Monday, November 30, 2020

Froogal Stoodent vs. Healthcare

The Froogal Stoodent Takes On Healthcare

Is Medicare for all the best answer to healthcare in the United States? Believe it or not, that might actually be a more efficient approach, in terms of minimizing administrative costs! https://www.nytimes.com/2018/10/15/upshot/is-medicare-for-all-the-answer-to-sky-high-administrative-costs.html
    But administrative costs aren't the only concern, of course.

Maybe this is a part of the reason why healthcare is so inefficient: https://www.axios.com/health-care-ceo-pay-compensation-stock-2018-0ed2a8aa-250e-48f1-a47a-849b8ca83e24.html

Mr. Money Mustache uses an alternative to the traditional medical model. Very interesting! But does it make sense for the rest of us? It's worth remembering that he's wealthy. I don't know about you, dear reader, but I'm not (yet): https://www.mrmoneymustache.com/2020/11/09/direct-primary-care/

Added 12/11/2020: Recently saw this horror story and thought it was highly relevant: https://www.nakedcapitalism.com/2020/12/medicare-blues.html

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It seems to me that there are a lot of insurance companies that would suffer greatly if we moved to a "Medicare for all" model.

It's tempting to say, "Yeah! Screw the big insurance companies! They just take all our money and make life miserable for doctors and hospitals!"

But that's partly because I don't work in the healthcare industry.

Imagine if we just snapped our fingers and did away with private health insurance companies like the various companies that comprise the Blue Cross Blue Shield Association. As of 2019, the U.S. Department of Labor counts 2.8 million people employed in the healthcare industry.

An untold number of additional people could be cut by hospitals and doctor's offices, because the billing would be streamlined from multiple different insurers to one (Medicare).

How would the economy absorb roughly 3 million suddenly-unemployed people? What kind of short-term waves would that create throughout the economy?

And what kind of impact would that have on the portfolios of people who are near retirement? Or are currently retired?

In the long run, over maybe 5-10 years, the situation would sort itself out. And, at least for younger folks such as myself, the efficiency gains over the long term may make it worth some short-term pain.

But tell that to the 3 million people who could lose their jobs.

Either way, there will be pain. There will be pain if we don't do anything, and there will be pain if we do overhaul the entire system.

Essentially, the cost-benefit analysis is far from clear, at least to me.

But what I do think is that our current situation is a lousy hybrid that marries some of the worst aspects of a free market with some of the worst aspects of government-run healthcare. In our current situation, nobody wins.

Except maybe the CEOs of healthcare companies.

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Saturday, November 21, 2020

Froogal Stoodent vs. Vanguard

The Froogal Stoodent Takes On Vanguard

In my constant search for better, easier, more profitable ways to invest, I've run into a fact that disturbs me more and more as I continue to think about it: most total stock market indices, such as Vanguard's VTSAX, are market-cap weighted.

What does that even mean?

Well, it means that a greater proportion of every investment dollar goes to the largest companies in the market. 

At first glance, you'd think, "More of my money is going to the Apples and Googles and Microsofts of the investment world. Isn't that a good thing?"

Maybe.

But maybe not.

Friday, November 13, 2020

Links for November 2020

Living AFI is a blog that's been inactive since 2016, but it snarkily--and truthfully--touches on a lot of issues related to work and early retirement. This article deals with how to handle the topic of financial independence among your friends: https://livingafi.com/2014/09/20/friends-and-fi/

Want more from Living AFI? He's not posting, but A Purple Life is, and she's also great: https://apurplelife.com/why-im-comfortable-retiring-with-500000/

It's probably best to invest now, even if the price of stocks seems high. Here's why: https://www.fool.com/investing/2020/08/25/should-you-invest-in-the-sp-500-and-apple-at-all-t/

Are index funds really the best choice for investing? Fit DIY Dad posts a thought-provoking analysis: http://fitdiydad.com/index-funds-devils-advocate/

Active or passive investing? What's the difference, anyway? https://www.investopedia.com/news/active-vs-passive-investing/

Can a sovereign currency issuer (such as the United States) actually default on its debt? https://www.pragcap.com/can-a-sovereign-currency-issuer-default/

A good analysis on the topic of 'Modern Monetary Theory' described in the previous link: https://www.advisorperspectives.com/commentaries/2020/06/29/the-theory-of-mmt-falls-flat-when-faced-with-reality-part-i

And who suffers when the worst happens to the American economy? Everybody:
https://thefederalist.com/2018/10/25/u-s-goes-bankrupt-heres-gets-least-pain/

A great list of quotes! My favorite is "No one agrees with other people's opinions; they merely agree with their own opinion expressed by somebody else."
https://jlcollinsnh.com/2012/06/12/i-could-not-have-said-it-better-myself/