Are Hedge Funds Worth It?

Hedge funds have been receiving a bad rep over the past few years. Funds like those of Bear Sterns lost Billions in investor capital by making bad, overleveraged bets. And they charge a whopping 2% front-end load and 20% of the profits. Compared to many other well performing funds, this is outrageously high.

Is this enormous fee worth it? Here's a very interesting email I received today:

This could be the worst hedge fund in the world... Jonathan Wood, a former UBS trader, founded hedge fund SRM Global Master Fund two years ago. Now he's bust. Wood took positions in Bear Stearns, the defunct investment bank; Countrywide Financial, the posterboy of the mortgage debacle; and Northern Rock, the U.K. bank that experienced a run on its assets.

SRM Global Master Fund raised $3 billion in 2006 and is down 85% through July. Investors agreed to a five-year lockup, so they haven't been able to redeem. See what you get for "2 and 20"?

Makes the -15% year to date return of the US stock market look pretty stellar in comparison! I guess sometimes simpler investments are better!

Getting Out Of Medical Debt

There are a lot of people who file bankruptcy each year due to huge medical bills that they just cannot pay.

The Wall Street Journal recently had a good article on getting out of Medical Debt. It seems that there are 77 million Americans struggling with medical debt, despite the fact that 62% carry health insurance.

Anyone who's financially struggling with medical debt should do the following:

1. Check for errors
By some estimates, 90% of hospital bills contain errors.

2. Stay on Top of the Insurance Company
If there is some dispute between the hospital and the insurance company, the easiest route is to just kick the bill to the patient. Make sure that the insurance company pays their fair share.

3. Negotiate
Everything in life is negotiable! However, its easier for patients without insurance to negotiate.

4. Ask For Help
Many hospitals have a financial aid center with access to government programs that can help pay for your treatment.

5. Ask for a Payment Plan
With treatment running into hundreds of thousands of dollars, all hospitals offer some sort of payment plan.

6. Don't Ignore The Collection Agencies

Ignoring letters from collection agencies will only ruin your credit. Instead try and settle for 25 or 50 cents on the dollar.