Saturday, April 3, 2010

Paying Insurance

My two teenage kids recently passed their drivers test. They are now eligible to drive a car on their own. At first I thought it was a good thing as their parents don’t need to drive them to school. I added both my sons to the car insurance. But when I saw the bill, I had second thoughts. Insurance is play on your fears and the way you would assess the possible risks. As my kids are of legal age and have passed the exam, one is reasonably assured that they have a normal chance of having no accident than the next person. But the problem is that one should account for the other drivers in road. The other drivers are likely to cause the accident as well. So naturally a parent would opt for insurance.

This is the point reached in a parent’s life when he or she should start pushing the kids to start working. At least to get a part time job to help pay the bills. All sort of expenses seem to be raining down like insurance premiums, taxes, anti-identity theft protection and so on. Taxes one cannot escape but insurance entails a choice. This involves one’s skills in probability and risk assessment. Previously I would have risked it with my usual recklessness but now one is more cautious in old age. So the key is to increase one’s income. Hence, all the more reason to increase one’s financial literacy.

Last night I checked the investment and financial books I have read so far. I checked my online book catalog and found I have read about 32 books on this subject. This would make it about 10 percent of the total books I have read so far since I started cataloging the books that I read. I also counted the number of books related to writing which reached a total of 15 books or about 5 percent of the total books I have read so far. My thinking is that writing would provide another source of income in the future once I have attained the skill and confidence. This is the twin strategies for me: investing and writing. Of course, I can also look for a part time job on weekends for the short to medium term.

As of today, roughly the topics of the books I read so far follows below. Literature, popular entertainment or fiction books account for about 40%. This covers American (North and South), Asian and European writers in every conceivable genre.

  • Literature :................. 132 = 40%
  • History/Biography :....... 104 = 32%
  • Investment/ Finance :..... 32 = 10%
  • Business :..................... 23 = 7%
  • Self Help :..................... 21 = 6%
  • Writing:......................... 15 = 5%
  • Total :....................... 327 = 100%
Non-fiction covers topics from history, biography, business, investment, finance, writing and self-help books account for the majority at 60%. The biggest bulk is history and biography. So I guess I can say that I have not been feeding my head with mindless mush in the recent years. I wonder what this says about me. Hopefully not an out of touch bookish nerd or a snobbish pretentious academic but maybe more of a practical person who likes to read a lot and hopefully make a career out of it. The reading knowledge I pray should help me assess risk more realistically in investment or in insurance or in life. Reading I guess is a form of insurance against ignorance.

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