* International Investments – IN-sured
* Natural Health Tip – Summer Madness ain’t
Cool
* Ecuador Real Estate – Compassion
Recent messages have looked at nationwide downward cycles
created by poor nutrition, masked by pharmaceuticals and enhanced
by insurance. These cycles distort our lives, enhance inflation
and place our business and investing success at risk.
We have been reviewing problems with insurance. Lloyds
of London’s has warned insurers that they must face
up to a growing threat of climate change or risk being swept
away.
Insurance concerns have been especially focused here at the
farm. In March Merri and I sold the last condos we held in
Florida. Shortly after I requested a refund on prepaid insurance
premiums. The refund never came. Last week we learned why.
Our Florida insurer had gone bust!
At about the same time I received a note from our insurer
of the farm. They wanted to increase our liability insurance
here by ten times even though we have used this company over
20 years and have never had a claim.
There are at least three huge insurance concerns the Western
world faces now. #1: Health Insurance, #2: Liability
Insurance and #3 Unfunded Government
Insurance.
We can see little warnings everywhere. Many readers have shared
additional concerns and suggestions about what to do.
Health Insurance:
Here is a reader who shows ways to reduce your original baseline
health insurance costs.
“Dear Gary, I am an attorney and pharmacist. Perhaps
my situation will help other insurance-needy folks. I am a
56-yr old woman living in Pennsylvania - one of the states
that does not apply group health insurance rates to individual
business owners. Several states, however, do give sole entrepreneurs
this break. Two years ago my employer health insurance (COBRA)
ran out. I had had one major surgery during that time. Living
in a state that does not give this type of insurance break
to single entrepreneurs (divorced as I am), is a huge financial
drain and could prevent me from achieving my dream of lifetime
financial independence. Also, the plans available to individuals
are a nightmare of medical exams and prior condition exclusions.
I was also told that no Rx drug insurance would be available
to me as an individual - only group plans! I had chosen to
run my own farming business in Iowa while assisting a parent
who was dying and during estate settlement, but I didn't qualify
for the farmer plans offered through Farm Bureau because I
was not an Iowa resident. Iowa's rates on all insurances, by
the way, are unbelievably low, compared to PA, - especially
car insurance - if you are a resident!
“I finally joined the local Bar Assn here in PA, and
found the coverage I needed, even though I was not actively
practicing law at the time but had considered opening an office
here. My current plan costs over $700/month, but I have eye
care, dental, and Rx drug coverage. Can't recall my deductible
but I am sure it is not more than $1,000. The only other comparable
plan was one that many others use: the local Chamber of Commerce!
This is a great resource for the majority of people. Many friends
recommended this to me.
“The answer to my particular dilemma is not some expensive
health care account, but national legislation that prohibits
insurance companies from discriminating against individuals
in types of coverage offered and cost if they have been maintaining
health care coverage for the preceding year. I should have
been able to shop any existing ‘group rates’ in
this state, without discrimination. I am, after all, a member
of a much larger group - the US Taxpayers!!!! My advice - move
to a state that counts a single business owner as a group for
health insurance, or open a home-based business, if nothing
else, and join the local Chamber! “
Another reader provides a very interesting health insurance
resource.
“Gary - this is the great link that I used when looking
at health care insurance two years ago. It is the Georgetown
University's Guide to Getting and Keeping Health Care Insurance.
It shows state-by-state which states allow ‘groups of
one’ or self-employed people to obtain group coverage.
If you live in such a state, you have a lot less risk when
you open your own business because you can get insurance despite
health status. This should be a FEDERAL law!!!
“This guide starts out by saying: ‘Under federal
law, employer group plans are defined as those sponsored by
firms with two (2) or more employees. In a number of states,
however, group health insurance has been defined more broadly
to include groups of one, that is, self-employed individuals
with no other employees.’”
You can read the entire guide at http://www.healthinsuranceinfo.net/newsyoucanuse/discrimination_limits.pdf
Self Insured Health
Here is a reader who has done as Merri and I have, self insure
through a chapter C corporation.
“Gary I now have a fantastic medical reimbursement plan
for myself that my C Corporation pays for with tax-deductible
dollars. I am now the only employee of this company. It even
covers OTC preparations and co-pays that the insurance co.
does not pay - eyeglasses, etc. Thank God I found this way
of financing my own healthcare. It is expensive but it works!”
Self insurance is great if you have your own business, a chapter
C corporation and enough money to survive a catastrophic illness
before reserves build. Merri and I developed 20 years ago a
wellness plan in our Chapter C corp. The company pays all medical
and dental costs for us our children (when they were dependants),
plus anything (from vitamins to massage to visits to spas)
that enhanced our wellness.
This covered the accidental medical portion of personal insurance
(property and car)…anything that helped the employees
of the corp. (Merri and me) and their children be well. We
are hundreds of thousands of dollars ahead from saved premiums
and tax benefits.
Liability Insurance
Self Protection of wealth (as well as health) is also a way
to address the huge concern of liability. Liability is becoming
increasingly hard to attain and is rising in cost.
Here is what one MD wrote about this:
“Gary, I have been deeply involved in the Florida Medical
Association's asset protection planning. Part of the plan is
holding off-shore accounts with Foster-Dunhill based in the
Bahamas. These are totally IRS compliant, and this firm has
extremely wealthy US clients-Kennedy's etc. Florida Medical
has checked them out. Their website is www.foster-dunhill.com.”
This site mentions three advantages to holding assets outside
the country where you live, tax benefits, asset protection
and estate planning. Most of the US tax benefits gained by
holdings assets abroad have been eliminated in the past decade.
Now new legislation is being suggested that will reduce this
benefit even more. Honestly (except for the largest estates),
good estate planning is easy to attain at home.
However holding assets abroad provides a simple way to gain
huge amounts of enhanced privacy and asset protection at very
low cost.
Join Merri, Thomas Fischer of Jyske
Bank and me at our last International Business and Investing
Made EZ course in North Carolina this year. Learn how
to gain extra asset protection. Review
where to invest and do business now and learn which markets
and currencies may be strong in the year ahead. Meet Steve
Marchant, our man in Ecuador, and learn about products to
export. Go to http://www.garyscott.com/nccourse/
Unfunded Government Insurance
The third insurance concern we face is off-budget insurance
provided by governments. This type of invisible liability creates
currency instability and inflation.
A recent message outlined how the Federal Reserve Bank of
St. Louis included an article in its July August “Review” that
says the US is bankrupt. See spottingtrends.com/investment/investment_philosophy_34.htm
That same Federal Reserve “Review” includes another
article entitled “Federal Credit and Insurance Programs
Housing” by John M. Quigley, professor of economics at
University of California Berkley.
This article recommends that insurance provided by government
sponsored enterprises (GSE’s), should be altered to reduce
federal risk exposure. The article says: “Federal policy
affecting housing is dominated by indirect off-budget activities-tax
expenditure policies and credit, insurance, and guarantee programs-rather
than the direct subsidy of housing production or the payment
of shelter allowances to the deserving.”
This is a very long complicated article, but the gist is most
federal guarantees are not needed to bolster the housing market
and that FHA and other similar GSEs actually cause housing
inflation.
The article ends with a warning: “Finally there is the
skunk in the middle of the road. The implicit federal guarantee
that GSE assets are insured is an enormous contingent liability
for the federal government.”
This is one more way that the US dollar is being devalued
by Federal overspending. This also is one of the causes of
inflation. You can access the Fed’s “Review” and
this article at www.research.stlouisfed.org/publications/review
Natural Health Tip – Summer Madness ain’t Cool. Don’t miss tomorrow’s message on three ways to
maintain calm during stress!
Ecuador Real Estate – Compassion. See yesterdays
message at successguidelines.com/ecuador_real_estate/ecuador_real_estate_96.htm
Until next message, I hope that your happiness and wealth
are assured!
Gary
P.S. Beyond compassion one part of Ecuador that Merri and
I love most is the sweet happiness of the people. The picture
of this happy Ecuadorian says it all! Please send me your photos
of happy people that I can share!
At Otavalo Market about 15 minutes from El Meson
Learn more about our August 31-September 4, 2006 Super Thinking
+ Spanish courses. These are courses that help you learn how
to learn. You find new ways to absorb, retain and recall information
much more effectively. You improve your health and add Spanish
fluency as bonuses! See details at at www.garyscott.com/catalog
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