Saw a commercial today for a Jeep SUV that they are evidently trying to push any way that they can. With gas prices these days, I’ve been reading that SUVs are not selling (at over $4 per gallon and a tank that can hold 21 gallons, who can afford it with the 4X4 Grand Cherokee only getting about 18 mpg city and 23 mpg highway for the 3.0L automatic.. the V6 gets about 15 city and 19 highway). So it totally makes sense that an advertising incentive involving gas savings may appeal to folks. However, the commercial for their Let’s Refuel America program says that for 3 years they will give you gas at $2.99 per gallon up to 12,000 miles per year. So at 16 mpg, that makes about 750 gallons that you can purchase at $2.99 each for a total purchase of $2242 and you can fill up about 35 times. If you were purchasing gas at today’s prices of let’s say $4.07 per gallon, you would have been spending $3052. That’s a difference of $810, which means that your bonus for buying a Jeep Grand Cherokee is $810 for year one. I think it is important to note that in order to be able to do the program, you have to have a Mastercard or Visa credit card (no debit cards). Your gas purchases get billed to that credit card. At $2.99 per gallon, it means that your credit card will get charged about $62.79 to fill up the tank when you are on empty. And at 16 mpg for city driving, for those of us who commute back and forth to work, the number of times you’ll be heading back to the pump will depend on your total distance, traffic, etc. For me, it is about 20 miles each way, or 200 miles each week just for going back and forth to work. That means 12.5 gallons used per week. If I only used the Jeep for commuting, I would have to refill almost every 9 commuting days. If my calculations are correct, at 750 gallons and 12.5 gallons per week, I’d be able to get the $2.99 gas for about 60 weeks (and of course, there are only 52 weeks in a year). Unfortunately, any unused “time” does not roll over into the next year, so you will have to use it all up in order to get all of the savings due you.
I tried to find out how many miles per year that the average American drives, and I’m sure a more updated statistic exists than the 11,900 that I found for the year 2000, but I haven’t found it. I have read that the rising gas prices have caused Americans to drive 11 billion less miles in March 2008 than they did in March 2007. You can read it at
http://tomwarnereport.com/twr/twr_v5n21.html
How many miles do you drive per year?
It appears that IF you pay off your credit card each month and don’t rack up finance charges, and IF you drive your car around 12,000 miles per year, then the $810 may seem like a good deal for you. I personally like the thought of getting closer to 30 mpg and paying less money on the car in the process. Sure, I won’t be able to climb up into my driver’s seat or sit up high and look down at the traffic, but I will be able to go further and spend less money.
**Note: One benefit of only getting about 16 mpg is that with the cost of gas these days, it has curbed driving among Americans, which according to the website I referenced above, has caused the greenhouse gas emissions to be greatly reduced. Hooray for Jeep!
Showing posts with label financial literacy. Show all posts
Showing posts with label financial literacy. Show all posts
Friday, June 20, 2008
Tuesday, June 17, 2008
A million people in foreclosure... along with Ed McMahon and Evander Holyfield
They released an astonishing figure a few days ago. There were apparently about 1 million Americans who were in some stage of foreclosure in the month of May 2008. As mind-boggling as that statistic is, what has seemed to catch more of the media’s attention are the names of two of those borrowers: Ed McMahon (Johnny Carson’s previous sidekick on The Tonight Show) and Evander Holyfield (former heavyweight boxing champion). So now that we see that it can indeed happen to anyone, let’s take a look at what happened.
According to Jet magazine (June 23, 2008), his 54,000 sq ft estate/home in suburban Atlanta with 17 bathrooms, three kitchens and a bowling alley is worth $10 million. Now I don’t pretend to know what year he purchased the house, how much money he put down on the purchase, or how much he still owed on the house, but what I do see from the article is that in his 1997 fight with Tyson, he supposedly made $34 million. This is in addition to the other millions that he made during his more than 20 years of boxing. Am I looking at this too simplisticly? I mean, you buy a $10 million home, and you make $34 million income in a fight. Okay, okay, you pay your agent, pay your trainers, pay your accountant, pay your staff, you know… your cost of doing business. But surely he had money left over after the bills were paid, didn’t he? Out of $34 million, didn’t he have at least $15 million left over from that fight? More importantly, didn’t anyone tell him that he needed to pay himself first? If someone had told him to do that, he’d likely have some money to fend off the current foreclosure.
That brings us to Ed McMahon. He was recently on CNN’s Larry King Live trying to answer questions on what has happened. A portion of the transcript can be found here:
http://www.cnn.com/2008/SHOWBIZ/TV/06/06/lkl.mcmahon/index.html
Mr. King basically asked them how they got $644,000 in arrears if they are millionaires. Mr. McMahon talked about the mistakes that he made: “taking care” of his friends and family, ”spending more than you make”, and not being prepared financially for a medical setback.
Lessons from these two celebrities? There are many contained in these two examples that all of us can use to help us to avoid some of their current woes. For those who may be in danger of slipping into a financial crisis, do what neither celebrity did… ask for and get help at the first sign of trouble.
For this and other posts, as well as info on the book series 26 Things to Teach Your Parents, go to www.26thingstoteach.com
According to Jet magazine (June 23, 2008), his 54,000 sq ft estate/home in suburban Atlanta with 17 bathrooms, three kitchens and a bowling alley is worth $10 million. Now I don’t pretend to know what year he purchased the house, how much money he put down on the purchase, or how much he still owed on the house, but what I do see from the article is that in his 1997 fight with Tyson, he supposedly made $34 million. This is in addition to the other millions that he made during his more than 20 years of boxing. Am I looking at this too simplisticly? I mean, you buy a $10 million home, and you make $34 million income in a fight. Okay, okay, you pay your agent, pay your trainers, pay your accountant, pay your staff, you know… your cost of doing business. But surely he had money left over after the bills were paid, didn’t he? Out of $34 million, didn’t he have at least $15 million left over from that fight? More importantly, didn’t anyone tell him that he needed to pay himself first? If someone had told him to do that, he’d likely have some money to fend off the current foreclosure.
That brings us to Ed McMahon. He was recently on CNN’s Larry King Live trying to answer questions on what has happened. A portion of the transcript can be found here:
http://www.cnn.com/2008/SHOWBIZ/TV/06/06/lkl.mcmahon/index.html
Mr. King basically asked them how they got $644,000 in arrears if they are millionaires. Mr. McMahon talked about the mistakes that he made: “taking care” of his friends and family, ”spending more than you make”, and not being prepared financially for a medical setback.
Lessons from these two celebrities? There are many contained in these two examples that all of us can use to help us to avoid some of their current woes. For those who may be in danger of slipping into a financial crisis, do what neither celebrity did… ask for and get help at the first sign of trouble.
For this and other posts, as well as info on the book series 26 Things to Teach Your Parents, go to www.26thingstoteach.com
Wednesday, March 26, 2008
It's Just a Game, Right?
Okay, so I saw an advertisement on television for a Monopoly game by Parker Brothers (an imprint of Hasbro). Let me just say from the start that it’s not a game that will I ever play, nor would I want my son to play it. Let me tell you why.
It’s the Electronic Banking edition apparently. Feel free to go to their website at and see it for http://www.hasbro.com/games/kid-games/monopoly/default.cfm?page=Products/Detail&product_id=19783 yourself. You can click on the game and get a virtual sample of what it will be like to play the game. Now I absolutely love Monopoly, and always have since I first played as a child. It is a game that I have played with my son many times. I would just never buy the electronic banking version. Apparently, each player starts the game with a debit card that is loaded with $15 million! Yes, I wrote 15 million, there is no error. There are so many things that I think are wrong with the messages that the game is putting out, that I don’t know if I can list them all here. How realistic is it to start with $15 million dollars? And who in their right mind would want it to be loaded and spend freely on a debit card? Is that all of the money that you have, or do you have a savings or investment account somewhere? OK, let me move on from the issue of the money… the tokens that you select from at the start. Your choices are a plasma tv, a box of Altoids, a space shuttle, a Segway, a purse with a dog in it (would my little girl be getting encouraged to be Paris Hilton for the duration of the game?), and thank goodness for those of us that were happy being the shoe or thimble in the old version… there is a baseball cap in this version.
Moving right along with the actual game: I can take my plasma tv, roll the dice and move down the lane… landing on Gateway Arch, St. Louis which will cost me $1 million dollars should I choose to buy it. OK, no problem, because I’ve got 14 more where that came from, and I’m feeling lucky. My opponent moves, and then it’s my turn again. A roll of the dice lands me on Community Chest where I am told that I am the runner-up on a reality tv show (and have therefore won $100,000). On my next turn, I land on Disney World Orlando, and have to pay rent of $200,000. 200K for what? Would that be for my resort timeshare there, and if so, how long does that get me? As the adult, I would assume it’s the rent for the entire place, but I’m not sure my child would know. A roll of the dice brings me to a Chance space, where I am ordered to donate $150,000 for disaster relief. Not bad I suppose since I have $14 million left… I suppose the message of being philanthropic is not lost here. I have a problem with cards that say “Win big at the casinos in Atlantic city… win $1 M”. I have no idea how much it will cost to get out of jail, can only image how much money could sit in “free parking” waiting to be won, and hate to guess how much those blue properties at the end of the board will cost that were always expensive (you know, Park Place and Boardwalk). What I do know is that each time the player passes “go”, they collect a whopping $2 million for successfully dodging all of the financial whoppers that are on the player’s path.
The game is said to be for ages 8 and up. Hmmm. It’s just a game though, right?
It’s the Electronic Banking edition apparently. Feel free to go to their website at and see it for http://www.hasbro.com/games/kid-games/monopoly/default.cfm?page=Products/Detail&product_id=19783 yourself. You can click on the game and get a virtual sample of what it will be like to play the game. Now I absolutely love Monopoly, and always have since I first played as a child. It is a game that I have played with my son many times. I would just never buy the electronic banking version. Apparently, each player starts the game with a debit card that is loaded with $15 million! Yes, I wrote 15 million, there is no error. There are so many things that I think are wrong with the messages that the game is putting out, that I don’t know if I can list them all here. How realistic is it to start with $15 million dollars? And who in their right mind would want it to be loaded and spend freely on a debit card? Is that all of the money that you have, or do you have a savings or investment account somewhere? OK, let me move on from the issue of the money… the tokens that you select from at the start. Your choices are a plasma tv, a box of Altoids, a space shuttle, a Segway, a purse with a dog in it (would my little girl be getting encouraged to be Paris Hilton for the duration of the game?), and thank goodness for those of us that were happy being the shoe or thimble in the old version… there is a baseball cap in this version.
Moving right along with the actual game: I can take my plasma tv, roll the dice and move down the lane… landing on Gateway Arch, St. Louis which will cost me $1 million dollars should I choose to buy it. OK, no problem, because I’ve got 14 more where that came from, and I’m feeling lucky. My opponent moves, and then it’s my turn again. A roll of the dice lands me on Community Chest where I am told that I am the runner-up on a reality tv show (and have therefore won $100,000). On my next turn, I land on Disney World Orlando, and have to pay rent of $200,000. 200K for what? Would that be for my resort timeshare there, and if so, how long does that get me? As the adult, I would assume it’s the rent for the entire place, but I’m not sure my child would know. A roll of the dice brings me to a Chance space, where I am ordered to donate $150,000 for disaster relief. Not bad I suppose since I have $14 million left… I suppose the message of being philanthropic is not lost here. I have a problem with cards that say “Win big at the casinos in Atlantic city… win $1 M”. I have no idea how much it will cost to get out of jail, can only image how much money could sit in “free parking” waiting to be won, and hate to guess how much those blue properties at the end of the board will cost that were always expensive (you know, Park Place and Boardwalk). What I do know is that each time the player passes “go”, they collect a whopping $2 million for successfully dodging all of the financial whoppers that are on the player’s path.
The game is said to be for ages 8 and up. Hmmm. It’s just a game though, right?
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