Health care and investments that make sense

Been meaning to write about this for a while…I’m getting another side business going, that won’t interfere with my credit card merchant services gig. This side venture looks to be a lot more fun and fulfilling.

It started a few months ago, when I began attending my BNI networking group. There I met this guy Ralph who told me he was in the financial education and access business – he teaches people how to gain access to health care, insurance, and investments that make sense for the individual.

So we started talking about health care. He showed me a way to pay the wholesale rates that insurance companies pay for prescription drugs, doctor office visits, etc. Did you know that some prescription drugs are marked up as much as 100,000% by the pharmaceutical companies? That’s why everyone hates their health care so much – because it’s designed to make money for the drug companies, insurance companies, and hospitals – not protect the individual. It’s out of control.

I immediately thought of my mother, who is retired and absolutely getting killed on her prescription costs. I called her and got a list of the drugs she takes. We ran them through an online check and found that she could get most of them 30-50% cheaper with the company’s prescription card. So she paid $9.95 a month for a card and saved many times over the next time she went to the drugstore. She told me, the pharmacist said it was the deepest-discounted drug card he had ever seen. She was delighted to have the extra money every month.

Then we got to talking about investments. Now, I self-direct my Roth IRA, which is invested in individual stocks. I’ve done well, and have no plans on changing the way I invest at this time. But, I have friends who have heard about my portfolio performance and have asked, can you show me how to invest the way you do? My answer: absolutely not. I spent years dabbling with an imaginary portfolio on paper before I went into the stock market for real. It’s not something that can be taught to someone.

So, up until I met Ralph, I had advised my friends to invest in an S&P 500 index fund, which is a mutual fund consisting of the 500 stocks that make up the S&P measure. It’s about as safe as you can get if you’re going to be in the stock market. But, the market can still go down. $10,000 invested in the S&P 500 index fund on April 1, 2000 would have been worth only $5,700 three years later. Ouch! Hopefully the dot-com bust won’t happen again, but still, the risk is there.

The alternative, of course, is to invest in something fixed like CDs. But that’s a losing proposition too, because CDs barely keep up with inflation.

Ralph showed me an investment product that works like this: It’s based on a stock market index like the S&P. But, at the end of the year, if the market is down, the company puts your principal back. So you can’t end up with less money than you had at the beginning of the year. If the market goes down the toilet like it did in 2000-03, you won’t go with it – at worst you’ll break even. Not bad, huh? Now, of course, the company has to make money somewhere, and they do it by putting a cap on the gains – the products vary, but the last brochures I read had the cap at 12% a year for one product, and 3.2% a month for another. Not too shabby – 12% is a heck of a lot better than a CD will ever do. So, you get to participate in the gains of the stock market – historically the best place to have your money in the long term – without the risk of losing your principal. Oh, and you can get a bonus of up to 10% on your money they day you open the account. This is absolutely where I would steer my friends.

The thing is, most people don’t even know these kinds of products exist. So they blindly follow the advice their broker or insurance agent gives them – which is usually designed to generate a commission for the broker or agent, not look out for the client’s best interests.

That’s why I like what Ralph does – it’s all about educating the public, letting them know what opportunities are out there. Whether or not they purchase the company’s products, at least they’ll be informed. At least they won’t be at the mercy of the drug and insurance and investment corporations anymore.

So, I’m going into business with Ralph. I had to get an insurance license, because some of the products we sell require one. I passed my Life and Accident & Health licensing exam today.

There are some other really cool products too. For example:

Most people’s life insurance is really death insurance – you don’t get the benefit until you die (and then YOU don’t get it, your beneficiary does). Ralph’s company has a life policy that not only pays off on death, but also pays you immediately if you have a critical illness such as heart disease or cancer. It also pays if you become disabled. And if you reach 65, you have the option of converting the cash value into a retirement benefit. It’s the first cash-value life insurance I’ve ever seen that makes sense to own.

Now here’s something that’s really cool – they have a card that provides discounts to alternative care. Yoga, acupuncture, massage therapy, Reiki, aromatherapy, chiropractors. They also have cards that get you access to dental care, vision care, hearing aids, and doctors’ office visits at discount rates.

And, they have health insurance. Which is pretty boring but still something people need. I never bothered to get insurance after becoming self-employed in December, figuring it would cost me a couple hundred a month at my age (34-year-old nonsmoking male). Through Ralph’s company I got major medical coverage for only $72 a month. Again, not bad.

I’m finding that it’s substantially easier to get appointments to talk about this than it is in the credit card biz. In fact, just from wandering around chatting with folks the past week, I already have 4 people who are interested in hearing more about various products. Ralph is already saying that this is soon going to become more than we can handle, and we’ll have to find a couple more key people. That’s not bad either – will be a chance for someone to earn a thousand or two a month on a part-time basis with completely flexible hours.

So, I’m really thrilled about this new venture. This is a chance to change people’s lives for the better, and there’s an element of teaching involved, which makes me happy. But unlike my days at the university, in this business I can actually make good money for teaching.

If you know anyone who needs any of the stuff I described above, drop me an e-mail – I’d be happy to talk to them.

Couple of unrelated quick notes about upcoming events:

Mpact Memphis is having a General Membership Meeting Thursday night, the 24th, from 5:30-7:30 at the National Civil Rights Museum. Mayor A.C. Wharton will be speaking. Mpact hasn’t had a general meeting in several months, and I’m glad they’re bringing them back. If you’re looking to get involved with Mpact, this is the best chance to learn what is going on.

Friday night the 25th is the South Main Trolley Art Tour from 6 to 9. Good people, good art, and most importantly, free wine in many of the galleries. Hope to see you there.