Insurance, Insurance, Insurance

From the Hoss's Mouth

Why do I need to spend so much money on insurance? The current economic situation has caused this question to rise in the minds of many readers of Hoss Cents Free Financial Money Magazine. With this in mind, The Hoss has decided to dedicated several issues of Hoss Cents Free Financial Money Magazine to the insurance industry.

What is insurance?

Insurance is a means to provide you and your family protection for financial loss caused by such things as fire, automobile accidents, theft, personal injury, and possibly even death. The policy holder pays a premium (regular defined amounts) in exchange for protection against a large unknown future loss.

What type of insurance do I need?

If you own property, have children, have a mortgage, or own a car you need insurance.
Similarly, if you cannot support yourself, if you are disabled, or cannot afford to pay compensation if you injure someone, you need insurance.

Most people should have the following types of insurance:

• Life Insurance: To protect your family in the event of your death.

• Auto Insurance: Protects you from damage or theft of your car and/or from liability.

• Health Insurance: To provide payment for medical expenses.

• Homeowner Insurance: Coverage which will permit you to rebuild and refurnish your home. Also protects you if someone is injured on your property.

• Disability Income Insurance: To provide income if you become disabled and are unable to work for an extensive length of time.

Hoss Cents Free Financial Money Magazine will, in future posts, provide additional details concerning each of the basic insurance needs mentioned above. Details such as the difference between term and life insurance, information on auto insurance deductibles and homeowner insurance coverage.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Life Insurance
Previous Post: Madoff Remains Free On Bail

Madoff Remains Free on Bail

From the Hoss's Mouth

Hoss Cents Free Financial Money Magazine is appalled by the decision of Federal Court Judge Lawrence M McKenna to uphold the ruling of lower court Judge Ronald L Ellis that prosecutors have not shown Bernard L Madoff is a flight risk or could obstruct justice or is danger to the community. He therefore remains free on $10 million bail.

Madoff (pronounced Made off--how appropriate is that?) is alleged to have swindled investors of $50 billion. Yet he remains under house arrest in his $7 million penthouse apartment. Some of his investors stand to lose everything or a good portion of their life savings because they invested with Madoff not knowing he was operating what could be the largest Ponzi Scheme (older investors are paid from money deposited by new investors) in history.

Madoff's bail was not revoked, even though he allegedly mailed to friends and relatives, approximately $1 million in assets previously frozen by the courts. His lawyer claimed the mailing of these assets was an innocent mistake. Yea, right. The Hoss is of the opinion this was an obvious attempt to, either hide assets to avoid restitution, or move assets around so he could live off them later. This should have alerted the Judge to Madoff's willingness to disobey court orders and possibly flee. His bail should be revoked.




In today's tough economic times, when consumers are not spending, when mortgages are unavailable, when financial institutions are failing and the stock market is collapsing, the ruling of Judge McKenna does nothing to suggest to the average middle class person that their hard earn money is being protected. In fact, permitting a fraud artist to remain free on bail is akin to giving a Golden Hand Shake to mangers of failed companies while the stockholders lose their investment.

On Tuesday, a new President will be sworn in and his promise of "change we can believe in" gives The Hoss hope that even though things may get worse before they get better, they will get better.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Insurance, Insurance, Insurance
Previous Post: Record Job Losses

Record Job Losses

From the Hoss's Mouth

The US Labor department report issued Friday January 09, 2009 indicated a total of 2,590,000 Americans lost their jobs in 2008.

What should be of serious concern to the readers of Hoss Cents Free Financial Money Magazine is the fact 1.9 million of these lost job losses occurred in the last four months of the year,
524,000 of which occurred in December 2008.

This is a clear indication (not that we needed any more) the economy is in a financial death spiral. Not since 1945 have job losses been so numerous.

The report also indicated the under-employment rate (those workers with part time or no jobs, that have stopped looking for a job) rose to a total of 8 million people. That is the highest since 1955, which incidentally is the first year such records were kept.

Unless something is done soon, the recession could continue for a considerable number of years. People will not have money to buy homes, new cars, TV's or even feed their families. Not only will they not have money, but being unemployed, they will not qualify for loans. That is, if the banks have any money to loan.



Fortunately, President Elect Obama recognizes the seriousness of the problem and, as stated in the previous edition of Hoss Cents Free Financial Money Magazine (Financial Crisis Deepens), he and his economic team are working towards the development of an American Recovery and Reinvestment Plan. The goals of this plan are to lay a firm foundation for growth and job creation by making major investments in the economy.

Two members of Obama's team, Dr. Christina Rower and Dr. Jared Bernstein, did a comprehensive analysis of this plan and estimate it will save or create 3 to 4 million jobs, 90% in the private sector and 10% in the public sector.

The recovery from this recession will not be easy. When Bill Clinton took office, the jobless rate was similar to today's unemployment numbers, but the big difference is that back then the economy was not in a free fall.

The Hoss sincerely hopes that President Elect Obama's plan works, that the economy recovers and the unemployment rate decreases. In any event, it is gratifying to see the President Elect tackling the problem head on and at least developing a plan to try and create jobs.

Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Madoff Remains Free On Bail
Previous Post: Financial Crisis Deepens: Obama

Financial Crisis Deepens: Obama

From The Hoss's Mouth

Just twelve days before his inauguration President Elect Obama delivered a major speech on the economy, or rather the financial crisis in America. Hoss Cents Free Financial Money Magazine presents highlights of his speech.

Obama's opening remarks clearly demonstrate the seriousness of the financial crisis facing Americans. He highlighted the following :

• Nearly two million jobs lost

• More jobs lost last year than at any time since World War II

• 2.8 million Americans working part time rather than full time

• Manufacturing at a 28-year low

• Many businesses cannot meet financial obligations

• Many families cannot meet their financial obligations (pay bills, mortgages)

• Recession could linger for years

• Unemployment could reach double digits

• Economy could fall $1 trillion short of its capacity

President Elect Obama summed up the financial crisis by stating, "In short, a bad situation could become dramatically worse."

Obama did not stop there. He went on to explain how this financial crisis occurred. He did not pull any punches.

"We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC." His honesty about how the Americans came to be in this economic crisis is refreshing. He further provided examples of this irresponsibility:

• Imprudent and dangerous decisions by Wall Street executives seeking profits without regard to risk

• Too little regulatory scrutiny

• Too little accountability

• Banks making loans with no concern for whether borrowers could repay

• Borrowers taking on loans they couldn't afford

• Politicians spending taxpayer money without wisdom or concern

President Elect Obama summed it up this way: "The result has been a devastating loss of trust and confidence in our economy, our financial markets and our government."

After presenting this factual assessment of the current financial crisis, President Elect Obama then spoke of the action he has already taken and intends to take to solve the financial problems facing Americans.

He his currently working with his economic team and leaders of both political parties on an "American Recovery and Reinvestment Plan".

He openly admitted that the budget deficit would increase in the short-term, but the alternative of doing too little, or nothing at all, would result in a worsening of the financial crisis.




The primary steps in this financial plan (in no particular order) are as follows:

• The creation of a clean energy plan

• Lower the cost and improve the quality of health care

• Improve the educational system

• Rebuild the American infrastructure

• Provide immediate relief to States, workers and families

• Eliminate unwise and unnecessary spending

He promises to make the plan transparent and that every American will be able to go online and see where their tax dollars are being spent.

Their will be nay sayers who will claim the steps he is taking are not part of the financial plan outlined in his election campaign. The Hoss says, way to go President elect Obama. You have recognized the fact the financial crisis has deepened and are taking action to address this very serious financial crisis. You, as promised in your election campaign, are listening to economic experts from both sides of the political spectrum and with their help and that of your own economic team you just may, over time, be able to mend the American financial crisis.

Stay on track,
The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Record Job Losses
Previous Post: Financial Year in Review

Financial Year in Review

From The Hoss's Mouth

Should auld acquaintance be forgot, and never brought to mind? Many investors and readers of Hoss Cents Free Financial Money Magazine would surely like to forget the financial devastation that took place in 2008. North American Stock Markets suffered one of their worst years ever.



Take a look a these numbers:

• Dow Jones down 33.8%

• S&P 500 down 38.5%

• NASDAQ down 40.5%

• TSX down 35%

These numbers combined with job losses, or threatened job losses, collapse of the housing industry, credit unavailability and unstable world economics has resulted in consumers loosing confidence in the financial system. As a result they have cut their spending significantly. Reports indicate the Christmas season, which normally provides retailers with 30 to 50 percent of their annual total sales, was not as lucrative as retailers are accustomed to and therefore some stores may be forced to close.

So what happens in 2009?

The financial crisis will not end unless or until people regain confidence in the financial system and learn to live within their means. Families will have to forgo unaffordable and unnecessary luxuries such as an extra car or two, big screen TV's, multiple cell phones, and dinning out just to name a few. In other words, people will have to learn to set financial goals and live by them. The Hoss has several previous posts which will help in this regard:

• Debt Control
• Good Debt Bad Debt
• Financial Priorities
• Creating a Budget
• Money Saving Tips

The Hoss and Mrs. Hoss hope you have a happy healthy and prosperous New Year.

Stay on track,
The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Financial Crisis Deepens, Obama
Previous Post: North American Auto Industry Christmas Package