Tag Archives: Social Security

Taxes and Insurance

Why America Doesn’t Have Free Universal Health Care And A Look At Those Who Do

Gallery 6 Comments
Doctor, Luggage, Verbandszeug, Patch

Since candidates are coming out of the woodwork for the 2020 presidential election, let’s talk about the elephant in the room: Healthcare.

Regardless, of your political beliefs, most will agree that a fully funded functioning health care system is a must. You need hospitals that have basic medical supplies and more advanced equipment for surgical procedures.

Those things don’t come cheap.

However, other advanced nations have been able to make this happen.

The elusive Universal Health Care (UHC) that we Americans have been unable to have due to numerous factors. Primarily, for one reason: money.

Taxes are a huge component of making UHC a reality. That is how other nations are paying for it with varying degrees of success.

However, we cannot doubt Universal Healthcare’s popularity.

For example, it was recently reported that a Canadian family visiting America did not stop at any hospitals after they confirmed that their patriarch had died of a heart attack while on vacation.

Instead they drove for an ENTIRE DAY, with a corpse in the back seat to avoid paying the exorbitant healthcare costs here on American soil and the cost of shipping the body to Canada.

This is a TRUE story. I can’t make this stuff up.

Remember that article in the New York Times about The Velvet Rope Economy? The Doctor Is In. Co-Pay? $40,000.


Chris B. Murray for the New York Times The Velvet Economy article

That is the type of story that would scare anyone from going to the doctor in America.

So let’s talk about healthcare.

WHAT IS UNIVERSAL HEALTHCARE?

Universal healthcare means there is a health care system that provides coverage to at least 90% of citizens, typically paid for by the citizens of the country via taxes.

Here in the US, thanks to the Supreme Court’s decision to uphold the ACA (aka Obamacare), signed by former President Obama, the US has universal health care starting in 2014 using an insurance mandate system. But will it last?

Prior to 2014, the US no universal healthcare anything other than Medicare, but that is for the elderly.

However, most of the other developed nations do not make having a mandate necessary.

This is why the great healthcare debate rages on in the current White House. The Us is offering subsidies for healthcare and the current administration is not feeling it. But in other countries, no subsidy is necessary or rarely required, if healthcare is being funded by tax payer’s dollars. And we mean paying a lot of taxes.

We will get into that later.

WHAT COUNTRIES HAVE UNIVERSAL HEALTHCARE?

Doctor, Luggage, Verbandszeug, Patch

Have you ever wondered what counties offer the coveted universal healthcare, but you never took the time to look it up?

Well, now you can find it right here.

That’s right. I did the work for you.

There are thirty-three developed nations. Thirty-two of the thirty-three developed nations have universal health care, with the United States being the lone exception. That is until the Affordable Care Act came along.

Americans can regularly be heard talking about UHC. Why do other developed nations have it and we don’t? What is good for the goose should be good for the gander mentality.

Well, you are about to find out.

The following list, compiled from World Health Organization (WHO) sources where possible, shows the start date and type of system used to implement universal health care in each developed country. Note that universal health care does not imply government-only health care, as many countries implementing a universal health care plan continue to have both public and private insurance and medical providers.

Country                         Start Date   System Type

Click here for more source material on each country’s health care system.

Norway                               1912       Single Payer

New Zealand                    1938       Two Tier

Japan                                    1938       Single Payer

Germany                            1941       Insurance Mandate

Belgium                              1945       Insurance Mandate

United Kingdom           1948       Single Payer

Kuwait                                1950       Single Payer

Sweden                              1955       Single Payer

Bahrain                              1957       Single Payer

Brunei                                 1958       Single Payer

Canada                               1966       Single Payer

Netherlands                    1966       Two-Tier

Austria                               1967       Insurance Mandate

United Arab Emirates     1971       Single Payer

Finland                                 1972       Single Payer

Slovenia                               1972       Single Payer

Denmark                             1973       Two-Tier

Luxembourg                      1973       Insurance Mandate

France  1974                       Two-Tier

Australia                              1975       Two Tier

Ireland                                  1977       Two-Tier

Italy                                       1978       Single Payer

Portugal                               1979       Single Payer

Cyprus                                  1980       Single Payer

Greece                                 1983       Insurance Mandate

Spain                                     1986       Single Payer

South Korea                     1988       Insurance Mandate

Iceland                                 1990       Single Payer

Hong Kong                        1993       Two-Tier

Singapore                          1993       Two-Tier

Switzerland                      1994       Insurance Mandate

Israel                                     1995       Two-Tier

United States                   2014?    Insurance Mandate

Please be advised that the dates given are estimates. Universal care rolled out gradually in many countries. For instance, in Germany government insurance programs began in 1883, but did not reach universality until 1941.

WHAT TYPES OF HEALTHCARE SYSTEMS ARE THERE?

You may have never heard of some of the above types of healthcare systems. That is why the definitions are being provided here.

Single Payer: The government provides insurance for all residents (or citizens) and pays all health care expenses except for co-pays and coinsurance. Providers may be public, private, or a combination of both.

Two-Tier: The government provides or mandates catastrophic or minimum insurance coverage for all residents (or citizens), while allowing the purchase of additional voluntary insurance or fee-for service care when desired. In Singapore all residents receive a catastrophic policy from the government coupled with a health savings account that they use to pay for routine care. In other countries like Ireland and Israel, the government provides a core policy which the majority of the population supplement with private insurance.

Insurance Mandate: The government mandates that all citizens purchase insurance, whether from private, public, or non-profit insurers. In some cases the insurer list is quite restrictive, while in others a healthy private market for insurance is simply regulated and standardized by the government. In this kind of system insurers are barred from rejecting sick individuals, and individuals are required to purchase insurance, in order to prevent typical health care market failures from arising.

What is free universal healthcare?

Universal health care is a system that provides quality medical services to all citizens. The federal government offers it to everyone regardless of their ability to pay.

Which country has free medical care?

According to Forbes, The two advanced economies with the most economically free health care systems—Switzerland and Singapore—have achieved universal health insurance while spending a fraction of what the U.S. spends. Switzerland’s public spending on health care is about half of America’s, and Singapore’s is about a fifth of ours.

HOW ARE COUNTRIES ABLE TO AFFORD IT?

Now let’s talk about them taxes.

Let’s start with Canada. The Canadian Institute for Health Information (CIHI) believes Canada spent approximately $228 billion on health care in 2016. That’s 11.1 per cent of Canada’s entire GDP and $6,299 for every Canadian resident. That per capita rate would put Canada near the high end of what other advanced economies pay.

Is health care free in Canada?

To review, per The Atlantic, Canadian healthcare basically works like Medicare, but for everyone. Medical care is free, and it covers almost everything other than prescription drugs, glasses, home care or long-term care and dental care. (Most people have supplementary insurance such as private insurance from their employers or the government to cover those things).

Does Canada have good healthcare?

Coverage and access. In both Canada and the United States, access can be a problem. Studies suggest that 40% of U.S. citizens do not have adequate health insurance, if any at all. … Yet, even if some cannot find a family doctor, every Canadian citizen is covered by the national health care system.

How is healthcare funded in Canada?

Basically, healthcare is being funded at both the provincial and federal levels. Financing the system is provided via taxation both from personal and corporate taxes. Additional funds from other financial sources like sales tax and lottery proceeds are also used by some provinces.

Do Canadians really pay more in taxes than Americans?

According to Investopedia, U.S. federal income tax brackets range from 10% to 35% for individuals. On the Canadian side, the range is 15% to 29%. Overall, it’s a bit more expensive to live in Canada than the US, and much cheaper than living in Europe. Taxes are higher, but generally people are paid more to compensate.

However, data from the OECD show that Canadians are lower-taxed than Americans. According to the Huffington Post, in the U.S., the same family would pay 14.2 per cent in taxes, a tax rate some 12 times higher than in Canada.

A brief note on France.

In practice, less than 50% of inhabitants in France pay any income tax at all; only around 14% pay at the rate of 30%, and less than 1% pay at the rate of 45%. According to the French tax authority, taxes range from 14% up to 45% for the wealthiest citizens. Like here in the US, there are citizens that pay no income taxes based on wages or other tax credits or exemptions.

WHY ALL THE UPROAR OVER UNIVERSAL COVERAGE?

First, we know right off the bat that no two countries are alike. Those that are third world are still trying to get clean water and internet access; therefore, universal healthcare is a privilege as water is a basic human need and a right. You know which one those countries are focused on.

However, the United States is by far the RICHEST country in the world.

Even with the deficit being 18 percent greater than last year, as the US is spending $4.4 trillion and has a revenue of only $3.4 trillion, which is a $1 trillion-dollar annual shortfall. We are still the RICHEST.

That is still the case even with the US debt being $22 trillion, and America owing the Chinese $1 trillion of that huge number. We are still the RICHEST.

However, roughly 15% of the US population are uninsured or lacking in health insurance coverage in some form.

Therefore, from people looking from the outside in, they are scratching their heads as to why we cannot offer universal healthcare to its citizens.

As you know, it all comes down to money.

Financial Freedom

Money and Life advice I got from Paper Towns

Gallery 2 Comments
Related image

“You don’t get to choose if you get hurt in this world…but you do have some say in who hurts you. I like my choices.” – John Green, author The Fault in Our Stars

The summer of 2015 my nieces really wanted me to take them to go see this movie. Not knowing what it was about, I decided to go ahead and take them because of their sheer enthusiasm alone. I was not disappointed. The movie was incredible.

Image result for paper towns

It is a coming of age teenage romance written by the Fault in Our Stars author John Green.

The movie was based on a Young Adult (YA) he novel he wrote entitled Paper Towns.

Image result for paper towns

It follows along with two young teens Margo Roth Spiegelman (played by Cara Delevingne) and Quentin Jacobsen or Q for short (played by Nat Wolff).

It was turned into a motion picture by Twentieth Century Fox and released in theaters on July 9, 2015.

The film is a series of adventures and near misses while we tag along with Quentin to find his dream girl, who goes missing just a couple weeks before high school graduation. Although, the film is fun, it’s the dialogue that really captures your attention and wins your heart.

If you get a chance, you can get lost, get found with Paper Towns.

WHAT IS A PAPER TOWN?

A paper town is a fake town that is created by map makers, as a way to protect their copyright, to know if they’ve been robbed.

In the film, it is referenced as a shallow town or place. Everything is so fake. A place that is fragile.

ALL STORIES HAVE A BEGINNING AND SOME ARE SWEET

“She had the kind of fingers you want to interlace with your own.” – Quentin

The story is based around the feelings Quentin has for his childhood sweetheart and crush, Margo Roth Spiegelman.

At a young age, it was shown that Margo was a precocious child. This intrigued Quentin. However, as they got older she became more outgoing and him more introverted.

Throughout my life, I have had to throw caution to the wind and go for what I want. If you want anything in this world, at times, you will have to do the same. You have to go all in and strike first.

For example, when I was looking a job many years ago, I decided to approach it as a numbers game. I said screw it. I’m just going to apply for as many jobs as I can and see what happens.

I must have put out 100 resumes. Out of all of those job applications, I got one yes. But that was all I needed. You only need one yes to change your whole life. It just starts with putting yourself out there. Nothing comes from obscurity and being shy. Sometimes, you have to be willing to shout.

PRETTY HURTS

“That’s always seemed so ridiculous to me, that people want to be around someone because they’re pretty. It’s like picking your breakfast cereals based on color instead of taste.” ― John Green, Paper Towns

What you look like on the outside is all vanity. Beauty is in the eye of the beholder. Do not let society dictate what you should be. Be you. And remember this: beauty fades.

“I’m starting to realize that people lack good mirrors. It’s so hard for anyone to show us how we look, & so hard for us to show anyone how we feel.” ― John Green, Paper Towns

You have to rely on more than just your looks in this life.  Eventually, you will have to take care of yourself. You better be up for the task or you will have problems.

I have seen tons of beautiful women have bad credit, horrible relationships, and be broke. But hey, at least they were pretty right?

It is not enough to be pretty. You have to be more than just fine. No one wants to marry a beautiful airhead or a beautiful fool.

This blog is all about financial independence.

Have you ever heard the saying a fool and his money is soon parted?

I rest my case.

MAKE THE FIRST MOVE

“I didn’t need you, you idiot. I picked you. And then you picked me back.” ― John Green, Paper Towns

Those who make the first move are usually victorious.

In the film, Quentin wants so badly to be with Margo. However, he always holds back. In this life, you can’t hold anything back.

Case in point, in this blog, I don’t hold anything back. I give you everything I have. I know that’s what I want when I deal with people. So, I make sure to do the same to others. Whatever it is you want in this life, this is my advice to you: make your move.

YOUR LIFE CAN CHANGE IN ONE DAY…OR A NIGHT

“Tonight, darling, we are going to right a lot of wrongs. And we are going to wrong some rights. The first shall be last; the last shall be first; the meek shall do some earth-inheriting. But before we can radically reshape the world, we need to shop.” – Margo Roth Spiegelman

I have read countless biographies of the rich and famous where they retell how a single incident changed the course of their entire lives.

Well, in this film, it is the night Margo climbed through Q’s window.

She asks him to borrow his mom’s car so she can go on a midnight caper of revenge or he could come along too and be the get a way driver.

Decisions, decisions.

PICK A PATH

“The way I figure it, everyone gets a miracle. Like, I will probably never be struck by lightning, or win a Nobel Prize, or become the dictator of a small nation in the Pacific Islands, or contract terminal ear cancer, or spontaneously combust. But if you consider all the unlikely things together, at least one of them will probably happen to each of us. I could have seen it rain frogs. I could have stepped foot on Mars. I could have been eaten by a whale. I could have married the Queen of England or survived months at sea. But my miracle was different. My miracle was this: out of all the houses in all the subdivisions in all of Florida, I ended up living next door to Margo Roth Spiegelman.” ― Quentin Jacobsen, Paper Towns

You can pretty much guess what answer he gave Margo.

He went with her.

Let the fun begin.

REVENGE IS A DISH BEST SERVED COLD AND AT NIGHT

“I always felt like you had to be important to have enemies.” ― John Green, Paper Towns

When she asks for his mom’s car, she tells him that she has like 11 items on her to-do list tonight and that most of them will probably require a getaway car.  

I remember that quote from Winston Churchill, “You have enemies? Good. That means you’ve stood up for something, sometime in your life.” Margo reminds me of that. She found out her friends had wronged her. So, she decided to take matters into her own hands.

“We bring the rain down on our enemies, not the scattered showers” – Margo Roth Spiegelman

That is a line that she says of their hit-and-run capers, on that fun-filled night, as she leaves a Zorro-like ‘M’ that is left at the scene of all her crimes.

Margo replies this when Q asks her if her scheme of getting revenge is necessary and if they can do something that is not so risky and harsh.

I have to agree. Sometimes you have to teach people a lesson. You have to tell people how you want to be treated. Stand up for yourself. You may not need a night of midnight capers to do it, but you can still send a message that you’re not a pushover.

“If you don’t imagine, nothing ever happens at all.” ― John Green, Paper Towns

Margo has some pretty extreme things she does that night.

First, they shop for supplies.

Second, they visit each one of her enemies.

Lastly, they celebrate their success at escaping getting caught.

I too like to celebrate my wins.

When I was able to start slowly paying off debt one by one, I celebrated each time. It keeps the momentum going. And just makes you feel good. Hard work = success and rewards.

  • Paid off my car. Then I treated myself to a spa day.
  • Then used that money to invest.
  • Once I hit my $100k mark, I turned my attention to hitting a target of 3 times more of $300k.
  • After I pay off each debt, I either save or invest that money.
  • I started saving $25 a week and slowly went to saving $100 a week and so on.

See my posts

How I turned a $450 car note into $100,000

They Shoot Greenbacks, Don’t They?

Money and Life Lessons from The Pirates of Dark Water

Finance Lessons from Flipping Vegas

 No matter how big or small. Winning just feels good so you want to celebrate.

BE PRESENT IN THE MOMENT

Quentin had the time of his life that night. It was a fun ride to say the least. And he enjoyed every moment.

Some dialogue from the film.

“What about the rest of your life?”

She shrugged. “What about it?”

“Aren’t you worried about, like, forever?”

“Forever is composed of nows,” she says.”

During that incredible night with Margo, Quentin is laughing and smiling. He was having so much fun.

“My heart is really pounding,” I said.

“That’s how you know you’re having fun,” Margo said.”

While they were running away from one of their capers, Margo says, “I mean, we’re ninjas.”

Related image

Of his time with Margo, Quentin thinks to himself, “At least I carpe’d that one diem.”

As she left notes, at all of her crime scenes, Quentin notices her handwriting and remarks on it.

Related image

“Interesting capitalization,’ I said.

‘Yeah. I’m a big believer in random capitalization. The rules of capitalization are so unfair to words in the middle.”

Absolutely. Live in the present. Enjoy the moment. Have some fun. Plan for the future, but don’t forget to live for today. Plan a visit with friends, or to a park or movie or museum. Or relax and take a break.

Seize the day!

There will always be something that requires your attention. I say if you have to work, find a way to have some fun too. If you’re not having fun, then what’s the point?

SURVIVE AND THRIVE

“I’m not saying that everything is survivable. Just that everything except the last thing is.” ― John Green, Paper Towns

No matter what life throws at you, handle it like an adult. You can’t always throw a temper tantrum every time you can’t get your way. You cannot use your fists and throw punches at people. Use your words. That’s what adults do.

It is not enough to merely survive. You do want to survive, yes. But you also want to thrive. Success comes to those who work for it. It is your duty to go out and get it. Your family’s survival depends on it.

If you ever saw the movie Troy, you heard the line, “guard this sword with your life. As long as a Trojan wields it, our people have a future.” Same rule applies for your family. You must survive and prosper today, so that your family has a future.

See my post Financial Independence in 10 years

LEARN HISTORY AS IT TEACHES US LESSONS

“Did you know that for pretty much the entire history of the human species, the average life span was less than thirty years? You could count on ten years or so of real adulthood, right? There was no planning for retirement. There was no planning for a career. There was no planning. No time for planning. No time for a future. But then the life spans started getting longer, and people started having more and more future. And now life has become the future. Every moment of your life is lived for the future–you go to high school so you can go to college so you can get a good job so you can get a nice house so you can afford to send your kids to college so they can get a good job so they can get a nice house so they can afford to send their kids to college.” ― John Green, Paper Towns

They say history often repeats.

Did you know that in the gilded age, robber barons held about 80% of all the wealth in this country about a century ago? And that many folks had no plan for retirement at all. No pensions, no 401(k), nothing.

That’s right. Before FDR created Social Security in the 1930’s, there was no pension for the elderly and many were living in poverty. Many people did not live past the age of 65. They did not have to plan so far ahead because many did not live long enough to see any type of future.

That has changed. Today people are living longer. You are your first, best, last, and only line of defense against living in poverty.  

Bill Gates said, “If you are born poor, it’s not your mistake. But if you die poor, it’s your mistake.”

Basically, he means you should do everything you can to build a better life for yourself. That means if you can’t go outside and play all day, you have to deal with it.

Can’t see that concert this week. Oh well.

You can only play one sport or instrument. Well, that’s it then.

You have to stay up and study all night for that big exam. That’s life.

Buy a new car or invest that money? Your call, but I suggest you buy a Honda or Ford and invest your dough.

See what I mean. Sacrifice. It yields great rewards.

HIGH SCHOOL IS NOT A DEMOCRACY

“High school is neither a democracy nor a dictatorship – nor, contrary to popular belief, an anarchic state. High school is a divine-right monarchy. And when the queen goes on vacation, things change.” ― John Green, Paper Towns

This is a nice take on the whole high school experience.

I felt high school was so silly. I could care less about who wears what or say this or that. I have never been a gossip. I kept my eye on the prize: high school diploma. Everything else is just stuff you do in-between until you reach the end of that goal. Most of the stuff that goes on won’t even matter after you graduate.

“I know it’s impossible for you to see your peers this way, but when you’re older, you start to see them–the bad kids and the good kids and all kids–as people. They’re just people, who deserve to be cared for.”

Amen.

“As much as life can suck, it always beats the alternative.” ― John Green, Paper Towns

You have to make lemonade out of lemons. There is always another rainbow and tomorrow does always come and it can get better. The alternative to getting old is dying young.

I will never forget this one time I was talking to an older gentleman and he said he felt old because he was retired. It went down like this.

Him: I feel old. Now, that I’m retired.

Me: Retirement means income.

Him: I like you. (He smiled and perked up.)

A few words of kindness can elevate someone mood, lift their spirits, make their day, and change a situation completely. So, be kind.

“Be curious, not judgmental.” – Walt Whitman

“You know your problem, Quentin? You keep expecting people not to be themselves. I mean, I could hate you for being massively unpunctual and for never being interested in anything other than Margo Roth Spiegelman, and for, like, never asking me about how it’s going with my girlfriend – but I don’t give a shit, man, because you’re you. My parents have a shit ton of black Santas, but that’s okay. They’re them. I’m too obsessed with a reference website to answer my phone sometimes when my friends call, or my girlfriend. That’s okay, too. That’s me. You like me anyway. And I like you. You’re funny, and you’re smart, and you may show up late, but you always show up eventually.” ― John Green, Paper Towns

That last line brought it home didn’t it? He started kind of shaky, but he finished strong. And that is how life is. You start out shaky and are working on a learning curve, then you finish strong. You do everything in your power to stay grounded, stay hungry, hustle hard, and stay humble.

I promise you, that if you ever get lost, the harder you work, the louder you shout and the more you seek to find answers and the truth, then the more likely it is you will find what you are looking for and get found.

Bankruptcy, Retirement, Saving

From Pulitzer Prize winner to Penniless

Gallery Leave a comment

‘All happy families are alike; each unhappy family is unhappy in its own way.’ – Leo Tolstoy from Anna Karenina 1877

The rich are all alike, to revise Tolstoy’s famous words, but the poor are poor in their own particular ways. – William McPherson

William McPherson, was a Pulitzer prize winning novelist and an editor at The Washington Post.

Although, he tried in earnest, he did not become a man of means.

A career in writing does not often come with riches. Writing tends to be a labor of love.

The career you choose can determine your outcome. It could mean the difference between fulfilling your destiny or starving.

No one wants to be a starving artist. I am not a romantic when it comes to money.

That is why I occasionally write these Cautionary Financial Tales such as these:

From debt-free to owing $1 million in mortgage debt

Meet an orthodontist with $1 million in student loan debt

Why the Rents shouldn’t pay your rent

Before Mr. McPherson died, he wrote an article called Falling, that was published in 2014, regarding his descent into poverty. It was published in The Hedgehog Review.

He went from book critic, novelist, and an editor at The Washington Post to destitute. That is a far fall from grace indeed. Here is his story.

HOW TO GO FROM PULITZER PRIZE WINNER TO PENNILESS

William Alexander McPherson was born on March 16, 1933. His father worked as a plant manager and his mother was a homemaker.

He attended public schools and eventually went on to college. Between the period of 1951 to 1966, he attempted to get a college degree. He attended several universities during this time. Alas, the coveted sheepskin (college diploma), remained ever elusive as he did not earn a degree.

He married in 1958, but it ended in divorce.

By 1969, he started working at The Post.

As an editor, he was in charge of Book World for The Post and under his leadership, he turned that into one of the leading literary publication in the United States, which is no small feat. That is a tremendous undertaking, job, and responsibility. However, here in the real world versus in college, he thrived.

WINNING THE PULITZER

In 1977, he was awarded the Pulitzer Prize for distinguished criticism and the judged noted his large breath of literary and historic knowledge.

A Pulitzer Prize is a coveted award in literature. It first began in 1917. This prize is given out for achievements in magazine, newspaper, literature, journalism, and music composition.

The Pulitzer is named after Joseph Pulitzer, a famed newspaper publisher, that made his fortune in publishing. The award is administered by Columbia University in New York City. Either a gold medal or cash prize of $15,000 (increased from $10,000 in 2017) and certificate is awarded to the winners.

He wrote two published works. One in 1984 and the other, a sequel to the first novel, in 1987. A third was in the works, but was never completed.

At the age of 53, he decided to leave his job, and head to Romania, after the fall of the Berlin Wall. He stayed there for seven years. Mr. McPherson opted for early retirement at the ripe old age of fifty-three. He would not be eligible to receive his pension for 12 years; at which time he would be sixty-five. This is where things began to spiral downward.

Why not retire at 65, when you can receive your money? That just makes more sense. In my opinion, unless you have between $2.5 to $5 million in assets it will be tough for most folks to retire or even justify retiring early before you have access to 401(k)’s, IRA’s, Social Security and pensions.

THE FALL FROM MIDDLE TO LOWER CLASS

Don’t follow any advice, no matter how good, until you feel as deeply in your spirit as you think in your mind that the counsel is wise. – Joan Rivers

After choosing early retirement, having no real plan and giving little thought for his future income, he set out for an adventure overseas.

Although, he is a writer by profession, with age and the decline in his health, he is unable to sustain this way of earning a living. It is far different to be a man of twenty-two, eking out a living by writing than it is at seventy-two. He can long longer grind out the words as he could when he was a young man. He states this is one reason that he is poor.

Inflation would also erode the purchasing power of his money. From 1986 to 2014, inflation has gone up 109.7 percent. Meaning things have doubled in price.

His pension becomes worth half of what it once was and it not adjusted for inflation.

He receives Social Security, but having not worked formally for the last few decades means that this amount would not be very high.

Medical insurance has skyrocketed. It is a much higher cost to insure anyone, let alone a man in his golden years. It now costs him more monthly than he used to pay in a year.

He did not pay attention to his investments and bought stocks on margin.

In addition, he allowed advisors to manage his money and give him advice against his own gut instincts.

Eventually, his investments and brokerage accounts were empty.

FINANCIAL MISHAPS AND MISSTEPS

These are the things that caused Mr. McPherson to lose his financial shirt:

  • No clear vision of a career
  • No path to wealth creation ever established
  • He did not complete his degree; after numerous attempts which is time and money wasted
  • His only income consists of a Social Security check and a miserable pension
  • He retired early without a financial plan
  • Gave no thought to the future or inflation
  • High cost of medical care never even considered
  • Higher cost of housing not considered either (as news flash, things become more expensive not cheaper)
  • Did not plan for health issues
  • Divorced without having a financial net
  • He invested on margin
  • He spent his investment capital
  • Took bad advice from advisors that told him not to buy shares in AOL and Apple
  • Having fun was more important than getting his financial house in order (See my post on Aesop’s The Ants & The Grasshopper)
  • He did not spend modestly
  • Due to this he has to depend on the kindness of family and friends
  • He couldn’t pay for $10,000 of dental work
  • Did not have the money to attend a funeral
  • He subsists on a HUD subsidy for housing and medical benefits
  • Things got so bad, at one point, he only had a quarter to his name in his pocket and no bank account

POVERTY IN OLD AGE

He states by all standards of living that he is poor. Living in poverty is awful and humiliating he writes. Being poor is exhausting and time consuming. Waiting for buses and in lines at assistance offices takes all day.

His income is above $11,670 annually, putting him above the poverty line, as he receives more than that in Social Security. Even though, he has not ever had to apply for food stamps, welfare, or Medicaid he still has had to ask for government assistance.

He feels his younger self was delusional and naïve.

Although, he does not live in a homeless shelter, but living in subsidized housing isn’t exactly palace living. Many living there are poor as well.

The ailments that come with age are hard. Without good medical insurance, medical bills can be catastrophic to say the least. Medical debt has caused some to declare bankruptcy.

According to Elizabeth Warren, Americans are filing bankruptcy in record numbers. The main causes are job loss, illness, and medical bills. Women with children are also most vulnerable to file for bankruptcy.

The things he did that harmed his financial future were unable to be undone.

I share this story because the author had the fortitude to do so. I urge you to not just eliminate, but crush all of your debt and save at least 20 percent of your income because one day you may need it.