Theory vs Practice

You Didn't Think The Regional Banking Thing Was Over, Did You?

Medicaid Unwinding: Help Your Neighbor

There is no community unaffected. Medicaid is being cancelled for those that no longer qualify, due to the Public Health Emergency ending. On this newsletter, I have stated that the existing predictions of how many were too low, it wasn’t a hero call. Early evidence has suggested this easy call was correct.

Pitfalls Exist

Worse is that some people are going to have to pay a tax penalty, because they are attempting to wrongly stay off their employer’s insurance, and keep the ACA with lower premiums. This is not allowed under the ACA, unless you have received an exemption, there are calculations to complete, and forms to be filed to get this exemption. There are more pitfalls, this was an easy one.

Y’all know what I think about handling this yourself, right?

Easy Steps

• Receive the letter from your state? Answer it, immediately.

• At the same time, check out the alternatives: click here, it’s free.

• If Medicaid is cancelled, save the letter, and go back to select (after sending us an email to make sure that you have correctly estimated your health insurance premium, this is a financial matter, not a healthcare matter).

Be Selfish & Share This With Someone You Know

They don’t eat at Jae’s Rib Shack anymore because they are over-paying for health insurance. Jae’s Rib Shack has additional problems, yanno (we are getting to that in the next article).

Theory Alone Does Not Pay Bills

What is it really worth? Mr Market doesn’t care what I think.

There is reason that the Silicon Valley Bank saga was important, it shed light on the fact that banks have a lot of assets (commercial real estate), which, in theory, are worth $xxx. They are allowed to value these assets using theory.

Based on ‘theory,’ they are able to lend 10-11x of $xxx to Jae’s Rib Shack.

Well, we will receive a lot of information about practical reality vs. theory. This news was released on September 6th.

The bottom line is that if a bank’s asset base has a lower value, then it cannot lend. Who is the first to lose out, if banks are unwilling to lend? Jae’s Rib Shack. I described this almost six months ago, and here’s the video.

Theory Has Limits

It is my very biased view that people should be guided by those with the best understanding of theory. There needs to be a starting point, so that when theory breaks down, or developments arise, you can get the correct explanation, not some fairy tale or false narrative. It is personally and professionally exhausting to explain the what/how/why private people have wrongly clung onto these ‘explanations.’ Let’s just say that repeating wrongly-formulated ideas, over and over, does not make them correct. This is known as the Illusory Truth Effect (link).

On top of that, then, the spice is a dash of practical reality, when the rubber meets the road. The issue is that financial information and guidance is full of almost-funny narratives that mislead consumers. Wrong understanding of theory, made worse by explanations of current events that don’t make sense. Tough stuff for consumers, even the highly-educated.

In theory, I am wildly underpaid

• I already know that the Comprehensive Financial Planning service can literally transform the way that a household looks at its financial future. I have receipts, and I am pretty sure clients will say so, publicly.

• At $3000 for a lifetime of financial guidance, it is wildly underpriced. This underpricing will end on December 31, 2023.

In practice…

• People think that they will be able to use free tools online, and get a single summary answer.

• People believe that they can figure out the combination of inputs all together, at once, by themselves. I am biased but here is the shortened list of the variables: Social Security, tax optimized investment strategy across qualified and non-qualifed funds (including Roth IRA), healthcare cost planning, insurance planning, lifetime income planning. And individualized for a household’s specific preferences.

• Doesn’t matter, many don’t think it’s worth a penny.

In other words, what I think does not matter. Just like what the banks have as the value of $xxx it has on their commercial real estate portfolio, and just like what I think my brass elephant is worth.

Medicare ABCs Is Released For Subscribers

• For Medicare newcomers, a must, since people don’t read books anymore.

• For existing beneficiaries, changes are almost a certainty, you need to stay up to date. The cost of not doing so? You could be wasting your own money, lots of it. The flip side is also true, a penny not spent is a penny earned.

• Click on the image to watch.