Obama care; for you or not?

This is Obama at the forum in Harrisburg in 2008. 

I was 5 feet away from him when I took this picture.

I was relaxing on my couch when an ad came over my radio. The man said if Ronald 
Reagan was President today, he would do away with Obama care. People just love 
to tell others what dead people will do to support their position. What is your 
position on Obama care? Do you have one? Well, I am going to give you my 
position.

I can care less about politicians. Yes, I think Obama and Reagan are nice men 
but politicians are all nice people. At least that is what they want you to 
believe. I focus on what these people are selling. Yes, they are selling you 
something in return for your vote. Obama at the beginning of his first term was 
selling Obama care. It is up to me to figure out if I need Obama care now or any 
time in the future.

Obama care is health insurance that protects you and your family against 
catastrophic loss.  When I was 21 years old, I had no health problems. For some 
reason, that is the way I thought my health would be the rest of my life. I did 
not want health care if I had to pay for it. I did not want my employer taking 
money and giving it to FICA. I never met FICA and did not know who FICA was.

But as I got older, I watched as my father’s health deteriorated. He died of 
cancer at age 57. I watched my mother develop a brain tumor then cancer. They 
were lucky. In the 1950s, 1960, and 1970s, most employers were happy to give 
employees and their family’s health insurance programs. But today, you find many 
people without health insurance. If my parents did not have health insurance, 
their medical bills would have wiped them out financially. My younger brother 
would be in serious trouble as the courts would have sold the family home out 
from under him. In the past 30 years, many people have recovered from life 
threatening illnesses, just to have to file for bankruptcy. With no job and no 
money they go into poverty. Some start living out of their car or under a 
bridge.

Do you know that health care will be your biggest expense when you get over 65 years old? People are lucky to have $250,000 saved up once they retire. That is not enough to live on let alone if you have some catastrophic illness that takes all your money. 

This is what Obama care is design to do, protect families against catastrophic 
loss in a family. Yes, you will have to pay on the front end of your life just 
like you do with car, accident, and life insurance; to make it easier on your 
family on the back end of your life or at your death.   Below is a link to 
“Facts on the Obama Health Care Plan. Double click it and read it.

 http://obamacarefacts.com/obamacare-facts.php

 
Obama Care Facts: Facts on the Obama Health Care Plan

Obama Care starts in October 2013.

Do You Really Know How to Buy a Car?

Most people concentrate on the sticker price of the car without giving much thought to the financing and “add on” features of the deal. The over all cost of your deal is what you should be looking at. This is a common blind spot that consumers have when buying cars and dealer know it.

In 1972, I bought my first new car at age 21. Being a computer programmer and over seeing the “Floor Plans” System for Union National Bank in Pittsburgh, I had a very good idea how much money the dealers where paying banks to keep the cars on the dealer’s lots. Going from dealership to dealership, I knew what inventories these dealers had. So taking advantage of me was not going to be easy. But like everyone else especially since I was young, they tried.

I found the car that I wanted from Dealer “A” but I went to Dealer “B” to buy the car. I told them how much I wanted to buy the car for. We agreed on a price that was lower than the sticker price. But the dealer thought that he was going to make up the difference on the interest rate of the loan and the “add on” options of the car. He started telling me how much the different options would cost me and I started telling him that the options he is talking about is already on the car. He quoted me an interest rate that his dealership would give me and I told him that I already have arrangements to buy my car using my bank.

Getting a loan was not like it is now. Up until 2008, a person could drop out of the shoot at the hospital and qualify for a loan. In my day, it did not matter if you had a good job or no job, at age 21 you needed a co-signer. My father co-signed for me. They offered me life insurance with the loan. In the event that something happened to the borrower, the loan would be paid off. But since the loan was in my father’s and my name, I took out the policy on my father.

Why? He was 55 at the time, smoked two or more packs a day and got about 3 hours of continuous sleep a day for 25 years. He worked 6 days a week from January to October. He worked 7 days a week from November to December for 25 years. Knowing the odds in 1972, he was at the end of his life span. He died less than 4 years later and the bank paid the car off and placed the car in my name. Some people called me all kinds of names because I was smart enough to know that Life Insurance is a gamble. You are betting that you will die and the company is betting that you will not. In most cases, I will not advise people to take out this option when buying a car because in most cases the odds are against you.

Below is a link to the article, “Biggest blind spot for car buyers? Financing” published by Zion’s Direct Online on September 29, 2011 written by Candice Choi.

http://think.zionsdirect.com/2011/09/29/biggest-blind-spot-for-car-buyers-financing/?m_source=ym_email&utm_medium=email&utm_content=article_3&utm_campaign=2011_10_05_newsletter

Me, disabled? No chance in ****?

But the chance of becoming disabled is higher than you probably think. According to the Council for Disability Awareness who says that you can ignore the problem, but it's hard to ignore the facts:

1. Almost one-third of Americans entering the work force today (3 in 10) will become disabled before they retire.

2. Freak accidents are NOT usually the culprit. Back injuries, cancer, heart disease and other illnesses cause the majority of long-term absences.

As I said many times before in my blogs and in my books, “Insurance is not an investment. It is protection against loss! That is loss of pay, loss of property, and loss of body parts.”

Are you prepared if it happens to you?

Probably not according to the Council for Disability Awareness. If you're like most Americans, you don't have disability insurance. Or you may not have enough emergency savings to last 2½ years. Yes, that’s the duration of the average long-term disability. Instead you probably have a large life insurance policy that will not help you if you become disabled.

Know your disability risk before you take it!

Most working Americans estimate that their own chances of experiencing a long term disability are substantially lower than the average worker’s. 64% of wage earners believe they have a 2% or less chance of being disabled for 3 months or more during their working career. The actual odds for a worker entering the workforce today are about 30%.

A. According to CDA’s 2010 Long-Term Disability Claims Review, the following are the leading causes of new disability claims in 2009:

o Musculoskeletal/connective tissue disorders caused 26.2% of new claims.

o Nervous System-Related disorders caused 13.7% of new claims.

o Cardiovascular/circulatory disorders caused 13.1% of new claims.

o Cancer was the 4th leading cause of new disability claims at 8.4%.

B. Cardiovascular/circulatory claims increased slightly in 2009 after three years of decline.

C. Accident-related claims dropped rather significantly as a cause of new disability claims from 10.7% in 2008 to 8.8% in 2009. This may be related to lifestyle changes, possibly driven by the economy.

D. Approximately 90% of disabilities are caused by illnesses rather than accidents.

In June of 2010, there were nearly 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits. Over 51 million Americans - 18% of the population - classify themselves as fully or partially disabled. 8 million disabled wage earners, over 5% of U.S. workers, were receiving Social Security Disability (SSDI) benefits at the conclusion of June, 2010.

A sample of factors that increase the risk of disability: Excess body weight, tobacco use, high risk activities or behaviors, chronic conditions such as; diabetes, high blood pressure, back pain, anxiety or depression, frequent alcohol consumption or substance abuse.

A sample of factors that decrease the risk of disability: Maintaining a healthy body weight, no tobacco use, healthy diet and sleep habits, regular exercise, moderate to no alcohol consumption, avoidance of high risk behaviors including substance abuse, maintaining a healthy stress level, and effective treatment of chronic health conditions.

Here is how you figure out the risk that you are taking.

To calculate your own Personal Disability Quotient, go to:

http://www.disabilitycanhappen.org/chances_disability/pdq.asp To learn more about risk factors and ways to help reduce your risk, go to:

http://www.disabilitycanhappen.org/reducing_chances/default.asp

When you take the risk and it does not work out. You take on a severe financial hardship.

1. 90% of wage earners rated their "ability to earn an income" as "valuable" or "very valuable" in helping them achieve long-term financial security — wage earners perceive their ability to earn an income as even more valuable than retirement savings, medical insurance, personal possessions, other forms of savings or their homes.

2. Medical problems contributed to 62% of all personal bankruptcies filed in the U.S. in 2007, a 49.6% increase over results from a similar 2001 study.

3. It is estimated that medical problems contributed to more than 500,000 personal bankruptcy filings in 2007.

4. Personal bankruptcy filings increased 32% from 2008-2009, 31% between 2007- 2008, and 38% from 2006-2007.

5. Medical problems contributed to half of all home foreclosure filings in 2006.

How long could you afford to be without a paycheck?

1. Do you spend more than you earn? 44% of U.S. families do.

2. Do you have private pension coverage? Most of us - over 50% - don't.

3. Retirement savings? One-third of us have none.

4. 60% of adult Americans have NO savings earmarked for emergencies.

5. 71% of Americans would find it very difficult or somewhat difficult to meet their current financial obligations if their next paycheck were delayed for one week.

6. 65% of working Americans say they could not cover normal living expenses even for a year if their employment income was lost; 38% could not pay their bills for more than 3 months.

7. Nearly nine in ten workers (86%) surveyed believe that people should plan in their 20’s or 30’s in case an income limiting disability should occur;

o Only half (50%) of all workers have actually planned for this possibility.

o Fewer than half (46%) have even discussed disability planning.

Relying on SSDI

A. 65% of initial SSDI claim applications were denied in 2009.

B. Can your family live on $1,065 a month? That's the average monthly benefit paid by Social Security Disability Insurance (SSDI) in June of 2010. 8% of SSDI recipients received less than $500 monthly. 52% received less than $1,000 per month. 97% received less than $2,000 per month.

C. The average SSDI monthly benefit payment was $1,190 for males, and $928 for females.

D. Less than 10% of disabling accidents and illnesses are work related. The other 90% are not, meaning Workers’ Compensation doesn’t cover them.

According to the Council for Disability Awareness, disability is already widespread in the U.S. and the risk is growing.

Here's what you can do to reduce your chances of becoming disabled.

Visit the CDA website for more information: http://www.disabilitycanhappen.org/

Darnell Reached a Mile Stone!

Darnell’s IRA Portfolio doubled in two years, two months, and 13 days. He started keeping track of his IRA on January 30, 2009 and it doubled on April 11, 2011. That was an investment time of 802 days giving 102.53 per cent.

“Year to Date” (YTD) Darnell's portfolio is out performing the Dow. This is a surprise to him because he thought that the recovery would have started by now and people would be spending more money causing profits of companies to rise. This in turn would cause demand for common stocks that would cause stock prices to rise. This would cause the Dow to rise. But this is not happening. The unemployment rate has fallen some but the amount of unemployment in the United States is staggering. The amount of unemployment around the world is far worse. Unemployment has caused civil unrest in Europe and governments are threatened in North Africa and the Middle East. The last time this much economic civil unrest occurred is when Hitler and Mussolini came to power causing World War II.

With his yearly contribution, YTD (April 15, 2011), Darnell is up 13.4%. Without his yearly contribution, YTD, April 15, 2011, he is up 6.64%. The Dow is up YTD 5.26%. Many of his bonds that he bought at the time of the Stock Market melt down matured on April 15, 2011. He will have to reinvest his money in bonds giving a lower return. The bonds that he bought in 2008 and 2009 gave a return of 36% per year for 2 to 3 years. The bonds that he bought on April 15, 2011 is giving interest of only 7.9% to 9.5% per year for the next 2 to 7 years.

No matter how you look at Darnell's portfolio, he is still beating the Dow.

Who has been looking at Darnell's blog in the past 30 days (from the most to the least);

1. United States

2. Russia

3. Slovenia

4. Canada

5. Germany

6. France

7. Hungary

8. Iran

9. United Arab Emirates

10. Brazil

Apartment Insurance, Who Needs it?

Insurance is not an investment. Insurance is protection against loss. I thought that people who live in apartments buy insurance to insure such things as their clothing, TV sets, computers, furniture, and etc. After all, people who buy houses insure their stuff. After watching the news, I seen crazy people set fires to apartments because of some dispute over drugs, women, men, money, and etc. Some do it just for fun. They could care less that they are burning several working families out of their homes. People smoking in bed and burning other families out. Sometimes a child is playing with fire and burns down the whole building.

In many cases, I hear that maybe one or two families out of 24 have apartment insurance. The rest walk away with just the clothing on their backs.

Apartment insurance is not that expensive. You can purchase it in most cases from your auto insurance company. You can buy insurance from insurance companies for $84 per year insuring up to $25,000. You can also buy insurance for $197 per year insuring up to $75,000. Most apartment insurance is in the price range of most people. So there is no reason not to insure you or your family against loss of property.

Do you need Tuition Insurance?

What about College and Private School Tuition Insurance? Part 2

I saved my money every month from the time my children where born to the time they started college. That was the only way I was going to put them through college without putting me or my children in the poor house. But there is one thing that I never thought about while they were in college. What if my children had to leave college in mid semester due to illness, death, or some other disaster? For some of these people who pay for their children to attend a private school from K thru 12, what if the parents job goes south for one reason or another? What if the major breadwinner confronts a job layoff? What if they have to move away because the job demands it? What if your angle of a child gets a student's suspension from school?

In a few schools, if a child withdraws in a short time after starting, they will be refunded all or in part by the school. Many schools have other refund policies. Some schools provide up to a 60% refund if the student withdraws for mental health or emotional reasons. You should protect your investment in your child by asking the school administrator what the policies are for mid-semester withdraws. Many schools offer a third party insurance policy that may be something that you as the parent or the student may want to consider.


When figuring out if you do or don’t want to take the risk of losing tuition, you must think of two issues. The first is, who is paying for this education? If the person paying for this education has a job where the employer has a history or reputation of laying off workers, it might be reasonable to consider insurance, especially if the tuition is high at that institution. The second is the condition of the student. Does your child struggle with disciplinary problems? Is the child an angle at home but a devil away from home? If so, an insurance policy may come in handy.


For the parents who have children in a private school from K thru 12 grade, I have two extra questions? Do you, the parent, have a job that has a history of job transfers to other parts of the country? Are the parents in careers that require them to transfer to other parts of the country? If so, insurance is a good way to protect your children’s tuition.


According to Kenyon College in Gambier, Ohio, about 13% of students bought tuition insurance in 2007. Most people would rather self insure themselves. But for a small minority of students, the protection is worth the cost of insurance. With tuition rates skyrocketing and a weakening economy, obtaining tuition insurance may be the way of the future.

Insurance Contracts

Insurance vs. Investments: Part 1

Several years ago, I got a job as a Part Time Flex (PTF) at the Harrisburg Main Post Office. I needed a part time job (so I was told by the family.) I thought that the name meant part time but I forgot I was dealing with a federal government corporation who does not know that slavery ended in 1865. I worked 12 hour days for 5 days then one day at 8 hours. Most of the time, when a holiday was not involved, I got one day off. That day was for sleeping.

One day, someone got me out of bed by ringing my door bell. It was an insurance salesman who came to give me a free book that I ask for. I did not know that this free book was connected with an insurance company. I filled out the card in the Post Office Cafeteria and mailed it in. This man wanted to talk to me about buying an annuity giving me 6% guaranteed. All I had to do was give his company so much money a month for so many years and I could get $25,000. I calculated the payment over time in my head then said, "You mean to tell me, if I give you $51,000, you will give me a guaranteed $25,000 back?" He looked at me then looked over at my book shelf, full of mathematical, computer, and financial books. He got up, collected his information, and said good day. That was the last that I seen of this salesman.

Most people do not know that insurance and investments are two different subjects. Insurance is protection against loss. You buy insurance to protect your families way of life incase you, the bread winner dies at a young age. You buy car insurance to protect you from being sued and loosing everything you have because you killed someone in an accident or caused some property damage. You buy umbrella insurance like O.J. did so that you can hire high priced lawyers to defend you in court in case you slander someone or incase you are involved in a wrongful death suit.

According to Dictionary.Com, the definition of insurance is;

1. The act, system, or business of insuring property, life, one's person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved.

2. coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.

3. the contract itself, set forth in a written or printed agreement or policy.

4. the amount for which anything is insured.

According to Dictionary.Com, the definition of investments is;

1. Investments are Property or another possession acquired for future financial return or benefit.

2. A commitment, as of time or support.

You buy an $18 US Savings Bond for 10 years giving $25 at maturity. That is an investment. You buy a corporate bond for 3 years, giving you 4% a year with payments to you of $20, every six months. These are investments. You know them because they give you more money in the end than you put into them at the beginning.

Annuities are insurance contracts. Along with insurance policies, it will pay you so much money in case you do not suffer the loss that you had expected. Some people use them as expensive savings accounts like the insurance salesman was trying to talk me into buying. You must know what product to use to meet your objective, protection against loss or to later maintain your own way of life.

By now, you heard of financier Bernard Madoff. The 70-year-old former NASDAQ stock market chairman was arrested Dec. 11 on securities fraud charges alleging he duped investors out of as much as $50 billion in a giant Ponzi scheme. The real problem was, he took the rich for everything they had. If it was a bunch of poor people, it would not be in the news and he would not have been arrested.

What he appeared to have done was bought stock then wrote "PUTS" against the stock and made 1% a month on the investment of "PUTS". He also wrote what is called NAKED PUTS". "PUTS" are insurance contracts against loss in case the stock unexpectedly would go up. "NAKED PUTS" are "PUTS" that are written but are not backed by stock. In the 1980s, 1990s, and until last year, stocks in general, always went up. So the people who bought his "PUTS" lost their money and Mr. Madoff made his money.

Then we had the big crash from 14,000 to 8,475 in less than a year. Many stocks fell 60% or more. Mr. Madoff had to pay off the people who bought his"PUTS" in stock. If he did not have the stock, he had to pay them off in cash. Just like in 1929, he had to give away his new clients money to cover his old clients contract obligations. So he and all his clients went broke. The clients had no idea that they were in the business of writing insurance contracts.

Moral of the story, know if you are dealing in investments or insurance. Next time, we will learn about using insurance to cover your children’s education fund.