CTMPR

A few years ago my wife and I decided to open a Health Savings Account. We were tired of watching the health insurance premiums for our family of four go up every single year. It got to the point where we were paying more than $500 per month and decided to make a change. I’m glad we did because family friends of ours are now paying nearly twice that much for a policy similar to what we had. How ridiculous!

What attracted us to the Health Savings Account (HSA) was the fact that we gained some control over what we pay for health insurance. The first year is a little scary because you start out with nothing in your account, but if you can make it through those first few months then things become easier. It’s probably best to start a plan in the spring as opposed to during cold and flu season.

Basically what we did was moved up to a High Deductible Health Plan (HDHP) because you need at least a $2400 deductible to qualify for an HSA. Then the money you save on your premiums can be redirected into your HSA. There are annual HSA Contribution Limits so you can’t put in more than the guidelines. If you don’t use all of the money in your Health Savings Account by the end of the year it simply rolls over to the next calendar year. This is a nice feature because as your account grows you can continue to raise your deductible and lower your health insurance premiums. We now have a balance of about $6000 in the account so we can comfortably have a $5000 deductible. Once our children are off our plan it should grow even faster because they tend to be sick much more often than my wife and I. This money grows on a tax deferred basis and many providers even offer investment options similar to an IRA.

When you reach age 65 Medicare kicks in so you really don’t need to spend much on health care so at that point the non-medical withdrawal penalties are waived and you can use the money for whatever purpose you desire.

In summary, there are many good reasons to consider a health savings account. Really the only drawback is getting through those first few months without a major health expense. Do more research and consider one today!

People like Warren Buffet will tell you that you should buy a stock and hold it until you no longer believe in the company or management team. Unfortunately for most of us, we aren’t privy to the level of information and management attention that Warren Buffet gets. For us, we can look at outdated financials online, listen to the quarterly conference call and rely on our own instincts.

In late 2008 – early 2009 I had the correct instincts, to buy the best companies I could somewhere near the bottom. This lead me to buy shares in names like GOOG, AAPL & ISRG in January & February 2009.

Unfortunately, even though I was correct I completely blew it. I set a goal to take profit when I made a 50% profit and Apple went on to run from $80 to over $320 in just 2 years. I never got back in because it never got back to a “reasonable” level.

Today, I’m not in any of those 3 stocks. I made good money on all of them, but I would’ve been much better off if I just would’ve stayed in them. Therefore, I’ve developed a new methodology that might work for me.

When I’m buying an individual stock, I look for a great stock that has been beaten up and is near support or just turning up. In these cases it’s often possible to risk less than 10% on a stop. Then, If the stock doubles I will sell 1/2 recapturing my original principal and just let the rest just run since I’m using the market’s money. This would’ve worked with all 3 of the stocks I bought in early 2009 and I would be much happier today.

The problem however, is that most of the stocks I buy won’t go up 100% so what do I do with those that go up 50% and stall out? Maybe in those cases I could sell 2/3 of the position to recapture my investment and keep the other 1/3 on.

Anyway, it’s really hard to know when to take profits. I bought both Dell and Oracle in late 1990 when Desert Storm was getting underway and sold them way too early as well. I would be retired if I had held them until 2000, but would I have been smart enough to ride them for an entire decade and then get out? Who knows.

The only solution I see is to develop a money management system like the one above that takes the emotion out of stock decisions. I’ve been trading enough years to know that your Emotions are the real enemy.

There is nothing that can affect your financial well being (along with retirement plans) than having issues with your credit. This can vary from a mistake on one of your credit reports or all out identity theft. Most often you don’t notice something is wrong until rates on your variable loans or credit cards start to dramatically rise. By that time the damage has been done and all you can do is go through a painful repair process. This can take a tremendous amount of time and often involves a painful amount of paperwork.

An easier thing to do is take advantage of the government’s mandate that credit bureaus (Equifax, Esperian & Trans Union) provide you with 3 free credit reports on an annual basis. As this site suggests I find it valuable to request a report from 1 bureau in the winter, another in the summer and another in the fall roughly 4 months apart. This isn’t as fool proof as having constant monitoring, but it’s definitely much better than doing nothing! After all, the government is providing it for free so why not take advantage of it?