A couple days ago my family and I visited the 16 year old son (I’ll call him Matt) of a close family friend in the hospital who was hit by a car while crossing the street. Matt suffered broken bones and a damaged spine. The damage to his spine has made him a quadriplegic.

As I starred at Matt, I realized that I could have easily been his situation. When I was 16 years old I too was hit by a car while crossing the street. I recall when I was hit by the car, the first thoughts that came in my mind was I would die or be paralyzed. Luckily I only suffered broken bones.

Meeting Matt for the first time, I felt an intense sorrow for him. Anytime I would hear of someone becoming a quadriplegic, I would think to myself it has to be one of the worst misfortunes a person could encounter. I recalled the life of Christopher Reeves.

Barring a miracle, Matt will miss out on so much of what life has to offer. I can’t imagine the physical and mental pain a quadriplegic must encounter. His parents will have to take care of him most likely for the rest of his life and will encounter a huge financial impact.

His parents will have to modify their home, purchase a new vehicle to transport Matt and his equipment, purchase a special wheel chair and bed, lifting equipment to get him in and out of bed, a respirator that helps him breathe, not to mention the medical bills.

When I was hit by the car about 25 years ago I learned at an early age how quickly life can change. I often think about all the people who were killed as a result of 9/11. They got up that morning thinking that day would be like any other, only to find out that it was their last day.

It’s imperative that we appreciate what we have and be cognitive not to take anything for granted because within seconds it can be taken away.

I will be praying for Matt and his family!

One way many people get into financial trouble is that they don’t make financial decisions based on what they “need” versus what they “want”.  Yes, we all want “stuff’, but do we really need it!

The recent launch of the Apple iPad had people lining up for hours, even days to be the first to own it.  Most of these people don’t need the iPad, they just want it.  There decision to own the iPad I’m certain is based on emotions and not financial logic.  I’m certain most of these people already own computers and smart phones that already provide most of the features provided by the iPad.  However, with the hype their emotions kick into gear and they think to themselves, “I want that iPad, no matter what!”

If you want to improve your financial situation, you have to start defining what you need versus what you want.   You need food, clothing, and shelter to survive.  You don’t need that expensive pair of shoes, vacation, gadget, or jewelry especially if your financial picture is poor.

Just recently I dropped my cell phone and it broke in pieces.  I wanted to replace it with an Apple iPhone; however, after much research I couldn’t justify the cost.  Currently, I pay $62 per month for cell phone service for 2 phones (for my wife and me).  So we pay $31 dollars each.  On many months we don’t even use all our minutes.  Switching to the iPhone I will have to pay a minimum of $80 per month, which is more than double what I currently pay.  So the question boiled down to do I really need an iPhone or do I just want it.  The answer is I just want it.   

The main reason I want the iPhone is for Internet access.  If I were traveling much for work or didn’t have access to the Internet I could justify getting the iPhone, however, I have access to the Internet most of the day, so my need to access the Internet via a smartphone isn’t needed.

So I decided to hold off on the iPhone and replace my existing phone with a used one I found online for $25 with free shipping versus purchasing an iPhone for about $200 and paying an additional $50 per month for service.  I “want” the iPhone but right now I just don’t “need” it!

If you use social networks such as Facebook or Twitter, be very careful what you post.  The CNN video above is about a couple learning this the hard way.  The girlfriend posted on her Facebook page that she was heading to a concert with her fiancé.  Later hidden cameras ended up catching 2 men breaking into their home.  One of the burglars is suspected to be a Facebook friend of the girlfriend.

It’s shameful that President Obama and the Democrats have worked so hard to reform healthcare and there are so many people still against it.  The people against it, I assume have healthcare insurance and don’t really care about their fellow neighbor who can’t get healthcare insurance because of a preexisting condition or who can’t afford it.   Or maybe they are just diehard Republicans.  However, I’m certain the 32 million people who don’t have health insurance are happy.  Although the healthcare reform bill isn’t perfect it sure is a very good first step.

Below are facts about the Healthcare Reform Bill:

Deficit:

• According to the CBO (Congressional Budget Office), the bill will reduce the deficit by an estimated $143 billion in first 10 years.

Coverage:

• Expands coverage to approximately 32 million Americans currently uninsured.

Health Insurance Exchanges:

• Uninsured and self-employed will be able to buy insurance through state-based exchanges with subsidies available to individuals and families with income between the 133% and 400% of poverty level.
• In 2014 Separate exchanges will be created for small businesses to purchase coverage.
• States will be funded to create exchanges within one year of enactment and until January 1, 2015.

Subsidies:

• Individuals and families who earn between 100% and 400% of the Federal Poverty Level (FPL) and want to purchase their own health insurance on an exchange are eligible for subsidies. They cannot be eligible for Medicare, Medicaid and cannot be covered by an employer. Eligible buyers receive premium credits and there is a cap for how much they have to contribute to their premiums on a sliding scale.

Medicare:

• Closes the Medicare prescription drug “donut hole” by 2020. Seniors who hit the donut hole by 2010 will receive a $250 rebate.
• Starting in 2011, seniors in the gap will receive a 50% discount on brand name drugs. The bill also includes $500 billion in Medicare cuts over the next decade.

Medicaid:

• Medicaid expanded to include 133% of federal poverty level which is $29,327 for a family of four.
• States will be required to expand Medicaid to include childless adults starting in 2014.
• Federal Government pays 100% of costs for covering newly eligible individuals through 2016.
• Illegal immigrants are not eligible for Medicaid.

Insurance Reforms:

• After six months insurance companies can no longer denying children coverage based on a preexisting condition.
• In 2014 insurance companies cannot deny coverage to anyone with preexisting conditions.
• Children can stay on parent’s insurance plans until age 26th.

Abortion:

• Private insurance premium funds are segregated from taxpayer funds. Individuals will have to pay for abortion coverage by making two separate payments.
• No health care plan will be required to offer abortion coverage. States can pass legislation choosing to opt out of offering abortion coverage through the exchange.

Individual Mandate:

• In 2014, everyone must purchase health insurance or face a $695 annual fine. However, there are exceptions for low-income people.

Employer Mandate:

• Employers with more than 50 employees must provide health insurance or pay a fine of $2000 per worker each year if any worker receives federal subsidies to purchase health insurance. Fines applied to entire number of employees minus some allowances. Technically, there is no employer mandate.

Immigration:

• Illegal immigrants will not be allowed to buy health insurance in the exchanges.

Source: CBS News

Related Article:

• How Will Healthcare Reform Affect You?

Equifax is offering a free “Credit Score Card” which provides you a range of where your credit score is. The score is from their “Equifax Risk Score” system, not the FICO score. The Equifax Risk Score has a range from 280-850, which is almost the same as FICO which is 300 to 850.  The tool is good for giving you an idea your credit score.

I checked to see my score and was happy to see it was high.  (See screen shot below).  Having a high score will help with qualifying for lower interest rates and offers from lenders.

Other places you can get a free credit report and score is at Quizzle.com and at Karma.com.

Did you ever think that by 2010 we’d be zipping around with jet packs like The Jetsons?  Well we soon maybe if you can afford $75,000. 

Designer Glenn Martin (of Martin Jetpack) has developed a Kiwi Jetpack starting at $75,000.  It is expected that early orders for sales to private individuals will start late 2010. 

The jetpack runs on premium gas which is much cheaper than jet fuel, has a range of 30 miles at 60 mph with a ceiling of 8,000 ft.   No pilot’s license is required and it comes with a low altitude ballistic parachute.  I would love to try one out!  See video below.

There are many questions you have to answer when you’re looking to start a business.  One of the first questions that come up is – should you start big or small?  Before you answer, let me clarify.  Big is starting a business that requires a large upfront cost. You may need to take out a loan, use a majority of your savings, borrow money from family or friends, cash out your 401K plan, max out your credit cards, or take a loan against your house, to name a few things.  Starting small simply means not incurring a large upfront cost.  You are able to fund your business yourself, using a small part of your savings.  There is no really no right or wrong way to start your business because it depends on the type of business, your tolerance for risk, your net worth, your age, and other factors.  

Donald Trump likes to brag about how he thinks big.  But the problem with thinking big is that it comes with big risk.  Of course, there are advantages and disadvantages either way you go.  Starting a business is risky.  No matter how carefully you plan, you can never predict whether it will be profitable or not, or if it will be profitable “enough”. If you forecasted the company earning $10,000 per month but it only ends up earning $1,000 per month, you may deem the business a failure.

Your net worth also dictates your risk when starting a business.  Someone with 20 million in the bank can easily pour 5 million dollars into a company.  If he loses that money, it may hurt but not as much as it would for someone with 10 thousand dollars in the bank trying to start a company that requires 100,000 dollars.  If she loses the 100,000 she will more than likely end up filing bankruptcy.  Your age also plays a role.  If you are a single 25 year old starting a business, you can tolerate more risk than a 50 year old with a family, mortgage, and car notes.  The 50 year old has much more to lose which may include his house and/or savings.  If the 25 year old fails, he has 40 years to recover vs. the 50 year old who has 15 years to recover (assuming retirement at 65 years old).

If you are considering starting a business, if possible, it’s a good idea to start small to ensure success, and then scale the business.  I recently read about a gentleman who owned a very successful restaurant.  He first started selling food on the street via a food cart.  It did well, so he eventually rented a very small store front.  He continued to do well and then moved into a much larger restaurant.  He minimized his risk by first testing the market on a small scale.  When he decided to scale his business he already had customers he could rely on.  His risk was extremely low when he first started, yet he made it big.