Well, I sold my first stock. I agonized over when would be the right time, but then I just pulled the trigger, anyway.
Earlier this year, I started using the “free money” I was getting from this credit card to buy some stocks.
In March, we paid our tax bill of over $3,300 using that card, so the 2% rewards were higher than normal. I asked a friend of mine who knows a lot more about the stock market than me what stocks were catching her eye, and on her unofficial recommendation I bought 60 shares of CAR, the Avis car rental people.
That was April 17th. The stock price was $1.50. With a $9.95 commission at Sharebuilder, I ended up “spending” a total of $99.95.
And then I watched as the stock price just rose and rose and rose.
On about May 20th I started wondering if I should sell my proceeds. We’ve had rather more pet problems than usual and I was a little worried that our upcoming vacation might suffer as a result. The “overall return” on that investment, according to Google Finance, was hovering around 200%, which is a heck of a lot more than the 7 to 9% we’re taught to expect from long-term investments.
So I sold it on May 27th. I was a bit alarmed to see that there was yet another commission of $9.95. To me, that’s like paying a toll over a bridge going in each direction.
Stock proceeds: $282.24
Minus original investment of $99.95: $182.29
Now, if I’m reading this Capital Gains Tax table correctly, we’re going to be hit with a 25% of the “cost basis” come next April. If the cost basis is the amount I spent on the investment, that’d be the $99.95 number again, which means a tax of about $25.
Profit minus upcoming tax: $157.29
So I spent $99.95 and got $157.29, a real profit of 157%. Not the nearly 200% that Google Finance was teasing me with, but not shabby, either.
The other way to look at it is that since the $99.95 was free money in the first place, I made a profit of infinity dollars.
More importantly, when we take our vacation next month, we’ll have $157 that we otherwise wouldn’t have had. That’s one fancy dinner with some very good wine. I’m looking forward to it.
A few months short of five years ago, I purchased a new 2004 Honda Civic to replace a failing older model that had not been in my care. Today, this “new” car is passing 100,000 miles on the odometer, and it’s still running great. While I occasionally find my mind wandering towards the purchase of something sportier, at this time, I plan on sticking with the Civic until maintenance costs more than the car is worth. I hope to stretch ownership for another 100,000 miles.
Here are the expenses I’ve put into the car so far:
| Accessories |
$745 |
| Insurance |
$9,894 |
| Interest on Auto Loan |
$413 |
| Fuel |
$7,042 |
| Parking |
$302 |
| Registration |
$239 |
| Service |
$3,208 |
| Tolls |
$3,645 |
The main accessory I purchased was a lower-end GPS device, which was ultimately stolen from the car while it was parked for the weekend in a particularly bad parking space in Queens, New York. I never replaced the device. The next most expensive accessory was a replacement stereo that fully integrated with my iPod. The service category includes regularly scheduled maintenance as well as a slew of oil changes. It also includes my $500 deductible after a “minor” accident, a tire replacement after one was punctured and unrepairable, and a couple of traffic tickets.
I paid off my non-industry auto loan with an interest rate of 2% somewhat quicker to keep my total interest expense down to $413. Also, according to edmunds.com, my car has depreciated a total of $7,580 since it was purchased.
Many of the expenses should be controlled better, and it may be time to re-evaluate my insurance coverage.
When I graduated college almost ten years ago and was moving out of the dorms on campus, my father picked me up in his graduation gift to me, a “new” (to me) 1988 Toyota Celica. From this point on, it was my responsibility to care for and maintain the car, but I didn’t really know what that entails.
I found out several months later while I was driving on Interstate 95 in Delaware. Without much warning — or without any warning that I recognized at the time — I heard a loud bang! from under the hood and the car no longer accelerated as I depressed the pedal. I pulled over to the side of the road to keep my broken-down Celica out of the way of traffic and walked to the nearest motorist assistance phone on the highway. This was a few years before I would own a cellular phone, so I had no choice but to risk myself with a leisurely walk alongside the breakdown lane of a major highway.
Well, apparently, cars require not only an oil change once in a while, but the occasional addition of oil to keep the engine lubricated. This knowledge is familiar to most people, I think, but perhaps not to a kid who is taking care of his own car for the first time. From this point on, I don’t know how many people reminded me that you should Check Your Oil Whenever You Get Gasoline and Have Your Oil Changed After Driving 3,000 Miles.
So that’s what I did. I discovered a few things after having the motor replaced in the Celica. First, the rebuilt engine that was installed burned through oil very quickly. I had to add more oil every few weeks just to keep the dip stick reading at “full” and the frequency of oil changes was about once a month.
I had the Celica for at most two years. When I needed a more reliable car in late 1999 or early 2000, I traded it in for a lightly-used 1997 Honda Civic and the accompanying monthly car payment. With this car, I did not need to add new oil so frequently. I also noticed that it took a longer time before the oil blackened so I figured this car might be able to last more than 3,000 miles without changing the oil. The Civic operated fine when waiting 5,000 to 8,000 miles between oil changes.
A number of circumstances led to the need for a car disappearing, and I gave the Civic to a friend of the family for her son’s use while in high school. Eventually, I received the car back but it wasn’t as reliable as it had once been. It wasn’t long before I sold the car and purchased a new 2004 Honda Civic. This car’s oil held up even better. According to the owner’s manual, the oil in the 2004 Honda Civic should be changed every 10,000 miles or one year, whichever comes first. Even four years and almost 90,000 miles later, the oil does not seem to ever get dirty, so I find myself stretching even that to 15,000 miles while still feeling comfortable that I won’t be damaging the car. The other part of my reasoning is to save money on maintenance costs, but I don’t want to find myself penny wise, pound foolish and spending more money to fix major damage.
Maybe the 3,000 mile guideline is only appropriate for older cars, but I’ve talked to many people with newer cars who agree that this is mostly a myth perpetuated by the industry.
According to Honda Owner Link, a personalized record-keeping and maintenance website available to Honda owners, this is better advice for oil changes:
There is absolutely no benefit in changing your oil more frequently than recommended in your owner’s manual. This will only increase your cost of ownership, and create an unnecessary burden upon the environment by increasing the amount of disposed oil.
Do not exceed the recommended maintenance interval. Oil eventually deteriorates and loses its ability to protect your engine, due to heat, friction, and exposure to exhaust components. Engine oil contains special additives to enhance the oil’s performance, and these additives are also broken down or consumed with distance and time. Engine damage can occur if the proper maintenance schedule is not followed.
The 2004 Honda Civic Owner’s Manual explicitly instructs owners to have the car’s engine oil changed every 10,000 miles, and I should force myself to stay on this schedule, particularly as I approach 100,000 miles.
If you own a car, how often do you change your oil?
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