If you take a second level finance course in college you're probably going to run across discussing financial options. And if you're like me, you're going to be flustered, to say the least.
There are a myriad of sites and books on options. They are all full of confusing information. But you've got to struggle through them as they are actually quite important. Now that I've scared you, let me take a shot at explaining finance options and why you should care about them.
There are two types, call and put and they are related to a stock. Morningstar has a number of Google call and put options you can buy and sell just like stock. Today we'll just be discussing buying as it's much similar to understand. If I get time in the future I'll discuss selling, but to be honest, once you understanding buying you might be able to figure out selling on your own.
If you buy a call option (again just like stock) you have the right to buy stock at the option's exercise price. For example, let's say you buy a call option with an exercise price of $10. When the call option expires (i.e. when you get buy it), you have the right to buy the stock at $10. If the stock is currently trading at $15, then you exercise the call option (i.e. you buy the stock for $10) and make $5. If the stock is currently trading at $5, then you don't exercise the option (i.e. you don’t buy the stock for $10) and you simply walk away. Easy right!
Now let's switch to puts. If you buy a put, you have the right to sell the stock at the option's exercise price. Let's stick with our $10 option. If the stock is worth $5, then you'd exercise the options and sell your stock for $10. You're in the money and just made $5! However, if the stock is worth $15, then you don't want to sell it for $10 as you'd be losing money. The stock is worth $15 on the market!
Basically it comes down to this: If you think the stock is going to go up, buy a call. If you think the stock is going to go down, buy a put.
So why do we have options and what can they do for us? Honestly, to the average investor, they don't do anything for us. However, indirectly they help us as our investments (e.g. mutual funds) use them all the time. One example is to hedge a stock to protect it from losing too much value. Or worst, all it's value.
Let's say you buy a stock for $10. Because you have a mob of angry investors that have trusted you with their money, you can't afford to have the stock go under $5. If it does, they loose their retirement and you lose your job. So what do you do? You buy a put option that allows you to sell the stock at $5 no matter how low it goes. For example, if the stock goes to $0, you can still sell it for $5. Buying the put is simply insurance on the stock.
I hope these two simple call and put options help you get started understanding this arcane subject. If your ebullient curiosity is asking for more, Yahoo has a nice site for learning more about options. Enjoy!
Wednesday, January 02, 2008
Monday, December 03, 2007
Should I buy an extended warrantee?
December 2007 - So we bought a new car. Because we have an expanding family we decided to purchase a mid-size SUV. There are a number of offerings, but for safety, reliability, warrantee, size and cost, we felt the Hyundai Santa Fe was the best option.
Notice that I said warrantee in the sentence above. Hyundai comes with a standard 100,000 mile "powertrain" and 60,000 mile "bumber-to-bumber" warrantee. From what I found, most car companies offer much less than Hyundai. Typically something like 50,000 mile powertrain and 36,000 bumper-to-bumper. I found Hyundai's offering to be very nice as if something happens with the transmission on mile 99,999 I don't have to worry about it.
I wrote about my experience in Denny Hecker Finance a few weeks ago. During our taped conversation, the finance manager tried to sell me an extended warrantee. That is, bumper-to-bumper coverage for over 60,000 miles or powertrain coverage for over 100,000 miles. To be honest, I can't remember the exact details. They're immaterial though.
Extended warrantees are nothing more than insurance. While some insurance (e.g. health) is good, some (e.g. legal) is bad. If you'd like to rid yourself of all risk, then you might want to buy an extended warrantee. That way if something ever goes wrong, you can drop it off and it's fixed. On the other hand, if you're comfortable with some risk, they are a rip-off. And I mean rip-off! Let me explain.
To calculate the price of an extended warrantee all you need to do is take the probability of something happening (P) multiplied by the cost (C) of fixing that something. For example, if you think there is a 10% chance that your axel will fall off during mile 100,001 and the cost of fixing that axel is $2,000, then the cost is $200 (i.e. P(C) or 10% * $2,000).
Now I hate to break it to you, but you're not getting an extended warrantee for that kind of money. I don't know what the exact costs are, but I think mine was something like $1,000. I figure there is a 10% chance of something major happing to my car after warrantee, so it would take a $10,000 repair bill to make the extended warrantee worth it. Thus, it's a rip-off for me.
In addition, the car dealership will want to finance the extended warrantee for you. As they say "it will only raise your monthly payment a few dollars." Isn't it sad how we value things by our "monthly payment?" Anyway, extended warrantees are bad, financing them is worse!
So here you have it. If you'd like to rid yourself of all risk, buy an extended warrantee. On the other hand, if you're comfortable with a bit of risk in your life (and you should be), then skip the extended warrantee like we did. Just make sure you don't bring up the "probability" discussion I described above. It has a propensity to confuse finance managers.
Notice that I said warrantee in the sentence above. Hyundai comes with a standard 100,000 mile "powertrain" and 60,000 mile "bumber-to-bumber" warrantee. From what I found, most car companies offer much less than Hyundai. Typically something like 50,000 mile powertrain and 36,000 bumper-to-bumper. I found Hyundai's offering to be very nice as if something happens with the transmission on mile 99,999 I don't have to worry about it.
I wrote about my experience in Denny Hecker Finance a few weeks ago. During our taped conversation, the finance manager tried to sell me an extended warrantee. That is, bumper-to-bumper coverage for over 60,000 miles or powertrain coverage for over 100,000 miles. To be honest, I can't remember the exact details. They're immaterial though.
Extended warrantees are nothing more than insurance. While some insurance (e.g. health) is good, some (e.g. legal) is bad. If you'd like to rid yourself of all risk, then you might want to buy an extended warrantee. That way if something ever goes wrong, you can drop it off and it's fixed. On the other hand, if you're comfortable with some risk, they are a rip-off. And I mean rip-off! Let me explain.
To calculate the price of an extended warrantee all you need to do is take the probability of something happening (P) multiplied by the cost (C) of fixing that something. For example, if you think there is a 10% chance that your axel will fall off during mile 100,001 and the cost of fixing that axel is $2,000, then the cost is $200 (i.e. P(C) or 10% * $2,000).
Now I hate to break it to you, but you're not getting an extended warrantee for that kind of money. I don't know what the exact costs are, but I think mine was something like $1,000. I figure there is a 10% chance of something major happing to my car after warrantee, so it would take a $10,000 repair bill to make the extended warrantee worth it. Thus, it's a rip-off for me.
In addition, the car dealership will want to finance the extended warrantee for you. As they say "it will only raise your monthly payment a few dollars." Isn't it sad how we value things by our "monthly payment?" Anyway, extended warrantees are bad, financing them is worse!
So here you have it. If you'd like to rid yourself of all risk, buy an extended warrantee. On the other hand, if you're comfortable with a bit of risk in your life (and you should be), then skip the extended warrantee like we did. Just make sure you don't bring up the "probability" discussion I described above. It has a propensity to confuse finance managers.
Friday, November 02, 2007
What kind of car should we buy?
November 2007 - November snuck up on me. I was going to write about how much a baby costs (yes again), but I'm still confused. Maybe another month will help me figure it out. Anyway, we actually have something else, equally exciting, going on. We're buying a new car!
Yes the old 1998 Mustang has finally had it. To be honest, it's actually in good shape, but getting a baby seat out of the back is like trying to move shit with a plastic show shovel. Plus mom thinks a rear wheel drive, sports car nonetheless, is not the best to transport kids. What gives?
We decided that a van was too much right now. A car is too small. A midsized SUV seems to be just about right for a family of three. Big enough for fitting baby, baby stuff, mom, mom stuff and dad's golf clubs. Not in that order of course.
We've looked at the Hyundai Santa Fe, Toyota 4Runnder, and Honda Pilot. All are very nice and would provide ample space for us. The Toyota is probably our favorite but at $28,000 it's a hefty price. At least for us it is. The Honda is about the same in both space and price. Both are very nice vehicles. The Hyundai is a bit smaller, but only around $22,000. Also a very nice vehicle.
I tell people I'm not into new cars, but two of the three cars I've bought have been new. The first one was used only because I made $4.25 an hour bagging groceries. So while I'll tell you I'm not into new cars, we'll probably buy a new car.
With a present value of $28,000 (Toyota or Honda), interest rate of 6% (yearly) for five years, we'd pay around $522 a month. That's about $9,500 in interest paid. With a present value of $22,000 (Hyundai), interest rate of 6% (yearly) for five years, we'd pay about $425 a month. That lowers our total interest payment to just over $7,500. Hyundai is cheaper.
Money is not everything though. Safety is important. All three say they have top notch safety records. They all have side impact air bags, some kind of stability controller, and brake technology that rivals everyone and all (so they say). I consider them all very safe.
Other things have value as well. Size, tires, engine, off-road experience. They all add up. When we broke it down though, we don't really need a lot of the things a more expensive vehicle offers. We don't need the DVD player. We don't need three rows of seats. We don't need a V8 with tow package. We just need a simple reliable mid-size that offers a good value with a great safety record. Thus we are leaning towards buying the Hyundai. The Hyundai also has a great warrantee. I'm not a big warrantee guy, but if you can give me one for free (at least for no additional cost, as you can't discount your car if you don’t buy it), I'll take it.
So there we have it. As of today, November 2nd, 2007, we are leaning towards a 2007 Hyundai Santa Fe. See you around town!
Yes the old 1998 Mustang has finally had it. To be honest, it's actually in good shape, but getting a baby seat out of the back is like trying to move shit with a plastic show shovel. Plus mom thinks a rear wheel drive, sports car nonetheless, is not the best to transport kids. What gives?
We decided that a van was too much right now. A car is too small. A midsized SUV seems to be just about right for a family of three. Big enough for fitting baby, baby stuff, mom, mom stuff and dad's golf clubs. Not in that order of course.
We've looked at the Hyundai Santa Fe, Toyota 4Runnder, and Honda Pilot. All are very nice and would provide ample space for us. The Toyota is probably our favorite but at $28,000 it's a hefty price. At least for us it is. The Honda is about the same in both space and price. Both are very nice vehicles. The Hyundai is a bit smaller, but only around $22,000. Also a very nice vehicle.
I tell people I'm not into new cars, but two of the three cars I've bought have been new. The first one was used only because I made $4.25 an hour bagging groceries. So while I'll tell you I'm not into new cars, we'll probably buy a new car.
With a present value of $28,000 (Toyota or Honda), interest rate of 6% (yearly) for five years, we'd pay around $522 a month. That's about $9,500 in interest paid. With a present value of $22,000 (Hyundai), interest rate of 6% (yearly) for five years, we'd pay about $425 a month. That lowers our total interest payment to just over $7,500. Hyundai is cheaper.
Money is not everything though. Safety is important. All three say they have top notch safety records. They all have side impact air bags, some kind of stability controller, and brake technology that rivals everyone and all (so they say). I consider them all very safe.
Other things have value as well. Size, tires, engine, off-road experience. They all add up. When we broke it down though, we don't really need a lot of the things a more expensive vehicle offers. We don't need the DVD player. We don't need three rows of seats. We don't need a V8 with tow package. We just need a simple reliable mid-size that offers a good value with a great safety record. Thus we are leaning towards buying the Hyundai. The Hyundai also has a great warrantee. I'm not a big warrantee guy, but if you can give me one for free (at least for no additional cost, as you can't discount your car if you don’t buy it), I'll take it.
So there we have it. As of today, November 2nd, 2007, we are leaning towards a 2007 Hyundai Santa Fe. See you around town!
Monday, October 01, 2007
How much did this baby cost us?
October 2007 - After recently having a baby, I made every attempt possible to figure out our hospital bills. I knew we wouldn't have to pay for them, but I wanted to get an idea of what it costs to have a baby these days. Unfortunately, I failed as I'm totally confused by what is a bill, what isn't a bill, what's paid for, what isn't paid for, and so on.
We've literally received five to six letters in the mail from our health care provider, all with different charges and totals. We even got a letter from our pediatrician stating we owed them almost $800. I quickly called our provider and they assured me, we can ignore that bill. As a side note, when ever I get a large bill - like my tuition bill for the fall - I plan on calling my provider to see if they can magically make it go away like they do with baby bills.
Continuing on. My wife has pretty good insurance. For around $140 a month, she pays a $20 co-pay and a $250 deductible for hospital stays. Not too bad. As of right now - two months after having the baby - we've had to pay a $250 deductible for my wife and a $250 deductible for my son which was expected given her insurance coverage. I'd argue that is a pretty good deal for 10 - 15 pre-sessions with her doctor and a five day stay in the hospital. Not to mention, they had to perform "major surgery" to deliver the little bugger.
The real costs are obviously much higher and once I get them figured out (if I ever do), I'll post the results. I'd expect them to be anywhere between $10,000 and $30,000. Why such a wide spread you ask? It's because I've yet to understand what is a bill or charge verses what is a bunch of needless line items that mean nothing. Once I figure that out, I'll take a deep breath and send a nice Holiday card to my healthcare provider.
We've literally received five to six letters in the mail from our health care provider, all with different charges and totals. We even got a letter from our pediatrician stating we owed them almost $800. I quickly called our provider and they assured me, we can ignore that bill. As a side note, when ever I get a large bill - like my tuition bill for the fall - I plan on calling my provider to see if they can magically make it go away like they do with baby bills.
Continuing on. My wife has pretty good insurance. For around $140 a month, she pays a $20 co-pay and a $250 deductible for hospital stays. Not too bad. As of right now - two months after having the baby - we've had to pay a $250 deductible for my wife and a $250 deductible for my son which was expected given her insurance coverage. I'd argue that is a pretty good deal for 10 - 15 pre-sessions with her doctor and a five day stay in the hospital. Not to mention, they had to perform "major surgery" to deliver the little bugger.
The real costs are obviously much higher and once I get them figured out (if I ever do), I'll post the results. I'd expect them to be anywhere between $10,000 and $30,000. Why such a wide spread you ask? It's because I've yet to understand what is a bill or charge verses what is a bunch of needless line items that mean nothing. Once I figure that out, I'll take a deep breath and send a nice Holiday card to my healthcare provider.
Friday, August 31, 2007
How much training do we need at work?
September 2007 - One of the most asked questions by perspective employees is how much on-the-job training is available. Employers know top candidates want training and have a full pocket full of answers ranging from management to technical training. Some companies (including mine) even offer foreign language training. "Me llamo Mac!" How much do we really need though?
When an employee first starts there is a need for human resource and job specific training. I'll give everyone that. Here is where it gets sticky in my mind. In addition, there is often a need to send employees for new technology training.
From all the training I've been in, I've observed a large percentage of individuals treating training like a vacation away from the office. Sure, we all need time away, but that's why we get personal days. When a company is paying for us to become subject matter experts, they don't expect us to take off early, show up late, or spend the entire time instant messaging our wife. These are all observations I've made in my most recent off-site training.
So here is my solution. Train everyone on human resource and job specific tasks. Then reward people with off-site training who you know will treat training like any day in the office. Sending the average employee is often a mistake as your $3000 in training fees and $1500 in travel expenses will be wasted.
When the below-average-employee asks why you didn't send them or why they've not had any training opportunities in the past year, tell them the truth. You're not going to send people who won't respect the opportunity and apply the knowledge they learned. This solves two problems; first your being candid with employees who need to improve their performance. Second, you're not wasting $4500 on some slug to spend time telling his wife how much he loves her, over, and over, and over again.
The savvy below-average-employee will become upset. They'll argue their lack of performance is due to, non other than, lack of training. Don't fall into their trap. Before sending them off-site make them improve their performance and prove they are worth of additional training. Training is a privilege that not everyone deserves. Make sure you reward your best employees and not waste money on people who don't deserve it.
When an employee first starts there is a need for human resource and job specific training. I'll give everyone that. Here is where it gets sticky in my mind. In addition, there is often a need to send employees for new technology training.
From all the training I've been in, I've observed a large percentage of individuals treating training like a vacation away from the office. Sure, we all need time away, but that's why we get personal days. When a company is paying for us to become subject matter experts, they don't expect us to take off early, show up late, or spend the entire time instant messaging our wife. These are all observations I've made in my most recent off-site training.
So here is my solution. Train everyone on human resource and job specific tasks. Then reward people with off-site training who you know will treat training like any day in the office. Sending the average employee is often a mistake as your $3000 in training fees and $1500 in travel expenses will be wasted.
When the below-average-employee asks why you didn't send them or why they've not had any training opportunities in the past year, tell them the truth. You're not going to send people who won't respect the opportunity and apply the knowledge they learned. This solves two problems; first your being candid with employees who need to improve their performance. Second, you're not wasting $4500 on some slug to spend time telling his wife how much he loves her, over, and over, and over again.
The savvy below-average-employee will become upset. They'll argue their lack of performance is due to, non other than, lack of training. Don't fall into their trap. Before sending them off-site make them improve their performance and prove they are worth of additional training. Training is a privilege that not everyone deserves. Make sure you reward your best employees and not waste money on people who don't deserve it.
Wednesday, August 01, 2007
How can I make more money?
August 2007 - I had a thought the other day. Every person will hit their maximum "individual contributor" earning potential. I'm nearing mine. I'm actually not that concerned about it as for now I'm pretty happy as an individual contributor, but it was just something that popped in my head while walking around the block and trying to figure out how my neighbors all have nice cars and new pools.
By my definition an individual contributor is a person who is not acting as a supervisor for anything or anyone. Two examples are a ditch digger and a seasoned software engineer.
A ditch digger will eventually max out their output and what they are paid for digging ditches. They can dig more ditches by digging them faster, but even then there is a maximum number of ditches ditch diggers can dig. Similarly a software engineer will eventually max out their output and reach an upper limit of what employers and/or customers are willing to pay for their services. They can work extra long hours, take additional training and moonlight for small shops in their spare time, but like a ditch digger, there is a max to their output. So how do they make more money?
Now I'm not saying the individual needs more money or even wants more money. My question is simply, if the individual wants to stay within their current employment, how can they increase their compensation. From my perspective, the only way is to take a percentage of compensation from someone or something that you're supervising. Basically have something or someone work for you.
Back to our ditch digger. If the ditch digger wants to make more money, he needs to either use technology and supervise an automated process that digs ditches. Or hire another ditch digger, supervise them, and take a percentage of the junior ditch digger's compensation.
A software engineer can either develop software to solve problems for her, or hire other software engineers to work under her so she can take a percentage of their compensation. For any of you who are in corporate America, this is how it works. I work for my boss and my boss is compensated based on his output plus a percentage of my output. Done right, it works well as everyone needs someone to hold them accountable. Done wrong, and supervisors can get away with doing very little while making lots of money.
In a way what I've described is a pyramid scam. You work for me and I make money off of you. Then you get people to work for you so that I make money off of you, plus the people working under you. Throw in a few more layers and as long as you don't get any cantankerous employees, you're doing just fine for yourself.
So there it is, to get the nice car, pool and house you need to run a pyramid scam. The good thing is any organization in the world provides the needed infrastructure. Then again if you're like me, you may be happy with what you produce as an individual contributor and what you're paid for it. Money's not everything!
By my definition an individual contributor is a person who is not acting as a supervisor for anything or anyone. Two examples are a ditch digger and a seasoned software engineer.
A ditch digger will eventually max out their output and what they are paid for digging ditches. They can dig more ditches by digging them faster, but even then there is a maximum number of ditches ditch diggers can dig. Similarly a software engineer will eventually max out their output and reach an upper limit of what employers and/or customers are willing to pay for their services. They can work extra long hours, take additional training and moonlight for small shops in their spare time, but like a ditch digger, there is a max to their output. So how do they make more money?
Now I'm not saying the individual needs more money or even wants more money. My question is simply, if the individual wants to stay within their current employment, how can they increase their compensation. From my perspective, the only way is to take a percentage of compensation from someone or something that you're supervising. Basically have something or someone work for you.
Back to our ditch digger. If the ditch digger wants to make more money, he needs to either use technology and supervise an automated process that digs ditches. Or hire another ditch digger, supervise them, and take a percentage of the junior ditch digger's compensation.
A software engineer can either develop software to solve problems for her, or hire other software engineers to work under her so she can take a percentage of their compensation. For any of you who are in corporate America, this is how it works. I work for my boss and my boss is compensated based on his output plus a percentage of my output. Done right, it works well as everyone needs someone to hold them accountable. Done wrong, and supervisors can get away with doing very little while making lots of money.
In a way what I've described is a pyramid scam. You work for me and I make money off of you. Then you get people to work for you so that I make money off of you, plus the people working under you. Throw in a few more layers and as long as you don't get any cantankerous employees, you're doing just fine for yourself.
So there it is, to get the nice car, pool and house you need to run a pyramid scam. The good thing is any organization in the world provides the needed infrastructure. Then again if you're like me, you may be happy with what you produce as an individual contributor and what you're paid for it. Money's not everything!
Tuesday, July 03, 2007
What drug coverage should we get our son?
July 2007 - It's time to decide what health care option our new addition will need when he arrives. If you're like me, picking healthcare is more difficult than splitting an atom. From what they tell us, my company has made things "easier" but it's still something you need to spend time on to figure out.
My wife pays $135 a month for coverage. For her donation, she gets a $20 co-pay, a $250 deductible, %100 coinsurance (what ever that is), and drug coverage at $10/%30/%30. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); %30 of a 30 day supply of retail generic formula with a $50 max; and %30 of a 30 day supply of retail nonformula (i.e. all other drugs you may need) with a $50 max.
I pay $104 a month for coverage. I get a $20 co-pay, a $500 deductible, %100 coinsurance, and drug coverage at $10/$30/$60. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); $30 for a 30 day supply of retail generic formula; and $30 for a 30 day supply of retail nonformula. As you can see, her plan has less risk, which works out since she had an emergency room visit (x-ray on her foot) a few months back.
Our dilemma is whether to add the baby to my plan, her plan, or go with a combined family plan. Adding the baby to her plan will increase her monthly expense to $284 a month. With her plan we will pay a $250 deductible for the baby's birth and have the best drug coverage the company offers. If he needs drugs (who doesn't these days) we'll only pay %30 of the price up to $50.
Adding the baby to my plan increases my monthly charge to $224. With my plan we pay a $500 deductible when he arrives and have the second best drug coverage we offer. Compared to my wife's plan we save $60 a month, but must pay an extra $250 (my deductible less her deductible) when he's born. Luckily after four months we would break even on the deductible which is to our advantage. But if he needs drug coverage, we'd end up paying $30 a month (or retail price if the drug is less than $30) which could eat into our savings if drug prices are less than $100.
If we went with the family plan and used my wife's plan as the basis, we'd pay $448. If we used mine as the base, we'd pay $358. With my plan we'd have to pay a $750 deductible ($1000 less $250 that she all already paid for the x-ray), which is no good. With my wife's plan we'd only pay $250 ($500 less $250 that she all already paid for the x-ray), but we'd have too much coverage for me.
We decided to put the baby on my wife's coverage which costs her $284 and I decided to keep my own coverage which is $104. This gives us a total cost of $388.29, which is not the lowest option but does ensure mom and baby have the best coverage available (remove all risk), which makes both mom and dad happy.
My wife pays $135 a month for coverage. For her donation, she gets a $20 co-pay, a $250 deductible, %100 coinsurance (what ever that is), and drug coverage at $10/%30/%30. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); %30 of a 30 day supply of retail generic formula with a $50 max; and %30 of a 30 day supply of retail nonformula (i.e. all other drugs you may need) with a $50 max.
I pay $104 a month for coverage. I get a $20 co-pay, a $500 deductible, %100 coinsurance, and drug coverage at $10/$30/$60. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); $30 for a 30 day supply of retail generic formula; and $30 for a 30 day supply of retail nonformula. As you can see, her plan has less risk, which works out since she had an emergency room visit (x-ray on her foot) a few months back.
Our dilemma is whether to add the baby to my plan, her plan, or go with a combined family plan. Adding the baby to her plan will increase her monthly expense to $284 a month. With her plan we will pay a $250 deductible for the baby's birth and have the best drug coverage the company offers. If he needs drugs (who doesn't these days) we'll only pay %30 of the price up to $50.
Adding the baby to my plan increases my monthly charge to $224. With my plan we pay a $500 deductible when he arrives and have the second best drug coverage we offer. Compared to my wife's plan we save $60 a month, but must pay an extra $250 (my deductible less her deductible) when he's born. Luckily after four months we would break even on the deductible which is to our advantage. But if he needs drug coverage, we'd end up paying $30 a month (or retail price if the drug is less than $30) which could eat into our savings if drug prices are less than $100.
If we went with the family plan and used my wife's plan as the basis, we'd pay $448. If we used mine as the base, we'd pay $358. With my plan we'd have to pay a $750 deductible ($1000 less $250 that she all already paid for the x-ray), which is no good. With my wife's plan we'd only pay $250 ($500 less $250 that she all already paid for the x-ray), but we'd have too much coverage for me.
We decided to put the baby on my wife's coverage which costs her $284 and I decided to keep my own coverage which is $104. This gives us a total cost of $388.29, which is not the lowest option but does ensure mom and baby have the best coverage available (remove all risk), which makes both mom and dad happy.
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