Understanding Health Savings Accounts

The following is a 3rd party contirbution
Even with insurance, the cost of healthcare in America can still feel like sustaining another injury, only this time it’s to your wallet. A new type of personal savings account, called a health savings account (HSA) can make it more affordable for certain individuals to pay for medical costs without ruining their budget or bank account. Learn how HSAs work as well as their advantages and disadvantages.

Definition

An HSA works much like any other personal savings account, but they’re only available to individuals who have a high-deductible health insurance plan. Even though these insured individuals have high deductibles, their monthly premiums are often low. If you like the idea of getting your up-front healthcare costs as low as possible, a high-deductible plan might be perfect for you. Generally, HSAs are a better fit for those who are near retirement and those in a financial position where they can save for future health care expenses.

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Why Cash Flow is Better than Big Salaries: An Example from the NFL

This is a guest post by Passive Income Dude at www.passiveincomedude.blogspot.com

I don’t have millions of dollars of cash.  In fact, I’ve probably never seen more than a few hundred dollars of cash together at one time.

But I imagine this picture to the left is close to what MILLIONS OF DOLLARS OF CASH looks like.

Pretty cool.  I’d love to somehow receive a giant lump sum of cash all at one point one day and turn it into wads of bills like this.  I’m sure we all would.  But consider what I just read the other day:

NFL

Did anyone miss that?

78% of NFL players go broke within three years of retirement?  That seems ridiculously high.  And almost 16% file for bankruptcy at some point in the future?  How can that be? Again I ask, how can that be?  And here is specifically why I ask the question “how can that be”:

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Caring for a Sick Child or Parent in Retirement

The following is a 3rd party contribution.

About 43 million people provided care to a sick loved one during the last year. For these caregivers, retirement doesn’t mean the end of work—just the end of a steady paycheck. Leaving your job can ease some of the stress of caregiving, but retirement when you’re committed to caring for another person can be frightening. How will you have enough money? How will you know when you have enough? Here are the steps you need to take to care for yourself and your loved one.

Get Clear Medical and Financial Advice Before You Retire

A million dollars might sound like a lot of money, until you consider the costs of health care, in-home aides, and nursing facilities. Don’t set an arbitrary financial goal without first talking to a financial advisor. Equally important is getting competent medical advice from your loved one’s health care provider. It may be difficult to think about, but you need a reasonable assessment of how long your loved one might live, and how his or her needs might change over time. Providing your financial advisor with this information can help you set reasonable goals and steadily budget to meet those goals.

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Reading Between the Lines

Reading Between the LInes

Communication has always been a fascinating subject to me. While discussing communication, we always tend to focus on languages, dialects etc, but there is so much more than just the spoken word. This may include other forms of communication such as body language, for instance. This post is a discussion focusing on what is *not* being said and trying to decipher the meaning of something; whether the other person has something to obfuscate or simply not a good communicator. As it turns out, what is *not* being said can shed more light on the interaction. I discuss a few personal stories in this post about reading between the lines.

The following tweet from Michael Batnick a few days ago quoting Peter Drucker resonated with me and reminded that as I get more experienced in a certain aspect of life, it becomes more and more important to learn how to read between the lines. What is it that a person is implying by saying something, or more importantly, what is that crucial piece of information that is not being communicated? As it turns out, this can have a big impact on the overall interaction.

Our Recent Car Buying Experience

To illustrate this idea, let me recount a car buying experience we recently went through. My wife’s car broke down earlier this year. We could have spent a lot of money to keep it going, but considering that it was already 15 years old and would cost us more to fix it to keep running, we decided not to sink more money into it. We tried living on one car, but after a trial of a few months, which didn’t work out — we finally decided that we are a two-car family and the mobility provided was worth the saved time and annoyances of taking public transit (we have a terrible public transit system here in our city, which is a disgrace considering its the capital city).

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Why I stopped making my financial advisor rich

The following is a guest post by Mark from My Own Advisor.

Why I stopped making my financial advisor rich

I’m not sure I can put things more bluntly than that.  I’ve made a number of dumbass financial moves over the years but this one might be my biggest mistake – I used to make my big bank financial advisor rich – but not anymore.  Let me explain…

The early investing days

In my 20s, I started my investing journey with big bank mutual funds that charged money management fees close to 2%.  I simply didn’t know how much high-fund fees would eat into my investment portfolio.  For those that still don’t know what they don’t know, let me share some numbers for you.

  • Assuming $10,000 was invested for 10 years in the TD Dividend Growth – Investor Series Fund (you would have paid money management fees of about 2% over that period); you end up with just over $15,000 in the bank but paying about $2,500 in fees during that time.
  • Compare that to owning a low-cost Exchange Traded Fund (ETF) (paying money management fees of about 0.10% over the same time period); you end up paying only about $125 in money management fees – a savings of over $2,000.
  • Compare that still to owning the company (TD Bank) and not the bank’s products, the returns are even more starling. $10,000 invested in TD Bank, from early February 2006 to this year, with all dividends reinvested throughout that 10-year period and your original investment would be worth just over $24,000 today.

Here is a link to the painful high-fee mutual fund calculator so you can run some numbers and if you own TD Bank stock, they have a handy calculator to play with here.

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