Planning on dropping Health Insurance. Change my mind.

[plowhog]

BrokeFarmerJohn,

I read most of your posts and replies here. Congratulations on exploring your decisions. That curiosity, in itself, separates you from so many others in your same age or circumstances.

A few things to consider:
- Any money that goes into your 401K or retirement becomes "untouchable." If you have a million dollars in a retirement account, get sued and lose everything, they can't tough that million. So I would put as much as you can into that protected nest egg, and not borrow against it.
- I disagree with others who shun rental and investment property. I have had good experiences and made good money doing that.
- The fastest and simplest way to financial success when you have limited income or means is to avoid debt. Pay off everything you can, get "ahead of the debt curve." In my younger years, I did without many of the toys and fancy cars my friends spent their money on. Now they are working into their later years still trying to pay on their debts. Not me.
- If you like real estate and consider investing, go get a real estate license. Right there you will chop your fees for buying and selling, plus get better information than most of the buyers have.

Good luck to you! And keep up the exploration!!

 

[MacLawn]

Broke, I couldn't read all these comments. I'll just say no wonder your name is Broke.

 

[BrokeFarmerJohn]

BrokeFarmerJohn,

I read most of your posts and replies here. Congratulations on exploring your decisions. That curiosity, in itself, separates you from so many others in your same age or circumstances.

A few things to consider:
- Any money that goes into your 401K or retirement becomes "untouchable." If you have a million dollars in a retirement account, get sued and lose everything, they can't tough that million. So I would put as much as you can into that protected nest egg, and not borrow against it.
- I disagree with others who shun rental and investment property. I have had good experiences and made good money doing that.
- The fastest and simplest way to financial success when you have limited income or means is to avoid debt. Pay off everything you can, get "ahead of the debt curve." In my younger years, I did without many of the toys and fancy cars my friends spent their money on. Now they are working into their later years still trying to pay on their debts. Not me.
- If you like real estate and consider investing, go get a real estate license. Right there you will chop your fees for buying and selling, plus get better information than most of the buyers have.

Good luck to you! And keep up the exploration!!

Interesting, I didn’t know the 401k was that untouchable in the event of a lawsuit. I’ll have to look into that.

Thanks for the advice.

 

[BrokeFarmerJohn]

Broke, I couldn't read all these comments. I'll just say no wonder your name is Broke.

Thanks for the input buddy, it was very constructive advice lol.

 

[D2Cat]

Interesting, I didn’t know the 401k was that untouchable in the event of a lawsuit. I’ll have to look into that.

Thanks for the advice.

A way to protect your assets is to put it all in a trust. You then can manage it just as you owned it, but the trust separates it from YOU.

 

[ultrarunner]

I have friends in the healthcare industry in Southern California. Time and again, hospitals are bankrupted from the same source. An indigent pregnant young woman, crack-addicted or meth-addicted, shows up. There has been no record of healthcare during the pregnancy, and the flurry of activity begins. Then a preemie baby weighing just a few pounds is born, and it costs $1 million or more to nurse the unfortunate infant to become as normal as it is capable of being. Mom and baby then checks out of the hospital-- paying nothing-- leaving a bill of seven figures behind for someone.

This is why the hospitals I mentioned closed...

It was not for lack of patients but patients that got a free ride...

Geographically moving to more affluent areas translates to more with insurance and means...

Years of managing Section 8 rentals has provided an insider prospective many would find hard to believe... a family of would need a mid 60k income here to equal the benefits offered and then... they would have the added stress of losing a job, getting ill, etc...


Again... do not be timid to negotiate care... especially elective procedures.

Travel a little and save a lot is sometimes the case plus asking what is the cash pay price when paid at the time of service... the savings can be huge.

One of my Doc friends who is no longer with us was quite an eccentric... never planned to go into the service and ignored his draft notice... the draft board said young man... you have two choices... you stay in medical school and come in as an officer or we take you now... he saw the light.

Anyway... after the military... the best description was that of a country Doc... he saw people with no to little means and never pressed it. He shunned material things much to the disappointment of his wife.

So his girls were thinking of college and he offered a proposition... he had boxes of unprocessed insurance claims and rejected claims... he told his 13 and 14 year old daughters those boxes are your college fund...

To their credit... these teens jumped in feet first... I would see them at the Hospital every weekend with a mountain of papers... they were submitting claims, resubmitting, etc... it took maybe 3 months to get the first check... they were ecstatic...it was for $383... which covered how much they were in the hole for postage and printer cartridges...

They literally mined their college money and old Dad could not have been prouder... plus learned a valuable skills along the way...

 

[ultrarunner]

The real question when it comes to Insurance is what do you have to lose... if you have little or nothing to lose, the United States is a great place to be uninsured...

 

[MossRoad]

The real question when it comes to Insurance is what do you have to lose... if you have little or nothing to lose, the United States is a great place to be uninsured...

Yes. That's why I asked in this thread a long time ago if the OP had ever done a net worth statement for himself.

The net worth statement will tell you exactly what you have at stake to lose.

 

[MossRoad]

For the life of me, I have many friends, well into their 50s, that have never ever done a net worth statement, and I can't figure out why? Sure, a lot of people "know" what they have in their head. My grandma could tell you down to the penny what Mrs. Clark paid her in rent the month of June, 1956, or how much they spent on groceries that year. But people like that are few and far between. When it comes to today's finances, there's your house, your cars, your possessions, your savings, your investments, 401K, IRAs, etc.... and your income, and your outcome! :laughing:

Do a net worth statement for yourself. It can be eye opening. I did one for my kid and she was actually surprised how much she was worth VS what she owed. She thought she was in debt up to her eyeballs and she was in the black by several years of income.

Do it.

 

[ultrarunner]

I have not updated for a couple of years... did not want to get carried away.

I took a huge hit back in 2009-12... down maybe 60% although nothing changed in my day to day life...

401k plan was hit but Real Estate Owned was down as much as 80%... but INCOME was up because rents were rising...

One thing I always know is what I owe...

 

[goeduck]

Does anyone else carry an umbrella adder on their homeowners policy? I have 3 vacant properties that I wanted coverage on and it was surprisingly cheap to get a $1M umbrella for them.

 

[Travelover]

Yes but depreciation is a temporary avoidance of paying taxes, whereas a deduction is a permanent one.

When you sell that investment property, you have to financially cough back up all that depreciation you took along the years .....

Unless it is inherited, then appreciation is canceled out to the heir.

 

[Jstpssng]

I have not updated for a couple of years... did not want to get carried away.

I took a huge hit back in 2009-12... down maybe 60% although nothing changed in my day to day life...

401k plan was hit but Real Estate Owned was down as much as 80%... but INCOME was up because rents were rising...

One thing I always know is what I owe...

Everything that I owe is on a spreadsheet, including the interest; Also all of my income and all of my payments for the next 4 months. I don't and won't do automatic payments or allow anybody to otherwise automatically take money out of my account. I learned that lesson the hard way a long time ago... it took me 4 years and a lawsuit to recover my money which they had interest free for that time.

 

[plowhog]

So his girls were thinking of college and he offered a proposition... he had boxes of unprocessed insurance claims and rejected claims... he told his 13 and 14 year old daughters those boxes are your college fund...

To their credit... these teens jumped in feet first... I would see them at the Hospital every weekend with a mountain of papers... they were submitting claims, resubmitting, etc... it took maybe 3 months to get the first check... they were ecstatic...it was for $383... which covered how much they were in the hole for postage and printer cartridges...

They literally mined their college money and old Dad could not have been prouder... plus learned a valuable skills along the way...

That is a GREAT story.

 

[plowhog]

Unless it is inherited, then appreciation is canceled out to the heir.

That is a "stepped up basis" to market value.

 

[plowhog]

Does anyone else carry an umbrella adder on their homeowners policy? I have 3 vacant properties that I wanted coverage on and it was surprisingly cheap to get a $1M umbrella for them.

Yes that is a very smart way to go.

 

[ultrarunner]

Simple for me in that my only debt is mortgage... each month the balance remaining is on the statement.

My Grandmother made me promise to never go into debt... it was not a casual thing to her as she knew many that lost everything because of debt... business, farm, homes... it was not a choice or strategic default like a lot I know the last crash... they were people that had no where else to go...

 

[goeduck]

Everything that I owe is on a spreadsheet, including the interest; Also all of my income and all of my payments for the next 4 months. I don't and won't do automatic payments or allow anybody to otherwise automatically take money out of my account. I learned that lesson the hard way a long time ago... it took me 4 years and a lawsuit to recover my money which they had interest free for that time.

Can you elaborate on what happened? I pay my property taxes on an auto withdrawal.

 

[Jstpssng]

I was self employed and hired a company to do my taxes , giving them permission to do monthly withdrawals. They ended up getting driven out of business because of their half a$$ed practices.
If you're doing business with people that you know and trust it's handy to not have to worry about those monthly payments. I just prefer to have more control. Also, I tried automatic payments for my pickup loan; but didn't like waiting until the due date before seeing it was paid.

 

[ultrarunner]

I don't like them either but my mortgage is with the Credit Union and I do have auto pay from my Credit Union Account... no issues.

But, I figure if there is finger pointing... all fingers point to them...