Investing 101
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Retirement planning - only as interesting for a teen/college student

1. Why you need to think about this starting at age 10

Do the math:

Graph saving 2k/ year starting age 10 to age 65 at 8%/year net 

This is what you'll be worth 55 years from today if you save $2,000 a year from now until then. That”s about $40 a week or a shade under 6 bucks a day. Doesn't seem like much of a sacrifice to become an xmillionaire. Assuming inflation doesn't dictate that by then you need $142 to buy a carton of milk… or ex lax (you'll be old by then).

2. Why you shouldn't expect to inherit

Daddy Warbux

Here's some scary math. Think daddy's rich? Bigshot lawyer? (hopefully for you an ambulance chaser – they're the ones who make the big bux) Chain-of-dry-cleaners founder? Rock star? Better still get a job – here's how much you and your 2 siblings get if daddy croaks when he's 55 and you're 20.

3. Why you won’t get social security

4. Health care costs

For a long time there has been a great divide in this country and among the rest of the world. The “haves” have more social benefits (part of the rationale for the progressive tax system) – and the “have nots” …get screwed. When a “have” goes into a hospital, she has decent health insurance. The insurance company negotiates on her behalf with the hospital. That insurance company knows a lot about how the hospital works, how their “profit” margins run (they don't really make a profit but they dream about it a lot) – and the insurance company over the course of years buys lots and lots of Kleenex. So when they have one of their own “family member” patients who uses a box of Kleenex, they negotiate on price and get charged for the box plus an “overhead” fee – that overhead fee is reflective of the costs to run the hospital in general. It's sort of like the way a restaurant works, charging you $4 for a glass of tomato juice. If you're ordering it, maybe 30 cents covers that actual cost of the juice – the remaining $3.70 covers the cost of washing the glass, the 1 in 100 glasses which break and have to be replaced, the cost of paying for a new white shirt for the bumbling waiter who spills it on 1 in 1,000 customers and so on. And the restaurant knows that if you have ordered a tomato juice for 4 bucks, you really want one so they stick it to ya on price. Same deal with Kleenex. Think what you'd pay to remove dangling snot when you've just had your appending out and just can't blow without it hurting.

So the “haves” pay a still-high price of like $10 per box of Kleenex. But the “have nots” – those who don”t have health insurance pay like $20. Why? Nobody is negotiating for them, in the first place. Since they come in one at a time with no buying power, the hospital sticks it to “em. But they are doubly screwed because of the group in which they are lumped: the credit unworthy. Most people who don”t carry health insurance, don”t carry it because they can”t afford it – either because they have no money or because they have what”s called “pre-existing conditions” which the insurance world doesn”t want to be stuck with.

Consider a big fat donut eating retired non-union cop who has type 1 diabetes. That”s a very expensive disease to treat: That cop would be charged double or trip the insurance cost or “premiums” to account for the likely high cost of his insurance. If you are the insurance company, you just don”t want this kind of customer unless he really pays for himself. Fair? Well, if you are a non-fat, non-donut eating retired non-union cop who didn”t kill his own health by eating horribly for 40 years, why should you have to pay for the guy who .. indulged? Because in the end, SOMEBODY has to pay for the insurance. If lumped together then the healthy people have to pay for the unhealthy people. Is it fair that YOU chose to NOT eat the Krispy Kreme Deluxe pack even though you totally wanted to – but you then have to pay 30% more in insurance premiums because someone else couldn”t hold themselves back? What about smokers? Or 100 mph naked motorcycle drivers?

But what if you were born with an illness that your behavior did nothing to cause? Is it then society”s burden to help you on your insurance? Maybe.

Not for profit sector/charity

1. How charitable giving has changed

There was a halcyon era that lasted a brief time in our history as a country where the not-for-profit industry competed squarely with the for-profit industry. It was a time of great wealth creation in the United States when the auto industry had so much power and profit that when it sneezed, the world caught Ebola. That was the era of the Peace Corps, x, and y and John F. Kennedy who imbued hope and trust in karma. But sadly, halcyon era, We Hardly Knew Ye.

2. Tax advantages

3. The next generation of charity

Charity is a concept that likely early cave men did not have as part of their DNA. But somewhere along the evolutionary bus trip, that gem entered our collective necklace. Jesus wrote about charity in various forms. Beggars got their feet washed in clay tubs just for the good karma people felt in doing it. Almost like a quiet thank you for having the power to not have to have ones feet washed.

The concept of “noblesse oblige” was a big deal in the Renaissance – the King was the noble and he blessed the concept of... obliging the poor with tithing from the rich. Kinda institutionalized Robin Hooding.

But charity works at scale when society is resource rich. Poor people simply don”t have the resources to charitably oblige.. much. So what do we do about the needy as we grow to be too many people on this planet, where we consume too many resources and simply don”t have the extra vig to give the needy?

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