For Anyone Who Might End Up Needing Medicaid…

By Nilus Mattive

Nilus Mattive

This post For Anyone Who Might End Up Needing Medicaid… appeared first on Daily Reckoning.

Do you have a loved one who is disabled or has chronic health issues that may require long-term care in the future?

Perhaps you’re confident that you can take care of the person yourself.

Perhaps you figure there are government programs, like Medicaid, that could be there to pay for long-term care and medical expenses.

At the very least, you probably expect the person to make use of any money you leave behind.

Well, before you make those assumptions, there’s something you should understand…

You see, if someone applies for government help, such as Medicaid, the state determines how much they can keep. And in most states, they cannot own more than $2,000 worth of assets.

Assets that are usually counted for eligibility include:

  • Checking and savings accounts
  • Stocks and bonds
  • CDs
  • Real property
  • Additional motor vehicles if they have more than one

Assets that do not get counted for eligibility include:

  • Personal property and household belongings
  • One motor vehicle of any value
  • Life insurance with a face value under $1,500
  • Up to $1,500 in funds set aside for burial
  • Certain burial arrangements such as pre-need burial agreements

Now, a personal residence is treated specially…

It isn’t counted as long as the equity doesn’t exceed $572,000, with the states having the option of raising this limit to $858,000. (The equity is the fair market value less outstanding debt on the home). These limits are inflation-adjusted each year.

Plus, in some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home.

In other states, the nursing home resident must prove a likelihood of returning home.

Meanwhile, if a person gets an inheritance, their government benefits stop until they have spent all but $2,000 of it. Then it takes months to resume the government assistance again.

That means your loved one would have to spend down all the money you left before they could qualify for Medicaid.

For example, if you leave your spouse a $100,000 brokerage account, they’d have to spend $98,000 of it before qualifying for Supplemental Security Income (SSI) from Social Security or Medicaid.

One solution to all of this?

Leave your assets to another family member with the understanding that they’ll use the money for your intended beneficiary.

But then there’s the risk that the money might not be used as planned or even lost due to divorce, bankruptcy, or mismanagement.

A better option could be a special needs trust (SNT).

Also known as a supplemental needs trust, an SNT allows a beneficiary to keep government health and disability payments while benefiting from trust assets.

These funds can be used for such things as out-of-pocket medical expenses, dental care, nursing care, travel and vacation, vehicle maintenance, and a live-in caregiver. Disbursements are not given directly to the beneficiary. Instead, they go to a third party (a trustee) who pays for the goods and services.

You can be a trustee. But you must select a successor trustee to oversee everything when you’re gone. It can be a close friend, a corporate trustee, or a combination of the two as co-trustees.

Honesty and reliability are critical. That’s because there is little court supervision on how trusts are managed. For the most part, they operate on the honor system.

Trustees should be familiar, or willing to become familiar, with the rules that determine eligibility for SSI and Medicaid.

They must also understand how the SNT can be used to supplement the beneficiary’s needs without violating those rules.

Even if you aren’t currently concerned about your loved one receiving government benefits, you never know what the future holds.

For example, if the beneficiary is ever sued, the funds in the SNT cannot be touched since they are not subject to judgments.

And to establish a good relationship between the trustee and the beneficiary, you might consider including a letter to the trustee describing the beneficiary’s needs.

You can fund the SNT immediately, or name it as the beneficiary of life insurance, IRAs, or other payable on death (POD) accounts.

Lastly, name a beneficiary to receive what remains in the SNT after your loved one dies. Otherwise, the trust assets will end up in probate court where a judge determines who is next in line.

You can draft an SNT on your own, as long as you include the proper language. There are tons of books and online sources with templates.

Just remember that state laws vary, and your circumstances may be more complicated than you realize. So to make sure it’s done right, also consider consulting an estate planning attorney who has experience with SNTs.

To a richer life,

Nilus Mattive
Editor, The Rich Life Roadmap

The post For Anyone Who Might End Up Needing Medicaid… appeared first on Daily Reckoning.

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From:: Daily Reckoning

Welfare by Another Name

By James Rickards

Jim Rickards

This post Welfare by Another Name appeared first on Daily Reckoning.

I’m Jim Rickards, a colleague of Nilus here at Agora, filling in for him this weekend.

One of the first things I learned as a registered Washington lobbyist, (yes, I admit it, I was a lobbyist in the 1990s), is “you can’t beat something with nothing.”

That’s a Washington insider’s way of saying that if you don’t like an opponent’s policies, it’s not enough to moan and complain about them and throw insults. You have to come up with a policy of your own that appeals to voters and can be offered to the public as an alternative.

This has been a problem for Democrats lately.

They can’t stand Donald Trump and insult him all day long, but they won’t prevail in major elections scheduled in 2018 and 2020 unless they offer the voters something other than constant ridicule of Trump.

A few smart Democrats, including Bernie Sanders and Cory Booker, have figured this out. Their alternative to Trump’s policies is a government guaranteed job for every American who wants one. The jobs will be low or negative productivity government jobs requiring few or no skills and offering no advancement.

This proposal may sound odd coming at a time when the official unemployment rate is 3.9%, the lowest in almost twenty years. Unemployment is 3.7% for adult white men and 3.5% for adult white women, while African-American unemployment is approaching historic lows.

Why roll out a jobs program now?

The answer is that the official unemployment statistics are highly misleading. They do not count approximately 10 million able-bodied working age adults who have simply given up on work.

Adjusted for those “missing workers,” the real unemployment rate is about 10%, a depression level figure.

Interest in the guaranteed jobs program is high. Critics say the program will destroy incentives and undermine the traditional work ethic. Supporters say it will help to raise wages because private employees will have to match the wages being offered by the program itself in order to compete with the government jobs.

In that sense, this is really a backdoor way to raise the Federal minimum wage and increase benefits. Whichever side you’re on, get used to hearing about this debate in the years ahead.

Who knows, maybe Trump will end up supporting it. Trump is not a traditional conservative, but he is a shrewd politician who may just steal his opponent’s best idea. You can’t beat something with nothing.

There is also a parallel idea beginning to gain traction in important circles…

I’ve been writing lately about something called “GBI,” which stands for guaranteed basic income. GBI is the new buzz phrase that’s the talk of academia, Silicon Valley and the elites on both coasts.

GBI goes by other names including universal basic income, UBI, or just basic income, but the policy is the same regardless of the name. The idea is that governments will guarantee every citizen a certain basic income as a matter of right. Everyone making below a certain amount of money gets a check.

It’s really just welfare by another name, but it would apply to a much broader group than just the poor and you would not have to pass any income tests or work requirements to qualify.

There is no means testing and no work requirement. The government just hands every man and woman a check every month whether rich or poor, young or old, employed or unemployed.

The idea behind GBI is that technology is making many jobs obsolete and those jobs are not coming back. Some Americans can compete in the new high-tech high-reward world, but most cannot.

If people cannot get jobs and incomes stagnate, then there will be no consumption and no one to buy the gadgets that the tech companies are making. Instead, everyone will get a check so they can spend freely.

My reason for highlighting GBI is that you’re going to be hearing a lot more about it in the next two years. Instead of a guaranteed job, leading Democratic Party politicians in the U.S. support GBI as part of their platform.

Polls show that about half the American people favor it as well. The argument in favor is that GBI gives everyone a firm financial foundation on which they can seek other employment, turn down “lousy” jobs, get education and training, provide household services to family, friends and community, or maybe just be artists.

The argument against GBI is that it encourages laziness, discourages productive work, is unaffordable by heavily indebted governments, and will produce inflation, which destroys savings and impedes capital formation.

But, what about hard evidence? Some countries around the world have already started GBI programs and the initial results are not favorable.

Finland has decided not to expand a pilot program of GBI. The program’s results in terms of job gains were disappointing. This tends to support the views of those who claim that GBI discourages work rather that encourages it through training. This is a small sample; there will be a lot more discovered about the effects of GBI in the years ahead.

Meanwhile, the political debate is going full-speed ahead. And it is not going away soon. The advocates for GBI see no problem with the budget deficit aspects of this. In their view, the Fed can monetize the debt forever; so there’s no problem finding the money.

The guaranteed jobs plan sounds better to politicians than GBI, but it still causes massive budget deficits without much in return.

In the end, the GBI and guaranteed jobs plans will fail as they always do. But that does not mean they won’t be tried. You should expect this to be a big political issue in the 2018 mid-term elections later this year and the 2020 presidential election. The deficits that go along with GBI will guarantee that America continues to go broke.

The combination of tax cuts and massively expanded government already guarantee ballooning deficits ahead. And this is when the economy is supposedly strong.

But the economy is long overdue for a recession. The typical post-WWII economic expansion lasted only 58 …read more

From:: Daily Reckoning

Requiesce in Pace

By Brian Maher

Cemetery

This post Requiesce in Pace appeared first on Daily Reckoning.

It is Memorial Day weekend… when we pause to honor the nation’s war dead.

Most Americans will not, of course.

It is merely a chance to lie flat on a beach… to munch frankfurters… to dream the dreams of approaching summer.

We’ll be joining them of course.

We will not be planting tiny American flags atop forgotten graves this weekend.

We will not be bugling taps.

It is unlikely we will thank a veteran for his service — not because we lack respect — but because we scarcely know any.

But we remember how we were brought up short one day… strolling the American military cemetery above Omaha Beach.

The rows and rows and rows of bleach-white crosses — and an occasional Star of David — seeming to stretch from horizon to horizon.

A haunting poem from the First World War came to us as we wandered among the dead… and listened for their ghostly counsel.

“In Flanders Fields,” the poem was called.

From which:

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place, and in the sky
The larks, still bravely singing, fly,

Scarce heard amid the guns below.
We are the Dead; short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

The American military cemetery above Omaha Beach

What fetched us was not so much the gravity of those distant events — but the soul-numbing waste of it all.

What great things may have awaited that 21-year-old second lieutenant if a German bullet hadn’t cut him down on June 6, 1944?

What did life have in store for that sergeant of the 2nd Ranger Battalion… who never made it up Pointe du Hoc?

What about this young paratrooper of the 101st Airborne Division, whose bones lie beneath a shady tree?

What might he have amounted to?

Maybe a lot.

Maybe nothing at all.

But he had a life to live. And every right to live it.

Let us also not neglect the pulverized and unidentified dead, known only to their creator.

What about the futures they never had?

Tombstone

“For of all sad words of tongue or pen,” lamented poet John Greenleaf Whittier, “the saddest are these:

“It might have been.”

And so before we embark on our Memorial Day weekend merriments…

Let us lower our heads in mournful reflection of America’s martial departed… and of what might have been.

Requiescant in pace.

Regards,

Brian Maher
Managing editor, The Daily Reckoning

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From:: Daily Reckoning

7 Income Generating Ideas This Memorial Day Weekend

By Nilus Mattive

Nilus Mattive

This post 7 Income Generating Ideas This Memorial Day Weekend appeared first on Daily Reckoning.

Long weekends are the perfect time to make some extra money.

Between backyard barbeques, trips out of town, shopping, and some long-overdue spring cleaning, there are plenty of income-boosting opportunities to be had if you know where to look.

The great thing about these ideas I’m going to share with you today is they work over almost any major holiday weekend.

Memorial Day is only the first of three major holidays happening during the warmer-weather months. You can use these income generating ideas again over the July 4th and Labor Day long weekends.

Here are seven ways you can boost your income this weekend.

1. List Your House on AirBnB

Has it been a few weeks since your parents have seen their grandkids? Perfect. Spend the weekend out of town at their house.

Or, if you’ve already booked a trip this weekend, take advantage of your empty house by renting it out on AirBnB. Not only are travellers looking for places to stay this weekend, they’re willing to pay a hefty price to find some decent digs last minute.

2. Do the Opposite of #1

If the thought of leaving your house to a stranger scares you, opt to stay close to home and house sit for a neighbor or a friend. House sitting is another easy way to make some extra money.

Your typical house sitting duties would include, collecting the mail, watering a few plants, and making sure the house is secure.

You also get the added benefit of hanging out in someone else’s house for a few days — which can often feel like a mini vacation on its own.

3. Sell Some of Your Junk

Memorial Day weekend is a great time to do some spring cleaning.

If you’ve been putting off doing your spring cleaning this year, use the extra day this weekend to first clean your house and then get rid of whatever junk you found.

Host a yard sale, list items on Craigslist, Facebook, and eBay.

Bonus tip: If you’re feeling energetic this weekend, get up early and go to a few yard sales around your neighborhood and buy up quality items. Then flip those items for a profit by selling them on websites like eBay or Craigslist.

To do this successfully, you need to write some killer product descriptions. A quick Google search will tell you most of what works and what doesn’t when selling through these platforms.

4. Watch Your Friend’s Dog

Like house sitting, pet sitting is another great way to make some extra cash this weekend.

A lot of your friends and coworkers will be traveling out of town this weekend.

Mostly likely they’ve been on the hunt over the past few days for someone to watch their pet while they’re away. Take the burden off them and enjoy the benefits of pet ownership without the commitment for a few days.

5. Run a Pop-Up Landscaping Business

This weekend, a lot of your neighbors will realize their yard needs some work.

Offer to help out by mowing lawns, raking leaves, pruning hedges, and powering washing driveways… Do whatever work needs to be done at a fair price for your neighbors.

Door to door or a simple Craigslist or Facebook post can drum up enough business to keep you busy all weekend. Surely there are some people in your neighborhood who either don’t want to do yard work or are unable to and willing to pay someone else to do it for them.

6. Work at Events

Block parties, concert, bonfires, cookouts, whatever events are happening in your city this weekend, there’s likely a shortage of event staff.

You can make some decent money working at one of these events, bartending, hostessing, taking ticket stubs, cooking, or cleaning up.

Start by searching for events near you on Google or check out your local Chamber of Commerce. Then email or call the event coordinator and ask if they need more staff.

7. Get a Job in Retail

Retailers love splashing sales over holiday long weekends. Which is good for you in two ways: First, if you do plan to shop this weekend, do buy appliances, mattresses and bedding, party supplies (stock up), and home accessories.

These items are historically discounted over the Memorial Day weekend.

Avoid buying electronics, back-to-school supplies, barbeques, outdoor patio furniture, and cars.

You won’t get the best deal on these items until later in the year and toward the end of the summer.

My second piece of advice if you want to make some extra cash this weekend is to get a job in retail.

A lot of people will be out shopping this weekend, which means there will be an increase in traffic to malls and local shops.

Customer service staff and in-store personnel will be in high demand.

If you have any prior experience working in retail, this weekend is the perfect time to pick up some part-time hours.

An added bonus, some retailers will offer overtime pay, making you even richer.

Have a great and safe Memorial Day weekend!

To a richer life,

Nilus Mattive
Editor, The Rich Life Roadmap

The post 7 Income Generating Ideas This Memorial Day Weekend appeared first on Daily Reckoning.

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From:: Daily Reckoning

The “Axis of Gold” Will Drive Gold Higher by the End of 2018

By James Rickards

Chart

This post The “Axis of Gold” Will Drive Gold Higher by the End of 2018 appeared first on Daily Reckoning.

A major blind spot in U.S. strategic economic doctrine is the increasing use of physical gold by China, Russia, Iran, Turkey and others both to avoid the impact of U.S. sanctions and create an offensive counterweight to U.S. dominance of dollar payment systems.

This is the Axis of Gold.

This gold-based payments system will dilute and ultimately eliminate the impact of U.S. dollar-based sanctions.

Gold offers adversaries significant defenses against these dollar-based sanctions. Gold is physical, not digital, so it cannot be hacked or frozen. Gold is easy to transport by air to settle balance of payments or other transactions between nations.

Gold flows cannot be interdicted at SWIFT, the international payment system. Gold is fungible and non-traceable (it is an element, atomic number 79), so its origin cannot be ascertained.

We have a lot of data to support the claim that the Axis of Gold exists and is gaining strength.

We know that for example, Russia has tripled its gold reserves in the last ten years. It’s gone from about 600 tons to over 1800 tons of physical gold, and is moving very quickly towards 2,000 tons. That’s an enormous amount of gold.

China is also amassing physical gold at an astounding rate. Like Russia, it has tripled its gold reserves, officially from 1,600 tons to 1,800 tons.

But we have very good reason to believe China actually has a lot more gold than that.

China might actually own up to 4,000 tons of physical gold. We don’t know the exact number because China is highly secretive about its gold acquisitions. But that’s a reasonable estimate. China is also the world’s largest gold producer with mining output of about 450 tons per year.

Iran also has an enormous amount of gold. Iran received billions of dollars in gold from the Obama administration as bribes to join in the now discredited nuclear deal (the “JCPOA” or Joint Comprehensive Plan of Action) to limit Iran’s nuclear weapons program.

Iran has also received gold imported from Europe via Turkey, but the exact amount is unknown.

We don’t have any insight into how much it has because it’s also highly nontransparent. But in the first quarter of 2018, Iranian gold bar and coin purchases more than tripled.

Turkey is also acquiring enormous amounts of gold, which should not be surprising given Turkish president Recep Erdogan’s recent comments questioning the role of the dollar in global trade.

The Turkish central bank has almost doubled its gold holdings since last May, according to the World Gold Council. And it was the second largest buyer of gold among central banks for the first quarter of 2018.

So that’s the Axis of Gold. Again, evidence for this Axis of Gold is overwhelming.

I have contacts in the national security industry community who have, in their own roundabout way, been able to confirm that to me, so it’s very clear that’s what’s happening.

This is the type of information you don’t see in the headlines. This is very granular, but it’s all going on behind the scenes.

I’ve explored the implications in many financial war games and other meetings as I’ve described in my books.

I’m also on the Board of Advisors of the Center for Sanctions and Illicit Finance, which is the leading think tank on this subject. I meet with others who are expert in this area, including current and former government officials.

I’ve warned the Pentagon and the Treasury Department about this threat for years. But the message has yet to sink in. The U.S. is still unprepared for this coming strategic alternative to dollar dominance.

Meanwhile, U.S. trade sanctions on China, Russia and Europe are just beginning to bite. Trump’s new sanctions on Iran may be the last straw in the world’s willingness to tolerate what is perceived as U.S. bullying through the use of dollar-based sanctions.

These headwinds are illustrated in the chart below. This shows the customers for oil exported by Iran. China is Iran’s largest oil customer by a wide margin. China’s need for imported oil is huge and Iran’s need for hard currency from its oil exports is existential.

If the U.S. makes it impossible for Iran to pay or receive dollars or other hard currencies for its oil exports and machinery imports, Iran will have to resort to other payment channels. China would be willing to pay Iran in yuan, but Iran’s appetite for yuan is limited.

As mentioned above, an obvious solution is for Iran and China to settle their balance of payments accounts in gold.

Trump’s sanctions on Iran are a double-whammy.

On the one hand, they impede global trade and growth; especially in Europe where growth was already slowing down before the sanctions. On the other hand, the Axis of Gold will create enormous demand for physical gold as an alternative to dollar payments vulnerable to U.S. sanctions.

At the same time, the Axis of Gold creates huge embedded demand for gold as the Axis nations build out an alternative to the dollar payments system.

But right now gold mining output is flat, western central bank sales of gold have ceased, and acquisition of gold by the Axis is increasing.

With limited output, limited western sales, and huge eastern purchases, it’s only a matter of time before a link in the physical gold delivery chain snaps and a full-scale buying panic erupts. Then the price of gold will soar regardless of paper gold manipulations.

Meanwhile, Fed tightening combined with weak growth will push the U.S. economy to the brink of recession later this year.

That will cause the Fed to reverse course and pause in their path of rate hikes. The pause will come possibly in September, and almost certainly by December. The perception of the Fed flipping from tightening to ease will remove a major headwind to higher gold prices and create a tailwind.

Future Fed ease combined with strong demand for physical gold will result in much higher gold prices by year end. The next few months could still be a bumpy ride …read more

From:: Daily Reckoning

The “Axis of Gold” Just Got Stronger

By James Rickards

This post The “Axis of Gold” Just Got Stronger appeared first on Daily Reckoning.

As you probably know by now, President Trump backed out of the nuclear deal with Iran and is re-imposing harsh sanctions.

And just this morning, Trump announced that he’s canceling the much-anticipated nuclear summit with North Korean leader Kim Jong Un because of Kim’s recent belligerent comments.

What does that mean, aside from the added geopolitical risk to markets?

As you’re about to see, you can now expect what I call the “Axis of Gold” to get even stronger. And it has potential to accelerate the demise of the dollar-based international system.

The Axis of Gold includes Russia, China, Iran and Turkey. I would also include North Korea in that list, although as a junior member.

These countries are forming a trading and financial network revolving around gold and are acquiring massive amounts of physical gold to support it. They are steadily moving toward a gold-based balance of payment system.

Why is this happening?

Well, if you’re on the receiving end of American sanctions like Russia, Iran or North Korea, you want a way to work around these sanctions. And gold is a powerful alternative.

Let’s first consider North Korea.

With the summit called off, there’s every reason to expect that North Korea will only intensify its nuclear program.

But how can North Korea obtain the foreign nuclear and missile technology it requires to advance its program?

By using gold.

If a rogue state wants to acquire ballistic missile components or equipment to enrich uranium, it can’t buy them through SWIFT, the international payment system. But it can use gold.

Gold can’t be hacked or traced. Unlike digital money in bank accounts, it can’t be frozen. You just put it on a plane or ship and send it to its destination.

And new U.S. sanctions will once again lock Iran outside of the international payment system. But Iran does a lot of business with Russia and China. That’s where gold comes in.

Let’s break down how a triangle trade involving Iran, Russia and China works using gold…

Russia is building a nuclear power plant in Iran. At the same time, China is building an energy pipeline for Russia.

Meanwhile, Iran sells a lot of oil to China. But Iran might not want too many yuan, because there’s a limited global market for them.

So Iran owes Russia money for the power plant, Russia owes China for the pipeline and China owes Iran money for the oil.

How does gold fit into this dynamic?

Gold allows the three parties to settle the multiple monetary transactions involved in this triangle trade.

The three parties can tabulate who owes what to whom, net it out and settle the transactions in gold. This is basically how a clearinghouse works.

When it’s all added up, for example, if it turns out that China owes Iran, China can then ship gold to Iran to square the account.

Now these three partners have a working payment system to settle trade. They’re not using the dollar payment system, or the SWIFT payment system or anything that the U.S. can interdict or even trace. They’re in effect bypassing U.S. sanctions by using physical gold.

This creates additional demand for gold as these nations acquire gold to preserve wealth and to mitigate their overdependence on the United States.

But now they’re actually getting to the stage where a nondollar system is close to becoming a reality.

Regards,

Jim Rickards
Managing editor, The Daily Reckoning

The post The “Axis of Gold” Just Got Stronger appeared first on Daily Reckoning.

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From:: Daily Reckoning

Secret Ways to Get Discounts from Everyone

By Nilus Mattive

Nilus Mattive

This post Secret Ways to Get Discounts from Everyone appeared first on Daily Reckoning.

The other day I talked about the virtues of being a cheapskate.

Today I want to talk about how to actually be a cheapskate… even if you hate the idea of haggling.

Now, it’s no secret that you can dicker for a better deal on a car.

Buyers have been doing that going back to at least 1926 when the first Kelly Blue Book came out. The publication gives you a dealer’s best price before you walk into the showroom.

Edmunds is another site with an online tool for first-time new-car buyers. It’s meant to arm you with everything you need to get a sweet deal on a new car.

And a lot of people are at least fairly comfortable with the idea of haggling over car prices.

But why stop there?

Here are some areas of your consumer life that in which you can easily negotiate or finagle lower costs…

Home repairs, remodels, and yard maintenance

These are generally small businesses. So you’re bound to be talking with the owner.

Tell them that you’re getting several bids.

The lowest price isn’t necessarily the best option. But you’ll get the point across that they better be competitive if they want your work.

The same for yard upkeep.

Suppose they refuse to negotiate on price? Then ask to add in an extra service, such as weeding the flowerbeds.

And if you have a neighbor who’s looking to have similar work done, you might have another bargaining chip to use.

You should also consider other ways to lower costs.

For example, cutting the grass every ten days rather than every seven will slightly lower the price.

Also think about materials and other choices when it comes to bigger projects.

I know several friends who spent $50,000+ just on kitchen cabinets.

Meanwhile, I’m about to do my second kitchen remodel with Ikea cabinets.

Not only are they well-designed and substantially cheaper than many other choices, I found two more ways to get the price down even lower this time around…

First, I purchased several thousand dollars in gift cards at discounted rates during the company’s Black Friday sale.

Then, I waited for one of its semi-annual kitchen sales where you get back 15% of every dollar you spend and used the gift cards at that time.

Add it all up and I got roughly 35% off the already-reasonable prices… just by planning ahead.

Healthcare and legal fees

If you have medical insurance, the company has already negotiated special rates. But if you’re uninsured or haven’t hit your deductible yet, you could be facing huge expenses. And dental work is rarely completely covered by insurance.

Not sure how much you should offer? The Healthcare Bluebook lists the fair price for procedures, including dental, in your area.

For elective surgery, the cost can vary a lot. The same for dental.

Shop around.

Then go back to a doc you really want and present the price you’re willing to pay.

Already run up a big bill? Make an offer before it goes to collection. The reality is that doctors are frequently stuck with patients who don’t pay. So they’d rather get something than nothing.

Need to hire a lawyer?

If you’re paying by the hour ask if the preparation work is at a lower rate than court appearances. Attorneys charge higher rates when they have to pay experts for your case.

Offer to pay those experts yourself for a reduced hourly rate.

And if you’re hiring a lawyer on a contingency basis, he’ll probably want 33% to 40% of your award. Offer a smaller piece of the pie or at least get him down to the lower end of the percentage range.

Home and auto insurance

I’ve written an entire article on this before because prices vary widely among carriers.

Your profession, the age of your car, where you park your car, your credit score, are potential negotiating points worthy of a discount. And if you tell your existing carrier that you’re shopping around, they might cut your premium since you’re a loyal customer.

After all it’s cheaper to keep a current customer than get a new one.

Shop around for home insurance, too. And remember that bundling different types of coverage together can save you even more money.

Phone, TV, internet, and other subscriptions

If you’ve been a long-term customer, demand a price break or you’ll move to another provider.

If they won’t budge, call later and ask someone else.

Are they offering teaser rates for new customers? Tell them you want that rate.

The same for subscriptions to newspapers, magazines, gyms. Calling to cancel might get you discount or several months free.

And obviously these days it’s a lot easier to go without some subscriptions entirely!

For example, we don’t have full cable at my house and haven’t for at least a decade. We use a combination of one-off subscriptions, Amazon prime, Netflix, and other methods to only pay for the shows and programming we really want to watch.

Furniture

You’ll have better success haggling with an independent store than a big-box retailer. Floor models often have small defects, like scratches. So if that doesn’t bother you, offer 50% off the listed price.

Put together a package of multiple items if that saves you money.

Wait for sales.

See if paying cash gets you a deeper discount.

Ask for free shipping. Or offer to pick up the items instead of using the store’s delivery service for a discount.

And as I’ve said before, there’s plenty of great used furniture out there on Craigslist and through other sources.

I’ve grabbed some terrific pieces other people were leaving out on their curbs. I also recently built an entire outdoor dining set from a discarded pallet and a few pieces of lumber from the local hardware store!

Jewelry

Again, your odds for negotiating are greater when you avoid the big national brand shops and head to a mom-and-pop store. Make an offer on the showcase item or something that has been in the store for some time.

Politely make a reasonable offer. Walk if they refuse. You might be surprised when someone chases after you to discuss …read more

From:: Daily Reckoning

The Oil Story Nobody Is Telling…

By Jody Chudley

Venezuela oil

This post The Oil Story Nobody Is Telling… appeared first on Daily Reckoning.

Just over one year ago, with oil prices hitting $43 and falling fast, I suggested that the market was making a big mistake.

My opinion at the time was that oil prices should have been rising, not falling.

I based that opinion on the fact that global oil inventory levels had been steadily declining for months and that the amount of oil being produced daily was already below the amount of oil demanded.

The global oil fundamentals were tightening which was a point that the market had completely missed (as evidenced by the falling oil price).

What had happened was that traders were focused on the wrong data point. The market had been misled by stubbornly high U.S. oil inventory data numbers that I believed were being temporarily caused by excessive Saudi oil exports.

Long story short, those excessive Saudi oil exports soon stopped, U.S. oil inventories fell quickly and now oil prices are up massively — almost 70% in less than 12 months…

So What Should We Be Looking At Today?

Today, oil investors are rightfully focused on the chaos that is taking place on multiple fronts in the Middle East and on how sanctions will impact Iran’s production.

However, something even bigger is happening closer to home…

Production from a very significant oil producing nation is imploding and the situation is only getting worse.

On Sunday, Venezuela’s Nicolas Maduro secured himself another six years as president in what was by all accounts a “sham” election.

That is terrible news for the people of Venezuela and for global oil supply.

Under Maduro, Venezuela is in the midst of a full scale humanitarian crisis. The country is faced with hyperinflation at an annualized rate of 15,000 percent, has just had a $70 billion bond default, can’t import basic medical necessities and currently has the military in charge of dispensing food.1

All of this despite Venezuela sitting on the world’s largest reserves of crude oil…

However, the Venezuelan oil industry is also in shambles. It is lacking tools, machines and money. With the country literally falling apart, the oil majors have fled. Production is in complete freefall and the situation is only going to get worse with the U.S. imposing sanctions on the country as a result of the Maduro sham election results.

Keep in mind that Venezuela is an important global oil producer. The world needs this country to keep exporting oil.

In 2016, Venezuela’s oil production was nearly 2.4 million barrels per day. Since then, production has collapsed by a shocking 1 million barrels per day and conditions keep worsening.

Analysts believe that by the end of this year, Venezuela could be down to only 1 million barrels per day of production which would take yet another 500,000 barrels per day of supply off the market.

This is a major global oil producer that is disintegrating at an incredibly rapid pace…

From Oil Crash To Oil Spike – How Quickly Things Change

In 2014, oil prices were in excess of $100 per barrel. By early 2016, we saw oil trade as low as $27 per barrel.

Is it possible that in 2018 — just another 24 months later — we could get back to $100 per barrel?

My answer is yes.

And that it could go even higher if Iranian production is hit hard by the sanctions freshly imposed by President Trump.

With Venezuelan production continuing to fall and Iranian production likely doing the same, realistically, the only man who could keep something of a lid on oil prices is the Saudi Crown Prince Mohammed bin Salman.

Saudi production is currently at 10 million barrels per day. And with the highest level that we have seen from the Saudis at 10.5 million barrels per day, hypothetically speaking, Mohammed bin Salman could probably cover what Venezuela is likely to lose over the remainder of the year.

That would be if he wants to…

Remember this man has a vision for a new Saudi Arabia by 2030 — a country not dependent on oil export revenues. Think about how ambitious that plan is, the man wants to create an entirely new economy in just over a decade.

To have any chance of doing that the Crown Prince needs to milk the Saudi oil cash cow for every penny right now.

Sometime in the next 18 months Saudi Arabia is going to sell a piece of the national oil company (Saudi Aramco) to the public. The Crown Prince only gets one chance to do that and high oil prices would maximize the value received.

The ball is in his court. We will have to wait to see what he does with it, but I think we can all guess what his decision will be…

Here’s to looking through the windshield,

Jody Chudley

Jody Chudley
Financial Analyst, The Daily Edge
EdgeFeedback@AgoraFinancial.com

1Venezuela’s Hyperinflation And The IMF’s Faulty Forecasts, Forbes

The post The Oil Story Nobody Is Telling… appeared first on Daily Reckoning.

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From:: Daily Reckoning

Creative Destruction: An Alternate View

By Brian Maher

This post Creative Destruction: An Alternate View appeared first on Daily Reckoning.

“Universal basic income (UBI) is so silly on its face,” begins reader Roger A, “even a middle school kid would at least know to ask, “What’s the catch?””

Yesterday’s reckoning on universal basic income drew a heavy mail… and we thank you for your participation.

Ron B said:

There are a lot of jobs that would not be done if UBI is adopted, and there will be serious problems eventually… UBI is a big, big, big mistake!

Adds Maria R:

When I first heard the term I thought it meant the lowest annual wage salary to survive on. But having read the more about it, I realize that it is just another incentive to keep people on welfare.

These comments were typical.

But not every reader stood in harsh opposition.

Dave S, for example:

Though I don’t believe UBI ‘s time has come it will in the future as automation technologies hit an inflection point… The rapid shift in technology will leave many behind with incompatible skills so UBI will really be a social program to keep the barbarians away from the gates.

Meantime, George B — a UBI booster — gave us a good hard slating:

Your diatribe on UBI makes many unfounded assumptions, utilizes examples that arrive at false conclusions and is short of actual facts. Under Nixon the United States was a hair’s breath [sic] from UBI. It was derailed by one of his advisors who was an Ayn Rand adherent and presented him with some very poor quality evidence later debunked.

The UBI was supported by 1,200 economists, many of them world renowned… There is abundant newer research all disproving the “people will become lazy if given free money” canard that you promulgate. If you are open minded than [sic] actually read someone who has looked at the research and covers it…

We might remind George that Finland recently had a go at UBI — and dropped it quick as a wink.

But let us recall the reason universal basic income is receiving any hearing at all:

Automation.

Some estimate artificial intelligence (AI) and robotics will replace half of all jobs in 20 years.

These are not limited to trucking, taxi-driving or manufacturing and construction.

To these we must add white-collar jobs in law, finance, medicine, accounting, etc.

What will become of the attorney-at-law, we wonder — and the human pilot of the ambulance he chases?

We are unconvinced automation will proceed at the projected gallop.

But let us suspend all assumption for the moment… and drive on to the inevitable question:

What happens when robots are brainy enough to perform all human labor?

Economist Joseph Schumpeter (1883–1950) put the term “creative destruction” into wide circulation.

For Schumpeter, capitalism was the “perennial gale” of creative destruction.

Capitalism blows away the old and inefficient. In comes the new and improved.

Because of capitalism’s perennial gale… today’s plebe lives better than yesteryear’s king.

Innovation and technology have always allowed humans to mine fresh sources of productive employment.

The 19th century farmer became the 20th century factory worker… became the 21st century computer programmer.

But a fully capable robot would likely mean the end of the line.

A brute of a robot that can strike home a rivet is one thing.

But a genius robot that can do anything a human can do — only better — is quite another.

This intelligent robot would tower over the human as the human towers over the ape.

An Aristotle, an Einstein, would be a pygmy next to it.

What human ability would lie beyond this unnatural beast?

Artistic expression perhaps.

An evolved robot might run its circles around the human antique you say.

But it cannot appreciate beauty — much less express it.

The robot has a brain… but no soul.

No, the kingdom of the arts belongs to man alone.

Well, please introduce yourself to Avia…

Avia is a computerized musical composer.

Programmers “introduced” it to the music of Bach, Beethoven, Mozart, and other such colossi of the classical canon.

It proceeded to acquire musical theory based on the inputs… and taught itself to compose original music.

Its tunes have been featured in cinematic soundtracks, advertisements and computer games.

No human composer has yet proven able to distinguish its music from a carbon-based professional’s.

Will the next Mozart be a computer?

Not even the oldest profession is safe from robotic competition — if you can believe it.

But let it pass for now.

Return your mind instead to Schumpeter’s creative destruction…

The obvious benefits of capitalism are why most see only the “creative” part of the equation.

But we must never forget the equally critical “destruction” side of the ledger.

Capitalism thumbs a mocking nose at tradition.

It uproots communities.

Capitalism sends the human being careening around hairpin turns of social and technological change for which he may be unprepared.

Within a generation, the centuries-old farming community is given over to the assembly line and the punch clock.

A generation later that factory goes dark as the gales of creative destruction blow the jobs clear across to China… or Vietnam… or wherever the labor is cheapest.

Have you visited the Rust Belt?

It is the “Rust Belt” for a reason.

Furthermore, Americans must constantly upend themselves and their families to follow the jobs — which yanks apart the bonds of community.

And advancing technology makes today’s job obsolete tomorrow.

Not everyone can take up new lines of employment.

Many are simply left behind, broken… and can never catch up.

Today’s unemployment figure is officially 3.9%.

But that does not include the millions of forgotten and hopeless Americans who have simply thrown up the sponge.

As Jim Rickards noted yesterday, roughly 10 million able-bodied working age adults have abandoned the search for work.

Adjust for those “missing workers,” Jim says… and the real unemployment rate is about 10% — a depression level figure.

The river of progress carries forward, as it must.

And yes — it must.

But let us at least recognize…

The advancing river of progress sometimes takes the human note with it.

Within the cold economic data, behind the dense forests of statistics… exist living human beings with beating hearts.

And many with broken hearts.

To these, our fellow Americans — our fellow human beings — we lift a toast of acknowledgment today…

Regards,

Brian Maher
Managing editor, …read more

From:: Daily Reckoning

Don’t Make These Money-Burning Mistakes

By Nilus Mattive

Nilus Mattive

This post Don’t Make These Money-Burning Mistakes appeared first on Daily Reckoning.

According to a GOBankingRates survey, 57% of Americans have set aside less than $1,000 in financial reserves.

Clearly not enough to fund a comfortable retirement.

But even if you have lots of money in the bank, there’s no reason to throw any of it away.

So here are eight simple money-saving tips that could help you stop wasting money and pump up your savings going forward.

Tip #1: Water bills

Do you linger in the shower? My ten-year-old daughter sure does!

The average American spends 8.2 minutes in the shower and uses 17.2 gallons of water.

Cutting shower time to five minutes or less can save up to 1,000 gallons per family member per month.

Faucets are another easy place to save water…

An average American household of three uses between 18.1 and 26.7 gallons per day for all faucets (bathroom, kitchen, and utility sink).

Turning off the water while brushing your teeth can save up to 200 gallons per family member per month.

Besides reducing your water bill, you could also see a drop in gas and electricity bills.

Moreover, you’re helping save one of our world’s most precious commodities!

Tip #2: Speeding tickets

Most of us occasionally push the pedal to the metal.

But if we’re caught, a double whammy awaits… a hefty fine plus the possibility of higher insurance rates for several years.

In fact, a staggering 41 million people receive speeding tickets annually. That’s 112,000 each day.

What’s more, it’s costing $6 BILLION or about $150 per offender for the tickets alone.

So easing off the gas could mean more money stays in your pocket.

Tip #3: Unused gym memberships

You joined a gym as one of your New Year’s resolutions. But you just never get around to going. And you haven’t dropped your membership because you know you should go.

The industry counts on members like you…

According to the International Health, Racquet, & Sportsclub Association, gyms sell memberships with the expectation that only 18% of people will show up on a consistent basis.

If you’re not getting value out of your gym membership, cancel today.

Then look for alternatives such as free – or almost free – cardio classes at the local community center, a neighborhood park, or even through web channels like Youtube.

You can also join a team sport like volleyball or softball or do some other activity that burns calories and makes you happy.

Tip #4: Bank fees

ATM and overdraft fees are at record highs.

The average fee charged by a customer’s own bank for using an out-of-network ATM rose 3% percent in 2017 to $1.72. On top of that, the average ATM surcharge rose to $2.97, a 13-year high.

That puts the average total cost for withdrawing cash at an out-of-network ATM at $4.69.

The takeaway: Plan ahead so when you need to get cash you can do it for free within your bank’s network.

Or at least do it in larger amounts so the fees don’t sting so much.

And if you have to walk another block or two to get to one of your bank’s ATMs, consider the exercise is a bonus.

What about overdraft fees?

Well, the average charge climbed to $33.38 in 2017 and the number of banks that increased their fee outnumbered those who lowered their fee seven to one.

No wonder the Consumer Financial Protection Bureau (CFPB) calls overdraft fees a short-term loan with a 17,000% APR!

To protect yourself against those outrageous fees, sign up for e-mail or text alerts that let you know when your balance gets below a certain level.

Or link your checking account to your savings account so that your money — rather than the bank’s money — can cover any shortfall.

Tip #5: Extended warranties

If you’re plunking down hundreds — or thousands — of dollars for a TV, refrigerator, or other expensive product, you’re sure to be offered an extended warranty.

It makes sense. After all you don’t want to get stuck paying for costly repairs.

But is it worth the price?

In most cases no, according to the Federal Trade Commission and Consumer Reports.

Several of the reasons why that is:

  • Some duplicate the coverage that automatically comes with the product
  • Some cover only part of the product
  • Some make it next to impossible to get repairs when you need them

And most products don’t break during the two or three years covered by the average plan.

These warranties can also come with tons of fine print, such as a deductible or fee each time the product is serviced or the exclusion of certain parts.

So why the high pressure to buy them?

Simple.

Consumer Reports says retailers keep 50% (or more) of the premiums!

So the next time you buy a product in a store or online, think twice before going for the extended warranty.

Putting that money into a savings account to cover repairs or future replacement is typically the better option.

Tip #6: Not-so-obvious airline fees

The Internet makes it easy to shop for an airline ticket.

But jumping on an especially attractive offer might leave you wishing you had chosen a pricier option.

Companies are now charging for things that were free not too long ago.

Many will tack on fees if you want to select a seat or check a bag.

Some, such as Spirit, charge more if you bring a bag on the plane rather than check it in.

And if you wait until arriving at the ticket counter to check in, you could get hit with another fee.

When shopping for your next flight, look carefully whenever you see a very low price.

You might find that after you add in the little extras, it’s higher than others that provide the same services within the basic fare.

Also consider ways to avoid paying extra – whether that means bringing your own food, adjusting your baggage count, or taking whatever seat is assigned.

Tip #7: Convenience stores

Exactly as the name implies, convenience stores get you in and out in a flash.

According to the industry’s trade group, the NACS, the average time it takes a customer to walk in, purchase an item and depart is between 3 and 4 minutes.

Here’s the breakdown: 35 seconds to walk from the car …read more

From:: Daily Reckoning