Summer 2015

Your Trusted Partner Through Life’s Transitions

What is wearable technology and how can it impact my life? Do I need a credit freeze? It’s all here in the latest issue of “Financially Speaking”! Enjoy and as always, we welcome your comments and questions.

The Doctor On Your Wrist

Many feel that medical costs are draining America’s resources, and if we assume that Medicare and Medicaid costs will rise as they have for the past 20 years (despite the brief interlude these last three years), then there is reason for concern. But ask yourself: how much of those costs are related to expensive diagnostic tests? How much are related to fixing major health problems after the fact, when they could have been prevented if we had only known where to look at what lifestyle changes to make?

What the bean counters are missing when they simply project ever-larger expenditures based on past experience is the enormous impact that wearable diagnostics are going to have on healthcare in general. You already know about Fitbit, which helps you get in shape by tracking the number of steps you take each day and week, and now also tracks heart rate, calories burned and stairs climbed. More recent innovations are the Sensoria smart sock, which diagnoses your running stride and can reliably identify a runner’s rookie mistake of heel striking. If you’ve gone to a hospital to evaluate your endurance, well, you could have used the PerformTech heart-rate monitor, which calculates your endurance simply from five minutes on a stair-stepper.

Not getting enough sleep? Or the right kind of sleep? The Withing’s Aura bed pad will diagnose the quality of your REM cycle. An app by Sleeprate will tell you when you have restless cycles. And if you’re one of those people who has trouble getting into meditation, you might try the Muse headband, which contains an EEG device that measures brainwaves, and helps coach you into a state of meditative peace. It also tracks your meditative progress over time.

If you saw the episodes of Jeopardy where a computer named Watson cleaned up the board, well, you saw the next major diagnostic engine. At this moment, Watson is busy absorbing the medical literature, and is helping real doctors make proper diagnoses and offer remedies. IBM, the maker of Watson, expects to put the program in the Cloud, where it will be accessible to, among other things, mobile devices.

The combination of the next generation of wearable diagnostics uploading data to Watson for instant analysis will allow us to have our health monitored constantly in real time—by affordable devices that are as sensitive as the expensive hospital equipment that hits the global healthcare budget so hard. When you begin to have a problem, the wearable device will schedule a medical exam. If you start to experience the early stages of a heart attack or stroke, the ambulance will arrive at your door—before you realize you have a problem. The treatments will be much less expensive, because the problems will be caught in the very early stages.

How many billions of dollars will this save? The statisticians who draw the alarming graphs haven’t even started to realize that they’re living in the middle of a health care revolution. But now you do.

“We are each given a block of marble when we begin a lifetime, and the tools to shape it into sculpture. We can drag it behind us untouched, we can pound it to gravel, or we can shape it into glory.”

–Richard Bach
Writer

Embrace The Security Freeze

In recent years, you might have noticed that just about everyone is losing your personal data. What follows is a primer on what you can do to avoid becoming a victim of identity theft as a result of all this data spillage.

A seemingly never-ending stream of breaches at banks, healthcare providers, insurance companies and data brokers has created a robust market for thieves who sell identity data. If your response to this “breachapalooza” is to do what each of the breached organizations suggest — to take them up on one or two years’ worth of free credit monitoring services — you might sleep better at night but you will probably not be any more protected against crooks stealing your identity. Credit monitoring services aren’t really built to prevent ID theft. The most you can hope for from a credit monitoring service is that they give you a heads up when ID theft does happen, and then help you through the often labyrinthine process of getting the credit bureaus and/or creditors to remove the fraudulent activity and to fix your credit score.

In short, if you have already been victimized by identity theft (fraud involving existing credit or debit cards is not identity theft), it might be worth paying for these credit monitoring and repair services (although more than likely, you are already eligible for free coverage thanks to a recent breach at any one of dozens of companies that have lost your information over the past year). Otherwise, consider freezing your credit file at the major credit bureaus.

There is little public knowledge or education about the benefits of a security freeze, also known as a “credit freeze.” This Q & A will provide some quality education!

Q: What is a security freeze?

A: A security freeze blocks any potential creditors from being able to view or “pull” your credit file, unless you affirmatively unfreeze or thaw your file beforehand. With a freeze in place on your credit file, ID thieves can apply for credit in your name, but they will not succeed in getting new lines of credit in your name because few if any creditors will extend that credit without first being able to gauge how risky it is to loan to you (i.e., view your credit file).

Q: What’s involved in freezing my credit file?

A: Freezing your credit involves notifying each of the major credit bureaus that you wish to place a freeze on your credit file. This can usually be done online, but in a few cases you may need to contact one or more credit bureaus by phone or in writing. Once you complete the application process, each bureau will provide a unique personal identification number (PIN) that you use to unfreeze or “thaw” your credit file in the event that you need to apply for new lines of credit. There are four consumer credit bureaus, including Equifax, Experian, Innovis and TransUnion.

Q: How much is the fee, and how can I know whether I have to pay it?

A: The fee ranges from $0 to $15 per bureau, meaning that it can cost up to $60 to place a freeze at all four credit bureaus (recommended).

inspfin1Q: What’s involved in unfreezing my file?

A: The easiest way to unfreeze your file for the purposes of gaining new credit is to spend a few minutes on the phone with the company from which you hope to gain the line of credit to see which credit bureau they rely upon for credit checks. Once you know which bureau the creditor uses, contact that bureau either via phone or online and supply the PIN they gave you when you froze your credit file with them. The thawing process should not take more than 24 hours.

Q: I’ve heard about something called a fraud alert. What’s the difference between a security freeze and a fraud alert on my credit file?

A: With a fraud alert on your credit file, lenders or service providers should not grant credit in your name without first contacting you to obtain your approval. To place a fraud alert, contact one of the credit bureaus via phone or online, fill out a short form, and answer a handful of multiple-choice, out-of-wallet questions about your credit history. The bureau you filed the alert with must by law share that alert with the other bureaus.

Q: Why would I pay for a security freeze when a fraud alert is free?

A: Fraud alerts only last for 90 days, although you can renew them as often as you like. More importantly, while lenders and service providers are supposed to seek and obtain your approval before granting credit in your name if you have a fraud alert on your file, they’re not legally required to do this.

Q: Hang on: If I thaw my credit file after freezing it so that I can apply for new lines of credit, won’t I have to pay to refreeze my file at the credit bureau where I thawed it?

A: Yes (unless you’ve previously qualified for a free freeze). However, even if you have to do this once or twice a year, the cost of doing so is almost certainly less than paying for a year’s worth of credit monitoring services.

Q: Is there anything I should do in addition to placing a freeze that would help me get the upper hand on ID thieves?

A: Yes: Periodically order a free copy of your credit report. By law, each of the three major credit reporting bureaus must provide a free copy of your credit report each year — via a government-mandated site: annualcreditreport.com. The best way to take advantage of this right is to make a notation in your calendar to request a copy of your report every 120 days, to review the report and to report any inaccuracies or questionable entries when and if you spot them.

Q: If I freeze my file, won’t I have trouble getting new credit going forward?

A: If you’re in the habit of applying for a new credit card each time you see a 10% discount for shopping in a department store, a security freeze may cure you of that impulse. Other than that, as long as you already have existing lines of credit (credit cards, loans, etc.) the credit bureaus should be able to continue to monitor and evaluate your creditworthiness should you decide to take out a new loan or apply for a new line of credit.

“It is neither wealth nor splendor; but tranquility and occupation which give you happiness.

–Thomas Jefferson

From The Data Bank

20 is the percentage of investors who are confident they can withstand a market shock. (Money)

43 is the percentage of female workers among the 4 million workers surveyed in 2013 who participated in their employer-sponsored 401(k) plan. (Wells Fargo)

53 is the percentage of U.S. women who have started saving for retirement. (BlackRock)

65 is the percentage of men who have started saving for retirement. (BlackRock)

87 is the percentage of individuals signed up through HealthCare.gov who qualify for financial assistance. (U.S. Dept. of Health & Human Services)

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CHOC Walk in the Park 2015 – Inspired Financial is creating a team to participate in the 25th anniversary CHOC Walk held at Disneyland for The Children’s Hospital of Orange County (CHOC) on October 11, 2015.  This will be a great family event that you won’t want to miss. Mark your calendars now to join our team for the 5k walk through Disneyland and California Adventure. Here is a link for registration/details and be on the lookout for a personal email invitation soon!

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Office Notes

Just after tax season, Laurie and her husband Scott enjoyed a river cruise in Southern France, with Laurie’s great college friend – a family friend of 37 years – and her darling 87-year-old mother. It was a very special trip.

Kevin is looking forward to a family visit in Illinois this summer. He is also excited about attending a financial planning conference in September that will give an update on current trends in the profession.

inspfin4Evelyn’s parents celebrated their 50th anniversary with a family vacation in Jackson Hole, Wyoming. Of course, Evelyn and Mark attended, and there were 11 there in total. The group visited two national parks (Grand Teton & Yellowstone) and enjoyed whitewater rafting on the Snake River. The highlight may have been a 2-mile ride on a covered wagon with a BBQ dinner with live, cowboy entertainment.

Have a wonderful summer season! We remain grateful for your trusted relationship and welcome your calls anytime.

Your team at Inspired Financial

Note: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategy may be appropriate for you, consult with your attorney, accountant, financial advisor, or tax advisor prior to investing or taking action.