By Steve Zimmer
Staff Writer
Personal Finance 101: Emergency Fund
When creating a personal budget, it’s always a good idea to focus on the future. Starting an emergency fund helps in preparing for unexpected events that can’t be planned for. Whether you have an unexpected car bill, medical expenses, etcetera; the emergency fund is theoretically supposed to be able to cover that expense when the rest of your income may be tied up in ordinary expenses (rent, food, insurance, utilities, etc.). How much money do you put into an emergency fund? Some say three months of income is adequate, but it really depends on your risk tolerance level. It’s always a good idea to put some money aside for a rainy day, but for students coming out of college with loans it’s much easier said than done. A great way to start an emergency fund is to have a percentage of your paycheck automatically deposited into a savings account or an account that won’t be touched frequently. With interest rates on savings accounts at all-time lows, setting up a money market account that carries a higher interest rate can be a viable option. While it may be tough to start, an emergency fund offers a peace of mind that may come in handy in the future.
Trading Activity
Partial Sell
UnitedHealth Group Inc. (UNH)
UnitedHealth Group owns and manages organized health systems in the United States and internationally. The company provides employers products and resources to plan and administer employee benefit programs. UnitedHealth also provides health care information and research to providers and payers. While health plan companies have performed well over the past few years with the implementation of the Affordable Care Act (ACA), the court case of King v. Burwell may have a dramatic impact on the future of healthcare. This Supreme Court case focuses on the phrase “established by the state” and whether or not the Federal Government has the authority to distribute subsidies to individuals who purchase health insurance through the federal exchange. Currently 37 states have its citizens purchase health insurance through the federal exchange (healthcare.gov). According to the Wall Street Journal and U.S. Department of Health and Human Services, 4.7 million people who shopped on the federal exchange qualified for a tax-credit subsidy. This number is expected to rise to over seven million this year. If the Supreme Court rules in favor of the plaintiff, these tax-credit subsidies will no longer be available, which will drive up prices on health insurance plans. Higher costing health insurance plans will allow many American citizens to become exempt from getting health insurance and not be forced to pay a penalty on their tax return. Thus, a potential ruling in favor of the plaintiff will result in less potential customers for health plan companies; something that hasn’t been projected into their 2015 guidance. While a verdict won’t be reached until June, the class wanted to take profits from our initial investment. As a result, a 14.77 percent gain was realized from the initial investment last May.
Those interested in joining SIMM next year can register for the class or participate in SIMM as an extracurricular activity. Any major and all experience levels are welcome. Researching companies and presenting recommendations provide education that can’t be found in any other class. If interested contact the Long Fund manager Steve Zimmer at zimmersm11@bonaventure.edu
