LONG TERM CARE: A Federal investigation of California's 1,400 nursing homes found that almost 1/3 were cited for causing death or serious harm as shown by death certificates. An article in the SF Chronicle and one attorney noting, "we'd like to think of all of these places should be heaven on earth, but all (residents) cannot have minute by minute, all the clock care unless the state is going to spend $100,000 per year per patient."
So what do you do if you do not have money to pay for the best of service? Pray. And hope that someone visits you often since that induces better care. That's about it. Outside of that, you are left to the financial constraints of Medicaid. If you have money and do not buy a policy so you can pass the assets to other beneficiaries and then end up dying in a Medicaid home under the above conditions: Don't Complain. You got what you wanted.
Also, "Workers are human. They make mistakes. Studies have shown that the bulk of elder abuse goes on in people's homes, not in nursing facilities".
Part of that abuse is due to the extreme emotional issue of caring for another. Again, if you do not have any money, count yourself lucky if a loved one can and is willing to take care of you properly. The problem is for many who do have money and who do not buy insurance- there is a great tendency to try to provide care beyond both the physical and emotional capabilities. This can easily lead to abuse. Such people that have purchased insurance are inclined to use it- hence better overall care and far less abuse.
Do what you want. But attempting to use State Medicaid when you have money has got to be one of the dumbest things imaginable.
MEDICARE: Clinton said he wanted
to include prescription drugs. But the Congressional Budget Office noted
that he had "grossly underestimated" the cost. Clinton indicated a cost of
$118 billion over 10 years. The study indicated it would be $168 billion-
$50 billion more- a 42% increase. Obviously, it went nowhere and will not
in the future unless taxes go up.
MORE MEDICARE: Medicare also
helps train doctors. But certain hospitals in New York are getting three
times the amount for each trainee than in LA or Cleveland and 7 times more
than in Houston. New York hospitals get as high as $55,000 annually for each
trainee while a major teaching hospital in Houston gets only
$7,000.
DAY TRADING: Statistics show that 70% who try day trading of securities lose all their money in 30 days and 90% lose it in 3 months. And they are also stupid.
THAT OL' TIME RELIGION: Duke University researchers say seniors with regular church or synagogue attendance are not only healthier but also more likely to live longer than the non-religious.
LONG TERM CARE: "Most seniors have difficulty maintaining their policies until they reach age 80, when they most probably will need them. The National Association of Insurance Commissioners reports that 16% of all nursing home insurance buyers drop their coverage each year because they can no longer afford it. Insurance companies know that of those who buy coverage at age sixty, 95% will have canceled the coverage by age 80. The U.S. General Accounting Office confirmed those figures. Of insurance company files that were investigated and excluding those who had died, 60% or more of the original policyholders allowed their policies to lapse within 10 years and one insurance company reported a lapse rate approaching 90%."
But don't unilaterally blame the insurance companies. Many seniors are still healthy at ages of 70 and 75 and "forget" the fact that the potential ill health is still ahead of them. That's neither the agent's nor company's fault that they refuse to recognize the future problem. Certainly the (legitimate) company and agent will try to counsel them about retention, but they may surrender it anyway. That said, many agents may oversell a policy- meaning that the owners really could not afford all the bells and whistles they were sold. So as time goes on and money seems a little tight, it may seem prudent to drop something that may not need. Lastly, some companies did raise rates unconscionably (guaranteed renewable) and they became very unaffordable.
More statistics- According to a Congressional study, "57% of all those who enter a nursing home were not hospitalized before their admittance." 47% of all nursing home residents have chronic illnesses.
AIDS: About 1 million people in the Western Pacific are now infected with HIV
MORE LONG TERM CARE: ( Dr. Robert L. Kane, director of the Center on Aging at the University of Minnesota): "Private pay allows a person to buy more or better care, except in a few states that require services and costs to be identical whether payment is from a public or private source. Furthermore, private reimbursement may allow greater flexibility and choice. Private funds can be used to purchase a wider variety of services under more creative arrangements, while public funds cover only a limited set of authorized services. Much of the innovation in LTC has occurred in the private sector, such as assisted living and continuing care retirement communities. Beyond asset protection, the other reasons for considering private LTC insurance all relate to the quality of the package offered by Medicaid. In effect, the less attractive the Medicaid package, the more enticing private LTC insurance becomes"
TAX QUALIFIED VERSUS NON TAX QUALIFIED LONG TERM CARE POLICIES: (Tom Orr) In a newsletter addressing tax qualified policies, it is indicated that an independent tax advisor would be required to review the difference between the standard and tax qualified policies. He notes, "why in the hell would I refer clients to an individual who is not mandated to take up to eighteen hours of LTC-CTQ/CPR continuing education/certification and which I can "safely" say that 95% of them know Jack Squat about LTC insurance."
And more- when looking at tax qualified versus non tax qualified long term care policies, keep in mind the restriction for the 90 day "exemption" for coverage by the TQ policies. And then note this- "According to "Health Care Financing News,"Summer 1993, 77 percent of all nursing home cases and 83% of Medicare home health care cases last for less than 90 days." Additionally, "If TQ plans existed in 1995, 86 percent of Medicare's patients age 65 and older would have received no benefits from their plans because their recovery care lasted less than 90 days (e.g., 94 percent of 1,242,664 Medicare patients in skilled nursing facilities, plus 83 percent of 3,182,000 Medicare home health care patients ages 65 and over).
Now that's not as explicit as it appears. Short term skilled coverage IS covered by Medicare- but only about 0.5% of all people go into a home for skilled care. The issues of the short term stay is whether you have opted for the 0, 20, 30, 60 or 90+ day elimination periods. The longer the elimination, the less costly the premium. But if nursing home costs are roughly $4,000 a month now, at 5%, it will run over $10,500 in 20 years.
401(k): As of year-end 1998, 24 percent of 384 companies surveyed by the Profit Sharing/401(k) Council of America (PSCA) grant newcomers immediate 401(k) eligibility. About 32% offer plan participation within three months, according to PSCA. In contrast, 48.3% of companies surveyed do not enroll employees in plans until one year or longer on the job.
TV: (American Academy of Pediatrics ) "Children under 2 shouldn't watch television at all, not even "Barney" or "Sesame Street." And older kids should not be allowed to have televisions or computers in their bedrooms. The academy said research shows direct interaction with parents and other caregivers is necessary for babies' and toddlers' healthy brain growth and the development of social, emotional and cognitive skills. Watching television may interfere with that interaction."
ETHICS AND FIDUCIARY RESPONSIBILITY: In 1998, in response to a statement by the California Department of Insurance regarding illegal financial planners, a Director at a San Francisco ICFP meeting not only voiced her displeasure at the requirement of adherence to the law, but also stated that she was in violation, intended to continue to do so and suggested that other members do so as well but just keep quiet about it. A properly licensed CFP (not me) in the audience filed a formal complaint with the Board of Standards. Guess what? She is still a Director. I am a CFP and am required to attend the Board's special 3 hour ethics course in order to retain the designation. But it's ethics and fiduciary responsibility in name only. If you are a consumer (or journalist) impressed that some ethics code is even remotely going to stop illegal and unethical behavior, think again. Never depend on an organization to defend your rights if they have been violated by the advisor. It is incumbent upon you to try and find a good one to start with so you will never have the mess to contend with. How do you do that? Read my article, Who Can You Trust.
401(k) and 404(c): (CFO) An institution was sued under section 404(c) for (supposedly) failing to follow its fiduciary guidelines for the betterment of its employees. The employees attorney noted, "Financial institutions have to exercise the same level of prudence as managers to select investments for employees as they do when they manage other pension plans". "They still have to evaluate the fund and have a diversified selection of investments that are performing reasonably well," "Make sure you can demonstrate that you have a basis for selecting the particular funds in a particular plan."
All this legal wrangling points to at least one unequivocal observation: "For all employers, the suit demonstrates how important it is to prudently select investment options under a 401(k) plan."
Frankly, I think that literally all employers are under a major liability problem. Why? Because if you do not understand diversification, you have already breached your fiduciary obligation in trying to determine a viable fund in the first place. The only offset is the fact that none of the consumers know what it means either- and neither do the attorneys.
DOWNGRADED JAPAN: (NY Times) I stated long ago that Japan may not retake its position of prominence and power, but that it would still be a major financial player. And I kept saying it and saying it and saying it. I'm getting tired of waiting- though there is some brightness on the horizon. But the Times article noted that due to its HUGE aging population and costly traditions, it might be in for some tough times for the next century. As a indication- over the next 50 years, there will be a reduction in the working age population by 650,000 per year. The Japan gross domestic product in 2050 could actually be 5% LESS than it is today.
OFFSHORE TRUSTS: So you wanna cheat the tax man or court or creditor by going overseas with your assets? A San Francisco Chronicle article noted that thousands of off shore trusts were established during the last five years with billions of dollars- many times in the misguided attempt of thwarting taxes and keeping asters free from attachment by creditors or the courts. . But the Ninth Court District has recently stated that setting up such trusts does not forestall the reach of the U.S. courts and actually sent some people to jail for failure to comply with the court's direction (though the point was that the trusts were established AFTER the legal proceedings had begun.)
STUCK IN THE MIDDLE: (NY Times) middle-income families have been stuck in place for a decade, their incomes even losing ground to inflation through part of the 1990s, according to data from the Census Bureau. The median family income is somewhere between $46,500 and $50,000 a year. And it took more hours to make it. A married couple with one or two children, for example, worked an average of 3,860 hours -- more than two full-time jobs -- in 1997, up from 3,236 hours in 1979
LONG TERM CARE: 40% of those in a nursing home are age 18 to 65 and the reasons are primarily drugs, alcohol and accidents.
VIATICAL SETTLEMENTS- These are tricky- if for no other reason that they are relatively new and relatively unregulated. The State of Florida recently filed against American Benefit Services and Financial Federated Title and Trust where 5,000 "investors" were sucked into a Ponzi scheme (that's where new money is paid out to old investors making it look very successful. Then the managers finally just abscond with the principal) Apparently the money was never invested. Agents and financial planner got a 18.5% commission. That should have been a tipoff right there.
And this from author Gloria Wolk- "Viatical settlements provide cash to terminally ill people who sell their life insurance for a percentage of the death benefit. "Patients are extremely vulnerable to abuse. They sell their policies to get funds to stop foreclosure of a mortgage, buy medical care, purchase a van that carries a wheelchair. But sometimes, after signing over their last asset, they don't get paid in full. Or their confidentiality rights are violated. That is why viatical licensing is so important. Patients need protection."
Wolk's concern is that most patients know little about viatical settlements. "Few are aware that under federal law, patients who want tax-free viatical settlements are required to sell to licensed companies." "Illegal companies may deceive patients into selling to them. They are far greater in number than licensed companies, and since it is far more expensive to operate legally, this could destroy the legitimate industry." "But if licensed companies fold, that won't end viatical settlements. "People who are desperately ill become financially desperate. If patients have no recourse but to turn to untrustworthy companies, they will do so. The issue now is to get the truth out, and to recognize that there are viatical companies that strive to operate responsibly, ethically, and within the law."
Y2K: (Ed Yardeni): In August (and last year as well), Yardeni noted that "despite progress fixing the Y2K computer glitch, there is still a 70% chance that it will spark a global recession. He said that the most likely cause of a Y2K-related recession were possible breakdowns in the "global just-in-time manufacturing system" because of weak links in the supply chain.
I don't agree- though I have indicated that foreign countries will have the most problems and such "messes" may screw up both international and national manufacturing parts and servicing. But I still don't agree with a 70% probability. 5%- 15% maybe. Maybe not.
FUNNY GRIEF:: (Infobeat) "Psychologist George Bonanno studied bereavement - and found that contrary to much of the self-help grief industry, some people may find laughter helps. Not forced laughter. Bonanno's not advising anyone to peddle jokes to the bereaved. But the Catholic University professor studied recent widows and widowers by videotaping them as they recalled their spouse. He says those who were able to give a heartfelt laugh once or twice during the reminiscence appeared to cope better over time."
ASSET ALLOCATION: Trying to figure out individual stock issues is almost a fool's game- though a lot of people have looked good in the last few years. But that's only because the market went up and up and up. (Remember 90% of day traders lose everything in about 3 months). Asset allocation is deciding where your money should be invested- growth, small cap, foreign and so forth. But don't necessarily let your allocations stagnate. For example, go back 10 years and every allocation utilized precious metals- primarily gold. But gold has lost and lost and lost. It is economics that dictates what you should be invested in. Again I state, if you are not getting the material from the Federal Reserve Boards, you are not a serious investor. And you sure ain't sophisticated. And this very sad real life reason why my criticism is so valid. A doctor- who did not homework- placed her trust in a CFP who was a officer of a major ICFP office. He took a discretionary account and placed literally ALL of it in gold for the last five years. And also charged a 1.5% management fee. Made only a little over 1%- actually lost when the fees were addressed. The no brainer would have been an index fund. Far less risk, far less volatility and a whale of a lot more money.
SUBSTANCE ABUSE HEALTH COVERAGE VERSUS NO COVERAGE AT ALL: A 1999 HIAA study estimates that chemical treatment coverage - coverage more narrow than substance abuse - raises health insurance premiums by an average of nine percent a year. Meanwhile, it is estimated that every one percent increase in the cost of premiums causes 300,000 people to lose or not afford health coverage.
SENIORS: The average income
for seniors is $16,000 annually.
NON QUALIFIED STOCK OPTIONS AND CHARITIES: (Ticker) If non qualified options have come due and have become more valuable (the whole idea), you are subject to ordinary income tax (not long term capital gains) between the exercise price and the current market value. That can be a substantial hurt. You might transfer the cash received to a charitable lead trust (you gift the income generated from the new investments and get the assets back at a later time). You should use tax free funds/investments since the income is still taxed to the grantor. The grantor receives a tax deduction based on the amount of the income stream, for how long and at a rate determined by the IRS. The deduction can be used to offset the tax from the exercise of the options.
VARIABLE ANNUITY: (Glenn Daily) Here is where an annuity might be helpful. Assume you have a universal life policy that is not earning much AND YOU REALLY DON'T NEED IT. But, of the (say) $30,000 you put in, the surrender charge will be $10,000. You might consider a 1035 exchange to an annuity with the $20,000. It then grows to $30,000 after time but you can pull it all out tax free because the basis transferred was equal to the basis of the premiums paid for the insurance ($30,000).
You could transfer to another variable life policy, but the fees are far greater in a life policy than an annuity.
Outside of that and a few other limited uses, variable annuities are for people who don't know how to invest sold by agents who don't know how either. So, of course, not many are sold. WRONG! Sales increased 12% in 1998 over 1997 to $98.9 billion and a 22% increase in total assets under management to $778.4 billion.
COMPUTERS: (Federal Reserve Board of New York) "Ultimately, by speeding up the flow of information among suppliers, manufacturers and retailers and by increasing the efficiency of supply chain management, electronic data interchange could help companies produce goods more efficiently.
RESISTANT DRUGS: (CDC) "The number of cases of streptococcus pneumoniae bacterium that proved resistant to antibiotics increased from 14% in 1993-94 to 25% in 1997. Although the study did not address the reason for the increase, Dr. Daniel Feikin of the CDC said one of the leading factors is overuse."
HEALTH CARE BENEFITS: (Newhouse) Employers are going to drop more employee heath care benefits since costs are expected to double in the next nine years to $2.2 trillion in 2008 form $1.1 trillion in 1997.
WHY YOU MAY NEVER DO WELL IN NASD ARBITRATION: Glenn O'Hare, a former stockbroker at A.R. Baron, a defunct New York brokerage firm, was one of 13 Baron brokers and executives convicted of securities fraud in 1997. In the federal case, a judge sentenced him to three and one-third to 10 years in state prison noting, "These were not some trivial violations of some obscure, pecuniary, overly conservative rule that some bureaucrat created. The conduct here, to use an Old World expression, was in fact sinful."
Last month, the National Association of Securities Dealers disclosed its own disciplinary actions: it fined O'Hare $5,000 and suspended him for 10 business days.
The inconsistency is not without its correlation to past disciplinary history by securities regulators nationally. Don't expect much to happen if your only recourse is NASD or NYSE arbitration.
401(k): (WSJ) 96% of employers with 5,000 or more employees have 401(k) plans.
And I bet that 75% of those don't have a clue to what they were doing or what is required under 404(C) regulations.
HEART DISEASE: (CDC) Heart disease and stroke remain leading causes of disability and death, with estimated costs including lost productivity expected to be $286 billion in 1999. death rates from coronary and hypertensive heart disease and rheumatic heart disease have decreased from a peak of 307.4 per 100,000 in 1950 to 134.6 in 1996, a decline of 56%. Stroke deaths have decreased 70% in that time, from 88.8 to 26.5.
THE DOLLAR: (NY Times) Some foreign countries are considering the U.S. dollar as their own currency- Argentina, Mexico and possibly, Canada. It would be similar to the use of the Euro. It is already used by some countries as their official currency (Panama) and other countries hoard it unofficially (Russia). "So strong is foreign demand for dollars that roughly two-thirds of all American currency is in circulation outside the United States."
NATIONAL HOSPITALS (WSJ) For profit's make up 15% of the nations hospitals. But they "cost" a lot. A Medicare plan with "for profits" cost $5,172 annually per capital- $732 more than those served by non profits (1995).
OBESE: Obese women are six times more likely than thin women to have a silent inflammation inside their arteries that increases the risk of heart disease.
But the commentary is lost on almost all Americans There has been a 50% increase in obesity (more than 30% above acceptable limits) in just the last 7 years.
HEALTH COSTS: A U.S. Chamber of Commerce survey of 251 small businesses, close to 80% said their health care premiums had increased during the past 12 months. On average, small company premiums rose 19% in just the past year.
PASSING ESTATES: According to a recent government study, 70% of family-owned businesses never get into the hands of second generation heirs and owners. Why is that? Simple. Most men don't like to think of their own demise. It's not the fact that when they will die, it's IF they will die. So nothing really happens and much of the value of the business is lost in a fire sale.
FINANCIAL ILLITERACY- This has been identified previously by illiteracy overall- the 1992 Adult Literacy Survey identifies the problem explicitly. A Parade article sponsored by the National Council on Economic Education shows the problem remains the same
1. On average, adults got a grade of 57% (49% flunked) on a test of basic economics- high school students; 48% (66% flunked).
2. Hard to believe- About 66% did NOT know that money does not hold its value in times of inflation.
LONG TERM CARE AND MEDICAID: Among Americans aged sixty-five and over, only 12% are below the official poverty line-and fewer than 7% receive means-tested cash assistance under the SSI program. But over half of seniors get a Medicaid subsidy from the day they enter a nursing home. [Actually, 78 percent of people are already eligible for Medicaid when they enter a nursing home. Source: CLTCF]
FRAUD: The SEC is investigating a Palo Alto "investment advisor" who launched a web site that had a $35,000 NO RISK and HIGH YIELD investment that would produce 40% in just 15 days- $3,000,000 in one year. They didn't say how much money he got but I'd like to make this offer. Just send me money. No guarantees, no nothing, just send me money.
Another fraud had 3,000 on line investors send him $190,000 for a non existent high tech internet start up company. He's now doing 10 years.
Here are some other fraud sites found by the SEC- One company promised to turn iron-ore rocks into gold, generating profits of 2,600 percent a year. Another sought money to construct prefabricated hospitals in Turkey. A third offered an opportunity to invest alongside the original backers of Microsoft and Intel in a new venture that would sell software to operate Web sites. Others included five pyramid schemes that promised risk-free returns of up to 400 percent a month, operated by three people in Indiana, Missouri and Amsterdam. The SEC said the operators gathered $1 million from investors. (I really like the iron to gold.)
And another- Double Your Money Every 4 Years!!!
Quadruple it Every 8 Years!!!
100% Safety of Principal! No Risk!
Another included so-called "prime bank" securities. Those investments are said to be in bonds or notes that are backed by domestic or foreign banks, the World Bank or overseas central banks; they typically promise outlandish investment returns, of up to 100 percent every few weeks. According to the SEC and the Federal Reserve, which have been fighting such scams for years, "prime bank" securities do not exist. (I actually still have an Email in my files from a Southern California scam artist that provided a decent article supporting all the elements of this investment. Impressive writing but anytime you see such unbelievable returns, you are undoubtedly looking at someone who will just take your money.)
DISABILITY: (HIAA) In 1996, the most frequently cited single cause for disability claims was for back problems, followed by emotional/psychiatric problems, neurological problems, and problems with extremities
DYING COSTS: End-of-life costs account for about 10 percent of total-health care spending and 27 percent of Medicare expenditures
AILMENTS: (World Health Organization) Aging populations, a lack of exercise, and tobacco and alcohol abuse mean that noncommunicable ailments such as cancer will likely account for the lion's share of global disease in the next 20 years. Cardiovascular diseases and cancer accounted for 43% of illness worldwide in 1998 but estimated that it would rise to 73% by 2020. Last year, noncommunicable diseases accounted for 81% of all illness in high-income countries but only 39% in developing countries. AIDS has become the world's most deadly infectious disease in the last year, overtaking tuberculosis and moving up to fourth place among all causes of death worldwide. Heart disease, which killed almost 7.38 million people last year - 13.7% of deaths worldwide.
NURSING HOME COSTS: (Pete Peterson) Per capita nursing home spending on the frail elderly aged eighty-five and over is OVER TWENTY TIMES HIGHER than spending on the young elderly, aged sixty-five to sixty-nine. Second, the number of these frail elderly is expected to triple or quadruple as America ages. We have no choice but to close loopholes that allow seniors to qualify for Medicaid through subterfuge--for instance, by transferring assets to their children.
GET OFF YOUR BUTT!!!: (Harvard-affiliated Brigham and Women's Hospital in Boston) The health care costs that result from inactivity costs the national bill, conservatively, at $24.3 billion. And all of those costs could be avoided if people who are inactive now did the minimum recommended by the federal government - 30 minutes of moderate activity on most days of the week. Inactivity accounted for 22% each of coronary heart disease, colon cancer and osteoporotic fractures, as well as 12% of diabetes./10: In 1996, in the continental U.S., Maryland had the greatest percentage of its citizens in HMOs (41.1 percent), followed by Oregon (41.0 percent), California (40.4 percent), and Kentucky (33.6 percent).
CAREGIVING: "Caregiving often hits people unprepared to negotiate the raw emotion that underlie our emotions, our relationships and our spiritual beliefs. When those unfamiliar feeling surface, we are unprotected by the what we have been conditioned to expect, unaware of the anchor that lies within. When illness, death and loss fund us, we discover some shocking truths: we have not made authentic connections with others, including family, we don't know ourselves very well, and we do not feel empowered by the institutions in which we have put our trust."
I concur- until you have been rocked to your core, you have little idea what you may be like.
Also, "...caregivers are on a path seemingly without end, subjected to the stressed and the guilts of watching another's pain without being able to erase it, of witnessing a loved one's dying without being able to prevent it. They quietly sacrifice personal agenda to look after those in need, often sandwiched between child care and jobs and usually without advanced planning. They live a world apart from everyday reality and wonder if they will ever be normal again."
CHILDREN: The odds of becoming a successful adult are stacked against children who grow up in poverty, have uneducated parents or become teenage age parents. There are about 9.2 million that are considered high risk..
(AP) "Grinding poverty, violent crime and absent parents" are just some of the major obstacles our children are facing. The most critical threats are abuse and neglect at home, substance abuse, teen pregnancy, inadequate child care, lack of health care, poor schools and dangers in the environment.
As I have repeatedly stated, there will be a major social uprising between the haves and have nots by 2010. Part of the problem is addressed above. Part is the fact that there is a further separation of social schisms due to the ability to have and use a computer or not. It may make the 60's look tame.
COMPLAINTS: (Inman) Consumer agencies were asked to list the top-five subjects that generated the most complaints in 1998. Auto sales topped the complaint list with 72 percent of agencies listing it, followed by auto repair with 70 percent and home improvement with 68 percent. Household goods ranked fourth, with 48 percent of agencies listing it.
CIVILIZED: NASA astronomers said they have research that suggests the universe is about 12 billion years old. Yet we still do not have a civilized society. Wonder if it will take another 12 billion years.
SO YOU THINK YOU ARE A MARKET EXPERT (KARZ) "People typically give too much weight to recent experience and extrapolate recent rends that are at odds with long run averages and statistical odds. They tend to become more optimistic when the market goes up and more pessimistic when the market goes down."
MEDICARE AND SKILLED CARE: (WSJ) Because of recent Medicare cutbacks, a growing number of skilled nursing facilities are denying admission to high cost patients. Some patients are staying days, weeks, even months in a hospital.
For example, a nursing home might be paid $170 per day for a ventilator dependent patients while the costs actually run two to three times that amount.
Medicare had to do something with the spiralling costs of the last few years simply because they reimbursed a nursing home for skilled care- giving an "incentive" for the home to provide unnecessary and expensive extra care. The new law provided a plump sum per diem amount- hence you can see the problem.
IPO's: CommScan) The average IPO of 1997 earned just 1.8% by the end of a year. During 1990- 1998, the average return was 8%. Another study at the University of Florida noted that from 1970- 1993 an IPO earned 7.3% average return. That was 5.6% less that the stocks of similar companies.
EURO: (NY Times) I personally thought the Euro was going to be the greatest thing since sliced bread (though I did not invest in anything to attempt to take advantage of this because when ever there is something new, sometimes it can go directly against you). The strong union would compete directly against the U.S. right from the beginning. Nope. The euro was introduced at nearly $1.18 on Jan. 4 but close at $1.0156 the week of 11/22. Much has to do with the strong U.S. economy. "The euro's problems have repeatedly defied investors' expectations. At the time it was introduced, the euro seemed so strong that some economists and political leaders worried about its climbing so high that it might make European exports too expensive."
Is the problem perception or reality? Per European bank's president, the "long-held position that the euro's exchange rate is only important if it fuels inflation. Does the actual movement give rise to concern?" The answer is no. It doesn't matter very much." But he admitted to "some concern" about perceptions created by a falling euro. "A continued further movement in this direction would contribute to undermining the confidence in the euro," he said. "Unjustified, but still it is a public perception."
This will become a strong entity. But always remember that so was Japan until their recession. Also remember what we did in 73 and 74.
CHARITABLE SPLIT DOLLAR IS OUT!!!!! (WSJ) The IRS has (rightfully) contested the game of tax deductible "gifts" to a charity where the charity subsequently buys a life insurance policy but only gets only a small return when the grantor dies. The bulk of the policy goes to the heirs. Life insurance premiums by individual are NOT tax deductible but some belligerent taxpayers (and, quite obviously come arrogant attorneys) pushed the envelope.
No wonder life insurance gets such a bad name. Some will say it's not the insurance companies fault that the products are sold this way. In some part true, but continually trying to state that there is no fiduciary obligation due to the client gets old pretty quick.
WOMEN WORKERS: The percentage of married women with children who work for pay soared to 68 percent in 1996 from 38 percent in 1969. By 1996, almost two-thirds of single mothers worked for pay.
MORE CHILDREN: First it was the TV, now this. (National Center for Missing and Exploited Children) About half of parents don't closely supervise their children's online activity, and a fifth say they don't supervise their kids' Internet activities at all.18% of the 62 children surveyed ages 8 to 18 say they plan to meet someone they have met online.
I CAN'T HEAR YOU: : An estimated 30 U.S. newborns a day go home with significant hearing impairment, and it will take an average of 2 1/2 years for their disability to be discovered.
MORE EXERCISE: "More and more doctors are concluding that exercise is good medicine, and their patients are more likely to engage in physical activity if ordered to do so by prescription. Many physicians may begin writing exercise prescriptions designed for patients suffering from heart disease, osteoporosis, arthritis, diabetes and any number of other diseases and health problems."
BAD INSURANCE: To give you an idea of how pervasive the insurance industry is in simply focusing on sales, I was called to attend a seminar where yet another index annuity was being presented. But before any significant commentary was offered, she next talked about the initial and trailing commissions. In other words, the only way anyone expects you to attend a product seminar is to immediately get the agent salivating about the commissions to be earned. Obviously it is a fact of life. But the fact is- it's your money they are after.
TRUSTED FRIEND: (NY Times) "... she was simply swindled out of her life savings -- hundreds of thousands of dollars -- along with other New Yorkers who, together with her, lost at least $20 million. They thought they were investing in ultra-safe securities backed by banks and real estate; instead, they were victims of a long-running Ponzi scheme orchestrated by a man they had considered a friend."
I am so sick and tired of hearing about people
lose money to friends and other trusted individuals. Invariably, the $20
million was lost because nobody did the requisite homework to determine
competency. At least read my article
Who Can You Trust before
you do anything. You will avoid at least 85% of all reasons anyone loses
money and about 100% of all scams.
PROMISSORY NOTES: Elderly individuals across the U.S., were solicited investments in promissory notes the salesmen said would pay 12 percent per year. But "Proceeds of the investments were supposed to be used to construct carwashes throughout Southern California," the indictment says. "The investments were supposed to be secured by U.S. government securities that would protect investors against any loss."
The scam apparently bought in $4.5 million. Of course, some of the elderly were scammed because they did not possess the mental faculties to understand what they were doing. But the bulk of the elderly were simply lazy, greedy and stupid. No matter what your age, you have to do your HOMEWORK!! READ, READ
ESTIMATED RISK FOR AN AMERICAN OVER A 50-YEAR PERIOD.
Risk of death from botulism: 1 in 2,000,000
Risk of death from fireworks: 1 in 1,000,000
Risk of death from tornados: 1 in 50,000
Risk of death from airplane crash: 1 in 20,000
Risk of death from asteroid impact : 1 in 20,000
Risk of death from electrocution: 1 in 5,000
Risk of death from firearms accident: 1 in 2,000
Risk of death from homicide: 1 in 300
Risk of death from automobile accident: 1 in 100
Source: Cosmic Catastrophes (Plenum Press, 1989)