A Book for Savers: High Wire

09.04.08 | Money | 0 Comments | by Fred Siegmund

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Savers might be interested in a new book by Peter Gosselin titled High Wire: The Precarious Financial Lives of American Families, which is a journalistic collection of essays with a common theme: America has growing economic risk and personal insecurity to go with its economic growth.

Chapters cover a selection of the new risks by using individual interviews and case studies as examples of the growing threats to personal finance.

Topics feature private sector issues that have slowly evolved through changes in practices and attitudes, especially the attitude that Americans should fend for themselves. As Gosselin notes, changes tend to take place without notice or public debate. Instead, changes come as a surprise to people who think they have something — career, pension, insurance — when they do not.

Chapters on insurance use material from interviews to illustrate the new methods and practices insurers are using to limit coverage and shift losses and risks to individuals. A chapter titled "Benefits" covers employee pension issues. A chapter titled "Housing" is about the new limits on home owners insurance. The chapter titled "Health" is about private health insurance.

Insurance is supposed to pool the random risks of many to reduce personal risk. Trouble is people who lose their jobs apply for health insurance in mid life, or later, when they are more likely to get sick, or be sick with pre-existing conditions like diabetes and heart disease.

As Gosselin explains, the circumstance of private insurance gives the companies every incentive to insure the young and healthy, and lower their risk of big payouts by avoiding the others. Gosselin does an admirable job documenting the practices and shortcomings of private health insurance and the need for a national risk pool.

The chapters on employee benefits, insurance and retirement accounts have self help and buyer beware information that makes them useful as part of personal finance. Other chapters on jobs and education have less self help information, but interviews illustrate a variety of risks of layoffs, displacement and unemployment for people from a variety of educational backgrounds and managerial, skilled and unskilled occupations.

The book is not just about politics and current events it covers personal finance issues that provide useful ideas to act on. It is quite flexible because chapters can be read in any order, or read some and skip others depending on interest. Careful readers will want to look over the insurance policies, health benefits and retirement accounts. It is a book for savers.

Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com

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