A Clarification Worth Noting

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Ok, something came to my attention today and I think it merits a blog post. If you already know this, I apologize for boring you.

• Deposit-taking institutions are where you SAVE

• Technically, you INVEST with licensed securities dealers or in a business. Although the term "invest" is used with "alternative investments" and Ponzi schemes, they are completely different from licensed and regulated forms of investments.
  

• Deposit-taking institutions and licensed securities dealers are not the same. If you are unclear about what category a certain entity is, ask them or ask someone you trust

• Deposit-taking institutions have JDIC or FDIC insured deposits. What does that mean? That means that the institutions have paid a premium to the Government to insure your deposits. Deposit Insurance was introduced as a safety net measure - should the institution that has your deposits get into difficulties, the Government will ensure that you get back your deposit up to a certain limit. The FDIC has a limit of US$100,000 per depositor which was temporarily increased until December 31, 2009 to US$250,000 per depositor. The JDIC has a limit of J$600,000.
  

• Investments are risky and have no safety net. Some investments are riskier than others. Higher interest rates generally reflect higher risk premiums. Interest rates are determined by the base rate (determined by the Central Bank) plus a spread. If you notice, deposit-taking institutions have lower rates than all other "investment" entities - licensed or otherwise.

• Licensed securities dealers are licensed and regulated by the Government. That is why they are specifically called "licensed securities dealers"

• Licensed securities dealers do not offer insurance on your investments. Deposit insurance is for deposits in deposit-taking institutions. There are reasons why these terms are used.

• Investments in Government paper - any Government - are not equivalent to deposit insurance. Whether you make those investments through a money market fund, or buy Government paper directly, the fact is that investments operate differently from insurance. I have heard that people are of the view that since the Government has never defaulted - like Jamaica and the US - then that is the same as insurance. And therefore, the argument is that investments in Government paper is the same as saving. That is not true. Some could argue that Government paper is "as safe as saving", but it is technically not saving. Investments are not insured; savings are insured up to a limit. Deposit insurance exists for a certain purpose, and that purpose is specifically to provide a safety net for savings.
  

• Therefore, I urge you to think about your asset allocations. Save FIRST. Maximize the insured portion, even if you are not getting the high interest rates some other institutions are offering. Make sure you distinguish between deposit-taking and licensed securities dealers. When you have sufficient savings (insured), then think about how much you wish to invest, and what your risk/reward tolerance is.
  

10 Best Green Jobs For The Next 10 Years

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Great post!

A green economy means opportunities; many of which are much needed with record rising unemployment. This post about jobs helps people to focus on where those job opportunities may be.

About Economy
Read the Article at HuffingtonPost

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Spend Less on Health Care - 3 Quick Tips

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No one wants to think about getting sick, but it happens. Plus, there's regular health maintenance all of us have to do - annual checkups etc. One thing we know for sure - health care is very expensive. Here are 3 quick tips to bring down those healthcare costs.:

1. Get health insurance.

For some people it's part of your benefits package at work; while others debate whether or not they should pay the premiums. Well, why do you pay premiums? So that the insurance company will cover the costs of certain covered activities up to the limit of the insurance that you have bought.

Health insurance is worth it, and here's why:

• Health insurance covers a wide range of things - doctors visits, dentist visit, optician visits, prescriptions, hospitalizations etc. Other than hospitalizations, I think health care provider visits (doctor etc.) and prescriptions are pretty unavoidable for most people. Since you have to spend money regularly on health-care, why not pay the least that you can for each visit/prescription/event?

• Here's the key: if you have an unexpected health catastrophe at any age, comprehensive major medical benefit covers you so you don't have to look first to wiping out savings, going into debt or cashing in investments.
  

What do you need to know about health insurance? You pay a fraction of the cost up to a limit.

Consider this.

• My recent visit to the dentist cost J$6000. BUT, when I took out my insurance card, I actually paid J$1200. That's right. I saved J$4800 just by making sure that I had health insurance and had the card. I paid 20% of the cost that was quoted to me. I saved 80%.

• Prescriptions with insurance can be hundreds of dollars instead of thousands of dollars.
  

If American Express would allow me to borrow their tag line, I'd say "I never leave home without my insurance card"

2. Get a NHF card.

A NHF card is a National Health Fund card, and no you don't have to be a senior citizen to qualify. If you live in Jamaica, if you have a NHF card, the government will subsidize the cost of certain prescriptions in certain categories of illness.

NHF and your insurance card work well together. So let's say you need Drug A. Drug A is covered by NHF and the Government pays a portion. Then, the pharmacist will determine if your insurance will pick up another portion, and how much. Then you pay what's left between the original cost and what NHF paid and what your insurance paid.

Now, why get an NHF card? Because it will allow your insurance benefits to last longer - you will take longer to reach your prescription limits and therefore receive more subsidies by using both.

What illnesses does NHF cover? Here's the list (click here):

• Cancer: Breast Cancer, Prostate Cancer

• Cardio-vascular: Hypertension, Ischaemic Heart Disease, Rheumatic Fever/Heart Disease, High Cholesterol, Vascular Disease

• Endocrine: Diabetes

• Neurological: Epilepsy, Major Depression, Psychosisoptical
  

• Optical: Glaucoma

• Respiratory: Asthma
  

• Musculo-skeletal; Arthritis
  

• Geneto-urinary: Benign Prostatic Hyperplasia (BPH)

NHF has a specific list of drugs in each category and the amount of subsidy for each. Here is the link for the Drug Subsidy List. For information about how to apply for a NHF card, click here.

3. Prevention and Wellness

Generally speaking, it's less expensive to avoid illness than to treat it or cure it. Take the time to adopt a healthy lifestyle with proper nutrition, diet, exercise and rest. Besides, the better you treat your body, the more you strengthen it to fight illnesses that you may not have been able to avoid!

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