FoxCraft

Jumping Into a Bigger Pool

This isn't my usual focus, but I've been getting very frustrated with a topic that has nothing funny about it—health insurance.

In the debate about whether we should move toward a government plan or whether that would just make a bad situation worse, there's been some discussion of "portability," or making health insurance more transferable between employers. To me that doesn't go far enough. I'd like to see health insurance coverage separated from employment altogether.

The whole idea behind insurance is to spread the risk and the cost across a large group of people. The problem with keeping health insurance connected to employment is that in many cases, those groups simply aren't large enough to keep the premium costs down. They become even smaller when you take into account the number of people who don't need coverage from their employers because they have it through their spouses' jobs. And, of course, those like me who are self-employed don't have much choice except expensive individual plans.

Requiring employers to provide health insurance doesn't make any sense for smaller companies, because it doesn't do anything to solve the small pool/large premium problem. (Here is how the current plan before Congress would affect one small business.)

One way to separate insurance coverage from employment could be for the federal government to set up large pools or groups of people that would be covered under one plan. These groups could be regional, but with the technology we have available they wouldn't have to be. Then insurance companies could offer various coverage plans to those groups, perhaps through competitive bids. There would need to be a way for people to transfer easily from one group to another, so family members would be part of the same pool.

I may be missing something here; perhaps there are drawbacks to such a plan that I simply haven't thought of. But I'd certainly like to see it become part of the discussion.

Going Cold Turkey

It all started with the turkeys. No, not the “wild” turkeys that hang out in our neighborhood to raise their families and provide meals for mountain lions. These are city turkeys: cheap, tempting birds with plump thighs and improbably rounded bosoms. They are the November loss-leader turkeys at Safeway: only $4.99 (under 16 pounds) or $6.99 (over 16 pounds) with a $25 purchase.

Turkey just happens to be one of my favorite foods. It’s not in the category of chocolate chip cookies, brownies, or fresh bread, of course, but it’s right up there in the second tier with baby carrots and leftover meatloaf. So this time of year, when turkeys are such a bargain, I’d like to stock up on three or four of them.

Unfortunately, what with the tomatoes from last year’s garden, the hamburger that was on sale last week, a couple of loaves of homemade bread, some bags of frozen vegetables, a handful of breakfast burritos, an oversized gel ice pack, several containers of vaguely recognizable leftovers, and three over-ripe bananas, there wasn’t room in the freezer compartment of the refrigerator for even one small turkey.

What the heck. I’ve been wanting to get a freezer for a while now, anyway. It was time for a trip to Sears. They had a cute little five-cubic-foot upright freezer, just what I wanted. On sale, with tax, it came to $228.95.

There was one in stock. We bought it. We hauled it home. We lugged it up the steps and into the house. We freed it from its carton. Funny, it seemed a lot bigger in our kitchen than it had there in the store, where it had looked so slender surrounded by its 17-cubic-foot cousins.

Nevertheless, it fit nicely into the spot in the kitchen where I had planned to put it. What I hadn’t stopped to consider was where to plug it in. The refrigerator, the electric teakettle, the microwave, and the telephone were all plugged into the two available outlets on that same wall. The question was whether the 35-year-old wiring would be able to handle a freezer as well.

You never know until you try. So I moved the phone into the next room, rearranged the kitchen, crossed my fingers and held my breath, and plugged the freezer in. Then, while it was cooling itself down, I simultaneously heated water in the microwave and the electric kettle. Everything worked. No circuit breakers tripped. So far, so good.

It was time to go buy turkeys. When I came back from the store, I did the math. Three 18-pound turkeys at $7.00 each, that’s 54 pounds and $21.00. Adding that to the $229 for the freezer makes $250. Okay, $250 divided by 54 pounds equals $4.63 per pound. What a bargain.

While I’m stocking up on cheap meat, maybe I should consider bigger game than turkeys. Deer, maybe. Or elk. Or what about a trip to Canada to shoot a moose?

Of course, then I’d have to buy a bigger freezer. I’m not sure I can afford to save that much.

The Economy and Corbin Morse's Cows

With a little luck and a lot of hard work, Corbin Morse became successful as a rancher in western South Dakota in the early days. The story is told that he was waiting out a snowstorm in the lobby of the Harney Hotel in Rapid City one bitter cold night. A half-frozen cowboy stumbled through the door with the bad news. Morse’s entire herd of 10,000 purebred Hereford cattle—over half a million dollars’ worth of livestock—had perished in the blizzard. The loss meant financial ruin.

Morse looked at the cowboy. “Well,” he said, “Easy come, easy go.”

I thought about Corbin Morse this week when I opened the statements from my retirement accounts. I looked at them, stuffed them into the file drawer, took a deep breath, and told myself, “Easy come, easy go.”

I didn’t really mean it, of course. Neither, I suspect, did Corbin Morse that long-ago winter night. But remembering his response to bad news helped me put my own losses into perspective.

Admittedly, it’s relatively easy for me to be optimistic. Unlike Corbin Morse—and many others before and since—I’m not facing financial ruin. I’m fortunate in that I don’t have any debt and I can easily live within my means. I can afford to leave my retirement savings alone until they recover.

And I do believe they will recover. Rick, my friend and financial planner, lives, breathes, and preaches “invest for the long term.” That means holding on through bad times as well as good. I trust him and believe him, so that’s what I’m doing.

Even so, the recent upheavals (or maybe a better word would be “downheavals”) in the economy are frightening. I have friends who are talking about whether they should keep cash under their mattresses and whether we’ll all end up raising chickens in our back yards. They wonder if it’s going to be the Great Depression all over again.

I don’t mean to minimize the Great Depression. It was a terribly hard time, with losses and suffering that were all too real. My parents grew up during those tough years, which here in South Dakota meant drought and dust storms. I've heard their stories about living as a family of 11 in a three-room house, wearing patched hand-me-down clothes, and sometimes going to school with nothing in their lunch pails but cold pancakes.

But all of them got by. They managed, one day at a time, and eventually, times got better. Those hard times helped shape their lives, certainly, but didn't define them. They went on to build successful, productive, and happy lives.

I visited my parents last weekend. It was my sister’s birthday, and we celebrated with a four-generation family party. The gathering reminded me again about what constitutes real wealth. My parents haven’t accumulated any financial fortunes. But they have children and grandchildren who care deeply about them, who enjoy their company, and who would gladly help them out of love rather than obligation. The legacy of integrity and competence and humor that they will leave to all of us who love them is beyond price.

Will we have to scrimp and patch and make do through economic hard times like the Dirty Thirties again? Who knows? My own belief is, probably not.

But I also believe that, if things truly do get that bad, most of us will do what we have to do. We’ll work together and help one another out. We'll get by, one day at a time. We’re a lot tougher than we think.

For me, knowing it’s possible to survive hard times and come out the other side helps keep today’s fears in perspective. It reminds me that there’s no point in fretting over things—like ups and downs in the stock market—that are beyond my control. It helps me remember all the ways in which my family and I are truly rich.

And when all else fails, I remember Corbin Morse’s cows and his “grace under fire” response to disaster. “Easy come, easy go.”

Please, Go Ahead and Spend It

When my Uncle Ernie, a life-long bachelor, was in his 80’s and in declining health, he moved into an assisted living facility. He complained to my mother that living there was going to use up all his savings. Her answer was, “What do you think that money is for?”

A close friend’s elderly mother is currently in a similar situation. Nearing 90, she has enough money to provide comfortably for her needs—including assisted living or nursing home care, if necessary—for the rest of her life. Yet she frets about spending it. She tells her two sons, “That money is supposed to be for you.”

No, it isn’t. That money is supposed to be for her.

All sorts of investment options, from IRAs to 401(k) plans, are described as “retirement funds.” We talk routinely about “saving for retirement.” Providing for our needs in old age is one of the most important reasons for saving in the first place.

Yet, when retirement comes, it’s not easy to start spending that money. Such reluctance is understandable. When you’ve been in the habit all your life of saving and putting money away, it’s hard to make a 180-degree turn and start spending it instead. It may feel like jeopardizing the security you have from knowing that money is there. In addition, many people want to leave a legacy to their children or to charity.

There’s nothing wrong with wanting to leave money to your children. But the money you’ve saved for your retirement is yours. It’s there to provide for you. Your children aren’t automatically entitled to it, and you don’t owe it to anyone.

Speaking as a middle-aged daughter of elderly parents, what sort of legacy do I want from them? When it comes to material things, all I really care about are the family keepsakes which are valued for what they mean rather than what they are—such things as my mother’s handmade quilts and my father’s books. What I want most, though, is to have my parents in my life for as long as possible. I want them to be comfortable, able to have more than they need and to do things they enjoy. I want them to use their resources for themselves so they can be an active presence in my life and the lives of my children.

If it’s hard for you to think about spending your life savings on yourself, you might consider this: Taking care of yourself is not taking anything away from your children. Instead, it’s a way of giving to them. When you have—and use—the resources to provide for your own needs, your children don’t have to take care of you. That leaves them free to build their own savings.

So please, when you get to a point where it’s time to start using what you’ve saved, go ahead and use it. After all, as my mother would remind you, what else is it for?