What health insurance product is right for you?

When it comes to insurance I'm the type of person that is always over-insured.  It's not so much that I think insurance is a great deal...it's just that I tend to up-sell myself to premium products whenever I look at insurance.  This results in me paying far more than I really ought to be paying.

This is especially true when it comes to Health Insurance.  I currently have a very high level of hospital and extras cover when I barely use any of it.  I'm healthy, in shape and have no serious pre-existing or family conditions to worry about...I'm the last person that should have full cover on everything (I even have pregnancy cover...).

I obviously have had the wrong health insurance for a long time (despite promising myself to the contrary) I have done nothing about it and I continue to pay my exorbitant premiums.  However I was recently forced to re-look at my health insurance plans when I was considering my fiance's and my future financial position.

She doesn't have health insurance however she was going to get stuck with both the medicare levy surcharge as well as the lifetime health cover loading in one hit after marrying me (which would affect my tax as well) so we started looking at plans together.

Comparing health insurance plans is incredibly difficult

Let's state this up front.  Comparing health insurance plans is one of the most difficult things you can do.  They all offer different levels of cover, they exclude different procedures and offer different amounts back for the same procedure.  Some offer policy limits and some offer limits per person per year while others have lifetime limits on what you can claim.

With all of this complexity how on earth do you sort it all out?  I like to think that I'm pretty astute when it comes to finance but honestly comparing these plans was about the most difficult thing I have ever done.

I have put together the following step by step guide to help you work through the nightmare of health insurance products, premiums and offerings.  Some of this is very similar to my original post 'Choosing the Right Health Insurance' but this will go into more detail.

Step 1: Know what you want and what you need

Before you start looking at any products you need to know both what you need and what you want.  If you don't you're going to be inundated with choice and too much

April 2015 Net Worth: $551,000 (+0.4%) and Goal Tracker

It's once again time to update my net worth and this month has seen some serious swings in the composition of my net worth even though the actual numbers didn't change all that much.  I continue to keep track of my 'future liabilities' (see this post for an explanation of them).  As at the end of April my future liabilities sit at $43,000 (down from $52,000 in March).

April 2015 Net Worth: $551,000 (+0.4%)

	Value	% Change
Assets	$965,000	+0.0%
Liabilities	$413,000	-0.4%
Net worth	$551,000	+0.4%

My performance this month at the headline level was actually quite lackluster and didn't quite live up to the modest $553,000 goal I had set at the end of last month.  However under the rather flat result there were a more movements and portfolio changes than I have had in a very long time. I've outlined some of the changes that were made this month below:

• A significant re-organisation of my share portfolio
• Recently I have been talking pretty consistently about how much the Australian share market has run and how I have been starting to get uncomfortable with being invested at these levels
• Well in the last month I put my money where my mouth is.  I sold some pretty big parcels of shares...some of which I wrote about and others which are just a continual re-balancing of my portfolio
• In the month I sold ~$30,000 of shares and made a significant profit...however from a net worth standpoint it was actually a negative
• This is because I account for the current market value of my shares in my net worth however it is only when I sell them that I actually generate capital gains liabilities
• Selling the shares therefore didn't increase my asset value but it did increase my liabilities to the tune of ~$4,000

Finding, gaining and keeping a mentor

How do we get ahead in our careers and our financial life?  It's a question that many of us ask all the time.  If you have read any books on getting ahead you will almost certainly have been told that seeking out the right mentors is incredibly important.  The problem that most of us face is twofold:

1. How on earth do we find a mentor who is where we want to be in life?
2. When we do find them how do we convince them to take an interest in us?

I suspect that most of us would love to be mentored by Warren Buffet or Bill Ackman but that's never going to happen.  I also have never really liked 'mentoring programs' that workplaces and student organisations typically run.  The mentors often treat it as an obligation and they are never really seem to have a real interest in you personally succeeding.

I therefore concluded that mentoring, while great in theory, was never really going to work in practice...until it did for me.  I found a mentor without actually searching for one and the experience has been far more positive than I originally imaged.

How did I find my mentor?

I didn't go out searching for a mentor.  I've always found the concept quite strange.  Of course there were people I wanted to learn off and I certainly didn't think I could do it all myself...however what did I have to offer?  Why would they take a particular interest in my life?  I found a mentor without intending to find one.  I'm not even sure that he realises that we have effectively fallen into that sort of relationship.

Where did I find my mentor?

My mentor is actually a

Why haven't I bought a second investment property?

When I first thought about buying an investment property I imagined that it would be the start of a property portfolio that would grow incrementally over time.  However almost 5 years after buying my first investment property I still only have one property.  Why haven't I bought more and why am I not some sort of young property baron?

My decision not to buy more properties was by design...

I actively decided not to buy more investment properties.  I could have done it several times and I definitely had the finances to do it.  My decision to stick to one investment property (for the moment) was by design and not through laziness or lack of opportunity.

I want to own a diversified portfolio of assets

My desire has never been to be a property baron.  Whilst I do want to be financially secure / well off and to reach my $90 million target I don't think that this needs to be within one investment class.  I want to own property, shares, bonds and alternative investments.

Owning an investment property puts a whole heap of your assets in one bucket.  Even if you can use a small deposit and use your cash to buy shares your actual exposure to the property market is still incredibly high.

If you want to own a physical property the fact is that you will be overweight that asset class for a very long period of time until everything else can actually catch up.  One of the reasons I haven't bought another investment property is that I was building up my other portfolio of assets during the last 5 years.

Your own home is an investment in the property market

When I was young I was very taken by Rich Dad Poor Dad.  I thought provided me with incredibly revelations that I had been completely missing before.  Once I did a bit more research and actually educated myself a bit more I realised that the book actually provided very little other than an idea of "you too can be rich".  

One of the core ideas that Robert Kiyosaki pushes in that book is that your home is not an asset because it takes money out of your pocket each month.  On face value this seems to be a true statement.  How many of us actually make money from our homes?  However the more I thought about the less I believed in this statement.

Your home is an asset.  You can spend too much for an asset, you can over-invest in an asset and you can over-capitalise an asset.  And most importantly not all assets put money in your pocket each month.  If you invest in physical assets (such as gold or oil or silver) they will typically take money out of your pocket each month due to storage costs and they certainly don't give you any cash until you actually sell the asset.  This is the same for your house.  Also owning your own home helps you avoid a cost - i.e. rent.

In fact your home is often one of the most tax advantageous investments you can own (in Australia).  You don't have to pay capital gains tax on your home and it is exempt from almost all forms of asset tests.

I don't own my own home (one that I live in) yet but it is definitely on the horizon. When I buy this home it will be an additional exposure that I have to the property market...and I will need to balance my other investment classes before I even think about buying property #3.

I can own additional property exposure through listed property funds and companies

I have written about buying listed property funds and companies before.  The major benefit of them is that you can buy them in small parcels and get exposure to sectors of the property market that I wouldn't normally be exposed to.  The major disadvantage of these types of investments is that you have much less control, the ability to leverage this investment is less and you have to pay fees on top of the natural costs.

I actually have a fair bit of exposure to the property market through listed funds although I have been reducing this lately.

The market doesn't look attractive to me at the moment

I'm a bit believer in value investing.  That is - putting my money to work where I believe there are fundamental traits which will make the investment more valuable in the future (even if these take a little while to realise).  At the moment I can't justify buying another property and increasing my exposure to the market.

If there was a crash or an amazing buying opportunity came my way I would not hesitate to go for it...but this does not seem likely in the current market and in the near term.

Over time I will probably buy more properties...but not right now

I don't have a problem with property investments in general.  In fact I think they are some of the easiest to understand and to own however like all investments you want to understand why your investing in something and have a thesis about how and when it will make you money.

Over time I will probably buy more properties and continue to hold onto them however this is not the right time for me.

You May Also Be Interested In

Real Estate Investment Trusts: An alternative to direct property investments

Book Review: Rich Dad Poor Dad by Robert Kiyosaki

Investing in real estate: All posts

What is the difference between bottom up and top down investing?

Financial questions to ask BEFORE you get married

You don't have to be a regular reader of this blog to know that I'm interested in finance.  Almost everything I write about is finance related and I am quite content sitting down and reading a finance book for hours on end.

I am also quite open about finance with those I talk to and am friends with.  Whilst I don't disclose how much I earn or what I am worth to those who know me I will happily talk about money and finance with anyone who would like the discussion.

With that sort of background you would be forgiven for assuming that I had had every single discussion necessary about finance before entering married life.  In fact I thought that is the one area that I had nailed down and that we didn't really need to talk about any more...but I was incredibly wrong!

There are a range of topics financial topics you need to talk about before committing to another person

I honestly thought I had covered all of the financial topics possible with my future wife.  We knew how we were going to save for a house, how we were going to pay the bills, what we were going to do when kids came around...everything...or at least I thought so...

One of the things people highly recommend is doing a marriage course so my fiance and I went along to one of these courses which gave us a huge multi choice questionnaire which covered a heap of different topics.  At least 30 of the questions covered finances and how much we had discussed them...and they covered incredibly important topics that we hadn't even touched.

Instead of just writing about my experience I thought I would make a list of topics that you should discuss with your significant other before you get married.  This list isn't exhaustive and if there are other things that concern you then you should definitely talk about them!

Financial topics you should talk about before getting married

Broadly speaking the things you should talk about fall into a few broad categories

1. Life plans and preferred lifestyle and the income you will need to support these
2. Attitudes towards spending and saving
3. Debt, current and future and how this will be incurred
4. Savings, goals and how you will achieve these
5. The day to day organisation of your finances

1. Life plans, lifestyle and generating the income you need to support this

This is the first thing you

Refinancing your mortgage can save you THOUSANDS

Home loans are a funny thing.  They are probably the biggest liability that most of us have and we research them to death when we actually get them but once they are set in place most of us fall into the pattern of paying them off as fast as we can without thinking about whether we can get a better deal.

Sometimes the deal we are on is so good that we want to hold onto it for as long as possible.  However when competition heats up between banks in the home loan market (as is currently happening in the Australian market) you can often save a lot of money by renegotiating your home loan or moving to a different provider altogether.

How a great deal when refinancing your mortgage

Getting a great deal when refinancing your mortgage is basically being able to do 3 things:

1. Know exactly what you want and need from your mortgage;
2. Knowing everything you are currently paying for your mortgage and all the benefits you are getting; and
3. Leveraging the best offers in the market with the financial institution you want to deal with

Step 1: Know exactly what you want and need from a mortgage

This is the most important

Importing my Japanese Sports Car...Step 4: Getting the car in my hands

After an agonizingly long 3 month wait my sports car (that I have been posting about for years) finally arrived in Australia.  Unfortunately I couldn't just drive the to the port and pick it up off the ship.  There were several steps the car had to go through before I could get it in my hot little hands.

If you have stumbled across this post and are wondering how to get a sports car into Australia (and why you may want to do so) I have written a series on my experience from buying the car, to getting it onto the ship and then getting it to Australia.  This is my final post in the series and will cover actually getting the car in my hands.

Getting the car compliant with Australian standards

After getting the car out of customs the first thing you need to do is to make sure that it is compliant with Australian standards.  There are a range of things that need to be done to a car to take it from compliant on Japanese roads and make them compliant for Australian roads and these are different for each car.  The cost is also different for each car.

For my V35 Skyline the cost was