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Though it makes sense the markets would react to an uptick in coronavirus cases, recent history has showed us it's still unpredictable. Here's what's happening now.

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You've lost your job. Now what? Here are the first things you should do after getting laid off to keep your finances in check and find a new job.

The post Laid Off Due to Covid-19? Five Things You Must Do in the First 24 Hours appeared first on The Dough Roller.

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The sooner you start planning for retirement the better. Too many people wake up 20 years from now and wonder where all their money went. By having specific financial goals by age, your retirement will be more comfortable than if you had decided to just wing it. I suspect being overwhelmed with choices is one

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One of the most overlooked tax credits is also one of the best. If you qualify for this credit, the government actually pays you to contribute to your retirement account. It’s called the Saver’s Credit (officially the “Retirement Savings Contributions Credit”), and it’s one you don’t want to miss. The Saver’s Credit is designed to help low to moderate income earners who put money into a 401(k), IRA, or similar retirement fund.  If you qualify, the Saver’s Credit can save you up to $1,000, or $2,000 if you are filing jointly.

How to qualify

As with any tax credit, there are certain requirements you must meet to qualify for the savings:

1. You have to be making retirement account contributions
2. You have to be at least 18 years old
3. You cannot be a full-time student
4. You cannot be claimed as a dependent on someone else’s tax return
5. Your Adjusted Gross Income (AGI) must fall below the specified level

You should be able to know fairly quickly if you meet qualifications one through four.  However, figuring out if you fall into the eligible income category might be a little trickier.  We’ll help you sort through it.

Income Limits

Your AGI is your total income minus certain reductions. Figuring out your AGI with tax software like TurboTax is a snap. For most people, a good rule of thumb is that your AGI is your gross income less any elective deferrals or deductible contributions to a retirement account. Once you figure out your AGI, you just have to see whether you fall below the AGI limits.

2014 Saver’s Tax Credit Income Limits

• If you’re a single filer this year, your AGI limit is $29,500
• If you’re the head of a household, your limit is $44,275
• If you’re a married couple or joint filer, your limit is $59,000

2013 Saver’s Tax Credit Income Limits

• If you’re a single filer this year, your AGI limit is $30,000
• If you’re the head of a household, your limit is $45,000
• If you’re a married couple or joint filer, your limit is $60,000

2012 Saver’s Tax Credit Income Limits

• If you’re a single filer this year, your AGI limit is $28,750
• If you’re the head of a household, your limit is $43,125
• If you’re a married couple or joint filer, your limit is $57,500

(Source: IRS (2013) and IRA 2014) Depending on your income, your tax bill will be reduced by a percentage of the amount you contribute to your retirement fund—ranging from 10% to 50%.  You’ll use IRS Form 8880 to figure out the exact amount, or use a program like TurboTax, which figures it out for you.

Qualifying retirement accounts

Contributions to just about any retirement account qualify for the credit. In addition to contributions to a traditional or Roth IRA, you can also contribute to any of the following:

1. Elective deferrals (including after-tax Roth contributions, if available) to a:
   • 401(k) plan (including a SIMPLE 401(k) and the federal Thrift Savings Plan),
   • SIMPLE IRA plan
   • SARSEP
   • 403(b) annuity
   • governmental 457(b) plan
2. Contributions to a §501(c)(18) plan, and
3. Voluntary after-tax employee contributions to a qualified retirement plan or 403(b) annuity. For purposes of the credit, employee contributions will be voluntary as long as they aren’t required as a condition of employment.

An Example

Let’s look at an example to get a better understanding of how the Saver’s Tax Credit works.  Let’s say Tom is a single filer who qualifies for a 20% Saver’s Tax Credit.  His AGI is $18,000 after he contributes $2,000 to his employer’s 401(k) plan.  Tom receives a tax credit equal to 20% of his total contribution of $2,000 (assuming 2013 income limits).  That means Tom will pay $400 less in taxes than he would have paid had he not contributed to his 401(k). The credit is a “non-refundable” tax credit. That means that while it can reduce your tax liability to zero, you won’t get back any remaining credits.

Next Steps

If you qualify for the Saver’s Tax Credit, all you have to do is fill out the correct forms.  Many low-to-mid earners use the 1040EZ form to file taxes.  Unfortunately, this is a problem because the credit can only be claimed on Forms 1040A, 1040, and 1040NR.  The tax credit can significantly reduce your tax bill, so you might seriously consider switching forms. As noted above, if you use software to fill out your taxes, make sure you answer all the questions about the Saver’s Credit, Retirement Savings Contributions Credit, and Credit for Qualified Retirement Savings Contributions.  Answering these questions can help guide you in the right direction and ensure you receive your tax credit.  If you don’t use software, but instead prepare your taxes by hand, complete Form 8880.  This form will help you find your credit rate, which will tell you the exact amount you will save.  You will then transfer that figure to Form 1040A, 1040, or 1040NR. This credit is designed to help workers who contribute money towards their retirement.  Unfortunately, only 12% of full-time workers in households making less than $50,000 know about it.  Don’t be part of that 88% and miss out on this easy savings opportunity.The Saver's Tax Credit is a great way to take your retirement savings goals off the back burner. Find out who's eligible and how much money you could get!

The post What is the Saver’s Tax Credit? appeared first on The Dough Roller.

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Are you wondering should I start a blog? Have you been thinking about starting a blog for a while? Maybe you’re trying to find a way to make extra money?

Today, I want to share why I love blogging so much, and how much it has changed my life over the years. My story may answer your question of should I start a blog.

A lot of people wonder if I started blogging to make extra money.

The truth is that I had no idea you could make money blogging when I started Making Sense of Cents.

I was so clueless when I first started my blog. And, it seemed like a very random thing when I first heard about blogging, but I decided to go ahead and create a blog of my own.

Making Sense of Cents was started simply as a way to keep track of my own personal finance journey. Most people in my life didn’t even know I had a blog.

It’s so funny to think back to when I first started my blog, but I’m so glad I gave blogging a chance. I can’t imagine how different my life would have been if I didn’t have this website.

I was just like you, asking myself should I start a blog. I realized there was no good reason not to, so I learned how to start a blog. It completely changed my life, and I’m so glad I gave it a try!

Because of how blogging changed my life, I love telling others about it. That’s exactly what I’m doing today if you are on the fence about starting a blog.

Blogging helped me pay off my debt, quit my regular job, travel full-time, and more. The best part is that I love what I do. And, as you can tell from my business income reports, I now earn a great living from my blog.

Related content to should I start a blog:

• How To Start a Blog Free Course
• How we went from $0-$10,000/month blogging in less than a year
• Your Top Questions Answered About How To Make Money Blogging
• How To Start A Successful Blog In 10 Steps
• Your Top 14 Tax Questions For Bloggers and Digital Nomads Answered

I first learned about blogging when I was reading a magazine that featured a personal finance website in one of the articles. I had no clue what they were talking about, but I was interested. I also knew that I needed to make a change because it felt like money was controlling my life.

I knew I wanted to be in control of my financial situation and pay off my student loans.

But, I did not create my blog to make extra money to pay off my student loans. Like I said, I had no clue that you could even make money from a blog. My blog was a hobby and outlet that helped me journal about my finances. It helped me keep track of my finances so I could stay motivated.

I quickly realized how much I loved blogging!

Then in October of 2013, I left my day job and became a full-time blogger. I had only been blogging for a couple of years, and it felt so good to turn it into my full-time job.

Learning how to create a blog has completely changed my life for the better, and it’s something that I recommend everyone try if they are wondering should I start a blog.

Blogging changed my life in ways such as:

• I now love what I do and look forward to working each day.
• I am able to help others improve their financial situation.
• It will allow my husband and I to retire early.
• Both me and my husband were able to leave our day jobs.
• It helped me pay off my student loans.
• We now split our time between a camper van and sailboat and travel full-time.
• I have a flexible schedule.
• I’m my own boss.
• Blogging gives me freedom.

There are many reasons to start a blog, and I have found it to be well worth it.

So, if you have ever wondered should I start a blog, today’s post will help you decide if it’s right for you. Spoiler: You’re going to want to start a blog!

Here are reasons to start a blog.

 

Blogging is a lot of fun.

Before I started blogging, I never gave it a single thought. Like I said, I didn’t even know that they existed, let alone that it would be fun work.

Now that I’ve been blogging for several years, I can’t imagine not being a full-time blogger.

I enjoy helping others improve their financial situation, reading blog posts from others, finding new people to talk to, working on my blog, and especially writing.

I love waking up each morning to work, and I no longer dread work like I did when I had my day job. Blogging is both challenging and rewarding, as there is always something new to learn and you can reach many people through your blog.

 

You can help others.

If you’re wondering should I start a blog, think about your story, what you’ve been through, and how it can help others.

Even if you think your story isn’t extreme, I’m sure someone in the world would find it inspirational and helpful.

Even though I didn’t realize it would happen when I first started my blog, I have been able to help many people over the years, including myself!

Your blog can definitely help others, and without a blog your story never would have reached them. You may help them by showing them a new idea, help them improve their finances, create recipes, manage their life better, and more.

For example: My blog posts help and motivate others to improve their financial situation as well as their overall lives.

I have received many emails over the years from readers who have used my advice and motivation to pay off debt, save for retirement, start a business, and more, and it makes it all worthwhile. 

 

It’s affordable to start a blog.

Blogging is a very affordable hobby, side hustle, or business to start.

In fact, it’s one of the most affordable businesses to start.

If you are interested in taking the steps to learn how to create a blog, I have a tutorial that will help you create a blog of your own for cheap, starting at only $2.75 per month for blog hosting (this low price is only through my link). In addition to the low pricing, you will receive a free website domain (a $15 value) through my Bluehost link if you purchase at least 12 months of blog hosting.

This means that you may be able to start your blog for less than $50 a year. I started my blog with super cheap blog hosting, I designed it myself (even though I had no experience ever doing something like that), and more. I did pretty much everything myself so that I could save money, and while it was a learning experience, it was well worth it.

I spent less than $100 total for the whole first year of Making Sense of Cents.

 

You can be your own boss.

With blogging, you can be your own boss. Keep that in mind if you are asking should I start a blog, as it’s one of the most positive parts of blogging. You can decide what type of business you’ll run, your schedule, your goals, and more.

I never had dreams of being my own boss. I always thought I’d work for some corporation.

Then, I started blogging and realized how much I love being my own boss.

I love being in complete control of what I do, and becoming self-employed may allow you to feel that way as well. I enjoy deciding what I will do each day, creating my own schedule, determining my business goals, handling everything behind the scenes, and more.

I actually have a rule in my life/business that says I don’t do anything unless I want to. While I still say yes to many amazing opportunities, I’m not doing anything that feels like a total drag or is against my beliefs. This has really helped improve my work-life balance, which is great because being able to choose how you earn a living amounts to making sure you love everything you do.

I honestly love each and every service I provide – writing online, networking, interacting with readers, and more.

Running an online business (and being your own boss) may not be for everyone, but it’s something I enjoy.

 

Having a flexible schedule is amazing.

One of the best things about working for yourself and being a blogger is that you can have a flexible schedule.

I can work as far ahead as I want to, I can create my own work schedule, and more.

I love being able to work for a few hours in the morning, do something fun during the day (such as a hike or a lunch with friends), and then work later at night when I have nothing planned. I can also schedule appointments during the day, and it’s really no big deal.

I can work at night, in the morning, on the weekends – I can work whenever.

 

You don’t need previous experience to be successful.

In order to become a blogger, you don’t need any previous experience. You don’t need to be a computer genius, understand social media, or anything else.

These are all things that you can learn as you go.

Nearly every single blogger was brand new at some point, and they had no idea what they were doing. 

I’m proof of that because I didn’t even know that blogs existed when I started Making Sense of Cents, and I definitely didn’t know that bloggers could make money. I learned how to create a blog from the bottom up and have worked my way to where I am today. It’s not always easy, but it’s been rewarding!

With blogging, you’ll have a lot to learn, but that doesn’t mean it’s impossible. It’s challenging, but in a good way!

 

Blogging can allow you to travel and/or work from home.

Another great benefit of creating a blog is that you can work from wherever you want.

Because of blogging, I was able to sell my house in 2015 and have been traveling full-time ever since. It’s great knowing that I can work wherever I want.

Plus, having no commute is really amazing!

 

You can make a living blogging.

If all of the positives above aren’t great enough, you can actually earn a living by blogging.

No, not every single person will become a successful blogger (it’s NOT a get-rich-quick scheme), but I know many successful bloggers who started in a similar way as I did – blogging as a hobby and it just grew from there.

For me, I have earned a high income with my blog, and I have enough saved to retire whenever I would like. I am still working on my blog, though, as I enjoy what I do.

 

You can earn money while you sleep.

One of the things that I love about blogging is that the things you do now can help you to earn somewhat passive income, such as through affiliate marketing.

With affiliate marketing, I can promote products that I already use and love, while earning a living from it even when sleeping.

I recommend checking out my online course for bloggers, Making Sense of Affiliate Marketing. I share my exact strategy and tips in this very informative online course. If you’re a blogger, then you NEED this course.

 

Blogging is a great platform for freelancers.

Should I start a blog if I have another business already?

If you are a freelancer, blogging can also help you land freelance gigs, such as speaking, virtual assisting, staff writing positions, book deals, and more.

By having a blog, people can find you easily, they can see a sample of your work, learn about you, and more. Without a blog, people may never find out about the services you offer.

 

There’s a ton of valuable free resources.

One of the great things about starting a blog is that there are a ton of FREE guides out there that can help you get started. So, if you are wondering should I start a blog if I’m on a low budget, you don’t have to spend much money at all to get started.

In fact, I didn’t spend any money in the beginning in order to learn how to blog – instead, I signed up for a ton of free webinars, free email courses, and more.

The resources below will help you create your blog, come up with blog post ideas, grow your blog income, design your website, learn how to share your website in order to grow your page views, and more.

1. First, if you don’t have a blog, then I recommend starting off with my free blogging course How To Start A Blog FREE Course.
2. Affiliate Marketing Cheat Sheet – With this time-saving cheat sheet, you’ll learn how to make affiliate income from your blog. These tips will help you to rapidly improve your results and increase your blogging income in no time.
3. 8 Easy Tips To Make Money From Sponsored Posts On Your Blog – Sponsorships on your blog are a great way of earning a living online. Learn how I made my first blogging income, and how I’m now making $10,000-$20,000 a month with sponsored partnerships! This is a free cheatsheet.
4. The Beginner’s Guide to Branding Your Blog – If you have a new blog, or if you are stuck in the design phase, this freebie will help you to brand and design your blog.
5. 120 Awesome Blog Post Ideas –  Are you struggling to come up with new content for your blog? Here are 120 great blog post ideas that will help you beat writer’s block and create great content.
6. Facebook Ads For Bloggers 101 – This free training will show you how to increase your blog’s traffic with Facebook ads. This is the top area I’m working on this year, and I recommend you do the same!
7. The SEO Starter Pack (FREE Video Training)– Level up your SEO knowledge in just 60 minutes with this FREE 6-day video training.

 

Is it a good idea to start a blog in 2020?

2020 is a great time to start a blog.

Trust me, people were saying the same thing when I first started Making Sense of Cents – that people who started in 2011 were starting too late and that no one would earn money blogging if they started when I did.

However, that wasn’t the case then or now.

The online world is still so new, and each year there are new ways to monetize and grow your blog.

For example, it wasn’t until the past couple of years that companies and advertisers started realizing the value of online influencers, such as bloggers, and that means even more opportunities to earn money blogging.

Before that, it was mainly celebrities that companies advertised with, but now, it is actually shifting to bloggers and other online influencers (such as Youtubers and Instagrammers!).

The online world is a huge place, and it is just going to keep growing. Every blogger earns a living in slightly different ways, and everyone has a different message and story. Plus, there are so many different ways to earn money blogging, and I expect that the options will continue to grow.

Of course, because the blogging world keeps changing, there will constantly be new things for you to learn, but that will probably always be the case for managing any kind of business.

 

If blogging is so great, then why doesn’t everyone do it?

I hear this pretty often. I also get a lot of people asking me: If it’s so easy, why don’t you just start multiple blogs and make even more money?

Blogging is not printing money.

It’s not a scam, and it’s not a get-rich-quick scheme.

Learning how to earn money blogging is work, and just like with all jobs – not everyone wants what you want.

And, for every successful blog out there, there are probably hundreds of bloggers who will never earn money blogging. While you can earn money blogging, not all bloggers will.

It would be like saying that 100% of people who start a business will see success. That is just never going to happen – businesses fail, business owners have a change of heart, and others just don’t find it enjoyable.

I know I am always talking about the positives of blogging, but I also like to mention how it’s not the easiest.

After all, if blogging was easy, then everyone would do it and everyone would make thousands of dollars a month.

But as you know, that’s not the case.

Not everyone is going to earn money blogging because it is WORK! Most new bloggers quit just a few months in. A few months is not enough time to see if your blog will be successful. It took me six months before I started to earn money blogging, and I only earned $100. 

It’s funny and weird to think about what life would be like if I would have quit back then.

I’m constantly learning something new when it comes to blogging, and that is why I enjoy it so much.

Once you realize that blogging is hard, you will be ahead of 99% of everyone else in the game. Don’t assume, like most people do, that blogging is easy or a get-rich-quick scheme.

Starting a blog can be difficult. But, all bloggers start at the same point.

I remember being so lost when I first started my blog. After I asked myself should I start a blog, I had to learn everything the hard way – it sure was difficult at times.

But, I have always really enjoyed blogging. I think that is so important when it comes to this type of business – you either need to have passion in your blog and/or passion in what your blog allows you to do in your free time (such as travel or spending more time with your family).

 

How To Create A Blog FREE Course

If you’ve been asking yourself should I start a blog and have decided to give it a try, I have created an email course for those who are interested, but haven’t made the leap yet.

Best of all, this course is free!

With this free email course, I will show you exactly how to create a blog, from the technical side (it’s easy – trust me!) all the way to earning your first income and attracting followers. Each day for seven days, you will receive an email in your inbox that will help you from the beginning as you create a successful and profitable blog.

Here’s a quick outline of what you will learn in this free 7-day email course:

• Day 1: Reasons to start a blog.
• Day 2: How to determine what to blog about.
• Day 3: How to create your own blog. This lesson focuses on creating a blog with WordPress. My tutorial makes it very easy to start your blog.
• Day 4: How to make money blogging.
• Day 5: My tips for making passive income from blogging.
• Day 6: How to grow your traffic and followers.
• Day 7: Miscellaneous blogging tips that will help you reach success.

Please sign up for my How To Start a Blog Free Course by clicking here or signing up below.

Are you interested in learning how to create a blog? Have you asked yourself should I start a blog? What other reasons to create a blog can you think of?

The post Should I Start A Blog? Here Are The Top Reasons You Will Love Blogging appeared first on Making Sense Of Cents.

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Also: is it better to send a congratulatory note to someone who deserves it or a condolence note to someone who needs it?

*      *      *

Relevant References & Research

Question #1: We need critical feedback to improve, so why is it hard to hear?

• Stephen refers to a recent conversation with David Byrne, the lead singer of critically-acclaimed rock band Talking Heads and the man behind the No Stupid Questions theme song, “And She Was.” Stephen spoke with Byrne for Freakonomics Radio Ep. 417, “Reasons to Be Cheerful” — in the episode, Byrne shares his experience with negative reviews and discusses his new project reasonstobecheerful.world.
• Angela admires how her friend, organizational psychologist Adam Grant, deals with criticism.. She says Grant often asks colleagues to critically review his public speeches, then rates himself on how well he received the feedback. You can check out two of these lectures on his Ted Talk page: “The Surprising Habits of Original Thinkers” and “Are You a Giver or a Taker?”
• Stephen tells a story about a creative writing seminar he took while in graduate school. This was part of a master of fine arts program in writing at Columbia University — Stephen received his degree in 1990, and later went on to teach at the University. You can read more details about his experience in Columbia Magazine.
• Stephen and Angela discuss a study colloquially known as the “wise-feedback paper,” which found that teachers were able to make feedback 40 percent more effective by prefacing it with 19 words. The 2014 study was published in the Journal of Experimental Psychology: General and is called, “Breaking the Cycle of Mistrust: Wise Interventions to Provide Critical Feedback Across the Racial Divide.”
• Stephen and Angela briefly touch on the idea of “radical candor.” Executive coach Kim Scott is the author of the New York Times bestseller Radical Candor, and Bridgewater Associates’s Ray Dalio famously practices radical transparency.

*      *      *

Question #2: Which is the more meaningful act — celebrating a friend’s accomplishment, or supporting them through a loss?

• Angela turns to the work of social psychologist Shelly Gable to teach Stephen how to best support a loved one’s accomplishments. In a 2006 paper, “Will You Be There for Me When Things Go Right? Supportive Responses to Positive Event Disclosures,” Gable and her co-author discuss the importance of active-constructive responses.
• For resources on how to best support someone during trying times, Angela recommends looking into supportive listening — a relationship-building tool which Stephen initially mocks, but quickly learns to embrace.
• Before Angela fully explains the concept of supportive listening, Stephen jokes that it seems like a “Saturday Night Live version of grieving.” For an actual Saturday Night Live version of grief, check out this 1976 sketch where Chevy Chase plays a priest who can’t stop hiccuping at a funeral.

Stephen and Angela briefly discuss the idea of “mirroring” — a subconscious reflection of another person’s behavior. To learn more about the science behind mirroring, we recommend checking out this 2016 paper from The Royal Society: “Mirroring and Beyond: Coupled Dynamics as a Generalized Framework for Modelling Social Interactions.”

The post How Do You Handle Criticism? (NSQ Ep. 7) appeared first on Freakonomics.

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While use of real estate lawyer is mandatory in some states, in most states it is optional. I’ve bought four properties and sold one property. For all the transactions, I have never once used a real estate lawyer because California law says using one is not required. However, even if you live in a state

The post A Real Estate Lawyer Can Save You From Tremendous Pain And Suffering appeared first on Financial Samurai.

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Recently, a reader named Lisa asked me about tax deductions for employees who work from home. Here is Lisa’s question:

My husband will begin working from home 3 days per week beginning at the end of this month and will need to travel to his company’s site the other 2 days. Can you please provide any information that may be helpful when tax season comes? I am wondering will he be able to write off some expenses he incurs while working from home such as internet, phone etc.

Tax deductions for the self-employed are fairly well known (home office deduction, for example). But breaks for employees present an entirely different question. My first reaction was that employees would have no possible deductions. But I was dead wrong. Now, before I get into the details, let me remind you that I am NOT a tax professional. For tax advice, consult a tax specialist. I did do some research, though, and here’s what I found.

Home Office Deduction

To my surprise, an employee who works from home can, under certain circumstances, qualify for the home office deduction. That being said, based on my research, I suspect must employees who work from home will NOT qualify for this deduction. The definitive guide to the home office deduction is IRS Publication 587–Business Use of Your Home (pdf). To qualify for this deduction if you are self-employed, you must use your home:

• Exclusively and regularly as your principal place of business (defined later), or
• Exclusively and regularly as a place where you meet with patients, clients, or customers. (You can see more about what the IRS says on home office deductions here.)

There are other requirements that you’ll see in the publication (e.g., if you run a daycare or store inventory in your home), but you get the idea. But here’s the catch. If you are an employee, you must meet two additional requirements:

1. Your business use must be for the convenience of your employer, and
2. You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer

It’s the first requirement that will trip up most employees. Typically, an employee works from home for their convenience, not their employer’s. In IRS Publication 587, you’ll find some helpful examples. From what I can tell, if your employer provides you with work space and does not require you to work from home, you won’t qualify for the deduction. But again, be sure to consult a tax professional. If you do qualify for the deduction, you’ll use IRS Form 8829–Expenses for Business Use of Your Home.

Unreimbursed Business Expenses

If you incurred expenses related to your employment that were not reimbursed by your employer, you may qualify for a deduction. I say “may” because most won’t. First, you have to itemize your deductions using IRS Schedule A. If your itemized deductions don’t exceed your standard deduction, then these expenses won’t help you. Second, the expenses must qualify for the deduction. Basically, the work related expense must be “ordinary and necessary.” While this doesn’t mean required, it does need to be helpful and appropriate for your business. Third, and most important, you can only deduct these business expenses to the extent they exceed 2% of your adjusted gross income. These types of deductions fall under the Miscellaneous Deductions category, all of which have this 2% of AGI limitation. As a result, many want qualify for these deductions. You can read more on this topic from IRS Publication 529–Miscellaneous Deductions. Start with page three of the publication. As I said at the start, I’m not a tax professional. So consult one for advice about your specific situation. Also, tax software like TurboTax and TaxAct can walk you through these deductions if you do your taxes on your own. Finally, if I’ve missed a potential deduction, please leave a comment below with information on other possible deductions.If you're a remote worker or telecommute, you might be able to take advantage of a number of tax deductions. Our guide will explain what you need to know.

The post Tax Deductions for Employees who Work from Home appeared first on The Dough Roller.

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Hello! Today, I have a great guest post from Chris about value investing. Chris started a digital marketing business that focuses on freelance writing, content marketing, and SEO — all while working full-time and playing dad to two kids. You can check out his blog – Money Mozart to read more.

Have you been thinking about getting into the investing game, but have no idea where to start when it comes to choosing a strategy? Find yourself totally overwhelmed by the sheer amount of options and information?

Then you may want to take a look at one of the best long-term, proven investing strategies around— value investing. 

Let’s take a deep dive into this technique, learn more about value investing, and explore why you should care about it in the first place.

Related content on how to start investing:

• How This 28 Year Old Retired With $2.25 Million
• How I Saved $149,000 for Retirement by 30
• How I Became A Successful Dividend Growth Investor
• How My 401k Loan Cost Me $1 Million Dollars

 

What is Value Investing?

Value investing is a simple concept that involves just what the name implies—buying investments that are a good value. The trick is understanding what makes an investment “good.”

Stock prices vary daily, regardless of their true value. That means that on some days, a stock’s price may be far higher than its value, and on other days, it might be far higher than its value. These stock prices are affected by many different factors (more on that later), and these fluctuating prices influence most investors to buy and sell with a herd mentality—but not value investors.

Value investing is a calculated, fact-based approach to investing. Intelligent investors who practice this strategy understand that there are plenty of stocks, bonds, and other types of investments out there that are undervalued and sell for far less than they’re worth.

Instead of concerning themselves with the emotionally driven practice of buying and selling, a value investor looks at the facts, identifies undervalued stocks, and jumps on the opportunity to buy them while the price is low. Then, when the value rises, they sell them for a considerable profit.

That might sound like a quick way to strike it big, but this process takes time. The price of an undervalued stock typically doesn’t skyrocket overnight, so it could take years to see a profit. Because it’s a strategy based on facts and common-sense, though, it’s a medium-to-low risk way to invest. Even better, when those prices do rise to reflect or surpass the actual value, the payouts are well worth the wait.

 

Why Would a Stock Be Undervalued?

Value investing is all about identifying and purchasing undervalued stocks. But why would stock for a company with strong long-term potential be undervalued in the first place?

The biggest reason why a stock might be undervalued can be summed up in one simple word—fear.

When a company underperforms, investors get scared. They’re worried that the underperformance is an indication of what’s to come. If things continue as they are in that given moment, there’s no chance for the company to have a successful future.

What do they do? They sell their stocks before the price drops even more.

When a lot of investors have this mentality and buy into this fear, they all sell at the same time, causing the price of that stock to plummet.

While this drop in price makes it look like the company in question is low-value, the given price of the stock doesn’t actually equate to the real value or the future potential of the company. It merely means that at this given moment, the company is undervalued.

Of course, the price could have dropped for numerous reasons–it isn’t always related to underperformance. These factors can include:

• The CEO or owner was involved in a scandal that’s gone viral
• Product recalls
• A low point in the natural business cycle
• A change in upper management

The potential reasons a company might be undervalued on any day are endless, but when you jump on the opportunity to purchase these undervalued stocks, you’ve increased the value of your investment.

To better understand this emotional trend of buying and selling, and to understand how you can beat it, we’ll take a look at what the father of value investing himself, Benjamin Graham, has to say.

 

Benjamin Graham’s Principles of Value Investing

Have you ever heard of the “Mr. Market” concept? It’s a well-known metaphor for the stock market created by Benjamin Graham. 

In his 1949 book, The Intelligent Investor, Graham created Mr. Market and asked readers to view him as a business partner.

While Mr. Market is very on top of things, he can also be a bit unstable. Some days, his perception of value will be completely on point and anchored in reason—but on other days? He lets his emotions get the best of him, either by being far too optimistic and hopeful or afraid.

Those emotions impact Mr. Market’s logic, and on those overly-emotional days, his offers to buy and sell additional interest will seem nothing short of ludicrous. Of course, in the metaphor, Mr. Market is the stock market itself.

You wouldn’t let a business partner’s emotions sway you into believing that your investment’s value had radically changed overnight if the facts and your reasoning were telling you something different, right?

Why should you let the stock market do the same?

Think Mr. Market’s is letting his emotions dictate his price? Then don’t bother with it. He’ll be there with a new price for you the next morning.

Viewing the stock market like this allows you to separate yourself from the daily ups and downs emotionally. You’ll find yourself making sound decisions based on what you know, as opposed to Mr. Market, who is making decisions based on his feelings.

You can choose whether you want to buy or sell at any given time. You never have to do something just because everyone else is doing it, even if everyone else includes successful and intelligent people.

Just because Mr. Market is feeling things at an extreme one day doesn’t mean the real value of your investment has actually changed, just that Mr. Market’s mood has.

At some point, you’ll find him feeling very afraid about the value of his stock and see that he’s trying to sell it off as soon as possible. That’s where you identify Mr. Market as undervaluing a company and pounce on the opportunity to buy it yourself.

Then, when Mr. Market’s perspective on things changes (as it always does), you’ll find him ready and willing to buy that investment back from you for a good chunk of money—far more than you initially paid for it.

 

How Do You Do Value Investing?

Is value investing just buying low and selling high, then? That’s exactly what it is.

Unfortunately, it’s also easier said than done. After all, if it were that simple, everyone would be doing it.

The key to successfully practicing value investing is to accurately know the current value of a given company and predict its future potential. This data is called the “intrinsic value” of an investment.

A few different things factor into the intrinsic value of an investment, including:

• PEG (price-to-earnings ratio)
• EPS (earnings generated per share)
• Expected growth
• Margin of safety

Determining intrinsic value is not an easy thing to do accurately and consistently. While you stand to profit significantly when your estimations are right, you can lose a lot if you’re wrong. That’s why it’s so important to study the past and the present and compare that information to market forecasts.

Successful value investors combine this information with Graham’s principles. They put their emotions aside as they study the facts and work out what the true value of a stock is and what that value is likely to be months and years down the road.

This is where value investing sets itself apart from simple speculation.

While speculators are often throwing money at the next big thing and taking a huge risk on whether it will be a successful investment, value investors are taking calculated risks based on reason and fact. 

If you can put aside your emotions, ignore your hopes and fears, and actively choose to make decisions rooted in logic and fact, you can make value investing work for you.

Related: How To Become Rich – It’s More Than Millions In The Bank

 

Does Value Investing Still Work?

Value investing has been around for nearly a century, and it’s not going away any time soon.

If you follow the news, you’ll undoubtedly hear some outlets say that value investing is dead and discuss how it can never be a profitable strategy for investors again.

But the simple concept of buying low and selling high has been proven to work time and time again. While various stock market cycles may make it look like a bad strategy, things do come full circle, and those value stocks that were once undervalued will once again be priced at (or higher than) their intrinsic value.

Which brings us to our next question…

 

Is Value Investing Right for You?

While the potential to earn big with value investing is there, that doesn’t mean it’s right for everyone. Countless investors have fallen in love with the idea of making Warren-Buffet-amounts of money through value investing only to fail miserably.

So, how do you know if value investing is the right strategy for you?

First, it’s important to remember that value investing will not get you rich overnight. You’ll have to be okay with playing the long game and have the patience to see it through. It can take months or even years to see a profit from value investing, which is why it should be a part of your diversified portfolio rather than all of it.

Before you start, you’ll need to remember that there is a risk in value investing. Even with the most calculated research, you can still lose. Making logical decisions and evaluating the facts will give you an excellent shot at success, but no investment is guaranteed.

Next, you’ll need to be okay with being a lone wolf who doesn’t follow the pack. You’ll need to ignore what everyone else seems to be doing and only make the moves you believe are right. If you don’t, all your hard work will go to waste.

Finally, you’ll need to consider the most challenging aspect – your emotions. You can never let your emotions get the best of you as a value investor. While plenty of people start out believing that they are or can be emotionally detached from their investments, the tables quickly turn once big fluctuations in price start to occur.

It’s easy to get caught up with the whirlwind of excitement once those prices start to rise, and it’s even easier to feel the fear once they start to drop. Prepare yourself to put these emotions aside before you even begin doing your research.

Sound good?

Then you can get started value investing.

 

What if Value Investing Isn’t for You?

If value investing seems too slow for you, then there are other approaches to consider. Growth investing, for example, looks at companies that are either smaller in market capitalization or less mature, but have massive potential for growth. 

I think this strategy is more in-line with gambling, personally, so I would instead recommend something called GARP investing (Growth at a Reasonable Price). GARP investing seeks to find a middle-ground between value and growth investing by finding companies that have high growth potential, but still meet some of the key principles and metrics of value investing.

 

How Do I Get Started with Value Investing?

Value investing is all about the research. To be successful, you absolutely can’t begin buying until you’ve evaluated the investment thoroughly and looked extensively into its future potential.

Your research should look at a variety of different factors. Don’t take the first opinion you come across as scripture–use your own reasoning and common sense to make a decision.

When you’re just getting started, you should look at companies in an industry that you have some knowledge about and, ideally, some interest in. You’re going to be spending a lot of time looking into the details of these companies, so picking an industry you enjoy can make it feel even more like time well-spent.

Having some knowledge of the industry already will give you a head start on your research. You’ll already be familiar with the types of products they sell, their business practices, who their competitors are, and what kinds of expenses they might have. If you’re not familiar with the industry already, you’ll have to put even more time and effort into learning all this information.

As you become more experienced, you can branch out and learn more about other industries, too.

When choosing a starting point for your research, you can use these points, recommended by successful value investor Christopher H. Browne:

• Has the company recently raised its prices on its products or services?
• Has the company discovered a way to increase its profits while also decreasing its expenses?
• How are the company’s competitors doing?

Of course, you’ll then need to dive into more detailed income reports and future market forecasts to make your final decision.

 

Is Warren Buffet a Value Investor?

An inspiration for value investors everywhere, Warren Buffet is probably the most famous example of a value investor you’ll ever find. Buffet is a very wealthy man who became wealthy because of his success in value investing. 

According to Forbes, Buffett has a net worth of about $76 billion, making him one of the world’s wealthiest men. For years, value investors have studied his strategies and attempted to emulate his success in their own practices.

Much like Benjamin Graham, Buffet is also very good at breaking down complex financial concepts by turning them into a metaphor that just about anyone can understand.

In addition to an incredibly successful value investor, Buffet is also known for living frugally–well below his means. He still lives in Omaha, Nebraska, in the same house he bought for $31,500 in 1958. 

Look at this frugality as another example of emotional detachment from wealth. Buffet doesn’t get caught up in the highs of buying huge mansions or the world’s most expensive supercars, which has allowed him to maintain his wealth for decades.

Need more value investing inspiration? A few other well-known value investors include Charlie Munger, Seth Klarman, Christopher H. Browne, and Peter Lynch, just to name a few.

 

What Are Value Investors Buying?

Unfortunately, there’s no simple answer as to what value investors are buying and selling at any given moment. After all, if the answer was that easy, there would be a lot more Warren Buffets in the world. Of course, there are a few common practices you can incorporate into your own strategy.

Value investors are certainly keeping an eye on companies making products that are in high demand and that are likely to be in high demand for the long run. While the trends of today are not always guaranteed to be the trends of tomorrow, every industry has some products that aren’t going to go away any time soon.

These companies are likely to hold significant long-term value and show strong market stability, even if they’re undervalued at any given moment. 

 

Value Investing: Wrapping It Up

When done right, value investing is one of the best strategies you can put your time into. While there is a lot of effort and patience involved, making your moves based on the knowledge you have rather than faith, hope, and fear will pay off big in the long run.

Plus, separating your emotions from the stock market and knowing each stock in your portfolio is there for a good reason will give you sincere peace of mind that’s quite uncommon amongst the majority of investors.

So, what are you waiting for? Start your research and begin value investing today.

Are you interested in value investing? What is your investing strategy?

The post What is Value Investing, and Why Should You Care? appeared first on Making Sense Of Cents.

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Learning how to stay motivated is incredibly important if you’re paying off debt, trying to reach a savings goal, learning a new skill, or doing anything challenging.

While it can be difficult, you have to learn how to get motivated and then learn how to stay motivated every day if you want to make your goals happen.

I know how hard this is because I struggled at times with motivation when I was paying off my $40,000 in student loan debt in just 7 months.

And, one of the top questions I receive about my debt payoff story is how I was able to push myself and stay motivated to pay off all of my debt.

Paying off my debt was extremely hard – I will not lie about that!

I took on several side jobs to make extra money.

I had to wake up early in the morning to work on them before I went to my regular day job, and then I stayed up late working on my side jobs too.

And, to put all of my extra money towards my debt, I had to stop spending money on many things that I enjoyed in life.

Even though paying off my debt so quickly was one of the hardest things I have ever done, it was well worth it.

Finding ways to stay motivated during my debt payoff was very important, and I will share some of the things I did in this article.

Finding motivation and then learning how to keep yourself motivated can be a hard task for anyone. It’s hard if you’re trying to stick to a budget, to reach your savings goals, to save for retirement, and more. And many people have trouble staying motivated.

The motivation you need to start working on your goals is often the easiest to find. However, it can get harder as you go if you aren’t able to see your progress, taking care of yourself, surrounding yourself with the right people, and more. These are the times when you need motivation the most.

Motivation is important because it can help you keep your eye on the goal even when you want to quit. Motivation will help you continue to work hard towards your goal, even when it seems impossible. Motivation is what keeps you going so that you don’t give up on yourself.

Without motivation, most people would give up on a goal very easily. This is why it’s so important to learn how to stay motivated.

Whether your goal is finance-related, career-related, family-related, lifestyle-related, or something else, there are many ways to help you stay motivated so that you can reach it.

Related content:

• How To Stay Focused, Get Stuff Done, And Be Successful
• 9 Actions To Take To Trick Yourself Into Saving Money
• How To Live On One Income
• Retiring Early: Is Early Retirement For The Crazy and Boring?

How to stay motivated – 12 tips to keep you reaching for your goals.

 

1. Remember the reasons for why you are doing this.

A big factor in staying motivated is to remember why you are trying for your goal in the first place. If there is no reason, then it would be very hard to stay motivated.

You should envision what your life will be like once you reach your goal, why you are trying so hard to reach it, and so on. A little daydreaming can go a long way every now and then.

If your goal is debt payoff, then your reason is probably so that you can stop living a stressful paycheck-to-paycheck lifestyle. Just keep dreaming about what a debt free life would be like!

 

2. Make it visual.

Making your goal visual is a great way to find motivation.

Having your financial goal displayed in front of you can make it that much realer, plus it’s nice to have a constant reminder of what you’re working towards.

Here are several ways to make your financial goal visual:

• Create a graphic that demonstrates your financial goal. You can download the free Debt Thermometer printable below.
• Keep a picture of your goal on hand. Whether your goal is a vacation, an item you want, or something else, having a picture will remind you what you are working towards.
• Start a blog. Blogging helped me a lot with my financial goals. I could easily look back to see how I was doing. Plus, I felt like I had to keep myself accountable and keep improving due to the fact that everything was public. If interested, you can sign up for my Free How To Start a Blog Course.

 

3. Read and watch financial media.

Money is all around you and it’s really not as boring as you may think. I read something related to personal finance every day and it’s not because I have a personal finance blog – it’s because I want to!

There are different ways to stay on top of financial media. You can watch the news, listen to financial podcasts, read personal finance blogs, read financial books, and more.

I recommend doing this because you may read about stories from others who are in a similar spot as you, learn new ideas, hear about some amazing money advice, and so on. I find that reading finance blogs is a great way to stay motivated, as I’m surrounding myself with others who are interested in improving their financial lives as well – and I learn so many new ways to live along the way!

If you’re looking for money-related books, some that I recommend include:

• The One Week Budget
• Broke Millennial
• Work Optional: Retire Early the Non-Penny-Pinching Way
• The Year of Less
• Quit Like A Millionaire
• The Simple Path To Wealth

 

4. Set smaller goals in between.

Setting smaller goals for yourself as you work towards your larger goal can help you stay motivated because it will help you keep your mind on your goal. Smaller goals feel more approachable, which can build your confidence as you reach them.

Also, smaller goals can be a nice way to challenge yourself. Making it more of a game and a competition with yourself, instead of a chore, can go a long way.

For example: If your overall goal is to pay off $24,000 in debt in two years, then you might want to aim for $1,000 in debt payoff each month. This seems much more attainable than the $24,000 number, and this can help you stay motivated while still challenging yourself at the same time.

 

5. Keep track of your progress.

If you want to learn how to stay motivated with your financial goals, you should review your progress every now and then. You might want to check in daily, weekly, or monthly, depending on what type of goal you have and what works for you.

Keeping track of your progress is a good idea because it can tell you what you need to do in order to reach your goal, if you are behind, or if you need to make a change.

I highly recommend you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more.

You can also keep a journal, and a blog is a great way to keep track of your progress as well.

 

6. Adjust your goal if you need to.

After you check in on your progress, you might find that you need to make changes in order to reach your goal. You might decide to change your timeline, your goal entirely, or you might set different smaller goals in between your time frame.

You should always make sure your goal is what you want and that it is realistic, so doing this step is important.

 

7. Be kind to yourself when learning how to stay motivated.

Every now and then, you might fall off track or come short of your goal. If this happens, do not be too hard on  yourself.

This is a very important step when learning how to stay motivated with your goals, as many people drag themselves down when they fall off track or aren’t making the progress they had hoped for.

Things happen, and instead of being negative, you should analyze what’s preventing you from making progress towards your goals and see what needs to be changed so that it doesn’t happen again.

 

8. Think about how you will feel in the future.

It can be hard to visualize your future when you’re just starting to learn how to pay off your debt, stick to a budget, reach a savings goal, save for retirement, and more.

One great way to stay motivated is to think about how you will feel as you make progress towards your goals, and definitely think about what it will feel like when you’ve reached your goal.

How will you feel once you pay off your debt, save a certain amount of money, or reach whatever financial goal it is that you have? 

 

9. Reward yourself when you do become successful.

Whenever you reach one of your smaller goals, you may want to try rewarding yourself so that you can stay motivated. 

A reward doesn’t mean that you are cheating your goal progress or that you will fall off the wagon. You can reward yourself in many ways – you just need to find what works for you while also staying on track. 

A small reward is one of the best ways to learn how to stay motivated because it can give you a taste of how good it will feel when you reach your goal. Rewards also boost your confidence.

 

10. Stop comparing yourself to others.

You will make progress towards your goals differently than someone else who is working on the same goal. After all, everyone has different circumstances and limitations, and everyone starts at a different point.

If you compare yourself to others, you can easily lose motivation because it can cause you to think that you aren’t working as hard as someone else. You have no idea what’s going on in their life, if they have help, how long they have been working on their goal, etc.

Focus on yourself and your goals.

 

11. Surround yourself with people who motivate you.

One of the reasons blogging helped me stay motivated towards paying off my debt is because I got to know other people who were also working towards big goals and some people who had already reached them. It helped me see that debt payoff was possible, and I learned some great tips along the way.

The other bloggers I got to know keep me motivated to this day, and we’ve become good friends.

If you want to learn how to stay motivated, I recommend finding others who are working on similar goals. You can find bloggers, social media influencers, friends, family, etc. 

Share your stories, and look to them for advice, guidance, and commiseration. Just remember, like I said in the last tip, don’t try to compare your progress to theirs.

 

12. Remember to still enjoy your life.

Learning how to stay motivated with your money-related goals means that you most likely still need to find ways to enjoy your life.

If you’re too tough on yourself, then you may lose motivation and maybe even become stressed.

Having financial goals doesn’t mean you have to be boring. You can still enjoy life, do many of the same things you usually do, and so on.

Remember to still have fun and enjoy life!

Are you interested in learning how to be more motivated with your budget, savings goals, and more?

The post 12 Ways To Stay Motivated So You Can Reach Your Money Goals appeared first on Making Sense Of Cents.

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This is a post from Samurai Sydney, my wife. This post highlights how my wife was able to double her life insurance death benefit for less money. At my last full-time job of 10 years, one of the free benefits that came with it was life insurance. When I first joined, I was single, didn’t

The post How To Get More Life Insurance For Less Money appeared first on Financial Samurai.

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From healthcare to scams, we list the top ten expenses that can drain your money during retirement.

The post 10 Expenses that Can Drain Your Money in Retirement appeared first on The Dough Roller.

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When you're hit with an unexpected emergency, a personal loan can be a saving grace. Find out about the best loans for emergencies.

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Thanks to the pandemic, the telehealth revolution we’ve been promised for decades has finally arrived. Will it stick? Will it cut costs — and improve outcomes? We ring up two doctors and, of course, an economist to find out.

Listen and subscribe to our podcast at Apple Podcasts, Stitcher, or elsewhere. Below is a transcript of the episode, edited for readability. For more information on the people and ideas in the episode, see the links at the bottom of this post.

*      *      *

Stephen DUBNER: Okay. If you would just say your name and what you do, please. 

Rebecca KURTH: My name is Dr. Rebecca Kurth. I’m an associate professor of clinical medicine at the Vagelos College of Physicians and Surgeons at Columbia University. And I’m a general internist in private practice in Manhattan. 

DUBNER: We should also say you are our family doctor. And I think you’re great. So, thank you. 

KURTH: Thank you for that. 

DUBNER: It’s been an interesting few months. Can you give us a quick overview, really, of what your typical day was like during the Covid peak in New York City and how that compared to a typical day pre-Covid? 

KURTH: Yes. I do predominantly preventive medicine. I do a lot of checkups and things that are done in a fairly routine fashion. What happened at the end of March is I went from having a few conversations with people who were having fever to having eight to 10 patients a day calling in with symptoms that were concerning. And I would say of my practice of about 1,000 patients, 50 had Covid-related illness. I spent a lot of time basically talking to people on the phone. The last two weeks of March and the first two weeks of April were the peak time here in New York City.  

DUBNER: And at what point did you stop going into your office to see people and handling this all electronically? 

KURTH: Well, I never stopped going into my office because I live within walking distance of my office. My office manager and I worked the entire time. It was also easier for me to be in my office in what I felt was my command central when I was handling all the phone calls. I had very quick access to my electronic health records. I was able to use my office as a reassuring background for any video calls that I had with patients. And it just allowed me to kind of stay focused. So, I would do an initial consult, a telemedicine consult, and then I would create my list of phone calls of people who I would call and follow up on over the next day or two or a week or two. 

DUBNER: I should say we were on your daily call sheet for a while. We had illness in the family during that time, which was pretty concerning, especially because in New York City the big concern was if you go to the hospital, what’s going to happen there? And so, we were talking to you every day for, it seemed like typically 20 to 30 minutes. 

KURTH: So, what happened with Covid, and the hard thing for physicians is that there was so much uncertainty, and there was a sense that there wasn’t much we could do other than maybe manage some of the other medications that the patient was taking, or maybe listen and see if on top of a viral infection, they were developing bacterial infections, or pneumonias, or sinus infections, or ear infections. So, every day I felt the follow-up phone calls — they were to reassure the patient, but it was also for me to learn more about the illness and what was happening and then to make micro-interventions to maybe prevent things from getting worse.

Things didn’t get worse in my family. In fact, none of Dr. Rebecca Kurth’s patients were hospitalized or died. We were fortunate. But many others were not: At the peak, as many as 800 people a day were dying in New York City from Covid-19. The streets had been abandoned. The most common sound was the ambulance siren. By mid-April, the Covid numbers started to decline, but the city was still shut down.

KURTH: What I saw in mid-April is that the Covid calls went way down, but the calls for other types of problems began to increase. 

Kurth was faced with a dilemma: Should she reopen her office or find a way to keep treating her patients virtually, practicing what’s known as telehealth?

KURTH: I think the thing that made me go immediately to telehealth was the news that Angela Merkel was in quarantine because her doctor had tested positive for the virus. And the idea of a physician or a physician’s office being a vector of illness is kind of creepy. That you go to a place to get help and you get sicker. 

So, Kurth started seeing non-Covid patients virtually, over Zoom. She felt she got to know them better.

KURTH: I enjoy seeing their homes. And I’ve met their pets and I’ve seen the children running in and out of the screens. 

Once she began offering a telehealth option, she got very busy.

KURTH: People were wanting telehealth visits for low back pain. They wanted it for shoulder pain. They wanted it for a rash that they had developed. They wanted to simply go over their blood-pressure medications because they hadn’t seen me in a few months. And it actually became quite enjoyable. Back pain is actually quite easy to do with a video camera. You can do all of the exam. You can phone in the prescriptions. No labs or x-rays are often needed.

DUBNER: Can you give me a quick list of the things that, going forward, cannot and will not be done via telehealth?

KURTH: So, earache, you’ve got to look at the ear. It could be wax. It could be anything. That’s a simple thing. Abdominal pain. I did a couple of telehealth, but I certainly knew when I was going to need to get some blood work or other x-rays. Tough ones are fatigue or malaise. You can start the conversation over the phone, but it’s hard to complete it. Chest pain and acute stroke symptoms, really need to go to the emergency room. There were two visits during the pandemic that I converted from telehealth to actual office visits because I felt that I was at risk of not getting it right on the phone or by video. And I actually brought the patient into the office with all protective gear because I felt it was essential. And I was safer than an emergency room at that time.  

Kurth became convinced that telehealth would outlast the shutdown, at least for certain kinds of care.

KURTH: For me, it’s the sick visits that I actually could easily do over the phone because they usually have algorithms. Back pain has an algorithm. A number of things like headache, sleep disturbance, you can actually do those things over the phone because they don’t require as much of a physical exam. For annual checkups we could do certainly the screening questions over the phone. So, I would say looking next year, I would expect that 20 to 30 percent might be done over the telephone, and office hours would be more restricted. 

Rebecca Kurth is just one doctor, with a pretty standard practice. Multiply her by the more than 200,000 primary-care physicians in the U.S. who’ve had to shift their practices during Covid-19 and you may be starting to look at a telehealth revolution.

Chad ELLIMOOTTIL: I really think that the old model of bringing patients in for every medical reason is over.

Today on Freakonomics Radio: what does this revolution look like? Who wins and who loses? And what kind of unintended consequences might we see?

ELLIMOOTTIL: You got the questions that stumped me. I was doing so well. 

*      *      *

There are going to be a lot of long-term consequences of Covid-19 — economic and social consequences, how we travel and congregate and educate, on and on. There will also be a lot of long-term medical consequences, beyond the destruction done by the virus itself. For instance, screenings for cancer and other illnesses that didn’t happen during the pandemic; childhood vaccinations that didn’t happen. On the other hand, the telehealth revolution that we have been promised for decades was finally thrust upon us, by necessity. Some institutions were already well set up for telehealth.

ELLIMOOTTIL: Prior to the pandemic in February, we were doing about 400 visits per month.  

That’s Chad Ellimoottil. He’s a practicing urologist, an assistant professor at the University of Michigan, and also:

ELLIMOOTTIL: And also the director of Telehealth Research Incubator at the University of Michigan. 

Which is what?

ELLIMOOTTIL: Essentially it’s a collaborative that uses resources and expertise at the University of Michigan to catalyze and disseminate telehealth research.  

Are there a lot of telehealth incubators?

ELLIMOOTTIL: It’s fairly unique. The purpose of it was to specifically look at population-level effects of telehealth. 

Before the pandemic, the University of Michigan health-care system — which is huge, by the way — was doing about 400 telehealth visits per month.

ELLIMOOTTIL: And then in April and May, we did about a hundred times that. In April, we had 30,000 visits. And in May, we ended with about 40,000 visits.

Ellimoottil also got hold of data from a large insurance company to show their telehealth activity for the entire state of Michigan.

ELLIMOOTTIL: Prior to the pandemic, there were about 10,000 telehealth encounters per month. And then in March and April, these numbers were 140,000 and 230,000. So, about 20 times as many visits during the pandemic.

The pandemic forced changes that led to a massive spike in telehealth — including regulatory changes, as we’ll hear later. But first, let’s define what we’re talking about when we talk about telehealth. For starters, is there a difference between “telehealth” and “telemedicine”?

ELLIMOOTTIL: So, telehealth, telemedicine, virtual care, and e-health are essentially the same thing for all intents and purposes. Telehealth is typically a little bit more broad than telemedicine. And some organizations may distinguish between the two terms. But nowadays those terms are all used interchangeably. 

We’ll call it telehealth too. You may be surprised to learn — I certainly was — that the earliest telehealth goes back to the invention of the telephone. In 1879, for instance, the medical journal The Lancet discussed using the phone to reduce unnecessary doctor visits.

ELLIMOOTTIL: It has been around for a long time. In fact, the Medicare program has reimbursed telehealth for about 20 years now. 

But take-up rates have been low.

ELLIMOOTTIL: Up until March 2020, less than 1 percent of Medicare patients have ever used a telehealth service. 

Ellimoottil’s own interest in telehealth came from working as a urologist.

ELLIMOOTTIL: We’re seeing patients from all over the state who sometimes travel four hours just to have a 15-minute consultation about their kidney stone. And to be honest, I probably knew the answer about how I was going to manage that patient when I looked at their C.T. scan.

M.D.’s aren’t the only people who can deliver telehealth; nurse practitioners, social workers, and clinical psychologists can use it. And the applications are diverse.

ELLIMOOTTIL: Everyone knows about video visits and telephone calls, but there are other modalities of telehealth. One example is called an e-visit.

What’s an e-visit?

ELLIMOOTTIL: Essentially an e-visit is a secure message between a health-care provider and a patient. That secure message can come in the form of a patient portal message. It can come in the form of an email. It could come in the form of a picture. A good example would be in dermatology, where you could take a picture of a rash and send it to a dermatologist and the dermatologist can reply without actually having to talk to you, and give you a prescription for it. 

There’s also an e-consult. 

ELLIMOOTTIL: An e-consult, also known as an interprofessional consultation, occurs when a primary-care doctor has a question about their patient and then sends a specialist that question. And then rather than having the patient see that specialist directly, the primary-care doctor and the specialist hash it out, they come up with the solution and that’s it. 

Telehealth can cut across many specialties. During the pandemic, it’s even been used to facilitate assisted dying. And also: 

ELLIMOOTTIL: Psychiatry is a very important area. Dermatology is an important area. Stroke care is a very important area. When a patient is diagnosed with the stroke, how quickly they’re started on medications impacts their function after that stroke. And so, if a patient is having a stroke in a small, rural hospital and there’s no neurologist that’s around, you can use video conferencing to get a neurologist in the room to diagnose that patient within seconds and then start that patient on medications within minutes so that they can have the best functional outcome from their stroke. 

David CUTLER: So, it turns out it’s not just telehealth, you can do tele-fill-in-the-blank for anything. 

That’s David Cutler, a health-care economist at Harvard.

CUTLER: For example, you can have a tele-I.C.U. You’ve got a rural hospital somewhere with maybe not a full-time I.C.U. physician who really does need backup. And you have a hospital system that then has a central I.C.U. where they look into maybe 10 or 20 different hospitals and their local I.C.U. 

Cutler worked in the White House under President Clinton and advised Barack Obama on health-care policy during the 2008 campaign. Being a health-care economist in the U.S. is a bit like being a general in a warzone: everywhere you look, there are crises — and opportunities. You want to cut spending while increasing access for those who need it. To that end, David Cutler is excited about this unplanned surge in telehealth.

CUTLER: It is amazing. We went from essentially no visits for medical care being telehealth to now between 10 and 15 percent of visits for medical care are telehealth. And we did it virtually overnight. 

But the telehealth spike didn’t happen entirely on its own. Yes, there was an increase in demand from patients who couldn’t get to their doctors during the pandemic. And yes, there was a supply of unbusy doctors who had the capacity to treat those patients. But that alone wouldn’t have been enough to drive the surge. Chad Ellimootil again:

ELLIMOOTTIL: There were more regulatory changes related to telehealth in the last three months than there have been in the last 20 years. 

The Trump administration has leaned into this one, hard. F.C.C. Chairman Ajit Pai has called the telehealth boom the “silver lining of the pandemic.”

ELLIMOOTTIL: At the federal level, there were five major changes. No. 1 was patients were allowed to connect from home. So, prior to the pandemic, patients were required to go to a medical facility, and that medical facility needed to be located in a health-professional shortage area. 

In other words: you didn’t have local access to the medical help you needed but rather than being allowed to get telehealth from your home, you had to visit a local medical facility and connect remotely from there. So, pre-pandemic access to telehealth was often not very convenient.

ELLIMOOTTIL: No. 2 was that patient privacy rules were relaxed. And what that means is that prior to the pandemic, there was a requirement that the software that you use, the equipment that you use, has high levels of security required by the law called HIPAA. And so, during the pandemic, there were some relaxation of these rules just so they can enable patients and providers to ramp up quickly. 

So, rather than a dedicated interface or device, patients could use their own phone or computer.

ELLIMOOTTIL: The No. 3 was that payments for telehealth services were essentially made comparable to in-person visits. This is especially true for phone calls, which typically were either not reimbursed by payers like Medicare or were reimbursed at low levels. 

No. 3 is the big one, if you think about it. The money. We’ll come back to this one.

ELLIMOOTTIL: No. 4 was that there was relaxation of medical licensure rules. What this means is that many state governments and the federal government also said it would be okay to practice across state lines.

This allows flexibility, of course. In the past, some health-care providers fought this idea, arguing their businesses will shrink if patients are allowed to see out-of-state doctors.

ELLIMOOTTIL: And then, finally, the other big change was that practices were essentially given the power to waive co-pays for patients. And that’s really important because it incentivizes patients to use these visits versus in-person care. 

Okay, so that’s a lot of regulatory change in a short time. The kind of change that doesn’t typically happen without years of legislative fighting and horse-trading. The biggest change, as I mentioned earlier, concerned how doctors could get paid for practicing telehealth. David Cutler, again:

CUTLER: The key missing ingredient had always been the financial one. It was not the technological one, because as we’ve learned, it’s easy, relatively easy to do. It was not the desire of patients because as we’ve learned, patients would like to do it this way. It was the financial issue. 

ELLIMOOTTIL: Insurance coverage for telehealth was fragmented. There were some private payers that were reimbursing for telehealth visits. The Medicare program was not at that time — or there was at least a significant regulatory burden on how a telehealth visit could be conducted. And so, that sort of fragmentation leads to confusion among patients, confusion among providers, which just inherently leads to lower rates of adoption. 

Now, keep in mind the U.S. health-care system is incredibly segmented. Some doctors take private insurance; some take Medicare; some take no insurance. So, the money didn’t flow evenly. Consider my family doctor, Rebecca Kurth; she doesn’t take insurance — which meant no insurance company was reimbursing her for all those Covid calls.

KURTH: April was a brutal month. It was a 75-percent reduction in revenue, even though I was doing eight telemedicine visits a day and probably 10 non-charged phone calls, which were my own neurotic follow-up phone calls. I bill by 10-minute intervals. But you don’t bill the same way when you’re not fully present in a room with somebody.

Money, probably more than anything else, will likely determine the degree to which telehealth continues after the pandemic. These federal regulations have been changed only temporarily, on account of the crisis. 

CUTLER: At the end of this, C.M.S. will have to figure out whether it wants to go back to the way it had it or keep things the way that it changed into. 

C.M.S. is the Centers for Medicare and Medicaid Services. It’s a federal agency, within the Department of Health and Human Services, and it accounts for 37 percent of U.S. health-care spending, and accordingly plays a huge role in setting costs.

CUTLER: That’s a political-economic decision. Congress might get involved as well. My hope is that they will continue to reimburse telehealth. Certainly there haven’t been stories about widespread abuse of telehealth that might indicate we’ve got to be careful here. 

DUBNER: What kind of abuse would one fear? 

CUTLER: Anytime that you have someone taking care of a patient or claiming to take care of a patient, you always need to be sure that that actually occurred. There was a good deal of home-health fraud that was about bills that were submitted for home health where people suspected no actual home health care was provided, that it was entirely a scam to submit bills. There is a seamy underside of a lot of medical care like that. 

This sort of caution may be justified, Cutler says. But it doesn’t fully explain why C.M.S. has been historically disinclined toward reimbursing for telehealth. 

CUTLER: I think what happened was there were no doctors yelling and screaming, “You have to create this telemedicine thing because I’m desperate to do it.” And so, C.M.S. listens to where the yelling and screaming is. And the yelling and screaming is coming from the specialists who say, “Oh, we’ve got a new way of treating X, you’ve got to find a way to reimburse X.” And so, there’s this tendency to focus on where the hockey puck is and not where it’s going. 

DUBNER: Talk about the other economic decisions being made, including — I’m really curious to know about private insurers.

CUTLER: So, private insurers are in a very interesting position. So, on the one hand, the use of medical services has plummeted. Absolutely plummeted. People are not going to the doctor. People are not going to the hospital. There are fewer people showing up with strokes and heart attacks. So, on the one hand, that was like a bonanza for private insurers because their business models take in premiums and pay out claims. And if nobody’s making claims, then you’re taking in premiums and not paying out.

On the other hand, they had businesses and individuals who were writing them checks who are saying, “I can’t pay you now. My business is shuttered. I can’t pay you. As an individual, I can’t pay you.” So, on the revenue side, they were losing a lot as well. Most insurers are in this tricky spot where in the short term they’ve been making a lot of money because they haven’t been paying out. They’re now, if you will, extending loans to businesses. And they’re wondering, is that care that was deferred going to come back and bite us? So, all those people who didn’t go to the doctor for X, are they going to show up in the fall next year?

They don’t really know about this. If they get very nervous that people are going to have all these elective surgeries, that doctors are going to make up for a couple of months out with a lot of billing, then they’re going to return to clamp-down mode. So, they’ll say, “We have to get a handle on expenses. We have to impose more drug co-pays. We have to stop this telemedicine thing. We have to do all these things to try and bring our costs under control.” If they don’t need to do that, if utilization stays low, if people come back and can pay their insurance premiums and so on, then the insurers will be in a much better position to say, “You know, this actually turned out okay, and we’re willing to go with this and let’s figure out how we work this into routine care.

It may end up being harder to take away telehealth reimbursement than it appears. Just because it can be hard to take away anything that people have gotten used to. For now, patients are using it, doctors are being reimbursed, and everybody’s already invested time and energy in figuring out how to do it.

ELLIMOOTTIL: And that reluctance and that resistance to change is a big problem in health care. As someone who is working to expand the use of telehealth, just getting providers to do a video conference with a patient that is eight hours away, is hard enough to build that into workflow. Providers and patients across the country were able to see what the value and the benefit of telehealth was during this time, where they really didn’t have any other options.

DUBNER: It strikes me that telehealth has been the future for a long time, and then suddenly in the course of a month or two, because of Covid-19, it became the present. Really, what I want to know is, is it also the future? In other words, is it going to stick? 

ELLIMOOTTIL: I think it’s going to be sticky to some degree. I think that this spike is probably the highest level that we’re going to get to for a while. After the pandemic is over, as health systems start to ramp up in-person care, we’re going to see telehealth drop, and it’ll drop to some baseline level that was much higher than it was prior to Covid, but it won’t be at the levels that it was during the pandemic. 

DUBNER: If this goes as you would like it to go, what share of in-person medical visits as of 2019, let’s say — right before pandemic, what share of those will convert to telehealth visits by, let’s say, 2025?

ELLIMOOTTIL: I think that the right number is probably about 25 percent. I really think that the old model of bringing patients in for every medical reason is over. And now that there’s been that exposure to telehealth, a lot of specialties will be redesigning care.

*      *      *

A few months ago, before the Covid-19 pandemic, we were working on an episode about the U.S. health-care system. We had two central questions: is the system as messed up as people think it is?

Zack COOPER: Oh, I think absolutely the U.S. health system is as messed up as people think it is, probably more so. 

And what are the primary drivers of this mess?

Marty MAKARY: If there are two fundamental drivers of our broken, costly health-care system, I would say it’s pricing failures and inappropriate care. 

We will finish up that episode eventually. But we, like everyone else, put our pre-pandemic plans on hold. And today, we’re focused on one piece of that larger health-care story — the massive boom in telehealth precipitated by the Covid shutdown.

In a typical year, the U.S. spends about 18 percent of its G.D.P., or $3.5 trillion, on health care. That’s nearly double the average O.E.C.D. country in terms of G.D.P. percentage; and our outcomes aren’t always so good. How might telehealth change this? The health-care economist David Cutler sees three main drivers of those high costs: 

CUTLER: The first one is the administrative cost of running the health-care system. In most countries, they just say to the physicians, “Here are the resources that we have, you make do with them.” And that’s not a very expensive way to do things. In the U.S. we don’t say that. We say, “You can have whatever equipment you want, but we’re going to question every single time you want to use it.” The net effect is we spend an enormous amount of resources adjudicating when is it appropriate to use care or not. That’s very, very costly.

Okay, so a huge layer of administrative cost. Health care is hardly the only U.S. industry to pay these costs — higher education comes to mind. What else drives up U.S. health-care costs?

CUTLER: The same provider of care — think about pharmaceutical companies — gets paid more for selling in the U.S. than in other countries. Drugs are more expensive in the U.S. than in other countries. So, by the way, are physician visits for the same thing, more expensive in the U.S. than other countries.

That’s connected to our byzantine system of insurance reimbursements, and the fact that many people get their health insurance through their employers, which doesn’t happen in other countries. And the third driver of high U.S. health-care costs? 

CUTLER: The typical visit to a medical-care institution is more intensive in the U.S. than it is elsewhere. It’s likely to involve additional testing, maybe hospitalization. And a lot of that care is not really so essential. It’s done because the physician just wants to be sure, sometimes because he or she is afraid of being sued, sometimes because there’s an empty hospital bed, so you might as well use it.

DUBNER: When you break it down into those three areas, does telehealth — if it were to, let’s say, double, triple, quadruple over the next five or 10 years — does that do anything to significantly lower those costs? 

CUTLER: One thing that it does, which is independent of cost, is it just makes the medical system more convenient for people. One of the big frustrations about medical care in the U.S. is that people have a very, very difficult time using it and accessing it and getting to where you need to and the physician visits and all of that. So, we shouldn’t underestimate the poorer outcomes that result from having a system that’s difficult to use.

But Cutler also sees promise in the direct lowering of costs. While C.M.S. is currently reimbursing telehealth visits at the same rate as in-person visits, that doesn’t necessarily reflect the future reality.

CUTLER: So, the telemedicine visit doesn’t need to be as high. My sense is that something like 85 percent of an in-person visit is roughly the cost that’s needed, because you don’t need the staff and you don’t need the office space.

ELLIMOOTTIL: I would play a little devil’s advocate here and say that it’s not necessarily cost savings. 

That again is Chad Ellimoottil, the urologist who runs the Telehealth Research Incubator at the University of Michigan.

ELLIMOOTTIL: There are kind of two ways to look at it. One is that it is cost savings because it reduces that in-person clinical footprint. It reduces overhead costs. But on the other hand, it actually can be — you can lose revenue through these visits. And so, there’s this concept of payment equity, which means that it’s not just is the visit reimbursed at the same level, but it’s also about all the additional services that come with in-person care.

DUBNER: Do you mean, upselling, essentially? Like I go for my physical and I get asked, “Do you want not only the flu vaccine, but the pneumonia vaccine, too?” that kind of thing?

ELLIMOOTTIL: So I don’t know if it’s so much upselling as it is kind of the services that you receive out of convenience. Let me give you an example in my practice. When we see patients in person for urologic care, we typically start the visit by collecting a urine sample and running a urine-analysis test. And so, that urine-analysis test, I’ll take a look at, I’ll make sure that there’s nothing that I need to address in that.

However, does every patient need that particular screening modality? I mean, we do it because they’re there and it’s quick and it’s easy and it helps us with our management, but it may be considered low-value care or a low-value test. Those are the kind of things that practices make money off of, so that the total reimbursement for a patient may actually be lower with telehealth visits than it is with in-person care.

DUBNER: But it sounds like the concern from the health-care provider may be that it really strips it down to the essentials, that even if reimbursement is commensurate with in-person reimbursement for certain activities, there are other activities that just won’t be happening at all, that you won’t be able to charge for. Is that right? 

ELLIMOOTTIL: That’s 100 percent correct.

What we’ve been talking about here is the microeconomics of one doctor. Health care is of course much, much broader than that. Consider all the treatment — all the elective surgery and consultations and other procedures — that was deferred during the pandemic. That loss of revenue has already put a lot of providers under an existential threat. It’s not a very popular position to express concern for the existential well-being of health-care providers — they’re generally seen as already charging too much. But no one wants to see providers disappear, either. So, what’s the best way to think about balancing health-care supply, demand, and price?

CUTLER: The biggest source of spending in health care is when people get very sick, so they wind up in the hospital, they’re in intensive care, they’re in rehab and acute-care facilities, post-acute care facilities. If you want to reduce spending in medical care, get people out of institutions. That is super expensive. Most anything you can do that prevents that will save money.

And here’s where telehealth may prove most valuable: using various technologies for preventive care, for health-care monitoring, and other cheap and easy interventions that keep people out of institutions.

CUTLER: One of the shames about prevention is we know how to do it and it’s still woefully underdone. Only about half of people with high cholesterol or hypertension are successfully treated. If you can use telehealth to do that, you can both improve people’s lives and save money on things like heart attacks and strokes and related conditions.

DUBNER: So, the complaint from providers is always — well, the complaint from everyone really — is always that prevention is not monetized, you’re not incentivized, and that procedures and treatment are. Can you see a way in which telehealth, and all that includes — apps that have a pulse-ox, smartphones are really, really smart when it comes to health care — can you imagine a way in which telehealth is an avenue for a huge increase in preventive care? 

CUTLER: Yes, I can. A lot of preventive care involves regular activities on the part of people, but that it’s easy to slip up. So, for example, I need to be taking medication regularly for someone who has a particular condition. But if you forget to go to the Walgreens that month or that week, then you don’t have it. Maybe actually the right way to care for yourself at home is with telemedicine and C.V.S. or Walgreens. You know, coming in and delivering your diabetes test strips and making sure that your high blood pressure monitor is accurate and so on. 

It’s a strange feature of our digital revolution. If you consider how much computers and the internet have changed the way we work and socialize and entertain ourselves, it can often seem that health care is back in the 20th century.

CUTLER: The thing about health care that’s always struck me is that health care is the most information-intensive industry in the economy, and it uses information technology among the least of any industry. The fax machine seems to exist, at the moment, only for health care. So, I think of telehealth as one part of a system that we know should work differently than it does. And this is an easy entree into doing that.  

ELLIMOOTTIL: The idea of remote monitoring is being able to collect vitals or collect important data from patients without them actually being there in front of you. That is going to be a big way that certain types of conditions, like congestive heart failure, diabetes, those conditions can be managed where physicians are essentially managing an entire panel of patients just by looking at their data. And that’s also where these new concepts like artificial intelligence can come into play, where the big part of remote monitoring is being able to sort through lots and lots of data to be able to come up with clinically-appropriate solutions and red flags for patients. 

DUBNER: So, here’s the big question, Chad. We’ve talked about uptake and technology and costs and regulations and so on. The big question for me is outcomes generally, health outcomes.

ELLIMOOTTIL: There’s four areas where we can think about outcomes. One area is access. Second area would be costs. The third area would be quality. And then the fourth area would be patient experience. And so, on the patient-experience side, there’s numerous studies that have essentially showed that patient satisfaction rates with these telehealth visits are equal to or better than in-person care.

DUBNER: Okay. But you’re talking about satisfaction outcomes, essentially, even when you talk about quality. I want to know about medical outcomes. So, in other words, if I feel that there’s huge value in seeing my doctor in person because there are things that can be done diagnostically, whether it’s physical examination, whether it’s a sort of conversation, whatever, or maybe how the data are are gathered, collected, and analyzed. I want to know what we can tell about, if we were, let’s say, the thought experiment, if we were to switch to 100 percent telehealth overnight, what do we see in terms of early cancer diagnosis? What do we see in terms of diabetes and C.O.P.D. diagnosis and monitoring and treatment and so on? What can you tell us about that?

ELLIMOOTTIL: Yes. That’s a good question. There’s certain things that we know from smaller sized studies, pilot studies, single institution studies, and what we don’t know is really the population level effect. And so, let’s just go to the chronic disease management of congestive heart failure. That’s one area that has been studied very well with a lot of randomized control studies that have found that using remote monitoring, checking patients’ weights at home, and adjusting their medications can keep them out of the hospital, can shorten their stay inside hospitals, and can actually decrease mortality as well. And so, that’s one area where remote monitoring works well.

In diabetes management, remote monitoring has been shown to, in randomized control trials, to be associated with lower rates of hemoglobin, A.1.C.’s. There is some strong data in selected areas. But in terms of, “Will a patient’s outcomes from a cancer diagnosis be improved because of early detection?” We don’t know the answer to that yet because it just hasn’t been used in oncology at a population level where we can actually assess that particular outcome.

Better medical outcomes are of course reliant on access to health care in the first place. Let’s go back to something David Cutler said earlier:

CUTLER: We shouldn’t underestimate the poorer outcomes that result from having a system that’s difficult to use.

Think about that for a second. Even if you’re the kind of person who does have health insurance — and 27 million Americans don’t — even if you’re the kind of person who does have the time and ability to make a doctor’s appointment on a weekday, and wait there as long as the doctor needs you to wait before seeing you, and you also have the time and the ability to come for the follow-up visits or tests — imagine how convenient a telehealth visit might be for you. Now imagine you don’t have the ability or the time to access medical care in that standard, old-fashioned way. How much more convenient would a telehealth visit be for you now?

CUTLER: So, if telemedicine becomes part of this whole thing, which is now we want to care for as many patients as possible at home, not by making them go to the doctor’s office and not by making them go to inpatient settings, then that could set off a really interesting battle for who controls the patient’s house in terms of medical care.

DUBNER: So, if I forced you to predict, when the data start being revealed in the fall and beyond, what do you think we will learn about, especially about the insurers’ thinking on the economic value of telehealth?

CUTLER: My guess is the more fortunate — economically, demographically fortunate — have probably found ways to keep in contact with the medical sector to make sure they’re getting their medications, to make sure if anything’s going wrong, they’re up with it. And that the lower income one has, the less able what it’s been to do that. We’ll likely see more in the way of missed medications, of missed screenings, and that will then translate into poorer outcomes.

DUBNER: So, an exacerbation of the inequality already, basically.

CUTLER: Correct. There’s a fact about medical innovation which is relevant here. Almost every medical innovation first diffuses to people who are better off and then diffuses to people who are worse off. So, you see that with new drugs, you know, new drugs for H.I.V. first get taken by higher-income people and then they spread to lower-income people and people in lower-income countries. Same is true with antihypertensives, cholesterol drugs and so on. It may very well be that telehealth and its related innovations happen first for people in cities, and rich providers and so on. I’m hopeful that it won’t be. But even if it does, that doesn’t mean that’s where it has to end up. 

DUBNER: So, assuming the change sticks, at least to some degree, and that telehealth grows — who stands to lose the most?

CUTLER: That’s an interesting question. It’ll depend on a couple of things. One thing that will happen is that the physical space and the office personnel may shrink some. If you’re, for example, a landlord renting to medical offices, they may not need as much space. And if you’re in the medical-record business or in the office-support business and there’s no office to support, then you may be out of a job. So, those would probably be the biggest losers.

The winners — some physicians will turn out to be winners because really what they want is actually a more flexible schedule, too. And so, being able to do the telemedicine version may actually work out well. Patients could very well be winners, too. Depending on how much more we spend in primary care relative to what we save, the spending balance could go up or down. My own personal thought as we’re talking about it is that over time, technology from telemedicine and other things ought to be able to lower spending. But there’s a possibility, certainly in the short run, that it would increase spending.

The bad way to say it is never waste a crisis. The good way to say it is people, doctors, patients, health-care systems are now open to more change than they’ve been in some time.

DUBNER: So, let’s just pretend for a minute that Joe Biden wins the presidency in November. Let’s pretend that you come back into that administration, head of C.E.A., maybe health care, specifically. What’s the first move you make or the biggest, best move you make to address “the health-care system”?  

CUTLER: I’m going to give you two priorities. The first one is you’re going to come in, in the middle of a continuing recession — hopefully it’s not a depression —  where people are going to be without coverage or they’re going to have lost the coverage they like, and they’ll be searching around for coverage. And so, you’re going to have to do something to help people. So that’s item one. Item two is that medical care is too expensive, and the expense hinders people from seeking medical care. It hinders businesses from investing in workers. It hinders governments from doing things that governments would like to do.

So, I make a full-frontal assault on the cost of medical care. I go after the administrative costs in medical care. I go after wasted resource use. I go after fraud and abuse. I go after higher prescription drug prices than are necessary. I do everything I can not to ration care to people because I don’t want to ration care to people, but to get rid of all the waste in medical care. We have a $3.5 trillion medical system and our best guess is that a trillion dollars a year is unnecessary. If I can get any part of that trillion, then I can do whatever the heck I want.

DUBNER: And would you consider — whether you pursue some kind of Medicare-for-All option or not — would you consider unbundling health-care insurance from employers? Because that strikes me as in some ways the original sin of the U.S. health-care dilemma.

CUTLER: There’s an issue as to whether the next president, if it’s President Biden, should take a big swing at medical care or should take a medium swing at medical care. A big swing would be something like Medicare-for-All or get rid of private insurance and some combination like that. And a medium swing is patch up the A.C.A. and focus on costs. There are other issues that we need to address, too. At a time where the capital of the president is at its highest, I don’t know that I would recommend going all in on the big swing for health care, spending the first year and a half on that and not addressing wage inequality and cities coming apart and racial issues and pandemic and all of that. I don’t know that I would say now is the time to do that.

One part of Cutler’s medium swing would be moving away from the fee-for-service system in most primary care:

CUTLER: What we currently do with primary care docs, is we say, “Every time you see the patient, send in a bill and we’ll pay you. Every time you have a phone call, send in a bill and we’ll pay you. Every time you do this, send in a bill and we’ll pay you.” A different payment model would be something like, “I’ll tell you what, we’re gonna pay you $40 for each person per month, adjusted for how severely ill they are. Then you figure out the best way to care for them. Oh, by the way, we’re going to monitor, like, make sure you actually do interact with them. They’re getting their medications, they’re self reports are good. And so on, so you can’t not see them. But you decide the best way to see them.”

If you, as a provider, say, “Hey, you know what? By using email and telemedicine, I can see many more patients,” then go ahead and do it. Those kinds of alternative payment models would also help to incentivize telehealth services.

KURTH: One of the things I should say about myself is I am a fee-for-service doctor and I’ve opted out of all insurances.

That, again, is Rebecca Kurth, a professor of medicine at Columbia and my family doctor. 

KURTH: One of the brutal things I realized 15-plus years ago was that I worked for the patient and I can’t have myself — and this is maybe more than one needs to know — I’m not working for Kaiser, which I think is a wonderful nonprofit health company. I don’t work for Cigna, or I don’t work for Oxford or United, or I don’t work for a commercial insurance company. Yet they put rules on me that may not actually be in the best interest of my patient. And that’s a harsh thing to say. And when I work for the patient, it means you have my undivided attention.

I will work with your insurance plan to get things covered that need to be covered. But I need to unfetter my brain from thinking about their rules. And when I do that, I become a better doctor because I’m thinking about what does this person need, how can I help this person, what do I think the diagnosis is, how do I best get at the diagnosis without somebody telling me I can’t or it’s going to take two hours on the phone to get prior authorization. So, I look at myself as somebody who is trying, to the best of my ability, to use my knowledge base and skills to navigate the health of the individual patient. And that makes it easier for me to say, first of all, accept all change that’s coming forward if it’s in the patient’s interest and if I can do a good job with telehealth, I’m going to do it.

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Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Zack Lapinski. Our staff also includes Alison Craiglow, Greg Rippin, Matt Hickey, Corinne Wallace, Mary Diduch, and Daphne Chen. Our intern is Emma Tyrrell. We had help this week from James Foster. Our theme song is “Mr. Fortune,” by the Hitchhikers; all the other music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts, Stitcher, or wherever you get your podcasts.

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