Is Jeep really offering help at the gas pump?

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!

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

A "miseducated" movie star...

I read today that actor Wesley Snipes recieved a 3-year jail sentence in relation to his legal tax troubles. I’m not going to argue whether or not I think he deserved to get that sentence or not. That was for the judge to decide. I thought that the most interesting part of the story was contained in the statement that Mr. Snipes read where he called himself “well-intentioned, but miseducated” in matters of finance.

I believe Mr. Snipes to be in the majority on this one. How many of us have made errors in judgement as it relates to financial matters?

……… Sorry for the delay in continuing my thoughts, I was too busy raising my hand, so I couldn’t type…

Where Mr. Snipes and I differ, however, is in the fact that he presumably has access to advisors and counsel that little-ole me doesn’t. For someone who earned millions of dollars over the past few years, to have not sought to use a fraction of that money to seek the wise counsel of some sort of financial advisor or accountant, is just silly to me. Granted, I am not wise about the stress, strain, hardships or responsibility that one faces when earning that level of money. But what I do know is that the instant I am making enough money that my taxes need no longer be handled by TurboTax’s software program because I am needing necessary creative deductions to help protect my wealth, is the instant that I will be finding a trustworthy tax accountant. What’s my alternative? Plead ignorance to the financial ways of the world, continue to live life with my head in the sand, get caught, and get sent to jail for 3 years where I can’t practice the livelihood that provided me the money in the first place? That’s one way to not give any money to Uncle Sam… don’t earn any to have to pay taxes on!

For these and other posts, as well as the books in the 26 Things to teach Your Parents series, visit http://www.26thingstoteach.com/