Now that we are firmly in the dog days of summer (as I write and published this, not as you are probably reading it) it is time to turn our attention to how pets actually make us richer in so many ways, including financially. And since it is the dogs days of summer we will focus on cats. This isn’t to take anything away from dogs and dog lovers (we always had a dog on the farm growing up). Dogs are cash machines, same as cats. It’s just that your favorite accountant currently lives with two cats.

Now I can hear some folks out there taking exception to my premise that pets are a cash machine when pets actually cost money. Food, litter, toys and vet bills add up. A few years back a blogger in the FIRE community let the world know pets were a frivolous expense and in no way frugal. I disagreed then and now. Unless you have a herd of animals in your home, pets increase your health and wealth in many ways. And our furry family members do it in such a stealthy way.

Of course I’m biased. I enjoyed cats in the home since high school. We always had a dog or two around the farm when I was growing up. A farm dog is a great help when getting the cows in at milking time. They are also a great companion when working in the barn and fields. There is a wealth beyond financial that friendship brings. And cats take care of important business, too.

You know you are in trouble when you get this look. Usually it means, “FEED ME!!!”

1. Medical Expenses

a. Health Insurance

 The biggest financial benefit of owning cats involves health costs. Pets, and especially cats, have been shown to lower blood pressure and cholesterol levels.

Medical costs are a serious percent of the family budget. Lowering cholesterol and blood pressure can not only save on prescriptions and doctor visits, but also open the door to savings with lower cost health insurance plans. A high-deductible health insurance plan that is health savings account (HSA) qualified reduces costs up front while opening the door for tax-deductible savings you can use for future out-of-pocket medical expenses or for retirement if not used by age 65. 

The financial benefits of owning a cat can exceed the expenses of owning a cat. That should come as no surprise. with medical cost so high.

b. Heart Health

Heart disease is the leading cause of death in the U.S. with ~650,000 people dying from this single cause every year. Stroke claims around another 150,000 Americans each year.

Due to the cholesterol and blood pressure lowering benefits cats bring, owning a cat could help you live longer. According to a Goodnet.org article, owning a cat can lower your risk of certain heart diseases and stroke by ~ 30%. 

Interacting with your cat also lowers cortisol levels. This means merely playing with your cat can lower the hormone responsible for weight gain. Excess weight is a major factor in many illnesses in the U.S. as well. Lower weight can also increase quality of life which comes in handy if you are going to live longer.

c. Faster Healing

The purring sound cats make when happy reduces stress and facilitates healing of bones, muscles and tendons. Something as simple as your cat laying on your lap and purring as you pet her can improve your health.

Vibration frequencies between 18-35 hertz have been shown to promote healing. The vibrations the purring of a cat creates fall within the 20-140 hertz range. It is no wonder a purring cat helps us get better sooner.

In a February 2018 report from the NIH, cats can also increase your mood, reduce loneliness and help children with developmental disabilities. 

d. Stress

Stress and anxiety is endemic in our modern world. Petting your cat actually lowers anxiety and stress levels by causing the release of calming chemicals in your body. 

Costs for stress and anxiety have reached $300 billion per year in the U.S., including: lost work hours, lower productivity, accidents, medical and insurance costs. 

Less stress improves mental health, too. Our furry family member improves our life on multiple levels. Taking care of our cat releases feel-good neurotransmitters. These neurotransmitters reduce stress and thereby, reduce health costs.

e. Fewer Allergies for Kids

A study from the National institute of Health released in 2002 indicated children exposed to cats in their first year of life were less likely to suffer from allergies. It seems high exposure to cats in a child’s early years reduces pet allergies later in life, but also for other common allergies: ragweed, grass, pollen.

I run this place and don’t you forget it.

2. Social Life

a. Family Life

Dr. June Nicolls, a leading pet researcher, found women are more attracted to men with cats. This isn’t a minor benefit either, guys. According to Nicolls, 90% of single women found men with cats nicer and more caring than men without a cat.

While I found no research proving the following statement, I think it is fair to consider owning a cat can improve your home life and interactions with family members. Instead of a fight escalating, the aggrieved party can talk it out with the family cat. Also, caring for a cat improves parenting instincts. By providing for your cat you train yourself to care for others and consider their feelings. This is good for everyone involved.

b. Energy Levels

There is a study from Indiana University (link no longer available) that says simply watching cat videos can boost energy levels and create positive emotions. There was also a reduction in negative emotions. Even if you don’t own a cat, watching videos of cats can provide health benefits. The sound of purring, even from a computer speaker, is valuable if you are healing from injury.

Cats talk! Pinky says, “It’s okay for food to fall from the dinner table.”

3. Making Money with Your Cat

Up till this point we focused on the money you can save from having a resident cat. Even a minor reduction in medical costs can turn your tabby into to a financial dynamo. Add the personal benefits and joy of petting and playing with your furry friend and it becomes clear cats really are a member of the family.

But saving money is only one financial benefit of cat ownership. You can also make make money with cats. 

a. Social Media

Rachel Miller is a self-acclaimed Facebook marketing geek. In the past she had a cat page on Facebook and made money from it. Countless others have turned some coin with cat videos on YouTube, Instagram and other social media sites. Here is one of my favorite YouTube channels (and a profitable one, I might add).

Cats are always a great selling tool. (Animals in general are. That is why so many firms use animals in advertisements.) If you are lucky you might get your cat into a marketing program with nice residuals. (Think Grumpy Cat.) If you have a business or side hustle your cat can bring home the bacon by providing your business a friendly face.

b. Cat Business

There are a variety of cat businesses to choose from. Cat grooming, training and cat-sitting are a few ways your cat can earn money for you. I have a client who makes kitty clothes; she turns a tidy profit. Her cat models the outfits and helps her size the clothes and costumes.

c. Rodent Control

Another massive benefit of having cats is they keep rodents away. Every so often a mouse makes its way indoors as the weather turns cooler in the autumn. We never need to spend on poison or traps. One mouse; two cats. What odds do you give the mouse? 

Mice and rats carry disease. Cats keeping a watchful eye 24/7 means rodents never get established in your home. The cost of an exterminator is significant and the household cats do it for free. 

 

Several years ago a personal finance blogger (as stated in the open of this post) nixed the idea of having a pet because it wasn’t frugal. He caught heck for that post (it wasn’t me!). Having too many pets can be a drain on the family finances. However, life is  series of trade-offs. You can’t spend on every item that glows in the dark and party all the time and have money for a pet. Your cat also needs love; while they soothe you, you soothe them. So you need home time with kitty daily.

It isn’t hard to make money with a pet in our modern world. I picked cats because I have cats. A dog or other pet can work just as well. People love watching animal videos. There was a time(it might still be out there) where people would put a video on their TV of a fish aquarium. And people binge watch cat videos on YouTube all the time.

Animals relax us. Cats are special. They don’t take a lot of work (feed them and clean the litter box and you are good to go). But too many cat owners miss the financial opportunity their furry friend provides. 

It seems cat pictures and videos sell. With that said, I will be starting a Facebook page for my kitties soon. I then can share the antics of my cats, along with other funny cat videos and placards. Who knows, my cats might pay the light bill one day soon.

Pinky is enjoying the last of the Dog Days of summer.

 

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This is how we can get Medicare for all. We can solve the healthcare crisis in America and save money and cut taxes at the same time.Healthcare is taking center stage once again as the political arena heats up. This will not be a political treatise, however. Instead, we will focus on the long-term problems in the U.S. healthcare system and potential solution to be found using the tax code.

Medicare for all is something that always appealed to me. When the politics are stripped away there is a lot to like in the idea of expanding Medicare coverage to everyone. 

Currently about half the people get some form of Medicare benefit. The old, very young and poor qualify for the Medicare or Medicaid programs. Unfortunately, the Medicare system is set up backwards. The people who pay for it are not the people receiving benefits and the people receiving benefits don’t pay for it (with the exception of people age 65 and older).

Even the elderly who pay a Medicare premium for some parts of the program are still subsidized by those earning a wage or salary, the very people who don’t qualify for benefits. 

The inefficiency of the U.S medical system has created the most expensive healthcare system in the world by far with sub-par results. For most illnesses it is better to travel to another country for treatment if you want better odds at living. 

Solutions have been hard to come by and the Affordable Care Act hasn’t delivered on it’s promise while costing taxpayers plenty. Medicare for all is a solution more people are clinging to with good reason. But it must be done right to work! 

Medicare for all will fail if simply enacted as another government entitlement to add to the budget. I propose there is a solution that increases American business’s competitiveness, covers all Americans with Medicare coverage and reduces taxes even more on all businesses.

 

Identifying the Problems

Small businesses struggle to afford healthcare for employees if they offer it at all and large employers are at a competitive disadvantage when competing against foreign firms that don’t spend major resources providing healthcare to their employees.

More and more small businesses have either stopped offering medical insurance as a fringe benefit or have seriously curtailed the benefit. Large businesses constantly deal with the large cost of medical insurance. If wages are the biggest expense for most corporations, then employee benefits—of which medical insurance is almost always the largest—are certainly the second largest expense or close to it.

We can solve the healthcare crisis in America with Medicare for all. And enjoy lower taxes and higher wages, too. Medicine should not be painful.Small businesses and large corporations alike get a tax deduction for providing medical insurance to employees. However, a deduction is worth less when there are fewer profits due to the added burden. (Corporations pay 100% of the benefit expense only to receive a faction of the expense back in tax savings.)

There is also a worry about turning over the vast majority of medical insurance over to the government. People say they don’t want the government involved with their medical decisions. They want their medical care choices to be between them and the doctor.

Except it doesn’t work that way! When you reach 65 you are on Medicare. If it is so bad we should maybe eliminate Medicare completely. (For the record, I am NOT recommending this and neither are the naysayers!)

The argument also falls flat when you realize your employer now makes those decisions for you! If your employer needs to downsize you are on your own medically. And God forbid you have a preexisting condition.

It isn’t often that we can have our cake and eat it to, but this could be one time when it could happen. If we got your employer out of the medical business (unless they are a doctor or medical facility) and let them do what they’re best at (providing the goods and services they are in business for in the first place) and could cover everyone with basic medical care at a cheaper cost we might be on to something.

 

Left and Right

The left generally pushes the idea of Medicare for all, but the right likes the idea too; President George W. Bush signed into law the largest expansion of Medicare since its inception with Part D.

The left is currently pushing the Medicare for all agenda. They love the idea since it covers everyone, eliminates waste (hopefully) and helps the uninsured, unemployed and those with preexisting conditions. It is easier to change jobs if medical insurance isn’t an issue. Early retirement is easier, too.

The right hates the idea because it promises massive new levels of government spending. There is something to be said about these concerns.

But nothing happens in a vacuum. Just tossing out Medicare for all would be a disaster! Yes, it would cover everyone with a minimal level of health care, but it could easily bankrupt the government or force taxes seriously higher. This is a major problem that must be resolved before we can grant every American basic healthcare and remain solvent.

 

 Facts and Circumstances

Medicare for all can be coupled with massive tax cuts for businesses, increasing American competitiveness around the world and keeping the government solvent. Tariffs and other strong arm measures might force a temporary trade imbalance reduction, but until U.S. businesses increase their competitiveness the problem will not go away.

To see how this intractable problem can be resolved we need to review some facts.

The median American household income is just north of $60,000. In 2019 U.S. employers will fork over nearly $15,000 for medical insurance benefits per employee.

This means about 20% of the cost of an employee is in the form of just one benefit: medical insurance. (I know I took some license here. Household income doesn’t equal what each employee makes, but it does skew the data against my thesis so no one can accuse me of fudging the numbers to prove a point.) Yes, American businesses cough up around $1.2 trillion per year providing healthcare benefits to their employees and their families, about the same amount Medicare and Medicaid spends combined each year. 

Call it what you want, but this is nothing more than a huge hidden tax! 

Let’s put this into perspective. Corporation paid $341.7 billion in income taxes in 2015. The cost of healthcare is nearly four times what corporations pay in taxes!

When you consider how American businesses need to compete in a global environment it is easy to see why foreign corporations have competitive advantages. Not only do American corporations pay $341.7 billion in income taxes, they also pay $1.2 trillion in healthcare expenses. 

You see, we already have nationalized healthcare! It is costly and inefficient with everyone trying their hand at dealing with the issues. In the U.S. we have corporations do what the national government does in most other nations.

We can fix this.

 

Tax Code to the Rescue

We have identified most of the major issues surrounding healthcare in America. It is a huge tax on businesses and is inefficient. 

If all we do is add Medicare for all we still have a massive mess. Employers would still fork over for benefits above and beyond Medicare benefits.

The solution requires a tax bill as draconian as the Tax Cuts and Jobs Act of 2017. Only the focus would be on a single issue: solving the American healthcare crisis.

First, we have to stop draining corporate coffers of $1.2 trillion every year, a cost that is growing at a rate many times the rate of inflation. 

For Medicare to offer universal coverage at current rates we would need to change the tax code. Medical insurance and all employee benefits related to medical can no longer be deductible. In fact, we would need to make medical coverage by an employer illegal so corporations could not shift the deductible expense to a nondeductible expense. 

This would save businesses $1.2 trillion this year alone which equates to a massive tax cut. Corporations would have a real cost reduction, opening the door to real wage growth going forward.

To pay for Medicare for all is straight forward. If businesses have $1.2 trillion less in expenses they will pay more in tax because they are more profitable. Even Wall Street would love such a plan as the stock market would climb smartly on such earnings growth.

Corporations would not be allowed to keep all of the $1.2 trillion tax cut, however. A 2% or so additional Medicare payroll tax would need to be instituted, paid by the employer only. (The current Medicare payroll tax is 2.9%, half paid by the employer and half by the employee. I propose the additional payroll tax be levied against the employer only since the employer just saved $1.2 trillion by getting out of the healthcare business.)

 

Winners and Losers

There would be lots of winners under my plan with only one real loser: insurance companies. 

Medicare returns around 98% of premiums in benefits while medical insurance companies return somewhere in the low 80s. The increased efficiency of a centrally managed healthcare system would be tremendous, saving the American economy (that is you and me, kind readers) massive resources better utilized elsewhere. The savings alone could dwarf the trade deficit!

Affordable healthcare shouldn't make you sick. Learn how Medicare for all is a solution that works.Businesses and employees are easy winners under my plan. A recession doesn’t bring the added risk of lost medical coverage for employees either.

Medical treatment centers would not have to deal with untold numbers of payment providers. 

Business owners would not squander valuable resources anymore trying to make medical decisions when they are not in the medical business. The added focus alone would increase American business effectiveness which should add to economic growth and competitiveness.

Insurance companies are not complete losers either. Medicare is basic medical coverage. Insurance companies can still play a crucial role in benefit administration. They can also provide supplemental insurance as they do now to the elderly.

I also propose, under my plan, that Medicare benefits be handled as they are now for those 65 and older. Certain benefits are free to all American while some benefits have a small premium (Part B, C and D, for example) based on income level. Insurance companies would still play a role in this arena also as they do now for older Americans.

 

Putting it Together

Here are the simultaneous steps to institute my program to provide all Americans with basic medical coverage:

  1. Medical insurance benefits no longer deductible for employers.
  2. It would be illegal for employers to provide medical insurance, even if nondeductible, unless they are a medical facility.
  3. Businesses would save over $1 trillion in costs this year alone. Part of these saving would be paid into Medicare to pay for Medicare for all.
  4. Medicare Part A would cover all Americans while a small premium would be required for Part B, C and D based on income. 

 

How You Can Fix Healthcare in America

This is my back-of-the-envelope plan to fix the healthcare crisis in America. It isn’t a perfect plan and I’m certainly open to adjustments, improvements and suggestions. 

Do you like my plan? How would you modify what I offered above?  

And most of all, send this to your Congressman or Congresswoman and Senator. They need to know it is time to fix the healthcare mess once and for all while we still have our health.

I think this is something we can all agree would make America great in a global economy.

And nobody has to get sick over it.

 

 

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cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregation studies work and how to get one yourself.

Worthy Financial offers a flat 5% on their investment. You can read my review here.