TAKING THE LONG VIEW OF FINANCES

#millennials #BabyBoomers #economy
Home prices in Seattle are soaring.
So, Kathryn Jacoby, 30, and Jeff Whitehill, 32 came to a sobering conclusion: buy now, before prices went up further, or they may never afford to own a home. They bought a 72-year-old house for $550,000. It may be more than they can afford on their combined $110,000 annual income, but they felt time was not on their side.
George Erb wrote of the couple’s plight, and that of other millennials, in the Seattle Times.
Meanwhile, Rodney Brooks writes of how baby boomers are bridging the Generation Gap. His article for The Washington Post was based on Lori Bitter’s book, “The Grandparent Economy: How Baby Boomers Are Bridging the Generation Gap.” The book focuses how baby boomers may be taking care of several generations of their family, be they their parents or their children who may not have recovered financially from the Great Recession of 2008.
“The real story is they (boomers) may have two or three generation of people living in their homes that they were working their butts off to support,” Brooks quotes Bitter. That puts their retirement plans in some peril.
Both Erb’s and Brooks’ articles were published in the March 6, 2017, issue of The Atlanta Journal-Constitution.
Meanwhile, Ron Lieber wrote in the New York Times of financial trade-offs people make, whether they know it or not. Some take two or three jobs just so they can raise their kids in a certain neighborhood. Others experience life now, perhaps after the sudden death of a relative, lest they not get to do it again, etc.
Lieber’s article was published April 24, 2017, in The Atlanta Journal-Constitution.
Let’s break this down a bit further. If you are young, you need to be actively engaged in financial planning, including not only what you earn, but what you spend and what you save. The young couple in Erb’s article believed that housing appreciation was going to continue for the foreseeable future, so they extended themselves a bit to buy a house.
If that holds true, they’ll appreciate that decision later. However, there is much peril in the meantime. They borrowed $30,000 from Jacoby’s parents, and Whitehill has a $60,000 student loan to pay off.
Hopefully, they can pay down those debts and they will earn more income over time. The latter is far from guaranteed, making the former more difficult.
Rather than borrow money from parents to help buy a house, some young people are still living with their parents, as Brooks’ article discusses.
The point here is that all generations alive today face financial challenges. The trick is doing what you need to do to overcome them.
With technology and globalization throwing a monkey wrench into job security, people in all generations might want to think about ways to earn extra income, preferably without taking a pound of flesh from themselves, or having no time to really live.
There are many options available to accomplish this. To hear about one of the best, message me.
With job security far from assured, no matter in what field one is employed, financial risks become that much riskier. Still, taking no risk at all generally doesn’t get one very far. As long as the risks are calculated, and one plans accommodations to alleviate some of the peril, there’s no telling what the payoff can be.
Here’s wishing the millennials great financial planning skill, and baby boomers great coping skills as they deal with their issues.
Peter

DIGITAL AGE BRINGS 2 TRENDS

#trends #DigitalAge #crime #technology
Youth culture has become less violent, less promiscuous and more responsible.
So writes New York Times columnist Ross Douthat.
He wrote that American childhood is safer than ever before, as teens drink less and smoke less than previous generations.
Violent crime, a young person’s temptation, had fallen for 25 years before the recent post-Ferguson homicide increase, he writes, in a column published Aug. 23, 2016, in The Atlanta Journal-Constitution.
At the same time, he writes, adulthood has become less responsible, “les obviously adult.” For the first time in more than a century, more 20-somethings live with parents than in any other arrangement.
Certainly, the recession of 2008 contributed to that. But Douthat also points out that the helicopter parent phenomenon, in which parents hover over their children by doing things the children should be doing for themselves, has contributed to the slower maturation process.
Douthat attributes these two trends to technology. “This mix of youthful safety and adult immaturity may be a feature of life in a society increasingly shaped by the Internet’s virtual realities,” he writes.
Let’s explore Douthat’s hypothesis.
When kids spend hours playing video games and otherwise sitting at computers, they are not out getting into trouble. At the same time, they are not out seeing what real life is all about.
A number of experts have written and spoken about the different groups in the workforce, with older workers, millennials and Gen-Xers all needing different things, and all motivated by different things.
But if you are among the older crowd, imagine hiring a 20-something who not only had never had a job, but also hardly had been out of the house in their formative years.
Imagine, too, the experts telling you that YOU have to change the way you do things to accommodate these kids.
Train them the way you were trained, they say, and they won’t last.
Not only are there psychological and mental differences in these kids, many are physically incapable of qualifying for many jobs. The police, fire and military usually have openings, but even if you bring back the draft, many of the recruits are not physically capable of enduring the rigor of military training. You’d probably kill them, literally, before you whipped them into shape.
Think, too, of the social aspects these kids bring. It’s tough to go out on dates when you are sitting at a computer for much of your life.
Of course, not all kids are like that. Some are ambitious, and are looking at bright futures. While others are taught to settle, they dream of what could be if they work for it.
If you are one of those kids, there are many options out there to fulfill those dreams. To check out one of the best, message me. You might come across a story of an 18-year-old high school senior who made more money than any of his teachers.
Technology is both good and bad for us. It is up to us, at every age, to take full advantage of the good while overcoming the bad. Young people must learn skills that will give them a leg up in the work force, while, at the same time, getting up, getting active and interacting live with friends, family and others.
Peter

INSURANCE BUSINESS CAN BE MESSY

#insurance #healthinsurance #riskmanagement
The insurance business can be messy and complicated.

Some insurance is mandated. For example, a minimum amount of auto insurance, usually liability insurance, in case someone else gets hurt, is required in most states.

Health insurance, under the Affordable Care Act, is now mandated. We can certainly debate the necessity of that – perhaps later.

Life insurance may be the only one that is completely optional, meaning it’s not mandated and many people can live without it.

But even if insurance isn’t mandated, it may be – or should be – something we can’t really live without. When a person doesn’t buy flood insurance because it’s too expensive, but lives in a flood-prone area and gets flooded, many thoughts crowd her mind, and the minds of others watching. Those others watching may want to help, but may cringe at a Go Fund Me request to help HER. They might prefer to help the responsible folks take care of necessities that their flood insurance may not cover.

As for health insurance, the business model may seem complicated.

All insurance business models are about “risk management,” which may seem like a vague term to most, but we’ll use health insurance as an example as we break it down.

The health insurer collects premiums from folks who are healthy, and not making any, or are making very few, claims. When a person gets to a point in his life that he needs to make perhaps significant claims, those premiums he paid all those years may not matter.

The insurer will use all kinds of gimmicks, technicalities and even trickery to find ways to either not pay a claim, or pay as little as possible. They may often put consumers, already dealing with what ails them, through an incredible process to get their money. The more daunting the process, the more likely people will give up.

Remember this: just as consumers don’t like to be put through a wringer to get what they are owed, the insurers don’t like to be pestered day in and day out, either. The rule of thumb: if your policy says you are covered, fight for what you are owed. If the company doesn’t pay, sue.

Then, we have the standoffs between providers, usually big providers who may be the only game in town, and insurers over fees, reimbursements etc. You see insurers use their leverage to give the least to the provider, and you see the provider using its leverage by not taking the insurer’s policyholders as patients.

Remember, an insurer’s promise of coverage with your provider is made to be broken. In standoffs like these, the patients (policyholders) suffer and no one cares.

New York Times columnist Paul Krugman wrote that despite the exit of some big insurers from the Affordable Care Act marketplace, the law is working well, reducing the number of uninsured Americans considerably. His column was published Aug. 22, 2016, in The Atlanta Journal-Constitution. Though some insurers’ exit from the marketplace is a concern, Krugman says the problem can be fixed if people can learn to work together to do so.

The U.S. is the only major nation in the world in which health insurance is left up to the free market. Some advocate that we move to the single-payer system, in which we’d all have health insurance through the government. There are pitfalls here, too.

The insurance industry provides many, good-paying jobs. Many of those would be gone in a single-payer system. Drug and device companies rely on their U.S. profits for much of the money that goes to researching new and better treatments.

What to do? Determine what insurance you need and buy it. You may have to give up some pleasure and deal with some messy situations along the way, but going without can create far worse consequences. Remember the Fram Oil Man ads: pay me now, or pay me later.

If you are having trouble paying your premiums, look for other ways to make money. There are many part-time options out there that could even give you enough to surpass your main income. To check out one of the best, message me.
Insurance is messy. You may have to shop around frequently for the best deal, but paying penalties, or just taking the risk that you won’t need it, is a recipe for disaster.

Peter