May 27, 2009
Dr. Marius Barnard, the creator of critical illness insurance, refers to it as a “marriage between medicine and insurance.”
In this video, Dr. Barnard tells the story behind the creation of critical illness insurance.
See also: What is Critical Illness Insurance?
April 30, 2009
I am a strong proponent of the savings habit. At the personal level, savings are what make your future possible. Savings provide a cushion for the unexpected, such as unemployment or unplanned expenses. Savings give you confidence when you are job hunting. Savings are what retirement is made of.
A look at the larger picture will only elevate the role of savings within a healthy economy. Production — and therefore economic growth — depends on savings. Behind every business loan is a pool of savings. No business could exist if it were not for savings. An easy way to understand this would be to consider a farmer who, instead of putting aside some corn for seed, consumed his whole crop. No seeds, no future crop, no business.
It is important to realize that the economy has severely weakened in large part because the national level of savings has dropped severely. It is a mistake to encourage further spending as the remedy whether personal or government.
Savings are important for all of the reasons I have cited, but it is even more important now as the way to recovery of a healthy economy.
March 25, 2009
John Stossel of 20/20 fame has a way of putting things that sheds light on flawed arguments. In this video, which aired on 20/20 on Friday, March 13, 2009, Stossel reveals how government bailouts of failed companies will not cure the recession, but will lead to further economic problems.
Unfortunately, Stossel falls short of identifying the principles behind bad political decision-making. It is a belief in self-sacrifice (altruism) as the ultimate virtue. Altruism can only lead to ultimate destruction.
Nonetheless, John Stossel does an excellent job of illustrating the fallacy of solving debt problems with more debt.
February 25, 2009
I enjoy watching The Biggest Loser, the TV reality show where extremely overweight contestants compete to lose the most weight. As viewers we get to be a kind of fly-on-the-wall observer of the struggles these individuals endure to gain back their lives. And all drama aside, it is true that life expectancy is shorter for those who are at an unhealthy weight level.
As someone who is passionate about financial security, I see significant parallels between problems with weight and problems with debt.
Contestants on The Biggest Loser (TBL) report that their eating habits grew out of control and admit to overindulgence when it comes to food. On becoming a TBL competitor, their trainers show them not only how to exercise, but how to manage a healthy diet. It would be insane to advise these contestants to eat more in order to lose weight and become healthy.
Now suppose the show was about “The Biggest Debtor” whose contestants were extremely in debt (not very exciting to watch on TV, mind you). No doubt, the contestants would be telling stories of overindulgence with spending. The trainers would be financial advisers who would show the contestants how to budget and exercise balance with monthly cash flow. The winner would be the one who gets out of debt and builds the biggest personal savings.
Professional trainers would not tell a person with weight problems to eat more. Nor would professional financial planners tell a person with debt problems to spend more.
Policymakers need to take a lesson from the trainers of The Biggest Loser: The way back to a strong economy is not to encourage spending, but to encourage savings. A healthy economy requires savings or else it cannot be sustained.
January 19, 2009
Maybe not an entire school, but a teacher in the Greater Toronto Area of Southern Ontario has developed a course, which he hopes will someday be part of the Ontario school curriculum. For now, the course is available as a four-week “money camp,” aimed at children in grades three to six
I hope that his school catches on. I have long held that money management ought to be taught in school. When I was a high school teacher, I included financial planning skills in the grade nine business curriculum. Students were eager to learn and parents were very supportive, often responding with the familiar, “I wish someone had taught me money management when I was in school.”
Read the article that tells the story of this new initiative for elementary students here: valuable-lessons-thespec-09jan10
Quoting the teacher who developed this course:
We think developing our kids into good savers who can handle credit wisely is a good thing.
So do I.
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