The Barefoot Brownlow

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Welcome to the Barefoot Brownlow, the annual awards celebrating the very best financial deals currently on the market.

Because of complaints from certain sections of the public, this year we’ve decided not to continue Dipper’s Best Tax Minimization Strategy Award, Ricky Nixon’s Negatively Geared St Kilda Development Award, or Warrick Capper’s Sleaziest Gold Coast Timeshare Investment Award. And I think we’ll all be financially better off for that.

Instead, we’ve scoured the financial world to uncover the best deals on offer. So let’s unveil the winners that could end up saving you thousands.

The Sam Newman Superannuation Award

This award is dutifully presented by Sam – a man who embodies the Baby Boomer ethos of refusing to accept his Seniors Card (despite being 66).

With super, there are only three things you can control: how much you put in, the asset class you invest in, and the fees you pay. The first two depend on how far you are from hanging up the boots, so let’s focus on the fees.

A study this week found that the most heavily hyped retail super funds are also the heaviest hitters when it comes to fees. They’ve delivered the worst returns on average over 14 years because of excessive fees. The study clearly shows that not-for-profit funds, by offering lower costs, deliver higher returns (average 6.3 per cent versus 3.66 for retail funds).

So ring your fund and ask how much you’re being stung each year.

Chris Judd’s Mojo Money Award

When you look up ‘dependable’ in the dictionary, there’s a photo of Kevin Rudd (only joking). As any Carlton fan will tell you, it’s Chris Judd.

The first step on the Barefoot path is to sock $2,000 into a high-interest online savings account to get that dependability. Here are the best offers on the market right now:

• UBank – 6.51% with $200 a month direct debit (otherwise 6.01%)
• Rabodirect Savings – 6.51% for 4 months (then 6.00%)

But remember, these are variable. If you want to lock your money away, the best deal is Suncorp’s 12-month term deposit, paying 5.85% annually.

Brendan Fevola Credit Card Award

Brendan was set to deliver this award, but he still hasn’t made it to our venue at the Crown Palladium. I’m sure he knows the address, so let’s hope he gets here soon.

In any event, he’s has had quite a lot of luck with credit, or so he tells us. Let’s look at the best deals:

The best no-frills cards are the MECU credit card (13.74% interest, no annual fee, 55 days interest free) and the Bankwest Zero MasterCard (16.99% interest, no annual fee, 55 days interest free).

If you want to be a rate tart, you can choose a zero per cent balance transfer deal. The best on the market right now is the Coles Group Source Mastercard – $0 annual fee, 0% per cent for 6 months. (But beware, for any additional purchase you are slugged 20.49%.)

But at the Barefoot Investor we believe the best credit card award should really go to a debit card. Cash is king.

Dermott Brereton Hall of Ferrari Fame

This is the inaugural award for Dermott. Younger readers will perhaps only recognise Dermie as the ‘dude who looks increasingly like Shane Warne’, but back in the olden days (the 1980s) he was known for driving fast cars.

Barefoot has always lived by the motto ‘buy the cheapest car your ego can afford’. In Dermott’s case, that was a big, bright Ferrari.

Bearing in mind the Barefoot rule of thumb is that your car should be worth less than half your annual income, here are the three best ways to finance a car:

Mark Harvey’s Income Protection Award

Like a lot of young cashed-up professionals, Mark Harvey never really put much thought into insurance. But he’s since come around to the wonders of income protection.

So here’s what you need – and how to avoid it costing more than a meat pie and a beer at the MCG.

Most Aussies don’t insure their most important financial free kick: their income. So, call your (low-cost, not-for-profit) superannuation fund and ask them what income protection (or ‘salary continuance’) insurance options they offer.

While you’re on the phone, ask them what you’re covered for if you can never work again (total permanent disability insurance), and about life cover, which should be worth about 10 times your annual salary if you have the triple Ms (marriage, mortgage and midgets). Eighteen Aussie families a day loses a parent – and they never thought it would happen to them either.

Jason Akermanis Smart Mortgage Award

Jason will be presenting this award to CHOICE partner ‘One Big Switch’. Just like Jason, One Big Switch has garnered a lot of attention by making boastful claims … but when you scratch the surface it’s one big confused, self-serving mess.

The program has not only attracted 40,000 punters to sign up, but it’s also managed to shred the cred of CHOICE (which now take kickbacks from lenders). This week the group announced its latest offer: a hobbled-together bunch of second-tier lenders who promise ‘discounts off their standard variable rate’.

Smart Barefooters know that anyone spruiking ‘interest rate discounts’ is only telling half the story. You need to look at the total cost of the loan, which includes fees, charges and other creepy-crawlies.

Final tip: if you really want to save tens of thousands, and take years off your mortgage, the ultimate Barefoot Brownlow should go to the mortgage rebate brokers.

Well at least the ones who will rebate the kickbacks they receive straight to you. A far cry from the millions of dollars in sneaky sales payments that One Big Switch and independent (cough, cough) consumer champion CHOICE are pocketing.

And there’s the Barefoot Brownlows for 2011. Regardless of who wins this weekend, these picks are guaranteed to pay.

Tread Your Own Path!



Photo: http://www.flickr.com/photos/sufw/5917585651/

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Barefoot also recommends:

1. Barefoot Reader Mailbag
2. Test Your Money Skills with the Barefoot Quiz
3. Three Steps to Master Your Mortgage
4. Commonwealth Bank – Barefoot Bluechips
5. Scott Responses to Some Barefoot Questions