The Democratic Debate Dilemma

This post The Democratic Debate Dilemma appeared first on Daily Reckoning.

Right before last week’s Democratic debate, Elizabeth Warren revealed her plan to greatly expand Social Security.

And then, during opening remarks, Andrew Yang said he wanted to pay 10 Americans “freedom dividends” worth $1,000 a month as a way of demonstrating his larger plan to do the same thing for everyone in the country.

Now, both of these proposals are attempts to create larger social safety nets.

Both are also attempts to buy votes.

And both, in my opinion, miss the mark.

Let’s start with Elizabeth Warren.

The Headline Promise

Warren wants to pay all current and future Social Security recipients an extra $200 a month.

Promising seniors, the group of Americans who always vote come rain or shine, an extra $2,400 a year in Social Security benefits is a pretty good way to garner their support.

In addition, her plan:

  • Changes the measure of inflation used for Social Security adjustments to make it more tailored to what seniors experience
  • Provides Social Security credits to non-earning caregivers
  • Allows disabled widows and widowers to claim survivor benefits earlier
  • Creates special minimum benefit rules that would guarantee checks worth 125% of the federal poverty line
  • Finally, it allows public sector employees to avoid negative adjustments for various pension benefits

Warren would pay for all of these changes with two new taxes:

  1. A 14.8% combined payroll tax on all wages above $250,000
  1. A 14.8% net investment income tax for individual filers making $250,000+ and joint filers making $400,000+. (This is in addition to an existing 2.9% net investment income tax.)

For the vast majority of Americans, this tradeoff sounds pretty good – higher Social Security checks, a better safety net for some, and all the costs being paid by the highest 2% of earners.

Personally, the individual line items sound like a mixed bag to me.

But there are really two big objections to be considered here:

A Philosophical Shift

Social Security was never intended to be an overtly progressive program. So this proposal would represent a marked philosophical shift.

When Social Security was first instituted, it covered about half of the population. Many teachers, nurses, librarians, and other workers were excluded from coverage.

Today, Social Security covers virtually everyone and the average American is living to age 76. Other features like disability insurance have also been added to the equation as well.

To accommodate this widening gap of money coming in and money going out, the initial payroll tax rate of 2 percent — which was and still is split between employer and employee — has already risen to a combined 12.4 percent.

But the idea was always providing a basic retirement benefit for all Americans … funded by their own contributions over time … with well-defined parameters on the top end (both maximum benefits and maximum contributions).

Warren’s plan is substantially different in spirit.

It places a lot more financial burden on a lot less people at the top of the income scale.

Whether you agree with her assessment that those people should bear the cost is up to you. That brings us to the second objection.

The Math Is Against Her.

It’s quite likely that Warren’s math wouldn’t pencil out in reality.

According to an analysis by Mark Zandi of Moody’s Analytics, Warren’s proposal would pay for itself and extend Social Security’s solvency out another 19 years.

Of course, one of the big assumptions is that wealthier Americans will take zero action to avoid the new taxes that Warren is proposing.

Newsflash: They will take actions to avoid the new taxes that Warren is proposing.

I have no idea to what extent or how, obviously.

But it’s foolish to think that America’s richest citizens won’t reconfigure their businesses … shift income sources … go through various legal restructurings … or use many other tactics to minimize the impact of these new policies.

Therefore, we can’t take any analysis at face value.

What About Yang’s Plan?

For someone who touts his ability at math, Yang’s proposal looks pretty ridiculous once you dig a little deeper.

I really like Yang. He’s funny. He’s intelligent. He also seems fairly reasonable.

I also thought his “freedom dividend” idea was somewhat palatable – or at least more palatable than Warren’s Social Security plan – until I read the fine print.

Okay, so one of Yang’s biggest ideas is a universal basic income program for all Americans.

Here’s the explanation from his website:

“Andrew would implement the Freedom Dividend, a universal basic income of $1,000 a month, $12,000 a year, for every American adult over the age of 18. This is independent of one’s work status or any other factor. This would enable all Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy, relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future.

“Other than regular increases to keep up the cost of living, any change to the Freedom Dividend would require a constitutional amendment.

“It will be illegal to lend or borrow against one’s Dividend.”

How would we pay for this?

This is the answer from Yang’s website:

“Andrew proposes funding the Freedom Dividend by consolidating some welfare programs and implementing a Value Added Tax of 10 percent. Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally – most would prefer cash with no restriction.

“A Value Added Tax (VAT) is a tax on the production of goods or services a business produces. It is a fair tax and it makes it much harder for large corporations, who are experts at hiding profits and income, to avoid paying their fair share. A VAT is nothing new. 160 out of 193 countries in the world already have a Value Added Tax or something similar, including all of Europe which has an average VAT of 20 percent.

“The means to pay for the basic income will come from four sources:

“1. Current spending: We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of the Freedom Dividend because people already receiving benefits would have a choice between keeping their current benefits and the $1,000, and would not receive both.

“Additionally, we currently spend over 1 trillion dollars on health care, incarceration, homelessness services and the like. We would save $100 – 200+ billion as people would be able to take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. The Freedom Dividend would pay for itself by helping people avoid our institutions, which is when our costs shoot up. Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth.

“2. A VAT: Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software.

“3. New revenue: Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy will grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $800 – 900 billion in new revenue from economic growth.

“4. Taxes on top earners and pollution: By removing the Social Security cap, implementing a financial transactions tax, and ending the favorable tax treatment for capital gains/carried interest, we can decrease financial speculation while also funding the Freedom Dividend. We can add to that a carbon fee that will be partially dedicated to funding the Freedom Dividend, making up the remaining balance required to cover the cost of this program.”

So, a little wordy but, here’s the thing.

I’m the last person who wants to support another tax. But I could have at least argued that a VAT affects people who spend money rather than people who earn money.

Moreover, if the proceeds were going to be redistributed to all Americans on an equal basis and regardless of their income or net worth, then “freedom dividends” are certainly a lot more fair than Warren’s proposal.

The real problem is that, based on Yang’s numbers, a 10% VAT would only produce $3,200 a year for every American adult. Which leaves about $8,800 unaccounted for.

I repeat: We would all pay an extra 10% on most of the purchases we make, and yet that would only cover a bit more than one-quarter of the income Yang wants to give back to us.

That’s why he’s also going to completely remove the cap on payroll taxes – a far worse blow to higher-earning Americans (particularly those earning between $140,000 and $250,000) than what Warren proposes.

There’s also another tax on financial transactions …

He would end a tax break on capital gains and carried interest …

Another tax – okay, a carbon fee – on some undefined people or entities …

Plus, all this nebulous stuff that essentially amounts to back-of-the-envelope guesswork. Streamlining existing welfare programs? Sure…

But the other claims of economic growth and institutional avoidance can’t be proven out until we’re years into the experiment.

So, math… Sure.

Heck, the very way Yang counts the things it will take to produce $12,000 a year for every adult American is a lot more than four sources.

At the end of the day, I don’t really like either of the two proposals we covered today.

But as much as I wanted to support Yang’s more than Warren’s, at least hers somewhat adds up.

To a richer life,

Nilus Mattive

Nilus Mattive

The post The Democratic Debate Dilemma appeared first on Daily Reckoning.

Are Your Retirement Expenses Out of Control?

This post Are Your Retirement Expenses Out of Control? appeared first on Daily Reckoning.

We’ve all seen the commercials with the gray-haired couple sipping champagne on the beach or the grandfather teaching his grandkids how to fish at the lake house.

But financially speaking, how realistic are these depictions of retirement?

According to the latest Consumer Expenditure Survey, produced every year by the U.S. Bureau of Labor Statistics, “older households” – defined as those run by someone 65 and older – spend an average of $45,550 a year, or roughly $3,795 a month.

Obviously, what you spend in retirement will depend on different variables, including the annual property taxes on that lake house, the price of your preferred champagne, and a number of other individual factors, but you get the point.

If I’m being honest, I think spending $45,550 a year after-tax in retirement seems a bit high. Based on a 20% effective tax rate, $45,550 is equivalent to $54,660 a year in gross income.

To generate $54,660 a year in gross income, you would need an investment portfolio of $1,366,500 generating 4% a year.

Is the average 65+ year-old retiree in America a millionaire?

We know that the average 60-69 year-old American has only about $195,500 saved in their 401(k) and only $62,000 if we look at the median 401(k) account balance, so something seems a bit off…

If we take a more optimistic view, however, we can assume that current retirees over the age of 65 likely have some form of pension income as well as a healthy Social Security check, averaging out at around $1,461 a month. Add to that a little financial help from your adult kids and it should all work out in the end.

But the question I’m most concerned with is where is this $45,550 being spent? With less mouths to feed, no daily commute, it seems surprising to me that retirement expenses are this high.

If we dig into the BLS data a little more, we see a monthly breakdown of how households spend their money, on average. Here are the seven major categories you need to plan for:

Housing: $1,399

Surprisingly, housing is the largest expense for the average retiree. With the median American home price at $226,800, spending $1,399 a month on housing is high.

If your house is paid off by the time you retire, you should only be paying property taxes, insurance, maintenance, and utilities. Therefore, it’s obvious that the average retiree still has a mortgage to pay.

With no mortgage, your average housing expenses would tally up to more like $350 a month based on the median home price today. Point being, paying off your mortgage before you retire is going to save you a LOT of money.

Transportation: $615

$615 a month for transportation is another surprisingly high number, especially given the fact that most seniors get discounts on public transportation.

For example, discounts usually start at 50% of the regular adult fare and go up from there. Some cities, like Chicago, even offer free transportation to all senior citizens.

As a senior, spending $7,380 a year on transportation means you either still have an auto loan you’re paying off or it’s a sign you need to find a more trustworthy mechanic. The average transportation expense across all consumers last year totalled $9,761.

Although seniors are paying less on transportation per year than most, it still seems high in my opinion. Most Americans could do with paying less for transportation. Overpaying for a car is one of the biggest financial killers.

Healthcare: $557

It’s nice to see that health care cost averages only $557 a month or $6,684 a year. The average healthcare cost for a working American is closer to $20,000 a year, which is heavily subsidized by the employer.

The horror stories you hear about health care costs skyrocketing in old age are a bit exaggerated, so long as you have Medicare or some type of subsidized health insurance program.

Food: $539

$539 a month for food is not bad compared to the $600 a month for the average individual. With all the early-bird specials and seniors discount shopping days, retirees should be saving money in this category. My advice, stay away from food delivery apps if you want to maintain a reasonable budget here.

Personal Insurance/ Pensions: $283

It’s a bit unclear why this category even exists. 65+ year-olds should mostly be retired, however, the BLS explains this category as households who are still employed, paying Social Security tax, and contributing to Social Security.

In other words, the secret to a prosperous retirement is to keep your spouse working as long as possible! Seriously, having one spouse work late into retirement means you can typically afford more and live better. It just needs to be a situation you’re both happy with.

Cash Contributions: $210

$210 a month or $2,520 a year in cash contributions (aka charitable donations) accounts for around 4.2% of annual gross spend. 4.2% is a respectable amount since the average American contributes roughly 3% of their gross income to charity each year.

Studies have shown that making charitable contributions can improve happiness. Seeing the effect your contribution has made can be powerful so donate while you’re still alive to enjoy it.

Entertainment: $233

$233 a month for entertainment seems a bit on the low end. But when you consider all the discounts and deals that retirees get for being able to attend movies, plays, and museums during non-peak hours, it makes sense.

Not every retiree is taking an around-the-world cruise or flying to the Mediterranean for a weekend. What most retirees are saying is their newfound freedom provides much of their day-to-day happiness versus having to spend money on expensive experiences.

Overall, the average retiree lives a pretty good life. Being able to spend $45,550 a year after-tax is a decent sum given that the median household gross income last year was $63,179. That means the average retiree got to spend close to 87% of the median household income without having to work. Not a bad deal.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Are Your Retirement Expenses Out of Control? appeared first on Daily Reckoning.

5 Financial Rules of Thumb You Need to Break

This post 5 Financial Rules of Thumb You Need to Break appeared first on Daily Reckoning.

One of my favorite Seinfeld episodes is when Kramer storms into Jerry’s apartment and starts complaining about another golfer who picked up his ball in the middle of the fairway to clean it.

Kramer goes on to say that he penalized his friend a stroke for breaking the rule.

Elaine then asks, “What is the big deal?” and Kramer replies, “Hey, a rule is a rule, and without rules there’s chaos.”

The same can be said for personal finance.

Without money rules, chaos can ensue. However, there are some rules of thumb I believe you should be breaking if you want to get ahead.

Some rules are outdated, and some simply don’t apply to everyone’s individual financial circumstances. So why bother follow a rule that makes no sense?

Here’s my list of 5 financial rules of thumb you should consider breaking:

1) Use Your Age to Determine Asset Allocation

During the 1980s and 1990s, it was standard to give the following asset allocation advice:

“Subtract your age from the number 100 and that is the percentage of your portfolio you should have invested in equities, with the remaining percentage in fixed income, adjusted each year as you age.”

Under this rule, at age 30, for instance, you should keep 70% of your portfolio in stocks and the rest in bonds and other relatively safer securities. At age 65, you invest 35% of your assets in stocks.

The idea behind the rule is to gradually reduce investment risk as you age. But that doesn’t always work. Americans are living longer and retiring later.

Your retirement savings strategy should be adjusted to meet a bigger nest egg. At the same time, the yield on a 10-year Treasury Bill is roughly 2.5%, down from a peak of nearly 16% in the 1980s.

And with the stock market soaring over the past decade, it might not have made a lot of sense to dump a large portion of money into fixed income when you could reap greater gains.

My advice, rebalance your portfolio each year, look at your target retirement age, what you plan on using your funds for in retirement and your risk tolerance.

2) Pay Off Your Mortgage as Fast as Possible

For most, a mortgage is the largest debt they’ll ever owe. So from a risk tolerance point of view, it makes sense to want to pay down the debt as fast as possible.

Although this really only makes sense when interest rates are outpacing the stock market. If interest rates are double digits and investment returns average 7%, yes, it makes sense to pay down your mortgage faster.

But, the majority of homeowners today have a mortgage rate of less than 5%, and are seeing average annual returns above 7%.

So it’s better to make your payments on time, take your mortgage interest deduction on your federal income taxes and have more money invested for higher returns.

3) You’re Throwing Away Money If You Rent

Owning a home is part of living the American dream. And there’s been long held debates over whether or not renting is akin to flushing money down the toilet.

The way I see it, you have to live somewhere and renting affords you a life free of many of the  unpredictable expenses homeownership offers. Not having to pay mortgage interest, property taxes, maintenance and repairs can be a big plus if there are good opportunities to put your money to work elsewhere.

Renting also means you have the flexibility to move to where opportunity exists. If you’re tied to a home, you might not be able to pick up and move to a more lucrative job opportunity in a neighboring state.

Obviously, there are benefits to owning a home too, so take this advice with a grain of salt.

4) Spend No More Than 30% of Your Income on Housing

The 30% rule is a common budget benchmark for housing costs. The gurus tell you to cap your rent or mortgage at under 30% of your monthly income.

This rule of thumb stems from housing regulations from the late 1960s. A US Census Bureau study said the Brooke Amendment (1969) to the 1968 Housing and Urban Development Act established the rent threshold of 25% of family income in response to rising renting costs.

The rent standard later rose to 30% in 1981, which has since remained unchanged, according to the study.

But this 40 year old standard may not be realistic for a lot of people today. A Harvard University study found in 2015, nearly 21 million renters — almost half of the country’s renters — spent more than 30% of their income on housing across the country.

Rather than think 30%, think what can I afford? Look at how much you earn, how much debt you owe, and where you live, your rent could be more or less than 30% of your paycheck.

If you find your rent is eating away most of your paycheck, consider ways of making more income or consider moving somewhere with lower costs.

5) Withdraw 4% of Your Savings In Retirement

When you retire, it’s been said you should start withdrawing 4% from your portfolio in your first year of retirement, increasing withdrawal each year enough to cover inflation.

If you have $2 million saved, you would take out $80,000 for the first year. If the annual inflation rate is 2%, then you withdraw $81,600 the following year ($80,000 plus 2%). And you continue this trend for the next 30 years.

This rule was created on historical data by financial advisor William Bengen in 1994. Where this rule falls short is it doesn’t take into account life’s ups and downs.

Your investment performance might lag one year because of a poor market or economic conditions. Bengen also assumes retirees have a portfolio split between stocks and bonds. He later revised the rule to 4.5%, using a more diversified portfolio.

My advice to you is be flexible and revise your spending rate based on your needs and portfolio performance. Early retirees might have a smaller nest egg, and need to withdraw less than 4% to make their savings last.

And someone with major health concerns and a shorter horizon might want to enjoy more of their savings with the time they have left.

As you can see there is no one-size-fits-all book of rules for personal finance. Use money rules as guidance, but use your best judgement on whether or not a rule should be broken or not.

To a richer life,

Nilus Mattive

Nilus Mattive

The post 5 Financial Rules of Thumb You Need to Break appeared first on Daily Reckoning.

Urgent: Your Will May Need Updates

This post Urgent: Your Will May Need Updates appeared first on Daily Reckoning.

When the “Queen of Soul” Aretha Franklin died last year, it was believed that she hadn’t prepared any kind of estate plan, including a last will and testament.

But, a few months ago, three handwritten wills were found in her home near Detroit. Two were in a locked closet and one was stuffed beneath the cushions of a couch!

If you’re wondering whether the handwritten wills are valid, join the crowd.

In Franklin’s case, with her $80 million estate, it’s likely good news that some kind of last will and testament was found to help divide her assets.

But, there’s no guarantee that the informal, handwritten wills are going to hold up in court. So the saga continues…

Aretha’s problematic situation is why it’s so important to have an estate plan with a legally valid last will and testament.

I won’t bore you with estate planning details (today), but I do want to talk about when you should consider updating your will.

This is all personal preference, of course, but I would suggest reviewing your will if you’ve done any of the following recently.

Moved to a Different State

If you’ve moved to a different state since your will was written, it’s a good idea to review it. Whatever state you die in, will be the state’s laws that are applied to your will.

And some rules in your new state could be different from your old one. For example, some states vary in the number of witness signatures needed on a will to transfer property once you die.

If you move from a state that requires only one witness to two, this can be problematic for your executor. Other rules that differ between states are the types of wills deemed valid.

Some states allow self-written wills but have rules around how they can be written. In one state, you might have to write out your entire will by hand. Whereas, in another state you can type your will and just sign at the bottom.

Purchased a New Property

Another mistake a lot of people make is they assume that because their will states that they are gifting their home to their children when they pass that it’s a done deal.

Your will needs to specify exactly what home and at what address you’re gifting. So if you move or decide to buy a second property, make sure your will specifies who receives which property and at what address.

Purged Old Possessions

If you’ve moved or downsized recently, you likely purged some of your old possessions. Sometimes you end up giving away or selling something you had planned on passing down.

If your will lists items you no longer own, those possessions will be skipped over and the recipient of those items with get nothing. So, it’s best to review your will and redistribute whatever possessions you currently still own.

Gifted a Willed Item

Sometimes you will gift some of your possessions early due to downsizing or out of necessity. For instance, you might gift an antique desk to one child, but in your will, it says that same desk goes to another child.

Things can become awkward between families if you don’t catch these little hiccups. Whenever you give something away that’s significant, review your will to make sure you haven’t disrupted the balance.

Had a Significant Change in Your Net Worth

You might have exact amounts of money earmarked for each one of your children. This will likely depend on how much your estate is worth, the value of stock you own, etc.

But the size of your estate and the worth of your stock could have grown or shrunk dramatically since you last wrote your will.

This can create challenges for your executor. Especially if one asset has grown significantly while another has shrunk. If that’s the case, it’s best to update your will to reflect your current net worth.

Begun Working with a New Charity

Maybe you’ve recently started volunteering at a nonprofit or you joined a board for a charity that means a lot to you. You might wish to donate some of your wealth to this group.

Now is a good time to update your will to reflect those changes. And the same can be said for charities or groups you no longer feel the same way about. You might need to remove some groups from your will to better reflect how you currently feel.

Had a Death in the Family

If your spouse dies before you, you won’t need to update your will because wills typically list alternate recipients in case this happens.

But, if your will lists a child who has recently passed as a beneficiary, then you’ll need to include instructions on how you would like that child’s items redistributed.

Your Primary Caregiver Changed

If one of your sons or daughters becomes your primary caregiver since you last wrote your will, it might be time to update your document to reflect your gratitude.

Oftentimes, becoming a primary caregiver involves a huge time and financial commitment. The best way to go about making this change so as not to upset the other beneficiaries listed in your will is to explain your intentions.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Urgent: Your Will May Need Updates appeared first on Daily Reckoning.

8 Unforgettable Fall Travel Destinations for Retirees

This post 8 Unforgettable Fall Travel Destinations for Retirees appeared first on Daily Reckoning.

As varied as people are, they usually have common wishes. I mean, who wouldn’t love to win the lottery or have a beach body no matter what they ate, right?

This holds true when it comes to the lifestyle people envision for their retirement.

When it comes to their post-work years. many people plan to use the extra time to visit loved ones, or get elbows-deep in their beloved hobbies. One woman I met recently wants nothing more than to spend her retirement years watching every single Yankees game, for example.

The most common dream that people have for their retirement, though, is travel.

Foreign or domestic, short hops or long hauls, men and women alike want to spend more time seeing the world around them.

This is largely because it’s almost impossible to travel before you retire. Sure. you might get a vacation to Cabo here or a week in the Wisconsin Dells there, but for the most part, your working and child-rearing years keep you pretty well locked in to a certain geographic region.

This happens because people don’t have the money, yes, but also because they don’t have the time. Your working years are spent at your 9 to 5, socking away as much money as you can, while spending your precious free hours running errands at Costco or sitting in the sun on the Little League bleachers (remember those days).

This all adds up to a deficit of money and time. These precious resources are scarce during the middle of your adulthood, and if you’re like most people, you spent years wishing you had more of each.

Ready for the magical, amazing, wonderful part?

Now that you’re retired, you have both.

That’s right, it’s time to finally realize your dreams of seeing the destinations you’ve only imagined visiting in the past. Now that it’s fall, the crowds have died down and the rates have dropped, so there’s no time like the present to get out there.

If you are ready to travel, but you have no idea where to start, you’re in luck! Here are some wonderful trips to stunning US locations you should take advantage of now that you finally can.

Burlington, VT

With wineries, breweries, a burgeoning food scene, and tons of beautiful inns and bed-and-breakfasts to visit, Vermont is a traveler’s paradise. Add in the turning of the leaves and amazing, crisp, weather, and you’ve got a perfect destination for an impromptu trip. Be sure to get some maple syrup while you’re in town – it really is on another level than what you can get anywhere else.

Flagstaff, AZ

The Grand Canyon is a beautiful sight to see, but Arizona in the summer is stiflingly hot and dry. In the fall light, you’ll see the remarkable oranges and reds in the local rock formations, and the tourist crowds will have died down considerably. Love kitsch and history? Williams, AZ, an iconic stop on Route 66 is right close by. If luxury travel is more your thing, you can spend a little time at the Canyon and then drive up the road a bit to Sedona. The accommodations, spas, and restaurants there are world-class, and the nearby vineyards produce jammy reds and fruity whites you’ll be sure to enjoy.

Savannah, GA

If you’ve ever seen the John Cusack flick Midnight In The Garden of Good and Evil (or read the book), you’ll already have an idea of the spooky aura that surrounds this old, Southern community. There’s no better time than the present to experience it for yourself. In the fall, the oppressive Southern humidity drops and you can enjoy your time experiencing quirky cuisine, viewing stately architecture, and taking in the mysterious history of this locale.

Oahu, HI

Who says Hawaii is just for summertime? In the fall months. Oahu still has temperatures in the mid-eighties, and the crowds will be almost non-existent. Accommodation prices fall and the beaches are all but deserted in the autumn, and in addition to the normal charming Hawaiian culture, you’ll also see food festivals, film festivals, and a variety of stunning natural attractions without the typical long lines.

Santa Barbara, CA

I may be a little biased, but if you love Spanish style architecture and great food, there’s no better fall destination than my home, Santa Barbara. With stunning missions here and in nearby San Luis Obispo, world class restaurants, and the added allure of whale-watching, this coastal California city has all the charm of a Pacific adventure with none of the hustle and bustle of Los Angeles. Plus the surfing is great.

Nashville, TN

Country music fans already know this city well, but even if you don’t love Willie and Waylon, there’s something here for everyone. Sure, you can visit country music hotspots like the Country Music Hall Of Fame, but you can also enjoy festivals like Nashvember and try local cuisine like Nashville Hot Chicken and farm to table cuisine. With early fall temps ranging from the 60s to the 80s, all you’ll need is a light jacket (and maybe a great pair of boots) and Nashville is yours for the taking.

Hill Country, TX

Texas is a huge state with lots of fun adventures, but let’s be honest – for half the year, it’s so hot it can be downright unenjoyable. Now that cooler temperatures are here, you can camp, hike, and eat tacos to your heart’s content. In addition to the outdoor and culinary adventures, you can take in Austin’s music scene or attend an F1 race without fear of melting in the stands.

The Fingerlakes Region, NY

Upstate New York is a harsh place in the winter, but in the fall? It’s a wonderland. Everything from wine tasting at acclaimed vineyards to long bike rides to apple picking is available for the casual traveler, and if you’re feeling intrepid, the Big Apple is just a scenic half-day’s drive away.

The greatest thing of all about retirement is the freedom to do whatever you choose, whenever you want.

With all of these awesome destinations just a short plane ride away, which will you pick first?

To a richer life,

Nilus Mattive

Nilus Mattive

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Could Retiring Later Make You Live Longer?

This post Could Retiring Later Make You Live Longer? appeared first on Daily Reckoning.

If you ask most people when they’d like to retire, they’ll tell you ‘yesterday.’

However, there’s an interesting argument to be made for delaying retirement just one more year.

According to the Employee Benefit Research Institute, the number of workers reporting that they expect to work past age 65 rose from 16 percent in 1991 to 48 percent last year.

It seems like more workers are getting the message that in order to boost their retirement security they need to work longer.

But boosting your retirement nest egg is not the only benefit to delaying retirement. In fact, I’ve got six reasons why putting off retirement just one more year is not such a bad idea.

Reason 1: You’ll Live Longer

It’s counterintuitive to think that working a stressful 9-5 job will increase your chances of living longer but that’s the truth.

The Center for Retirement Research found that delaying retirement reduced the five-year mortality rate for men in their early 60s by 32%.

Another study of half a million retired self-employed workers in France found that dementia was significantly less common among those who retired later than those who retired earlier.

Researchers hypothesize that the reason why early retirement has such negative effects on the brain is due to a decrease in mentally challenging tasks.

Reason 2: You’ll Save More

The longer you work, the more time you have to save for retirement. And, as you get older, the opportunity to set aside even more money increases.

Here’s how: If you’re under 50, your contribution limit to a 401(k) is $19,000 and $6,000 for an IRA this year. But, once you’re older than 50, you can add an extra $6,000 and $1,000 to your 401(k) and IRA contribution limits, respectively.

On top of that, the money you have saved and invested gets a chance to grow one more year without you touching it.

For example, if you have $500,000 in a retirement account today by delaying just one year, that $500,000 could grow to $535,000, assuming a 7% annual rate of return. And that’s not including any additional contributions you make to your retirement accounts during that time.

What can you do with an extra $35,000? That leads us to my next reason…

Reason 3: You’ll Have a Better Quality of Life

The reason why your quality of life will improve if you work just one more year is due to the fact that your retirement will be one year shorter.

If you estimate your yearly expenses in retirement to be $35,000, then delaying just one year lowers your required savings by that same amount. Couple that with an extra $35,000 from compound growth and you now have an extra $70,000 to spend how you please.

Reason 4: You’ll Have Bigger Social Security Checks

If you delay retirement, you boost your Social Security benefits in two ways.

First, it’s likely that you’re at the peak of your earning potential so because your Social Security check is based on the average monthly income during your 35 highest-earning years, delaying retirement could make up for the early years in your career where you earned less.

Second, depending on your age, you might be able to delay your Social Security benefits, which further increases your checks. Everyone can begin claiming as early as age 62, but you give up a significant amount versus if you waited until your full retirement age. How much exactly?

You’ll earn 124% more with a full retirement age of 67 and 132% for a full retirement age of 66. Plus, the longer you wait to claim benefits, the less of a burden you place on your personal savings later on.

Reason 5: You’ll Have Better Health Care

One more reason to delay retirement is company benefits, especially health insurance. Depending on the size of your company, your employer’s health insurance plan could be cheaper than Medicare and provide better coverage.

Here’s what you need to know: At 65, you qualify for Medicare Part A, which covers inpatient hospital services. Because Part A is free, there’s no reason why you shouldn’t enroll. At that point, you can also enroll in Medicare Part B (for doctor visits), Medicare supplemental coverage and Part D (for prescription drugs).

If your company has less than 20 employees, you need to sign up for Medicare as your primary insurance, even if your employer offers its own coverage. Failing to do so could mean you’re not covered at all. Talk to your Human Resources department to find out what’s best for you.

Reason 6: You’ll Make a Difference

A commonly cited reason for staying in the workforce is meaningful work. If there’s a project you’re working on that you enjoy, it might be fulfilling to stick around and see it through to the end. Capping off your career with a big project could be the perfect way to cruise into retirement.

Lastly, working one more year is not always going to be your call. Sometimes your boss has a different timeline for when he sees you retiring. Take what I said today with a grain of salt and decide what’s best for you and your family when the time comes to make the call .

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post Could Retiring Later Make You Live Longer? appeared first on Daily Reckoning.

10 Upgrades to Sell Your Home, or Flip 10x Faster

This post 10 Upgrades to Sell Your Home, or Flip 10x Faster appeared first on Daily Reckoning.

Yesterday, I talked about income properties and how you can get started with investing in real estate. If you are looking to start flipping houses, or if you are looking to sell your current home and downsize, it’s important to know what will help get your house sold as quickly as possible, and get you the best price for your property.

Now, if you aren’t flipping a house as an investment and you’re just looking to downsize, you may be ask:

Why would I renovate my house now if I’m going to sell in [pick any short timeframe]?”

It’s a valid question for two reasons: First, if you make upgrades before you’re about to sell, you won’t get to enjoy the money you’ve invested. Second, a lot of upgrades don’t necessarily deliver the return on investment you would imagine.

That goes for flipping homes as well. You need to be smart when picking the things that you choose to upgrade, so you don’t spend more than you need to on your flip and still get the maximum profit potential from your property.

According to Remodeling magazine’s 2019 Cost vs. Value report, most home remodeling efforts only increase a home’s value by 50% – 80% of the average project’s costs.

For example, the average remodel for a mid-range bathroom is $20,420. According to the report, you’d make back only $13,717 (67.2%) when you sell.

If you aren’t flipping a house or looking to sell immediately, your best bet is to make small upgrades over a longer period of time. This way you can enjoy the upgrades while you’re still living in the house and it’s not one big expense or project you have to deal with when you eventually sell.

Of course, this is easier said than done. And if you’re asking the question, I’ll assume you don’t have much time to waste and you are looking for your best options now.

So, what kind of upgrades deliver the best bang for your buck today and what kind of upgrades will get your home off the market fast?

Here are 10 upgrades to consider in 2019:

Upgrade #1 – Exterior Lighting

85% of buyers want this feature and the cost to install exterior lighting is relatively cheap. You’re looking at around $65 per fixture.

If your lawn is well kept, exterior lighting is a nice finishing touch that will grab a buyer’s attention before they even walk through the front door.

In fact, exterior lighting is the second most-wanted outdoor feature, according to the National Association of Home Builders. Choose between spotlights, walkway lights and pendant lights.

Exterior lighting also signals safety. Even just having motion-sensor lights can be a big plus.

Upgrade #2 – Laundry Room

91% of buyers say they want a laundry room. The investment varies but you’re looking in the neighborhood of $1,000 to $5,000 for a small-scale project.

If your guest bedroom looks anything like mine, you know why homeowners rate a laundry room as a must-have feature.

Homeowners want a separate room to fold and iron clothes, a place that keeps the mess out of the main living spaces.

If your house doesn’t currently have a laundry room, the basement is typically the easiest (and cheapest) place to put one. Utility lines are already there, and most basements are unfinished so you don’t have to demolish anything to start.

A basement laundry room will set you back $1,000. If you want a laundry room or laundry closet close to your bedroom that fits just a washer and dryer, you’re looking at $5,000.

And if you want a full laundry room with sink and storage cabinets included, the price climbs to $10,000 or more.

Upgrade #3 – Garage Storage Space

85% of buyers say they want garage storage space. Buyers with growing families especially need more storage space.

And unlike a backyard shed or the attic, garage storage is more easily accessible. For cost, you’re looking at around $2,025 – $2,363 per 380 square feet.

Upgrade #4 – Energy Efficient Appliances and Windows

89% of buyers want energy efficient appliances, windows, and doors. The cost of owning a home is not cheap, so buyers are looking for anything to lower monthly utility bills.

Energy-efficient windows can trim heating and cooling costs by 12%, while Energy Star-rated appliances, like washing machines, can save homeowners around $45 a year or more.

Energy Star-qualified windows use an invisible glass coating, have vacuum-sealed spaces filled with inert gas between panes, sturdier weather stripping than regular windows.

And they use better framing materials to reduce heat gain and loss in the home.

Upgrade #5 – Patio

87% of buyers want a backyard patio. If you’re thinking of installing a concrete patio, your cost is around $963 per 120 square feet.

Only recently have outdoor living spaces gained in popularity. I blame the backyard makeover shows, but it’s good news for sellers.

A nice patio will help sell your home faster because buyers can envision themselves sitting outdoors with friends having drinks or cooking meals.

Also, installing a patio is a lot cheaper than adding an addition to your home. So you get more living space for less.

Upgrade #6 – Ceiling Fans

85% of buyers say they want ceiling fans installed. Similar to the Energy Star-rated windows and appliances, homeowners these days want anything that will lower utility costs.

A ceiling fan with light kit and remote control will set you back $466. Because ceiling fans create a wind-chill effect, a person sitting in a room will feel cooler when the fan is on.

According to, homeowners should be able to raise the thermostat level by four degrees without a reduction in comfort while the fan is in use.

Upgrade #7 – Walk-In Pantry

83% of home buyers want a walk-in pantry. Costs vary based on design but the reason why most home buyers today want a walk-in pantry is because kitchens get overcrowded when there’s not enough space to store essentials.

Unlike reach-in closet pantries, walk-ins allow for more storage. Which is critical for larger families that buy in bulk.

Most walk-ins are about 5 x 5 feet and have open shelves. Just make sure your pantry is installed somewhere cool and dry.

Upgrade #8 – Hardwood Floors

83% of buyers say they want hardwood floors. For cost, you’re looking at spending around $999 per 120 square feet of red oak flooring.

Homeowners like hardwood floors because they’re easy to clean, look nice, and are more durable than carpet. You can also refinish hardwood floors, extending their life even longer.

If you can’t afford to install true hardwood, engineered wood flooring is another good option. The cost is typically a few hundred dollars less or about 15% cheaper than pure hardwood and you’ll still get most of the benefits mentioned.

Upgrade #9 – Walk-In Closet

Walk-in closets are one of the most sought after features for first and second-time homebuyers.

They rank among the top five for must-have features. So if your current home has only a reach-in closet, you might want to consider revamping it.

Couples want a closet with more space, because they have to share. And singles like the flexibility of storing all their stuff in one organized space. Homes with walk-in closets in the master bedroom are a lot easier to sell than ones without.

Upgrade #10 – Eat-In Kitchen

Again, these are popular with first and second-time homebuyers. Eat-in kitchens are popular because they’re great for families with small kids.

Everyone can meet in the kitchen for breakfast before work and school and in the evenings for dinner. Costs vary based on your space but it’s not as expensive as you can imagine.

Removing a non-load-bearing wall to make room for a small table and some chairs will set you back about $1,000. Of course this can be scaled up quickly but that’s for you to decide.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 10 Upgrades to Sell Your Home, or Flip 10x Faster appeared first on Daily Reckoning.

How to Make Money the HGTV Way

This post How to Make Money the HGTV Way appeared first on Daily Reckoning.

Thanks to television shows like Flip This House and Income Property, many people want to make income as a real estate investor. And why wouldn’t you? In just an hour (or less, if you don’t count commercials), you can watch people make tens of thousands of dollars by just picking out a property and sprucing it up.

Of course, we both know it’s not as easy as they make it seem on HGTV, but real estate investing can still be a pretty lucrative enterprise.

Not only can you make big gains from flipping houses or accrue a steady stream of income from renting out your properties, you’ll also benefit from tax breaks and reap the advantages of appreciation over time.

Of course, there’s more than one way to make money from real estate, and there are a few things you should know before you jump in.

If real estate sounds like an interesting potential investment, here are a couple of tips you can use to get started in the real estate game.

Learn from Successful Peers

If you’re brand new to investing in real estate, you might be eager to get started right away, but before you dive in, take some time to get to know your area and market a little better.

If you don’t have any friends locally who are successful real estate investors, that’s ok – you can find lots of groups who are always accepting new members. Look on Facebook, on, or simply Google a term like, “Real Estate Investor Association” along with your city’s name and you’ll find lots of groups you can join in order to learn more.

In addition to the knowledge you’ll gain, there’s another benefit to getting started by joining a group, too.

Jim Rohn may have put it best when he said “You are the average of the five people you spend the most time with.” If you surround yourself with successful investors, you’ll naturally want to rise to be at their level.

This positive peer pressure makes it a whole lot easier to succeed than hanging out with naysayers ever will.

Look for Cash Flow

If you decide you want to become a landlord, look for properties where you’ll have cash flow.

This means you want a property where the rent the tenant pays you exceeds all your costs associated with owning the property.

Your cash flow on the property doesn’t have to be a lot – as I said, you’ll still get other benefits like tax breaks and appreciation even if your property only brings in a few hundred a month.

Once you find one of these positive cash flow properties, you’ll find it easier to add others to your portfolio, too.

Look for a Quick Flip

Another way to make money from real estate investing is the way they portray in all those aforementioned HGTV shows. You buy a property for a low price, fix it up a bit, and then sell it at a substantial increase.

This is different from investing for cash flow – it has bigger and faster potential rewards, but it has more substantial risks, too, so do your homework on how much risk you can afford to bear before you decided to go this route.

If you do decide to flip houses, get to know local contractors and vendors.

When you’ve built relationships with tradespeople, they can give you the inside scoop on what materials to use and how long jobs will realistically take.

This way, you won’t end up holding the bag if, say, the new flooring takes a lot longer to put in than you thought it would, or your contractor initially estimated, for example.

Go in with a Group

If you are looking for a more secure way to make passive income through real estate investing, going in with a group on multi-family housing might be a better method for you.

With an investment of just $50,000, you can usually get started with this strategy.

The reason this is a more secure method is because you’ll be investing with other people.

The potential for risk is shared, so this method is safer than some others. Obviously this shared risk comes with shared profits, and you have to be willing to work with the other members in your group.

So be aware that by limiting your risk, you also limit your potential earnings, and say in what happens with the property.

Invest in a REIT

You don’t have to stay with the world of residential real estate investing. You can also look for retail, healthcare, or office real estate, too.

The easiest way to get started in any of these areas is with a Real Estate Investment Trust, or REIT. REITs are different than the other types of real estate investing mentioned above because they’re typically traded on stock exchanges.

You’ll probably see smaller gains, but you’ll also have less long term risk because you’re not locked into a property.

If you just want to dip your toe into the waters of real estate, this is a great way to see if this is right for you without a big commitment.

Do Your Due Diligence

Once you’ve got the lay of the land for your market, and you know how you want to invest, make sure you do your due diligence when looking for a property.

It’s really easy to get caught up in the momentum of a deal and wind up in over your head, so make a conscious choice to slow down and request all the documentation you need to make smart decisions.

Ask to see an income statement and a balance sheet if the property you’re interested in has been a rental before. If it hasn’t, then create your own balance sheet for the property so you can see what the actual costs associated with renting it out will be.

If you’ve decided to flip the house, look for comps in the neighborhood to make sure you can sell it and still see a profit.

Stay Strict with Your Budget & Timelines

One final note – no matter what method you go with, pay strict attention to your budget and your timelines.

It might seem like a good idea to throw in granite countertops to your flip home, or you might want to take an extra day to review a contract before turning it around, but you’ve got to be really judicious, because too many extras might end up costing you, and even a day too long in a particular period can put you on the hook for thousands in interest.

Real estate investing can be a healthy addition to just about any portfolio. As I said, it all starts with doing your homework, so if this idea interests you, start learning right away!

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post How to Make Money the HGTV Way appeared first on Daily Reckoning.

Big Time Gains from Part-Time Gigs

This post Big Time Gains from Part-Time Gigs appeared first on Daily Reckoning.

Dear Richer Lifer,

The first few days of retirement are invigorating and strange. Should you set an alarm? Should you get to the gym early, or sleep in and enjoy a few days of extra rest?

Your schedule is fluid and you find yourself relishing all the extra time on your hands. Want to go play golf mid-morning? Sounds great. Have lunch at 3pm? Sure, why not! That hobby you have been wanting to pursue? Try it out!

A few days turns into a few weeks, and if you’re like a lot of people, you’ll find yourself filling the hours in weird ways. You watch some tv, read a few books, take naps…

Then boredom sets in. The hours and hours of open time that were once so appealing, are now dull.

You may be surprised to find that you wish you were working again! Not necessarily full time, don’t get me wrong, but a few hours at a time just to stay engaged and energized.

You might find that you miss the fulfillment you used to get from working. Maybe you don’t find yourself wishing for your 40 hour a week, 9-5 grind, but you do want to be on a team again. There is something special about working toward a common goal you enjoy with others.

Or maybe you aren’t bored, but you might find you could use a little extra cash, now that all those retirement dreams of travel and leisure are here. Some additional spending money when you’re visiting the tropics might come in handy, or get you on the plane in the first place.

No matter what your reason, you may find you want to pick up a part time job.

Here are some part time jobs that are perfect for retirees:

Driving for Uber / Lyft

I can’t tell you how many times I’ve chatted with my Uber driver and had them say some version of: “I retired a few years ago and I wanted a way to fill the time. Uber is perfect – I wish I’d done this years ago!”

With flexible hours and a low barrier to entry, Uber and similar driving gigs are an easy way to get started making part time income. This is so popular with retirees that more than half of all Uber drivers are age 61 and up. If you want a gig that’s interesting, variable, and available to you on demand, ride-share driving might be perfect for you!

Translating / Tutoring In A Foreign Language

If you speak more than one language, you’re in luck. Translators and foreign language tutors are always in high demand.

Like teaching, you can look for positions at local companies or go it alone and offer one-on-one lessons. Best of all, you can often offer this service online. So if you don’t want to leave your home, you don’t have to!

Acting As A Park Ranger / Docent

Maybe your heart yearns to be in the great outdoors, or maybe you really dig the Paleolithic Era. Either way, you can find a great part time gig at National or State Parks or a local museum.

These amazing resources are always in need of friendly, dependable staffers, so find your favorite park or museum and offer your time and talent.

Real Estate

If you’re looking for a position with lots of opportunities to meet people and share your knowledge of your hometown, real estate is a great option. You can become a licensed agent with just 4-6 months of training, and as for the income potential, the sky’s the limit.

If you’ve got a great community of friends already, real estate is great in that case, too – you can quickly build a network of potential clients with people you already know.


If you have considerable professional experience you may find that consulting can be a fantastic gig for you. Companies, small or large, may be able to benefit from your knowledge.

In order to get started, decide on some areas of specialty and update your LinkedIn profile so people know you’re available to help them. Don’t forget to reach out to past colleagues, too. With a little effort, you can have a thriving and lucrative consulting job in a short amount of time.

Freelance Writing

If you have considerable professional experience you may find that consulting can be a fantastic gig for you. Companies, small or large, may be able to benefit from your knowledge.

In order to get started, decide on some areas of specialty and update your LinkedIn profile so people know you’re available to help them. Don’t forget to reach out to past colleagues, too. With a little effort, you can have a thriving and lucrative consulting job in a short amount of time.

Offering Childcare

Parents and grandparents have experience in one extremely useful, high-demand skill set — childcare. Wherever there are people, you’ll find moms and dads who need all the help they can get.

You can offer your services as a babysitter, or get certified through your state and offer complete childcare services. If you want to make a big difference in a child’s life, you can even move into foster care and take in kids who need help temporarily. While this isn’t the typical part time gig you might have been thinking of, it certainly is an invaluable way to give back.

House Sitting / Pet Sitting

Perhaps working with people isn’t your thing, but you love dogs. Pet sitting could be perfect for you. You can offer your services on sites like or sign up for local Facebook groups and reply to anyone who needs help there.

If you want something even easier than checking on Fido and Fluffy, then look into house sitting. This easy gig is little more than checking on someone’s home from time to time and making sure their plants don’t die while they’re out of town, so it’s perfect for someone with extra time on their hands.

There are just a few ways you can earn some side income in your retirement years. If one of them piques your interest, give it a shot! If you find you want to try something else in the future, you can always change.

After all, the best thing about retirement is the flexibility to do what you enjoy, so factor in what you like, and you’ll find new satisfaction every day.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post Big Time Gains from Part-Time Gigs appeared first on Daily Reckoning.

How My Medical Mishap Could Save You Hundreds

This post How My Medical Mishap Could Save You Hundreds appeared first on Daily Reckoning.

Okay, let’s just get it out there…

A few months ago, I had another surfing-related trip to the ER.

Without going into all the gory details, here’s a quick picture:


As you can see, I ended up with a small sideways smile right below my original one.

Essentially, I was tumbling under the water and the pointy nose of my surfboard went straight under my lip – all the way through, in fact – and eventually stopped when it hit my gums.


“Hey, how does this look?” I asked a friend after it happened.

“Uh, yeah, that’s definitely stitches,” came the reply.

An hour and a half later, stitches it was – five on the outside and one on the inside. Also a quick trip to the dentist the following day since the blow had damaged a tooth.

In the grand scheme of my major lifetime injuries…

  • Four broken ribs and a collapsed lung from surfing back in December (I know… I know…  Two surfing injuries in 12 months!?)
  • A middle finger bent at a 90-degree angle while mountain biking back in college
  • A torn medial collateral ligament spinning off a jump on my snowboard
  • A broken metatarsal skateboarding on a ramp

This one was relatively minor. Painful, and a bit demoralizing to be sure, but with a one-week heal time, not too big of a deal…


… Until it was time to get the stitches out.

That’s where the real pain (and self-discovery) began.

Do as the Doctors Say

Now, before you suggest giving up my favorite hobby, recommend I buy a soft board from Costco, or blame me for skyrocketing insurance premiums…

Let me just say one thing.

I do these things for you!

How else would I have discovered the money-saving power of self-surgery?

My high-deductible health insurance plan requires me to pay out of pocket for most medical procedures until an annual cap is met. However, it does typically provide discounts on services performed by in-network facilities and specialists.

When I was discharged from the ER, they told me I had several options for getting my stitches removed:

1. Go back to the ER. (“The downside is you might have to wait a while.”)

2. Go to an urgent care facility.

3. See if a primary care physician (PCP) would do it.

I first called the ER. After a discussion with their billing department, I learned that I would be charged for another visit if I came in to get the stitches removed.


Emergency Room Alternatives?

Next, I started calling PCPs.

I don’t currently have one since I’m healthy as a horse unless I’m going to the ER from sports-related injuries.

One wasn’t taking new patients. Another couldn’t see me for four months. In a nutshell, it started becoming clear that even if I could get in to see someone, it wouldn’t just be a “get stitches out” appointment. Instead, it would be a full office visit and then another charge for the stitches part.

So I moved on to urgent care facilities.

The one in my network couldn’t tell me how much it would cost.

Minimum charge of $160. And then, once you get in there, it could be more depending on a lot of factors.”

What about my in-network discount?

“Don’t have any information on that. You’d have to pay and then submit everything.”

We went around in circles like this for quite some time. Multiple phone calls to all the different groups involved.

At the end of it all, they still couldn’t tell me what it would cost for a simple procedure.

I thought maybe it would be better to just go in person.

Once they saw me, and the simple procedure we’re talking about, perhaps it would all crystallize.


The first thing I saw was a 1.5-hour wait time prominently displayed on a big digital clock.

Urgent care, indeed.

Next, I started discussing my situation with the receptionist.

It was pretty much the same conversation all over again. There was no guarantee on how much the process would cost.

Mystery Medical Charges

This is where I like to step back and think about the same type of idea in a different context – say, a car mechanic.

You pull up to your favorite oil change place and ask how much it is to swap out the 10W-30.

Maybe they ask you if you want synthetic or regular, but either way they can give you a price right upfront.

You can shop that price around.

Or, if you don’t like the prices, you can simply go get some oil and open the hood yourself.

Can you see where I’m going with this?

When faced with the idea of paying at least $160 … waiting several hours … and then possibly ending up paying far more once in the actual room … I opted to just open the darn hood myself and change the oil.

Now before I go any further, let me just put this out here. I’m not a doctor (obviously). So don’t take what I’m about to do as the “right” way to solve your medical problems. In this situation I was able to shop around and take matters into my own hands, but that isn’t the right reaction in every circumstance, especially when you have a medical emergency.

Anyway, back to my story…

I headed to CVS and bought a pair of small scissors.

Then I went on Youtube and watched a quick tutorial on stitch removal.

A couple minutes later, I was snipping my way to massive time and money savings.

Hey, it’s only my face, right?

Of course, I’m not telling you this story because I think WebMD should be your default care provider.

I just want to highlight a couple important points:

First, in some cases, it is entirely possible to avoid our frustrating medical system. In my case, removing stitches is now one of them.

Second, there should be no reason why our medical system is this frustrating in the first place.

I had a minor injury and I have health insurance.

Why on earth should a simple procedure like a few stitches cost me a couple thousand dollars at my local hospital and still not even include taking the darn things back out?

I’ll give you some more of my own thoughts on that soon… Until then, if you have the opportunity, and it’s not a medical emergency, consider shopping around a little.

Don’t be afraid to ask what procedures are going to cost. If you aren’t comfortable with the price, get a quote from someone else!

Just because it’s a medical procedure doesn’t mean that you have to pay whatever the first person quotes you. Make sure you get the best price available for your care, like you would with any other major purchase.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post How My Medical Mishap Could Save You Hundreds appeared first on Daily Reckoning.