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!

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.

The Top Worst Tickets to get for your Car Insurance Rates

Receiving a traffic ticket is, for most people, a humiliating experience but also can be quite disastrous financially. Besides a big fine the fact is that most tickets (besides simple misdemeanors) will increase a person’s car insurance rates significantly.

For example, in many states a single moving violation can raise someone’s premiums by nearly 93% and, with more serious offenses come bigger increases.

Someone who has an accident or two and gets a ticket for some of the worst types of violations might even find that car insurance companies will refuse to offer them insurance.

What violations are the worst? Keep reading to find out.

At the top of the list is a citation for driving under the influence or DUI. According to InsuranceQuotes.com, a DUI ticket will nearly double most people’s insurance premiums.

Next is Reckless driving, an offense that guarantees a hefty hike of anyone’s insurance rates. It varies from state to state but can bring stiff fines and even jail time. Keep in mind that at least one state has categorized texting while driving as reckless, Virginia.

Next on the list is Careless driving which, although it’s often confused with reckless driving, is actually a lesser violation. It means that you’ve unintentionally been risky behind the wheel and, while it won’t be as bad as Reckless driving, it can still can cause your rates to increase almost 30%.

Speeding tickets, especially more than one, can cause your insurance rates to go skyward and, if you get enough of them, can cause it to get canceled as well. In most cases insurers will overlook one speeding ticket if it’s less than 10 mph over the limit, but some won’t and almost all will increase your rates if you have multiple violations.

One of the reasons if that, by NHTSA estimates, 10,000 lives are claimed each year by crashes caused by speeding.

Other ticket-able offenses like running a red light or stop sign, turning right on red without stopping and other “failure to stop” offenses can mean an increase in insurance rates as well. These types of violations actually  caused nearly 700 deaths in 2012.

Without a doubt the best way to make sure that your insurance premiums aren’t increased by traffic violations and tickets is to drive safely, drive the speed limit and obey all traffic laws at all times. It’s actually not all that hard to do if you think about it and, in the long run, will save you a lot of grief and an awful lot of money.

Gas Saving Myths Exposed

Summer is coming up fast and with it gas prices will be increasing, as they seem to do every year.   In order to help you, our dear readers, keep as much of your hard earned money in your wallets and purses this summer, we’ve put together a list of some of the biggest myths about gas saving to take a look at which ones work and which ones don’t. Enjoy.

The first is about the best way to actually save on gas. Many people will offer their own opinion but, in test after test, the best way that’s always been found to decrease gas consumption is simply to slow down. Studies show that, among most cars including hybrids, the change from 55 mph to 65 will reduce fuel economy by 4 to 8 MPG. If you go from 55 mph to 75 it’s like switching from driving a compact car to driving a large SUV the increase is so bad.

How about carrying stuff on the roof of your car? Does that wind drag really bring down your fuel economy that much? In fact, yes. Tests show that even something like an empty bike rack can decrease the cars mileage by 5 miles per gallon and adding to bikes to the top decreases mileage by nearly30%!

Many people will say that if you want to save gas you need to use your car’s AC sparingly. While it’s true that using the AC  will decrease your mileage somewhat, the fact is that it’s only between 1 and 4 mpg,  not really enough to warrant turning it off if it’s blazing hot outside.

One question that many drivers have is how long they can keep driving once the “low fuel” warning light starts blinking. The fact is that there’s really no set rule and it differs from car to car. The average car has between 1 and 2 gallons of gas left in the tank when the light starts blinking, about enough to travel 40 miles. If you’re far from a gas station when your fuel light starts blinking, the best that is to slow down and maintain a steady speed.

As for whether a new air filter can increase fuel economy, it’s been found in numerous tests that it won’t. In most tests it increases acceleration and performance, but not MPG.

Finally, many people wonder if running their car when the tank is nearly empty is bad for the engine.  In fact, it’s really not. In most cars the fuel pump is pulling gas from the bottom of the tank already, even if it’s full. Fuel filters at the tank and closer to the engine also take out any junk or gunk that might affect it.

We hope these myths that we’ve just busted have opened your eyes to what you can do and not do to save extra money this summer on gas. As always, remember that one of the best ways to save gas is simply to not use your car at all. With warm winter approaching, walking or using your bicycle is definitely an option.

How to Avoid Getting Ripped Off by Your Mechanic

You know how to fill up your gas tank, how to turn on your car, and how to push your brake and gas pedal to stop and go. Unfortunately, though, that’s about as far as your car expertise goes — and the mechanic knows it. Face it: your car will eventually break down, and you’re going to have to put your trust in a stranger to fix it.

And when it comes to strangers, many mechanics seem to be the greediest when it concerns taking your hard-earned cash. With that said, here are six steps to help you avoid getting ripped off by your mechanic.

Try to Diagnose (and Possibly Fix) the Problem Yourself

Image via Flickr by ::w i n t e r t w i n e d::

Image via Flickr by ::w i n t e r t w i n e d::

Sure, your knowledge of cars might stop at being the driver of one, but that shouldn’t preclude stepping out of your comfort zone and getting your hands dirty. There are a lot of issues with cars that are easily fixable if you have a car manual and the necessary tools. Do-it-yourself auto repair is relatively easy with a Chilton’s manual, which provides in-depth directions on how to fix most problems on many makes of models of cars and trucks.

Follow Recommendations From Family Members and Friends

If you’re not adventurous enough to try to fix the problem yourself — or if you tried, and the repair is just too big a job — the next step is to start looking for a mechanic who’s credible for the right price. Considering that everyone has to get their vehicle serviced or fixed from time to time, the best way to find a local shop worthy of your business is to ask family members and friends for their opinion and references. They’re likely to point you in the right direction.

Do Your Homework Before Committing to a Shop

If your family members and friends don’t know a reliable mechanic — let’s hope that’s not the case — then it’s time to start doing your own investigative research. In the world before the Internet, this was a lot harder to do. With the Internet, though, you have an unlimited amount of resources at your fingertips for finding out which shop is shady and which one is trustworthy.

If you really want the best of the best, consider getting a consumer report. Resources like the Better Business Bureau and Angie’s List are also good for doing your homework on a potential mechanic.

Ask Questions and Don’t Let the Mechanic Control the Convo

Once you find a shop and walk through the door, the mechanic will love to hear nothing more than “Do whatever is necessary to get this car driving!” Translation: “my money is your money, no matter how much.” Although you might not have the know-how to fix the car, you shouldn’t let that intimidate you from talking with the mechanic and asking detailed questions. After all, you’re paying them to do the work, not vice versa.

Put Everything in Writing and Get Signatures

Before you and the mechanic agree on the work they’ll do on your car, make sure what’s getting done, what’s included in the cost, and how much it’ll be after parts and labor. They legally can’t start work until you sign off (if fact, you’re entitled to ask for a written estimate in most states), so if anything seems fishy, this is the stage where you need to ask the right questions.

Don’t be surprised if the shop asks for wiggle room on the estimate just in case something unexpected happens, either. No matter the case, put it all in writing and make sure you and your mechanic sign off on it. That way, if anything happens, you have proof or price.

Make Sure You Get a Guarantee and Warranty for the Work

You want to make sure the mechanic shop you go to works on all type of vehicles, whether it’s luxury suvs or older model compact cars, and you should make sure they offer a warranty on the work they do. This guarantees that the shop’s work will happen in the best interest of keeping the customer satisfied as opposed to filling up the cash register in the fastest amount of time. Additionally, make sure you keep all receipts and warranty paperwork in a safe place for future reference.

Do you have a trustworthy mechanic shop you can count on? What are their best qualities? Share your experience with other readers of the blog in the comments section.

 

Secured Auto Finance: How to Save Money when buying a Car

After unprecedented growth in 2013, the new car sales market in the UK is braced for a continuation of this trend in the year ahead. This is also impacting on the procurement of used vehicles, as private vendors and dealerships look to capitalise on soaring demand to maximise the profit in their vehicles. With the majority of vehicle purchases, however, it is necessary to request secured funding and deal with an established and reputable lender. This can slightly complicate the issue, however, unless you are able to think in a proactive manner and identify the most suitable lenders for your needs.

How to Access the Best and Most Affordable Car Financing Deal

With this in mind, what practical steps can you take to secure the best and most affordable care financing deal? Consider the following: –

Search for a Lender that Makes Borrowing Simple

One of the biggest issues facing borrowers in the complexity of secured loans, which can seem extremely difficult to understand if you are new to the concept. The fact remains that secured borrowing is relatively simple, as you apply for a principal amount that is used to fund the purchase of a selected asset. In this instance, the car that you buy serves as the collateral, while a competitive interest rate is applied to create a cumulative level of debt that must be repaid. The best lenders strive to explain this in great detail to consumers, and afford them the best possible chance of saving money.

Work Out precisely how much you need to Purchase a Car

While you may have a specific lender in mind, this means little unless you have budgeted carefully defined amount to fund your purchase. This requires you to identify a potential vehicle, and one which sits comfortably within your existing financial means. It is all too easy become overly casual when you are dealing with money provided through a secured loan, but the fact remains that this sum must be repaid as though it was withdrawn from your own bank account. Without this approach, you run the considerable risk of borrowing too much money and encumbering yourself with an unmanageable repayment schedule.

Compare the Market for the Best Available APR

Not all lenders are created equal, and each will offer a variable rate of APR. This will be applied to the principle borrowing amount and ultimately dictate the total sum that you will repay, so it is crucial that you shop around and compare the market for the best possible rate. APR is used by lenders to offset their risk and ensure that they are able to make a profit, although the secured nature of automotive financing means that the typical rate can be relatively low. Do not be afraid to invest time into this endeavour, as sourcing the best deal with help you to save considerable amounts of money over time.

One Way to Save Money on the Maintenance of your Vehicle

Keeping your automobile running can be extremely costly, and this will include fuel, insurance and any maintenance work, so whenever there is an opportunity to save money on one of these then it is important that you take it. Maintenance is one of the big ones, as from time to time something will stop working in your car, and that is because it is such a complex bit of machinery with so many different working parts. A lot of the time this will be something that will not require a mechanic, and if you have all the right tools for automotive repair along with the knowledge of how to get the job done then you may be able to fix it yourself for a fraction of the cost.

 

One of the more common problems that arises is that the gas struts stop working, and when this happens it means that your boot will not open properly and stay open, and this can be a real pain for those that regularly use the boot for storage and transportation. Replacing your gas struts is something that you can easily do yourself, and all you need is a spare pair of hands and a flathead screwdriver, but you may be able to solve the problem with an even more simple and cost effective method.

 

How the Service Works

This is a gas strut re-gassing service, and instead of replacing your old struts this service will re-pressurise them so that they will work again properly and do their job. This will cost a significant amount less than buying a brand new replacement whilst doing the same job, so if you want to save money on your car maintenance then this is the way to go. This service works by you removing your struts and then sending them off to a company that provides a re-gassing service, such as SGS Engineering amongst others, where the strut will be inspected and you will be told if it can be done. If so then they are re-pressurised, tested and sent back to you.

 

The struts are easy to pop back into place, and they should then be working as good as new. This is a great way to save money on the maintenance of your car, and all the hard work will be done for you as well.

Getting Yourself Covered if you are a Courier

Anybody that works in the courier industry should know that a regular vehicle insurance policy will not cover you if you were to encounter any problems whilst out on the road, and instead you will need something called courier insurance. The reason for this is that when you are a courier you will be out on the roads more frequently than other motorists and making longer journeys more often, and on top of this you will also be transporting expensive goods with you as well. This type of insurance will be needed whether you are delivering goods by motorcycle or by van, and there are different types of courier insurance too for you to choose from.

 

You will generally find that this type of insurance will cost more than regular types seeing as you are on the roads more often and transporting goods, but of course this type of insurance could end up saving you a fortune if you were to have an accident and damage the goods. You can also save money on your premium if you know where to turn for this as well, and you will find that most regular insurers will not offer this kind of cover.

 

Finding an Insurer that Offers Courier Insurance

Specialist vehicle insurance companies will be the best place to turn, and this way you will be able to get a personalised service so that you can find the right policy to suit your needs as a courier. This might be courier motorcycle insurance, single van insurance or maybe a whole fleet of vans, and by getting in touch with the right insurance company it will save you money and time which will make it a stress free process, and before long you will be out on the roads with peace of mind knowing that you are protected.

 

If you were doing your job on regular vehicle insurance then you are putting yourself at risk and you could lose out on a lot of money if there was an accident, so make sure that you get yourself covered with courier insurance from a specialist insurer that will be able to offer you a personalised service and affordable rates, and with some of them you may even find that there are a whole host of benefits to go along with your policy too.

How to Buy a Used Vehicle Safely

The popularity of used cars has increased considerably in recent years. There are many advantages attached to purchasing a second hand vehicle over a new one, the most important one being the greatly reduced price. Whether you’re thinking of upgrading, looking for your first car or buying something bigger to accommodate additional family members, the second hand car market will have something suitable for you. Most people choose to buy used vehicles from trusted dealerships like Exchange and Mart, but if you’re looking at advertisements from private sellers, follow these simple steps to stay safe.

Before You See the Vehicle

There are certain checks that should be completed before you even go to view the car, van or motorbike in question. Ask the seller if they can provide you with the make and model, registration number, tax disc details and MOT test number for the car. Any honest seller will be more than happy to oblige. You can then use the DVLA’s online vehicle enquiry service to check if the details you’ve been sent match their records. You can also check that the MOT history matches and the MOT is up to date. You don’t have to leave anything to chance when checking out the history of a second hand car.

When Viewing a Second Hand Car

Always go to see the vehicle in daylight and avoid viewing in bad weather. Darkness and rain will make it more difficult to see scratches, chipped paintwork and other imperfections. Ask the seller if you can see the V5C vehicle registration certificate. It should have a DVL watermark and the details should match those you were given by the seller. It’s also a good idea to check the vehicle identification number and the engine number, and make sure that these match the details you received earlier.

Always Test Drive

It’s essential to take a vehicle that you’re considering buying for a test drive. Your trip should take around fifteen minutes and cover different types of road, fast and slow, and include corners and roundabouts. Check that the car’s features work and watch out for unexpected noises or vibrations as these could indicate a significant fault in the car’s inner workings. Once you’ve test driven and feel confident about the vehicle, don’t be afraid to haggle with the seller. You should set your budget and refuse to pay outside of that. If the seller won’t be flexible on price and is asking for an amount outside of your budget, remember that there are plenty more second hand cars on the market!

How to Avoid Life’s Financial Pitfalls

Perhaps for the more wealthy and affluent amongst us, the financial problems of today are not too disconcerting. But for the vast majority of ordinary citizens, money matters. Particularly when it comes to attaining significant financial goals – buying a home or owning a car  – setbacks such as major credit card debt do tend to stand in the way of complete peace of mind and financial security. Here’s how to avoid the pitfalls.

Work off that Credit Card Debt

Credit card debts are a large part of why the world is in the position it is in at the moment, financially speaking. So for two or three months, stop using your credit cards completely (or as much as possible) and begin paying only the minimums on them. Doing this will enable you to grasp the concept of only living off what you are actually earning. Once you have begun to live within your means, you can then think about paying off the debt on the card with the highest interest rate. Once you’ve managed to pay it off entirely, start on the card with the second highest rate.

Reduce the Cost of Your Vehicle

Vehicles are one of the biggest ongoing costs, but there are still ways to save money on them. Insurance is a killer, so look absolutely everywhere to ensure that you are getting the best deal possible. Shopping around for the cheapest gas will save you money in the longterm, as will looking after your car. There are even mobile apps which tell you where the cheapest fuel in your area is.

Invest in Income Protection Insurance

Most people over a certain age will have life and car insurance, but what happens to your financial stability if unforeseen circumstances make it impossible for you to work? Not everybody can afford to take time off when they become ill or worse – have a serious accident at work. Investing in income protection insurance from a recognised firm such as Active Brokers, will ensure that you’ll always be financially stable, even when you aren’t working.

Give Yourself a Chance

Most average earners will experience money problems at some point in their life. Fortunately though, none of these issues are unsolvable. By working off your outstanding debts, reducing the cost of your vehicles and investing in income protection insurance, you stand a far better chance of avoiding the financial pitfalls of today.

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