Personal Finance

Waking up in a place of your own with the birds chirping right outside your window is a great feeling. You go outside and enjoy your coffee on the back porch, simply enjoying the quiet that comes with not living in an apartment. Your neighbors are friendly, the sun is shining, and you know it is going to be another great day of owning a home. Everything is going great… until the peaceful morning is ruined by the sound of your air conditioner going out. As romanticized as owning a home has become in America, there are some significant costs associated with buying, owning, and maintaining a place of your own. The True Cost of Home Ownership Let’s break down some of the areas on how to value home ownership. There are some obvious costs like your monthly mortgage payment, but hidden costs sneak in there and can break the bank. Obvious Home Cost: Principal and Interest For most, the cost and financial benefits of renting versus homeownership are the deciding elements. The traditional logic is that renters are throwing away their money by paying someone else’s mortgage. Though true, this is a simplistic view. On a $150,000 home purchase with 20% down (so a mortgage loan of $120,000) at 3.5 percent APR, the monthly principle and interest payment is $538.35 per month. This sounds like a smart deal since most houses increase in value over time, while the monthly payment lowers the principle balance and increases the equity. If you are paying $600 per month in rent, owning your own home for about the same amount sounds like a great deal. While principal and interest is a big chunk of your monthly costs of owning a home, there are a lot of other costs to consider. Hidden Home Cost: Property Tax and Insurance When you speak to a real estate agent about looking at homes, they generally speak of how much a home is going to cost you in a monthly payment. Many agents will focus on quoting you prices based just on the principal and interest because it means they can get you into a more expensive home — pulling you toward that dream home — thus earning a larger commission check on the sale. Unfortunately, your monthly payment will have other costs associated with it, namely property tax and homeowners insurance. Depending on the area, these costs can increase the payment significantly. Unlike principal and interest, taxes and insurance payments is money that you are not getting back. You might pay an extra $150 to $450 per month in tax and insurance cost depending on the area you live in, what the tax structure is, and how much insurers charge to protect your home’s area. Tax and insurance costs are not fixed unlike your principal and interest payments (assuming you get a fixed rate mortgage). Your local municipality can raise taxes over the years, and homeowners insurance companies are constantly changing annual premiums. Some states have homestead exemptions that lower a homeowner’s tax burden, so check to see if your state allows this. Obvious Home Cost: Down Payment When you rent an apartment your only costs are an application fee, security deposit, and your first month’s rent. With just a few thousand dollars you can be completely moved in and setup in an apartment or rental home. When you purchase a home of your own you need to save up money for a down payment. Back in the heyday of the housing boom you could buy a property with little or no money down. Those days are gone. (This is a good thing!) Home ownership is a serious commitment and requires serious cash to get started. Many lenders want to see you have a 20% down payment in order to be approved for a loan. On a $150,000 home that means you need $30,000 in straight cash sitting in an account waiting to be used once you find a home. That’s a lot of dough to be sitting on. I highly recommend using one of the top online savings accounts such as Capital One 360 Savings to hold your down payment so you earn interest until you find the home you

I've been waiting for a 20% correction since July 2011. In May 2012, I decided to trickle in funds earlier to avoid missing a "fast correction." As a result, I did put some investments in managed funds in November 2012 and February 2013. Now I'm considering adding funds with as little as a 2% pull back. Here's my reasoning: No commission costs. I plan to purchase commission free ETFs. So I can minimize my downside risk by making small purchases. For a 2% market decline, I can add 1% of my cash to equities. That way I can take advantage of a further decline, e.g. add another 1% with the subsequent 2% decline. Economy is in an stable upward trend. The economy continues to heal, despite political stalemate, government scandals and lurking EU sovereign debt issues. A cautiously slow economic recovery has been good for stocks. Market is advancing. The market my go the whole year without a 5% correction, as it did in 1995.Waiting for a 5% correction may have a high lost opportunity cost. At this point, I am still trying to sell two large positions into the rally, to reduce my specific stock risk. In addition to commission free ETFs, I may also use the rest of my commission free trades to buy select biotech and select bank stocks. For more on Strategies and Plans Ideas, check back every Monday for a new segment. This is not financial or investing advice. Please consult a professional advisor. Copyright © 2013 Achievement Catalyst, LLC

Insider trading has been doing on ever since the stock market existed. Everyone is looking for an edge and no one is willing to play fair. Martha Stewart did it and was treated to several months in one of our nation’s fine institutions. Raj Rajaratnam did it and was sentenced to 11 years in prison and penalties of over $150 million. Heck, someone you know has probably done it. Some are brazen about it, others are a little more secretive. I first realized how prevalent it was when I read Trading with the Enemy, an anecdotal book written by Nicholas Maier as he worked at Jim Cramer’s hedge fund. The story that struck me most was how they’d get news stories before they hit print and used it to their advantage. It’s not necessarily insider knowledge about a company but getting it a few minutes before the rest of the world, even if it was a third party, is a big advantage. So, as for insider trading, if you want to learn how to do it, this is what you need to do to get away with it. 1. Don’t Be Greedy We can thank Gordon Gekko for what many believe is the driving credo of Wall Street – “Greed is good.” It’s not, however, good when it comes to insider trading because that’s why so many people get caught! We’ll go into many of the reasons below but stock brokers have programs designed to find unusual activity and notifying the authorities. If you’ve never traded options before and then you suddenly start trading them in large quantities, you’ll get investigated. Even if you just sell a stock before an announcement, you might get investigated too. Then, the next time you do it, since they are monitoring you now, you’ll get caught. You’ll be fined, sent to jail, boom goes the dynamite. They see you handing some guy a bag of cash, a watch, and everyone goes to jail. You rarely hear about someone having to disgorge $500 in illicit trading profits. 2. Know Your Insider Really Well Who is giving you your information and who else is he or she giving it to? Raj Rajaratnam of Galleon Group was convicted of 14 counts of securities fraud and conspiracy and it started because prosecutors were investigating David Loeb, a managing director of Goldman Sachs. In wiretaps, they learned of Rajaratnam and then the whole thing came crumbling down. (The crazy part is that 9 years earlier an Intel employee that passed information to Galleon was prosecuted but they didn’t go after Galleon). Insiders rarely just tell you all that juicy sensitive information. Why get a bag of cash from one person when you can get multiple bags from multiple people? Martha Stewart’s insider was Peter Bacanovic of Merrill Lynch, who was tipped off by ImClone’s founder Samuel Waksal. Waksal told friends and family (and even tried to sell his own shares) and everyone got in exactly as much trouble as you’d expect. It was pretty brazen actually when you read about it. 3. Don’t Be Famous When Martha Stewart was caught insider trading (when the assistant to her insider disclosed it to investigators), she sold her $230,000 stake in ImClone. She was not even close to the top of the list in terms of ownership size. There were Waksal family members who had in the millions, other executives, but everyone focused on Stewart because she was the most famous. They made an example of her by sentencing her to five months of prison, five months of home confinement, and two years probation. The lesson here is that you don’t want to be so famous or so public that they want to put your head on a proverbial pike and walk around the town square with it. 3. Don’t Trade Options The reason why a lot of insider traders get caught has to do with options. You can get a lot of leverage using options (which is a contract to buy or sell shares) and many times traders will use options because they can get the most bang for their buck. A call option is the right to purchase a hu

This post is by staff writer Honey Smith. Maybe it’s the years of conditioning we receive as children to think of summer as an endless stretch of time to be filled with fun and relaxation. Maybe it’s the fact that my day job is at a university, and during the summer dramatically fewer students are on campus. Whatever the case, each spring when the semester is drawing to a close, I find myself making plans. At the moment I don’t have plans to travel, but there are plenty of other fun and frugal things that I’d like to accomplish during “summer vacation.” Use my vacation time creatively I could conceivably take a week or two off of work entirely. However, summer is generally a low-stress time of year for me and one of the best times to get ahead on projects and the next year’s events. As a result, I don’t tend to see the point of taking that much time off simply for a stay-cation. Two years ago, however, I hit upon a vacation-hours strategy that I simply adored, and which I think I’ll be implementing again. Rather than taking a week off, I arranged to leave work two hours early for a month. The same 40 hours, just a different configuration. The difference? Structuring my vacation this way gives me the freedom to do several things that aren’t possible during a “normal” workweek. 1. Take care of weekday errands Eye appointments. The dentist. Annual veterinary appointments for the pets. An oil change and new tires for my car. There are so many things that can only really be accomplished between 8 a.m. and 5 p.m. on a weekday, and we’re not all fortunate enough to be able to literally run our errands. It’s certainly possible to take care of these things as a one-off. However, these are also the type of errands that can pile up before you know it. Additionally, mentally it’s easier for me to keep track of my time if it’s consistent. I’m much likelier to remember to make it to my dentist appointment if it’s the same time that my eye appointment was the day before. Some errands, like grocery shopping, have to be done more or less on a weekly basis for me. After a full day at work I’m often too exhausted or frustrated to want to spend an hour or more in the store, especially since that’s when all the other exhausted, frustrated people are in the store too! That means this task is generally relegated to a weekend. While it’s the best solution for me, I do dream of not having to spend the weekend playing catch-up. But if I’m leaving work at 3, it feels like a party! Like I’m playing hooky, even if I did work harder throughout the day so I could leave early. I can make it to the store, beat the crowds, and free up my weekend all in one. 2. Experiment in the kitchen Speaking of the grocery store, when you combine taking care of that errand with getting home early, you have a situation that is the perfect storm for cooking! Cooking is probably my favorite hobby, and summer is my favorite time to engage in it. Since Arizona doesn’t observe daylight savings time, it’s usually dark by the time I get home during the winter months, even if I don’t stop to run any errands. In the summer, not only am I able to get home sooner, but it will be sunny out until well after 7 p.m.! As a result, I’ll have both the time and the motivation to try some more complex recipes. Summer is also one of my favorite times to cook because fresh ingredients are much more varied, high-quality, and less expensive than during other times of year. I just made my first batch of fresh salsa yesterday, and I can’t wait to put it on everything. So easy, and so much better than store-bought salsa. Honey’s Easy Salsa (Hot!!!) 4 Anaheim chilies, roasted and peeled, then de-seeded 4 jalapenos, de-seeded and chopped into quarters 5 Roma tomatoes, chopped into quarters 2 habanero chilies, de-seeded (omit

After two years, my beloved tenant is leaving me for another man. My tenant is a single woman in her 50s who sold her house on the east coast to start a new life in San Francisco. She’s always wondered what all the west coast fuss was all about so she decided to see for herself. After a year of work, she met someone and is now moving in with him. I’m so sad to see my tenant go as she’s been wonderful. Yet, I’m so happy she’s found new love! I don’t know what it is about my rental property but every single tenant ends up marrying or finding someone special. Good feng shui perhaps! As I wrote in my real estate vs. stocks post, real estate takes more effort to manage. I’ve got to now host multiple open houses and carefully vette my future tenants like the CIA to ensure the least amount of headache down the road. Thank goodness everything is so easy to do on Craigslist nowadays. I’ve got all the application forms and after almost 10 years of being a landlord, I know exactly what to look for. If you are an aspiring landlord or a new renter in a hot market, this post should help provide some prospective to getting what you want. This post should also help renters get their ducks in order. CRITERIA AND DOCUMENTS NEEDED WHEN APPLYING TO RENT * Income and Paystubs: The general rule of thumb for a landlord is for renters to make at least 40X the monthly rent as annual income. In other words, if the rent is $2,000 a month, the minimum the tenant should make is $80,000 a year. Prospective tenants should bring in their latest two paystubs and prior year’s W2 if you feel comfortable. If you operate a business, then please highlight your income statement. * Duration of Employment: The longer you are at one firm the better. If there’s a history of moving around every year, the landlord will put you in the bottom pile because the last thing a landlord wants is to have to go through the entire tenant screening process again so soon. Seeing a letter from your Human Resources department verifying your employment and duration puts your landlord at ease. Landlords want a tenant who will ideally stay for two years or longer. * Assets: It is preferred to have six months of rent in liquid savings or semi-liquid investments or more. A landlord’s fear is that a tenant loses his or her job, runs out of money in several months, stops paying rent, turns into the psychopath from the movie Pacific Heights, and destroys all your property! Bring a copy of a bank statement and brokerage accounts that show liquid assets. You don’t have to show everything, just enough where the assets cover at least 6 months worth of rent. If you have tons of assets, feel free to show up to 36 months worth of rent but not much more. Having too much money makes your landlord think you’re only here for a pitstop until you find something better. * Letters of Reference: Almost every single landlord will experience some type of problem tenant if they landlord long enough. Letters of reference are important to verify a tenant is worthy. Please also provide the telephone number(s) of previous landlords so we can speak to them about their experiences with you. Many times, letters/emails don’t mean anything because the landlord is just being nice so that you can hurry up and get out of their place! As a result, please also provide work references or outside activity references as well. * Credit Report and Credit Score: The first thing landlords check is the credit score. The credit score is always used for screening purposes if there are many applicants. Even ff there are only a couple applicants, a credit score is still used to gauge the tenant’s ability to pay the rent on time. It doesn’t matter how much you make or how much is in the bank if you aren’t a responsible payer. You need an actual score along with your credit report, otherwise, your landlord will suspect something is wrong.

Photo: ejorpin Saving a down payment is one of the hardest parts of buying your first home. In fact, about 25 percent of first-time homebuyers get help with a gift from a relative as part of their down payment. There’s nothing wrong with this, but there are some regulations you need to consider as you plan for the big purchase. Can You Use a Gift as Part of Your Down Payment? First, you need to know if your lender and type of mortgage will allow you to use a gift as part of your down payment. With many loan programs, a down payment gift isn’t an issue, but with some mortgages, you may need to prove that you’ve provided most or all of the down payment yourself. Mortgage programs created with first-time homebuyers in mind, like the FHA loan and VA loan, as well as many state and local programs, allow a significant portion of the down payment to come from a gift. For an FHA loan, for instance, all of your down payment can be a gift from a relative. Considering an FHA loan? Check out the credit score you need to qualify. With a conventional loan, things get trickier. Most conventional loans, depending on the lender, require a 10-20 percent down payment. Of that down payment, a lender may require that some portion, often around 5 percent of the home purchase price, is provided by you and isn’t a gift. With that said, limits on down payment gifts vary from one lender to the next. If you’re planning to use a gift for some of your down payment, you should talk to your lender about its rules before you proceed. Why Gifts Invite Scrutiny Because a mortgage is the largest loan many of us will ever take out, lenders are cautious about writing them. That’s why you have to prove your income, debt-to-income ratio and other financial data. It’s also why down payment gifts may invite scrutiny from potential lenders. One of the main reasons lenders will require clear documentation of a down payment gift is that they want to make sure the gift isn’t actually a loan. Lenders need to guarantee, for their safety, that you aren’t taking out another loan disguised as a gift. Lenders need to know if your down payment is coming from a loan, rather than a gift, in order to accurately calculate your DTI. For these reasons, lenders will require some serious documentation noting exactly where a down payment gift comes from, including a letter from the giver, and possibly even some bank records from the giver. The Process of Using a Down Payment Gift With all that said, using a down payment gift isn’t impossible and is, in fact, a common enough practice. Here are the steps you’ll need to take to make it happen: Ask only family members. Gifts from friends, neighbors and co-workers won’t be accepted, but gifts from siblings, parents, grandparents, or aunts and uncles are usually acceptable. Get a letter. The giver will need to write you a letter entailing the details of the donation, including the exact amount, the property the gift is for, and your relationship with the giver. The giver will also need to explicitly state that the money is a gift and doesn’t need to be repaid. Gather documentation. You may also want to have the giver gather documentation showing their ability to give the gift. Whether they withdraw the amount from savings or cash in some stocks, records will help ensure the down payment gift is accepted. Record the transaction.There are a couple of acceptable ways to record the transfer of money between the giver and yourself. One is to have the giver transfer the exact amount in a wire transfer, keeping all documentation. The other is to ask for a check and to put the entire check in your home savings account at one time, getting documentation from the bank teller. Keep all money together. One important key to successfully using a down payment gift is to keep the money together until you write your check to the lender. Have a separate account for your down paym

This post is from staff writer Suba Iyer. Money and its effect on happiness is one of those topics that has been discussed over and over again. Yet, the topic fascinates the academic community and the research continues — with contradicting results every few months. The latest finding in this genre of research comes from two economists at the University of Michigan, Betsey Stevenson and Justin Wolfers. Their new study, published in the May edition of American Economic Review, argues that more money does buy more happiness. The study looked at “satiation” with respect to income. In other words, they questioned whether there is a saturation point, where you earned “enough” to be happy, beyond which you are not happier with the increased income. In previous studies, this saturation point has been anywhere from $50,000 to $75,000. This study argues that there is no such point where happiness starts to slope down while income increases. (click to view larger image) Image source: The Economist I am not entirely convinced by these studies. I feel any hypothesis can be proved right with the relevant subset of data. And it is almost impossible to account for every single variable like gender, age, cost of living, race, education level, location, confidence level, expenses and personal savings rate. Despite these weaknesses as a pure scientific experiment, these types of studies always make me stop and think about how I perceive money affecting happiness. In my opinion, money does buy happiness. I honestly cannot see why it wouldn’t. Yes, that is a bold statement but I stand by it. Money does buy happiness Money cultivates goodness: If you have more money than you need, you can give it away and make someone else’s day. There are too many people in this world that can use the help. Feed a starving child and the content smile on its face will fill you with happiness. What stops anyone from donating their excess to a cause they relate to? Use the money to make the world a better place. Compassion makes humans happy and that is experimentally proven. Money buys security: With money to take care of your survival, you can think about other things, things that you really want to do with your life. You do not have to worry about whether you will ever be able to retire. You do not have to lose sleep worrying about how you are going to pay for your food and shelter tomorrow. Money buys freedom: Money buys choices. People with money do have more choices than without. Many dream about early retirement. Most people who think about early retirement don’t really mean they want to quit doing everything and spend their entire day either in front of a TV or on a beach sipping margaritas. What they are really after is financial independence — the freedom to not depend on a paycheck, the freedom to not let anyone dictate what you can do with your day. Money buys this freedom. Money buys time: How many of us want to spend more time with our spouse/parents/friends/kids but have to go to work to make ends meet? Don’t we wish we had more time to do everything we want to do? Take more vacations, go to the museum in the middle of the weekday with your kid or simply relax and read a book. When we have a job, we pay for money with our time. Why not use the money to buy us time to use it as we see fit? Money buys experiences: There is a multitude of research that says people value experiences over stuff. Most of us remember a great vacation much more than an expensive toy. Why not use the money to travel the world, taste different cuisines, learn new languages, get immersed in different culture and learn new things every day? Do whatever makes you happy. Money is a tool. As with any tool, it can only be as useful as we make it out to be. If we are spending it wrong, get obsessed about the tool itself instead of using the tool, compare our material possessions with others and get stuck in the over consumpt

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some fantastic articles on money lessons from the new Star Trek, budget travel 101, and sending your child to preschool for less. Top 5 Articles 12 money lessons from the new Star Trek — Learn a couple lessons from Star Trek by staying in shape and remembering that sometimes intuition should rule. [MSN Money] See More for Less: Budget Travel 101 — You can see more for less when traveling if you take advantage of free walking tours. [Money Talks News] 5 Tips to Lower the Cost of Sending Your Child to Preschool — Going outside your area to find preschools may help you save money. [Money Crashers] 50+ Mini-Tasks to Improve Your Finances One Step at a Time — To improve your finances, ask for a pay raise and sell your unwanted stuff. [Moolanomy] 5 Better Investments Than the Lottery — Instead of investing in a lottery ticket, invest in a taxable account instead. [Kiplinger] Other Essential Reading 12 Reasons Why You Aren't Earning More, According to Science — Your gender and weight may be keeping you from earning more money. [PopSugar Smart Living] Target Investment Mix at Age 50 — If you are between the ages of 45 and 54, you may want 39% of your investment mix to be in U.S. stocks. [Free Money Finance] What Does Your ZIP Code Say About You? — Did you know your ZIP code enables marketers to profile you and send you marketing items? [Bargaineering] Can a First-Time Buyer Get a Jumbo Loan? — First-time buyers may have a chance of getting a jumbo loan if their debt to income ratio is less than 42%. [Credit Sesame] 7 Books to Help Expand Your Child's World View — Expand your child's world view by having him or her read the book One World One Day. [Parenting Squad] ShareThisWritten by Ashley Jacobs and published on Wise Bread. Read more articles from Wise Bread.Best Money Tips: How to Ask Your Boss for a Raise Best Money Tips: Ways to Cut Your Tax Bill Best Money Tips: Cut Your Electricity Bill Best Money Tips: Smart Ways to Spend $1,000 Best Money Tips: Secrets to Successful Haggling

You have to admit - we were right. Last week was indeed a big week for the S&P 500! From Monday, 13 May 2013 to Friday, 17 May 2013, the S&P 500 rose by nearly 2%, or 32.35 points, from 1630.77 to a new record high of 1666.12. Over half the gain for the week came on Friday, 17 May 2013, as the S&P 500 rocketed up by 17 points. In doing that, the S&P 500 completed the transition it began on 1 May 2013, as investors shifted their forward-looking focus from the second quarter of 2013 to the first quarter of 2014 in setting their expectations for the sustainable portion of future earnings growth for the stock market (a.k.a. "future dividend growth".) We can observe this transition directly in our chart below as the movement of the daily and 20-day moving average of the change in the rate of growth of stock prices from the red line representing 2013-Q2 to the green line representing 2014-Q1, which correspond to the change in the year-over-year rates of growth of the trailing year dividends per share expected for each of these quarters. Now, even though this confuses the more dim-witted among Seeking Alpha's commenters, this latest transition of investor forward-looking focus from 2013-Q2 to 2014-Q4 follows very similar transitions that have taken place periodically since the end of the Federal Reserve's QE 2.0 program at the end of June 2011. Following the deflation of that mini-bubble in the weeks that followed, stock prices have since been very fundamentally-driven with little noisy exception, with the pace of acceleration of stock prices matching up with the changes in the growth rates of trailing year dividends per share for discrete future quarters. The transitions of investor forward-looking focus from one future quarter to another, combined with changes in the growth rate of dividends expected in quarters where investors have focused their attention, accounts for nearly all but a small portion of the changes in stock prices that have occurred in the post-QE 2.0 period. These periods of transition in forward-looking focus also mark the greatest uncertainty we have in anticipating the direction and change of stock prices over time, outside of significant noise events such as the Federal Reserve's quantitative easing programs marking major changes in their acquisition rates of U.S. Treasuries. That was definitely the case with QE 2.0, when the Fed ramped up then discontinued an interest-rate lowering bond-buying program, which resulted in the mini-bubble for stock prices. However, that has not been the case with QE 3.0, where the Fed ramped up only its purchases of Mortgage Backed Securities in September 2012, or for QE 4.0, which began in December 2012, where the Fed maintained its ongoing acquisition rate of U.S. Treasuries that it set in its "Operation Twist", but stopped selling off an equal value of holdings that was the other part of that operation. The lack of change in the Fed's basic acquisition rate of U.S. Treasuries for both QE 3.0 and QE 4.0 is why these latest quantitative easing programs have had no significant impact upon stock prices. Now that the pace of acceleration of daily stock prices has risen above the green line on our chart above, we can expect the recent rate of growth to taper off, and even to fall following this period of transition, as there is no fundamental support for stock prices to remain significantly above this level for any sustained period of time, absent some action by the Fed. That brings us to this week, where a lot of focus will be upon the pronouncements of the Federal Reserve. At present, there are a number of indications of recessionary conditions being present in the U.S. economy, which the Fed might attempt to offset by amping up its purchases of U.S. Treasuries. The market's response to such a noise event would be the only reason for the latest rally in stock prices to continue at their current rapid pace of escalation, as the earnings season for the second quarter of 2

With the national average cost of a gallon of gasoline currently hovering around $3.58 (or even $4+ in some areas), filling up your car may seem like a nightmare. Car fuel is one of the most volatile categories under most families' budgets, because prices fluctuate due to a variety of factors, from Middle East tensions to oil spills or refinery fires. (See also: 5 Simple Ways to Cut Your Car Expenses) Luckily, there is an increasingly popular alternative to driving environmentally unfriendly, gas-powered cars — electric cars. Forbes reports that at least 47,500 electric cars were sold in 2012 and, although these sales only account for 0.4% of overall car sales in the U.S., electric cars are gaining popularity among American consumers. Whereas a few years ago, SUVs were all the rage, we are seeing a societal shift towards smaller, more fuel-efficient cars, and those vehicles powered by electricity are leading the way. But are electric cars right for everyone? Cost One of the biggest factors people take into consideration when shopping for a new car is the cost. With electric cars, you're saving money right off the bat, thanks to federal electric car tax credits, which can reduce the initial cost of the car by $7,500. You also get to eliminate the cost of gas from your budget (unless you drive a gas/electric hybrid), which leads to long-term energy savings. There are some downsides to the electric car, however. The purchase prices for these vehicles are much higher than similar model, gas-powered cars. For example, the hybrid 2013 Chevy Volt starts around $31,000, the 100% electric Nissan Leaf is "as low as $21,300" (after federal tax savings and without all the fancy add-ons), and the 2013 electric Ford Focus starts at $39,200. Even with the fuel savings, it might take several years to break even. These high costs make electric cars unaffordable for many low and middle-income households, and even though they're electricity based, there are still more costs involved. For instance, you will probably need to install a charging station in your garage (factor in $1,000 to $5,000), and don't forget regular battery maintenance or replacement costs. All of these costs start to add up, and even without the added car accessories, the final price tag for an electric car is too high for many drivers. Efficiency One of the greatest advantages of electric cars is their energy efficiency. A new term was created for electric cars to determine their fuel efficiency — miles per gallon of gasoline equivalent (MPGe). Most electric cars get over 100 MPGe, even larger vehicles like SUVs and station wagons. The downside here is that electric cars can generally go only 250 miles on a fully charged battery. The infrastructure for public charging stations is scarce in the U.S., so long road trips are out of the question, and if you run out of electricity while on the road, you can't simply go to the nearest gas station and fuel up. This makes electric cars more of an inconvenience for their drivers, but they can still be valuable investments if driven locally and charged regularly. Environmental Factors There are few, if any, comparative disadvantages to electric cars where the environment is concerned. Whereas the EPA estimates that gasoline emits 8,887 grams of CO2 per gallon (PDF), electric cars have close to zero emissions. Regardless of your views on what causes global warming and how serious a problem it is, the fact remains that electric cars pollute the air much less than their gas-powered counterparts, and, as the driver of an electric car, you can vastly reduce your impact on the environment. Final Word Multiple factors ought to be taken into consideration when buying a car, particularly when you're deciding between a gas or electric car. Although electric cars are more costly upfront, the long-term fuel savings could make it worth your while. And, as technology continues to develop and more car companies produce elect