The dreaded Colonoscopy!

Okay, we’re going a little off topic on this one but I felt it worthwhile to recount my experience last week should any of you be dragging your feet on this.

As is the case with many of us, it took one of my childhood friends putting this procedure off too long to get me sufficiently motivated to get it done.  It was the shock factor that woke me up to do it.  In my friend’s case by the time he went in for the scan, his colon cancer had progressed to the point he is now going through Chemo/Radiation before surgery.  Yes, that’s before surgery!  Then the surgery, then most likely more Chemo/Radiation.  He pushed me to do it now and not put it off.  I’m 54!

With no family history of colon cancer you should not wait past 50.  With history, much earlier.  Consult your doctor.

The reason for even writing about this procedure is the real shock of it all is how SMALL a deal it really is.  As a comparison, I would rather a Colonoscopy than have a cavity filled.  It’s that routine and pain free.

The following is my experience:

1. Normal visit to my Primary care physician December 6th.  He says “get it done” and gives me the number to contact NCGA (his recommendation for who to do it).
2. I call NCGA and schedule an initial visit.  Most of you will not even need an initial visit.  I did because I’m on Coumadin (thanks to United Airlines)
3. Initial visit to NCGA December 18th lasts 10 minutes.  Procedure scheduled for January 18th.  (Yesterday.  Yes, it’s fresh in my mind).
4. Starting January 12th I go off the Coumadin.
5. Starting December 16th at 5PM no more food.  Just clear liquids.  I get a little bit hungry.  Okay, well a lot hungry.
6. 5PM on January 17th take one bottle of Suprep (no worse tasting than
   Alka Seltzer cold medicine) mixed with 16 ounces of water followed by two more 16 ounce glasses of water.  All takes 3 minutes.
7. The next two hours are not pretty but as long as you have a clear path to a bathroom and nothing important to do it’s just not a big deal.  The desired reaction from the Suprep only lasts for about 2 hours.  Other than being hungry everything else returns to normal.
8. 5AM January 18th, take another bottle of Suprep and repeat the steps above.  Again, no big deal.  By 7AM I was back to a normal day.
9. 9AM onward until the procedure no food or drink.  Yes, I’m still hungry!  But I’ve been promised all I can eat Pizza by 5PM.  I can do this!
10. Arrive for the procedure at 2PM.
11. Taken back for prep at 2:30
12. IV inserted at 2:45.  Drugs injected at 2:55 (twilight Anesthesia)
13. Procedure done at 3PM.  Takes 15 minutes.  One small Polyp removed.
14. Out of there by 3:45
15. On the basketball court in my daughter’s school parent game by 4:15
16. Chowing down the all you can eat pizza by 5:15.
17. Just finished my normal gym workout this morning.
18. Absolutely no side effects.  One bonus, I lost 7 pounds!

Key message:  Absolutely no excuses.  Do it!!

Read Full Post »

A couple random useful thoughts

I received quite a few responses to my last couple topics as well as requests for me to evaluate several additional topics.  Below I address the following in random order:

• Life Insurance – How much is enough?
• Balancing your checkbook
• Buying yourself a new car every 6 months by spending 3 hours of your time getting exercise and setting a good example for your kids.
• $1 saved v $1 earned
• Thinking about life from the book “Thinking Fast and Slow” chapter 38.  How satisfied are you with your life? Love this one!!

Let’s tackle the first 4 first, and then the tough one last…

Life Insurance – How much is enough?

I’m only going to talk about life insurance in the purest sense of the term.  True insurance against the death of the person insured.  In years gone by there were different types of Life Insurance and some people bought life insurance as a form of investment.  I don’t see that happening anymore.

As I’ve mentioned previously my family has chosen to “self insure” for Life Insurance.  In other words we don’t carry any life insurance other than what comes for free with our health insurance from the company I or my wife happen to work for at the time.  Many people do carry life insurance and the question is always how much insurance should we carry?  In my view the answer is two part; part one is do you want the insurance to fully compensate financially as if the deceased person was still living.  If not, what % would you be comfortable?  50%?  75%?  The second part of the answer links directly back to the Family Financial Plan in a previous Blog Post.  You need to evaluate the financial impact of the person in question (being considered for Life Insurance) on the family financial plan.  Consider both the cost impact as well as the income potential.  From here it gets pretty simple if you’ve developed your financial plan as described in the prior Blog Post.  You add up all the income from today forward that person would likely earn for you to reach your goals and subtract what they would be personally costing the family over that same period of time and you get your answer.  If that sum comes to say $4M and you want to insure for the full amount, you buy a $4M life insurance policy.  If you feel you can downsize your lifestyle or modify your financial goals by say 25% then you insure for $3M. and so on…

Balancing your checkbook.  

I have to say this one really shocked me as to how many people still do this.  I can think of 4 reasons people might still balance their checking account; first would be to make sure the bank has not made a mistake (in the bank’s favor), second, to make sure you don’t overdraw the account due to a check that was written but has not yet been cashed,  third, to make sure there is no fraudulent access to your account going on, and fourth, just because it’s emotionally gratifying in some way.  Let’s take these in order.  Can you recall the last time a bank made a mistake and didn’t catch it themselves?  If they do make a mistake there are numerous easy ways in this modern online access world to catch it without needing to balance your checkbook.  Risking overdraft can easily be handled by maintaining a larger balance or adding overdraft protection to the account so that no one outstanding check can send you into the red. You can also address this issue by setting alerts in your online account to alert you when the balance reaches a level you should be taking action.  The same alert setting solution applies to fraud protection.  In addition, in the US the bank is responsible for fraud so they will more likely catch it before you do by balancing your checkbook each month.  I’ll let you answer #4 yourself. Bottom line in my opinion, balancing your checkbook can take a lot of time and be very frustrating.  It’s not worth the time and frustration.

Buying yourself a new car every 6 months by spending 3 hours of your time getting exercise and setting a good example for your kids.

As my family will attest this is one of my favorites.  If you’re like me and in a white collar management sort of job where you spend all day managing people, thinking strategically and planning for the long term, you come home most nights and think back on the day and ask yourself “what did I really get completely done today?”.  In my case the answer is usually “nothing!”.  If you’re also like me you like driving a nice car.  By nice I mean one of top quality that runs like new, looks like new and even smells like new.  Well, there are two ways to accomplish this on an ongoing basis;  You can buy a new car (spending $50K or more) every 6 months or the alternative option is to spend 3 hours once every six months and restore it to “new” condition right in your own driveway, with water, car wash detergent, wheel wash soap, leather conditioner and so on.  In addition, it’s good exercise, it sets a good example for the kids but most of all when you’re done you can say to yourself you really got something done today.  Try it.  Also a good way to catch up with the neighbors.

$1 saved v $1 earned

This one may be completely obvious but I still think it’s worth mentioning.  When you complete your family financial plan and you conclude something has to be done to improve the situation, remember that money saved (not spent) is after tax money.  The IRS will not tax you for saving money.  If you’re in the 50% tax bracket (top bracket at least for now) that means for every dollar you can improve your financial situation by cutting an expense is worth $2 in incremental earnings.  In previous blog posts I’ve talked about many ways to save money by simply being a bit more efficient and aware of what things should really cost without giving up on any utility or sacrificing any quality of life.  I plan on digging into this much further in a future post.  Bottom line is you don’t just have to work longer or take more risk with your investments or buy more lottery tickets.

Thinking about life from the book “Thinking Fast and Slow” chapter 38.  How satisfied are you with your life?

If any of you have not read the Book “Thinking Fast and Slow” by Daniel Kahneman, and you have many analytical tendencies like I do you should definitely put it at the top of your list.  It’s best read electronically as it has many interesting links to related research.  One very interesting question it poses towards the end of the book (chapter 38) is “How satisfied are you with your life?”.  The same basic premise explored in the book generally also applies when answering this question.  In the book Kahneman developed this framework for thinking he simply labels “Level 1 and Level 2 thinking”.  Yes, not very creative for a book full of so many insights into how we think about things.  Level 1 thinking is your immediate gut reaction conclusion you reach when faced with a question or issue needing thought and needing an answer.  You reach this conclusion instinctively based on your immediate frame of reference.  Level 2 thinking is as I put it “doing the math”.  It involves taking a much more structured and in-depth analytical approach to reaching a conclusion.  It attempts to strip out the emotion from the decision and focus just on the facts.  The book gives 100’s of examples whereby using only level 1 thinking to reach conclusions yields the wrong answer most of the time.  The more important the decision the more you should extend to level 2 thinking to insure you reach the right answer.  The less important it is to get there right answer and the less time you have to analyze the situation the the more appropriate the use of Level 1 thinking is.

I leave it to you to read chapter 38 and think about how you go about answering the question “How satisfied are you with your life?”.  I would like to modify this question slightly to read “How satisfied are you with your current financial situation?”.  The Level 1 response is what most of us apply when we ask ourselves this question.  We might take a quick look at our investment portfolio, our bank account, the size of the home we live in and a few other things that require no serious time or in depth thought.  From this we conclude something like “Ah we’re fine” or “Oh S_ _ t, we’re in trouble”.  We reach this conclusion based on how we feel at that moment not from any scientific analytical process.  It could literally be determined by events of that day or the last week.  Maybe the stock markets had a good week.  Maybe you received your bonus for the year just yesterday.  Maybe your daughter’s volleyball team won the High School league championship, or a big Crew Regatta.  These are all recent events that would give you a good or bad frame of reference that impact Level 1 thinking as it relates to how you feel about your financial well being at that moment.  Simply being in a good mood or a bad mood will have a large impact on how you answer this question using Level 1 thinking.

The Level 2 thinking approach to answering this question is spelled out in my Blog on Financial Planning in the Modern Era.  Using Level 2 thinking you carefully evaluate the facts and make projections into the future.  You run numerous “what-if” scenarios and you develop an answer to this question that strips out the emotion and the most recent biases impacting your Level 1 frame of reference.  It looks at the situation holistically and over a lengthy period of time.  You can be much more confident in the conclusion you reach when it’s based on Level 2 analysis and therefor you will worry less about the answer you reach.  You will find yourself asking that question much less often.  If you only apply Level 1 thinking as soon as the recent events of the last week are now events of 6 weeks ago you will begin worrying again and asking the question all over again.  The question “How satisfied are you with your financial situation?” is far too important a question to be left to Level 1 thinking.  My guess is that most people don’t move beyond Level 1 when answering this question and it leads to a constant source of stress and anxiety.  Taking the time to do the analysis laid out in my previous post will set the right framework for answering this question properly.  Yes, the initial investment in time may be considerable when set against the backdrop of how much free time you may have, but when offset by the accompanying reduction in stress and worry my feeling is it’s a no brainer.  Do the work!  Take it to Level 2!!

Read Full Post »

Wills, Trusts & Estate Planning

This is another one of those topics that has a major financial component to it as well as a significant emotional component.  In an attempt to overly simplify this topic I see three reasons for establishing Wills and Trusts:

1. Minimize tax liability when transferring an estate to heirs and beneficiaries.
2. Establish how you want your estate to be transferred to beneficiaries and heirs both while you’re still living as well as upon your death.
3. Squarely falls in the category of “getting your affairs in order”.

Don’t forget that once you’re gone the estate transfer process can be a huge benefit and positive experience for those receiving what you’ve worked your whole life to provide them, but it can also (if not handled properly) become a “family buster” if people feel cheated and relationships get strained as a result of poor planning or a lack of forethought.

Let’s start with the basic set of documents and instruments that need to be put in place:

1. Will for Spouse #1.  Determines what happens to Spouse #1 personal property upon death & Guardian assignments for the minor (under age of 18) kids
2. Will for Spouse #2.  Determines what happens to Spouse #2 personal property upon death & Guardian assignments for the minor (under age of 18)kids
3. Durable Power of Attorney for property management Spouse #1.  Legally empowers someone (often Spouse #2) to make legal decisions regarding Spouse #1 personal property upon death of Spouse #1,
4. Durable Power of Attorney for property management Spouse #2.  Legally empowers someone (often Spouse #1) to make legal decisions regarding Spouse #2 personal property upon death of Spouse #2,
5. Durable Power of Attorney for Health Care Spouse #1.  Same as 3 above but for Health Care decisions should Spouse #1 become in capacitated.  In California this is a standard form.
6. Durable Power of Attorney for Health Care Spouse #2.  Same as 4 above but for Health Care decisions should Spouse #1 become in capacitated.  In California this is a standard form.
7. Declaration for Natural Death Spouse #1.  States the wishes of Spouse #1 as to how they would like to die.  Primarily whether you would like a Do Not Resuscitate declaration.  In California this is a standard form and can be found here.
8. Declaration for Natural Death Spouse #2.  States the wishes of Spouse #2 as to how they would like to die.  Primarily whether you would like a Do Not Resuscitate declaration.
9. Family Living Trust.  This is where all your significant Family Assets should be held.  Used to avoid the costly and time consuming state probate process when spouse #1 dies.
10. Various other Trust funds can be set up for the kids, for grandma or anyone you like.  Used to transfer and hold assets for the benefit of certain individuals.
11. Charitable Trust.  Used to more efficiently gift assets to charities.  I have no real experience here so will only list as something many people do.

I suspect most of you have all or a subset of these already in place.  If you don’t you should.  My recommendation is the first time you do this you hire an experienced Wills, Trusts and Estate lawyer to prepare them.  Depending on how complicated your situation is this can cost as little as $2,500 and up to a big number if your situation is very complex.  I would guess most of you will fall in the range of $5,000 to $25,000 for a full set of first time instruments and documents.  Secondly I recommend you instruct the attorney to draft them in a way that you can easily edit the parts that will change over time so as your family situation changes over time you can edit them yourself without risking the legal integrity of the various documents.  We will cover more of the detail below.  For most of you there is no need to overly complicate this process or these documents.

My most important recommendation is that regardless of how many pages long the legal documents become,  that you maintain a written set of notes that accompany these documents in your own words that describe what you feel the intent is that should have been captured in the legal documents.  Most good Attorney’s will either interview you for this information or ask you to write this up anyway.  This is very important as most of these documents leave a great deal of latitude in judgement to the Trustee.  Once you’re gone if the Trustee is left with only the legal documents to go by in trying to carry out your wishes a lot can get lost in the translation to legal speak.  I suggest that at least every 2 years you update these notes and at least every 5 years you carefully review whether the legal documents still reflect your written wishes.  When your written notes and the legal documents are no longer in sync it’s time to update the legal documents.  If the initial set was prepared properly you can do this update yourself very easily not incurring any cost other than Notary costs to execute them.  This approach also avoids the time consuming back and forth with a lawyer trying to be sure the legal documents represent your  wishes.

Make sure all the above documents are properly executed in accordance with the requirements of the state you live in.  I’m shocked by how many times I hear of these documents being prepared but the final step of properly executing them was not taken.  Store the original executed versions of each of these documents in a fireproof safe or safe deposit box and note in your notes where the originals are stored.  Make sure the key people involved in the vehicles are also aware of where these documents are held and how to access them in the event of your death.  In particular make sure the designated Trustee knows they are the Trustee and where your written description of your wishes can be found.

What goes into each instrument/document:

Special disclaimer;  I make no representation that I have any Legal experience in this area nor do I consider myself a Tax professional.  I’m simply going by my own experience handling our own family situation recently as well as hearing from many others about their experiences.

Wills (one for each Spouse):

1. Remember any assets held in the Family Living Trust are dealt with in the Trust instrument and not in the Will.  The Will itself only considers the personal property not included in the Family Trust.  As stated earlier all bank accounts , all real estate and investment properties, anything of significant value (above $25,000) should be held in the name of the trust not in the name of the individual.  The only exception to this in my own experience was when we bought a condo in Australia.  We bought it in the name of the trust and as a result the Australian government levied additional taxes on the trust that we would not have had to pay if we bought it in our own names.
2. Named Executor.  Normally the first in line is your spouse, if there’s no surviving Spouse then you name a close friend or Family member.  You may have several in succession before finally naming a Bank that handles Estates, in the event all named Executors are no longer living or able to perform the duties.  The Executor basically executes your desires as spelled out in the Will.  Remember it’s important to have your own set of written instructions that can help make clear what is stated in the Will.
3. Named beneficiary (s).  In most cases where you have established a Family Trust you will name this trust the beneficiary.  If no Trust is established most often the surviving Spouse is named the beneficiary.  We’ll cover the case where there is no surviving spouse in the Trust section.  The same rules will apply to both the Will and the Trust.
4. Named Guardians of Minor Children (Children under the age of 18).  Normally the first choice is the surviving Spouse.  If there is no surviving spouse the next choice becomes more complicated.  This is obviously an important decision and one that warrants careful consideration and discussion amongst the family and the considered guardians.  Choosing a Guardian should not be thought of as bestowing an honor on someone.  Whoever you choose will certainly think of it as an honor that you would entrust your children to their care and judgement but this does not mean this should factor into your choice of who would be best to guard your minor children if you and your spouse are gone.  Nobody wants to think of this decision in terms of it really might happen but despite the low probability of both spouses dying simultaneously you must think of it in  “what if” terms.  When talking to potential guardians they must accept it might happen and would they really be in a position to handle it should it actually happen?  Don’t just list someone in your Will assuming it will not happen and neglect to even inform them of their designation.  Again, very important to have a set of written instructions that accompany the Will making sure the Guardian knows your wishes as they pertain to caring for your children.  Even though the named guardians only legally have guardianship over the minor children they should also be prepared to support the older children as well.  Make sure the Trust instrument makes appropriate financial support available to the new Guardians.
5. Execution.  In California the execution can be done in witness by two witness (each over 18 and not family members).  Other states may require Notary.

Durable Powers of Attorney (Property and Health), (One per Spouse):

1. These instruments legally empower your spouse or someone you designate to make legal decisions regarding your personal property and health care should you not be able to make these decisions yourself.
2. It is customary to appoint backup “attorneys in fact” should the primary appointee not be able to fulfill their duties.  You can appoint as many as you like with the final entity in the chain being a bank with this capability.  Normally you would designate 1 or 2 backups before the bank.  Remember you can always update this document over time.
3. In the state of California these documents require a Witness by a Notary to be properly executed.  Other states may vary.
4. Each Spouse should have one each for Property and Health Care.
5. If one Spouse or the other appoint someone other than the other Spouse be sure that person knows they have been appointed and has a copy of the document and knows where the original is kept and how to access it.

Declaration of Natural Death (One per Spouse):

1. This is the infamous DNR (Do Not Resuscitate) declaration.  Everyone loves thinking about this one…  This documents details the circumstances or conditions whereby you are unnaturally being kept alive and you would prefer to be allowed to die.
2. In California it requires two adult witnesses of your signature to be considered legal.
3. Make sure whoever you granted the Power of Attorney to for Health Care decisions has a copy of this document and knows where the original is kept and how to access it.
4. In California this is a standard form and can be found here.

Family Living Trust:

The primary purpose of this instrument is to avoid the state probate process when one spouse dies.  This avoids having to legally transfer all assets from one (the deceased) spouse, to the living (surviving ) Spouse through the state probate process.  Since both spouses are designated as Trustees of the Trust when one dies the other assumes full Trustee responsibility for the Trust and no probate process is required.  Saves time, money and stress.

Components of the Trust instrument:

1. Included Assets.  Ideally this should include everything you own together (between spouses).  Practically speaking this should be limited to the big items like bank accounts, real estate, investments and large $ value purchases.  When you first set up the trust you need to transfer all these assets over to the name of the trust.  Once the trust is established you simply make the original purchase of large assets in the name of the trust.
2. Revocable.  This trust can be changed or cancelled at any time by both Trustees signing a new trust to replace the old one or agreeing to cancel it.
3. Trustees.  Normally the two spouses are designated as the initial Trustees.    Total control of the assets lies with the Trustees.  It gets a little more complicated if the initial Trustees and the Settlors are not one in the same.  Again, there is a  succession of Trustees if one can’t perform the duties then it passes to another and so on until it lands with a Bank.  Normally you should name at least 2 or three trustees to succeed yourselves (as original spouses) before it lands at the Bank.  Remember this is a changeable document and as time goes on and you feel a different order of Trustees makes more sense that can be changed.  It’s my personal feeling that you should not designate a Trustee that is also an ultimate beneficiary of the trust as the assets get divided upon your death.  This sets up a conflict of interest situation when the Trustee is required to make a “judgement” call on something.  I realize in many cases your most trusted people in your lives are the ones closest to you and so likely to be the beneficiaries of the trust distribution and therefor in some ways the most logical to name as the Trustee.  Tough call and many people chose Trustees that will ultimately be a beneficiary as well.  I think the risk of interest conflict and damaged relationships outweighs the argument in favor.  Just my feeling.
4. Settlors.  Normally the Trustees and the Settlors are one in the same but not always.  If you designate Trustees other than the primary Spouses of the estate then the Settlors would be the spouses of the estate and would be the beneficiaries of any income or principle distributed from the Trust while the Settlors are still living.  The trust document defines the rules by which this income or principle would be divided amongst the settlers while they’re still alive.
5. Division of Trust estate upon the death of the Settlors (the spouses).  This is the critical issue the Trust deals with.  When you and your spouse are both gone who gets what.  This is also where it is critical to write up in your own words your wishes in this regard.  Try to write up in the simplest terms you can.  As unambiguous as you can.  you want the Trustee at the time to know what you really intended to happen.  Most Trust documents are written with quite a bit of latitude for the Trustee to make judgement decisions.  you want these judgements to be as closely aligned to what you would have done had you been around to do it.  Some flexibility is needed as circumstances can change drastically once you are gone that you could not have foreseen.  You want  a Trustee you feel will make the same sort of judgements you would have made given the changed circumstances.  Give them that flexibility but at the same time make your wishes well known.  This division can be done very simply like half to Mary and half to Betty.  It can also get very complicated with the use of contingencies and percentages requiring a Math PhD to work out.  Your personal situation will dictate.  I’m not going to attempt to describe all the possibilities in between.
6. Generation skipping provision.  Can be very useful to allow the Trustee to skip a generation when dividing the assets to insure no double tax risk of generation one then later on to generation two.  This can be included in the Living Trust or set up as a separate trust from the beginning.

Various other Trust fund structures exist:

1. Grantor Trust fund often used to transfer assets to kids that are considered “under valued” at the time like equity in privately held companies that might one day go public at a much higher value than was originally paid.  With the emergence of the social media bubble maybe this form of Trust will become popular again.  It was commonly used in the last bubble.
2. Charitable Trusts.  Families can set up a trust fund to make charitable donations out of.  This structure allows you to transfer highly appreciated assets into  a Trust for Charitable donation purposes only and sell those assets not having to take on the tax liability.  Essentially it assumes the charitable gift status up front for tax purposes.

In conclusion I don’t know if the description above makes this whole area sound more complicated or less.  Regardless, it’s important everyone takes care of it.  This falls squarely under the category of “having your affairs in order”.  When your affairs are not in order it’s something you think about and worry about constantly again leading to another stress accelerator.  It’s your heirs that also benefit or are harmed by the degree to which you have your affairs in order.

Read Full Post »

Third in the Series – Simple way to reduce daily family drama

Okay, see if the following vignette sounds at all familiar:

The day starts our around 6 to 6:15AM with everyone getting up to alarm clocks, dogs barking and doors slamming.  The first real spoken phrase you hear is “Oh My God I have no clean PE clothes!”.  To which you reply “well dear you have 5 sets, what happened to them all?”,  “they’re all dirty and we have no time to wash them now!!”.  “well dear, did you not know yesterday when we did have plenty of time to wash them you had PE today?”  then the final reply from the child “well!! I guess I just won’t go to PE, I’ll get a check mark against my grade, it will lower my GPA and I won’t get into college and therefor never get a job and end up homeless on the streets.  What do you think of that Mom?!”.  Then about 45 minutes later as you’re half way to school you hear the “OMG” thing again.  “I just remembered I am responsible for snack for my advisory group today”.  To which you calmly reply “and how long have you known about this?” to which you hear a muffled (but tone clearly blaming you) reply “since the beginning of school when the snack schedule was set up”.  “Okay, when is advisory (thinking it must be in the afternoon giving you plenty of time to get the snack and deliver it to school)”.  “9:15 this morning (again in a quiet but blaming tone)”.  Note:  There goes an hour out of your day.

Then after burning the extra hour getting the snacks and delivering them back to the school you just came from, you arrive home only to see 2 lunches still sitting on the counter where you made them and left them.  Back to school you go (yes, for the third time) to deliver the lunches.  Now you’re at around 2PM and so far it’s calm.  Then Dad gets the innocent text message from your daughter as follows”Hi Pops, I forgot to tell you I don’t have practice today after school so pick me up at 3 (instead of 5:30 if she had practice), thx.”.  You’re thinking to yourself (being the mature adult you are you don’t just blurt this out in frustration) “do you think I’m just sitting around here with nothing else to do able to jump at a moments notice?”.  Then after a couple phone calls to your wife, mother in law and maybe a few neighbors who might be able to pick her up, all to no avail you get in the car and drive the 45 minutes (because you have to drive from your office) to school and pick her up.  Oh by the way you arrive about 10 minutes late and the first thing your daughter says when she gets in the car is “do you think you could get here on time next time”.  “Hmm”.  Note:  there goes 3 hours out of your day.

Finally when everyone is home you start doling out the chores.  “it’s your day to empty the dishwasher”, “no it’s not! my day was yesterday”, to which your other daughter standing by in earshot replies “No you didn’t, I did it yesterday!” and back and forth it goes until one bright daughter blurts out “prove it”.  Now it’s your word against hers and you’re the adult so your word must be the word of truth.  Hmm.  How do you think this all turns out?  You guessed it.  Maybe the dishwasher gets emptied but certainly not with any smiley faces.

The final chapter in this vignette takes place around 8PM when you get an email message from the neighbor saying “everything OK there your daughter didn’t turn up for babysitting tonight and I just wanted to be sure everything was OK”.  “Oh S__T! ” you say to yourself, “I completely forgot to tell her (your daughter) about this”.  Just take a guess what sort of dialog followed your telling your daughter about the “mixup” the next morning.  Lost wages, neighborhood embarrassment, etc.

The point here is that not only could somewhere between 2 and 5 hours of time been saved with more effective advance planning but the toll taken in terms of anxiety and frustration continually adds up over time.  It leads to relationship issues and tension in the household that don’t need to be there.  There’s enough to deal with as it is.  You don’t need this fuel on the fire component!

We’ve adopted one very simple tool to tackle 90% of this.  We bought an iPad and keyboard docking satiation and placed it in the middle of the kitchen (being the smart modern parents that we are we’ve figured out all kids do need to eat).  On the iPad are not a bunch of games like doodle jump.  It’s exclusively practical items centered around a family calendar.  It also includes a family gmail account so that my wife and I can both easily place calendar entries on the family calendar simply by clicking on the “invite” button (inviting this email address) when we’re entering a calendar entry in our own personal calendars.  This way anything we put on our personal calendar that relates to the family is easily added to the family calendar.  Same goes for our older kids who keep some form of their own personal calendar.  When we first set this up we had a  fun set of sessions together filling in all the items we knew about.  Since then whenever someone schedules something they must go add it to the family calendar.  It’s really easy and takes virtually no time.  We also set the chore schedule on the calendar so we get no more “prove it” to me responses.  It’s right there in the calendar.  You can even set the notifications up so everyone has enough time to get to the task.  They can be set to just make a sound or can send a text or email if you want to get really anal about it.  Since doing this the number of unplanned trips to school has been drastically cut back, the stress level in the morning has been cut way back and the number of tragic OMG moments has been greatly reduced.  All this has simply lead to a level of calm not seen in many years.

We’ve also added a weather ap since getting dressed appropriately for the wether is a big deal in our family.  It always displays the day’s weather forecast.  We also have a shopping list that builds during the week and is erased anytime someone goes shopping.  With kids at home driving they know the rule of getting everything on the shopping list if they go to the store to get one thing they particularly desire.  We still seam to go to the store far too many times in a week but it’s getting better.  We also have iTunes and Pandora on there  as  soothing music in the Kitchen in the Am helps keep things calm.  We’ve also recently added a cooking ap for accessing recipes and building ingredient lists and shopping lists.  We also include CNN headline news just for fun.

Try it.  Life is stressful enough.  We can do without this sort of stress layering.

Read Full Post »

Second in the Series – When stuff breaks!

Lets face it stuff breaks!!  The more stuff you have the more stuff breaks.  Fixing things around the house when they break and you’re busy or don’t have the skills to do the repair can be a very inefficient process.  It can eat up lots of time and generate a great deal of anxiety leading to worry, frustration and stress.  When the “check engine” light comes on or the LED reads oil maintenance required what do you do?  You know the car manufacturers all want you to run the car right over so they can rack up more unnecessary service charges.  When should you really bring it in?  How long will you drive with the Oil Maintenance readout flashing red before you take it in?

If you have a computer network set up in your house you know how challenging and time consuming that can be to keep up and running.  When someone cries out “it won’t print” and begins ripping the printer apart and the only person who knows how to get it working is away on a business trip, what do you do?  When someone cries out “the whole Internet must be down cuz my Hulu episode wont download” and the same person who knows how to power cycle the cable modem is still away on the business trip, what do you do?

Even just getting the TV to turn on when the person who configured the “one button easy to use home entertainment system” is not available can become a family tragedy in a manner of minutes.

Plumbing problems.  OMG.  Don’t even want to go there.

Have you ever tried activating your home security system when it reads “trouble in zone 3”.  What is “trouble”? what is zone 3?  What does it mean “do you want to bypass zone 3”?  All these sorts of problems occur daily and cause family members great anxiety and stress not to mention the potential for damage if a plumbing problem is not fixed in a timely manner.

All these sorts of problems eventually get resolved but at great expense and I’m not just referring to dollar expense.  The worry and stress cost is far greater in many cases.  You can definitely waste money by not fixing these things in the right way and in the most cost efficient way but you can induce a great deal of worry and stress by not handling them promptly and efficiently.

Lets start at the high level – The first philosophical question is are you a “do it yourself” kind of family or NOT.  If you take pride and derive personal satisfaction from personally fixing things then you will want to identify from the list below those things you are capable and willing to tackle yourself.  If you’re not the Do it yourself kind of family then you need to put a system in place whereby you can quickly diagnose problems and know who to call, email, text or whatever to get the issue fixed.  My advise here is to not “kid yourself” when it comes to what you truly have the skills and time to fix.  You can create huge amounts of frustration for yourself and those wanting and needing something fixed if you think you can do it but you can’t.  You can spend many hours and even days trying to fix something to only in the end give up and call in the expert.  Not to even mention the possibility of making it worse and costing you more than if you had just called in the expert up front.  As an example plumbing is one of those areas for me I will not touch under any circumstances.  I’ve yet to tackle a plumbing issue with any success and 9 out of 10 times I manage to make things worse by the time I call in the plumber.  Know your limitations.

Now lets categorize things you might own that will need fixing and/or regular maintenance to avoid the emergency problem:

1. Anything with an engine.  This includes Cars, motorcycles, RVs, Boats, lawn mowers, snow blowers, snowmobiles, etc.  All these items will require some form of maintenance and are not generally items you just through out when they break.  You are most likely to repair them and expect to own them at least 5 to 10 years.
2. Major appliances you depend upon.  This includes heating and AC, Hot water heater, Refrigerator, Stove, Oven, Microwave (most important to me), Clothes Washer and Dryer, Dish Washer, garage Door opener, etc. These are also items you will not simply toss out and replace when they break.  These are items you cannot live for long without.  Will need immediate repair if they break and will also need some form of regular maintenance.  Some much more than others.
3. Home electrical and plumbing (including natural gas & Oil burning systems).  When problems occur in either of these areas urgent attention is required and in most cases by a professional.  Faulty wiring can lead to fire and plumbing issues can lead to vast amounts of water damage.  We’ll build the list of contractors later in this blog but this is one aspect of  life you must have a good relationship with a  good electrician and a good plumber and they both need to be available on short notice.  If you take nothing else away from this blog post take this one.  Make sure you have a plumber and electrician on notice at all times.
4. Essential electronics.  Lets face it we now live in a completely wired world.  Access to the outside world from home is essential for our jobs and for our personal lives.  Can’t live without it.  Therefor it’s essential we are connected to the Web from our homes at all times.  Most of our home security systems are now connected to emergency centers via the web or minimally phone connection.  Therefore our personal home security also depends on connecting to the outside world.  Within the home most of us have set up some form of a network for all devices to communicate with each other, share components like printers and connect to the outside world.  All this stuff needs to work properly and around the clock.  If you’re like me (in this business) you love setting this stuff up, getting it all working and maintaining it.  I love it!!  The more problems the more fun I have.  That is until there’s a problem I can’t fix.  Yikes!  then it’s not fun for me or those members of my family who now can’t do their homework (all in the cloud) or my wife who can’t complete her report cards (all on school servers).  If you’re going to do this yourself be sure whoever does it devotes the needed time to train the rest of the family how to use it and how to recover from the common problems likely to crop up.
5. Non essential electronics.  Stuff like the TVs and related AV equipment, video game consoles and other pure “entertainment” devices.  This is very painful for me to say but it’s not the end of the world if I can’t watch the Knicks and Jeremy Lin tonight.  Painful – yes, the end of the world – NO.  These are all things that need to eventually get fixed but can usually wait for the time or the skills to arrive.
6. Outdoor items and systems.  This includes gutters, downspouts and drainage.  Irrigation systems, pools, spas, BBQs, etc.  All stuff that will break and some which requires regular maintenance.  Anything that involves water should receive special attention.  Neglecting gutters can lead to water runoff that leads to ground erosion and damage to the house foundation.  Neglecting the irrigation system can lead to leaks and excessive watering running up your water bill and wasting scarce water.  Irrigation leaks can also lead to ground erosion and foundation damage.  Same applies to Pools and Spas.  Faulty BBQs can lead to fires.  We have 3 friends that have had major fire damage caused by problems with their BBQs just in the last 5 years.
7. Miscellaneous indoor issues.  There is an endless list of other things in the home that will need attention.  Tuning piano, fixing squeaks, doors, windows, painting, cabinet doors, chipped counter tops, burned out light bulbs.  The list goes on and on.  Many of these issues you can tackle yourself if you like this stuff.  But in many cases you simply need a “handyman” on call to be working through a list of small non time critical issues.  Having a good relationship with a skilled handyman is essential.  When a problem does not fall into any of the 6 categories above this is the person you call.  If the handyman (or woman) is really good they may be able to tackle some of the issues in 1 to 6 above but don’t make it a requirement.

Okay, so what do we do about all this?  Step number one is to build a contractor list.  Needs to include the following (Contact number and name, email and emergency number):

Note: don’t just merge them into your primary contact DB.  When you need to you will not likely be able to find them.  make this a separate contact list.

1. Plumber
2. Electrician
3. HVAC maintenance and repair (including solar if you have it)
4. Appliance service – Find a service provider that services all the brands of appliances you have in the house.  Hopefully you can find one that covers all the brands you have but it may take 2 or 3.  They must be trained and authorized to service the brand appliances you have.
5. Tech geek from somewhere like Geek squad or a neighborhood kid that really understands this stuff.  Further on in this blog I will talk about some simple fixes that cover multiple problems but you should have a backup in case you can’t get it working.
6. AV service company that services Entertainment gear.  Often this same service company will do security systems.  No need to go to an ADT anymore for home security.  We use Trojan Systems in CA.  They started on the new modern technology platform and do a great job with security and all in home electronics.  Oh by the way they’re 30% less expensive than ADT just for home monitoring/security.
7. Garage Door Maintenance and repair.  Most garage doors weigh upwards of 500 lbs.  When the opener breaks you’re often stuck unable to open it.  This can be a problem.
8. Pool/Spa maintenance and repair
9. Car maintenance – Either the Dealership or a local Auto Mechanic
10. Small engine repair – There are service shops that will make house calls to maintain all small engine items like lawn mowers, leaf blowers, snow mobiles, boat engines, etc.
11. Handyman
12. Gardener
13. Housekeeper

Step #2 is to build a list of all items that require regular maintenance (The list should include the Item description, Date purchased, Date last serviced, Brand, Model number, Serial number and Warranty information):

1. Cars
2. HVAC & Water Heater.  Make a note as to whether each is Electric or Gas.  You would be shocked how many people don’t actually know.
3. Appliances
4. Small engine items
5. Pool equipment (Filter, heater, etc.)
6. Garage door opening systems
7. Renewable energy systems (i.e. Solar systems)
8. Include simple use instructions for things you don’t use regularly like how to program the HVAC thermostat or how to set the home security system.

Step #3 is to build a maintenance Schedule:

1. Cars.  My rule of thumb is “light on” plus 3K miles.
2. HVAC & Water Heater – Every two years until 10 years old then every year.  Watch your gas bill for evidence of leaks.
3. Appliances – Once every 3 to 5 years
4. Small engine items – Once every 2 years
5. Pool/Spa equipment (Filter, heater, etc.) – once per year
6. Garage door opening systems – once every two years as long as you go around and tighten up all bolts every 6 months.
7. Renewable energy systems (i.e. Solar systems) –  once every 3 to 5 years.
8. Gutters and downspouts – Gutters cleaned out once per year.  Downspouts every two or three years.
9. Irrigation system checked once per year.  Watch your water bill for evidence of leaks.
10. Set a schedule to replace HVAC air filters – At least every 6 months and best every 4 months if house being used regularly.  If it’s a house not used regularly adjust according to use.
11. Set a schedule to replace Smoke detector batteries.  If you use the 10 year life 9 volt batteries plan on changing them every 6 years.  If you use the regular 9 volt batteries plan on changing them every 2 years.  Take one year off each of these estimates if you want to be 100% sure you’re not awaken in the middle of the night by one Chirping at you.

Step #4 Maintain a list of all other items that don’t require regular maintenance for warranty purposes and home inventory purposes:

Note:  Most of these items will likely just get replaced rather than fixed or maintained.  Many break during warranty and should be at least partially covered.  This includes AV equipment, iPods, smart phones, tablets, WiFi routers, printers, etc.  Even includes most computers.  I counted 54 items in our possession that came with a warranty.  Guess how many of those warranties I could locate?

(The list should include the Item description, Date purchased, Location of purchase, Brand, Model number, Serial number and Warranty information):

1. All electronic devices.  Anything that needs to be plugged in to charge should be listed.
2. Athletic equipment
3. Furniture
4. Art
5. Musical instruments
6. Collectables like Wine, coins, art, etc.
7. Miscellaneous items costing more than you want to just throw away if it breaks.

The aggregate of these item inventory lists will make up your home inventory required by most insurance companies should you need to file a full loss claim against your home owners policy.

I’m going to conclude this post with some random tips to help in managing the myriad of problems that come up when thing break:

1. If you KNOW you can fix it yourself do it.  If you’re not sure, call in the specialist unless you have significant amounts of time on your hands.  At least 3X the amount of time you think it will take to fix it.
2. Gas related problems.  Most often it’s the pilot light that’s gone out.  Many times just because condensation builds up in the gas line and eventually puts out the pilot light.  Each appliance is slightly different so it’s best to consult the manual but in general you will need to cycle the gas control by first turning the gas knob all the way up then immediately all the way off and then to the pilot light setting and try starting the pilot light.  My experience (limited to my own home) is that this solves it 90% of the time and no call to the plumber is needed.  If this does not work don’t mess with it and call in the plumber.  Be sure the gas control knob is off when you give up on the Pilot light fix and are calling the plumber.
3. All electronic devices that contain computer chips.  This includes laptops, smart phones, networking equipment, internet access devices like cable modems, printers, etc.  The quickest and easiest way to solve most problems is to restart them.  Soft restart first then power cycle restart where you are certain all power is shut off to the device before restarting it.  This means removing all batteries as well as unplugging it from the outlet.  This is particularly important with devices that have battery backups like cable modems also providing phone service.  I would suggest that at least once every 6 months you go around the house and shut off every electronic device and then go back around turning them all back on one at a time.  Computer equipment is very temperamental and over time just accumulates bad habits.  A full reboot is needed on a regular basis to flush out these bad habits.
4. General Plumbing.  As I noted below this is one area I simply don’t mess with.  Call in the expert.  Water can cause a lot of damage very quickly.
5. Electrical problems.  check the obvious GFI button to be sure it hasn’t tripped.  Bathroom items like hair dryers can trip it easily.  Then go to the circuit breaker and see if its flipped in the opposite direction of all the others.  If it has flip it back over and see if problem is solved.  Anything beyond these two easy fixes call in the professional.  Touching the wrong wire at the wrong time can be devastating.  Unless you really know what you’re doing to go there.
6. Small engine problems.  Usually something won’t start.  First make sure you’re following the right startup steps.  If you don’t use the thing very often there might be one more switch you need to slide over to set it properly for starting.  Might be an engine shut off or fuel line shut off valve.  Make sure you’re using the choke properly.  Consult the directions.  Often a piece of equipment you don’t use regularly.  Next place to look is the gas.  Gas goes bad in 30 to 90 days depending on the engine’s sensitivity to gas gone bad.  Drain the gas and put in fresh gas.  Not the gas from the same can that’s been sitting there for 6 months.  It goes bad in the can just as fast as in the engine tank.  If this does not solve the problem then clean the spark plug or replace it.  If it’s still not starting you might change the oil.  If none of these gets it going it’s time for service.
7. When trying to make adjustments to major appliances like say the Fridge, consult the directions carefully.  Don’t just start pushing buttons assuming it’s obvious how these things should be adjusted.  All instructions are now online and if you built your list of appliances properly (as detailed earlier in this post) you will have no problem finding them online.  In fact you’ll find them much quicker than going into a filing box somewhere in the garage that may contain the original instruction manual.  When you do find them bookmark them in a folder of bookmarks appropriately marked.

It’s my firm belief that how you go about fixing things that you know will eventually break has a lot to do with your overall stress and anxiety level and filters into many relationship dynamics in the family.  Take this stuff seriously!  More to follow…

All comments welcome.  Sorry about the length of this one.

Read Full Post »

First in the Series – Insurance

If most of you are like me you do a fairly detailed evaluation of Medical Insurance when you join a new employer and all other types of insurance when you change brokers.  From then on you check back in fairly infrequently if at all.  You just pay the premium each year or 6 months as it’s billed.  I remember the feeling each time I received the premium notice wondering is this a fair price?  Did it increase from last year?  What am I really getting?  am I properly insured? Am I able to recall the details of each policy?  am I utilizing the insurance optimally?  I would then start to dig through the paper files and quickly sigh a big groan and give up due to more pressing issues needing my attention.  I would then just pay the premium and move on.

Lets start with Health care Insurance.  If you joined your current employer 5 or 10 years ago and if your insurer is Blue Shield of California (as mine is) they’ve probably changed plans on you at least 3 or 4 times.  They seem to be randomly experimenting with new plans each year and terminating old plans that don’t meet their profitability hurdles and introducing new plans that better meet their interests (not yours).  The general type plan (HMO v PPO) may still be the same but the details have changed considerably.  Are you in touch with these changes?  I doubt it.  I wasn’t.  In the 5 to 10 years since you joined your employer and last looked at the details of your plan, your family needs have likely changed considerably.  Heck you and each member of your family is 5 to 10 years older.  When you and your spouse are in your 20’s and 30’s you’re most likely active and healthy.  Not on many if any prescription drugs.  Not yet having knees scoped and rotator cuffs repaired.  The kids are young and only needing the odd antibiotic for ear infections and regular pediatrician visits.  Now that you’re in your 40’s and 50’s the knees are wearing out, the shoulders are freezing up, the kids are all in braces and there are lots of prescription drugs now being taken regularly by all members of the family.

The key question to ask first is whether or not your current plan really matches your current needs?  As one example, prescription drug costs are a big deal as you get into your 40’s and 50’s and the kids into their late teens and early 20’s.  If you’re like me 10 years ago I never even paid attention to the Prescription drug aspect of the plan I chose.  Now I scrutinize it carefully.  I make much more use of Generic drugs than in the past.  If there is a generic alternative it can save you 70%.  I now make full use of the Blue Shield Mail order pharmacy which saves you another 33% to 50% and after getting over the start-up hassles is much more convenient.  The retail cost of all the prescription drugs we use annually in our family is well over $12,000.  We’ve now got that cost to us down to around $2,500/year.  You will be surprised how quickly it adds up.

Another aspect of Health Care insurance is more philosophical.  Do you view it as protection only against major unexpected medical expenditures or do you view it as an overall protection against all types of medical expenses.  It’s kind of like the “sleep at night factor” v “I’m willing to pay a predictable $X amount of money each year to cover all medical costs”.  Where you fall in this spectrum will dictate what sort of plan best suits your needs.  If you just want to protect against the big expenses.  The big $100K emergency surgery then a plan with a high deductible but lower premiums would suit you better.  You won’t get reimbursed for the small stuff as you may not even hit your deductible level in an average year but you’re protected against the big one.  On the other hand if you view health care as your god given right and you expect insurance to cover essentially all of it then you will be looking at a differently structured plan and will certainly pay more for it.  Going this way you can rest assured that all your expenses will be covered by the plan and your cost will predominantly be the cost of the insurance.

This may be obvious to all of you but the list below details the really important aspects to pay attention to when selecting and using your health insurance:

1. Annual deductible.  These can range from $0 to $5K or $10K per family.  This is the amount of medical expenses covered under the plan that you must pay out of your pocket (or a Health Savings Account pocket) before insurance kicks in and starts paying.  Even though you know you’re still short of your deductible make sure all medical expenses are still processed through your insurer so you get the proper credit towards the deductible.  May seem obvious but you would be shocked how many people overlook this aspect.  Particularly when you have teenagers handling their own medical affairs.
2. % coverage or co-pays.  Once the deductible is reached your insurance will then cover a percentage of the cost of the medical service you receive or you will pay a fixed $ co-pay with each treatment or drug purchased.  These percentages and co-pay amounts vary by type of service or drug being purchased.  These will also vary by in network or out of network.  Brand or generic drug.  Type of medical treatment.  Etc.  Pay special attention to this area.  Can get very complicated.  In my opinion Insurance companies deliberately make it complicated to confuse the consumer.
3. Limitations.  All policies have limitations as to what they will cover per year.  Read the fine print.  There are $ limitations, number of treatment limitations, etc.  When you unexpectedly hit these limitations as I did following shoulder surgery with the limitation of Physical Therapy sessions it can get very costly.  Cost me $2,500 out of my own pocket before I learned I had gone over the PT session limit.  With the lag in time it takes insurance companies to process claims and the fact the medical care service provider is not incentivized to notify you when you reach the limit, you can go well past the limit before you realize it.  You must know the limitations in the policy you choose.  Also keep track of when you have more to go towards the end of the year on a category limitation and if possible take advantage of the $$s left and take a treatment in the current year rather than postponing to the next year.  Having old tooth crowns replaced is a good example.
4. Dental and Vision.  Don’t forget about these components.  Most Medical plans offer or include Dental and Vision.  If you have not reviewed the details of your current plan you might be surprised to find out the new coverages now included.  10 years ago it was unusual to find Orthodontist or contact lens being covered.  Now it’s pretty common to cover some ortho and some contact lens purchases.  Many vision plans will also cover Lasik up to tight limits.  I neglected to spot this change and went 3 years not claiming any of these benefits.  Cost to me was over $5,000.

Now lets turn our attention to the other types of insurance.  Home, Auto, Life, Umbrella Liability, specialty (i.e Earthquake).  I’m going to skip small business since I truly know nothing about it.  Personally I’ve now concluded it is both economical and obviously more convenient to bundle all these together with one carrier.  I use State Farm (despite  their insistence this Internet thing never really happened.  they are far and away the most backward company when it comes to using technology!).  I know people who use different carriers for different types of insurance and find it works out better but my analysis has consistently shown the bundled approach to be superior.

The same philosophical issue I talked about with regards Medical applies here.  Are you trying to protect against the BIG $$ unexpected expenses or are you trying to buy insurance against all insurable expenses.  I’m much more in the former category.  I carry large deductibles on both home owner and Auto and pay lower rates and rarely file any claims.  We view our cars as very utilitarian.  As long as the safety of the car or the operability of the car is not effected we don’t worry about it.  They’re not pretty but we don’t worry about it.  We also pretty much “use up” the cars we buy.  We’re definitely long term buy and hold Car buyers.  Same pretty much goes for homeowners insurance.  We only protect against the big expense item.  Fire burns down the house, major flooding damage or major theft.  The smaller stuff we essentially self insure through lower rates.  We have also chosen to self insure for life (death) insurance through savings.  What we would have paid in for life insurance payments we simply put away each year into savings.  I’m no expert on life insurance but it seems to me the days of using life insurance as an investment vehicle are long gone.  Umbrella liability insurance is in the category “sleep at night”.  It’s relatively inexpensive (obviously because it’s rarely needed) and in my opinion is worth having.  The range is from $1M to $10M on average.  If bundled with Car insurance it is very affordable.  It’s primary purpose is to cover liability resulting from auto accidents that exceed the auto insurance limitations for liability.  Also covers liability for accidents in your home and elsewhere but in my understanding the primary application is Auto.

The combination of the deductible and the max coverage limitations when taken together make up the bulk of what you will pay in premiums.  Applies to Home and Auto (along with boat, motorcycle, etc.) equally.  Think about your aggregate premiums over 10 years and weigh against what your insurance value is likely to be and decide what your comfortable losing.  Everyone sleeps at night better according to different rules.  You simply need to figure out where you fall on the spectrum of fully insured against everything v only insuring against the BIG one.  There’s some analysis needed to frame this but it really comes down to a risk comfort decision.  I would suggest reviewing your policies to remind yourself what’s in there annually and reviewing the premiums v alternatives every 2 or 3 years.  Keep your broker honest.  He feels you’re locked in as the switching cost to go to another broker/carrier is high.  Lots of paperwork and hassle to change.

Some small tips:  If you have teenage drivers in the house make sure you utilize the good student discount.  The bar is only a 3.0 GPA.  If they have an accident or get a ticket don’t file the claim for the accident and make sure they take the driving school (offered online now in CA.  Not sure where else it’s available) to have the ticket scrubbed off their record.  Kids getting in accidents or getting tickets really hurts!!  Pay particular attention to which driver you designate as the primary driver of each vehicle you have as this can have a significant impact on the overall premium.  If the child is away at college and not driving any of the cars much if at all be sure to change their status with your insurer as this will also bring down your rates. If  you’re looking into Earthquake insurance make sure you completely understand the policy you’re getting.    Note that if there’s an earthquake and a fire starts and burns down you house that’s one type of insurance needed.  If the earthquake causes a Tsunami and the flood wipes out your house that’s another type of insurance.  If the shaking from the Quake brings down your house that’s straight up Earthquake insurance.  Very complicated and worth understanding thoroughly if you live in earthquake country like we do here in the Bay Area.  If you are converting a house from your primary residence to a rental property as many of us have done who recently moved and could not sell our old house, be sure to note you will now need “renters” homeowners insurance which is a different policy from the one you had when you were occupying the house yourself.  It’s basically the same coverage as before but will cost you 25% more.  Why?  Because the insurance carriers can get away with it (in my opinion).  If you don’t make this change you might find you’re not insured should something happen while you’re renting the property.  (placeholder note here for a future blog on the advantages of converting your prior primary residence to a rental property for 3 years in these economic times)

One final category of insurance I’ll just mention here is Warranty and product recalls.  Do you know that the major insurance carriers that underwrite this category of insurance assume up to an 85% breakage.  That is to say they assume 85% of the potential claims against warranties are never filed.  A future blog will discuss this issue and what you can do about it.

All thoughts and additional ideas and experiences are welcome.

Read Full Post »

Reducing STRESS in the busy complicated Life one step at a time

The last 30 years of my professional and personal life has been spent adding, building, complicating, growing, driving towards goals, always looking forward and rarely looking back.  I’ve spent 25 years working for High Technology start-ups (10 as CEO of two of them), 7 years as a Partner in a Venture Capital Firm, 9 years on the board of a private preK through 8th grade school (6 years as the Board President), served on 14 different private company boards and one public company board.   I’ve been married for 22 years and have 4 daughters ages 21, 18, 16, 13.  I try and stay in good physical shape by spending at least 2 hours/day in the gym or playing squash.  I try and get in at least 50 rounds of golf each year.  I’ve coached each of my daughters in at least two sports now collectively over 40 seasons.  My wife has now gone back to work teaching 5th grade locally here in the Lafayette Schools.  She has 30 kids in her class and just 4 hours of classroom assistance each week.  If you’re doing the math, you quickly see this all adds to much more than 30 years worth of time jammed into the aforementioned last  30 years.

6 months ago I cut back to just one job (VC Partner at Pond) and one coaching assignment (7th grade girls basketball team).  No other corporate boards, no more school boards, no golf (ugghh!), 2 daughters off to college (much less drama in the house).  Wow!  I now have so much time on my hands.

This blog is about what I’ve been using that time to do.  I’ve been systematically going over all aspects of our family life looking for ways to recover from years of neglect in two areas;  The first is economic.  Simply from neglect and lack of time and access to the right information I’ve found we are  systematically overpaying for almost everything.  Second is general life efficiency.  Finding ways to avoid time wasting tasks and make life’s mandatory mundane tasks much easier and less stressful to accomplish.

As I’ve been tackling each area of our life and talking to friends about my findings I’ve discovered I’m not alone!  In fact I think I’m more the norm than the exception.  All this would not be an issue except that it all seems to lead myself and just about everyone I talk to one major conclusion.  This overcharged lifestyle and the feeling of being continually out of control and  financially ripped off leads to massive amounts of STRESS and all sorts of resulting side effects.  I’ve realized this connection in my family’s life so I set out to tackle it piece by piece.

Over the next couple months I intend to publish through this blog my findings as I explore and to some extent solve each of these areas of life.  To give you a flavor of some of these areas I’ve already explored and will be writing about shortly please see the list below:

Financial planning:  Not in the investment sense but in the “retirement” sense.  Under varying scenarios am I secure financially.  What can I afford?  What am I worth?  Should I be concerned?  If I need to be concerned how big is the problem?

Insurance analysis:  Do I really understand the insurance coverage I currently have?  What insurance coverage do I need?  What is a fair price to pay?  am I utilizing all types of insurance properly?

Wills, Trusts & Estate:  Do I have a Will?  Do I have an appropriate living trust?  What other Trust vehicles do I have in place.  do I understand what they imply?  Are they current?  Do I have a written plan or set of instructions to the designated trustees should I not be around to explain my intentions?

Debt analysis:  Have I optimized my debt vehicles?  Should I be refinancing my mortgage loan?  Do I actually understand my mortgage loan?

Family records:  Important documents like SS cards, birth certificates, Passports, drivers licenses, etc.  Medical records, school records for the kids.  Do I have these all and are they organized so I can find them easily when needed?  Home property inventory including collectables like Wine collections and coin collections.  These are needed for insurance purposes along with net worth calculations.

Warranty and recall tracking:  did you know that up to 85% of all legitimate warranty claims go unclaimed by consumers?

Monthly money saving opportunities:  Cell phone service package, TV/Phone/Web service package, energy saving, maintenance savings.  Many others.

Security:  Home security, online security, emergency plans, identity theft protection, action plan when wallet stolen, credit score, etc.

Family scheduling:  Chores, to do lists, daily events, vacation planning.  All about efficiency.  No more needless spontaneous trips to school because you child forgot his lunch, anxious tense moments when you realize someone is double booked and neither can be cancelled or disappointment when an important event was missed.

Fix it:  Lets face it the more stuff you have the more stuff breaks.  Fixing things that break is wrought with waste and frustration.  Knowing how to fix the simple things and knowing who to contact to fix everything else is crucial to not spending all your time in this area.

The list goes on.  I think you get the point.  In the coming months I plan on publishing what I’ve discovered and what I’ve been doing about these and numerous other issues which has all lead to a greatly reduced level of stress.  I look forward to generating an active dialog on these topics with new ideas for how to address these issues leading to lower levels of STRESS!

All comments and new ideas are welcome!

Much more to come…

Read Full Post »