Letting go of stuff

Yesterday someone picked up 6 computer cases, over 100 sticks of RAM, 10 hard drives, multiple GPU’s, PSU’s, NICs, RAID controllers, and other PC part goodies. They grabbed everything from 3 large boxes covered in black yard waste trash bags to protect them from the rain. From the moment I posted the give away on craisglist to the time it was gone was less than an hour.

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This was hard. That case second to the left with the gold sticker is a PC I built in 2001 at Alpine PC in Colorado Springs. It had been upgraded, but my sticker with the specs was on the case. That Enlight case is also one of the best solid steel cases you can get. See that blue one on the far right? That’s a Dragon case and in the middle is an Antec 300. Those parts were accumulated over years. A lot of that stuff was still usable. But it had been sitting in a bin or storage somewhere for years. Part of the “one day I’m going to build some awesome retro PC’s from this” pile. One day isn’t on the horizon for a while so I decided it was time to get rid of it.

Why didn’t I sell it? It was worthless, not to me, but out on Craigslist no one is looking for old out of date computer parts. Recycling costs money so this was my frugal way of getting rid of it without having to pay.Being the nice guy I am, I did recycle the stuff that didn’t work. Everything I gave away was in working condition. Just old.

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Debt free for my family is spreading outward beyond our personal finances. Now we’re seeing the junk we have lying around, the things we’ve accumulated over the years, as debt. Getting rid of physical debt is just as important.

Use the 6 month rule, or some variant of. Extreme could be the 3 week rule. That just means if you haven’t used it in 6 months, get rid of it. Either sell it or give it away. Find out if your stuff is worth anything by checking the craigslist and ebay. Look for recent sales on ebay to see if it’s actually selling.

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Using Beepi to sell your car loan

In January of 2015 I bought my first brand new loan, a 2015 Subaru Impreza I call Pizza. It still had the vinyl protective wrap on the exterior and everything was wrapped on the inside. I added this brand new loan to my fleet, which comprised of 1 other loan and a car: A 1995 Mustang GT convertible my god mother sold me for a $1 (literal fairy god mother) and a 2011 Subaru Outback loan. Oh, and it gets better. I traded in a 2006 Dodge Durango loan (canyonero) that had very low miles that I had only paid for 6 months and of course was upside down. I put the down payment on a credit card. Yes, I put the down payment on a f*****g credit card. “It’s interest free!” What a dumba** I was. Time to fix that mistake.

Enter Beepi. Beepi is basically an online used car broker. They handle all the paper work and delivering the car from the seller to the buyer. Beepi isn’t available everywhere though, so you will want to check to see if you can use it. If not there are auto dealers that will buy your car as well like Carmax and Echo Park Auto.Here’s why I like going to a dealer, you don’t have to mess around with test drives from complete strangers, paper work, going to the bank, etc. The less steps in the process, the more likely you are to get rid of the loan.

The first thing you should do is get an idea of what your loan is worth and what you owe. Go to http://www.kbb.com/ and look up your loan’s private party fair condition value. That is most likely what Beepi will offer you and is basically the fair amount to ask for at dealers when trading in (sometimes called wholesaling). Now go to your bank and get the payoff amount. Get payoff amount because it will be different than just the principal left. Even if you are upside down by a $2,000 it’s worth it. If you are drowning in debt like we are, it’s worth a couple thousand. You’ll make that back in interest and the cash flow from the car payment added to paying down your debt.

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Beepi sent inspectors out to look over the car, and these weren’t your average Joes. Each had extensive training and worked in the auto repair industry before Beepi. Not the dealer side, the repair side. They knew their stuff. About two and half hours later they finished and let me know the inspection report would come in the next 24 hours, and if all was well an offer from Beepi as well. I got the offer in a few hours.

Keep in mind my car was almost brand new. Less than 10k miles, only one small dent on the driver’s door. Some numbers for you. My payoff amount was $15,613.09. Beepi offered me $16,655.00. When the car sold I got a check for $1,041.91. I had been making payments against the principle to bring it down since I bought it. You could say I knew deep down the mistake I made and was trying to correct it.
After agreeing to the offer amount they listed it on their website they sent me the listing link. About two weeks after that they sent an email that a buyer had been found. Two days after that they sent someone to pick the car up.
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Goodbye Pizza. Goodbye $15,613 of debt. Hello extra $330/month to the budget.
Pretty easy right? Now you have no excuse not to list your loan with Beepi or wholesale to a dealer. The average car payment in America is $479 so I am going to safely assume you are somewhere in that ballpark. What would you do with an extra $479 every month? How much faster could you pay down your other debt and be completely debt free?
Quick note. Beepi does have some restrictions. Your car should have less than 80k miles and roughly be 2009 or newer. They may take higher miles if it’s a Honda, Subaru, or Toyota since those tend to run forever. But anything older you can always sell private party. Sure it may take longer and won’t be as easy, but it’s worth it.

Replace your car loan with a Mustang

If you have a car loan, pay it off now. Don’t have enough to pay it off? Sell it and buy a beater with cash to drive around until you are debt free. If the car is your last bit of debt, sell it. You’re now debt free. Save cash to buy a car. “But my car is so reliable!” I have driven a $500 car from Ohio to Colorado. The price of the car has nothing to do with reliability. Sally (my Mustang) has 197,000 miles and she’s a Ford (Found On Road Dead) and starts everyday. The power top even works.

You didn’t buy a car, you bought a loan. Dealers make the least amount of money when you buy a car cash. On average it’s about $400 per vehicle. When they get you in financing they make about $900 and that’s before they get you to buy an extended warranty to protect your investment and etched security glass. If they can lease you a vehicle that’s $1500 per car before warranties, interior protection, and maintenance plans. You bought a loan.

Cars don’t appreciate in value. Period. Cars are not investments ever. “But I have a 1967 fastback with 10 original miles with all the paper work and original parts and valid VIN and serial and …” You have to put gas in it, you have to store it, you have to maintain it, you have to insure it. “But my car is the tool I use to get to work and make money, it’s an investment in my future to have reliable transportation.” No, a car is not investment and never will be. You will never get a return on that car, ever. It will always cost you money and it will always go down in value.

This is the toughest one for me because I love cars. I pass idle time by looking at used car ads. I’ve owned over 30 different loans and I’m only 34. It’s taken a lot to convince myself that I will never pay for another car loan. And as I beat frugality into my thick skull I’m quickly realizing that I will probably never own a brand new car again because I will never want to pay that much. If I have $50k to spend on a car, I’m going to find a LOT of other things to spend that cash on then a car.

Dave Ramsey recommends selling the car loan and paying cash for a beater. A beater is a car so ugly you give it a name. It’s a car that no one wants to drive so they come with incredibly low miles. Think of names like PT Cruiser, Taurus, Camry, Kia, Focus, Pontiac, Isuzu. You’re looking for that gem of a car that looks like crap on the outside but is mechanically sound. If you live in an area with hail storms, your search just got a lot easier. Who cares if your car looks like a golf ball.

Here’s a pick of my beater. This is a $2,000 car on craigslist at best. That’s white leather interior with matching convertible top, V8 5.0, shiny wheels, 197,000 miles, and even has a working stereo. What in the world would possess you to pay $30,000 for a brand new car when you could drive this beautiful example of American muscle for $2k?

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I’m not advocating you get rid of your sedan for a Mustang, but for all those that don’t believe you can get something as nice as my beater for that low of a price look at these nicer Mustangs from a search I just did.

96 GT

94 convertible

50,000 actual miles, this isn’t even ugly enough to name and you save $200!

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Ok, one more non Mustang. The average car payment in America is $500/month. For a month and a half of a car loan you could own this.

PT cruiser

I hope you didn’t even make this far and you’re already on the phone with a dealer to see what your car loan is worth so you can sell it back to them (Carmax and Echo Park buy used cars). Or getting a quote from beepi.com. Or on Craigslist looking for your next dream beater.