As featured in The Wall Street Journal, Money Magazine, and more!

September 2013


In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

SteveDH is retired, and he and his wife have two grown kids. By the time he retired in 2008, he had reached his retirement asset goal of $500,000. His goal now is to ensure his savings last as long as he does. Read his bio to learn more about SteveDH. SteveDH is on Team Roger, with Certified Financial Planner Roger Wohlner.

Keep reading to see his net worth report, updated for August 2013. You can read last month’s analysis here. Following the analysis from SteveDH, Roger Wohlner will offer his own thoughts and guidance from his planning perspective.

Roger Wohlner, CFP appears courtesy of The Chicago Financial Planner.

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Editor’s note: A few times a month, Lance from Money Life and More will stop by to share some of the best articles from across a variety of publications, including other blogs and mainstream media.

It may seem like I’ve fallen off the face of the earth here on Consumerism Commentary over the last two months and I apologize for that. I’ve been crazy busy doing things like getting married, going on our honeymoon cruise (cruise trip cost report here) and trying to keep everything else running at the same time. It’s been a lot of fun, but now it is time to get back to business and share some great articles with you all.

Sometimes I think I’m afraid to spend money, but then I remember we’re trying to destroy my wife’s student loan debt. However, once we’re done, I wonder if I’ll be able to loosen up the purse strings a bit and start spending more. MSN Money tackles this issue in their article Are You Afraid To Spend Your Money?

In case you hadn’t heard, JD Roth is back and writing again at Get Rich Slowly! I was super excited to hear this news and look forward to reading his articles every now and then when they pop up.

Mr. Money Mustache had a great couple posts that listed 50 jobs over $50,000 that don’t require a college degree. Some of the jobs are a bit of a stretch in my opinion, but overall I think it is a great resource if you don’t have a college degree.

Finally, if you have kids heading back to school you might want to see Len Penzo’s 5th annual sandwich index. Len measures the costs of 10 different brown bag sandwiches every year and the results may surprise you. Which sandwich should be in your kid’s lunch bag if you’re pinching pennies?

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In just a few days, one of the major provisions of the Affordable Care Act will go into effect. The health insurance marketplace will open. The public discussion about this marketplace and about Obamacare overall is full of partisan politics, so it’s difficult to see beyond the rhetoric and get an idea of what this new marketplace really means.

The health insurance marketplace is a way for American citizens, who may not be able to get or afford health insurance through the traditional channels, to select a plan for health coverage. Those traditional channels include insurance through an employer, which is usually subsidized by that employer, or directly from an insurance company, such as through individual health insurance.

The law calls for states to set up their own insurance marketplaces, but the federal government is providing a marketplace for residents in states whose governments choose not to organize their own marketplace. The state in which I live, New Jersey, is one of these states in which citizens will use the federal marketplace.

If you have health insurance through your work, the marketplaces (or exchanges) won’t affect you, but other portions of the Affordable Care Act might as I’ll explain. Getting subsidized health insurance through an employer is still going to be the best option for the majority of middle-class or above, full-time employees.

I don’t have health insurance from an employer. I have coverage through COBRA, and I would qualify for continuing that coverage through January 2014, but I may not want to, now that I have more options. With COBRA, I have the same plan I had while I was an employee, but my premiums are no longer subsidized by my employer. In fact, I’m sure my premium includes a fee that gives the third-party COBRA administration company a reason to exist when this layer may not provide any additional benefit to anyone.

Until October 1, my only option than COBRA would be to buy individual insurance directly from an insurance company. After October 1, I can begin shopping on the federal health insurance marketplace, to choose a plan with the coverage that I want, and the monthly premium may be a better deal. The prices and plan details won’t be publicly available until October 1. If there’s a more affordable option than COBRA that meets my coverage needs, I’ll take it.

Why employees may have to select a new plan

Aside from the new marketplaces, the Affordable Care Act requires that all health insurance plans comply with new rules for coverage. The way some insurance companies seem to be handling the requirement is by informing policyholders they must choose a new health care plan for next year. You may have received a letter from your insurance company informing of the need to select a new plan, particularly if you have health insurance through your employer. If you haven’t received this notification, chances are good you know someone who has.

The new plans offered for next year will include at the least the baseline provisions called for by the Affordable Care Act. Policyholders with plans who do not meet that standard will need to select or confirm new coverage for 2014. Some of those baseline provisions include:

  • Outpatient and emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health disorders
  • Preventative care without co-payment
  • Screenings and immunizations for children

Qualifying for discounts

Many people in the United States will qualify for a discount if they choose a health insurance plan through the marketplace. With household income below a certain level, some Americans will qualify for lower monthly premiums, lower copayments, lower coinsurance, and lower deductibles. This income limit for discounted premiums starts at $28,725 for an individual and increases to $99,075 for a family of eight.

Plan categories: bronze, silver, gold, and platinum

The new plans will be categorized as bronze, silver, gold, and platinum. Each level indicates a different balance between premium costs — the monthly fee for coverage — and out-of-pocket costs. In general, if you expect to visit the doctor less, you can choose a plan with lower premiums and higher out-of-pocket costs, but your future medical needs can be difficult to predict sometimes. The marketplace also includes “catastrophic” plans, which have very low premiums. These are often the same decisions employees have made for years when choosing health insurance plans; these new categories can help organize and compare the options.

Medicaid and CHIP

Medicaid is still an available option for health insurance, as is the Children’s Health Insurance Program (CHIP). If you can’t afford coverage from the health insurance marketplace, you or your family may qualify for Medicaid, or your children might qualify for CHIP. If you can afford health insurance but choose not to be covered, a new line on income tax forms will calculate a fee that starts at 1 percent of income, and that fee will be added to the tax you owe, but those who cannot afford health insurance will not be charged this fee, up to $695. That’s less than the cost of health insurance, but opting for health insurance if you can afford it is always a better choice.

In many states, Medicaid is expanding, so more people will be covered under this provision, and for those who do, it will cost less money than buying an insurance plan from the exchanges.

Estimated costs

The Kaiser Family Foundation offers a calculator that helps you determine how much you might pay for a Silver health insurance plan from the exchange in your state (or the federal exchange). According to the calculator here, my premium will be $3,668, or $306 a month. That’s less than half of what I pay for COBRA for good coverage, and about half of what I used to pay for a bare-boned health insurance plan I selected directly from an insurance company as individual insurance.

If you don’t have a health insurance plan through your employer and believe you might be interested in buying health insurance from the exchange, take a look at the calculator and estimate your monthly premium. If you do have health insurance through your employer, you probably won’t need to look at health insurance through the exchange.

Signing up for new health insurance

If you are an employee, you might have some new choices during your open enrollment period this year as insurance companies reformulate their plans to comply with the new law. But for those without with employer-subsidized health insurance options, the marketplaces will open online on October 1. (Owners of small businesses who are shopping for health insurance for their companies can start shopping offline on October 1 but the online shopping won’t be enabled until November 1.) This will give shoppers almost three months to select a plan before they go into effect on January 1, 2014, though open enrollment will continue for three months into 2014.

States have not been very forthcoming with information for their citizens about how to enroll in these health insurance plans. In some cases, it seems like government agencies at the state level are deliberately confusing residents in an effort to make this process more difficult. The process is really easy, though, particularly for those with access to the Internet.

  • Visit HealthCare.gov, the federal government’s health care website.
  • Answer a few questions about your residence and status.
  • The website will tell you where to browse to next to see your health insurance options. For example, since New Jersey doesn’t have a state marketplace, I shop right on HealthCare.gov.

The chance of Obamacare failing

The Republicans in Congress are looking to block the provisions of the Affordable Care Act, and seem to be willing to shut down the government in order to make their case. These tactics historically don’t work. Obamacare will go into effect. This is the plan that insurance companies wanted. Unlike a single-payer health care system, the system created by the Affordable Care Act keeps the insurance companies in business and not only keeps industry jobs in place but presents an opportunity for more jobs in insurance as well as health care.

One threat to Obamacare is defunding. The political tactic involved comes from the desire to see ideas put forth by the other party fail, and one way to do that is to put a system into effect while removing the government funding that is necessary for the system to succeed. The result is that one side gets to say, “I told you so,” even if the failure is due to defunding and not due to a systemic problem.

Regardless, with a group as powerful as health insurance companies behind Obamacare, defunding probably isn’t a major concern in the long run, and the health insurance marketplaces will likely live on in some form in perpetuity. Defunding will have an effect on lower-income families that qualify for and rely on the discounted insurance plans.

What are your expectations for the new health insurance marketplaces?

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In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.

Calvin is in his early 40s, earning an annual salary of $120,000 plus bonus as an IT project manager in New Jersey. He recently finalized a divorce and has a teenage child. Read his bio here. Calvin is on Team Sara, with Certified Financial Planner Sara Stanich.

The net worth report below and following commentary refer to the last full month, July 2013. Last month’s report analyzed Calvin’s progress during the month of July. Continue reading this article to see Calvin’s latest net worth report for the month of August, including his own analysis.

Calvin’s thoughts are followed by Sara’s feedback and advice as well as thoughts from budgeting expert Jacob Wade from iHeartBudgets.

Sara Stanich, CFP appears courtesy of Stanich Group and Cultivating Wealth.

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Kathleen, August 2013 Net Worth

by Luke Landes
Kathleen's Naked With Cash Net Worth Update

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

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LastDollar, August 2013 Net Worth

by Luke Landes
LastDollar Net Worth, August 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

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Anonymous S, August 2013 Net Worth

by Luke Landes
Anonymous S Net Worth

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

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How to Save Money Without Worrying About Coupons

by Luke Landes
Coupons

The retail industry has everyone fooled. While millions of people spend their time scouring for deals, clipping coupons from the newspaper if they’re old-fashioned, plugging into the latest mobile deal applications if they are somewhat more technologically inclined, sharing their finds on Facebook to recruit friends for group deals, the companies on the other side ... Continue reading this article…

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Anne and Matt, August 2013 Net Worth

by Luke Landes
Anne & Matt Net Worth, August 2013 for Naked With Cash

In the series Naked With Cash, seven Consumerism Commentary readers share their financial progress on a monthly basis. They are joined by Certified Financial Planners who provide feedback on their journey. Read this introduction to learn more about the series. Anne and Matt are twenty-seven years old, living in the Midwest, with two children. Read ... Continue reading this article…

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JW, August 2013 Net Worth

by Luke Landes
JW Naked With Cash August 2013

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

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JPMorgan Chase Settles SEC Charges Regarding Fraud in 2012

by Luke Landes
JP Morgan Chase

I would have thought that all the shenanigans within the financial industry ended when regulators began looking into causes of the Great Recession. Today, the SEC announced that JPMorgan Chase is settling the charges that lying to investors was part of the method of operation for the company as late as the first quarter of ... Continue reading this article…

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Blogging Will Enhance Your Public Image and Help You Succeed

by Jim Wang
Ink, pen, and paper

One of the most effective ways of boosting your human capital is to publish your well-edited and relevant thoughts in your particular field. Blogging is a great way to communicate with an audience, establish your credibility, and enhance your public profile. Jim Wang is the founder of Bargaineering.com, one of the earliest blogs (along with ... Continue reading this article…

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Should Millennials Trust the Stock Market?

by Luke Landes
Should millennials trust the stock market?

First impressions often form the basis of how a young person perceives an object for the remainder of that person’s life. The object in question could be another person, a business, an industry, a group of people, or even a part of society. Deeply-seated beliefs are entrenched during several stages of formative development. Psychologists point ... Continue reading this article…

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8 Reasons to Sell Your Business

by Luke Landes
Handshake in suits

I was an entrepreneur by accident. When I started blogging in 1994, I didn’t expect to earn money; I wasn’t even trying. But almost ten years after building my first website, I created Consumerism Commentary to learn about personal finance and to improve my own money situation. Within about a year, much to my initial ... Continue reading this article…

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Podcast 170: Jeff Rose, Soldier of Finance: Take Charge of Your Money and Invest in Your Future

by Luke Landes

I haven’t been running the Consumerism Commentary Podcast on a regular basis. Instead of a weekly podcast, my intention is to share occasional interviews to discuss topics that go beyond product updates and general personal finance information. Jeff Rose is a successful financial blogger, founder of Good Financial Cents. His new book, Soldier of Finance: ... Continue reading this article…

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5 Keys to Full-Time Employment for Young People

by Luke Landes

The latest economic news from the Department of Labor paints a mediocre picture at best of the employment situation in the United States. It’s still difficult for young people to find full-time jobs. There may be some concern that this lower level of employment is going to be the new norm, and whether American society ... Continue reading this article…

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The Best Investments for a Teenager

by Luke Landes
Teenager

While it doesn’t hurt to discuss investing with children at an earlier age, they can get real, hands-on experience with investing as a teenager. Like many other kids in the 1980s, I played the Stock Market Game in elementary school, and learned nothing about investing, but I learned that adults checked the newspaper every day ... Continue reading this article…

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Building Community: Financial Blogger Conference and Plutus Awards

by Luke Landes
Crowd, audience, community

Despite my varied interests, education, and professions throughout my teenage and adult life, which have included everything from music to computer technology, education to personal finance, there has been one constant: building communities. As a teenager I ran a computer bulletin board system (BBS) out of my home computer. This is an outdated concept now, ... Continue reading this article…

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Kathleen, July 2013 Net Worth

by Luke Landes
Kathleen Net Worth July 2013 Naked With Cash

In Naked With Cash, seven anonymous Consumerism Commentary readers publicly track and analyze their finances on a monthly basis. For almost a decade, I tracked my own finances on Consumerism Commentary; now I’m sharing the benefits of public accountability with the participants. I’ve partnered with financial planners who will offer some guidance along the way. ... Continue reading this article…

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