Monday, April 25, 2011

Notes on Investing: Baruch and Lessons Learned, Part three

In part one of this review on one of the greatest investors, Bernard Baruch, titled “Notes on Investing: Baruch and Lessons Learned“, we looked at what he has learned from his own mistakes, errors that we all make and of which numerous books have been written in anattempt to correct our own investor and totally human fallibilities on the subject. In part two, we looked at, among other things, the art of investing and getting a good night’s sleep.
  • I can’t tell you how many times I get told that having several projects in the works is multi-tasking. It is not and Baruch more or less felt the same way about what and how to focus. His belief that traders tried to be too many different things at once, concentrate on too many things at the same time and in the end try and parse all of that information in something worth investing in, something profitable, was futile. If you are going to be an investor, you will need to, in his opinion do “one thing at a time, perfect it, and do it well.”
  • In the days before behavioral finance took hold, in the days before efficient markets were thought to exist, value investors were trying to teach people how to invest.  They knew that that more you knew about the business you invested in, the better your understanding of the risks such an investment posed. To incur a loss in Baruch’s experiences as well as from what he witnessed in his cohorts, suggested that “they [knew] too little about the company’s management, earnings, prospects, and possibility for future growth.”  And Baruch, also guilty in the early days of investment career, fell into the same trap as many investor still do today.  ”They tend to trade beyond their financial capital capacity.”
  • Baruch also knew that companies were dynamic entities and need to change over time to survive. It was how they changed that matter. “Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries.” These improvements needed to come with some chance of success. Unlike the speculation during the Internet bubble, where products were scarce and promises of profits abundant, the businesses you invest in need to have something tangible in place before they start exporting the next new thing. He believed that “The majority of your profits will come from these two…..The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”
  • In recent years, the study of our emotional involvement has taken over for some previous thoughts on how we trade. And Baruch recognized these flaws early on, was able to tamp down his demons and become successful. It is no easy feat. He remarked, almost in passing: “Without control over your emotions, there is very little chance for profitable success in the stock market.”
  • In the current atmosphere of the media and what seems to be instantaneous reactions to every detail of news, one thing has never changed. In the discussion about which wags the dog, it is not the markets that do the damage, but the reaction to the economic factors at play. “The market,” he suggested,  ”does not cause economic cycles but merely reflects them and the judgments of what traders believe business and the future will be like.”
  • He believed in buy low sell high but also believed that no one could actually do it. “I made my money by selling too soon.” Market axioms aside, timing is not possible.
  • perhaps one of his greatest observations of investor foibles involved when and why investors bought and sold. “It is much harder to sell stocks correctly than to buy them correctly.” Further suggesting, quite possibly from his park bench view of the world going past, that a “stock went up, the average investor would hold because he wants more gains – he’s exhibiting greed. If the stock declines, he also holds on and hopes the stock will come back so he can at least sell and break even – he’s hoping against hope.”
  • Sitting, staring a a screen while you invest doesn’t make someone who loses any less a liar. What it does do is completely removes the blame from being laid at the feet of someone else. You invest and if you don’t do well, you have no one to blame. “Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought.”
  • Baruch did not think that anyone was capable of predicting. But we do and we listen to folks who suggest that one this news or that, the market will go higher. They don’t know. You don’t know. To which he suggested that “Every man has a right to his opinion, but no man has a right to be wrong in his facts.”
  • Once agin, Baruch is right on this point. But this is no easy task and I wonder if this is what Ben Graham meant when he said that there isn’t an investor in all of us, only in some of us. Baruch pointed out that the key to successful investing hinged on control: “Only as you do know yourself can your brain serve you as a sharp and efficient tool. Know your own failings, passions, and prejudices so you can separate them from what you see.”
  • Baruch was haunted by his mistakes and took numerous hours to reflect on those missteps. We, on the other hand, beleiev we should stay in the game, or get back on the horse. Baruch knew that only by going on a sort of self-induced recess would he be able to understand where he’d been, the wrong turn he’d made and why he did what he did. Do you do the same? Are you willing to take money off the table to reflect on how well you did – or didn’t? If you knew, as Baruch knew all too well that “The main purpose of the stock market is to make fools of as many men as possible”, why would continue to fight a force that only thoughtful reflection and recollection will help you overcome?
Successful investing is a fleeting, almost elusive thing. Seems as though there are millions of books and websites offering something, some rope to grasp, when it comes to investing. I even offer a few of my own. In the end, it will come down to how well you do and recognizing that if you don’t do well, you should push yourself away from the table. Investing is not for all of us. And at the same time, it is. We still need to invest for retirement. But using individual stocks is not the way most of us should pursue it.
Paul Petillo is the Managing Editor of

Saturday, April 23, 2011

Notes on Investing: Baruch and Lessons Learned, Part two

In part one of this review on one of the greatest investors, Bernard Baruch, titled “Notes on Investing: Baruch and Lessons Learned“, we looked at what he has learned from his own mistakes, errors that we all make and of which numerous books have been written in an attempt to correct our own investor and totally human fallibilities on the subject.

  • Someone once suggested that worrying is like a rocking chair – it’s something to do but doesn’t get you anywhere. But worrying about things you have control over – rather than those you don’t, consumes many investors as they attempt to gain some rest at the end of the day. Baruch believed that there is a “sleeping point” that investors, or the savviest ones, understand and if you have failed to reach this point, where you can simply lay your head down and get the rest you need, you should do as Baruch suggests and sell to that point.
  • Investing as a hobby is not investing. It is more dabbling. You are willing to lose money even as you think you can make some. Real investors embrace what they do as a full time task. Baruch suggested: “Because of the extreme challenge, one must commit full attention to it” to which he also added about those who do it part time or do so in a speculative manner, investing is “no different than trying to be a successful doctor or lawyer….you simply must devote yourself full time to the study of your craft.”
  • We are social animals by nature and because of that need to interact, be it in person or through the numerous online and offline media outlets, we look for opinions. Or better, we look for reassurance. Or even better than that, we look for something that we can glean, some tidbit that no one else has yet to uncover or capitalize on. Baruch boiled it down to one simple tenet and suggested that anyone doing any investing at all do so by “doing one’s own thinking”.
  • Someone once suggested that men invest and tend to dominate the investment world because they love the bravado of doing so. Brauch suggest taking that bravado out of the equation. In other words, no matter your gender, boasting is not what you should do – ever. He believed it was “best to trade alone.” Doing so from your home office or a laptop in a coffee shop is not what he had in mind when he coined this directive. Instead, it was a suggestion to research, analyze, and purchase with confidence. He wrote: “Most of the successful people I’ve known are the ones who do more listening than talking.”
  • This is pretty simple and also the focus of many books and reports: how does the economy impact what you do and how you should invest. Baruch believed that the markets were basically mirrors of the economic health, not movers. No reflection has ever taken a commanding role in where the one making the reflection needs to be. This skill is not as easily mastered as it is learned, through trial and error, time and nuance.
  • Baruch did what many average investors do not – and possibly should not. He traded both long and short. I didn’t say he bought on margin, borrowing someone else’s money to make trades. He understood the way the markets worked and embraced the flexibility of how the markets could be traded.
  • Simply stated: “there is no investment which does not involve some risk and is not something of a gamble.” Although numerous authors have suggested you can take the gamble out of the effort, in truth, it can’t be done. Instead Baruch offered that “what we can try to do perhaps is to come to a better understanding of how to reduce the element of risk in whatever we undertake.”
  • And most notably, diversification spreads an investor thin, making the person monitor too many fronts. Baruch thought it was “better to have a few stocks and to watch them carefully.”
  • Few of us structure our portfolio with cash on the sidelines. Baruch considered this an important facet of the process suggesting that a “good supply of cash on hand at all times in reserve is important”. Crashes happen, markets fall and opportunities happen and without cash on the sidelines, you will miss those opportunities.
Next up, in this part three of our look at the investor Bernard Baruch, we will look at his belief that seeking perfection in this one effort is really what you are looking for.

Friday, April 22, 2011

Retirement Planning and the Lessons we can Learn for those Who Know

Retirement planning is a process. It is also investing. 

Perhaps you think it is too late to learn how to invest. The act, for most of us is filled with frustrating moments that are hinged on losses. But if you listen to what famed investor Bernard Baruch suggests, losing is only part of the experience and the best teacher available.
Baruch refused to join any trading house, hence his moniker the "Lone Wolf of Wall Street". He made a fortune by 30 - investing in sugar - and served as not only a park bench statesman but an advisor to presidents. He was a man of rules and when it comes to investing, too few of us possess such stringent parameters.

  • Baruch believed that act of losing was actually the best teacher. While we mostly abhor the idea that we can actually lose invested money, he embraced the experience. He admits to not having enough knowledge in the beginning to separate himself from his cohorts, starting out as most traders do - losing lots of money.  Experience and eventually discipline taught him: "You have to lose money in order to better yourself."
  • While most of think that timing and the ability to invest are keys to success, he thought that real success in the market takes time and money. Why then do we harbor what Baruch suggested when he observed that "most people view the market as the place where the miracle of great and quick riches can be performed with little effort."
  • Baruch believed in simplicity. He thought that most people fail when the over-traded and held too many positions. This taught Baruch the lessons of going broke - which he did many times before he developed the discipline to succeed.
  • Investing is different than speculation. But those who consider themselves investors often blur those lines. In his opinion, asuccessful speculation is "a man who observes the future and acts before it occurs." Acting swiftly in the market is important.
  • Who you listen to can be blamed for what you do. And we all listen. Baruch admitted that after losing money from the recommendation of others, the facts were all that was needed. "One must search through a maze of complex and contradictory details to get to the significant facts.....Then he must be able to operate coldly, clearly, and skillfully on the basis of those facts." Speculation is not every man/woman's game and it is beyond the ability of most. So that leave the challenge for the successful speculator in learning "how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts. If, as he suggested you do, " get all the facts, your judgment can be right; if you don't get all the facts, it can't be right."
  • The person that stares back at us in the mirror is not always honest. And without this honesty, he believed that you can expect to be wrong as many times as you are right. "If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong." Can you honestly suggest to that reflection that you will cut losses quickly? In his opinion, this is the most important trading rule.
  • Taking the time to think is something we believe we can not always afford. But it is one of the most profitable luxuries we can use. He suggested that, "During my eighty-seven years I have witnessed a whole succession of technological revolutions. But none of them has done away with the need for character in the individual or the ability to think."
Next up,  more from this investor on sleeping and self reliance.

Paul Petillo is the managing editor of and

Thursday, April 14, 2011

Commentary: Tweaking Social Security

Bring up Social Security to just about any American, Boomers included and you will get one reaction or the other. And it doesn't really matter whether you are young or old. You feel something is bound to happen to the program and although you may have no idea how it works, you believe that the way it currently does can't go on. Now opinions differ on the health of the program and the long-term sustainability of it but few argue that there aren't problems looming in the future. Is there?
The first reaction most feel is that the program can't continue on the way it has for decades to come. Bankruptcy, running out of funds, too many Baby Boomers, all get the blame for the demise of this important program. Whomever lit the match to this topic (someone on Wall Street I suspect with a keen eye on the potential windfall privatization would provide his/her business) has got to be pleased. A simple tinder of an idea has caught the public's attention and now we have a full-on brush fire.

So here's the rub: I'm not going to argue with those who have their mind's set on the end of the Social Security program as we know it. Let them think that it will not be around.

Let them believe that what is essentially a program to provide insurance that poverty won't grip those less fortunate, the disabled, the children who have lost parents or spouses who have lost loved ones, and those who did not have access to any additional cash to invest or save for retirement won't be penniless is worth tossing to the curb. Lawmakers seem to think that their suggestion that by simply telling the average American to save and invest more, work harder and longer, and in the process, feed their fear of not being able to retire in a lifestyle that is not sustainable on a single dollar less than they are currently making, that they are moving the country into a more prosperous future. They are not.

The bottom line is that the program will continue to exist. And so will the talk of its end. Why that conversation persists is puzzling. Even as fewer people contribute into the plan, those few actually contribute almost more than eight times as much as the post-WWII generation did. As Merton C. Bernstein, the Walter D. Coles Professor Emeritus at Washington University in St. Louis School of Law recently suggested, it is because of production. Workers are not only producing more output than previous generations, the work they are doing is better compensated. And that increased compensation according to Bernstein has closed the gap sufficiently. Is that simple equation likely to improve in the coming generations? Without a doubt. Yet little consideration is focused on that economic anomaly.

That's not to say that the program couldn't use a few additional tweaks. But preparing for the worst is not worth considering. And recent attempts by the GOP would actually create more debt not less should they try and change the program. It's a complicated and sort of odd way to think about it. The reality of what some of these proposed changes would bring about point to a flaw that cannot be overlooked: changing Social Security in the name of dealing with some future debt obligation we would leave our children would actually increase the debt limit we leave those kids.

Without getting into the vitriolic debate about the cost of government, the ridiculous ideas for reining in costs while two, possibly three wars are under way (and no talk of slowing spending down there) all while a recovery is under way, seems absurd. The bottom line still falls back on your ability to have enough to feel comfortable in retirement. If you exclude Social Security from your retirement calculations, then the onus of financing your retirement is on you. While I do not like the idea of a back-up plan (it suggests that the original plan has the potential to fail), Social Security not only acts as one, it is one that cannot be touched.

And surprisingly, despite all of the talk about its end, it will still be there for my grandchildren. Perhaps snot as robust. But doing the same thing it does now: providing insurance against poverty.

Paul Petillo is the Managing Editor of

Friday, April 8, 2011

The Financial Implications of Alzheimer's Disease

Search out the deadliest diseases that have plagued mankind and you will likely turn up such unsavory candidates as Small Pox (considered to have killed more people than any other infectious disease), Spanish Flu (some experts put the death toll for that single year as high as 50 million people worldwide), the Black Plague (thought to have killed 25 million people in Europe—about a third of the population—from 1347 to 1350), Tuberculosis (still kills nearly 2 million people a year and is ranked as the eighth leading cause of death worldwide by the WHO), Malaria (more than 1 million people die from it annually), Ebola (known to kill up to 90 percent of its victims), and Cholera (doesn't pose a problem when clean water and proper sanitation is available). Not on that list and not infectious as the previous maladies are but sure to be added to one of the deadliest disease is Alzheimers.

When you get Alzheimers, you will not recover. According to Harry Johns, president and CEO of the Alzheimer’s Association. "It is as much a thief as a killer. Alzheimer’s will darken the long-awaited retirement years of the one out of eight baby boomers who will develop it." Statistics suggest that over 10 million baby boomers will develop this affliction and at least as many of us will feel the emotional and financial repercussions of it.

Before we get to the financial implications of this problem, I thought I'd look at some of the information on this problem outlined on the Alzheimer's Association National Office website. Just because you are forgetful, doesn't mean that you have the disease. As one expert put it, it is not forgetting your keys that indicates the onset of this problem; it is forgetting what they are for. While memory plays a role in the gradual and always fatal disease, it is much more complicated.

These disruptions can impact what you do every day. More than just making yourself lists, asking for constant repetitive reminders for things that are consider part of your daily life - taking medication, getting dressed, even leaving the daily newspaper on the stoop might be qualifiers, if not to you to someone in your family. If you not only can't remember an appointment but can't recall why you made it, you might be in the initial stages.

You or a loved one might begin to forget certain aspects of their favorite activities, the rules to a game, what you went to the grocery store for or as one older woman I encountered on a grocery store aisle the other day. She had a list in her hand, a few odd items in her cart and was looking around at the overhead signs. Familiar with the store, I asked if I could help her. Seems I couldn't. She had written "dinner" and was searching for some sort of item to match her note. (I joked and suggested that my wife regularly wrote something just like that on lists she gave me. But you could tell she thought that there was just such an item somewhere in the store. She was dressed well which made me feel even more helpless, wondering if her family saw what I saw in just those brief seconds.)

Alzheimers manifests itself in other ways. At least this woman knew she was somewhere that might provide what she sought on her list. But not knowing where you are, having difficulty driving, or simply not understanding what was being said can also be additional signs that this cognitive slip has begun to take hold.

One of the easiest to spot signs are often the ones most often overlooked. Normally predictive reactions to every day events are no longer the ones you witness. In fact, if you are surprised by this frustration, perhaps the anger that accompanies it, you might be witnessing something worth your concern. These emotional disruptions go unnoticed with people living alone.

So what now? Your parent or relative is not acting as they always have. You show up to pick them up for a lunch date and they are still in their bedclothes without any recall of the event. You should be concerned. But simply writing it off as a sign of age is the easy way out. In fact, you are buying into one of the oldest myths. But don't be so quick to judge the older relations as the most prone. Alzheimers knows no age limit. And there is no cure.

As I mentioned there are some serious financial implications at play here. Our independence relies on our ability to take care of our financial well-being. While I regularly suggest that parents guide their children in their financial decisions, using their expertise and wisdom to help them, Alzheimers strips some of those abilities.

This can not only cost them in the short-term (losing a wallet, forgetting to pay the water bill) but in the long-term as well. They are quite often avid shopping channel customers, susceptible to scams and overly generous on a limited income.

While you may not at first witness these changes in their ability to handle money, some of their contacts often do and feel unable to do much of anything. According to the NYTimes: "The Financial Industry Regulatory

Authority, the largest nongovernmental regulator for securities firms doing business in the United States, recently met with individual financial services companies and the Alzheimer’s Association to formulate guidelines on how to deal with clients who have trouble remembering and reasoning, a problem that is not new but is increasing as the population ages."

Their doctors and attorneys have the same sort of problems in dealing with this situation. But there is something you can do and now is the time to begin to execute your plan.

Be sure their will is up-to-date. Lawyers will sometimes question whether their client is in the right state of mind when making decisions regarding this and other legal documents. And they wonder whether any changes made will be one day challenged. Your parents should include you in all of these appointments and if a living will needs to be created, now is the time to consider it. In fact, the attorney might feel as though the conversation would be worth having if you are present. (This, to the best of my knowledge, implies permission to discuss the client's issues or the lawyer's concern in front of you. Otherwise, they can't discuss the situation.)

A living will according to the National Institute of Aging "includes instructions and pages where you can specify your wishes for: (1) the person you want to make health care decisions for you when you can’t make them for yourself, (2) the kind of medical treatment you want or don’t want, (3) how comfortable you want to be, (4) how you want people to treat you, and (5) what you want your loved ones to know."

Also in the article written by Gina Kolota, she notes that "The bar association’s handbook for lawyers, written with the American Psychological Association, tries to provide some guidance. But the handbook acknowledges that it may not be easy to determine a client’s capacity to sign a will, execute a contract or transfer property."

Financial planners are also something that you should be in contact with. This is incredibly difficult from a distance. But often they can spot problems sooner rather than later. But not having one only amplifies the potential for problems. One of the easier remedies to this situation is to have your name placed on a to-call list. But by the time a landlord, bank or lender calls to suggest a discrepancy, the damage may be already done.

This conversation is a two way street. You need to be trustworthy enough to warrant their including you in what may among their most private affairs. Parents may appear open and honest about how they feel you should handle your finances. But the total opposite may be how they treat their own.

Your financial strength gives them greater reason to trust you in their affairs. And while you are at it, consider some of the following: Do the same for your loved ones who might be needed in the event something happens to you (living wills and wills are great start). Begin to plan for the cost their problems might have on you (without a doubt it will mean lost time at work, lost retirement contributions and lost insurance might also play a role in upsetting your financial apple cart.) Consider long-term care insurance before the symptoms begin. And lastly, realize now that your personal financial situation is so much more than just your immediate world and begin to plan for it now.

Monday, April 4, 2011

The Overlooked Insurance

Is this the insurance Boomers and pre-Boomers overlook the most? Quite possibly. Last week, we talked about the idea of disability policies in your personal finance framework. This week, we're going to take a look at some of the add-ons that you might consider when buying a policy.

Shoppers know what a value is. Except when it comes to buying cars and insurance. Then, we often lose sight of what value is by adding stuff to the purchase which can increase the cost. Want the spoiler on the car? It’ll cost more. The upgraded sound system? More. Leather, sunroof, alloy wheels? More, more and more money out of pocket. And most shoppers know they can add these extra items on after the purchase. But few seldom leave the show room with the stripped down version of the car, the basic model, with the intentions of adding on the features we think we need.

Our conversation about disability insurance also has the same sort of stripped down version – the basic coverage that replaces some, not all of your income should you not be able to work. Now, we're going to take a look at the seriously upgraded policy that most of us find not only enticing, but worthwhile. These add-ons are referred to in insurance jargon as riders. Are they worth it or can we do it alone with less?
Let’s discuss what you can add-on to these basic policies and what they may cost you for this peace of mind.

The first of these add-ons is often the Cost of Living Adjustment or COLA. We know how our money can erode over time with inflation. So it can be suggested that if you have agreed to a set benefit, that benefit, the longer it is in place will be worth less with each passing year. The COLA rider is intended to protect you from this risk and usually kicks in after first full year the policy is play or even after the first year of your disability. They offer an enticing increase, sometimes as high as 6% every year that you are disabled and receiving benefits.  Sounds good but could cost you about 40% more than the basic coverage.

Most people who use a disability policy do so because they can’t work. But when an agent offers you what is called a residual disability rider, they are suggesting that even though you are hurt, you might be able to return to work in a limited fashion and because of that, this policy makes up some, not all of the difference in your pay.  It typically provides a partial benefit when your earnings are reduced by at least 15-25% as a result of an injury or illness. But it will cost about 20-25% more if your policy doesn’t have it already built-in.

Think you might need more insurance at some point down the road? While most of us either fall into one of two categories: over insured or under insured, this rider called a future increase offers a sort of Goldilocks add-on. It suggests that if at some point in the future, you might like to increase your monthly benefit, because the benefit you have “just isn’t quite right”, you can do so without re-applying and submitting to additional medical examinations.

All you need do is pay for the rider (sometimes 10% more in premiums) and should you decide to exercise it, simply prove that you make more now by providing the right financial documentation. To do so without the rider means you will need to get another medical exam.

The catastrophic disability rider sometimes called the 2 of 6 rider (meaning you are unable because of your disability to perform 2 of the 6 basic morning duties: getting out of bed, going to the bathroom, showering, getting breakfast, brushing teeth, getting dressed) allows you to purchase an additional benefit amount that will be paid if you are catastrophically disabled. Catastrophically disabled means you have a complete and irrecoverable loss of sight in both eyes, hearing in both ears, speech; or the use of both feet, both hands, or one foot and one hand. Alzheimer's Disease or other irrecoverable forms of dementia or senility are also considered. Keep in mind that this is not a Long Term Care policy. Some policies include this; others don’t. That’s the best way to compare the true cost of this benefit against a separate LTC policy.

The automatic increase benefit is available with most carriers at no additional cost. The AIB rider will increase your monthly benefit amount by 5% of the original benefit at each policy anniversary, for the first 5 anniversaries. Your premium will be increased based on attained age at each anniversary. If you have this rider and chose not to accept the annual increase, you can do so by submitting a written request to the insurer.

The own-occupation rider allows certain occupation classes to upgrade the definition of disability to a “true own-occupation” definition. If this rider is added to your contract it will replace the standard definition of disability offered, to one that states “You will be considered totally disabled if due to injury or sickness you are unable to perform the material and substantial duties of your regular occupation”. Good luck finding this but if you do, it can be worth the cost, which is about 10% more in premiums. If you are in a relatively hazardous job, this sort of rider can also retrain you after a period to do another job.

By having a refund of premium or as it is sometimes referred to as the good health benefit rider on your policy, the insurance company will refund a percentage of the premium paid over a defined period of time that you remain healthy and not on disability claim, until age 65. This costs a lot and if you do have a claim, it will be all for naught.

This one is quite possibly the best rider available in part because it actually lowers your premium in many cases as opposed to increasing it. Called the Social Security rider It is actually a bet with the insurer that suggest that, if you should be come disabled, and Social Security coverage kicks in, the insurer is off the hook for a percentage of the benefit owed. I actually have this and should I become so disabled that Social Security kicks in, the insurer is only obligated to pay 20% or what they may have owed me. But as Social Security suggested, the next step in life if you qualify for Social Security is death.

Like all insurance policies, shop around, be sure that your employer doesn’t already cover you in some way and be careful you don’t buy coverage that might be better suited as a stand alone policy.

And one last note: the more you have saved in an emergency account, the less you have to worry about some of these riders. While all insurance is designed to never be used, an emergency account can make it easier to forego exercising the policy or adding on expensive riders you may never need.