Long Term Care Plan v. Long Term Care Insurance (Part 1)

As I outlined in an earlier post, I disagree with Dave Ramsey  (and a lot of other people) when it comes to long term care insurance.  Many people debate with their family, with "experts" and/or with themselves regarding whether or not to buy long term care insurance.  However, I rarely hear anyone talk about a long term care PLAN, unless they are using it as a synonym for LTC insurance.  Having no plan is a bad plan, no matter how good of insurance that someone might have, and some times having no insurance is the right plan.

So what's the difference between LTC insurance and a LTC plan?  Maybe it will help to plug in "fire" for LTC to understand it better.



If your house is burning down, the most important thing is to have a plan of action, so everyone gets out safely.  If everyone's dead, there's not point in having the insurance to replace your stuff that burns up.  Even better than an escape plan, is a fire prevention plan.  Almost all fires are preventable.  If you never have a fire, your never hurt by not having fire insurance or having bad insurance.  Also, once a fire starts, a good plan and things like fire extinguishers can minimize the damage, again making much less important to have good fire insurance.

Having a long term care PLAN starts with prevention.  Many of the things that result in someone needing long term care are preventable.  Most physical problems that result in people being unable to live on their own are caused by poor lifestyle choices.  Heart attacks, strokes, broken hips, lung problems, etc. are mostly preventable.  Making healthy choices dramatically reduces the odds of needing long term care.  Insurance companies know that, so if you decide to buy LTC insurance, it will cost a lot less and be easier to get if you are healthy.

The next part of making a plan is to assess your current status and figure out what would happen if right now you were suddenly unable to care for yourself with little or no chance of recovery.  What would happen?  I always recommend taking a lot of time writing out the answer to this question.  It's going to vary a lot from one person to another.  For example, if a person were a grain farmer, someone would have to take over planting, harvesting, etc. pretty much immediately, but if someone is retired or one of many people performing the same basic job as several others within a company, the situation isn't as urgent.  It would also look different for someone running a company where others were dependent on him or her for their employment.  Family situations are another variable affecting things dramatically.

If you haven't already, now is the time to really think about this possibility, and get it down in black and white what you think would happen.  That is the foundation of a long term care plan.  We'll work on putting the rest of the building up soon.

Self-ful, Health-ful AEP

On paper, 2014 was my least successful Medicare Annual Election Period (AEP).  The AEP, which now runs from October 15 through December 7, is akin to tax time for accountants or harvest time for farmers.  It is during this time that people on Medicare can change their prescription coverage and/or enroll in a Medicare Advantage plan.

Overall, the chaos has been great for my business.  When I went on my own in 2006, very few people knew how the new prescription drug coverage worked, only that they needed to sign up for something.  Once people found out that I understood it and could explain so that most people could understand it, they told their friends and family about me.  It wasn't unusual for me to show up at an appointment I had scheduled at the home of a couple and have a half dozen other people there too.  I very quickly went from having a handful of customers to having hundreds.  Without that chaos, I probably would have failed quickly.

Instead, my business took off. I helped a lot of people, and I've won a couple of trips and trophies for my number of sales.

But it hasn't been all sunshine and tuna and pelicans.  I've had some rough times and close calls.  The standard has been that I would run like crazy, sucking down pots of coffee to wake up in the morning, run all day from appointment to appointment, and then pound drinks when I got home in order to be able to finally go to sleep and do it again the next day.

I've been trying to back it off for several years, but 2013 made me realize I HAD to slow down during AEP.  Literally.  Right at the end of AEP two years ago I had worked myself into such an exhaustion that my brain was pretty much shut down, even though my eyes were open.  I was driving to an appointment and couldn't figure out why the guy coming the other way was turning left directly across my path.  It wasn't until after I had clipped his back quarter panel that I realized that he turned in front of me because he had the green arrow and I had a red light that I had just run right through.  My truck was damaged, but his car was much worse.  He was mad, but luckily didn't punch me.  I probably deserved it.

I did better in 2014, but still ran myself down, got sick for the 9th straight year, and took almost no time at all for myself, my family, friends, or anything else but work.  In 2015 I got it right, I think.

This year, my new sales were about 1/10 of what they have been in past years during this time, but I did a pretty good job of focusing on taking care of my existing customers, and more importantly, taking care of myself.  I got good sleep when I needed to.  I cut back some on exercise, but kept it going, and even did a "50k" race.   I didn't take complete days off, but I took some time to bow hunt during the rut, something I haven't done for the past 10 years.  I took a class.  I spent more time with my family.  I even took advantage of some beautiful weather and camped out a couple of nights when I was on the road instead of driving home tired or staying in a questionable hotel room.

Poe Hollow, Mount Ayr, Iowa

I wrote fifteen new blog posts during AEP, which is fifteen more than the prior nine years combined, and also wrote 2 new songs.  Instead of gaining 10 or 15 pounds and feeling completely wiped out at the end of AEP, I'm .2 pounds lighter and feeling great.  That's success in my book.

New Strategy For "Bridge" Health Insurance

Before Affordable Care Act (AKA "Obamacare") I often was asked to help find health insurance for people who were a couple of years from Medicare eligibility.  Most often it happened when a husband retired at age 65 and his wife was younger, usually by a few years.  Health insurance was easy for him because he was new to Medicare, and they could both collect Social Security if they wanted.  It made sense of both of them to retire while they were healthy enough to travel extensively if they wanted to.  Getting health insurance for the non-Medicare spouse required answering some health questions, but I could usually get her a decent rate by selling her a policy that excluded maternity and mental health coverage.  It was a safe bet that she wouldn't get pregnant, and if she hadn't had mental health issues by her early 60's, the odds were against her developing them suddenly.  I could get her a decent health insurance policy for around $200-300 per month.  That was affordable and reasonable.  Those days are gone.

Now for someone in the last few years before being eligible for Medicare, that "bridge" coverage costs two to three times as much because everyone is accepted regardless of health, and the policy has to cover maternity and mental health.  That drives up the cost, making doing the things people want to do in retirement less affordable.

As much as I dislike it, I'm wondering if the best solution is to manipulate income in order to qualify for a tax subsidy to cover health insurance cost.

For example, an Iowa couple with an income of $50,000 with him on Medicare could get a monthly tax subsidy in the neighborhood of $150 per month for her health coverage (per this calculator, at least).  If income is $40,000 instead of $50,000, the subsidy increases to just under $280.  That doesn't mean the couple has to have $10,000 less to spend, it just means that they need to decrease INCOME by $10,000.  There are lots of ways to do it.  For example, take $10,000 more out of a savings account and take $10,000 less from his 401K.  One of the screwy things about the ACA is that the subsidy doesn't care what you have for assets.  You can be a billionaire in term of assets but still qualify for a subsidy if your "income" is low.

Just one more reason to have some assets (Roth IRA, life insurance cash value, etc.) that can be used without increasing "income".

Why Not Self-Directed Roth IRA?

Usually when I'm writing here, it's more to share my wisdom (just lobbing that one up there for you to take a swing at) than it is to ask for advice.  This time I'm asking.  I'd love to hear what others have experienced or considered, what holes you see in what I'm thinking, etc.  You could email me at or better yet, I'd love to discuss face to face.

My older son recently started working at Hy Vee, so he'll be able to start an IRA, most likely a Roth.   I've been thinking about how cool it would be if he maxed out his contributions every year, how well off he would be with all those years of contributing and growing it.  But what's a good way to grow it?  I love fixed indexed annuities for conservative growth and/or income in retirement, but he's not even out of his teens.

Here's what I'm thinking I would do if I were in his shoes.  I would max my contributions until I had enough saved to buy a piece of investment real estate (or rather a significant enough down payment that the rent would cover the payments).  Or one of the many other options available for a self-directed IRA.  I'm especially intrigued by the idea of  investing in "intellectual property".  The way I'm looking at things, he could be an entrepreneur who never pays taxes on what he makes from his investments, just keeps reinvesting them.  And then passes them on tax-free if set up as a Roth.  Seems like a heck of a deal.  With a lot of work involved to figure it out.

I'd love to hear your perspective on it.

Sycamore 8--Friday Favorite

Sycamore 8 is my favorite local race.  About the only thing I don't like about it is that it's the first weekend in December, which means it is also on opening day of the shotgun deer season and the last weekend of Medicare Annual Election Period.  The stars have to align perfectly for me to be able to squeeze it in.  Unfortunately, they aren't lined up for next weekend.  But YOU can still register here.

The race director, Brad Dains, is top notch.  He's pretty impressive as a runner, but even better as a race director and all around good guy.  Here's what makes it my favorite local race.  In no particular order.

• It's close to home for me.  Which means I don't need to drive there if I want to run or walk there.  
• The weather both times that I've done it has not been above 80 degrees (I'm not much of a warm weather runner).  In fact, I don't think it's even been above zero.

• The race finishes in a parking lot, so I can get warm, dry clothes right after the race instead of having to walk several blocks to my vehicle.
• The proceeds go to a good cause (Central Iowa Trail Association)
• A bus is available to take participants from the finish line to the start.
• I am very familiar with the trail since I run and bike it often because of its convenient location.
• Warm, tasty soup at the finish
• Eight miles is enough of a distance to be a challenge, but not so long that it gets boring or I'm overly sore the next day.
• (saving the best for last?)  Great swag.  I have plenty of t-shirts already.  From this race I've received a stainles steel pint "glass", a very nice bottle opener/key ring that I have attached to my computer bag, and an orange Buff that I use often.  This year there will be a small bag f "Sycamore Single Track" coffee.  Trail running and coffee.  Can't go wrong there.

Thank you, Brad, for directing my favorite race.  Someday I'll do it again.

Thanks, Mom

Thanksgiving has been a hard day for me since my mom passed away.  Today I'm thankful for the last lesson she taught me:  life is short, and every day matters.

As a kid, Thanksgiving was "our" holiday, the one where we were the hosts for Mom's family.  This is what it looked like.

(Got my best side)

I have a lot of great memories of Mom and I having rare one-on-one time every year on Thanksgiving morning, the two of us working together after my paper route was finished and everyone else was still sleeping.  With six kids in the family, there wasn't much time that it was just the two of us.

Every year on Thanksgiving I find myself irritable, usually getting into arguments over stupid stuff with my wife, etc.  I'm getting better at focusing on enjoying the good memories instead of thinking about the loss, but it's still a tough day.  

It's a tough day, but it's one day closer to the end of my life, so I'm going to keep making the most of every one.  Happy Thanksgiving!

Dave Ramsey is Wrong--Part 2: Long Term Care Insurance

If you missed Part 1 regarding determining the right amount of life insurance to purchase, it gives a little background to this post.

Dave Ramsey's is wrong with many of his comments regarding long term care insurance.  Not completely wrong, but kind of like those true/false test questions, it only needs to have one little bit wrong to be "false".  And that one little false bit can really screw up a person's life.  Here's what he says on page 160 of Dave Ramsey's Complete Guide to Money.  "Statistically speaking, long-term care coverage is pretty much a complete waste of money--until you turn 60.  Then, something dramatic happens.  Long-term care coverage goes from being a waste to being an essential part of your insurance plan.  You don't need it when you're fifty-nine, but you need to be on the phone setting it up the day you turn sixty".  Huh?  The other things I disagree with him on, I can at least see why he thinks the way he does, even if I disagree with it. But this is completely illogical.  At 59 and 364 days LTC insurance is a waste of money, but the next day I absolutely have to have it?  But what if I was born 2 months premature?  What if they had to induce labor because I was 2 weeks overdue?  Do I adjust accordingly?   Why isn't he recommending that I buy it to be effective the day before I turn sixty and "waste" the premium on one day of coverage so that I pay a 59 year old rate instead of a 60 year old rate for the next 20 years or so?  That argument would at least make some sense to me. It would at least be a "smart" financial move.

His first mistake is his first word: "statistically".  Statistics are extremely important when it comes to insurance.  To the insurance company.  But they are absolutely meaningless to you as an individual.  It doesn't matter what the average length of time needing long term care is.  It doesn't matter what the average age of a person needing long term care is.  All that matters to YOU is when YOU need it, how long YOU need it, and when or if it happens to YOU.

You don't buy insurance to protect you and your family from something that happens when and how you expect it to, you buy the insurance to protect you in cases where you are NOT average.  For example, no one in their right mind says, "I'm not going to buy home insurance because most people's houses don't burn down.  It's a complete waste of money.  If it looks like my house is going to burn, then I'll buy home insurance."  We all know what would happen if a person did that, even if you aren't like me where every time there's a forest fire I get a barrage of emails saying that no one in that area can buy a new home insurance policy.   That's almost what he's saying to do when he says that you should wait until your 60th birthday to by LTC coverage because younger people rarely (according to statistics) need LTC coverage, but after 60 they are likely to have a claim.  Does he think the insurance companies are not aware of these statistics?  And that they don't factor that into their underwriting and rates?  They don't issue a single policy that the statistics tell them they will lose money on.

Are there 60 year-olds who are able to qualify for coverage?  Sure there are.  Also from page 160:  "According to the American Assciation Homes and Services for the Aging (AAHSA), 69 percent of those turning age sixty-five today will need some form of long-term care".   Translation:  31 percent of those turning age sixty-five today will NOT need some form of long-term care.  Who do you think the insurance companies want to sell their policies to?  The 31% or the 69%?  They aren't 100% right all the time, but they do a pretty good job of avoiding selling policies to 69%.

As I said, there are 60 year-olds who qualify for LTC insurance, but there are quite a few who don't.  People who would have qualified at age 50 or 55 or 59.  You can't just buy long term care insurance with money.  You have to be healthy.  If you've ever had a heart attack or stroke or cancer, you've got an uphill battle.  If it's been within the last few years, it's next to impossible to qualify.  Or if you've had back or joint surgery.  Or missed work because of a bad auto accident.  Or any other health issues.  Have you ever heard of anyone having any problems like that before they were 60?  Especially between 50 and 60?  If you haven't, then you haven't been paying attention.

That's only a small part of what's wrong with his views on long-term care insurance.  Looks like I'm going to have to have a Part 2-B at least.

Dave Ramsey Is Wrong: Part 1

Tonight was the last night of Financial Peace University for my wife and I.  If you aren't familiar with FPU, it's a class by Dave Ramsey, usually hosted by a church.  Rather than misstate what they do, I'll quote his mission statement directly from his website.  "Ramsey Solutions provides biblically based, common-sense education and empowerment that give HOPE to everyone in every walk of life."  That's a pretty good mission statement.  I admit, they do it very well.  He's even better as a marketer, especially when it comes to knowing his target market and tailoring his message accordingly.  I've learned much more watching his marketing than I have from the content of the class.   I recommend taking it, even you are pretty knowledgeable regarding finances.  The lessons are more about changing behavior rather than financial knowledge.  Behavior trumps knowledge every time.

So why did I put "Dave Ramsey is wrong" at the top of this post?  Partly because it will evoke an emotional response from a lot of people who read it.  But mainly because as much is I like his stance on a lot of things (we both are big fans of HSA's and Roth IRA's, for example), he is wrong, contradicts himself, oversimplifies and/or uses too many absolutes on several topics.  Which is why this post is only "Part 1".

Since life insurance is my favorite financial product, I'm starting there.  From page 167 of Dave Ramsey's Complete Gude to Money  ( book of less than 400 pages is a "complete guide to money"?) under the heading,  "How Much Coverage?"
"You need to get coverage equal to ten times your income.  So if you're working and making $40,000 a year, you need $400,000  The ten-times rule of thumb is not an arbitrary number.  Remember, life insurance is designed to replace your income.  If your surviving spouse invests that $400,000 in good mutual funds at an average 10-12 percent return, he or she could peel off $40,000 a year from that investment to replace your income without ever cutting into the principal."

Sounds great, doesn't it?  It's easy to do the math.  10 x $40,000= $400,000.  $400,000 x 10% plus $400,000 principal = $440,000 minus $40,000= $400,000  It very much reminds me of listening to a politician.  We all stand up and cheer, and feel good.  Unless we start thinking too much and see the holes.  There are a lot of them.

• Where does the income come from for the first year?  Unless you wait to take income until the mutual funds have earnings, you cut into the principal right at the beginning, so it's not $400,000 that is doing the earning.  Your initial principal for the investment is $400,000 minus whatever you used to cover funeral expenses and all the other additional things that came up due to the death
• Dave Ramsey himself says in the same book on page 212, "Mutual funds make excellent long-term investments, but don't bother with them unless you can leave that money alone for at least five years.  This where you park your money for the long haul, looking toward retirement".  So what you're saying, Mr. Ramsey, is that if I die tonight then my widow should put my life insurance proceeds into a retirement investment and leave it there for at least five years?  And during that five years the bill fairy will come and wave her magic wand and all the bills will be paid and my kids will have their college tuition covered?
• Page 211 says, "The average annual return from 1926, the year of the S&P's inception, through 2010 is 11.84 percent.  Just keep in mind that's the eighty-year average..  Sure, within that time frame there are up years and some down years."   Between now and 1970 there have been 9 years that the S&P has been down for the year, with the worst year (2008) down 37%.  I wouldn't be comfortable betting my family's future on something that had approximately a 1 in 5 chance of dropping in value the same year I died.  I don't call that "Financial Peace".
• If I am a good, ambitious person, I should expect to be making more money in the future than I am now, and a lot of the plans for my family expect that too.  It doesn't give me financial peace thinking that if I died tonight then my family's income (assuming that I follow his plan and that the proceeds consistently earn 10% year after year in mutual funds, even though that has never happened) would never increase, that it would be locked at the same level it was on the day I died.

I could keep going, but going on and on about it isn't necessary.  If you haven't figured out by now that you should consider more than just "10 times your current salary" to calculate the right amount of life insurance, then you probably won't ever get it.  There are a lot of  other ways, often just as simple to calculate.  Listing them all here would be more confusing than helpful, since without knowing the particulars of your personal situation, no one can tell you what the best calculation method would be.  A good professional would get to know you in a way you are unlikely to get doing a web search or something like that.

 Anyway, I do need to go to sleep so I don't put my family in a position of using my life insurance proceeds to provide their financial peace.  One time of driving sleep-deprived  was more than enough.  (And I also recommend Dave Ramsey's book, More Than Enough--pun intended).

Back Country--Friday Favorite

There's lots of excitement about the new REI opening last Saturday in West Des Moines.  I haven't been there yet, but my son is convinced that I'll be taking him there tomorrow.  I don't have anything against REI and own a couple of their sleeping bags and one of their backpacks, but I don't see them replacing Back Country as my favorite.  Not just for Friday, but every day.

When I say "Back Country" I don't mean the online retailer Back Country Outfitters.  I mean our local store whose website is http://theoriginalbackcountry.com/    I'm not one of those people who says we should support local businesses simply because they are local.  I think we should support local businesses who do things better.  That's why I support them.

When I go into Back Country, I know I'm going to get personal service from a knowledgeable person who will remember me when I come back and who actually backpacks, camps, runs, etc.  I also know that I'll get a fair price.  It may not be lower than the discount outfitters (sometimes it is), but I know it will be close.  And I don't have to pay shipping or wait or have to drive across town.  Which means less time shopping and more time for fun!

Great Race, Better People: Vet's Run "50k"

You know it's a good race course when you have to replace your shoes in the middle of it.
I didn't get any pictures of the course, but some friends got some pretty good shots.

Photo courtesy of Kevin Riessland

Photo by Sheri Pfeil

Photo by Angry Cow Adventures

This race report turned out much longer than I planned.  Most of it is for me to remember and reflect, so feel free to just look at the pictures and skim if you want.

For a few years I've heard lots of good stuff about the races that Jim Craig puts on with Angry Cow Adventures  I have heard that his races are very challenging but fun, and he treats every entrant like a super star, regardless of ability.  I wasn't planning to do a 50k this year, but I was going to be working nearby and bike racing season is over, so I said, "Why not?" and entered.  After seeing a map of the 5ish mile course (which I would run 6 times), I knew it was going to hurt.  The only question was how much.

I found my way to Indian Cave State Park Friday night just before they closed the gates at 10 p.m.  I had no idea where I was going, but another guy (who I'll call "Mercedes" since he was driving an older one) drove into the park just after me and looked like he knew his way around.  I said, "You here for the race too?"  He didn't even know there was a race, but was impressed that I was going to be doing a "supermarathon" as he called it.   He and his dog were there to camp with some friends, but he told me I could just drive around and should be able to find a spot.   I drove for 10 or 15 minutes through the park looking for a familiar vehicle or some kind of clue that I was at the race site.  Just before a "road closed" sign I saw an "Angry Cow Adventures" sign and figured I must be close.  I also saw someone parking a truck with a 50 mile sticker, so I figured I must be in the right place.  I introduced myself (found out his name was Jeremy, not realizing until later that it was Jeremy Morris, a super fast guy who won the overall title for the Red Dirt Trail Running Series) talked to him briefly, and decided that we were probably in the right place according to the maps.  I set up my tent just a few feet from my truck, rolled out my bag and fell asleep looking at the stars, which were still out when I woke up with a glow in the east.

I brewed a pot of coffee and ate some roasted beets mixed with sour cream and lots of salt (always have before a race) and a couple of small tortillas filled with a mix of boiled eggs, avocado, onion and lime juice that I'd brought in my cooler.  Then I got into my racing clothes and put on warmer clothes over the top since it was only in the upper 30's.  I had a few minutes before I could check in, so I relaxed in my warm truck for a few minutes until I could check in at 6:30.

After getting my number and putting it on my race belt, I started seeing some friends arrive and had a chance to chat with them.  I usually spend most of the actual running time alone at the majority of the events I do, but I love the social part of before and after races.

Of course just as everyone else was arriving and the parking lot was filling, my morning coffee and all the fiber from the prior three days hit me at once.  I hadn't seen any bathrooms in the immediate area but had seen some driving in.  I got in my truck knowing that I would lose my prime parking spot, but I didn't think I had time to walk to the bathrooms and make it back to the start. I started down the road and had barely gotten out of the parking lot before I found bathrooms that I had missed driving in.  By the time I got back my prime spot was gone, but I was able to still park at the end of the lot furthest from the start area.

I took off my warm clothes and got down to shoes, socks, compression sleeves, running shorts, hat, sunglasses, and my long-sleeved tech shirt from the Drake Half-Marathon.  I didn't realize until later that it's the one that says, "In it for the long run" on the back.  I later laughed thinking that I was wearing that for a 50k race with many people who have run 50 and 100 mile races.  I debated wearing gloves, but figured I would warm up quickly and wouldn't want them.

Just as we were about to start, someone, I think Reg Bollinger, suggested that we get a photo of everyone participating.  Great idea.

I briefly considered sprinting ahead at the start so I could say I led Kaci Licktieg in a race, but I knew I would be suffering plenty later in this race.  No need to make it worse than necessary.  If you don't know who Kaci is, you should.  She's one of the top trail runners.  Period.  Not "in the Midwest" or "on the women's side".  One of the top trail runners.  Here's her blog and you can find a lot more about her with a google search.

The first mile or so was mostly downhill, with some steeper and more technical sections of downhill, which I absolutely love.  Maybe from having so many bicycle crashes, I'm not scare of falling, so I descend faster than most people at my level.  I soon found myself running and chatting with a small group that included  Kevin Riessland, Angie Hodge and another lady that they knew but I did not.   Among other topics was the unknown lady saying that she always is afraid that Kaci would lap her at the GOATz 50k race, to which I replied that Kaci had never lapped me there.  Because I'd never raced it.  I also remember saying that I had made the wrong decision in opting to not wear gloves since I couldn't feel my hands. After more conversation I introduced myself to the unknown lady and found out that she is Kaci's mom.   No surprise that they are equally nice.

Even though I felt great, I knew I had no business at all running with that group.  I've seen Kevin and Angie run enough to know they are much stronger and faster than me.  I forced myself to slow down and go at my own pace, keeping a close watch on my heart rate.  I knew if I kept it in the low 140's I could maintain that for a long time.  But even doing that, I was able to occasionally see glimpses of Angie's pinkish/orangish hat up ahead of me even at mile 4.  I kept telling myself to slow down, but my running felt effortless, like I could go like that all day.  I was shocked that I was almost back to the start/finish area before the three leaders, Kaci Licktieg, Jeremy Morris and Miguel Ordorica, went past me on their way out on their second lap.

At the start/finish line aid station I just topped off my water and went back out.  I didn't check the time when I came I finished the lap, but I did look at my Garmin in the first mile of the second loop and realized I'd done the first loop in about 50 minutes.  Big shock since I was optimistically hoping to average an hour per lap.  I ran briefly with a few other people, but for the most part I ran alone, continuing to monitor my heart rate, feeling great and forcing myself to slow down through the 2nd lap.  It was very uneventful.  I started to feel a little hungry, so I took a little more time and ate a piece of foccacia bread, a muffin, and grabbed a small can of Coke to take with me but was in and out of the turnaround/aid station quickly.

Early in the 3rd lap I had my first minor difficulty.  I was feeling a hot spot on the bottom of my right big toe on a steep downhill.   Luckily I've paid attention to my smarter, more accomplished trail running friends and took their advice and took care of the small problem before it became a big problem.  I sat on a log, took off my shoe and sock, slathered on some Glide, put the shoe back on and got back on the trail.  No one passed me, and it couldn't have taken more than a minute.  The rest of the 3rd lap was pretty much a replica of the 2nd.  I finished the lap with the time showing 2:30, so I had averaged right at 50 minutes per lap!  I was way ahead of my goal time.  I got another Coke and piece of bread and headed out for lap 4 full of confidence.

The confidence drained in a hurry.  Down the first hill my legs hurt,  and I was putting on the brakes instead of letting it flow and enjoying the gravity of the downhills.  Instead of forcing myself to walk the uphills like I did the first three laps, I kept catching myself walking the runnable parts and had to force myself to run at all.  I wasn't enjoying the view any more.  My heart and lungs were good, but the lack of time on my feet had caught up with me.  Then I looked down at my feet and saw the hole in the side of my shoe.  It looked better  and less torn up than I felt.  The first 3 laps I averaged about 10 or 11 minutes per mile, but now it was 13 to 15 minutes per mile.  I still felt I could finish, but not anywhere close to what I had been thinking just a lap before.

I staggered up the last hill of lap 4 and headed to my truck at the FAR end of the parking lot to get different shoes.  "Mercedes" was just coming out of the woods with his camping friends, gave me a big smile and said, "You did it!".  I had to reply, "Not yet.  I'm only two-thirds done" and showed him my shoe. While at the truck I grabbed a couple of pickles from my cooler and filled my coffee cup with the juice.  I've never found anything better than pickle juice for fighting cramps, so I hoped it would work.  I drank half and put the cup against a tree in the drop bag area, hoping no one knocked it over so it would still be there for my last lap.  I refilled water, got another Coke and piece of bread and headed back out.  I walked the downhill, eating, drinking, and trying to refocus.

It wasn't good, but lap 5 was definitely better than lap 4.  I still had to force myself to run and didn't quite let it all out on the downhills, but it was better.  I hurt, but knowing the end was near, I was able to push through.  I did get lapped by a few people, including Angie and Kevin that I'd been with on the first lap, but that wasn't unexpected.  The unexpected part was that they didn't lap me sooner.

At the start/finish I downed the other half of my cup of pickle juice, got another piece of bread and Coke and headed back out.  It still hurt, but knowing it was the last lap, I was able to get a little more flow to the downhills and run the runnable parts.   I did yell out, "F' you, Jim Craig!" going up the steepest climb the last time, not because of disliking him, but because I had conquered the toughest obstacle he had put on the course for me.  That felt great!

Shortly after that I caught up with my friend Colleen Duda who was pacing Bill Lauer.  He was having some cramping issues, so I gave him an unopened gel containing some electrolytes that I had found on the trail, and then went on ahead.  Apparently it worked, because they passed me shortly after that.  I heard Colleen tell him, "only a mile to go".  Apparently part of being a good pacer is being a good liar, because I knew it was at least a mile and a half, probably two.  But it worked.  I never caught back up.  In the last mile I actually felt like I was "racing", which was a goal to be able to do that on the last lap.  I kept hearing a group behind me, but I was able to push hard enough to stay ahead of them to the finish line.

The finish line food was outstanding!  Colleen's Catering makes some incredible potato soup.  It was so good that I just kept getting more bowls of it instead of even trying the other stuff.  It even made up for me being too slow (official time of 6:11:42)to get any of the Hamm's at the finish.

I'm not going to call myself an "ultrarunner" since according to my Garmin it was just over Marathon distance, not a full 50k.  It was definitely more difficult than the one Marathon I had done before, however.

Jim Craig lived up to his reputation.  Even though we had just met that day, he knew me by name when I came into the finish, shook my hand and congratulated me, and thanked me for coming out for his race.

I got the same attitude from everyone there.  The top runners greeted me on the trail, congratulated me and made me feel like I was one of them, even though I'm nowhere close to them in ability.  the not at the top runners did the same thing.   They are exactly why I say, "I'm not a runner; I'm a bike racer.  I just run so I can hang out with the cool kids".

P.R.I.D.E. In Health

When I worked at Clarinda Academy, we had shirts that read "PRIDE" down the left side, with the words "Personal Responsibility In Determining Excellence" across.  That was our attitude.  I thought of that when I saw these billboards today on Fleur Drive.

Were I (God forbid!) the president or a candidate for that office, I'd be more than a little irritated if someone asked me what I planned to do about it.  My response would be something like this:  "Let me get this straight.  I'm responsible for making sure planes don't get brought down by terrorists.  I need to decide whether or not to launch a nuclear attack and possibly destroy the entire earth.  I have to make sure we get along with hundreds of other countries, balance a multi-trillion dollar budget, stimulate the economy, and get political parties that hate each other to work together, but it's ALSO my job to make sure your kid has something other than Pepsi and and candy corn for breakfast, that you exercise on a regular basis and your mom quits chewing Skoal?  Really?  REALLY???"

I did look at the website http://www.fightchronicdisease.org/iowa and saw that they at least say that they are for prevention, and some of their partners are organizations I support. However,  their policy platform  "proposes the following public policy recommendations to help our nation’s leaders – including the 2016 presidential candidates – address the growing epidemic of chronic disease and highlight commonsense reforms that will help the nation address this challenge".  We don't need "public policy", we need P.R.I.D.E.!  Don't ask what presidential candidates can do for you; ask what you can do for yourself.  Exercise.  Stop stuffing your face with carbohydrates.  Stop using tobacco.

The vast majority of chronic disease, especially Type 2 diabetes, is caused by bad decisions, not bad luck.   We don't need more government studies to find out what causes them or more funding for more expensive treatments for the symptoms.  We need grow up, to take responsibility for ourselves, and to stop acting like victims.  It's simple.  Not easy, but simple.  Bring back an insurance billboard.

Money Is Time, Part 2

Do you consistently calculate how much time a purchase costs you?  Try it some time.  Or all the time.  It will definitely change how you spend money when you also consider that you are buying time.

I've heard others talk about this, but the ones I've heard don't do it completely.  They usually say something like, "To calculate how much an item costs you in time, divide the cost of it by your hourly wage.  That will tell you how much time you have to work to earn the item".  So a person making $25 per hour would have to work 4 hours, or half of a work day to pay for a $100 item, right?  Not right.

I'm using estimations and round numbers here, but let's start with sales tax.  It's conservative to put it at 5%, meaning that you need to pay $105 to get it.  Assuming free shipping.  Or if you are going somewhere to buy it, you're going to spend money on gas, wear and tear on the car, or bus fare, or whatever.  Plus the time to get there.  Put that into your calculations too.

If you've ever had a paycheck, you know you don't bring home 100% of your hourly wage.  80% would be a very high percentage, so it would be generous to figure $20 per hour, so 5+ hours of working to cover the item.  If you have an unpaid lunch break your up to at least 6 hours.  If you have a commute, probably add another hour.

So in this case, the real time cost of a  $100 item is more than 1/4 of one of the limited number of days this person has on the earth.  He or she is never going to get that time back.  I hope it's worth it.

Try making the calculations with your own numbers.  It's eye opening.  For me, it's been a great help in getting me to not make frivolous purchases, increase my earnings per hour so things cost me less time, and to get more enjoyment from the smart purchases I make.  It's worth every minute.

Money Is Time

Among other things that I have let get in the way of me blogging consistently is my son's math homework that I've been helping him with.  I'm not really a very good math teacher because I don't understand how other people don't understand it.  Luckily, he's the same way, so I usually just have to explain it once.

Somehow in my mental ramblings while he was working on a problem, I started thinking about how people often say "Time is money".  Which, thinking mathematically, means "time=money".  So according to the symmetric property of equality, "money=time".  Just as I don't "get" how others don't "get" math, I also fail to understand how people comprehend "Time is money" but ignore "Money is time".

The older I get and less time I have left on this earth, the more I see how money is time.  With money I can buy more time by doing things to improve my health and extend my life.  More importantly, with money I can upgrade the quality of the time that I have.  I can pay someone else to do chores I don't like to do so I can spend my time doing things I want to do.  For example, even though I know how to do it and could save a few dollars doing it my self, I don't change my own oil in my truck.  I buy time.  It's worth it.

Here's something to try when considering paying for a service:  if someone offered to do the task for free, would you let him or her do it for you?  If so, you should probably pay for the service.  Your time is almost always worth it.  Example, I pay for someone else to work on my car, but I do my own mechanical work on my bicycles.  Not because I can't afford a bike mechanic, but because I like doing it, and would do it myself even if someone offered to do it for free.

And yes, this does relate to insurance.  I almost always think "money = time" when working with retirement and life insurance issues.  That's what it's all about.  Having enough money that you control your time.  If you don't or can't do that, you aren't "retired", you are "unemployed".

They Underestimated. Again

Robert A. Heinlein Power Quotes

Also, "Don't underestimate the other guy's greed"--Frank Lopez in Scarface

I spent the today and will spend much of the time over the next several weeks talking with people about why health insurance rates are going up and/or benefits are being cut.  Calling it "greed" and "stupidity" might be a little bit harsh, but it shouldn't be surprising.  Anyone who thought that we were not going to have huge increases in health insurance cost is naive.  If people are given the opportunity to get something for nothing or for less than fair market value, they will.  Not everyone, but enough of them that there will be huge cost overruns.  It's human nature.  It's about survival.

If you haven't seen it in the news, the big "underestimation" of expense this past year was in relation to specialty drugs.  Even though there are a small number of people taking them, the costs are very high.  Before the Affordable Care Act, insurance companies were able to control for expenses by declining people who were likely to need them.  Now that the insurance companies can not decline an applicant, why would a person suffering from something like Hepatitis C apply for coverage with the lowest possible deductible and get the prescription to cure it?  He or she would be stupid not to.  If you were in that situation, do you honestly think you would care that you doing that would cost the insurance company tens of thousands of dollars?

I don't know the solution, but I do know that costs will continue to be underestimated.  Why?  Because the public moves much faster than the government and the insurance companies.  As long as there are dollars to be had, someone will find the way to get them.  It's simple supply and demand. It's already started with pharmaceutical companies coming up with "better" more expensive drugs.  They can afford to manufacture them because there is a way for them to get paid.

History repeats itself.  We don't even have to look back very far.  When Medicare Part D started in 2006, I rarely worked with people with high drug costs.   Most of my Medicare customers took no or few prescriptions, and mostly generics, because without insurance coverage, they either couldn't or wouldn't spend that much.  The exceptions were severe diabetics and those who had retiree group insurance with prescription benefits.  A person who was on "a lot" and/or "expensive" medications spent $50 to $100 on them.  I remember looking at "the donut hole" (coverage gap) of $2,250 and thinking, "Nobody uses that much in a year, or if they do, they'll be dead before long".  The vast majority of the consumers I spoke to said the same thing.   Most of them said that they'd never meet the $250 deductible.

Flash forward 10 years.  Going into 2016, even though the threshold for getting into the coverage gap is up to $3,310, a large number of my customers reach it before they get halfway through the year.  It's not unusual for people I talk to to have a drug cost (before insurance) of $500 or more per month.  The health of the people isn't any different, as far as I can tell, than people of the same age 10 years ago.  The difference is that  someone else is paying the bulk of the cost.  It's not just stupid, it's not just greedy.  It's just human nature.

History repeats itself.  Costs are going to keep going up.  Stop underestimating.

Grove and Platt Dental Associates--Friday Favorite

I hate going to the dentist, so it is strange that I'm writing about a dental practice as my Friday Favorite.

I started going to Grove and Platt because the dentist I had was charging more than everyone else while complaining that he wasn't making enough money, and they were recommended by one of my wife's coworkers.  I thought it was stupid to drive all the way out to Grimes to get my teeth cleaned, but I didn't have a better option.

The first time I went there I thought it was a fluke that they sent me straight in instead of sticking me in the waiting room for a half hour or more.  What I found, however, was that not waiting is the norm there.  I've been going there for several years, and I still don't know whether or not they have decent magazines in the waiting room.

In addition to the lack of waiting, they up the ante by making it feel like I'm going to a spa.  I can get a hot wax treatment for my hands (tried it once, felt trapped) or a hot towel wrap on my neck (love that!) each time I go in.  They also have free coffee and tea and water.

The best part is that they don't overcharge.  Virtually every time I've been there I get a refund after my insurance gets done processing their part.  Nothing beats that.

You never get a second chance at having teeth.  Keep yours healthy.  You can find them here.

My Ideal Customer

There's an old saying in the life insurance business.  "There are only two reasons to buy life insurance;  you love someone or you owe someone money", which is of course means that virtually everyone should buy life insurance.  I agree with that, but that doesn't mean that everyone should buy it from me.  As much as I would like to have the commission from that many life insurance sales, there are only 24 hours in the day, and I'm not a good fit for everyone.  Just as there are many people who are great people individually but don't make a "love connection".

I don't often ask for referrals, but I get a lot of unsolicited ones.  I love when it happens, because there's no better indicator that I am doing a good job for a customer than he or she telling friends and family about me.  Most of the time it works great, but sometimes it's like an awful blind date.  That doesn't mean to not refer someone if you're not 100% sure it will work out.  I've been at this long enough that I'm not going to curl up in the corner and cry if I get rejected.  But I am going to publish this list so people have a better idea of the likelihood of me being a good match.

Here are characteristics of my ideal customer.  For me to be a good fit, we should match on at least a few of these.  

• Positive Attitude
• Non Smoker (Ex-smoker is even better)
• Athlete/competitor/fitness and health-oriented
•   Parent
• Goal-oriented/planner
• Self-employed
•  Has connections for people to refer to me.  A social person.  
• Open-mind
• Critical thinker
• Passionate
• Cares about others
•   Hates paying taxes
•   Into self-improvement
•  Odd/eccentric  Rebellious
•   Loves being outdoors

That is far from being a comprehensive list, but it's a good start.  They don't have to owe anyone any money, either.  Dave Ramsey followers are just fine with me.

Enabling Natural Consequences

"If I accept you as you are, I will make you worse; however, if I treat you as though you are what you are capable of becoming, I will help you become that."--Johan Wolfgang von Goethe

I try not to get sucked into political debates, especially on Facebook, mainly because they are akin to discussing religion.  The vast majority of people already have their minds made up on what is right and what is wrong, so they embrace the things that support their existing viewpoint and ignore or fight violently against things that contradict their existing viewpoint.  Almost every time the result is that people on both sides are angry and further entrenched in their beliefs.  It just doesn't seem like a good use of my time and energy.

However, the quote above got me thinking about politics, so I'm doing a brain dump here.

Especially since my years working at Clarinda Academy and Tarkio Academy, I have strongly believed that natural consequences are the best teachers and behavior modifiers.  When it comes to addictive behavior, the hardest type of behavior to change, behavioral changes only happen when one "hits bottom".  The "bottom" is different for different people, but unless a person suffers the pain of the "bottom", he or she won't change the behavior.  Enablers are one of  if not the very biggest hurdle to addicts overcoming addiction.  If  you aren't familiar with the term "enabler", the Merriam Webster definition is "one who enables another to persist in self-destructive behavior (as substance abuse) by providing excuses or by making it possible to avoid the consequences of such behavior".  Enablers do things like giving addicts unearned money, making excuses for them so they don't suffer social consequences, covering their work or family obligations, etc.  Enablers don't do it out of evil intent, but with the intention of "helping".  Sometimes they think they really are helping, or sometimes they know they are hurting in the long run but choose to make the short term "better".  But the effect is that by keeping the person from hitting bottom, he or she never recovers so he or she never makes it to the top.  In fact, they are always close to "bottom".  Which puts continuous stress on families, friends, employers, neighbors, and society in general.

So how is this political?  It got me thinking about politics, because what is our government except the world's biggest enabler?  The vast majority of government programs (and even more so the most controversial ones) are all about preventing people from suffering the natural consequences of their negative behavior (and in many ways prevent from enjoying the natural consequence of good behavior).  Didn't save money for retirement?  We'll make a government program to pay you anyway.  Didn't pay attention or didn't go to school?  Haven't developed sufficient skills to demand high wages?  The government will make your employer pay you more than they want to so you can have  stuff anyway.  Or if it's not enough, the government will supply you with food and housing.  Have an unintended child?  Or six or eight or ten?  The government will supply all your needs so you can continue to be a parent.

Some may say that I have a negative view of people, that many are "losers", etc.  But it's the opposite.  I truly believe that those dependent on government programs are capable of doing great things, that if they are no longer "enabled" then they will enable themselves.  I think that it's pompous and condescending to think that people can not overcome their circumstances without governmental help.  People are much more capable, resourceful and smart than anyone, even themselves, think they are.

Stopping the enabling by the government would be painful in the short term, and it's difficult to do, but it's necessary for long term success and results.

Are there good government programs?  Yes, but for the most part the government's role as an enabler is the "I" in "If I accept you as you are, I will make you worse".  It should not be acceptable to be uneducated, unskilled, and unmotivated in this country.  To make things better, we as citizens need to demand that "I (the government) treat you as though you (the citizenry) are what you are capable of becoming,  I will help you become that".  The best way to teach that is to stay out of the way and let natural consequences teach.  When we do that, we will get closer to realizing our full potential.

Cosi Cucina--Friday Favorite

My main criteria for going to a restaurant is that there has to be something about it that's better than what I can do at home.  I am a pretty good cook, so there are not a whole lot of restaurants who meet my standard.  Cosi Cucina is one for sure. 


I don't eat a lot of Italian food since I've changed my diet to mostly low carb, but if I'm going to go out for Italian, it's definitely the place to go.  Not just for the food.  From the time that Lisa and I first started dating, it's been the main place we've gone out to celebrate anniversaries, birthdays, etc.  There are a lot of good memories there from the last 20 years or so, in addition to the incredible food.


I'm hesitant to talk about how great it is, because I do like that it isn't as trendy as it was when we first started going there, and we can go in and get a table rather quickly instead of having to call ahead and still have to wait at least an hour, probably more like two.  However, I would not want the place to go out of business because of lack of business.


There are a lot of things to love about Cosi Cucina.    The bread.  The aromas when you walk in the door.  The bread.  The wait staff, some of whom were there the first time I ate there.  The bread.  The fact that you can eat fairly inexpensively, or spend a pretty good chunk of change.  The bread.  The white chocolate brownie for dessert.  The bread.  The way the wait staff describes the specials and soup of the day (It's better than calling a 900 number.  From what I've been told).  The bread.  The unusual specials (like ostrich) and soups (cream of red pepper, for example).  And did I mention the bread?

When you go there (it's mandatory, not optional), make sure you get the white chocolate brownie for dessert.  Just eat half your meal and get the other half boxed for tomorrow's lunch.  You'll be glad you did.

Frog and the Scorpion (Day 16)

In 1992 people were raving about the fable of the frog and the scorpion fable in The Crying Game, but I was thinking that it came from what I think is a much better movie, Skin Deep.  If you aren't familiar with it, you can view it here.  Or the Crying Game version here.  However, it was actually first in a film in 1955, an Orson Welles film called Mr. Arkadin.  Which probably stole it from something earlier.

Regardless of where it came from, it's still a lesson I'm continuing to learn.  I'm getting better at my job as I'm realizing that people often act illogically.  Sometimes I need to help them do that.  I always say that what I sell is a good night's sleep, but I've been realizing lately that I sometimes put too much emphasis on doing what is logical.

I had several examples come up today.  I talked to two different people who I could save some money by switching their health insurance to a different company.  I told them briefly how they could save the money, etc.  However, both of them expressed that they liked their current coverage, the premium is affordable, and that they felt safe and secure with their current company.  A few years ago I would have pushed hard for them to make the change to save the money.  Today, however, I reinforced them keeping their coverage as it is.  I reinforced their decision, making sure that they continue to sleep well.  That's the most important thing I do, even more important than saving them money.  I had a similar conversation with a customer regarding life insurance.  His kids have told him that he doesn't need to spend the money on life insurance.  I've crunched the numbers and see that he could possibly pay more for the life insurance than it will pay out.  It's not logical.  But logic has nothing to do with it.  He will sleep better tonight knowing that when he passes away, his family will receive a chunk of money without it having to go through probate, and it will be a quick and tax-free payout.  Taking care of his family, that's his nature.  And worth every bit he's going to pay.

Onederful! (Day 15)

It only took me a little over six years to write this. On July 25, 2009 I made a vow to myself that I wouldn't drink until my weight was below 200 pounds.  That vow was inspired by this photo.

My wife Lisa took that of me struggling to drag myself and all my extra weight up Snake Alley at the end of  the one day RAGBRAI I rode that year.  I was never skinny, but for several years in the late 1980's and early 1990's I had participated in Snake Alley Criterium, a bike race that required us (my lowly Category 4) to ride up this 12 times.  I never (yet) finished that race, but it was always because of crashes, not because I was unable to climb it 12 times.  It disgusted me that I had let myself get that out of shape.  Partly because I was miserable from drinking all day, and partly because I knew that I tend to overeat whenever I drink, I figured not drinking would be the way to drop the weight.  At the time I weighed just under 250, which was down a bit from my high point (not sure of exact number, but was in the 260-270 range).  I figured it would take me three to six months to get below 200.  No big deal to stay sober that long.

"Fast" forward to October of 2011.  I had been without alcohol for more than two years.  I had dropped the first 10 pounds easily.  I had to work harder for the next 10, but had been hanging around the 210-220 range for awhile.  I often sabotaged my weight loss efforts, I think because I was really liking not drinking.  I set myself a target of being below 200 and drinking with my college friends at homecoming the 3rd weekend of October.  I got down to 212 the week before homecoming and then attacked it like it was a wrestling weigh-in for the last few days.  I finally got to 199 after a couple of days without food and spending a couple of hours in Eric Brush's sauna.  Mission accomplished!

But not really.  In the past four years I've gotten healthier and stronger.  I've made at least one hundred new friends who lead active, healthy lifestyles.  I've started bike racing again, riding faster than I did in my 20's.  I don't drink like I used to.  My diet is much healthier.  I've completed a few triathlons.  I even completed a marathon.

This guy is never coming back.

However, I wanted and needed to make it a permanent change.  Really, my weight should be somewhere around 180, but since I got below 200 for a few minutes in 2011, my weight was usually somewhere around 205-210.  Until now.

I'm not sure why, but for a long time I've done weekly weigh-ins on Tuesday mornings.  Maybe it was because it was a Tuesday when I started using this phone app that has been a huge part of my weight loss.  I used to always weigh when I first woke up in the morning or after a workout, so I was usually dehydrated, but now I weigh after a big glass of water and usually some coffee with lots of cream and whey powder, so I know it's my "real" weight.  Here's what I weighed at this week.

I'm never going to see anything but a one for the first number on the scale.  Partly because I'm holding myself accountable by declaring it publicly.  Partly because of the incredible support I have from my family and friends, especially "The Grind and Grit" group.  But mostly because of my own commitment to keep it "Onederful".

(Almost) All Comebacks Are Possible (Day 14)

One of the reasons I prefere life insurance over all other products I work with is that it's the only catastrophe where a comeback is impossible.  Once you're dead, you're dead.  Life insurance prevents a personal disaster from also being a financial disaster.




Now that I've talked insurance, let's talk baseball!  Today's finish was one of the best finishes that I didn't see.  I didn't even get to hear Denny Mathews.  Instead I got John Kruk and some other windbag the radio.  The only good thing about it was that they were dead wrong when they declared the KC team dead after the Astros (when the heck did they move to the American League, by the way?) hit back to back homers and took a 6-2 lead in the bottom of the 7th inning.  I saw this on my computer screen while the commentators went on and on about how great the Astros were and how the Royals were done, couldn't come back from this deficit, etc.

I hadn't realized that it was an afternoon game until I got a text from my friend Gary "The Carrot" Davis, with whom I watched most of last year's playoff wins at Buffalo Wild Wings.  The way they had been hitting, I had my doubts about their ability to come back.  I even texted Gary, "I guess I'll be saving $ and time from not watching.  And more running miles".  That text was at 2:55 p.m., as I was getting ready to head out the door to parent teacher conferences. 

But before I left, the Royals quickly loaded the bases and had Lorenzo Cain at the plate with no outs.  I listened on earbuds and got text updates as the Royals scored 5 in the inning to take 1 run lead into the bottom of the 8th.  It wasn't easy, but I turned the radio off while talking to teachers, so I missed the 2 last inning insurance (see, I'm still talking about "insurance") runs supplied by Hosmer's homer. 


Now I just have to figure out how to squeeze a couple of days of insurance work into tomorrow so I can enjoy most of Wednesday night's game 5 clinching win for the Royals!

Kansas City Royals--Friday Favorite (Day 12)

Every day is a good day to be a Royals fan.  Some days, like today, are better than others.


The Royals have been my favorite baseball team for almost as long as they've had a team.  Because of players like Amos Otis (my favorite), Buck Martinez, and Bo Jackson?  Because of their beautiful park?  Because they've won the World Series one more time than the Chicago Cubs have in the time I've been alive?  No.  It's because of two men who most people have never heard of, Royals broadcasters Fred White and Denny Mathews.


Growing up I loved playing baseball and learning as much as I could about it.  Fred and Denny gave me my baseball education on KMA, my local radio station.  I listened to almost every game from the mid-70's to the mid-80's.  I learned what "hitting for the cycle" was when John Mayberry did it August 5, 1977.  They kept me awake way past my bed time relaying Jim Colburn's no-hitter on May 14, 1977, and many other nights, especially those when they were up against the Yankees.  They were too classy to say anything bad against the Yankees, but their descriptions of those losses turned me into a lifelong Yankee hater.


Fred was replaced in 1999 (huge mistake, in my opinion) and passed away in 2013, but I still do get to hear Denny occasionally when I'm within range of a Royals broadcast.  Nobody does it better.  How can a team who makes me feel like a 10 year old again not be a Friday Favorite? 

Paychecks and Playchecks (Day 11)

Most people seem to have forgotten that the 401(k) plan has mostly replaced the pension plan.  In the not so distant past, people worked for the same company for 20 or 30 or more years, with the reward for loyalty to the company was that at some point they would be able to continue to get a regular paycheck without continuing to work.  That was supposed to what happened with 401(k) plans, but with the employee rather than the employer having control.  But that hasn't been what happened, for various reasons like I wrote about recently (Follow the Money and Don't Die With This).


This is not advice on what insurance product to use, or even whether or not an insurance product is the right tool for the job (I usually think it is, but I'm biased.  Think for yourself too).  All I'm saying is that you need to have a plan so that, unlike a large percentage of people in retirement, you know that you have enough cash flow and liquid money to cover everything.  Even if something goes wrong.  Because it will.  Which means that if you're counting on dividends, rent being paid on time, or other non-guaranteed investments for your paychecks, you need to either change your plan or have a good back up plan


When I say, "enough cash flow and liquid money to cover everything", I don't mean just enough to cover the bills.  I mean enough to cover buying a different car if you need it, to buy someone special a really cool wedding present, to take a trip with friends, etc.  When you were in your 20's (or even if you're there or haven't reached that age yet), did you sit around with your friends and say, "All I want is enough of a paycheck that I can eat  two or three times a day and keep the electricity turned on?"  Of course not.  So why plan your retirement on having just enough to pay the bills.  Don't sell yourself short.  Plan to have enough in your regular checks to both "pay" and "play".

"How Much Did He Leave?" "All Of It" (Day 10)

Yesterday I wrote about what I see people do most often with retirement money, and said that instead of just complaining about their mistakes, I would offer some solutions.  As I often say, this isn't insurance advice.  Without sitting down with you and discussing the specifics of your situation, I can't make an informed recommendation.  What I'm posting here is very general, something to use to open a discussion with me or another professional and figure out an action plan, not something to take action on right now. 


People often tell me something along the lines of, "I want my money to run out the day I die, and the check to the funeral home to bounce".  They understand the old saying of "You can't take it with you."  However, they almost never actually spend their retirement money that way.  Just like a business, 401 (k) and IRA plans should have an "exit strategy" from the beginning.


These are some possibilities that in many cases are better than holding on to tax-deferred money until it gets passed to beneficiaries or a nursing home.

• Start a guaranteed income stream from the retirement funds and use it to buy a life insurance policy.  Often the best option is one that also provides a benefit if you need long term care.  Advantages:  Taxes on withdrawals are spread out over multiple years, and proceeds from life insurance to designated beneficiaries are not normally taxed.  Depending on age, health, etc, life insurance benefit could be more than the value of the retirement savings, even not figuring in tax advantages.  Depending on options chosen, beneficiaries may get both the life insurance benefit and more regular income.  At least they won't get everything as taxable.
• Gradually convert to Roth IRA.  You pay taxes on that part when you convert it, but it is later passed on without the taxes hitting all at once.  With some planning, you can offset the amount you convert with other deductions so you pay little or no tax on the money.  For example, I've had customers balance the Roth Conversion with deductions like large medical bills, HSA contributions, business losses/investments, work layoffs, etc.  I haven't had anyone do it, but it would be ideal to take a year off work to travel, live off savings, and do a Roth Conversion to turn money that's never been taxed to money that will never be taxed.  All without every paying any taxes on that money.  Do this only AFTER consulting with a tax advisor.  That's better than getting a surprise at tax time, and if the tax advisor is good, he or she often has ideas on how to do it even better than you and I think of doing it.
• Give it directly to a charity each year.
• Give a portion as gifts to family each year, paying a small amount of or no tax as you go.  With both this and the charitable giving, you get to see the benefits of your gifts, which is a lot better than saving on taxes.  They might even take you out fishing or water skiing on their new boat.

Those are just a few options.  A key to any of them is to have a plan for long term care.  Notice I didn't say, "long term care insurance" or "to pay for the nursing home".  The insurance part is sometimes involved in the plan, but just having a policy isn't enough, and often is not the best way to plan for it.  Nor is a nursing home always the best option.  But they are full of people who didn't plan because they didn't need a plan because, "I'm never going to the nursing home".

"Don't Die With This" (Day 9)

"Don't die with this".  I heard that from a company employee talking about one of their insurance products.  I found it refreshing, because usually a company wants a customer to keep a policy forever.  I wrote about that a few days ago so I'm not going to rehash it now, but if you want to read it,  just click this link for last week's "Follow the Money" post.


One of the things I complain about is people complaining about something without working toward a solution.  This is part one.  I will also discuss solutions in another post.




Unfortunately, way too many people die with too much tax-deferred money.   I have seen the same thing happen over and over again.  To the point that whenever I get an email from an insurance company talking about the huge amounts of tax-deferred money that's going to be passed on in the coming years, I always think, "Damn!  I should have been a boat salesman!"  Make sense?  No?  Let me explain.




Here is the pattern I see repeatedly:  person follows "expert" advice and puts everything he or she can into an IRA and/or 401(k).   They work like crazy until they and/or their spouse is eligible for Social Security and/or Medicare.  Then they quit their job.  They don't want to withdraw any of the money they saved because they would have to pay taxes on it.   So they scrape by on Social Security, worrying about money, thinking of their retirement savings as something that they will use to cover nursing home costs and/or pass on (almost always to their kids).




Then when they hit age 70 1/2  they start taking RMD's (Required Minimum Distributions), which isn't a whole lot in the first few years, but the percentage required goes up each year.  They pay the taxes, but let everything else sit there.  Then eventually they either go to a nursing home or die.  What happens then?  Most commonly, if they go to the nursing home, they spend through their money, then go on Medicaid if the money runs out.  How much enjoyment did they get out of it?  None.  If they are lucky enough to die either without having to go in a nursing home or before the money runs out, then that's where I think, "I should have been a boat salesman!"  Because from what I've seen, if two 60ish year-old kids inherit the money, at least one of them buys a boat.




Nothing wrong with buying a boat, if done the right way, but what happens time and time again is they "get a deal", make an impulse buy, and since they don't want to have payments, pull out the money to pay off the boat.  Then the tax bill comes.  The withdrawn money is taxable, piled on top of their earned income tax liability (usually when in their peak earning years, with all their tax deductions grown up and out of the house), and they withdraw more money to pay the taxes, which adds to next year's tax bill.  They repeat until the money is gone, which doesn't take long.


Who wins in this scenario (besides the IRS)?  Not the person who saved up all this "retirement money".  They didn't use it for retirement.  The one who now owns "a hole in the water you fill with money"?  Maybe.  But the big winner is the boat salesman.  So "Don't Die With This!".  At least not until I open a boat dealership.

Spinal Tuning Center--Friday Favorite (Day 5)

Day 5 of 100 consecutive days of writing for publishing is now day/week 1 of "Friday Favorite".  I've been thinking for some time that I would like to regularly write about products or businesses that I particularly like.  I'm finally doing it.


Today's Friday Favorite is Chad Rohlfsen of The Spinal Tuning Chiropractic Center.  Ironically, this Friday Favorite isn't open on Friday, and I chose a medical practice that doesn't accept medical insurance.


I love supporting businesses who go against the norm because they believe their way is better.  That's exactly what Chad does with his membership practice.  Since (as far as I know) he's the only chiropractor in the state who uses this business model, he definitely goes against the norm.


If you're not familiar with the membership practice model, as Chad explains it on his website, he "provide[s] unlimited care for a low flat rate monthly fee".  Unlike most chiropractors, he doesn't take insurance.  The fee I pay him comes 100% out of my pocket (not literally--actually it's deducted automatically from our family bank account).


So why does an Insurance Nerd recommend someone who doesn't accept insurance?  Three main reasons are that (1) what he does is in line with why I entered the health insurance business to begin with,  (2) it fits what insurance is supposed to be, and (3) it works.


One of the biggest reasons I got into health insurance was that I saw what my mom went through battling cancer, and wanted to do what I could to make it so that people facing health issues could concentrate on their treatment instead of having to weigh treatment options against the monetary cost.  The membership practice removes that stress.  Because I pay the same no matter how much or how little I see the doctor, I simply have to consider whether or not I want to go, not how much it's going to cost.  I love that.  There have been a lot of times that I dropped in on him simply because I was driving by, thought, "Well, it won't hurt and it won't cost me anything".   And I walked out knowing it that I needed to stop.


The membership practice fits the insurance concept that insurance is supposed to be to prevent a catastrophic event from becoming a financial catastrophe.  It's not intended to cover small expenses like basic maintenance, which is exactly what I view regular chiropractic adjustments to be.


Getting regular adjustments from Dr. Chad works.  When I first started going to him, I was using a lift in one of my cycling shoes because I had been told that one leg was longer than the other.  However, his initial assessment was that it wasn't a leg length discrepancy, but rather my lower back and hips were out of alignment, I'm guessing from an old hip injury from getting hit by a drunk driver.  Now I no longer have to use the shoe insert.  I have also found that I recover much more quickly from hard workouts and races, and I'm rarely sick.  That's worth a lot more than I pay for my membership.


Bonus benefit of membership:  with no paperwork to fill out, I am in and out of the office in less than five minutes, even if I spend time talking about business,  horses, Freemasonry, or health.