It’s amazing what a few facts will do for the brain.
We’ve spent the past several days deep in research for readers of our Manward Letter. We had a hunch, so we picked up some books, did some digging and uncovered some facts that will, if we do our job, change the financial fate of our loyal followers.
The idea is simple.
Stock market diversification is a lie.
To most folks inside the realm of money management, that idea is blasphemy. The evangelicals tell folks to own a bit of this, a bit of that… and not think twice when your portfolio can’t keep up with the market’s moves.
It’s the cost of insurance, they say.
Well… after what we’ve uncovered, it’s the price of ignorance.
The tactic will cost you money when times are good but will likely never save you a penny when times are bad.
We’ve got the numbers… and a fresh strategy.
If you’re a Manward Letter subscriber, more on that soon. For now, we want to share a variation on that theme… the illusion of health insurance.
All Cost, No Reward
It’s going to be a very big topic over the next few months. Elections tend to get folks talking about free money and government giveaways… so we figure it’s best to set the record straight right away with a big ol’ chunk of Know-How.
Health – and who pays for it – has somehow become political over the last decade or two.
And we know why.
Let us share the opening line of a recent piece from our fellow thinkers at the Mises Institute:
Due to Obamacare, my health plan has become something other than insurance. It is now, for the most part, nothing other than a wealth transfer scheme to benefit the politically connected over others.
The issue gets to the heart of so much of what we muse about – government overreach, a dependent populace and lies disguised as the Truth.
By its definition, insurance protects us from the unpredictable.
Home insurance pays out if a fire ravages our attic.
An auto policy fixes the mess that becomes our hood when we slide on the ice.
And a health plan is supposed to pay the tab when we break an arm or need a tuneup for our ticker.
But it doesn’t… or at least not like it’s supposed to.
This is where the state has really screwed things up.
Over the last few decades, our vote-hungry lawmakers and the lobbyists who feed them have forced insurers to pay for everyday things. They now provide “free” wellness visits, no-cost cholesterol tests and even free birth control.
But these things aren’t unpredictable.
That means they aren’t insurable.
Having a pool of money at the ready to cover unexpected costs won’t do a lick of good.
And yet your monthly insurance premium pays for them. It’s money out of your pocket, put directly into the pocket of another. There are no actuarial tables… no statistical analyses… just money going from one account to another.
It’s the greatest transfer of wealth of our time.
That’s why the political types now deem it health “coverage,” not health “insurance.”
Change of Thought
If this were auto insurance, the craziness of this mess would be obvious.
The days of $100-a-month premiums would be out the window.
Folks would be taking jobs just to get coverage.
And a trip to the local parts store would look a whole lot different.
We’d file a claim to get our windshield wipers replaced. We’d show our insurance card at the garage to get our brakes checked and our dipstick examined.
But when we smack a tree, good luck… We’d be taking out a loan to cover the sky-high deductible.
This nation will debate the merits of who pays what for healthcare.
But if we’re going to have a battle… let’s at least make sure we’re fighting about the same thing.
We need to change the way we think about all of this.
Health insurance in America is no longer insurance. It’s now a state-controlled form of cash-flow management.
It takes from the few, but provides no real protection to the masses.
It’s the greatest (legal) transfer of wealth in our nation’s history.