Tonight’s posting comes to us as My Money Blog’s 3rd guest post by Alban. To read his previous guest posts, click on either of the two links shown below.

5 Essential Financial Products Most People Need

Most if not all have graced the cover of a fashion magazine, most do tremendous work for charity and most can be seen strutting down a catwalk wearing nothing more than some strategically placed glitter; but now men who can’t have them and women who can’t be them have even more reason to be jealous because we’ve compiled the Top 10 Highest Paid Supermodels of 2010

1. Gisele Bundchen –

Born in the town of Tres de Maio (which translates to 3 of 5) this Brazilian bombshell is the highest paid supermodel of 2010. Earning a loco $25 million (20m Euro) this year and estimated to have a $70 million fortune it’s the fact that she could sell out a stadium quicker than the Brazilian soccer team that has her in the number 1 spot again. Her latest endeavour sees her teaming up with Apple to promote their new Macintosh line…which gets me excited to say “I can have Gisele Bundchen on my Dashboard anytime I want!”

2. Heidi Klum –

Gutentaaaaaag Heidi! Dis German Frauline hash bin making ush say “Wunderbar” since 1992. Furst appearing in da Sports Illustrated Swimsuit she den became vun of Victoria’s secret angels and now lives with a Seal and 4 seal cubs. Last year Heidi ish making a whopping $16 million (13M Euro – shizer! That’s a lot of Deutschmarks), which equals a lot of frankfurters yuh. Heidi vee vud never say Auf Wiedersehen to you.

3. Kate Moss –

Major respect must be given to Kate for staying alive this year to make it onto this list. Known for her wild lifestyle and boyfriends to match, Kate could have probably been in the top spot if only drugs weren’t so addictive. Despite losing several major contracts with sponsors when a photo of her snorting “a mysterious white powder” emerged, Kate still managed to make an enviable $8.5 million (6.5m Euro) in 2010.

4. Adriana Lima –

They sure know how to make very beautiful women in Brazil. We’re sure even the man upstairs doesn’t mind when she comes out for Victoria’s Secret wearing high heels and some oversized wings made of feathers and sequins. All that praying earned her a tidy $8 million (6m Euro) in 2010 and I might take this opportunity to thank the great bearded one in the sky not just for the ladies on this list but for all budding supermodels everywhere. Amen.

5. Doutzen Kroes (pronounced Dow-tzen Crew-s) –

I’d never heard of her either but this gorgeous Dutch clog made $6 million (5m Euro) in 2010 to come in 5th in this year’s list. Showing she has brains as well as beauty she sent the paparazzi photos of herself to get noticed and boy did they take notice. Her wax model in Amsterdam’s Madame Tussaud’s requires daily cleaning from all the cookie crumbs and drool that is left behind from visitors and it is reported Van Gogh cut off his ear off after she called their relationship quits (which is understandable).

6. Alessandra Ambrosio –

Whattaya know another Brazilian makes the list. As my personal favourite Alessandra stays in such good shape with a daily routine of what she calls the “Brazilian Butt Lift”. Ladies pay attention. It is a mixture of aerobics, samba and the Brazilian martial art Capoeira. It is this formula that had her back on the catwalk 3 months after giving birth. Though it was not all peaches and cream for Ambrosio; at 11 she had surgery to have her ears pinned back, which has left more than physical scars. She now cries into the $6 million (4.9m Euro) she made in 2010.

7. Natalia Vodianova –

This Russian born Lolita came from a less than lavish lifestyle and currently uses her global status to help construct playgrounds for children in Russia. While being hot enough, Vodianova wasn’t good enough to make the professional Tennis Tour (see Top 5 Female Russian Tennis Players) and turned to modeling. Her father walked out on the family when Natalia was a toddler and surprisingly came back into her life once she became famous. Natalia now attributes her model figure to a diet of vodka and caviar, which her annual earnings of $5.5 million (4.4M Euro) allows for.

8. Daria Werbowy –

Polish born but residing in Canada, Daria has had a stellar career but is already contemplating life after modelling. Werbowy is choosing rather to sail around the world, despite the lure of a star on Canada’s Walk of Fame along the likes of “The Great One” Wayne Gretsky and Celine Dion (how could you say no) and fulfil her lifelong dream. While Linda Evangelista would only make $3.65 million for waking up every day ($10,000 x 365) Daria earned $12,329 a day raking in $4.5 million (3.6M Euro). Enough to make you think twice about chucking a sicky.

9. Miranda Kerr –

Australia’s own dimpled girl next door is so nice she gives part of her hard earned $3 million (2.2m Euro) to Australian bush fire appeals (probably in case she gets so hot that she starts one!) She’s posed naked to attract attention for Koala’s and claims to be a practicing Buddhist. Already replacing Gisele for a major lingerie label contract, I won’t say a bad word about her and we won’t be surprised if Miranda is in the top half of this list very soon.

10. Carolyn Murphy –

Making a healthy $3 million (2.3m Euro) and being the only American on the list, at 36, Carolyn’s been in the modelling game for a long time. Carolyn is predominantly known for her work with cosmetic company Estee Lauder due to her ageless beauty and less for her marriage to Eddie, which ended after he made Holy Man (smart move on her behalf we think).

And that rounds off this year’s list. So what can we make of this bevy of beauties? For one Brazil is looking like a great place to travel and two, Victoria’s “secret” is where the hell she is finding these women! And remember, you read it on the Internet…so it must be true.

Alban writes about personal finance, he also helps people to compare home loans. Please click on his website for more information.

Note: If your tastes are more basic, and you just want something for teleconferencing, I use the service at the link below, FreeConference. It has a nice interface for conducting teleconferences, but you have to pay to use the desktop sharing feature.

After receiving several requests/suggestions for apparel and accessories for people wanting to show their support for my blog, I finally had some time to create the items available from CafePress at the link below.

My Money Blog Apparel and Accessories Store

In addition, I’ve created a My Money Blog Store page on the home site of this blog for you all’s easy access. On this page, you can view pictures of each of the items available.

Enjoy and keep on learning! 

During a recent extended weekend vacation, I had the pleasure of reading another masterful financial literary work by David Bach. The book was titled, Fight For Your Money.

The book is great because it is nicely divided in to chapters, based on different financial “hurdles” that a person can, and probably will face in life. Examples of the topics are shown below:

• Cars
• Banking
• Credit
• Family
• Health
• Home
• Retirement
• Shopping
• Taxes
• TV and Phones
• Travel

For each of these topics, David then proceeds to discuss potential ways that people (you included) have or could be ripped off.

One of the most compelling sections of this book is about ways to save money on rental cars. I liked the content so much that I wanted to share combined advice from David’s book, and my personal experiences in an effort so everyone can benefit.

For the sake of analysis in this post, I am going to assume two scenarios of renting a car – Scenario 1) Renting a full-size car for 2 days during the workweek – June 29 through July 1st, 2010, in Richmond, VA, Scenario 2) Renting a full-size car for 2 days during the weekend – July 10-12, 2010, in Richmond, VA.

• Tip # 1 – Shopping Around

The first bit of advice that Bach offers is that prices can vary greatly between the different rental car companies.

My favorite website for doing this comparison is Kayak.com. At this site, you can type in exactly what type of car you want, and it automatically not only gives you results from Kayak’s search engine, but also pops up search results for priceline.com, hotwire.com, travelocity.com, and expedia.com. Amazing right!? Another great place to compare rates online for different rental carriers is CarRentals.com.

Another tip that David presents to us is the idea of making sure not to overlook the smaller, regional rental car companies. Names of these companies are listed below.

• ACE
• Advantage
• Fox
• Triangle
• U-haul 

Often, these companies will be able to match, or beat, the rental rates of the national chains.

The rental rates for Scenario 1 for several different companies are listed below.

Scenario 1
Enterprise – $105
Budget – $110
Hertz – $113
Ace – $118

As you can see, there is a slight difference in rental rates. Clearly, this difference wouldn’t make that much of a difference for just two days, but if you were to rent for longer, the price differential would be even greater (because the rental rates are per day).

Enterprise is the cheapest, followed by Budget. It is interesting to note that in this instance, the smaller rental company was actually much more expensive. Interesting!

• Tip #2 – Negotiating and Asking for Discounts

Another great piece of advice that David instills in us while reading his book is the power of simply remembering to 1) find and 2) ask for a discount.

Finding Discounts
For example, many of the most company organizations that we belong to today (AARP, Sam’s Club, AAA, Costco, gyms, and even certain companies) offer discounts on many different types of service. Usually, rental cars are included! So, be sure to ask about what discounts you can get. This goes for hotel rooms as well!

In addition to these discount offers, rental cars publish discount coupons on consumer discount websites such as Rental Codes and Rental Car Momma

Asking for Discounts
In addition to the already published offers discussed above, you should always remember to ask “are you all having any specials currently?” After all, the worst they can say is “no” right?

Another trick to use here is that after you have used a site like kayak.com to find the cheapest rental car rate, you should call the actual rental car store where you will rent from and ask, “can you give me a better rate than the website?” Many times, they will!

• Tip #3 – Renting on the Weekend

Since a large majority of the business that rental car companies get is from business travelers, they can generally charge a higher price during the week vs. the weekend. As individuals, we need to take advantage of this price differential by making every possible effort to rent on the weekend.

Listed below are the rental rates from several different companies in Scenario 2. As you can see, the rates are ~50% cheaper. Awesome!

Scenario 2
Budget – $57 (a 45% price reduction from renting during the week)
Hertz – $60
Ace – $118

This is consistent with what I have experienced as well. In a recent trip, the rental rates from Enterprise for a full size rental car were $25/day on the weekend and $59/day during the week.

• Tip # 4 – Avoid Renting at the Airport

Similarly, since demand for rental cars is higher at airports, the rental car companies charge more if you rent from these locations.

Because of this, you should always do a cost analysis to compare how much more you will pay for the convenience of renting directly from the airport. Many times (if you will be renting for more than 2 days), it will be a lot cheaper to rent from a nearby location, and then simply take a taxi to the airport.

If we perform the exact same rental car search on kayak.com from Scenario 2 above, except that we change the rental location to the airport, the results become as follows:

Scenario 2 @ the airport
Dollar – $68 (~20% increase in price from renting at a neighborhood location)
Alamo – $73
Hertz – $107

• Tip #5 – Avoid Dropping Off at a Different Location Than You Rented From


The privilege of being able to drop off the rental car at a location different from where you rented comes at a high cost.

Let’s take a look at what happens to the rental rates in Scenario 2 if we rent the car in Richmond, VA and drop it off in Baltimore, MD. The results are shown below.

Clearly, the prices vary significantly in this case, depending on which rental company you choose.

Scenario 2 w/ dropping off at a different location
Alamo – $212 (272% price increase from original Scenario 2 rate – crazy!)
National – $302

These prices are even higher than what I have experienced. In a recent trip where I rented from Enterprise, they were charging a flat $75 car drop off charge for returning the car to a location different from where it was rented.

• Tip # 6 – Avoid Buying the Insurance Coverage They Offer

This topic is extensive, and will be covered in a future post.

However, the short answer, is that most people DO NOT need to buy the coverage offered.

• Tip # 7 – Fill Up With Gas Before Returning the Car, gas 2.60 – they offer 3.90

A very easy way to get ripped off when renting a car is to forget to fill up the car’s tank with gas before returning it.

For example, when I recently rented a car from Enterprise, the going rate for gas at gas stations was $2.60/gal. However, the rate being charged for Enterprise to fill up the tank was $3.90/gal (a 50% increase in price).

In plain English, for a 16 gallon gas tank, this would mean that you would pay Enterprise $63 to fill up the tank, but you could do it yourself for just $42.

I hope these tips will be useful and you can bring a printout of this post with you next time you go to rent a car. I know I will!

In the recent posting series about formulating and implementing an investment strategy that suits your individual situation (see link below for more information), I described in detail the specific, individual index mutual funds that can be used to make up both the equity and fixed income portions of your investment portfolio.

However, in recent years, a different type of combined fund has been developed that is essentially a “fund of funds.” Other names for these types of mutual funds include Target Retirement Funds, Balanced Funds, and Lifestyle Funds.

These mutual funds can be either actively or passively managed, and can contain equity or fixed income investment funds (or a mix of both).

Because of the multifaceted component mix, these Balanced Funds have gathered a big following among investors who want to keep their investing simple by using only one mutual fund.

However, are these funds truly a good option for investors to use? This topic will be the center of discussion in this posting.

According to Larry Swedroe’s book, The Only Guide to a Winning Investment Strategy You’ll Ever Need, the following case can be made for avoiding Balanced, or Lifestyle Funds.

Essentially, the reason that Balanced Funds produce lower returns is that since almost all of these funds are made up of a mix of fixed income and equity investments, one of types of investments is always going to be held in a tax-inefficient location.

Note: Refer to previous post at link below for most tax-efficient locations of different types of mutual funds.

My Money Blog – Tax Efficient Locations for Different Asset Classes

For example, if the Balanced Fund is held in a tax-sheltered account:

-The fixed income mutual funds are being held in a tax-efficient manor. So, this is a good thing.

-However, the equity investments are not being used in the most efficient way due to the following considerations:

• You lose the ability to use losses to minimize your tax liability.

• You lose the ability to use your equity assets for charitable contributions.

• You lose the ability to collect losses at the individual asset class level (in the normal case that one type of asset performs better than others at different times).

• You lose the ability to use foreign tax credits generated from international holdings, which reduce your total tax burden.

So, the key takeaways from this post are shown below –

• Individual investors should take advantage of the ability to hold different types of mutual funds in tax deferred and taxable accounts (see link of location suggested), and should therefore, avoid Balanced Funds containing multiple asset class investment instruments.

• The only time that Balanced Funds should be used is when you know that you absolutely DO NOT have the ability to invest or stick to your investment strategy unless you use this type of instrument.

Keep on learning!

For each of the three categories above, list out the specific % ranges that you will allow price fluctuations to occur before you rebalance your portfolio. 

The recommended rule to follow for figuring out when to rebalance is the 5% rule. This means that you should rebalance when price fluctuations cause the current % allocation of an investment category to be greater than +/- 5% off of your target allocation.

For example – 

Once you have listed the information in Step 6 and 7, you have now created your Investment Policy Statement! Congratulations! The link below shows the Investment Policy Statement I have created.

Step 8 – Monthly Review 

Next, you will want to put a reminder on your calendar to review your Investment Strategy/Policy statement above each month in order to track your asset allocation percentages, and make adjustments as needed.

The page where I post my monthly portfolio review can be accessed at the link below. 

My Money Blog – Monthly Portfolio Review

Along with the monthly review, you will want to place a reminder on your calendar to go through Steps 1-9 one time per year to make see if your cash needs, risk tolerance, or financial situation has changed significantly enough to warrant adjustments in your investment strategy.

In Part 4 of this series, you were able to determine the %’s of international and US domestic investments that will make up the equity portion of your investment portfolio.

In this, Part 5, of this series, we will take a look at how funds should be further divided up within these broad domestic and international equity categories. 

Note: The numbers/strategy shown below is a mesh of the advice of the four books (all of which I would highly recommend reading) show below:

Additionally, the % breakdowns in the table correspond to a 70% domestic / 30% international split for the equity portion of your portfolio. Depending on the results that you were most comfortable with in Part 4, the %’s may need to be adjusted slightly.

The table below shows the recommended breakdown and categories of mutual fund investments needed to make up the domestic portion of your equity portfolio. I have also, for your convenience, listed the corresponding Vanguard index mutual funds that can be bought for your portfolio if you choose.

To find the overall percentages of your portfolio that each fund should contribute, simply multiply your overal equity allocation % (70% in this example) by the % allocation of the equity portion of your portfolio. This multiplication can be done to all of the funds with the exception of the REIT portion, which needs to make up 10-15% of your overall portfolio, increasing as you age.

The table below shows the recommended components to make up the international portion of your equity portfolio, based on a 30% international / 70% domestic equity split. It should be noted that in several of the books I referenced above, they suggest purchasing Large cap value, small cap, and small cap value international funds as well.

However, since these funds are not readily accessible through Fidelity and Vanguard, I avoid them (they are only available through DFA Fund Advisors).

In place of these categories, I use a Total International Stock Fund offered with low management fees through Vanguard.

You now have all of the technical tools needed to create your investment strategy. In Part 6 of this series, we will walk through putting all of the pieces together and finalizing your strategy!