Written By Ryan Mack, President of Optimum Capital Management, LLC

In the wake of this momentous occasion where the President has done what 7 Presidents before him have not been able to do. He has passed the largest reform of the health care system since Medicare and we have a lot of reasons to celebrate!

• Pre-existing conditions…gone!
• Dependent care…extended until the age of 26.
• Lifetime caps on coverage…gone!
• Dropped from coverage because you got sick…over!
• Medicare reimbursements to doctors…increased!
• 32 million people who don’t have coverage…covered!
• Seniors who are impacted by the Medicare “donut hole”…donut hole closed!

However, despite this momentous occasion, you had better believe that those who oppose this legislation will begin a fear campaign of the likes that you have never seen.  The worst thing that could have happened to the GOP was for President Obama to obtain this victory. Now, because they positioned themselves as obstructionists, and called the President every name in the book from socialist to communist, they eliminated the possibility from voting with the bill otherwise committing political suicide if they did. Doing this left them with no other choice but to continue the strategy to scare the hell out of the American people before the next political election seasons of 2010 and 2012 in order to obtain a political victory. By not participating in this historic moment the GOP party has proven that they are more concerned with self-preservation than trying to improve the conditions of the country.    

So here are some of the arguments and counterpoints that you can expect to hear:

• Fear Based Argument – “Barack Obama and the Democratic Party are moving this nation to a socialist state!”
• Response – Socialism is the theory advocating the state ownership of an industry or an economic system based on state ownership of capital.  In fact, as far as health care is concerned the Government owns nothing. They only want to regulate it more to make sure that people don’t die!

• Fear Based Argument – “Barack Obama and the Democrats rammed this bill down our throats.”
• Response – We have been debating this bill for decades and the Republicans have never shown any interest in doing anything but keeping things the same. The same isn’t working because costs keep rising and people keep dying. Just like a child who has a toy and hasn’t played with it in weeks…let his friend have an interest in the toy and the child starts to cry, “Gimmie my toy!” GOP you had your turn to play with health care, you didn’t want to play with it and you let costs continue to skyrocket while people died…it’s the Democrats turn now!

• Fear Based Argument – “This will spell political destruction for the Democratic party if you push this through!”
• Response – The people voted Barack Obama into office to push this through. They only are upset with him because he took too long in pushing it through.

• Fear Based Argument – “The people are against this legislation!”
• Response – The people are highly in favor or health care reform. Barack Obama won on a campaign of promising a STRONGER health care legislation and that is the reason that they are against it.  They want the public option which was taken out but promised in the campaign and they don’t want mandates which Barack stated in his campaign he wasn’t for. However, despite the fact that the people wanted a stronger bill, this bill as it stands is infinitely better than nothing at all because we now have a framework which we can build.

• Fear Based Argument – “Obama and the Democrats want to kill Grandma!”
• Response – End of life discussions with your doctor actually empower you to provide your doctor with information so that in case you are ever in a condition where you can’t make these decisions for yourself (you are in a coma or vegetative state) your doctor will know exactly those wishes that YOU want to carry out pertaining to your life. Here is a previous blog that I wrote that elaborates on this fear based point…http://www.huffingtonpost.com/ryan-mack/policies-of-fear-or-ignor_b_269122.html

• Fear Based Argument – “The Democrats want to spend, spend, and spend so our children are saddled with heavy mountains of debt!”
• Response – This bill is not only paid for, but it reduces the deficit according to the Congressional Budget Office by $140 billion in the first 10 years and by over $1.2 trillion in the following 10 years. For some reason you don’t trust the CBO whenever they produce numbers that disprove your point and call them liars, but you cite them whenever they help to prove your point…which is it? Are they reliable or liars?  

Furthermore, let’s just say that this legislation was not funded as the multiple legislations passed under a Republican legislation such as the Medicare prescription drug plan, the tax cuts, and the two wars…there is no dollar value on the value of the almost 50,000 lives that will be spared per year, and millions whose lives will be improved because they now have health care coverage.

• Fear Based Argument – “This is a Government takeover!”
• Response – I thought that a Government takeover required the Government to actually take something over?! The hospitals will still be private, the doctors will still be private, and the Government will not collect ANY funds. For this to be a Government takeover, they sure did a poor job of taking over the health insurance industry.

The GOP party is the most effective marketing machine that you will ever come across. Their first priority is to get re-elected and they will stop at no cost to achieve that goal.  Although the Democrats are enjoying this victory, we have to be aware of those on the right that will be giving an onslaught of rhetoric that can be very destructive to the party in November. They wake up with the same talking points and you can be sure that those talking points will be plastered on every news channel. Fake grass roots organizations like “Freedom Works”, funded by Dick Armey, will continue to spread the message on a massive scale to 100s of thousands across the country.  We can’t rest on our laurels thinking that we have done enough because policy is on our side…we have to combat this evil rhetoric not with evil, but with truth, facts and a lot of noise!  It is NOT ENOUGH to yell at the TV to create change, we have to arm ourselves with truth and become as active as they are…the political success of the left depends upon it.

by: Andrew Bruskin

Editor-in-Chief, All About Business

Fox News is at it again.  According to Hannity, Obama is “pushing the single biggest power grab and move towards ‘socialism’ in the history of our country.”  And according to the right wing blog The American Thinker, their writers have finally figured out what the American people should have known all along:  Obama really is a “socialist”!  From reading these media outlets, it seems like everyone should quickly gather their belongings and run to…Canada!

Oh, wait, we can’t go there. Canada is a very socialist country!

Well, then we will go to Mexico!

Wait, I take that back.  The Mexicans are a filthy country who gave us the Swine Flu!  They’re stealing our jobs, too…

Well, that means we’ll have to go to Europe!

Oh, wait, Europe is even more “socialist” than we are!

Isn’t there a place in our own country that values rich over poor, corporations over people, white over black, and, for the love of God…a place where nothing can ever get done?!

Yes, my friends, there is a place that values all of these things!  It’s called…Capitol Hill.

No, my fellow Americans, Obama is not a socialist.  According to the dictionary, socialism is “a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.”

If Obama was truly a socialist, he would have taken my house by now.  But yes, there are far-right advocates (who I won’t point out by name) who continue to believe that Obama is the next Mao Zedong.  Many of Obama’s fiercest critics target his “radical” health care reform policies.  Even more interesting is the fact that while we denounce universal health care coverage for our own citizens, we are giving the people of Iraq and Afghanistan universal health care coverage through our own tax dollars.

Even though Americans die from lack of treatable health-related conditions every year, we are still generous enough to give millions of dollars in tax money for two countries to establish a universal health-care system.  Isn’t that so nice of us?

Obama is labeled a “socialist” because many Americans don’t know what the word means, and as an end result, the label becomes an effective scare tactic.  These are the same tactics certain people have used in the past.  If people want to scare other people, why not use key words such as “weapons of mass destruction”, “big government” and, well, “socialism”?  “Socialism” is the new McCarthyism.

You may be thinking that I am completely bashing the GOP.  Let’s get some things straight:  I believe that there are members of the Republican Party who want to do great things (this does not include the religious right, corporate puppets, and a certain old man who just won’t go away!).  There are some self-proclaimed conservatives who back the public option.  I do believe, behind the noise, that there are good hearted people on both sides of the aisle who want to create beneficial change in this country.  And yes, I do like the Bill O’Reilly Show, what can I say?

With that being said, it is time for me to bash the Democrats.  This bill is not being passed, not because of the Republicans, but because Democrats are absolutely atrocious salesmen.  In mid 2009, most Americans supported this bill.  Now, support for this bill is down—way down.

Why?

While health insurance PAC’s were dorm storming and rallying their troops to destroy this bill, Democrats stood idly by and let these organizations turn the vast majority of the American people against health care legislation, even if most favor universal healthcare to begin with.  Which Democrats are responsible for this?  Ever heard of Evan Bayh?

Unfortunately, President Obama, Speaker Pelosi and Harry Reid are also to blame for this.  Maybe they should have concentrated on the unemployment rate before they tackled healthcare?

Wherever things went wrong, this is the sad news: if some type of health reform does not pass, then the uninsured will probably never receive coverage in their lifetime.  Tens of thousands of Americans will die from preventable illnesses because of this.  This is not a scare tactic.  This is a fact.

Here’s what I don’t understand: why are Americans are supporting a trillion dollar war because of 9/11, but not a trillion dollar health care bill that will save countless more lives?

The health bill being legislated by the government is beside the point: I want people who don’t have healthcare to be able to have complete coverage in our country. Period.  From the looks of it, there seems to be no other way to ensure coverage except a government-sponsored health care bill.

I hope both parties can come to their senses and work together to pass meaningful legislation.  In the meantime, I won’t be holding my breath.

Andrew Bruskin is the editor-in-chief for All About Business (AAB), a global organization geared towards the spread of ‘empowerment’ through social movement and grassroots advocacy. He was the elected president of The National Society of Collegiate Scholars (NSCS), a national honor society comprised of 230 chapters in all 50 states of the U.S. with over 650,000 members. Currently attending the College of William and Mary School of Law, Andrew is a contributing editor for the Constitutional Law Society and the founder and co-president of the Northeast Legal Society. He can be reached at Andrew.Bruskin@gmail.com

 For instance, the bill prohibits insurance companies from charging women or those with prior illness an increased premium and also eliminates yearly and/or lifetime limits on the amount of coverage that is provided under a given health plan; which would make it illegal for an insurance company to drop the health coverage of a policy holder. Furthermore, the bill provides tax credits for small businesses to assist them in offering insurance to employees and will also offer a fifty percent discount on prescription drugs to seniors with gaps in their Medicare part D prescription drug coverage. These provisions would make the coverage more affordable and equitable for individuals with low to moderate incomes, particularly senior citizens and the working poor. While such provisions seem ideal, the prescription discounts for Medicare beneficiaries aren’t without drawbacks. For instance, according to the Congressional Budget Office, under the House bill (HR3200) Medicare recipients will see a five percent increase in their premiums by 2011 which would grow to twenty percent by 2019; however, expenses on prescription medications apart from Medicare premiums would decline overall. These discounts and savings on prescriptions provided by the Senate Bill may not be worth the cost of the increased premium of the House bill, especially, for the beneficiary who takes only one form of medication. The good news, however, is that there will not be any Medicare benefit cuts under the “Americas Healthy Future Act”.

Another proposal of the Senate bill is to transition the Medicare fee-for-service system based on the volume of care towards a reimbursement system based on the quality and value of care. Consequently, a percentage of hospital payments would be linked to performance and quality measures in terms of the care for general and high-cost health conditions. These standards would be designed to encourage physicians to avoid redundant testing and procedures, which are likely to impede efficiency and result in cost ineffectiveness; but instead, strive to achieve the most optimal patient outcomes in the most inexpensive manners.

Although a healthcare environment under this proposed legislation has plenty of appeal and potential, there are also several prospective issues that may arise as a result of its enactment. For instance, many Americans could be subjected to considerable increases in taxation as well as rationing of actual healthcare, which under some circumstances may be the difference between life and death. Furthermore, Republicans have strongly opposed these healthcare reforms and have made claims that this legislation is a slow start to a “government takeover”. Moreover, if the private insurance companies are unable to compete with the federal government, the government can possibly become a monopoly within the health insurance market. Also, private insurance companies have made claims that there would be an increase in private plan premiums instead of the “competitive decrease” that the federal government anticipates, which would impose greatly upon individuals who prefer private insurance coverage.

Taken as a whole, the healthcare reforms proposed in the bill are certain to change the way Americans pay for healthcare services, however, with regards to improving the quality and efficiency of healthcare delivery, the “America’s Healthy Future Act” doesn’t quite deliver. The bill seems to be lacking clear-cut practices or standards that will ensure that Americans will receive the highest quality of care. Moreover, it fails to define and/or standardize methods to reduce operating costs of hospitals and other healthcare organizations. Theoretically it would be ideal to provide affordable healthcare to the millions of uninsured Americans but, as the old saying goes “it’s not about quantity but quality”; and with respect to the likely increase in taxation to pay for this healthcare overhaul, many Americans deserve to get their “moneys worth”. Furthermore, if the quality of care declines under government healthcare coverage, citizens may find themselves at the mercy of private insurance companies, even more so than they are at present time, as they seek quality healthcare under the coverage of private plans with “hyper-inflated premiums”. It is not yet known as to whether or not there will be an actual healthcare reform under the proposed legislations but, if such a reform were to occur, the final body of legislation would have to accentuate tangible means that will guarantee quality care and cost efficiency in order to be truly beneficial to American society.

Ultimately, the demand for affordable and quality healthcare presents a challenge, and thus far, the private sector hasn’t achieved nor attempted to achieve this challenge. Instead, private insurance companies have sacrificed the well-being of countless Americans to ensure their own interests. Furthermore, many Americans have been sold a false sense of security under private health coverage because when it comes to the “bottom-line” policy holders are viewed as liabilities or expenses and when the insured become too expensive the insurance company is liable to drop their coverage. Therefore, it is imperative to afford the American people a better alternative which is both affordable and beneficial. It just so happens, that the alternative is being proposed by the United States government which is the same government that has instituted successful programs like Medicaid, Medicare, Social Security and W.I.C. to ensure the welfare of the American people. Albeit, these programs have not always been well received, they are still quite beneficial nonetheless. For that reason, a healthcare reform with a public option may be just what the doctor ordered.

 Written by Manuel Gonzalez, Intern for Optimum Capital Management

Living Will – Advance health care directives, also known as advance directives or advance decisions, are instructions given by individuals specifying what actions should be taken for their health in the event that they are no longer able to make decisions due to illness or incapacity.

Health Care Proxy – An instrument (or document) that allows you to appoint an agent to make health care decisions in the event that the primary individual is incapable of executing such decisions.

Both documents together are crucial in ANY estate plan. The living will allows an individual to outline what he/she would want to happen if they are ever incapable of making decisions about his or her life due to illness or incapacity. For instance, if you are ever in an accident and left in a vegetative state, would you want the doctor to “pull the plug”? This decision, without a living will, would be left up to debate by doctors and family members. A living will allows you to outline exactly how you want to be treated. If you know that you would want to be kept on life support for as long as possible as long as there are any life signs, you can write that into your living will. Conversely, if the fear of living your life as a “vegetable” is too much for you to bear you can have your wishes to be removed from life support earlier. The choice is entirely up to you but nobody will ever know that you even have a preference unless you have a living will.

The health care proxy, is the document that essentially appoints whom you would want to have carry out the wishes outlined in the living will. So continuing in the same example above, you would have the option of naming your doctor, best friend, mother or another trusted person as the person who fulfills the instructions of the living will. What is important to remember is that whomever you name as the agent with your health care proxy has a duty to make executing decisions based upon YOUR WISHES.

In my financial literacy courses I suggest that you name your trusted physician as the agent in your health care proxy, especially if he/she has been your physician for a period of time. You should also have regular conversations with your physician that allow you to discuss with him or her exactly how you would like to be taken care of. These conversations are critical because they allow you to make these decisions while you still have a voice. The living will and health care proxy provide you with that voice and the regular conversations with your physician are there to insure that your physician is perfectly clear of your wishes and desires.

In a version of the new proposed health care reform legislation, it is proposed the government provide funding for individuals to have one of these critical conversations every five years with their physician. Somehow, there have been many false statements made about the purpose of these conversations. Below are a few quotes that demonstrate how many have been perpetuating misrepresentations (or blatant lies) of this proposed legislation.

On a radio show on July 16, former Republican Lieutenant Governor of New York Betsy McCaughey said she had read the bill and made some disturbing discoveries. She stated the following:

“Congress would make it mandatory… that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go into hospice care… all to do what’s in society’s best interest… and cut your life short.”

House Republican Leader John Boehner (R-Ohio) and Republican Policy Committee Chairman Thaddeus McCotter (R-Mich.) issued a joint statement stating the following:

“Section 1233 of the House-drafted legislation encourages health care providers to provide their Medicare patients with counseling on ‘the use of artificially administered nutrition and hydration’ and other end of life treatments, and may place seniors in situations where they feel pressured to sign end of life directives they would not otherwise sign,” they said. “This provision may start us down a treacherous path toward government-encouraged euthanasia if enacted into law.”

Former Governor of Alaska stated that the new proposed legislation was an attempt to mask the government’s desire to cut costs by refusing treatment and she stated the following:

“And who will suffer the most when they ration care?” Palin asks. “The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care. Such a system is downright evil.”

The specific area dispute within the legislation, of which I have read all 1018 pages of bill HR3200, comes on page 425 in subsection (hhh)(1) where it discusses “Advance Care Planning Consultation”. It states the following:

“[T]he term ‘advance care planning consultation’ means a consultation between the individual and a practitioner described paragraph (2) regarding advance care planning, if, subject to paragraph (3), the individual involved has not had such a consultation within the last 5 years.”

It goes on to describe what the consultation will consist of which includes an explanation of advance care options, explanations of advanced directives, the roles and responsibilities of the health care proxy, resources available, end-of-life services and supports available, and benefits available for advanced care services. This topic is by far not the most optimistic or cheerful topic to be discussed but is necessary to be addressed so that we can be better prepared for these scenarios that occur in many of our lives. In addition, these conversations should not be restricted to the elderly as in many cases those who are younger have unfortunate accidents or illnesses that require advanced care planning.

While many people are focused on page 425 of the bill, I would suggest that they turn to pages 426 and 427 which state the following in section (III) as it relates to the explanation of the orders regarding life sustaining treatment that has so many people alarmed:

“(III) the identification of resources that an individual may use to determine the requirements of the State in which such individual resides so that the treatment wishes of the individual will be carried out if the individual is unable to communicate those wishes, including requirements regarding the designation of a surrogate decision maker (also known as a health care proxy)”.

The key phrase that I underlined and will state again as it debunks all of the misrepresentations (or blatant lies) that have been told reveals the following:

“[S]o that the treatment wishes of the individual will be carried out if the individual is unable to communicate those wishes”.

The wishes of the doctor will not be carried out, nor will the wishes of the government be carried out…the WISHES OF THE INDIVIDUAL will be carried out. There is no “death panel” when life sustaining treatment is being considered. There are no conversations about how to end one’s life sooner nor are there pressures on seniors to sign end of life directives. While these conversations are not the most fun to have, this bill does nothing more than promote the EDUCATION of the people about the options that they have, and the resources that are available, in the same way that I educate people in my workshops. If you have a health care proxy, living will, or even a durable power of attorney, you ensure that your wishes will be carried out.

Knowing what I know, I am certain that to encourage people to have a living will, health care proxy, and to have regular conversations are wise and a valuable component of ANY financial plan, young or old. Are the politicians ignorant of this information, or are they knowledgeable about the importance of these items but choose to use this time to twist the words of others to insight fear?

If it is the former, this is a huge concern of mine, and should be a concern of yours. To have legislators attempting to legislate an issue about which they themselves are not familiar cannot be good for the country. If it is the latter, this should also be a tremendous concern. As we see from the violent, and disruptive town hall meetings across the country there is strong fear brewing throughout the country as people are comparing Barack Obama to Hitler because he apparently is going to start a crusade to kill the elderly or disabled…this far from the truth and embarrassing to even acknowledge.

The answer to the politics of fear or ignorance lies within the reason that I am writing this article. We need to have a massive crusade of educating the public starting with YOU. Barack Obama has not been as aggressive as should be to explain the contents of the proposed health care reform to the American people. In the least, he is definitely not as aggressive as those who are out to play upon the lack of knowledge within America making it easy to insight fear within American people by spreading lies. While we need the President to increase his outreach with more concrete explanations, as this reform may comprise up to 17% of the nations GDP we must all increase our efforts to learn about this legislation and assist to educate our community. You can read the bill for yourself on line as I did, attend town hall meetings, and do what it takes to become knowledgeable enough to help our government spread the message of the true contents of this legislation. Ignorance and fear have no place in the home of the educated and well-informed.

No matter your age, if you are an independent citizen you should have a living will, health care proxy, or durable springing power of attorney. You would be wise to have regular conversations with you physician at least once every five years. You need to educate yourself of the resources that are available to you to make sure that, God forbid, you are ever in a position where you are unable to make life sustaining decisions due to illness or incapacity. In the same vein of nobody expecting to lose their job so they should have 6 months of living expenses saved, nobody expects to suffer a severe illness leaving them incapacitated so we all need to prepare ourselves. The essence of financial planning is preparing for the worst but expecting the best. This is not National Socialism, this is good sense.

Written By: Ryan Mack, President of Optimum Capital Management, LLC

Likewise, while some recognize the need for retirement planning, they often mistakenly exclude annuities as a viable option simply because of limited exposure to the various annuity options and features. This article will educate you on how annuities work and where they can assist you in fulfilling your retirement planning objectives.

What is an Annuity?
Annuities are insurance products allowing individuals, or annuitants, to contribute premiums guaranteeing income payments over a specified period of time. There is a saying that “you can’t outlive an annuity” which holds true as annuity income payments are typically guaranteed for the rest of the annuitant’s life.

Annuities can be either qualified or non-qualified. Qualified annuities are typically used for tax-deferred retirement savings vehicles such as IRAs, 403bs, etc. Non-qualified annuities are funded with after-tax funds and in most cases income payments can be considered tax-free income.

Annuities can also be categorized as immediate or deferred according to when annuitization, or annuity income payout, occurs. Immediate annuities are designed for individuals who begin annuity income payments immediately (or shortly after) opening the policy. These annuities are also known as Single Premium Immediate Annuities or SPIAs. Deferred annuities in contrast, allow individuals to contribute premiums over an extended period of time and elect to withdraw income from the annuity at a later date.

Why Should You Consider Annuities?
• Lifetime income
• Protection against outliving your assets
• Qualified annuities can grow tax-deferred
• Ideal for individuals seeking a specified income amount during retirement years
• Can be distribution method for individuals receiving unexpected lump-sum income (e.g., inheritance, lottery earnings, personal injury settlements, etc.)

What Annuity Categories are Available?
Annuities can have several variations but they are typically categorized by product type, namely fixed, equity indexed and variable annuities.

Annuity Category Description
Fixed Annuity Insurance companies guarantee to credit annuity policy with a fixed interest rate (usually calculated annually). Fixed annuities are generally considered the most conservative annuity type.
Equity Indexed Annuity Equity-indexed annuities credit interest based on the movement of an equity index like the S&P 500, for example. EIAs differ from variable annuities (described below) in that they are not directly invested in the stock market. EIAs may also have an interest rate cap.
Variable Annuity Annuity funds are invested directly in the stock market, usually via mutual funds according to the annuitant’s risk tolerance. The annuity account value can fluctuate up and down based on how the market performs. Typically variable annuities have higher returns than other annuity types, but also carry the increased risk for potentially negative returns.

Are you confident that upon retirement you will have enough income to not only cover basic living expenses, but also for the pleasures of life? If not, call one of our qualified Optimum representatives at 718-623-3433 to evaluate if annuities should be a part of your retirement planning. II Corinthians 9:6 says “Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously.” Let Optimum assist you in sowing financial seeds today for a bountiful harvest during your retirement years.

NOTE: Neither Optimum Capital Management nor its Financial Advisors provide individual tax preparation or legal advice. Clients should review any planned financial transactions that may have tax implications with their own tax and legal advisors in addition to the consulting provided by Optimum of such matters.

*Roper ASW, 2003 and AARP Study, 2003

Once again it’s that time of the year when hopeless romantics everywhere look forward to candlelit dinners, flowers delivered to the office or even a much anticipated marriage proposal. Aside from Christmas it probably is the most wonderful time of the year, but before we let Cupid create our ideal vision of love, we must first ask each other the following questions about the role money plays in maintaining healthy relationships beyond Valentine’s Day.

1. What is your current financial picture and what are your financial goals?
Far too often couples find it easier to discuss how many children they will have, which house to buy and where they will spend retirement without even talking about how they plan to meet those goals financially. College funding, home ownership and retirement are three of the biggest financial decisions any couple will make, but somehow we fail to determine how we will make it happen. Further we choose to hide from our partners outstanding credit card debt, low FICO scores and excessive spending habits instead of having honest conversations with our significant others. Perhaps you want to be “copreneurs” (couples who own businesses together), but like everything else it requires careful planning and consideration.

2. Do you put the pursuit of money above everything else?
I Timothy 6:10 is says: “For the love of money is the root of all evil; which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.” Some have misinterpreted this passage to read Sthat money is evil and that the accumulation of it should be avoided at all costs. But read the scripture carefully – it says the love of money is the root of all evil, not money by itself. In other words, we err in the sight of God when we place money as the most important thing in our live and we love money more than we love God. As a couple you need evaluate that you are not putting material things (which often leads to unnecessary debt) above building your relationship together according to God’s purpose.

3. Are you disciplined enough to maintain a family budget?
My pastor recently called for a six (6) month fast on excessive spending except for absolute necessities. As hard as this will be, the purpose for me is to enforce a sense of discipline and more importantly to recognize God as the true provider of my daily bread. Part of that discipline comes from understanding the difference between need vs. want and sticking to a budget. I am always amazed with reality shows like Bridezillas where brides obsess with spending at least $100,000 on a wedding and aren’t the least bit concerned if the wedding goes over budget. Unfortunately many of these brides and grooms will carry that same mentality into their marriage and their finances and ultimately relationship will suffer as a result.

Now, I’m sure this wasn’t Valentine Day message you were expecting, but sometimes we need to look at more than just being in love, sometimes you need a reality check. Don’t get me wrong I believe in the power of love and desire romance just as much as the next person, but I’ve learned that they key to the success for any relationship is not just about finding chemistry or common interests. It’s also about making responsible decisions as partners, including those related to finances. So, enjoy the chocolates, cozy dinners and tender kisses this Valentine’s Day, but be sure you also make time to have serious conversations about your finances…it just might save you from Heartbreak Hotel.

Given today’s economic challenges, this is not the time to start panicking. Instead we must carefully plan our next financial steps to ride out this storm intact. The steps outlined below are tangible solutions to guide you and your loved ones in making sound financial decisions during this uncertain time. Let one of Optimum’s qualified advisors work with you to start your tomorrow today!

At one time or another we’ve all heard the ominous, monotone and quite frankly annoying tone that typically interrupts our favorite television or radio program to let us know these famous words—”This is a coordinated monthly test of the Emergency Alert System (EAS). If this had been an actual emergency, official messages would have followed the alert tone. This concludes this test of the Emergency Alert System.” We are then returned to our regularly scheduled program already in progress. Like EAS, today’s economic crisis may initially frustrate and confuse us, but we should not panic thinking the world is on the verge of total collapse. Therefore we must heed sound instruction and most importantly use this as a signal to adequately prepare and protect our financial futures.

Rising foreclosures, decreasing values of retirement plans, tight credit lending, plummeting stock markets and bank recovery plans have experts saying we are experiencing our biggest financial emergency test since the Great Depression. But the good news is that all is not lost and we WILL recover if we are patient and diligent enough to ride out the ups and downs of this economic storm.

So How Do I Prepare?

We’ve all heard the advice, “Save for a rainy day” but lately today’s economy makes me wonder if we should be saving for a monsoon! With that being said, preparation is the key to riding out any storm, including economic storms. Most Floridians put together hurricane kits ready at a moment notice with basic survival items just as Californians will have a similar earthquake kit and New Yorkers may have one for adverse winter weather. As a person who rode out several hurricanes and tornadoes, I can attest that being prepared helps calm some of the fear and anxiety that often comes with uncertainty. It gives a sense of peace that at the very least, I know my basic needs will be provided. The same is true for our finances. We can be calm about our financial situation during times like these when we’ve taken the time to plan. Our Economic Survival Kits should include the following:

• Develop a written budget that is enforced and realistic, avoiding large purchases unless absolutely necessary and affordable within the budget.
• Ensure everyone is held accountable for following the household plan.
• Contribute to an Emergency Savings account to cover at least 3-6 months (or more depending on your occupation) of your living expenses in a high-yield savings account.
• Create diversified investment portfolios (i.e. retirement acct) with the proper asset allocation according to your individual risk tolerance and market conditions.
• Consider alternative methods for earning extra income to further increase your savings potential (e.g. selling unwanted items on eBay, consignment stores, yard sales, seasonal employment, etc.).
• Consider barter agreements with neighbors, family and friends for babysitting and other services.
• Maintain adequate life, health, disability and property insurance – now is not the time to drop coverage in order to minimize your expenses.
• Prioritize debt repayment with the goal of being completely debt free.
• Establish estate planning documents such as wills, trusts, living wills, durable power of attorney, etc.
• Don’t forget to continue in your efforts of responsibly “giving” to others who are in need, as we remember the proverb, “Give and it shall be given unto you”.

If you’ve already put together your Economic Survival Kit, Congratulations! You’re well on your way to minimizing your economic collateral damage and today’s economy will test your preparation efforts to sustain your family during financial downturns. But I suspect that most of you are reading this thinking, “I don’t have any of these items prepared for my economic future and I’m doomed for failure.” Not so, as there is still time to start putting these things in place. Even if you are only able to place one item in your Economic Survival Kit, it will go a long way in creating stability during these times. The most critical thing to start doing today is changing your bad financial habits (i.e. using credit card for consumption purposes, not saving) and replacing them with sound financial disciplines that will render the greatest results.
One of Optimum’s qualified representatives will gladly assist you with any questions you may have about how the economy directly affects you. Remember, we are in this economic test together so don’t stress knowing that at some point we will return to regular programming.

According to a recent study by LIMRA International, 44% (48 million) of all U.S. households either don’t own life insurance or believe they need more (LIMRA, September 2006). Bottom line, each day without adequate life insurance coverage almost one half of the U.S. population is taking the risk that their family’s assets and lifestyle will be protected in the event of an untimely death. Will your loved ones have to sell treasured assets (e.g. houses, cars, possessions, etc.) you worked hard to accumulate during your lifetime just to cover basic household expenses? Will your children’s college education still be funded if you are no longer there to provide income? Unless you have enough liquid assets to cover these needs, these are important questions you must ask yourself now before your family is faced with the harsh reality of poor life insurance planning. For most people the best solution to this dilemma is by obtaining enough life insurance that covers your expenses and protects your assets from liquidation. Call us today at Optimum Capital to discuss appropriate life insurance solutions to help protect your family’s future!

If you had a choice of receiving $100,000 toward your retirement or a penny that doubled for 30 years, which would you choose. Most would choose the $100,000 and miss out on a whopping $10.7 million.
Grow Penny Grow
Years Interest Earned Your Balance
1 $0.01 $0.02
2 $0.02 $0.04
3 $0.04 $0.08
4 $0.08 $0.16
5 $0.16 $0.32
10 $5.12 $10.24
15 $163.84 $327.68
20 $5,242.88 $10,485.76
25 $167,772.16 $335,544.32
30 $5,368,708.80 $10,737,417.0

Although financial institutes don’t offer you an annual percentage rate of 100% the above example illustrates the power of compound interest. Compound interest is the concept of earning interest on top of interest. It’s the reason a penny can grow to ten million without another cent being added to the account. Each year the dollar amount of interest earned increases in response to a growing balance. Without compounding, the account would have only gained $0.01 a year and grown to a measly $ 0.30.

Getting a head start on savings will also lower your monthly retirement bill making it easier to fit into your budget. Imagine you discover by using a retirement calculator that you’ll need $500,000 to retire at 65. If you start saving at 25 your monthly commitment would be $78 to achieve your goal, if you wait until your 35 that number increases to $219.* That extra $141 a month could be used to save for a house, pay off debt or take a vacation. What you use the money for is insignificant to the high price you paid for procrastinating.

Now that you’re clear nothing can replace the rewards of starting early, here are three things to remember when socking away money for retirement:

1. Maintain a positive attitude

Don’t look at saving as a burden. Focus on how you’ll feel once you reach your goal and take pride in knowing you are taking the necessary steps to plan for your tomorrow today.

2. Perform checkups

Examine your progress at least twice a year. Make sure your on track to retire at your desired age, verify your money will last and confirm you’ll be able to afford the lifestyle you want during retirement. To help with your examination work with a financial advisor or try one of the free retirement calculators on bankrate.com.

3. Keep a long-term perspective

Sometimes you’ll look at your balance and feel you’ll never reach your goal. You’ll come up with a million and one reasons to withdraw your money. Don’t do it! Remember you can only replace missed time with more money and who’s signing up for that.

We must be proactive in planning our financial future. With the cost of living increases, staggering health care cost and a troubled social security system we must partner with time to accumulate an adequate retirement fund.

To develop a retirement strategy that fits your income level and financial goals contact your Optimum representative today at 877-75-TEACH (83224).

On April 30, 2007 I lost my most valuable asset here on this earth – no, I didn’t lose it in the declining stock market nor did I lose it in some elaborate investment scam. You see on that day my father, Rev. James A. Hodges, passed away after a courageous and faithful battle with cancer. It’s amazing how as a financial advisor who is immersed with stocks, bonds and investment opportunities on a daily basis, my greatest asset was something that money can’t buy. While my father was not a financial advisor by profession, he instilled in me solid financial principles that ensured economic stability for my family and others. In this article I will share his “Fab Four Financial Principles” so that Optimum’s readers may also benefit from his legacy of teaching and empowerment.

1. Pay God First, Then Yourself
Nothing feels better than giving back to God what is rightfully His in the first place. He has called us to be good stewards over all things so we should make a habit of faithfully paying our tithes and offering first before heading out on our next shopping spree. Malachi 3:8 states “Will a man rob God? Yet you rob me. But you ask, ‘How do we rob you? In tithes and offerings.” My question to you is “Are you robbing God?”

Some may ask “What about my bills and other expenses, there just isn’t anything left?” The key word in this question is “left” because it implies that you’re putting other things ahead of God. Trust me, when you put God first He will provide the increase to take of the bills and other expenses (see Malachi 3:9).

2. Learn to Save for A Rainy Day
After you’ve honored God with your tithes and offerings, learn to protect your family’s financial future by saving regularly. We at Optimum teach that you should have at least 3-6 months of expenses in a high-yield savings account to cover unexpected expenses due to job loss or disability. The only way your emergency fund will grow is if you have the discipline to diligently contribute to the account. Sorry, there is no magic wand that will instantly fund this for you, therefore you must be responsible enough to do this on your own.

3. Live Within Your Means
I can’t even lie, I’m feeling the new Lexus LS 460L that parallel parks itself, especially since I can’t parallel park to save my life! But at $71k+, that doesn’t mean that I will rush out to the nearest Lexus dealership and buy one, as I’m perfectly content with a car that fits my budget more appropriately.

We as a people need to learn that although we see famous celebrities and athletes with fancy cars, big houses and fine jewelry, we have to keep it in perspective that they are just material things that will eventually fade away or at the very least go out of style. Most importantly, if you couldn’t afford it in the first place, you’ve now incurred a load of debt that you’ll still be paying off even after that Lexus is towed off to the junkyard.

4. Pay Off Your Bills and Credit Card Balances
My father was quite proud of the fact that he always paid his bills on-time and refused to carry a credit card balance.

First, he established a house checking account strictly for household expenses and ensured that his paycheck went directly to this account first. Second, he put his bills in a central location and clearly marked on the outside of the envelope when the bill was due. It should also be noted that he always knew the average due date and amount for each bill so if he missed a statement or if the amount due seemed incorrect he knew how to respond accordingly. Lastly, after each payday he reviewed his bills and paid and mailed each bill at least 8-10 days before the due date (I’ve personally modified this step by utilizing online banking services). Following these principles I can assure you that you will never pay a late fee or have service discontinued because of a misplaced bill or because you spent the rent money at Macy’s. The same is true for credit cards by making sure you pay off the balance each month to avoid high interest payments.

Don’t let my father’s advice be in vain – take charge of your financial future today! By applying these principles you too, like my father, can hear Jesus say “Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things…” (Matthew 25:21). Thank you, Daddy!