The Importance of Proper Asset Allocation

Proper asset allocation is the key to any investment portfolio. The goal of asset allocation is to balance your risk and reward, and often times differs based on your age and lifestyle.  I think the term asset allocation sounds a lot more complicated than it actually is. You essentially have three different types of investments; equities, fixed-income, and cash & equivalents. Equities are your basic stocks, fixed-income includes annuities and income producing bonds, and then you have your cold hard cash. The question still remains, what should your ownership allocation of each be?

For the beginner investor the best bet is usually a target date fund. I have a good portion of my 401k and IRA investments in target date funds currently. Most brokerages will have a series of these age targeted funds that hold a mixture of investments based on your target retirement date. For example, I currently have a Fidelity 2050 fund, meaning me goal retirement year is in 2050. The further out the year then the riskier the portfolio is to start, and as the years roll on the fund will reallocate itself to safer and more liquid assets. There are many critics out there that claim these types of funds ignore the uniqueness of each person, but the truth is that they are safest and low cost way for a novice investor to stash money for retirement. Say you want to increase your risk then you simply invest your money in a target date fund in a year that is further out than you actually plan to retire, and vice versa if you want to reduce your risk profile.

I gave you the three major types of investments, but let’s take a quick look at the individual investments within each of those categories. As I said before, equities are stocks and can include dividends, large-cap stocks (also known as blue chip), mid-cap, small-cap, and even emerging market stocks. While each of them carries their own individual risks, as a whole these are the riskier types of investments in your portfolio. Binary options are an investment derivative that fit within this category as well. What is binary options you may ask? They are an option that predicts the movement of a stock, up or down, and if you predict right then you stand to make some money. Next we have fixed income investments. These can include government or municipal bonds, and are often considered much safer in nature. Though there is still some risk involved, just think about all of the municipal bankruptcies after the economic meltdown.  Cash and cash equivalents are the safest ways to hold cash, but they are also prone to inflation. This could be a bank CD, a money market account, or even cash stuffed under your mattress!

Do your Tires really affect your gas Mileage?

Okay, so you’ve heard that under or over-inflated tires can affect your gas mileage. Did you know however that the size of your tires, their weight and the type of tread that they have all impact fuel efficiency as well?

A lot of things affect your gas mileage, including driving in cold weather, your speed, the amount of air drag on your vehicle, how well your engine is tuned and many other factors. It’s been calculated that just the combination of heavy braking and quick acceleration can decrease your mileage by almost 30% when traveling on the highway.

It’s also been calculated that the size of the tires you use, and their overall design, can have a 4% to 7% impact on your fuel economy. This differs slightly depending on whether you’re driving around town or on the highway. Also, while using larger tires will usually reduce fuel efficiency, the actual design and construction of your tires can sometimes offset the loss due to their larger size.

The impact that “rolling resistance” has on your fuel efficiency can be quite high. This is caused by the amount of friction or resistance that your tires cause when contacting the road and, since larger, heavier and wider tires contact the road more than smaller, lighter and thinner tires, they create more friction and thus decrease your fuel economy.

Interestingly, the tires used on race cars, called “slicks”, have no tread at all and are the best for fuel economy. The problem is that, without tread, they are also much more dangerous because they don’t “hold the road” well. In effect, your tire’s treads reduce your gas mileage but increase your car’s safety factor greatly and thus are a necessary evil.

There are tires that have been designed for better fuel efficiency however, and usually they have a tread that is shallower and they’re made of materials that generate less friction and thus less heat when driving. Usually the best tires for fuel efficiency are the ones that come “stock” with your car from the factory. The reason is that automobile manufacturers want to be able to get the highest miles per gallon possible when they undergo US Environmental Protection Agency tests.

What this means is that, when you go to replace the tires that came with your car, you should definitely ask the tire vendor you plan to use to give you advice on which tires have the best (i.e. lowest) rolling resistance.

Finally, as we mentioned earlier and as (hopefully) most of you know, properly inflating your tires is the best way to make sure that you get the highest gas mileage as well as protect your tires and make sure they last as long as possible. Every car owner should have a tire pressure gauge in their glove compartment to be able to check their tires at least once a week. The best time to do this is before you drive when the tires are cool.

It’s been calculated that you will save as much as 3% when driving on tires that have been properly inflated, which can amount to quite a bit of money if you do a lot of driving.

Consumers Should Take Advantage of This

Consumers can easily take advantage of special offers throughout the U.S. automobile market. On major holidays, there are plenty of nationwide discounts and other special promotions available on car leases and purchases. It is a tradition for car dealerships to mark down prices significantly during major holidays like Christmas, Independence Day and Thanksgiving. Local dealerships team up with auto manufacturers to come up with exciting ways to attract new customers.

For example, some dealers might host special events like barbecue cookouts during summertime holidays. Of course, the ultimate goal is to sell brand-new cars that are nicely displayed in the parking lots. However, auto dealers understand that customers should have a good time in order to show some interest in buying new vehicles. Zero money down is one common offer made during special promotional periods at car dealerships. Zero percent APR is available for a limited length of time, such as 12 months for a financing term that’s 48 months in total.

These days, consumers do not always have to visit a car dealership right away in order to browse a selection of models that are up for sale. Websites are loaded with listings of all the cars in stock in local dealerships. A simple entry of a zip code can yield results featuring the nearest car dealers within a maximum radius from a customer.

When browsing virtual listings, customers can reserve some cars online. Several days are given for patrons to visit a dealership and test drive the reserved vehicle. Communication by email, text message and phone is available when making reservations on cars that are part of a local dealer’s inventory. The MSRP of a brand-new vehicle is typically negotiable. However, the addition of feature packages obviously brings up the price significantly. At the same time, customers can request that certain optional features be removed or substituted in order to adjust the final sale price according to a specific budget. Exploring Toyota Land Cruiser offers and other deals is one way to make buying or leasing full-size sport utility vehicles more budget-friendly.

The Longest Lasting Cars on the Road

While most people talk about how to save a few dollars on gas, the real savings when it comes to an automobile is holding onto a car for as long as possible and, as long as it isn’t costing you a lot for maintenance, driving that sucker until the wheels fall off.

With that in mind, we put together a list of the longest lasting automobiles on the road today, as per the data that was recently released by iSeeCars.com.  If you’re looking for a vehicle that will last you from now into the next decade and further, these next five cars should be high on your list of the ones to buy. Enjoy.

The Subaru Outback is one of the best cars to purchase if you’re an outdoor enthusiast because it has standard all-wheel drive and, while the interior isn’t what you call luxurious, it is very capable and practical. What’s even more impressive is that quite a few of these excellent cars make it to 200,000 miles.

A big surprise, especially for people who love to bash the American automobile industry, is that the Ford Taurus actually was tied with the Honda Civic and Acura TL for reliability, and the ability to put 200,000 miles on its odometer.

Speaking of the Acura TL, it’s not  surprising to see one of them reach 200,000 miles when you consider that Honda has been making reliable cars for decades. Acura is their luxury line and the apple didn’t fall far from the tree as far as quality is concerned when they made these cars.

Of course any list of reliable, long-lasting cars wouldn’t be complete without the Toyota Camry but, truth be told, it’s only slightly ahead of Acura, Honda and even Ford when it comes to vehicles that have reached or exceeded 200,000 miles on their odometer. Still, it’s America’s best-selling car for something, and longevity is a big part of the equation.

We already mentioned the Honda Civic, one of the best-selling models from one of the best-selling automobile brands in the world. Although it’s tied with the Acura TL as far as the percentage of cars that reach the 200,000 mile mark, the numbers are a bit skewed because the Civic sells a lot more than the TL.

While the Altima is one of the best selling cars in the country, it’s the Nissan Maxima that appears to be hitting 200,000 miles more often. It’s on the same par with the Toyota Camry, although it does sell in lower volumes that either the Altima or the Camry.

Lastly there’s the Honda Accord which, not surprisingly, is the number one longest lasting car on the road with nearly 2% of all Accords hitting the 200,000 mile threshold. This simply backs up what’s been known and said about Honda for the last few decades, that they make some of the most reliable and long-lasting vehicles in the world.

Saving Fuel Requires Lighter Cars

What’s the best way to get better mileage out of our automobiles? Make them as light as possible.

Think car roofs made out of carbon fiber, bumpers created from aluminum foam and windshields made out of plastic. The fact is, even though hybrid and electric cars are in the news, lighter materials are the real “final frontier” for fuel economy.

Known as “lightweighting” among automakers, experiments have been going on for decades to bring that weight of automobiles further and further down. With the new, tougher gas mileage standards that have recently been adopted the effort has definitely gained a bit of urgency of late. The fact is that most cars will need to lose a lot of pounds in order to meet the government’s 2025 fuel economy goals.

For those people that are concerned, the fact is that lighter cars don’t mean cars that are less safe. In fact, many of the cars being made with these new, space age material are doing quite well in government crash tests. Roughly 30% of the new vehicles already being made today have aluminum hoods that are as impact resistant as steel, and a number of auto manufacturers have teamed up with airplane manufacturers in order to get their data from years of lightweight material crash testing.

Developed in concert with the US Department of Energy, the Ford Fusion lightweight prototype car weighs approximately 800 pounds less than the Fusion already on the road, thanks to carbon fiber instrument panel, a rear window made from the same thin plastic that covers cell phones and aluminum brake rotors that are nearly 40% lighter than cast iron.

Due to all of these lightweight materials the new Fusion can use the same engine as the Ford Fiesta, an automobile that gets about 45 mpg on the highway already.

Of course the one drawback that it has is that these lightweight materials are ridiculously expensive. For example, the carbon fiber frames used for the seats are approximately $73 each, compared to the steel frames normally used that are priced at approximately $12.

This isn’t stopping automobile manufacturers however as they are constantly looking for newer materials that not only shave weight but also cost.

Matt Zaluzec, the technical leader for materials and manufacturing research at Ford, says that “These are the technologies that will creep into vehicles in the next three to five years.”

The 2013 Range Rover from Land Rover is a great example. When it was put on sale last year it featured an all-aluminum body and other lightweight components that enabled Land Rover to make it 700 pounds less than its predecessor.

It’s been estimated by Morgan Stanley that, if 1 billion cars on the world’s roads rose today were made lighter by only 110 pounds, upwards of $40 billion would be saved in fuel every year.

“Lightweighting is going to be with us for a long time,” said Hesham Ezzat, a technical fellow at GM. “Every manufacturer is going to have to leverage their entire palette of materials.”

So it seems that, even if they might not be looking for the better, renewable fuels, at least auto manufacturers are doing their best to design cars that are lighter and use less of the fuels we are already using.

Summer Tips for Saving Money at the Pumps

Summertime is here again and with it summer trips and the usual increase in prices at the pumps. If you’re keen on traveling this summer but don’t want to break the bank putting gasoline in your automobile, read the Tips below before starting out on any automobile adventure. Enjoy.

In this technologically advanced age, if you’re still driving all over town looking for the best price on gasoline you’re a little crazy. Smartphones give you access to a plethora of apps that will help you quickly find the best price in town, including one of the best called GasBuddy. Download it today and to stop wasting time and gas.

Purchasing your gas from a station that’s busy is a great idea because fresh gas is less likely to be contaminated and is better for your car’s engine.

Purchase a tire pressure gauge and check your tires once a week to make sure that they are properly inflated. This is an extremely easy and simple thing to do and, since tires that are under or over inflated can reduce your engine’s efficiency by 2%, is also a great way to save money on gas.

Definitely take advantage of your car’s cruise control when traveling on the highway. When your car is traveling at a specific, steady pace you increase fuel efficiency by upwards of 8%.

If you’re going to be stopped for more than 45 seconds it’s best to turn off your car because idling for any longer is simply a waste of gas.

Try to plan your trips so that you don’t drive through a crowded metropolitan area during rush hour.

Before setting off on a long-distance trip, have your car serviced and make sure that everything is running correctly, all fluid levels are where they should be and your tires are inflated properly.

If you are a fan of “topping off” when filling your gas tank, you’d be well advised to stop. The fact is that most gas pumps don’t contain sufficient pressure to deliver gas well in short bursts which means that, if you top off your tank, you might get shortchanged.

The next time you purchase new tires, consider radial tires instead of standard because they will cut your fuel bill by 2 to 3%.

Driving in the morning, late afternoon or at night is a great way to save energy because you won’t need the air-conditioning nearly as much.

It’s definitely a good idea to either use the GPS mapping on your smart phone or, if you don’t have that option, map out your route before you leave on a long-distance trip so that you can get to your destination while still driving the least amount of miles.

Hopefully these tips will help you to not only have some wonderful summer adventures in your car but also save a lot of money on gasoline. Enjoy your summer, drive safe and have a wonderful time.

Braking Properly Can Save on Gas!

Most drivers realize that an automobile uses the most gas when it accelerates. This most basic law of physics, that force equals mass times acceleration, also means that your car requires a lot less gasoline to keep moving forward than it does to get up to speed.

The reason is because inherent inertia, or your car’s forward motion, reduces the amount of gasoline that your car’s engine needs to push it forward. It also means that, if you want to improve your mileage, one of the things that you need to learn how to do is use your brakes as little as possible, especially in moderate to heavy traffic.

Here’s a great example; when a person is stuck in heavy traffic and, instead of controlling their speed with their accelerator pad only they have to control it with both their accelerator and their brakes, they end up using a lot more gas because they lose their car’s forward inertia and have to use more gas in order to get back up to speed.

These are the people that you see in traffic that speed up and then use their brakes, then they speed up again and hit the brakes again, doing this over and over while they sit in traffic and not only waste time but also waste a lot more of their precious gasoline.

This of course also poses a problem for the cars following directly behind this automobile, who must also brake unnecessarily in order to avoid causing an accident. In very heavy but still moving traffic over 90% of automobiles do this and, even though it’s relatively easy to hold a speed without stepping on the brake, they use them anyway and with them more gasoline.

The fact is that by simply keeping a little bit more distance between their car and the car in front of them these drivers would be able to use their accelerator only in order to keep their speed at a steady pace, even if it’s a slow pace, and keep their car’s inertia working for them.

This means not only paying attention to the car directly ahead of them but also to the cars ahead of that one so that, if necessary, they can anticipate when traffic is going to slow down and thus ease off of the gas instead of hitting the brakes.

What it all boils down to is simply this; every time you have to speed up you use more gas. It only makes sense that if your car is already moving forward, and you don’t have to slow it down constantly, you won’t have to speed back up constantly either and less you’ll save gasoline and money.

In fact, most experts say that if you can learn to do this and drive more efficiently you can save between 10 and 20% on gasoline cost, something that in this day of $4. a gallon gasoline is no small amount of savings.

Need more Fuel Efficiency from your Prius? Track your route

Okay, we get it. Your Toyota Prius is already an excellent car with mileage so high that it puts every solo gas using car to absolute shame.  But what’s that?  You say you want even better mileage from your Prius, so that you can use even less gas because you can run on your car’s battery for a longer amount of time?  Well then, you’re in luck, because researchers have just figured out a way to make your gas sipping car even more efficient.

The way they’ve done is to let you track the route that you take to work.

The solution that the Prius has right now is that, when you’re battery runs out of power, the Prius starts using your gas supply. It works, but it isn’t the best use of power by any means.

Now however a system has been developed by Chalmers University of Technology and professor Viktor Larsson that will analyze the daily route that you use to go to work, including any detours to places that you go to regularly (Starbucks anyone?), and once it knows your route will then determine the best way to get the most life out of your battery.

For example, when you’re on the highway your Prius may switch to gasoline as it’s more efficient, saving the stored power in your battery to use when you’re in stop and go traffic closer to the office.

It’s not going to save you a huge amount of money on gasoline by any means, but Prof. Larsson predicts that it could reduce the energy consumption of your Prius by up to 10% and, since the technology behind most hybrid cars is relatively the same, the new device will be able to work on most of them. It simply needs to be able to set up a communication between your car’s battery and engine via the computer in order to do it.

Similar technology has already been developed by Prof. Larsson for the Volvo V60 Plug-in Hybrid, where testing and simulations have already been carried out. Tests have also been done to see if using a smart phone, in place of the computer server that powers the cars management system, could be an option.

In any case, look for the new technology to arrive sometime in the next few months and help your already ultra-mileage hybrid vehicle to get even more miles out of a gallon of gas and its bank of batteries.

Spend Less at the Pump with these Gas saving Tips

Summers coming and, whether you’re planning to head out on the open road and do some exploring or just want to cut down on expenses, there are a number of excellent ways to do it at the gas pumps. Read below and we’ll gladly share them with you! Enjoy.

The 1st is simply to not wait until you’re so low on gas that you have to use whatever gas station is nearest. In most cases you’ll be stuck paying whatever crazy price that the station charges which, depending on where you live, could be from 5 to 15% higher! Your best bet is to simply get into the habit of putting gas into the tank when you’re about a quarter full, giving you the option of going to a station with the lowest prices.

Another great tip is to use your smartphone to map out your route ahead of time. For example, Waze is an app that will tell you about road closures, travel delays and real-time accident reports so that, wherever you happen to be going, you don’t waste time and gas sitting in traffic. There are other apps to do the same thing too so, if you have one of the latest smartphones, download 1 of them and save yourself some time, money and gasoline.

Sticking to your car’s maintenance schedule is extremely important not only to save gas but also to save on car repairs as well. Your car’s performance, especially the engine of course, will determine how much gas you use and how much money you spend. Things like your tires, your oil and your coolant should all be checked regularly by a qualified mechanic to keep your car in excellent running condition and keep your gas expenditure as low as possible.

If you’re the type of person that pays off your credit cards at the end of every month, using a gas card that will let you earn rewards points and even get you free gas is a great idea. Remember however that, if you don’t pay those cards off in full, the interest that you pay could negate any savings that you might gain,  so if you don’t pay them in full, you probably shouldn’t use them.

On longer trips, and even just around town, your best bet is to keep the roof of your car unloaded.  Incredibly, hauling cargo around on your roof  can actually cost you over $.60 per gallon so, if you have to haul something around, try doing it with a trailer or by hanging it off of the back of your car instead of the roof.

Finally, we mentioned earlier that using your smart phone to map out your route ahead of time is a good idea, and using that same smart phone to download a gas app and use it to find the cheapest gas station is also a great idea. One of the best is called GasBuddy and, since it’s updated by users in real time all day long, it can easily show you where the closest local gas station is in your town with the cheapest gas prices.

So there you go, a slew of gas saving tips that you can use all summer long to save time, energy and money every time you had over to the gas station. Happy travels!

Idling is the Worst Possible Way to Waste Gasoline

Every single day in America millions of drivers are wasting precious and costly gasoline because of one bad habit that they all share; idling their cars while they sit in line waiting for their children to get out of school.

In practically every blog  about saving gasoline and lowering gasoline costs that we’ve posted here on this website in the last couple of years, one of the examples that we’ve always given for saving gas is to not let your car run for more than a few seconds in idle while it’s parked.

The reason why is one of the most basic tenets of saving gas; when a car is idling, its MPG is negative. In other words, since your car isn’t moving forward, but you’re still burning gas, your MPG goes below zero.

Granted, the amount of gasoline wasted if a car sits idling for one or two minutes is minimal. The fact is however that, in front of elementary, middle and high schools everywhere in the United States, millions of parents spend upwards of 15, 20 and 25 minutes, 5 days a week, waiting for their children to be let out of school. Sometimes it’s even longer and, in most cases, their cars run in idle the entire time.

Now, some may argue that in the winter it’s necessary to leave the car running for its heater because it’s frigid cold outside. I’ll grant you that this makes a little bit of sense but it’s basically the same argument that’s used in spring and summer, especially in the South, when it’s too hot outside and the air-conditioning needs to be kept running.

When you take into consideration the amount of gasoline that’s being wasted five days a week and over 40 weeks a year, and the amount of pollutants that are being released into the air while these automobiles basically go nowhere, the resultant waste  and pollution being caused is simply astronomical.

If you think that this is overdramatic or exaggerated, please allow me to slip into the first person narrative here for just a moment.

As a father of two high school aged children, and a parent who’s moved a number of times for work, I’ve driven my kids to over a dozen different schools in four different states and have seen the same exact thing at every single one of them.

Some of those schools were in the northeast and some were in the southeast but, in front of every one, the majority of people sitting in line and waiting for their kids to be let out for the day were doing it while their car’s engine was running in idle.

Lest you think I’m an incredible hypocrite, I can honestly say that my habit has always been to find a spot somewhere near the school that my children were attending and park there until it was possible to move through the car line without stopping. (I can also say that, until recently, this caused more than a bit of “embarrassment” and frustration for my kids, who never quite  understood why their dad couldn’t just “be normal” and wait in line like everyone else.)

I’m a fan of hypermiling, I work from home and I basically follow every single money saving gas tip that has ever been featured here on this blog site. For me, to see this kind of waste on a daily basis is extremely frustrating, especially on a day like today when, here in the city of Atlanta, there’s an “orange alert” for air quality

So, if you’re a parent who drops-off and picks-up their kids from school every day, I’d like to ask you to consider the fact that you’re not only wasting money but also a precious resource that some scientists say will be depleted within the next 50 years. (That would be gasoline.) I’d also like to ask you to think about how idling your car for 15 to 20 minutes a day is adding to a pollution problem that those same scientists say are causing catastrophic global climate changes.

The fact is, it’s not just about saving a few bucks anymore, it’s about saving the planet.

I’ll get down off of my soapbox now. Thanks for listening

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