The Affairs Organizer Blog

According to The Wall Street Journal, despite most of the state’s population living in the desert, “Nevada Has Highest Percentage of ‘Under Water’ Households”

• Nevada leads the U.S. in the proportion of households whose mortgage debt exceeds the current estimated value of their homes, a condition known as being “under water.”

• Many Americans are under water because they bought homes at or near the peak of the housing boom and put little or no money down.

• (A new study estimates) 48% of owners of single-family homes with mortgages in Nevada are under water. That compares with 18% nationwide.

Cheers to WSJ’s James R. Hagerty for a fine article.

When deciding how to invest your money, consider both offense (investment earnings – dollars going into your pocket) and defense (dollars going out of your pocket – spending & expenses).

The key here is to look at the defensive side and eliminate a hefty expense.

Let’s say you have a checking account with a $6 monthly fee if your balance falls below $1,000.  $6 per month multiplied by 12 months is $72 in annual fees that you pay with after-tax dollars.  Simply keep $1,000 in your checking account at all times to avoid this fee and you will enjoy a guaranteed 7.2% after-tax rate of return.

Wow – that’s so easy even a lowly author of a book such as “The It’s All Right Here Life & Affairs Organizer” can understand it.

Why Thanksgiving as a deadline?  It’s conveniently close and it’s something your loved ones should be thankful for if you actually do it.

A will (sometimes known as a “last will and testament”) is the legal instrument that enables a person (the “testator”) to make decisions on how, after death, his/her estate will be managed and distributed.

It is very important that you have a current and valid will.  Otherwise:

(1) If you die without a valid will (“intestate”), the laws of the state you live in will determine such critical issues as who raises your children and what happens to your assets.  Moreover, if you have no will when you die and you have no heirs in the eyes of your state’s law (e.g. living children or parents), all of your assets will become the property of the state, instead of the friends, relatives or charities you would have chosen to inherit them; or

(2) If you die and have an out-of-date will, it may be declared invalid if it doesn’t properly meet legal requirements (see “intestate” above); or

(3) If you die and have an out-of-date will that is valid, it will require that old decisions be carried out, even if they don’t reflect your current wishes or circumstances.  For example, you may end up leaving your entire estate to an ex-spouse instead of your favorite charity (or book publisher).

- Source: “The It’s All Right Here Life & Affairs Organizer” (www.AffairsOrganizer.com) written by yours truly.

Dreaming about making an expensive purchase? Consider the following excerpt on ‘Adaptation’ from page 256 of Rob Walker’s book “Buying In – the Secret Dialogue Between What We Buy and Who We Are”:

“…Human beings have a remarkable capacity to get used to things. This means a capacity to get used to miserable situations. And it means a tendency to become bored with stuff that used to thrill us: to overestimate how much pleasure any given purchase will give and for how long. Thus, the iPod eventually gets taken for granted, the visually thrilling high-end kitchen appliance simply becomes your stove, and the (Lance Armstrong) Livestrong bracelet ends up at the back of a drawer.

We all know that novelty fades … What we’re not good at is judging the ‘intensity and duration’ of our feelings about events (i.e. purchases) that haven’t happened yet … we’re not good at figuring out how to factor (our knowledge of fading novelty) into our decision making. ”

(disclosure: my wife and I just bought a new vehicle)

Below is a link to an April 2008 article on investing from NPR’s Morning Edition.

It’s based upon interviews with David Swenson, manager of Yale University’s endowment and one of the world’s very best long-term investors.

http://www.npr.org/templates/story/story.php?storyId=89324244

Today’s Wall Street Journal article “Digging Out of Medical Debt” by Stacey Bradford offers good advice to ease the pain of medical bills via “avenues every financially-struggling patient should pursue”.  Here’s a summary:

(1) Check for Errors – the nonprofit agency Medical Billing Advocates of America estimates 90% of the thousands of inpatient hospital bills contain costly mistakes. “One of the most common problems is duplicate billing of services under different descriptions.”

(2) Stay on Top of the Insurance Company – make sure the insurance plan is paying its share. “If there is a dispute between a doctor and a health plan, the physician will eventually just bill the patient … find out if any bills aren’t getting paid and what the issue is, such as wrong billing code, and try to get it resolved as quickly as possible.”

(3) Negotiate – medical care is negotiable, especially “for patients who are paying out-of-pocket for services because they either don’t have insurance or have a high deductible health plan … physicians and hospitals don’t want to get stuck with unpaid bills so they often grant discounts to those who pay before they leave the office … when haggling with a hospital, ask for the rate Medicare pays, which could be 50% less than the full price.”

(4) Ask for Help – many hospitals have government funds to help patients who can’t afford their medical care. “To find out what help you might be eligible for, ask your doctor for information or contact a hospital’s financial counselor … there are many independent nonprofits that will provide financial assistance.” resource: http://www.patientadvocate.org/index.php

(5) Ask for a Payment Plan – “not only will the debt go unreported to the credit bureaus, but medical facilities also typically don’t charge interest, says Rod Griffin, a spokesman for credit bureau Experian. “

(6) Deal With Collections Agencies – “Hospitals are getting more aggressive about sending unpaid bills to collection … Even if (not) a mistake, you don’t necessarily have to pay the entire bill. Like doctors, collection agencies are often willing to negotiate.”

When writing a check to make a payment on a credit card account, DO NOT put the complete account number on the ‘For’ line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won’t have access to it.

This tip was sent to me in an email that’s been circulated several times, so I’m afraid I don’t know who to credit.