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Medicare is Not Totally Free

For those of us of a certain age, it seemed like the distant future when we first heard the Beatles sing: "Will you still need me, will you still feed me, when I'm sixty-four?"  I clearly envisioned that, by that time, we would live in a world as depicted in The Jetsons.  But as that age approaches (or has been reached), mundane matters like Medicare start to impinge on our thoughts of flying cars and robot maids.

Of course, no one really wants to think about Medicare, with its jumble of letters—Part A, Part B, Part C, and Part D.  What a mess.  The basics on what this alphabet soup means can be found on Medicare's web site.

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The Universality of Cheetos Fingers

It turns out that knowing what to do with "Cheetos Fingers" is not common knowledge in all cultures.  This is a good reminder that we all come from different backgrounds and experiences. 

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Readers Write: Housing as an Investment

The great thing about having an engaged and intelligent readership—besides being able to publicly flatter them—is that they catch you when you fall short.  I recently attempted to discuss the value of an owner-occupied house as an investment.  My efforts to simplify a complicated calculation caused a number of you to point out some factors that were not included in the original piece.  Thank you for your assistance.

Please note that you will not be quizzed on this topic.  In weighing the distinct possibility of confusing you even more, I decided that it was still worthwhile to explore the matter a bit further for those so inclined.  For the rest of us, please skip down to the "Words of Wisdom."

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A House is a Place to Live

Let's say you bought a single-family house in 1980 for $99,550, which was the median-price in California at the time.  (I was in my third year of college in Ann Arbor then, but we can pretend for a moment.)  By 2010, your dream house was worth $292,820 if it retained its median status.

Under this example, your house appreciated about 3.6% per year.  If you had the foresight to sell your house at the market peak in 2007, your annual average gain would have been even higher at 6.6%.

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Who is a Millionaire

It seems that more people than ever are millionaires these days -- 1 in 20 households in the United States have investable assets of $1 million or more (excluding real estate).

Most of you realized that inflation means that being a millionaire is not what it used to be. $1 million today is equivalent to only $430,000 in 1983. As Yogi Berra so wisely put it, "a nickel ain't worth a dime anymore."

One of the main reasons we invest is to keep pace with inflation. Otherwise, the purchasing power of our money declines over time.

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