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YOUR BOTTOM LINE

Barack Obama's Health Care Proposal; Starting a Business in a Recession; Credit Score Myths; How to Protect Your Home

Aired September 12, 2009 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


GERRI WILLIS, CNN HOST: Hello, I'm Gerri Willis and this is YOUR BOTTOM LINE, the show that saves you money.

Congress is back on the Hill and health care is a make or break issue this session. We'll show you what all the proposals would mean for you. Protecting your home, tips and tricks to provide peace of mind around the house. And how to get the stuff you want for free. Yes, free. YOUR BOTTOM LINE starts right now.

Make or break month for health care reform only fired up members of Congress as they headed back to work this week. President Obama made his case for a major overhaul of the system in a prime time address saying he's not the first president to take on health care, but he is determined to be the last.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The time for games has passed. Now is the season for action. Now is when we must bring the best idea of both parties together and show the American people that we can still do what we were sent here to do. Now is the time to deliver on health care.

(END VIDEO CLIP)

WILLIS: But, what likely matters most to you is how these proposed plans would affect your health and your bottom line. Andrew Rubin is the host of "Health Care Connect" on Sirius XM Doctor Radio and Peter Moore is an editor with "Men's Health" who recently did a one-on-one interview with the first family on the issue of health care.

And Peter, you're actually the editor of the magazine as I recall. Welcome to you both.

PETER MOORE, MEN'S HEALTH MAGAZINE: Right. Thanks so much.

WILLIS: All right, I want to start with this idea of the president's speech and show you some of the major elements of it. It was wide ranging. He suggests offering a public insurance option, very controversial, coverage for people with pre-existing conditions. The list goes on and on. The first thing I want to do here is get your reaction to this speech starting with you, Andrew.

ANDREW RUBIN, HEALTH CARE CONNECT: I loved the speech. You know, he's given a lot of speeches on health care, but this was the first one we really heard, there was some of the detail in there. It might have been a little difficult for most Americans to understand it unless you read the Senate finance bill, or what's in the Senate finance bill today.

But, a lot of what the president said last night had a lot of key components of what's in the Senate finance bill and what we're going to be hearing about over the next few weeks.

WILLIS: Peter, what did you think?

MOORE: Well, you know, I thought that the president did a fine job last night, too. And I think that what worked for me best was when he brought it all around to the discussion of the moral imperative. You know, all thought this I've been thinking about the 30 million out there -- you know, people argue about the number. If it's in the millions at all that means there's a vast human tragedy taking place out there with health care. And I just think we're a good enough nation to address that.

WILLIS: Andrew, let's talk about costs, though, right? I mean, this is a big issue. President said $900 billion important my plan. We know now that right now we're spending something like $7,400 for individuals every year. It's a lot of money. Can we afford this? It seems that health care seems to be taking up all of our money. Where's the money for education, where's the money for other programs?

RUBIN: Well, there is money. And first of all, this country has money and this bill is, as the president made very clear last night, is not doing to cost anymore than we're spending today.

And because I work in this industry and because of what I know is in the Senate finance bill today, there is a lot of room in the health care system to save some money and fund insurance for everyone.

So again, we're going to have to look at the detail of what actually happens. But, what I do know and what I feel comfortable telling you is there's enough cost in the system and the mandates that came out in this speech last night, where everybody's going to have to have insurance, there's enough room in there to cover cost of this reform.

WILLIS: Peter, you had the good fortune to actually interview the president at length. And one of the things I'm always so interested in when we talk about policymakers, is what's their personal experience coming into talking about policy, what forms their viewpoints? What did you learn about the president?

MOORE: Part of what we're talking to the president about was, you know, he started out on the wrong side of the tracks, as far as economically speaking, so he had an experience of, you know, going through his mother's terminal cancer where she was fighting with insurance companies to get her chemotherapy covered. You know, that's a very specific tragic experience that he went through. But he also told me that his grandmother had excellent health care through her job. So, I feel like the president has seen how bad the system can be and how good the system can be when it works. And that was the point that he wanted to make for me. He hoped that we as a country can move from to the better and away from the bad.

WILLIS: Yeah and the devil's in the details, obviously.

You know, Andrew, we talked a lot about the cost and I know a lot of people out there are worried because they like the health care they have. Do you think at the end of the day people will change the way they use health care because of what's going to happen or what could happen?

RUBIN: I think we, as a country, need to change the way we use health care. And I think what's in the bill protects people who like their insurance, it promotes preventive care. The president has said many times he believes in wellness programs and keeping people out of emergency rooms. What's in the bill is in there. But he also said if you like insurance you can keep it and that's also there. So, I think we're moving in the right direction.

WILLIS: You think we're moving in the right direction.

Peter, you know, you talked to the president about solutions. And one of the things you asked him about was soda tax. There's been a lot of conversation about do you tax people to stop behaviors that just aren't productive? He said he was in favor. What do you make of his response and do you think that would ever happen.

MOORE: Well, you know, I think the president, even when he was talking about it was kind of back-pedaling a little bit. He said he was interested in the idea because it's been shown that sugary drinks have been -- have had such an impact on the nation's diet. I think he's realistic in the fact that that's not going to happen. We're having enough trouble just getting people insured right now.

But, I think that, you know, with the president's emphasis on preventive care that if we can all do a better job of identifying our health problems early on in the process when they're very easy to treat with behavior modification, whatever it takes, then we can avoid those catastrophic situations where people are going into the E.R. and spending millions of dollars.

WILLIS: All right, and you know, you mention all the people who are in line for health care. I have to wonder if you add 45 million people to a doctor's waiting list, will there be enough doctors?

RUBIN: You know what, that's a great question. Massachusetts, which had the first sort of mandated coverage, struggled with this in the beginning. There is again in the bills out there, money for primary care, preventive care. I think there's -- look, in the beginning we won't know for sure, but I would say over time, there will be enough doctors to take care of everyone.

WILLIS: Andrew, Peter, thank you so much. Great answers, very tough questions, complicated issue. Appreciate your help. Still ahead, protecting your home on a budget. Tips and tricks for provide peace of mind. Plus fabulous freebies, we have lots of great stuff that won't cost you a penny.

(COMMERCIAL BREAK)

WILLIS: Microsoft, Burger King, CNN, what do all three companies have in common? Well, they were all started in a recession. In fact, it's said one of the best times to get a business started is during tough economic times. A new ABC show called "Shark Tank" gives entremaneurs (SIC) the chance to pitch five investors to see if they can get the money they need to make their dreams come true.

And here with tips, if you want to be your own boss is Barbara Corcoran. She is a real estate mogul that we've talked to so many times. And you're an investor on the show. Barbara, welcome, good to see you.

BARBARA CORCORAN, ABC'S "SHARK TANK": Nice to see you too, Gerri.

WILLIS: All right, well, I want to start with this whole idea of now is a great time to start a business because I have to tell you 50 percent of small businesses fail in the first five years and to start in a recession it just seems contrary to logic.

CORCORAN: Yeah, it seems wacky at first hearing but if you really think about it, the batting averages are better for businesses that start and succeed in very bad times. And you have a lot of advantages in bad times you're not doing to find.

WILLIS: What?

CORCORAN: Well, first of all, you have less competition. You have to be a nut job to go out there in the first place and start a business and be super confident and really believe in what you're pushing on the public or who you're selling to. The other thing is in bad times the big competitors lay back and lay low because it's great prudence for them to all agree with each other that to lay low. And it's really not. It's the best time to steal their market share.

WILLIS: And you're more nimble, too. Like in bad times, as a small operator, you can really move around quickly and maybe outsmart the competition.

CORCORAN: Well, just compare for a minute a decision-making process in a large corporation. It's about committees and attorneys and a long, long lead time. If you're in business for yourself with a small team or very often by yourself, whatever you think of on a Monday you can have on the street Tuesday. It's much easier.

WILLIS: Well, you know, I think about starting a business in a recession and then I think about this particular recession. It's been so hard to get money. What's your advice to businesses that want to get a bank loan? CORCORAN: Well, getting a bank loan, forget about it. Most of these small businesses are funded by families and friends, which I'm not a big believer in, because it often loses a friendship and the family member, too, if the business goes south. But, most new businesses, believe it or not, are funded through credit cards.

WILLIS: Right, which is even harder to do, too, now.

CORCORAN: Harder to do, but everybody has two or three credit cards. Most credit cards, even in bad times, are pushing new credit cards at reduced rates. So, people grab these and keep changing the credit cards to fund their new business. It sounds extreme, it is extreme, but where else do people often turn?

WILLIS: Well, you know, Barbara, they could turn to you. That's what you guys are doing on this show.

CORCORAN: That's true.

WILLIS: And you know, I think it's so interesting, you people are actually putting up your own money, right?

CORCORAN: Well, that's the hard part. It's one thing to judge an entrepreneur quicker than a wink and try to size up if their business venture is doing to succeed or not and analyze the numbers when you have no advance copy. It's something else when it's your money, when you're saying "I do" and you know when you go back, off the show, on Monday, you're going to be writing checks. Yes, it's difficult, specifically because it is your money.

CORCORAN: I think the whole shirt tag idea is pretty tough. Those guys are very, very tough. I have to get to you talk about real estate. That's what we normally talk to you about. We've seen improvements and fundamental changes in the marketplace. Sales are higher, pending home sales doing really well on fire here. Foreclosures are higher as well. What's your advice to people out there who may be thinking about getting into the market for the first time. Is now a good time to be buying?

WILLIS: Yeah, I can -- yeah, I think the whole "Shark Tank" idea is pretty tough. Those goes are very, very tough. But I have to get you to talk about real estate. That's what we normally talk to you about. And we've seen some improvements and fundamental changes in the marketplace. Sales are higher, pending home sales doing really well, on fire, here. But you know, foreclosures are higher, as well. What's your advice to people out there who may be thinking about getting into the market, maybe for the first time? Is now a good time to be buying?

CORCORAN: Well, I totally believe the only time to be buying is when you are within the low. For those people out there waiting to sharp shoot the market, where they identify the very bottom and jump in. Forget it. You can never do it. I've tried it my whole life, I've not succeeded at it.

But what you can you is buy within the low, and if you can go in on foreclosure, auction, or an individual foreclosure and get a good deal. If you really do your homework it's a great idea. But for most of us, you're better off working through a broker who gives you the lowdown on the house and truly tells you what the darn thing is worth, because that's where the negotiation starts and ends, actually, if you're doing to get a good deal.

WILLIS: All right, and of course there's some big advantages right now, too. First time homebuyers tax credits still out there until the end of November, so if you want to jump in, you're going to have to do it fast. Right?

CORCORAN: You betcha. That's free money. Why not grab it? And it's tax free.

WILLIS: Barbara, thank you so much, great to see you and good luck on "Shark Tank."

CORCORAN: My pleasure, thank you.

WILLIS: Well, new legislation and stricter credit standards are making it hard to even qualify for a credit card and that makes your credit score more important now than ever before. First off, there are some common myths out there about credit scores. You actually have three credit scores, not one, from the three major credit bureaus, Equifax, Experian and Transunion plus your FICO score.

Now, that is the one more lenders look at and it will vary depending on which credit bureau is reporting it and the kind of lender that looking at it.

Myth No. 2, canceling credit cards increases your credit score. This is something you don't want to do as it will increase your debt to credit ratio.

Myth No. 3, a higher salary will boost your score. Hey look, getting a raise, inheriting money, even winning the lottery will not affect your score because your net worth and income aren't factored in.

So, how can you really improve your store? Well, first off, forget retail store credit cards, every time you open an account with a store to get that 10 percent discount you're giving the retail lender the ability to pull that credit score and that can lower your credit score.

Pay your bills on time. That accounts for about a third of your FICO score and try to spend within 10 percent of your credit limit. Finally, make sure you look at your credit report once a year to make sure it's error-free. You're entitled to one from all three credit bureaus. That Web site, AnnualCreditReport.com.

Now, whether you live in a house or an apartment, it's important to know your home is protected. Tips and tricks to provide some peace of mind whether you are home or away. That's coming up next.

(COMMERCIAL BREAK) WILLIS: Before you leave that extra window open or an extra key under the doormat, think again. According to the National Crime Prevention Council, six out of 10 burglaries take place without forced entry. But there are simple steps you can take today to protect your home and your loved ones. Earlier I spoke with Danny Lipford, a home improvement expert and host of "Today's Homeowner with Danny Lipford."

(BEGIN VIDEOTAPE)

WILLIS: Well, let's start with the simple things like don't be silly, lock your door.

DANNY LIPFORD, HOME IMPROVEMENT EXPERT: Right, without a doubt, there's a lot of common sense things you can do. When you're away for a little while, make sure your neighbor to pick up those newspapers, the mail, and also those little things that hang on your door, make sure those are taken away, as well. And trim back bushes around the house so that people that are passing by and your neighbors can see some of the windows and doors where the bad guys might try to get in your house.

WILLIS: That's great idea and I just recently had that happened. We thought if we had our mail stopped, we didn't, but the neighbors pitched in and they are great security for us.

LIPFORD: Oh yeah, absolutely, without a doubt.

WILLIS: OK, let's talk about lighting. That's critical at night. You don't want your house to be in the shadows, right?

LIPFORD: Right, that's a big deterrent. One of the best ways is to light up your house, but naturally utility bills high, you can't have those big flood lights running all night long. So, a motion sensor light like this allows you to put these wherever the critical areas around the home. And then when it has motion it clicks those on it takes a pretty brave bad guy to hang around with that much light around.

WILLIS: They'll usually run away, right? Let's talk about locks, and obvious thing for your windows and doors. What's the best thing to use?

LIPFORD: OK, well just make it as hard as you can for those guys to get in the house. So, putting secondary locks on like windows, different window locks are available. Certainly your glass sliding door is one that's real susceptible to people breaking in.

WILLIS: Oh, those are easy to open.

LIPFORD: And this is a nice little heavy duty lock like this is only $12 and that attaches to that glass sliding door to really prevent anyone from being able to pry that open.

WILLIS: OK, you've got a really cool combination lock here, for people who, like, OK, you forget your key, guess what. You can plug in just the numbers. LIPFORD: Exactly. Well, the thing about it is, you hate to hide those keys. Never hide a key outside. The bad guys know all the tricks, putting it above the door, below the mat, the little fake rock...

WILLIS: Maybe you have a little flower pot?

LIPFORD: Oh, they know all of those and they can find it. But here, you're able to use this combination lock. First of all, when you leave, all you do is touch it one time and it locks. And it's a good quality lock from Quickset it's called Smart Code. Then, you're able to key any kind of code that you want in order to control it and to open it up.

And the other thing about it, you can put a secondary code. Say you have a dishwasher that needs to be repaired. You can call in, let the guy know what the code is, that night, you change it again, he has access in, access out, and you're not having to worry about him keeping that code because unfortunately, Gerri, that's where a lot of people that are breaking into your homes are people that cleaned your carpet, they did certain things. It's kind of scary, but this will prevent that from happening.

WILLIS: Everybody is worried about this, particularly because of the economy, they want you to be sure to be safe, the obvious thing, obviously, an alarm system.

LIPFORD: Oh, yeah.

WILLIS: But you know, Danny, those can be problematic, too.

LIPFORD: Well, it can be and it really depends on the guy that installs that. You want to make sure you have a certified installer that does it. You also can get some of these little simple kits. This costs about $40 that will alarm a couple doors, maybe the critical doors, those that are more susceptible to people breaking in.

WILLIS: I can do this yourself?

LIPFORD: You can do this yourself, it's only $30 or $40 and then you can add different elements to it. There's also other kits that available in the $100 range where you can do several doors around the perimeter of your house. But, the professionally installed alarm usually is better and also will enable you to have it monitored for fire use or police use.

WILLIS: But, Danny, when I did that, you know, we had flowers in a vase, they fell over and the alarm went off, and here are the cops, ma'am, are you OK in there? How do I avoid that?

LIPFORD: Well, it really is important that you have that designed properly to where people just don't go in and automatically wire up everything on your doors and windows, if they really think about how you use the house and make sure that all of the motion detectors are adjusted just right so it doesn't pick up little things like that. WILLIS: We got to get you to video surveillance.

LIPFORD: Yeah.

WILLIS: And I know people who do this not for burglars, they want to know what the family is doing.

LIPFORD: That's right, when are those kids getting home at night?

WILLIS: Exactly.

LIPFORD: Well, this is so advanced, here, it's from Archer Fish and it's called a mobile video intelligence unit. And what this does, you have cameras...

WILLIS: Wow. Sounds...

LIPFORD: It sounds fancy and the technology is unbelievable. You have cameras that you can position, critical areas of your house. It ties into a smart box then you're able to monitor this anywhere you are. You can monitor it on your mobile device. It can send you a text message if you have a breach of a certain area. And you can program things.

Let's say you're expecting a package to be delivered at your house. You can program that particular camera that when that event occurs it will let you know that that package has been delivered. That can be very, very valuable.

WILLIS: That's excellent.

LIPFORD: It's perfect. It's really good.

WILLIS: Let's look at the Web site because you can actually see what's going on.

LIPFORD: The Web site will enables you to see exactly what's happening in real time at your home. So, if you do get an alert, you can pop on the Internet there at the portal that they've assigned to you and then you can see exactly what's happening.

WILLIS: Fantastic.

LIPFORD: So, if it is an area that no one should be in and it alerts you, you can quickly call 911 and the video is stored online. You have access to that, so that you can show a picture.

WILLIS: Wow, Danny. Great stuff. Thanks for bringing all this stuff. I appreciate it.

LIPFORD: Hopefully we can save a few people from getting broken into.

WILLIS: I like that. OK, Danny.

(END VIDEOTAPE)

WILLIS: Up next, free stuff. Who doesn't love free stuff? Grab a pen and paper we'll tell you just how to get it.

(COMMERCIAL BREAK)

WILLIS: Who doesn't like to get something for free? Our friends at "Kiplinger's" have put together a list of the most fabulous freebies you can take advantage of right now to save you both time and money. Janet Bodnar is the editor of "Kiplinger's Personal Finance" and she's joining us now from Washington.

Janet, great to see you again.

JANET BODNAR, KIPLINGER'S PERSONAL FINANCE: You too, Gerri.

WILLIS: All right, so let's go over your list, because there are some really good stuff. We want to start with places to stay and that's so important right now because people want to take some time off, but they don't want to pay for a hotel room.

BODNAR: Yes, exactly, Gerri and one of the cool things is home exchanges, and there is a Web site called HomeEchange,com which will let you switch houses with someone else who might want to stay in your area, which is a really great way to go, literally great way to go.

(LAUGHTER)

WILLIS: Well, I love this idea. I just say if you have allergies make sure they don't have a pet on the scene because I've done it myself and it's really great.

All right, so let's talk about free directory assistance. I would never have thought of this.

BODNAR: Yes, and it's true. Let me say quickly, Gerri, all these web sites are on our Web site, Kiplinger.com, so if people miss them, they can get them.

But, Google, for example, has a service called 1-800-goog-411 in which you can use to be connected to businesses if you want free directory assistance and actually free connection to businesses. And then there's another site that's called 1-800-free-411, which will connect you to both businesses and individual sites, residential sites.

WILLIS: Love that. Love that. OK, free kids' meals. You know, you always know that there are restaurants out there that will allow you to have free kids' meals, but it's hard to keep track of the list. Help us out.

BODNAR: Exactly. Well, first of all, on Tuesday nights there are certain restaurants that will let you do this. Denny's, for example, or Lone Star Steak House's, Tuesday nights, free Tuesdays for kids if they come with parents. But you're right, a lot of sites or restaurants do this but you don't know when it is. So, there's a site out there called, this is a tongue twister, KidsMealDeals.com, which will keep track of these for you. And that's really cool because, again, these aggregator sites are kind of nice because you can log on and find out what's going on around the country and in your area.

WILLIS: Lone Star Steak House, Roadhouse Grill, there's a long list. Be sure to check it out. Financial planning for free? I don't know that I want to do this. I have to tell you. You know, you get what you pay for sometimes.

BODNAR: Well, I do have to say, Gerri, if you really want financial advice for free I'd come to Kiplinger.com site. Because editor of the magazine...

WILLIS: Ah, a little self-promotion there. OK.

BODNAR: Exactly. But, on the other hand, if you want to do some -- one of the other sites that we mention is called Voyant.com and what they do, it's a tool more than it is an advice site. So you can plug in your situation or your goal, do you want to save for college, do you want to buy a house, you can move the numbers around and manipulate them to see how much money you would have to save, whether you're on track.

And it's kind of getting some financial planning help without -- at least preliminary, you're not paying for it as if you were going to a financial planner, but you're getting a good base and then you can build on that.

WILLIS: I think that's a great idea. But you really caught my attention with free TVs and movies.

BODNAR: Yeah, free TVs and movies, which really is good thing. Everything knows, I think, about Hulu.com and some sites that will give you access to free TV shows, current and old. But there's also, again, another aggregator site called OVGuide.com, which kind of aggregates all this, so it includes the Hulus of the world plus the network TVs where you can get those show.

WILLIS: Janet Bodnar, thank you so much. Kiplingers.com, that's her Web site.

As always, we thank you for spending part of your Saturday with us. YOUR BOTTOM LINE will be back next week, right here on CNN. You can also catch us on HLN every Saturday and Sunday at 3:30 p.m. Eastern Time. And you can hear much more about the impact of this week's news on your money on YOUR MONEY with Christine Romans and Ali Velshi, Saturdays at 1:00 p.m. Eastern and Sundays at 3:00, right here on CNN.

Don't go anywhere. Your top stories are next in the CNN NEWSROOM. Have a great weekend.

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