Friday, September 24, 2010

The saga looks to continue this weekend.

My quest to purchase a vehicle resumes tomorrow. I will be heading to dealership a bit closer to my house. So far they have provided me with some great prices on a new cars.

It may interest only me that I have gone from buying used to new. When the price differential is about $1500 between the two, I think you have to get the new vehicle. I am sure some people would say otherwise I it gets down to opinion.

I am also rethinking how I am going to purchase the car. I was thinking of paying in full. I have been buying company stock with the sole purpose of using it to cover the purchase of a vehicle when the time came. Problem is I know that the stock is worth more. Especially if the Democrats would get their head out of their ass and vote on extending the tax cuts. I know they are itching to raise the dividend but too much uncertainty in the foreseeable future is preventing this from happening. Beside, I made a prediction that the div would get raised in the fall. Next month is the time it would be announced. I am hoping I am right.

Anyways, this is my thought. Beside that money, I have some other cash from selling an investment. I am thinking that I can take a 0% loan to cover the purchase and invest the cash on hand. The alternative is to take $1000 and apply it to the purchase price. I view it as a sum game: Can I earn more than a thousand bucks investing my money? I think I can.

There are many dividend paying stocks that would pay out more than a grand over a year. But you also risk losing principal by doing so. It wouldn't matter how much you make in divs if the stock price takes a nose dive. Plus, if a company would cut its divident, it would likely mean a drop in price.

I am leaning in that direction now. I believe I can do better by finding a couple good companies paying some safe dividends. I would hedge it by selling some options against it as an attempt to further drive up the income from the investment. I don't have time to give an example but if people ask, I can give some detail later on.

I just hope my experience with this dealership is better than the other. I have yet to call them back as I couldn't make out the lady's name on the message. But I most likely will talk to them next week.

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