Monday, November 16, 2009

Poor health can send you broke

Everyone knows someone who has been or is currently sick. If it's just a passing flu or virus, that's not a huge problem. However, if it's something terminal or something that will affect you for the rest of your life, such as cancer or disabilities, then it will drain your finance and could send you broke.

Personally, I've been blessed and fortunate that I have been born with relatively good health. A recent injury whilst snowboarding and over a year worth of stomach pains gave me a taste of what I was missing out on medically and financially.

First health problem of the year:
The snowboarding injury to the shoulder (compacted/compressed shoulder joint) required a visit to the Physiotherapist and several weekly visits thereafter.
Initial consultation $69
Each visit thereafter $57
Total cost of physio $ 426
Total cost out of pocket $228.50

I finally had the opportunity to use my private health insurance (besides the obligatory trip to the dentist for a checkup), so that meant I was out of pocket for $228.50
Bearing in mind that private health insurance fees are now about $1100 per annum and rising.

Second health problem of the year and still ongoing:
Stomach pains and aches. This health problem is a pain in the arse and ongoing. It's random...meaning the pain onsets at random moments...after I eat and not necessarily all the time. It's irregular and can happen whenever which is highly annoying because it's hard to pinpoint whether it's a gastro, allergy or organ problem.

So a trip to the doctor for blood tests - covered by Medicare
A trip for an ultrasound $50
Out of pocket $25

Unfortunately the stomach problems are still ongoing and still need additional tests with specialist doctors to find out what the problem is.

So far, medical bills out of pocket are $1353.50 and that's not counting the cost of travelling, time wasted in medical waiting rooms, and the actual cost itself in lost working days or hours.

Colds, Flu and Viruses
A trip to the doctor is typically covered by Medicare. A box of prescription medicine is typically $30-$38 for a packet. If you don't get paid for sick days that you take off, then the total cost of being sick each day may range from $100-$200 for each day and more. I find that if I'm stuck out and about somewhere, and it starts raining - it's much cheaper to just buy an umbrella for $7 or $30 rather than rushing around in the rain and increasing the probability of getting sick.

Broken Bones and Terminal Illnesses
Now we're talking big bucks. Huge bills. Specialist and hospital bills. Out of pocket costs are typically a few thousand dollars and I've heard of bills up to $35,000 for injuries involving ambulances, hospitals and no private health insurance. Even worse, having no travel insurance and injuring yourself badly overseas. Repatriation costs are several thousands of dollars and you could be left stuck, in that country that you've injured yourself in, with no way home.

Getting sick isn't cheap. Being continuously sick will end up costing you a lot. That's why it's important to eat healthy and exercise regularly. Something that we have to try to do more often.

Sunday, November 15, 2009

Managing Cash Flow for Yourself, Business or Company

Cashflow is one of the most important concept for individuals and for businesses. If you're asset rich, but liquidity poor, then being unable to pay your bills or invoices could lead to a creditor taking you to court and this may force you declare bankruptcy if you haven't got the money to pay the creditor.

An interesting excerpt from Dun & Bradstreet Australia outlines how you can improve your cash position:
* Develop a cash flow projection and ensure you monitor and update it regularly
* Minimise bad debts through an established credit-assessment procedure
* Establish an accounts-payable policyat the outset of every credit
* Establish a deposit policy for work in progress
* Monitor
your customers' use of credit and adjust their credit limits accordingly
Closely manage your invoice process and collections practices
* Re-arrange
annual payments such as insurance so you pay small instalments frequently. This
will help smooth out lumps in your cash flow cycle
* Select an appropriate
source of funding for your requirements and pay the debt before the interest
kicks in
* Use short-term cash surpluses wisely. Don't keep them in accounts
that don't pay interest

I agree with all of the above, having utilised them in practice. The point about re-arranging your annual payments to pay by small regular, frequent instalments...that one I'm not quite a proponent of. If you can get discounts for paying the entire sum upfront annually, then this may be a more attractive option if your cash flow is reasonably liquid.

If you are struggling in terms of your own personal cash flow, then you need to review your budget and cut back unecessary expenses where possible. Contact creditors straight away to see what options they provide for clients experiencing hardships. Firstly by pre-empting the difficulty ahead, some creditors will be more lenient and offer you different payment terms, some will be informed and thus, not bill you for late fees and debt chasing fees.

For businesses, it's important to delay making early payment on accounts payable. For accounts receivable, it's important to follow up as soon as clients miss the payment date. The older the account, the less collectable it becomes.

Resourceful Websites for Business, Money, Finance and Random Things.

Excellent resource links for entrepreneurs and business people:

Australian Retailers Association (
Business Enterprise Centres (
Business Entry Point (
Department of Innovation (
E-business (
NSW Small Business (
SMExcellence (
NSW Department of State and Regional Development: offering inventors and small business innovators support to plan and commercialise their innovations. Original concepts, new or improved device, product, material, business process or service falls witin the definition of innovation may be eligible for assistance at NSW Innovation Advisory Centres.
Hunter Innovation Advisory Centre at Newcastle

Law Society of NSW (
Legal Issues Guide for Small Business (

Australian Business Register (
Business Licence Information Service (
GovForms (

Austrade (
Australian Competition and Consumer Commission (
Australian Copyright Council (
Australian Government Workplace Ombudsman (
Australian Securities and Investment Commission (
Australian Taxation Office (
Australian Workplace (
Department of Employment and Workplace Relations (
Department of Immigration and Citizenship (
Human Rights And Equal Opportunity Commission (
IP Australia (
NSW Office of Fair Trading (
NSW Office of Industrial Relations ( (
Office of the Privacy Commissioner (
WorkCover (
Workplace Authority (
Workplace Ombudsman (
Importing websites:


National Mentoring Association of Australia (

Australian Mentoring Institute (
Government grants (
Investing/Buying Gold (
A news gathering website (
Property Investing (
Property Management for Apartments (
Property Finance & Advanced Calculators (
Property Newsletters (
Mortgage Site (
Business News (
Business Articles (
Business Articles (
Forums and money articles from one of the largest US site (
Sales Articles (
Personal Finance Blog (
Small Business Articles (
#1 Internet Marketing Forum (
Affiliate Marketing Forum (

CASH BACK HOME LOANS (get rebates on upfront/annual/trailing mortgage commissions)
Peach Home Loans & YourShare. Average upfront commissions are typically 0.6% and average trail commissions are 0.2%

Design Sponge Online (
Apartment Therapy (
Remodelista (
James Merrell (
Design Squish (
Decorno (
Fine Little Day (
Ikeahacker (
Loving Living Small (
The Design Files (
Unhappy Hipsters (
This Is Naive (