Car 2

Don't Fall Into The Debt Trap

Previously, on another earlier article last year, I have mentioned about not buying new car. I have been thinking of changing my 10 year-old Proton for some time. There are a few reasons why I wanted to change it. But I won't discuss it here. Hehe.

Putting my money where my mouth is, I bought a year 1986 Mercedes-Benz 190E 2.0 Auto. The picture above is that car. 

It's only at RM14,500. And I have budgeted another a few more Ringgits to make it a nicer and safer ride. I have added in a reverse sensor (very important if you have kids in your family or around the neighbourhood). 

Well, I made a calculation. If I were to buy a new MyVI and take a loan, I will be paying way, way much more upon paying back the loan (7 years). Well, a used Japanese car at RM14,500 should be alright too. However, I prefer the 3 pointed star brand. Just personal preference. I did think about getting a Jap but can't get a model that has the wow factor.  

Finally, my friend was selling one! I was also surprised that I can readily get the replacement parts (new parts even) without much hassle. There are two friendly forums on the net in Malaysia for Benz owners. Merzclub.org and MyBenz.org. A lot of knowledgeable and helpful people in those forums providing advice too for newbies who have just started owning the cars. 

So, now I have a ride that is fantastic. I am smiling everyday when I drive it. The money that I have saved on the loan and the monthly repayment can be paid for maintaining the car and pay for the slightly higher fuel consumption. It's slightly higher fuel consumption compared to my old Proton. Perhaps I need to take it to my mechanic to see if anything can be done on the car to improve the fuel consumption.

I was told there should not be any much major repair on the car. As long as we maintain and service it regularly. Of course, the regular wear and tear parts surely need to be replaced from time to time, but are not more costly than some local cars. You just got to know which shop to go to. 

Some people may say I am rich to drive a Benz. Well, not at all. On the contrary, I am driving this because I am poor. I can't afford the monthly loan installment on new cars. Just can't bear to do it again after the experience with buying a brand new Proton 10 years ago and taking out a 7-year loan.

Anyway, the point that I want to say here is, don't get into debt. Especially on buying cars. I know a lot of people are stuck in the slave game because they have loans to pay for houses and cars. The road to financial freedom is when you have set yourself free from all debts. 

#169. Gold Investment And Tetrahedron Update 11

Create Extra Grams From This Cut Loss Strategy
Previously from November 2008 till February 2009 we have seen a great bull run in gold price. The uptrend (line C) didn't break until recently in March 2009.

We are now in what seems like a downtrend channel between line A and B. Price might move within this channel for the time being with the immediate USD850 in sight. If we don't break above line B, we might see price trending lower in the next month or so.

What strategy to use in this downtrend?

I was having a discussion with my friend and came up with an idea. Since some of you have bought at a high price and now still holding to it, this strategy might be an alternative.

From the chart, you can see that the price is now in the middle of the downtrend channel. It might go down touching line A or go up touching line B. I am hoping it goes up touching line B. But I am not so sure if we will see it breaking above line B.

If that's the case, say if it reaches line B, I am going to sell my holding. And when it then moves down to line A, I will buy it back again.

Example, when it touches line B at USD915, I will sell it. In Public Bank price, this might be around say RM104.62 (Bank's buying price). Say I sell 100 gms, I will get back RM10,462.

I will then buy back when the price goes down lower touching line A. Possibly at USD830-850 range. That would probably be at RM99.03 to RM101.42 range (Bank's selling price). In this case, with RM10,462, I can buy back around 105 or 103 gms.

What it means is that I now have created an extra 3 or 5 gms versus the original 100 gms.

Nevertheless, this is just a theory. And it all really depends on the actual timing and price that we buy and sell.

I guess this is a good reason why we have to put a stop loss when things really go south and sour.

Also, another bright side is since we have bought at RM99.03 or RM101.42, it's a lower price now. And easier for us to recoup and make a profit when price starts to move upwards again. From my record of Public Bank price, I remember seeing the price went up as high as RM115 (Bank's buying price) during the February 20th bull run of USD1,000.

What's your thought and comment on this strategy? I guess this is a way we can play 'short' (sell at high price, and buy back at low price).