Covering the Costs of Alzheimer's Disease

Guest blogger Lydia Chan runs Alzheimer’s Caregiver, a resource for those who have been thrust into the position of caring for a loved one who’s battling Alzheimer’s.

Covering the costs of healthcare is never easy. But when it comes to planning for long-term care, it can be downright overwhelming. Many seniors find themselves in difficult situations after retirement and have to look for ways to raise funds in a hurry after a health scare or hospital stay. It’s important to do some research on the costs of long-term care, especially after an Alzheimer’s diagnosis. Being well-informed will help you stay on top of your finances—both now and in the future—and will ensure that you aren’t left scrambling for funds in the event you do require expensive care.

One of the keys to researching the costs of Alzheimer’s care is to make sure you’re well-informed on your insurance policies, including Medicare and Medicaid. These programs can help significantly with covering the costs of healthcare, but they don’t cover everything. Some treatments and types of care can run into the thousands of dollars very quickly.

Look for help

There are many programs out there specifically for seniors who need help paying for treatments, medicine, and medical bills. Do some research on the best ways to get assistance. Most of these have strict requirements regarding income level, age, and health status, so it’s crucial to ensure you have all the information you need ready to go when you inquire about getting help.

Figure in out-of-pocket costs

Even with Medicare or Medicaid, the costs of medicine and some treatments can be astronomical. Do some research online to find out how much you’ll be responsible for when the time comes to start treating the disease, and look for specific numbers in regards to medication and prescriptions. In some cases, the type of medicine you can get is dependent upon your insurance, but there may be a similar treatment that has a generic alternative.

Look into padding your savings

If you’re worried about racking up medical bills that you’ll be unable to pay, consider looking into a reverse mortgage, which will allow you to free up some cash in a short amount of time. There are many horror stories out there about reverse mortgages, but if you find a reputable lender who knows what they’re doing, they can guide you through the process without stress. Shop around for the best company for your needs; you can start with this list provided by Consumers Advocate.

Get educated about Medicare

Medicare can be invaluable to seniors in many ways. However, as with any insurance policy, it can be difficult to understand. Make sure you know all the details of your own policy and find out what it will cover in the event you have to stay at the hospital or in a long-term care facility in the future. In many cases, Medicare will only pay for about 100 days of a nursing-home stay, and only gives limited coverage on medicines. Read up on their policies and, if possible, talk to someone who can help you create a plan.

Covering the costs associated with Alzheimer’s disease can be stressful and overwhelming, especially if you’ve recently lost a partner or spouse. Just remember that you are not alone; there are many companies, programs, and people out there who can help you figure out how to take care of your future. Practice self-care as often as possible so stress and anxiety aren’t an issue. With a good plan, you can ensure that your diagnosis doesn’t define you.

Intellectual Dishonesty & Investing: A Lesson from Kanye West

Almost everybody on your TV is lying to you…and they don’t even realize it.

In February of 2018, FoxNews host Laura Ingraham took exception to Lebron James and Kevin Durant criticizing Donald Trump.

Ingraham said, “It’s always unwise to seek political advice from someone who gets paid $100 million a year to bounce a ball. Lebron and Kevin, you’re great players, but no one voted for you…so keep the political commentary to yourself, or as someone once said…shut up and dribble.”

Ingraham was vilified throughout the media, castigated for being a white woman who would tell a couple of black men, “Hey, just do your job…we don’t care about your opinion on politics.”

Fast forward to just a few weeks ago when, on Saturday Night Live, Pete Davidson weighed in on the fact that Kanye West had aligned himself with Trump: “Kanye is a genius, but a musical genius. You know, like Joey Chestnut is a hot-dog eating genius. But I don’t want to hear Joey Chestnut’s opinion about things that aren’t hot dog related.”

So this is the same thing, right? A white guy telling a black guy, “Just stick to what you’re good at and keep your political opinions to yourself.”

But for some reason, there was no media outrage this time. Davidson was a cultural hero, a comedian who could so poignantly verbalize what everyone already thought.

Speaking of Kanye, his recent White House visit made a few headlines. After he regaled the gathered media with a litany of bizarre thoughts and no shortage of profanity, MSNBC’s Velshi & Ruhle wore out their fainting couch, calling his visit to the Oval Office “an assault on our White House.” This was the same Oval Office, mind you, where their hero Bill Clinton got oral sex from an intern a couple of decades ago…but sure, it was Kanye’s language that sullied the dignity of the place.

Meanwhile, let’s head over to FoxNews and see what Sean Hannity had to say about Kanye’s visit…

“What’s wrong with what he’s saying? What’s wrong with more jobs? What’s wrong with safe neighborhoods? Kanye is realizing that the Democrats had eight years and they had a failed agenda. Look at what’s happening. The Trump agenda is creating a future for the forgotten men and women in this country.”

But contrast this with what Hannity said in 2011 when he was clutching his pearls after another rapper, Common, visited the Obama White House:

“It baffles me that this is a person the White House chooses to set as an example for our kids…this is inappropriate for a President and he goes back to his radical roots again and again and again.”

You’ve gotten the point by now, but allow me one final Kanye indulgence, because it’s just too perfect. Kanye’s visit with Trump took place in the immediate aftermath of the Florida panhandle being devastated by Hurricane Michael. Which is amusing, because Trump tweeted this in 2012:

“Yesterday Obama campaigned with JayZ & Springsteen while Hurricane Sandy victims across NY and NJ are still decimated by Sandy. Wrong!”

So what’s the point of highlighting all of this hypocrisy and goalpost-moving all across the political spectrum? The point is that all of these people, more than likely, don’t even realize that they’re not being truthful with you in presenting their analysis.

You can call it whatever you want…double standards, intellectual dishonesty, confirmation bias. The bottom line is that as humans, we’re wired to continue believing what we already believe, and then look around for things that seem to support our way of thinking.

So if this is a problem in the political realm (as well as in religion, sports, and culture in general), doesn’t it stand to reason that it would be a problem in the financial world too? Here’s a few examples of cases where a financial advisor might suffer from intellectual dishonesty without even realizing it…

1) Suppose you have the option of taking a lump sum buyout on your pension or just keeping the monthly lifetime payout. Your advisor is certain that you’re better off to take the lump sum, invest it, and then create an income from those investments. He might be right. But it’s also possible that he’s been conditioned to believe that you should always take the lump sum no matter what (because his firm can’t make any money off of that money if it stays in the pension plan).

2) You have $125,000 in the bank and you owe $55,000 on your house. You’re wondering if you should just pay off the mortgage. An advisor tells you not to pay off the house, instead you should take that money and invest it because, with interest rates so low, you can make more money by investing than you’ll lose by paying interest on the mortgage. Again, he might be right. But again, it might be possible that he’s been conditioned to believe that you should never pay off your house (because, again, it doesn’t profit him for you to get rid of your mortgage payment).

3) An advisor tells you that your current _________  is inferior and he has one that’s better. You can fill in the blank with anything…mutual fund, annuity, life insurance policy, REIT, etc. He might be right, his might be better. Or it’s possible that his company has sold him on the benefits of their product for so long that he’s no longer able to see any downsides to it and believes that it trumps anything else on the market, regardless of whether or not that’s actually true.

So how do you avoid being lied to by an advisor that doesn’t even know he’s lying? You can start by looking for a few things…

Independence: Is the advisor able to make his or her own decisions, or does he work for a big brokerage firm (that likely tells him what he should or shouldn’t sell)?

Understanding gray area: Does the advisor understand that most issues aren’t black and white and that there’s some gray area to explored? Or does his sales pitch highlight only the bad things about your current situation while explaining only the good things about his approach?

Listening ability: Does the advisor ask probing questions to get to the bottom of your situation, or does he just look at your account statement and say, “Here’s what you need to do” without any deeper exploration?

Ability to articulate convictions: If an advisor feels strongly about what you should do but you have questions about it, are you able to get a direct and thorough answer, or does the answer sound more like a rehashing of the sales pitch you’ve already heard? If you present an alternate scenario, is the advisor able to entertain the thought, or does he dismiss it immediately?

The bottom line is that it’s actually really hard to operate successfully as an advisor that truly has the best interest of the client in mind. But it’s important, necessary work, and there are people who can do it effectively. Just be aware that they usually don’t work for a company with a nationally-recognized brand name.

The Stock Market Hurricane

If you’re not a news junkie, maybe you haven’t heard about this…but there’s a hurricane headed our way. And like most things in life, there’s an investing lesson to be learned here.

There are three conditions that have to be present for a hurricane to form.

1) Warm water

The storm can only develop over water that’s at least 80 degrees. Warmer water means increased evaporation from the ocean’s surface, which creates the necessary moisture in the atmosphere.

But the warm water also has to go deep enough; that 80 degree water needs to run at least 200 feet deep. Hurricanes don’t form in May or June because even though the surface of the water might be warm enough, the warmth doesn’t go deep enough. But throughout the summer months, the water slowly starts to heat up from the surface down, and by the end of summer, the conditions are ripe.

2) Little to no wind shear

Another important factor is the absence of wind shear, which is the difference in wind speed or direction over short distances. If the wind off the coast of Senegal is blowing west but the wind over Cape Verde is blowing south, while the wind off Sierra Leone is also blowing south, but at a different speed, that would indicate strong wind shear. Not ideal conditions for a hurricane to develop.

3) Cooler atmosphere

Finally, the air in the atmosphere has to be significantly cooler than the air at the water’s surface. The rapid cooling of water molecules as they evaporate allows for condensation and quick development of cloud formation in the storm wall.

Unless you have all three components—warm water, little to no wind shear, and cool atmosphere—you won’t find hurricanes forming.

In many ways, the birth of a stock market crash is similar.

Generally speaking, for a stock market crash to occur, we also need three factors to be present…

1) A long period of rising prices and economic optimism

Except for a very slight downturn in 2015, stock prices have done nothing but go up since March of 2009. Some analysts have classified this as the longest bull run in history. Others consider 2015 to have been a slight bear market, so they see it more as a two average-length bull markets with a small bear in the middle. Either way, the last decade has been a long upward trajectory.

As for economic optimism, there’s actually a polling group that created an index to measure this. In August, that index hit a 14-year high, meaning that people feel better about the economy right now than they have since John Edwards was getting $400 haircuts while he ran for Vice President alongside John Kerry.

2) P/E ratios much higher than long term averages

Understood simply, a high P/E ratio usually means that people are really excited about a company (so the stock price is high) even if the profits aren’t there to back up that excitement.

So when P/E ratios are high across the board, that means lots of people are excited about investing in many companies that aren’t necessarily profitable enough to justify that enthusiasm.

The combined P/E ratio of all stocks in the S&P 500 in September is almost exactly 25.

The average P/E ratio of the last 20 years? About 24.6.

3) Extensive use of debt.

According to the federal reserve, the average American household carries the following debt:

Credit card: $16,883
Auto loans: $29,539
Student loans: $50,626
Mortgages: $182,421

Meanwhile, the median household income is about $60,000. So yes, as a country, we’re heavy on the debt right now.

So where does that put us on our Stock Market Hurricane Score Card?

Two of our conditions are definitely present—a long period of rising stock prices and enthusiasm, and extensive use of debt. But we’re not in bad shape on the P/E ratio metric.

Now, the P/E ratio metric is one that can rapidly change, especially if something goes horribly wrong with some of the major players in the market—Apple, Google, Amazon, Facebook, etc.

So based on this analysis, it’s not wise to buy into any doomsday predictors who tell us that the next market crash is imminent. But it’s also wise to note that the right conditions could develop at any moment.

The water is warm and deep, and the atmosphere is cool. Right now, the wind shear is in our favor, but if that changes…look out.

Unhealthy Financial Foods

Depending on who you ask, you might get varying opinions about whether a certain food is good for you.

Are eggs good or bad?

What about butter?

Milk?

Red meat?

Red wine?

But there are certain foods that anybody with half a brain will agree aren’t good for you. And believe it or not, we can find a lot of those unhealthy foods represented in the financial world…

Empty Calories

Empty calories are the ones that add calories to your diet but no actual nutritional value. Soft drinks, candy, chips, pastries, and frozen desserts would all fit the bill here. They’re problematic because they make you feel full so you don’t have room for foods that actually give you the vitamins and minerals that you need.

Consider these two different meals:

1) McDonald’s Quarter Pounder deluxe, medium fry, and 20 oz Coke.

2) Grilled chicken breast, avocado toast on whole wheat bread, a fruity protein shake, and Pascha dark chocolate for dessert.

Both meals give you somewhere between 1100-1200 calories. The first meal provides you virtually no helpful nutrients, other than a little bit of protein in the Quarter Pounder. But the second meal is high in potassium, phosphorus, zinc, iron, magnesium, copper, protein, fiber, vitamins B and C, omega 3 acids, beta-carotene, and riboflavin—all for the same number of calories!

In the financial world, empty calories come from that 75-page financial “plan” that you get from the big brokerage house.

Most of those pages aren’t customized to you, and they don’t really provide any true advice. Once you sort through all of the pages that are just boiler plate filler and disclosures, you’re left with just a couple of pages that actually give you some analysis that’s actually related to your situation. And most of that analysis isn’t even that accurate.

So you’ve added a lot of “paper calories” to your file cabinet’s diet, without any real tangible benefit. But you feel like you’ve accomplished something because you have this 75-page document, so you don’t really push any further to get a true plan in place for yourself.

It’s no different than eating the McDonald’s meal and feeling full, so you don’t feel the need to eat anything else to give you the nutrients you need.

Added Sugar

Several months ago, a neighbor was cleaning out their pantry in preparation for a move and asked us if we wanted some of the canned goods that they needed to get rid of. Sure, why not—who turns down free food?

As it turned out, most of the cans weren’t things that we’d actually eat, and we ended up purging most of the cans from our own pantry a few weeks later. During the purge, we noticed the ingredients on a can of tomato soup. The first ingredient, to no one’s surprise, was tomato paste. But the second ingredient was high fructose corn syrup.

I’m sorry, tell me again why we’d want sugar in our tomato soup?

Well, we don’t. But most food companies are just trying to fill the can the cheapest way they know how. This often means you get a lot of sugar in foods that don’t seem like they should warrant a high sugar content.

A lot of fruit juices are bad about this too. They even go out of their way to market themselves as a healthy option, but when you really study the ingredients, you find out that most of them have an absurd amount of added sugar.

The problem with most “added sugar” foods is that you think you’re eating smart when you have them. Tomato soup, fruit juice, yogurt…at first blush, all of those sound healthy. Very often, they aren’t.

In the financial world, added sugar comes in the form of hidden fees. You might believe that you own a product with very low fees, or no fees at all. But when we take a closer look at that product (either by exploring the prospectus or by calling the company and asking a few very specific questions), we often find that your fees are much higher than you would have guessed (or in some cases, much higher than you were led to believe).

Trans Fats

Usually when you’re consuming trans fats, you’re aware that you aren’t eating healthy. Cakes, pies, cookies, and doughnuts all fall into this category.

Nobody has ever eaten cookies or doughnuts and tried to convince themselves that they were making healthy choices. You know they aren’t good for you, but they just taste so dang good that you can’t help yourself.

In your portfolio, this is the same as having too much risk exposure. You’re 58 years old and you’ve been watching your 401k grow and grow for the last several years. You know the ride can’t last forever, but it just tastes so good to see that account balance keep growing quarter after quarter. You can’t stop yourself from feasting on the risk.

“I’ll make it more conservative once I get to $500,000,” you say. Or $750,000. Or a million. “Just one more cookie and then I’ll start my diet tomorrow.”

But you never do start the diet, the market crashes, and you’re left with the financial equivalent of a diabetic coma.

The good news about all of this is that it’s actually much easier to eat healthy in your portfolio than it is to eat healthy in real life. So there’s really no need to put it off…