More Money News You Can Use

The IRS will no longer take the super rich's mega-checks, credit card debt is inching up again, and a travel website has pinpointed the best time of day to buy airplane tickets.

• US prescription drug spending hit $374 billion in 2014, according to IMS Health. That’s up 13% over 2013 and the highest growth rate since 2001. Big Pharma’s rationale for high, and rising, prices is that they have to keep prices high to pay for the (admittedly) high cost of bringing new drugs to market. But that claim is given the lie when you consider that AFTER paying for those development costs, Big Parma’s profit percentage is still higher than even the banking and financial sectors.

• Note for all of you docs planning to bill Medicare for tens of millions: The IRS has announced that they will no longer accept checks for more than $99,999,999. Amazingly, so far this year, the IRS has received 14 checks in excess of that amount, presumably none from practicing physicians. FYI - In 2014, the top 400 taxpayers averaged an income of $336,000,000, each. And we had to go to medical school….

• Many people are expecting to be boosted in their quest for retirement security by a hefty inheritance. Estimates are that $12 trillion will be coming down the pike in the coming years. But research has shown that less than 2% of households will be taken out of retirement financial peril because those monies will be distributed in large boluses to a relative few. Most of us still have to save, and save some more.

• Some rules of thumb:

1) Wait to trade stocks until after 10 a.m. Buying and selling are especially heavy when the market opens since there are many orders stacked up, made overnight, so that’s when the gap between “bid” and “asked” is the greatest. It amounts to pennies per share on average (.84% according to Dan Strumpf in The Wall Street Journal) but over time can really add up in dollars lost.

2) For now, it is cheapest to buy airline tickets on Tuesday afternoon, according to FareCompare. New fares are offered, or matched, by the airlines late Monday and early Tuesday. So 3:30 Tuesday afternoon is “the golden hour”. The cheapest days to fly are Tuesday, Wednesday and Saturday on both domestic and international flights.

• Credit card debt has been inching back up toward the $900 trillion mark, the highest since the end of the Great Recession. That’s an average of $7,813 per household. More ominously, when asked about their level of debt, people underestimated it by an average of 37%. That’s important because the percentage of available credit that you use accounts for about 1/3 of your credit score. FYI - The average FICO score is now 695, the highest in at least a decade (The max is 860). All this from TheFiscalTimes.com, CardHub.com and CNBC.com.

• The next time that your hair stands up seeing the volatile gyrations of the market, consider this: Since the S&P 500 was created in 1957, it has fallen on 46.7% of days trading. But if you looked at your portfolio just once a month, that number drops to “only” 40.7% of days with a loss. Better yet, if you were to look at the end of the year instead, you would see a loss only 27.6% of the time. This from Justin Wolfers in The New York Times. In the end, what matters is not timing the market but time IN the market.

N.B. - Follow up to “Pets Are Expensive”: Vet visits cost about the same as a doctor visit. So, $500 later, after a minor kerfuffle, we signed up for pet insurance at $400 per year. I have also learned about pricey puppy classes and pet sitting when we are away. The cost of raising my kids is beginning to feel like a bargain.