August 28, 2010


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"many a doctor is out of sync with patients and as a consequence often does them a disservice or makes preventable medical mistakes." — Canadian Medical Association Journal, Aug 23, 2010

Medical doctors are among the most highly trained professionals but they make mistakes. You probably know this from your own experience. Two years ago, identifying and treating a basic wart took six separate doctors.

We learn to print and write as children but doctors' bad handwriting kills over  7,000 a year. You'd think that injecting a needle would be a basic skill yet the CDC found that unsafe injection practices may have harmed over 125,000 patients since 1999. The Journal of the American Medical Association (JAMA) reports that medical errors cause 250,000 deaths in the US each year — the third leading cause of death.

Statistics don't tell the whole story but make great sound bites. For our purposes, let's consider the claims plausible or possible. Doctors don't intend to hurt you, yet that happens despite their high level of skill.

When you need help, would you rather deal with a novice instead? In many parts of your life, you do.

Look Around

You'll find mistakes abound when you look elsewhere too. That's not much consolation. At least there are tough requirements to become a professional like a doctor, lawyer, engineer and accountant. The barriers limit entry and make the designations valuable. That's a consequence of what Seth Godin calls The Dip.

What if the barriers were very low? Almost nonexistent? Welcome to the financial world. The ability to sell means often more than formal training or demonstrated ability.

Earlier this week, an investment advisor from a major bank knocked on our door. Is this  the return of the door-to-door salesman?  In the world of do-not-call lists and do-not-spam, door-to-door solicitation and junk mail are loopholes for interruptions. Lucky us.

When I'm interrupted, I look up the offenders. Try this yourself. Their business cards rarely show designations — not even a university degree. They rarely show up with a web search. If they have a profile on LinkedIn, don't expect much detail or (m)any testimonials. Maybe they have wonderful experience, but where's the proof?  In a world of abundance, you've got lots of choice.

New doctors may cause a 6% increase in death rates among hospital patients. Couldn't a new or untrained advisor wreak havoc too? Regardless, count on paying roughly what the experts charge.

Why Education Matters

Education is what remains after one has forgotten everything he learned in school.
— Albert Einstein

School teaches us to think.Completing school takes discipline. Many drop out physically or mentally before graduation.

Yes, experts make mistakes too. When doctors admit theirs, they face fewer malpractice suits. The less competent in any field may not even know they messed up.

Low Barriers

Back in 2000, the last time we bought a Toyota, the sales manager said new salespeople would have university degrees. Imagine a world where selling cars takes more formal education than selling investments or insurance. Scary.

A framed degree on the wall may not prove much … except that the recipient had enough discipline, intelligence and determination to succeed. Maybe that matters to you.

Would you believe that 23% of patients had an adverse event after discharge? That's with well-trained medical doctors. What happens with your financial doctors?


Podcast Episode 81 (4:38)

direct download | Internet Archive page

August 22, 2010


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"A pocket full of mumbles such are promises." 
— Simon and Garfunkel,
The Boxer
Your insurance contract is an expensive but worthless stack of paper if your claim isn't paid. A promise broken. As Warren Buffett says, promises vary greatly in their quality. You know that.

You can boost your chances of getting your (legitimate) claim paid with
  1. an insurer with excellent corporate governance
  2. an independent distributor with leverage with the insurer
  3. an independent advisor with leverage with the distributor
These keys maximize your leverage when you need it most. The cost is minimal.

The Right Insurer

Corporate governance deals with companies keeping promises. This measure looks to the past but is a reasonable predictor of the future, especially for publicly-traded companies. Due to competition, picking a well-run insurer rarely costs you much more. The Globe and Mail prepares rankings.

The latest global financial crisis shows that bigger doesn't mean better corporate governance. Investors and taxpayers around the world learned this tough lesson. So you won't automatically pick the company with the highest score because other factors also matter.

If your advisor is independent, you'll likely get proposals from different insurers. Ask about the selection criteria. Was corporate governance a consideration?

The Right Distributor

Insurers are growing through acquisition to reduce unit costs, increase market share and eliminate competitors. You're stuck with less choice but may not get lower prices.

Fortunately, the independent distributors are growing too. They're  often called Managing General Agents (MGAs).
An independent distributor promotes products from different insurers. A dependent distributor is generally owned by an insurer to promotes its own products.
Insurers don't like dealing directly with advisors — too many points of contact. The distributor is the intermediary. Also, the insurer can recover advisor debt from them.

Some independent distributors have better reputations and more clout with the insurers. Here is the just-released 2010 Report Card from Investment Executive. This link shows the main chart in PDF format. Don't worry if you don't recognize the names.Your advisor picks the distributor. Who did they pick and why?

The Right Advisor

Through your advisor, you'll get the distributor and access to the insurers. You want your advisor on good terms with all parties. If not, you lose by association when you need a favour.

You have full control over who you pick. Get this decision right and you don't need to worry much about the others. Here are three decision criteria to consider: chemistry, credentials and generosity.
Avoid an advisor who's a "squeaky wheel". Insurer staff don't like them. Who would? You may  face unwelcome delays and anguish during the claims process. Your advisor will likely blame the insurer … even though they picked the company.
Since insurers set the premiums, you don't pay extra for picking a particular advisor. You simply need to be careful. Your decision affects everything else.

Exceptions Prevail

Insurance is an intangible promise on a piece of paper. You're dealing with people and ambiguity. A claims adjuster uses judgement to decide if you're disabled or have suffered a critical illness that qualifies under the terms of the policy contract. So requests for exceptions are routine. Some lead to changes in procedures. Others are special one-time arrangements. Many are rejected.

The nicer advisors and the larger advisors get more exceptions.

That's no surprise. That's how life works. You want the leverage on your side. An advisor who knows the inner workings of the insurers can help the distributor frame requests in ways that are more likely to get results.

Cutting Back

You've experienced the effect of companies trying to make more money. You might face higher prices, smaller sizes, slower delivery, tougher return policies, smaller selection or less service.

An insurer maximizes profits if clients pay premiums but make fewer claims than projected. Some of those savings may be passed on to you. For example, term life insurance is inexpensive because so few die. Getting you to cancel your coverage helps too. So you find incentives like a return of your premium if you cancel your critical illness insurance. The insurer wins because they keep all the investment returns and didn't pay a claim. You may gain more by keeping your coverage. Since you're older, you're more likely to make a claim.

If you or your advisor pick the lowest price, do you think that company is taking lower profits or are they making money by cutting back somewhere else? As a shareholder, what would you want them to do?
Bell Canada Enterprises owns Bell Mobility, Solo and Virgin Mobile. They share the same network. If there are network problems or enhancements, who gets top priority? Probably customers of the flagship brand.

In the world of acquisitions, bigger insurers are more likely to survive and to give their own clients preferential service. What's worse, experienced staff from the acquired company are often cut to reduce costs. So picking the right company at the outset is helpful — though you can't be certain which company is the right one. Your advisor can help in reducing the chances of guessing wrong.

Sad Cases

Here's a sad story about an insurer that delayed a death claim for 11 months. Imagine the family's anguish. Even then, intervention by Ellen Roseman seems to be the catalyst for payment.

There's the cruel world of bank mortgage insurance. You may think you're covered because you've been paying premiums for years. How would you feel to be told you never qualified when you file a claim?

External pressure from a journalist may help if you have a solid case and exhaust other options first.

No Guarantees

Insurers are likely to pay "obvious" claims. Otherwise you'd see articles in the media regularly and pressure to reform their practices. The government might even intervene.

The challenges occur when there's ambiguity. Human judgement isn't perfect and there may be financial pressure to deny claims — maybe not today, but in the future.

Insurance is about peace of mind. Why not boost yours with simple, inexpensive steps?


Podcast Episode 80 (7:46)

direct download | Internet Archive page

PS Visit the links for more, including touching examples.

August 14, 2010


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If you're lost in a new city, you might ask a stranger for directions. They'll probably help for free.

Nowadays, you can easily reach strangers worldwide by phone, email or text messages. Ease of access doesn't obligate them to help you. Try other options first.

Try Other Options First

Yes, you're original, but is your question? Probably not. That's great because answers for your query --- or a variation --- are probably online waiting for you. If you can't find an answer with your preferred search engine, try another one. Also, try different search words.
Search for places that those with answers might gather. Consider getting books from the library (depending on your question).

There are many places where your questions are welcome and you can get multiple answers
  • a LinkedIn Group (newly revamped). The quality of your question and your profile may affect who answers. Check for similar questions first.
  • on Facebook. If your friends don't know, they may know someone who does. Whether they bother to help depends on your relationship with them.
  • an online forum. Example: for financial questions, the Canadian Money Forum is excellent.
  • in person Meetups: so many, so many different topics
You'll get better answers if you first observe and participate. You're then a welcome guest, not an annoying pest. If you're helped, why not stay to help others? That's a great way to say thanks.

What To Ask

Ask what they would do, rather than what you should do. They don't know you. Opinions vary. Would you act if you didn't get the answer you wanted? We routinely ignore advice from family, friends and doctors.

A critique can be better than an answer. Why not share what you're thinking and explain why? The strangers might raise questions that help you figure out your own answer. That's ultimately what you'll need to do.

Asking A Real Person

If you must ask a stranger, be sure
  1. to use their preferred method of contact. If in doubt, use email. Chris Brogan has a nice structured form
  2. be patient. People are busy and have their own priorities
  3. followup nicely if you don't get a reply. Your question may have gone astray or been forgotten.

The Bizarre Request

Here's this week's most bizarre request for help. I got two long distance voicemails that I couldn't hear properly. That's why my greeting recommends sending email for faster and better service. I then got a phone call and still couldn't hear properly. The caller asked me how to enter a post-graduate program at a university I never attended. Huh? He also wanted advice on whether his study plan was a good idea.

How could I possibly know? I asked the caller to send an email with the details. He agreed but didn't. Case closed?

If you're lost in a new city, you could use GPS Navigation on your smartphone or even a paper map. That way you're self-reliant. Preparation takes more effort but makes you more resourceful.


Podcast Episode 79 (3:48)

direct download | Internet Archive page

PS Say thanks --- even if you don't like the answers.

August 7, 2010


Maker Faire Detroit 2010
When things get so big, I don't trust them at all. You want some control -- you've got to keep it small.
--- Peter Gabriel,
Maker Faire is a celebration of the Do It Yourself (DIY) spirit. You leave feeling inspired and energized by the ingenuity.

Now In Detroit

Maker Faire came to Detroit for the first time. That's the location closest to Toronto (about four hours away). The event took place mainly on a parking lot at The Henry Ford. We attended both days and the weather was perfect: overcast on Saturday and sunny on Sunday.

Most participants seemed to be from Michigan. The many inventions ranged from robots to DNA kits that motivate students to study biology to ways to create electricity in Africa from stove exhaust. In the DIY spirit, the ideas were generally inexpensive. Most of the computers were inexpensive netbooks.

The crowd-pleasing touring spectacles came from further away.

The Lifesize Mousetrap

This elaborate DIY mousetrap takes 13+ years to design, five days to assemble, two days to dismantle and a tractor trailer to haul. The mouse is represented by a GM van (no surprise at a Ford venue).

Mentos and Coke Zero (Eepy Bird)

If you want to see two men in lab coats get doused with Coke Zero, this is the place. Ditto if you want to get wet. Preparation takes three hours and 108 2L bottles of Coke Zero. Although Pepsi was the only soft drink sold, Coke got plenty of free publicity.
You can create your own liquid fireworks at home … outside.

3D Printing

I've read about 3D printers but never saw one before. They print plastic layer by layer to create physical objects. Unlike the new 3D TVs, you don't need to wear special glasses to enjoy the results.

The military showed a model of a hybrid humvee that doubles mileage to 8 mpg. Printing took 14 hours on a $60,000 3D colour printer. You could even see detail inside it. This was like a model kit assembled for you. That's beyond the budget of most DIYers.

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The other extreme is the $950 monochrome CupCake CNC from Makerbot, which you assemble. It makes plastic objects as large as a tennis ball. I spoke to the inventor, Bre Pettis, briefly. If you're not creative, you can download templates from Thingiverse. Here's the Stanford Bunny taking a break from her keyboard.

Amazing Examples

This video shows objects you can make with a high quality 3D monochrome printer (not related to Maker Faire).
Imagine the possibilities when we have 3D printers at home.


You may have the tools to take your ideas to reality. If not, there are well-equipped inexpensive hackerspaces with equipment and willing collaborators.

This kind of creativity can revitalize Detroit to have a future beyond cars.

If you like visiting science centres or exploring new ideas, you and your family will enjoy Maker Faire. Attending is even easier now that Maker Faire is travelling east. The next stop is New York City.


Podcast Episode 78 (4:29)

direct download | Internet Archive page

PS Thanks to Peter McGarvey for telling us about Maker Faire and meeting us there.