Whose Money Is It Anyway?

In the past few years Credit Unions have offered interest rates on savings that are quite compelling.  HOWEVER,  hoops abound through which one must jump in order to achieve these higher rates.  Below is an annual notice regarding some of the hoops and "costs" of the good interest rate shell game  

Pain in the Back

The perfect follow-up to the last blog post on disability.  In the most recent Economist magazine this insert--sourced from the Lancet--shows the results from the Institute for Health Metrics and Evaluation study on the burden of disability on countries.  The legend is as follows:

Disability "Insurance"--the REAL Thing

In the dental business--according to insurance companies--the number one cause of disability insurance claims is due to neck and back issues. Just imagine that you spend your entire day seated and leaning over a patient with at least a little tension in the room;-)  That seems like a prescription for some sort of physical therapy to counter the long-term potentially negative effects.  However, in my 33 years in business the most common solution is to buy disability insurance--which is more expensive than ever and not nearly as good as it used to be.  Recently, a dentist client asked 

Lipstick on a Pig

Two stories recently have converged to make me wonder about a couple of the biggest financial decisions people make.  This morning CNBC reported that 4 of the worst cars in crash tests were Jeep and Dodge. (Chrysler/Fiat products)  The reporter went on to say that in the last few years the Jeep specifically was reported as unreliable, had poor owner satisfaction, and bad crash tests BUT--sales are up 21% in the past year due to pretty design.  

Last week a local builder told me about a neighborhood, in which they are building, where the smaller more energy efficient homes are not selling nearly as well as the larger less efficient but "fancier" ones.  Hence his motivation to build more of the latter rather than the former. (BTW--the builder has a more efficiently built home for his personal use.)  

Years ago I considered building a house but only wanted it to be on the smaller size allowed for the area. After meeting with an architect and building designer it became clear that the only way to make the project make sense on a COST PER FOOT basis was to build a multi-level house with more "cheap" square footage to average down the cost.  For me the project never made sense and so it never happened.  

Maybe I just don't get it OR maybe the explanation resides in another report recently showing that the sales of SPIRITS are up dramatically in the past few years.  That along with the burgeoning business of marijuana and SHAZAM--it's starting to make sense;-)

You know the age old FRAM oil filter commercial--"pay me now or pay me later"--it certainly applies to housing and vehicles in today's world.

What's Your Motivation?

In January ATT--the original Ma Bell--lowered their expected return on pension fund assets to 4.3% from a previous 5%.  They also increased life expectancy for retirees to accommodate current longevity trends.  RESULT--over $8 Billion dollar charge to their financial statements for the increased cost in funding the pension plan.  (BTW--Auntie is 105 and has been on an ATT pension since she was 55.)  

Below is a clip from the most recent valuation of the Oklahoma Teachers Retirement System Pension Plan (OTRS):