Debt 
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comments

How to Fight Debt Collectors

List of Credit Card Debt This guide is designed to equip you with the information you need to fight debt collectors attempting to collect personal, family, and household debts. This does not cover business debts.

Debt collectors buy old debts from companies or lenders for pennies on the dollar. For them, it’s a business transaction. They are doing whatever they can to get you to pay the debt. They’re facing increased regulation because many have used intimidation tactics such as yelling and insulting their targets. They’ve often blatantly lied or otherwise deceived their targets. They’re often run into cases of mistaken identity and continue to harass the wrong parties. Many debt collectors are not nice people because they operate in an environment where they are often treated in the same way, though that shouldn’t excuse their behavior.

(Click to continue reading…)


 Reviews 
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Review: Stay Healthy, Live Longer, Spend Wisely by Davis Liu

Stay Healthy, Live Longer, Spend Wisely by Davis LiuOne of the great paradoxes of our nation is that we spend far more, by a great margin, than any other country on healthcare yet we don’t live the longest. According to a report from the NCHC [PDF], which was based on other research, we spent $2.3 trillion on health care in 2007 or about $7600 per person. (that article lists a lot of other sobering statistics).

Part of the reason is because the system is so complicated and convoluted. When a doctor orders a battery of exams, it he or she motivated by expertise, fear, or greed? Is the test what is actually needed because the doctor needs to rule out a particular condition, or does the doctor fear malpractice suits so he orders every possible exam, or does the doctor need to up his pay this month because he has a vacation soon? While I’d say that most medical practitioners operate out of expertise, there is a subset that operates, if only sometimes, in the other two groups too.

That’s where Stay Healthy, Live Longer, Spend Wisely by Davis Liu comes in. It’s a guide to help you navigate the complexities and vagaries of the American healthcare system.

About Dr. Liu

Who is Dr. Davis Liu? He’s a board-certified family physician with the Permanente Medical Group in Northern California, graduate summa cum laude and Phi Beta Kappa from the Wharton School of Business and the University of Connecticut School of Medicine and has written several opinion pieces that have appear in the San Francisco Chronicle and the Sacramento Bee.

Do Your Homework, Question Everything, Pay Nothing (At First)

That’s the subheading of a section in which Dr. Liu explains how you can be a smarter consumer of medical care, specifically with respect to the billing process. He tells one story about his brother who saw a general practitioner and specialist for a throat issue. His brother confirmed with the insurance company that the visits would be covered yet was billed anyway. Fortunately, due to diligent note taking which included which representatives they spoke to, the issue was resolved and the brother didn’t have to pay anything.

The lesson here is that you should question everything, since most medical bills contain errors, and confirm with the insurance company as to whether something is covered (unless it’s a true medical emergency).

The book has a lot more in it than I explained so here’s a listing of what’s included in each of the eight parts:

  1. The Most Important Policy You Will Ever Own: This part discusses health insurance in general from how much coverage you need to what an HSA is, from COBRA to health care costs.
  2. Mastering the Ten-Minute Doctor Office Visit: Every aspect of a typical visit with a physician is covered including how to be a “wise patient,” versus a typical one. It stresses the importance of knowing your medical history and making each visit count.
  3. Do the Right Thing Regularly and Repeatedly: This part stresses the importance of routine checkups and preventative medicine, such as routine screening, immunizations, and age specific checks.
  4. Meet Your Medical Team: Any and every medical professional you’ll meet is discussed in this chapter along with anything you may need to know about their profession. Do you know what a Rheumatologist or a Nephrologist or a Ophthalmologist is? If you said you did and you’re not one, you’re probably lying. :)
  5. The Truth About Medications: It’s hardly a hard hitting expose on branded medicines but he discusses branded vs. generic (and points out studies of the placebo effect, a topic discussed in Predictably Irrational too) and even goes through over the counter drugs.
  6. Caveat Emptor, Or “Let the Buyer Beware”: This section talks about all the unproven, untested remedies from body scans to herbal remedies. He’s a little apprehensive about them but does recognize that some provide benefits.
  7. Twenty-First Century Medical Care: Dr. Liu is looking forward in this chapter, looking at new and different techniques that may play a larger role in medicine in the future.
  8. Take Control: Excellent Health Pays: In this last part, he talks about how you can be proactive about your health such as using the internet for research (which can be counter productive, depending on your mentality) and being active.

Stay Healthy, Live Longer, Spend Wisely is far more comprehensive than I gave it credit for when I first opened it. I expected a book that discusses health insurance, government plans like HSAs and FSAs, and medical expense related ideas but this one really went above and beyond that. The sections discussing all the specialists, the various medications, and even looking to the future of medicine was a nice bonus. Another nice bonus was Dr. Liu’s style, I can see why he would be asked to write opinion pieces in the newspaper because he has a very easy style that likely translates into a comforting bedside manner.

If the whole world of medicine intimidates you, this book can help by giving you a good basic understanding of the whole breadth of the medical world.


 General 
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comments

WIN: I Love The Olympics

9500000 pesos: First Philippine Olympic GoldCNN reported that the Philippine government has offered 9.5 million pesos to any athlete who brings home their first-ever Olympic gold medal. The government ponied up the first five mil and private businesses kicked up the remaining. According to Wikipedia, there are 15 competitors in 8 sports in the 2008 Games and their chances look as good as they did the last two games where they blanked on medals in Sydney and Athens.

2.0 billion yuan spent on China Olympic TeamAccording to The Epoch Times, China spent approximately 2.0 billion yuan (~$292 million USD) on its delegation across the four years of preparation. China has 639 competitors in the Beijing Games, putting the cost of each competitor at about half a million dollars over four years.

$100000000 Opening Ceremony CostAccording to NPR, the opening ceremony of the 2008 Beijing Summer Olympics cost about $100 million. That makes it about half a million per minute ($476k) and about eight grand spent each second. Absolutely AMAZING.

Finally, Beijing National Stadium, also known as the Bird’s Nest, cost an estimated 4 billion yuan, or about half a billion US dollars according to Wikipedia.

And absolutely no mention of Michael Phelps and 8. Well, until I mentioned that I didn’t mention it. :)


 Your Take 
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comments

Your Take: Will Your Frugal Fuel Changes Stick?

Gas PricesThe price of gas has dropped by a significant amount the last month or so (though a barrel of oil popped up $6 yesterday!), we might be looking at the beginning of oil slipping out of the stratosphere (could be lowered demand, could be speculators running for the exits, who knows!?). This begs the question, will all of our energy consumption habit changes stick?

Whenever people think of high fuel prices, they think back to the energy crisis of the 70s. One big difference between this last energy crisis and the 70s was that in the 70s, there was rationing. If you wanted fuel, you couldn’t necessarily get any. In the energy crisis today, and I loathe to even call it a crisis, you can buy gasoline anytime you wanted to. It might have been close to four dollars a gallon but you didn’t have to wait in lines or wait for the right day to buy. I think that’s a huge difference.

Here’s the scary part. The last energy crisis should’ve been a wake up call … but we hit the snooze button. Here we are, dealing with our reliance on oil, and there’s nothing that says our changes and the presidential campaign rhetoric this will result in action. I never lived through the last energy crisis but the stories I’ve read show a time when that crisis had a greater impact on one’s life.

As a naturally frugal person, I didn’t make many changes to my life to conserve energy. I’ve always had an eye on the recurring costs of things like my car, so I’ve never had a gas guzzler. I own a Toyota Celica and my first car was an Acura Integra, both are efficient with fuel. I try to use as little energy as possible, even before electricity prices spiked dramatically in Maryland, simply because I didn’t want to pay for something I didn’t need to. Let’s be honest, I need the money more than the power company!

So I’m fairly confident that any changes I have made will stick because they’ve been so tightly integrated, I feel as though I never changed in the first place! How about you?

(Photo: notjake13)


 General 
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comments

How Much Is An Olympic Medal Worth?

2008 Beijing OlympicsIf you ask an Olympian, the answer is that the medal is priceless.

If you ask the governments of countries, the answer is in the millions.

If you ask someone who is interested only in the precious metals in the medals, the answer is a little more pedestrian.

While the gold, silver, and bronze medals of each Olympiad are unique in their design, the IOC has minimum standards for medal composition. The Beijing medals are 70mm in diameter and 6mm in thickness, which is 10mm wider and 3mm thicker than IOC requirements. The IOC requires that the gold medal be made of pure silver and gilded with at least 6 grams of gold. They also have a fair amount of jade integrated into the design. Since there are no reports as to the actual composition of the medal, with respect to jade versus the precious medals, for simplicity I’ll assume the medals are 700mm x 6mm of 92.5% silver and six grams of gold (for gold, and 100% silver for silver). It’s a bit inaccurate but I think we can make do!

Six grams of gold is worth approximately $160 at average prices today and the other 92.5% of the silver is worth at about $60, again assuming average prices. A total price for the gold at $220 puts it higher than previous years in sheer previous metal values.

Or we could cheat and read reports on China spending $1.24M on the six thousand medals, making them an average of $206.66 each. Telegraph.co.uk priced the cost of a gold medal at $393 though this probably includes design, manufacturing and shipping. Compare this to Athens in 2000 when each medal cost $155 and you see how much of an impact gold prices have been.

So pretty!

2008 Beijing Olympic Medals: Front w. Ribbon

2008 Beijing Olympic Medals: Back w. Ribbon

Medals of Beijing Olympic Games unveiled (with detailed photos of the medals) [Beijing 2008]


 Insurance 
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7 Deadly Sins of Personal Finance: Get Adequate Insurance

7 Deadly Sins of Personal FinanceWe’ve made it through four of the seven deadly sins of personal finance and touched on many good topics so far. The first few were easy – have an emergency fund, don’t raid your retirement, budget, and plan and project for the future. We’re starting to get into a bit of the hazier areas of personal finance, where the answers are quite so clear cut and where much of it depends on you and your specific situation. You could argue that failing to budget isn’t so bad a sin, the reality is that math will do the budgeting for you if you decide you don’t want to. When you run out of money, you’ve hit your budget. :)

I doubt anyone can argue against today’s deadly sin…

Being Improperly Insured

The reality is that insurance is a very difficult subject to tackle because it provides you protection against the unknown. Since you’re protecting against the unknown, it’s difficult to know how much protection you’ll actually need. Insurance is also very temporal. When you pay the premium for the month or the year, that protection is gone once the insured period passes. I’ve been driving for nearly five years and never once made a claim. That’s five years of auto insurance premiums gone. (I’m not complaining, I consider myself very lucky!)

But you can’t look at insurance that way and many people do. Insurance is a hedge against unknown events that could potentially bankrupt you and it’s a way for you to purchase peace of mind. So, how do you ensure you have the right amount of insurance? How do you avoid getting too much coverage or too little? Sadly, it’s mostly a judgment call but here’s how I approach it.

My approach towards insurance is that it should protect against catastrophic events. Not everyone is like that and that’s certainly not the “right” or “best” way to approach it, I don’t know what the “right” or “best” way is (or if there even is one). My tolerance of risk is such that I’m comfortable with assuming some self-insurance (high deductibles) in order to pay lower premiums.

How should you approach it? I can’t answer that other than to say that you have several factors that will affect how you adjust your coverages and deductibles:

  • Assess your financial situation. If you have a fully funded emergency fund, consider increasing it and self-insuring through higher deductibles. If your current automobile insurance has a deductible of $500, increase it to $1000 and put the premium savings into your emergency fund. If you work in a volatile industry or have irregular income, consider adjusting your insurance so that any negative events don’t cause extreme financial distress.
  • Known your own “riskiness.” If you’re a bad driver who is prone to accidents or mishaps, lower your deductible. There’s no sense in being prideful and making the wrong financial decision by increasing deductibles or removing certain coverages. If you live in a dangerous neighborhood, lower your homeowners deductible so that you’re better covered in the event of a break-in or fire.
  • Know the statistics. Some cars are burglarized more than others, some neighborhoods are rougher than others, and some ethnicities are more prone to some medical problems. Be aware of these statistics, many of which can be found online, and use them to adjust your coverages.
  • Your tolerance towards risk. If peace of mind is priceless to you, adjust your insurances so that you obtain that. You can’t quantify stress and all we know about its effects are that it’s bad on the body. Paying a few extra dollars so you can sleep better at night and prevent a few gray hairs is money well spent. Frugality is important but your health is more important.

I’m sure there are actuaries who know insurance backwards and forwards who would disagree with me, if you are such an actuary I invite you to let us know what you think.


 Devil's Advocate 
7
comments

Don’t Invest In What You Know

Devils Advocate Logo
This is a Devil's Advocate post.

One of Peter Lynch’s most famed principles of investing is “Invest in what you know.”

I humbly disagree.

(Click to continue reading…)


 Career 
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comments

Stay Focused, Stay Balanced, Stay Healthy: My Thoughts

The following were my thoughts after Gary first sent me an email about his health and work-life balance, that email has been transformed into a two part article titled Stay Focused, Stay Balance, Stay Healthy (Part 1, Part 2).

When I first started working at my first company, there was a training class on Work-Life Balance and a panel of managers there to share their experience. The panel was quite diverse from an experience perspective, they varied in tenure from ten years to thirty and ran up and down the organizational charts. That’s when a well respected manager of 20-something years of service said to us – “I work forty hours a week, get the job done, and I don’t sacrifice my family, my life, or my health.” He said he left work at 5 PM every single day so that he could be home to see his daughters. This was his job, but this wasn’t his life.

His perspective hit us like a punch to the gut. Here we were, young bucks thinking that the company wanted hard charging workhorses to push sixty-plus hour weeks to get the job done. The reality is that you can get ahead if you do a good job and only work the standard forty hours most of the time (there will always be times when you need to work hard but that should be an exception, not the rule).

When Gary wrote me that story about his medical problems, that hit the same chord. Gary was on the work side of the work-life pendulum and it affected his health. When he tried to get back to a more balanced life, his employer probably thought he was shirking or past his prime. Perhaps he transitioned down too quickly. Whatever the case may be, he was outputting less and it affected his employer’s perception of him. But, when you’re forced through a battery of medical exams, it puts your life in perspective and I felt that perspective needed to have a voice.

You might think Gary has an axe to grind against his former employer. He doesn’t. We’ve traded nearly two dozen emails (at least!) and he never once mentioned being let go until that story. In fact, that part of the story surprised even me.

Whose fault is it? You might be surprised to hear that I think it’s my fault he was fired.

He writes about how the corporate mentality of today is to run a workhorse until they’re burned out and gone. This wasn’t the case when he first started because the employer-employee relationship has changed dramatically since then. I often write about how you aren’t dating your job and how you should look for a new job with more pay, more opportunity, or more responsibility and growth potential. Companies are forced to work their employees hard because there is little incentive to go slow and grow stars because those being groomed could easily jump ship in a heartbeat.

The moral of this tale?

If you don’t have work-life balance, you will have neither.

Thankfully Gary persevered, his health improved, and was able to share that story and the many more that will soon follow.


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