10/26/26 The Price of Parenthood, Market Moves & Medical Malpractice

The Moneywise Radio Show and Podcast Monday, October 26th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com https://www.moneywiseguys.com/ facebook: Moneywise_Wealth_Management https://www.facebook.com/moneywiseguys/ LinkedIn: Moneywise_Wealth_Management https://www.linkedin.com/company/moneywise-wealth-management-bakersfield/ Guests: Matt Clark & Chris Hagan, Attorneys of Chain Cohn Clark Law website: https://www.chainlaw.com/ phone: 661-323-4000 The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Matt Clark, Chris Hagan and Chain Cohn Clark are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management

• 0:00Speaker 00

  Live from the basement inside the historic Woolworths Building in downtown Bakersfield. Call or text in at 661-396-1000.

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

• 0:29Speaker 02

  Security is offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and MoneyWise Wealth Management are independently owned and operated.

• 0:37Speaker 00

  Now, let's start the MoneyWise Show. Welcome to the MoneyWise Show. We are live from the basement of the historic Woolworths Building in downtown Bakersfield. For the next hour, you are on News Talk 96.1 and 1230 AM, KERN, streaming live at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, we are your hosts, I'm Sammy Abiyawi with?

• 1:03Speaker 03

  Frank Lee.

• 1:04Speaker 00

  Frank, welcome, and Stephen Nicholas.

• 1:07Speaker 04

  It's good to be on.

• 1:08Speaker 00

  Hello.

• 1:08Speaker 04

  Yeah.

• 1:08Speaker 00

  Uh, I'm, I'm, the Dolphins won.

• 1:11Speaker 03

  They did.

• 1:12Speaker 04

  Hey.

• 1:13Speaker 00

  Wow.

• 1:13Speaker 03

  The Steelers won too?

• 1:15Speaker 00

  Yes, in Paris, in Paris.

• 1:17Speaker 03

  Look at that.

• 1:18Speaker 00

  Yeah, wow, I'm, I'm, and the Dolphins though, I mean, they, they took one.

• 1:22Speaker 03

  Yeah, you, you act surprised.

• 1:24Speaker 04

  So.

• 1:25Speaker 00

  I am surprised, Stephen.

• 1:26Speaker 03

  Why surprised?

• 1:28Speaker 04

  Who did they win against?

• 1:29Speaker 03

  The Jets.

• 1:30Speaker 04

  The Jets?

• 1:31Speaker 00

  Yeah, this is the second worst team in the NFL.

• 1:34Speaker 03

  But yet, you're still surprised. I don't get it.

• 1:38Speaker 04

  Do you see the new logo update from the Falcons?

• 1:41Speaker 00

  Yeah.

• 1:42Speaker 04

  Oh.

• 1:42Speaker 03

  We're gonna get into that?

• 1:44Speaker 04

  Well, no, no, no.

• 1:44Speaker 00

  We have, we have a great show, we're not gonna get into that. We have Matt Clark and, and Chris Hagan joining us here today. Later, after we do a quick market update and answer a couple of questions from the listeners. So Frank, why don't you start us off?

• 1:58Speaker 04

  Yeah.

• 1:59Speaker 00

  Just a quick market update.

• 2:00Speaker 04

  Yeah, so stocks, the stocks rally up to the start of the week. We got the Dow Jones up about 21 basis points, S and P 500, 67, NASDAQ, 87, and the Russell 2K about 46. So we still got about an hour until the market closes, but so far, looking good.

• 2:17Speaker 00

  Good, good. And let's go over the, the questions because all interesting, but which one do you want to start with?

• 2:24Speaker 04

  Oh, we, we can start with this one. So I'll read the question. Message is, I enjoyed your discussion of people not having children because of climate change. It seems a better reason not to have children in this economy. People can't afford gas, groceries, housing, or college, much, much less raising a child. Please discuss what it currently costs to raise a child these days. Johnny.

• 2:49Speaker 04

  Thank you, Johnny.

• 2:50Speaker 00

  Yeah, we, we did talk, Chad Hathaway was on the show last week and he brought a study that was done, completed 10,000 people over about maybe 10 or 12 different countries about the fear of just engaging in having a child.

• 3:03Speaker 04

  Yeah.

• 3:04Speaker 00

  Because they, they, they see the world ending somehow really, really soon. So, but, but the question here is, how much does it cost to raise a child? And I'm gonna assume here in America. And the average is $300,000. Now, we have, we have Chris Hagan and we have Matt Clark here with us in the room. They both have kids. Frank, I'm not asking you because your kid is still very, very young, but our guests' kids, they are teenagers and beyond. So what, what do you guys think that, that number is?

• 3:34Speaker 03

  Well.

• 3:37Speaker 04

  They're not on the spot right there.

• 3:38Speaker 03

  I think that, I think that number varies a lot depending on, I'm sure where you live makes a big difference. I'm, I would imagine raising a child in like New York City is probably more expensive than out in rural Iowa, right?

• 3:52Speaker 00

  Yep.

• 3:52Speaker 03

  Um, but, um, uh, I, I'm gonna guess it's somewhere around, I don't know, 20,000 bucks a year.

• 4:01Speaker 05

  And as somebody who has both a boy and a girl, I can tell you, I think it probably varies by the gender as well.

• 4:08Speaker 00

  Yes, so which one is more expensive?

• 4:11Speaker 05

  I'm gonna, I hope my 16-year-old daughter's not listening, but I'm gonna go with, with the females.

• 4:16Speaker 00

  Oh, yeah. So you were close, Matt, $20,000. I think the average is about $17,000 nationally, with California being a little bit higher than that.

• 4:25Speaker 03

  I'm assuming that includes, that's the, the all, as they say, the all-in price, right? So that includes health insurance.

• 4:31Speaker 00

  Correct.

• 4:31Speaker 03

  That includes.

• 4:33Speaker 05

  Only through age 17 though, I mean, that's important, right? A child.

• 4:36Speaker 00

  Correct, yes, yes. So, so California is at almost $34,000.

• 4:41Speaker 03

  $34,000 annually?

• 4:42Speaker 00

  Yes.

• 4:42Speaker 03

  Oh, it does break it down by state, okay.

• 4:44Speaker 00

  Yeah, so the national average is about $17,000 with California being close to $34,000. And I believe that. I have a boy, I don't have a girl.

• 4:53Speaker 03

  Yeah, so that means you, that means that child, you're, you're in a half million bucks in 18 years.

• 4:58Speaker 00

  Yes.

• 4:58Speaker 03

  In California.

• 4:59Speaker 00

  Correct, correct. And, and it makes sense, I mean, just from experience, my kid is 13, he's gonna turn 14 in November 10th. And it's, it's.

• 5:08Speaker 05

  Can you send this in writing to me, please, so I can send my kid a bill?

• 5:15Speaker 03

  From a financial advisor's son, please pay your father back a half million dollars.

• 5:21Speaker 00

  But the, the listener's question is, is, is right. A lot of people are thinking twice about having kids because of the cost of living. I mean, we're talking about groceries, gas, insurance, which is, keeps climbing up. And now the kids can stay and remain on that insurance until the age of what, 27-year-old, I believe?

• 5:39Speaker 04

  Is it 27?

• 5:40Speaker 03

  I thought it was 26, but it's somewhere in that realm.

• 5:42Speaker 00

  Yeah, in, in, in that range. And insurance by itself keeps going up 10 to 15% a year.

• 5:49Speaker 05

  As employers, anybody out there who is an employer knows that seemingly every year, you're seeing double-digit increases in your health insurance premiums.

• 5:57Speaker 00

  Yes.

• 5:58Speaker 03

  Yeah.

• 5:58Speaker 00

  Yes, we're, we're just.

• 5:59Speaker 04

  Yeah, we're going ours too.

• 6:00Speaker 00

  Yeah, we just renewed it.

• 6:02Speaker 03

  Yeah, I think ours.

• 6:03Speaker 00

  For MoneyWise.

• 6:03Speaker 03

  I think ours was a 16% increase just this year.

• 6:06Speaker 04

  16.

• 6:07Speaker 03

  Yeah.

• 6:07Speaker 00

  Yeah, it's, uh, it's, it's one of the largest expenses, right? In addition to when the kid is small.

• 6:14Speaker 03

  Well, it's also why fewer and fewer employees, employers, I should say, offer it, right? I mean, if you're a smaller employer, you just try to figure out any way you can to not, to not have health insurance plans in your office.

• 6:26Speaker 00

  Yes.

• 6:26Speaker 03

  Or, or in your.

• 6:27Speaker 00

  That's unfortunate, that's really, really unfortunate because it's a really good benefit and people need it, especially in the insurance world. And I want to talk about this later on in the show with you guys, but especially in the, in the world of insurance we live in today, or the medical world we live in today. It's really, really necessary to have that.

• 6:44Speaker 03

  Well, it's, it's critical. I mean, look, if you don't, we see in our practice, we deal with medical bills all the time. And Chris, Chris can comment on this, but the difference between a medical bill, if you're insured and you're subject to, and you get the benefit, I should say, of the capitated rate that your insurance contract allows a facility to charge you versus if you're totally uninsured and you get, you're now responsible for the full bill. I mean, what's the differences like, Chris?

• 7:13Speaker 05

  It's massive. I mean, we see the discounts based upon the insured, the, the rate upon rate with the insurance company. I mean, just use a hypothetical, $100 doctor bill, right? And so you may see an insurance payment of $20, 20%, and you'll see 80% written off.

• 7:28Speaker 03

  Well, I'll give you a better.

• 7:29Speaker 05

  A cash, a cash patient doesn't get that discount.

• 7:32Speaker 03

  Yeah, I mean, so put this in, you know, we're, we're accident and injury attorneys, so we see sort of catastrophic cases, right? And so you get somebody that's up at Kern Medical Center, maybe they're there for a couple of days, they had a trauma activation fee. Maybe they, maybe they had surgery, maybe they didn't, you know, MRI, CT, you name it. All of a sudden, in comes a 300, $350,000 bill for a couple of days, okay? If you are insured, it's not uncommon to see that bill reduced tenfold, right? So it goes from 30, 350,000 to 35,000. And then people always go, what happens to that other, you know, 315,000? It's a write-off. That's the benefit of you having health insurance. And so it is, it is a necessary evil.

• 8:15Speaker 00

  Yeah.

• 8:15Speaker 03

  No question about it. I encourage people, if you really want to look at health insurance premiums in California historically, go back and there, there are some articles written on this. Uh, and I don't want to quote them exactly because it's been a very long time since I've read them. But back in the 1980s, and maybe even into the early 90s, Blue Cross of California was a registered nonprofit, okay? And then that business model shift to a for-profit model. And, and again, I'm not against, I don't want to give people the impression I'm against profit-making. I think profit-making is fine. But if you look at what happened in premium dollars spent on patient care, the numbers shifted drastically almost overnight, right?

• 8:57Speaker 03

  And my recollection is it went somewhere from like, when they were a nonprofit, out of every premium dollar collected, 97 cents went to patient care, 3 cents to overhead, right? Afterwards, it was like 67 cents went to patient care, 3 cents to overhead, and 30 cents to shareholders. Okay, and so you have people profiting off of illness, basically, right? And so, you know, as a society, I guess at some point we have to ask ourselves, is that, is that something that's acceptable? Apparently, we've said yes, because they're all for profit now.

• 9:34Speaker 00

  Yeah, because, I mean, the, the system is what, what the system is, and we're living it. And it's, I think it's hard to change the system.

• 9:41Speaker 03

  But if you're.

• 9:41Speaker 00

  It's gonna take a long time.

• 9:42Speaker 03

  If you're an employer in California, in the last five years, you've probably seen at minimum a 40% increase in your health insurance premium.

• 9:51Speaker 00

  Yep.

• 9:53Speaker 00

  I have a second question. I'm 61-year-old and, and hoping to retire in about four years. I've got a decent amount saved up, but with the cost of everything these days, I'm starting to second guess whether I'll have enough. How do you guys help somebody figure out if they are actually ready to retire? Well, I have a quick answer here. I don't think, call Frank at MoneyWise and he'll, he'll sit with you for free. Your first meeting is free and subsequent meetings eventually, if you become a customer. So that's probably for me, the best advice I would get, give is to get together with a financial advisor. And I prefer for you to sit with one of ours at MoneyWise.

• 10:32Speaker 04

  Yeah, so just to give a little bit of answer to that question, basically, there are scenarios that we can formulate and, and put into our systems using the systems that we have, Monte Carlo simulations, or even stress tests. And I think in this particular case, you're looking for that specific type of stress test. It's like, hey, if I retire now, what is my, what are my odds looking like? And I think that is where we can help.

• 10:55Speaker 00

  So, so if you, employer offers 401K and you've been.

• 11:01Speaker 00

  Putting money away into the 401K, you probably were part of an educational meeting. Hopefully you have, and hopefully you learned something or learned how to put money away. And maybe you did some type of simulation with that financial advisor that's running the plan. I can assure you, a lot of the time employees don't do that. That's why when you get closer to retirement, it's very, very important to sit with a financial advisor. And I know I'm pushing for Frank here, but financial advisor is necessary in my opinion. Just to help you go through multiple scenarios, like you just said, Frank, and ask all these questions. How much money do you want to spend on vacation? How much money do you want to give to your grandkids? How much money do you want to, your mortgage, if you're renting?

• 11:46Speaker 00

  If you have a car payment, can you afford buying a new car? All these questions go into that interview that you do with them. Is that correct?

• 11:53Speaker 04

  Yeah, yeah. I mean, listen, there's a lot of people that can do a lot of things on their own, but you don't know what you don't know. And I think that's where our expertise and knowledge really come into play.

• 12:03Speaker 00

  Yes.

• 12:04Speaker 03

  Do you guys have an opinion, I mean, on the 401K subject?

• 12:08Speaker 03

  Are you allowed to sink away enough money in a 401K plan for it to truly be, you know, to fully fund a retirement?

• 12:18Speaker 04

  Yes, so to your question, what it sounds like is, are you allowed to maximize your 401K, right? So yes, yes. And in most cases, in the education meetings that I do, there's this illustration, it's really cool. I'm sure we've all heard of compounding interest in some form, right? So in this meeting, I show four different categories of age groups, you know, depending on when you start investing. And for those who start early, as started at the age of 25 to 65, when they retire, there's a drastic difference. And as you consume each age group that you delay on utilizing that 401K, means that you just have to put in more and more and more to a certain point.

• 13:01Speaker 00

  But you do have some catch-ups too. Like if you, let's say you started later, right?

• 13:04Speaker 04

  You do, but to that point is if you start later and you're maximizing your 401K, sometimes you have to look into other options, like opening an individual account or something like that. But for someone who's young can definitely take advantage of that 401K.

• 13:21Speaker 00

  We'll move into another question. Hey, guys, everybody talks about diversification, but I've got money spread across dozen different funds. Am I actually protecting myself or just making my portfolio so complicated that I can't keep track of anything? Maybe that's the point.

• 13:36Speaker 04

  Yeah.

• 13:37Speaker 00

  That's a very good question for the, you know, the people that want to do it on their own.

• 13:43Speaker 04

  Yeah.

• 13:43Speaker 00

  So Frank, what's your take on this?

• 13:45Speaker 04

  Yeah, and I think it's very important to know exactly what you're investing in because to this listener's question, there's a point to that. You could be investing in two different type of mutual funds. Let's, for example, take Vanguard S and P 500 and then Vanguard Total Stock. Well, what you don't know is that within the Vanguard Total Stock, you actually have some of the Vanguard S and P 500 incorporated in there. But within the Total Stock, you're expanding your, or diversifying, I should say, into international companies, developed emerging stock. So when we say diversification, it's not like, hey, let's pick all these different type of ETFs and, you know, we're diversified.

• 14:28Speaker 04

  When in reality, those ETFs could be more aligned than you think. So understanding exactly what you're investing in is the key right there. Cause again, you could have S and P 500, you could have, or the Vanguard S and P 500, the Vanguard Growth, Vanguard Tech. But there's a lot of stocks within those mutual ETFs that are in the same buckets. Yeah, so that's not true diversification. If anything, you're being exposed, you're concentrating your exposure to certain industries and sectors. So true diversification is making sure that you have a good portion in domestic.

• 15:12Speaker 04

  So US stock, international stock, and potentially depending on where you are, maybe some fixed income.

• 15:19Speaker 00

  Matt and Chris, as attorneys, you work with clients and eventually maybe they get a settlement or they get some type of fee.

• 15:29Speaker 03

  I know the question you're gonna ask.

• 15:31Speaker 00

  So do you ask, I mean, like sometimes, do you, like I feel like you can be not a financial advisor. But definitely you tell people, hey, you're gonna come across this money. You've got to be smart about it and then, hey, maybe you need to sit with a financial advisor.

• 15:45Speaker 03

  So it is, it is, it is legal for us to say just what you just said, which is be smart and sit down with a financial advisor. But that's where the line is drawn, right? There was times in many, many, many days past when some unethical lawyers, I mean, you know, this is 100 years ago.

• 16:07Speaker 03

  What they did is they, you know, the client got a lot of money and the lawyer said, hey, I got an investment deal for you. You should come invest with me, right? And then the lawyer either steals the money or doesn't know what they're talking about and the client loses the money. And so we are, we are barred under the rules of the state bar of California from dispensing financial advice to our clients. And so we, I know I will tell you, anecdotally, we do see frankly, too many instances in my 25 career, 25 year career where people have gotten significant sums of money and it lasted for about a week, right?

• 16:50Speaker 03

  I mean, you know, it's sort of akin to like lottery winners and you look at their ability to plan with whatever their winnings may have been. And I don't know what the status, but it's something you might, you guys may know, it's like 18 months, the money's gone, you know, the lottery winners.

• 17:09Speaker 00

  I mean, it sounded like I was gonna condescend that to lottery winners, but you've stated that.

• 17:15Speaker 03

  Yeah, so, and look, these are people, my clients didn't win the lottery. They suffered, their lives were changed, if not ruined, right? And so whatever money we're able to get them to move on with their lives, it's meant for that purpose, right? To move on with their lives. It's meant to get them, you know, maybe in an instance where they need future medical care, it's meant to pay for that future medical care. And if they can't work, it's meant to pay for that loss of earnings capacity that they otherwise may have had. And so it's a, it's a real tragedy when the money isn't handled correctly. Unfortunately, we are strictly prohibited from dispensing financial advice, other than to say, please go talk to a financial advisor.

• 17:58Speaker 05

  Go see Money Wise or somebody else.

• 18:00Speaker 03

  Yeah, well, actually, we're not even allowed to do that. Like we can't even say, go see Money Wise. We're not allowed to say that.

• 18:06Speaker 05

  Interesting. Nor do we dispense any tax advice. We're oftentimes asked tax questions. We do not provide any tax advice whatsoever.

• 18:14Speaker 00

  But can we have a life-size picture of Frank? Go see a financial advisor, you know, like.

• 18:23Speaker 03

  The sidewalk out in front of the firm is public. Yeah, you're welcome to put it up, Frank.

• 18:29Speaker 04

  Thank you, thank you guys.

• 18:31Speaker 03

  But no, Sammy, you hit, you hit on a very, very.

• 18:35Speaker 00

  I mean, it's lucrative, yeah. I can see sometimes like the, hey, I just settled a couple of million dollars and this guy doesn't, they're not financially savvy, you know? Let me, let me help them out or whatever.

• 18:49Speaker 03

  I can count probably on one hand, the number of folks I've represented over the years who actually took their settlement and grew it, right? Like they invested in such a way where it grew. Chris and I had the pleasure, actually it was more like honor of.

• 19:05Speaker 05

  I already know who you're talking about.

• 19:06Speaker 03

  Yeah.

• 19:06Speaker 05

  I already know who you're talking about.

• 19:07Speaker 03

  We represented a guy a few years back and I can't get into too many details, but let's just say he suffered a horrific injury. It was a bad, bad burn injury. And we litigated that case for a couple of years and were able to get him a good result. And he was a younger guy, you know, just sort of getting started in life. And he was able to take what we got him and turn it into a completely new career that he's able to do despite his burns. And he's just out there killing it, right? And that, that is for us, that's, those are the stories that we love to tell and that make you feel proud of the work that you've done.

• 19:44Speaker 05

  Yeah.

• 19:45Speaker 00

  So on a case like that, you just mentioned something. You said you litigated the case for two years.

• 19:50Speaker 03

  Yeah, that was quick.

• 19:53Speaker 00

  Does that mean that you guys carry the cost of that person for those two years, three years, however, the length of that case is?

• 20:01Speaker 03

  Yeah, we do. So in our firm, we finance all of our clients' costs, which is unique, okay? Because there are a lot of firms out there that don't, okay? And so the way they finance the cost is they're taking out high interest loans, okay? To finance the cost of the litigation for two, three, four, five, sometimes six years, all right? And at the end of the case, who pays the interest? Well, unbeknownst to the client oftentimes, even though they've signed an agreement that says they're paying it, the interest gets passed on to the client. And by high interest, Chris is talking like 100%. Like we're talking like usury high interest.

• 20:34Speaker 00

  Wow.

• 20:35Speaker 03

  And so, you know, people always go, well, what are the costs, right? Well, okay, if you have to file a lawsuit, there's filing fees with the courts. You have to, you have to obtain medical records, that costs money. You may have to retain expert witnesses, that costs money. You have to take depositions. You cannot take a deposition anymore, it seems, for less than 2,000 bucks. Now, that's not attorney's fees, that's what the court reporter charges to transcribe the deposition. And so, you know, as these things add up, you're talking a lot in the way of costs. Chris and I tried a case in federal court back in January of 2025.

• 21:11Speaker 03

  The federal court is particularly slow, especially in what we call the eastern district of California, which is where we live, okay? And so if you, if you have a case that ends up in federal court and the, you know, you're venue'd in the eastern district, so you're likely in Fresno, okay? That case took what, over six years, Chris?

• 21:30Speaker 05

  Over six years.

• 21:31Speaker 03

  To get through the system. And we were into that case, our personal money and costs, we were in for what, about 1.1, 1.2 million?

• 21:38Speaker 05

  Right around there.

• 21:38Speaker 03

  In one case.

• 21:41Speaker 03

  In one case, that's what the cost, that's not attorney's fees. That's what we spent on X. There's a products liability claims. They're very expensive cases. And it's important that people understand that because there's folks that call sometimes, you know, maybe they've got a product that's injured them. And, you know, the injury may not be trivial, but it's not life changing. Okay. And then they're, they're wondering, well, why, why can't we take that case? Right? Well, because a products case can oftentimes cost hundreds of thousands, if in this particular instance, a million dollars plus in expert costs to litigate. If the overall value of the case is only a couple hundred thousand dollars, you know, you, you outspent the value of the case.

• 22:21Speaker 03

  Client gets nothing. And so you have to be somewhat selective of those cases when you get involved. But yeah, carrying the cost is a big deal.

• 22:30Speaker 00

  It is. As, as an, as an ex-commercial banker, I've banked some, some, some attorneys in my banking life. And I've, I've seen that. I've seen where some years where the litigation is heavy and you have not, you don't have cases that are settling. A lot of the money is coming out of you guys' pocket. Because this person is basically living off you. Like you guys are feeding them. You guys are paying for the mortgage or the rent or whatever during that period. And I did not know that. Like I've before, before I, when I started like listening to this and learning about this was an eye opener.

• 23:05Speaker 03

  You want to do, you want to touch on that one?

• 23:08Speaker 03

  Well, technically, Sammy, a lawyer should not be doing that. Okay. A lawyer should not be, advancing case costs is one thing, and that's allowed under state bar rules. So filing fees, depositions, expert costs, things that are related to, to the actual trial of the case. Living expenses to the client. Okay. The state bar would take issue with that. And the reason is now the lawyer has a conflict of interest potentially with the client. Because you've lent the client all this money. Maybe a settlement offer comes in and the lawyer needs the money to get paid back right now. And so the lawyer puts pressure on the client to settle the case.

• 23:51Speaker 03

  That, that could be a conflict of interest, right? And so you have to be a little bit careful and, and, and, um, you know, there are instances where folks can't take care of themselves. And there are lenders out there that you can get money from in those circumstances. Because you obviously got to have, you got to be able to live.

• 24:08Speaker 00

  Definitely, definitely. There's a, uh, we're going to take our first break and when we come back, uh, uh, we have a lot more with Matt and Chris. So stay tuned. We'll be right back.

• 24:27Speaker 00

  Welcome back to the Money Wise Show. I'm Sammy Abiyawi here with Frank Lee, joined with Chris Hagan and Matt Clark.

• 24:35Speaker 00

  Welcome back, guys.

• 24:36Speaker 05

  Thank you.

• 24:38Speaker 00

  We were talking about a bunch of stuff of, of Aaron, but Frank has a specific question about something here in, in, in Bakersfield. Go ahead, Frank.

• 24:47Speaker 04

  Yeah, yeah. No, I just, we were talking about this off the air a little bit, but I wanted to get your guys' opinion and also some insight as far as like, the, uh, what is it?

• 25:01Speaker 04

  Yeah, some of the rules and regulations on this, but there was a recent case regarding a certain OP guide and the lawsuit that, that followed after that. But, um, wanted to get your guys' take and, uh, you know, we can expand on that.

• 25:18Speaker 03

  Well, my first take is that, and Chris, you, you pick up after I say this, but just a tragic case. I mean, horrible case. My heart goes out to that poor family.

• 25:29Speaker 03

  When it comes to medical malpractice cases, you know, we live in a state where damages are capped on those cases. Chris, take it from there.

• 25:36Speaker 05

  Yeah. So in the seventies, they, they capped general damages, pain, suffering, loss of enjoyment of life, wrongful death, for example, at $250,000. Right? And so that law recently changed. Was it in 2026 that the, the increase became effective?

• 25:51Speaker 03

  25 or maybe even 24.

• 25:53Speaker 05

  And so, so that, that general damages cap has now gone from 250 to 350.

• 25:58Speaker 03

  So, so let's talk about that. What's the actual impact of that? Right? Well, if, if a doctor commits medical malpractice and because of that medical malpractice grandma is killed, right? Chris, what are the damages?

• 26:13Speaker 05

  When did it happen?

• 26:15Speaker 03

  If it hap, let's just assume it happened this year.

• 26:17Speaker 05

  Okay. It's a $350,000 case. That's it.

• 26:19Speaker 03

  Doesn't matter how egregious the conduct is because there's no economic loss, meaning grandma wasn't a wage earner. There's no economic loss. You're capped at 350,000.

• 26:29Speaker 05

  Even more tragic, right? Sorry, Mrs. Smith, we had a complication during the delivery. Your baby's dead. That's a $350,000 case.

• 26:38Speaker 03

  If it happens this year.

• 26:39Speaker 00

  So, so it sounds like death is cheaper.

• 26:43Speaker 03

  Well, so very much so. I mean, in, in what they call bad baby cases, right? Which are cases where, um, the, the, the baby lives. Okay. Those are oftentimes, you know, by dollar amount, the most valuable medical malpractice cases. Because if the baby lives, but for example, has cerebral palsy, right? So now you've got a child with CP. Well, the future cost of medical care is in the millions and millions and millions of dollars. That is recoverable, but the pain and suffering loss is still the same, right? So it's still capped at 350, but you can collect for, uh, whatever the future cost of care is, is reasonably anticipated to be.

• 27:22Speaker 03

  And so, um, where you really see the tragedies, and to answer your question, yeah, I mean, in many respects, it's cheaper to have somebody that's died versus somebody that's survived, but now needs ongoing care.

• 27:35Speaker 00

  Is this max only in the state of California or other state have the same or is it national?

• 27:40Speaker 03

  There, there are other states. We were the, to my knowledge, and, and again, I don't, I'm not a medical malpractice expert. But to my knowledge, we were the first state to institute a, a, a cap on medical malpractice damages. That then spread throughout the country. And so there are several other states that have similar caps. There may even be some that have lower caps than us. I don't know. But this is why, and I think it's important for listeners to understand this. This is why putting arbitrary caps on damages, and there's been efforts to do this, not just in medical malpractice cases, but in other kinds of cases. Putting arbitrary caps on cases is unfair to those people who have been harmed. Right?

• 28:22Speaker 03

  And, um, and if, you know, Chris was on a symposium just last week. The, uh, uh, public entities in California, it's not necessarily a cap, but they've made a real run up in Sacramento to limit their liability in certain types of cases. And the governor signed some legislation into law that does make it more difficult to sue public entities. Right, Chris?

• 28:47Speaker 05

  Yep, yep. But I want to go back to something we were talking about in the context of practitioners, right? Or professionals. So, you know, we're talking about this tragic case out of Kern County where a young woman lost her life. And absent it being preventable, which it sounds like the jury determined it was. I want to know if the family, and, and I'm not trying to throw shade on them. Did you look up the doctor that you were treating with to find out, did the doctor have a history of issues? Because we're looking at the medical board's website right now. And there's a history there involving this same doctor. And so, you know, you're really, if you're out there shopping, a lawyer, a dentist, a doctor, a financial advisor, please, please, please.

• 29:31Speaker 05

  Most of those people are licensed and if they're not, they shouldn't be doing what they're doing. Go to the licensing agency's website for lawyer, go to the, the state bar's website. For a doctor, go to the medical board's website and look them up and find out, do they have a history of discipline?

• 29:45Speaker 03

  Yeah, there, there are similar boards for chiropractic care. You know, just about any, um, any profession that requires you to maintain a license. There will be a public website that you can access and you can look up, has this particular person been disciplined? Have they been suspended? Has their license ever been called into question? And that's just doing your due diligence. Now, I will say this, Chris. When it comes to medical care, right? Sometimes you don't have a choice, right? You just don't have a choice. Like if it's an emergency and you know, you're in the hospital and you need care right now. You're not going to have the opportunity to go on the state board, but I don't want that doctor.

• 30:29Speaker 03

  Well, they're like, well, that's the only one around, man. That's your stuff. And so you, you don't always have a, a, a, a, a choice in, in who's going to provide you medical care. But if you do.

• 30:40Speaker 00

  Do your homework.

• 30:41Speaker 03

  Do your homework.

• 30:42Speaker 00

  Yeah, do your homework.

• 30:45Speaker 04

  Yeah, to, to that, like as, as financial advisors, there is something that goes, I think the FINRA broker check that you can look up any type of advisor, see any of their records and everything. And it's very transparent. You can see it's on those websites. Same thing here with the, the medical board. You can see past, uh, uh, public documents, uh, any records, uh, malpractice and all that. So, uh, doing your due diligence does, does help.

• 31:12Speaker 03

  You know, there's also, oh, go ahead.

• 31:13Speaker 05

  Well, I was going to say the, and the interesting thing about, about, uh, medical malpractice cases. Listen, I did some med mal defenses. The only reason why I know this is so, um, as it relates to the doctors only, okay? There was a period of time, and, and I don't know if this has since changed from a monetary perspective, where if a doctor was to settle out of court for anything above $25,000. Number one, the doctor had to consent, even though the insurance company is paying the money. And two, that was then reported to the medical board.

• 31:46Speaker 00

  Wow.

• 31:46Speaker 03

  You know, there's, there's along this with this idea of doing your due diligence, right? And doing some research before you hire a professional as it relates to medical professionals. There is a, I believe it's a federally maintained website and I'm not going to be able to cite the website, but you can Google it and find it. Okay. It allows you to look up your doctor or your, or I believe even other medical professions. And it will tell you how much money they have taken from various pharmaceutical companies or other special interests, right?

• 32:19Speaker 00

  Oh, wow.

• 32:20Speaker 03

  That way you know if you're, you know, like if you're showing up to the dermatologist and they continue to push some product on you, right? Well, go look. I mean, maybe they took a couple hundred grand from the company, you know, and, and it reports everything. It's like even the sort of less identifiable stuff, like they took me to a conference in, you know, Rio de Janeiro, all expenses paid by Pfizer, right?

• 32:46Speaker 00

  During the carnival.

• 32:47Speaker 03

  Right, exactly. It tends to show up. And so, I don't know, I think, I think it's one of the things I look at, you know, it's just do your due diligence, do your research, know, you know, know, know who's taking care of you.

• 33:01Speaker 00

  Yeah, that's, that's, that's a super, super important. We, I want to go back to something we started talking about off air earlier, which is the amount of time it's taking for cases now. You know, we talked about civil cases, that's how we started. And then there's criminal cases. And you've asked me a question, Matt, how long do you think, Sammy? And I answered a year and a half. And you said, no, that's 20 years ago. And the answer today is a lot longer than that.

• 33:26Speaker 03

  So before I started practicing law, before Chris started practicing law, we didn't have something in California called a fast track system. This, this applies only to civil cases. So your listeners need to understand, you've got criminal cases, you've got civil cases. Those are two really separate systems. Okay. But in the civil world, we didn't have what was called a fast track system. And so in California, this is in the eighties and early nineties, you had it, it was not uncommon for a case to take five years or more to work its way through the civil justice system until you got a trial date, you were in court, you know, swearing in a jury. Okay. What's funny is we have a five year rule in California. So the court only has jurisdiction

• 34:08Speaker 03

  for five years. So there used to be this goofy game that was played where you would have to go in just before the five years expired, swear in a jury, and then continue the case and leave. That way the court maintained jurisdiction while, while, while the five years had expired. We then instituted a fast track system. And in Kern County, when I started practicing law in 2001, we had an incredibly efficient fast track system in this, in this county. In fact, we were probably one of the most efficient fast track systems in the state. A lot of that credit goes to a since deceased judge named Arthur Wallace. But he, he, I, my recollection is he was really the one that sort of spearheaded fast track.

• 34:51Speaker 00

  Yeah.

• 34:51Speaker 03

  And, and so we, you would get a trial date on average about a year after you filed. So if I filed a lawsuit today, I'd get a trial date, you know, October of 2027. Now, despite the fact that we still have a fast track system, if you file the lawsuit today, you're probably looking at the earliest October 28th for a trial date.

• 35:14Speaker 00

  October 28 ish for, that's your first trial date.

• 35:16Speaker 03

  Which won't go.

• 35:17Speaker 00

  Yeah, it won't go. I mean, recognize our, our civil judges are setting eight to nine trials deep every single Monday. Okay. And so the likelihood of your case going out on the date that you're initially given for trial is very slim. And what, what's, what's the cause? Is it lack of judges? The bench is not, is not deep? What's, what's, what's going on?

• 35:39Speaker 03

  Well, that's certainly one of the causes. It's lack of money, right? I mean, you don't have enough money. You've got, look, our community has grown a lot in the last 25 years. Our county has grown a lot in the last 25 years. And they're, they're frankly, we haven't grown the courts consistent with population growth in the community. And so you've got too many cases, too few people to handle them. And, you know, literally every civil judge in our community, eight, eight cases every Monday. You go, well, how does that work? Right? You can't call eight cases to trial every Monday. A lot of them settle, right? And so, and so you don't, you don't end up actually having eight people in a courtroom every Monday morning, ready to try a case, but.

• 36:24Speaker 00

  Well, going back to what you're talking about, Matt, I mean, so when I started practicing law here in 2003, we had four civil trial judges. You know how many we have today? Four?

• 36:35Speaker 00

  Four. So, so in 25 years ago, the population of Bakersfield, Kern County was what? 350,000?

• 36:40Speaker 04

  Maybe less.

• 36:41Speaker 00

  Maybe less?

• 36:42Speaker 03

  Oh, Bakersfield's certainly less.

• 36:44Speaker 00

  Yeah. And now we're like.

• 36:46Speaker 03

  Greater Bakersfield, 600 probably.

• 36:49Speaker 00

  It's Kern County though. So it's not just Bakersfield. So our, our courts take all of the cases within the county. So, so we're not hiring because of money or because we don't have talent or judges not coming up the ranks?

• 37:00Speaker 03

  I don't, right now, I believe almost every open judgeship is filled. I'm not aware of a, a real lack of people willing to do the job. I, I think it's, it's a lack of resources, right? And, and then look, I'm going to pick on insurance companies for a second. You know, insurance companies know that this is going to take years to work its way through the system. If you don't think that's advantage insurance company, you're crazy, right? One, if you're, if you have a claim and the claim has value, but the insurance company can hold on to that value for a period of 24 or 36 months, what do you think they're doing with the money?

• 37:39Speaker 00

  Yeah, that's compounded interest. Is that what Frank talked about earlier?

• 37:43Speaker 03

  And, and so it's in their interest that justice be delayed, right? And it goes back to the old saying, for, for a victim, justice delayed is justice denied. It always is. And, and so you've got, you've got different incentives at play on other sides of the case. You know, for our clients, we only represent the victims. They want justice as quickly as it can reasonably be dispensed to them. And unfortunately, in far too many cases, we're looking at three, four years and some extreme cases, six years plus.

• 38:17Speaker 04

  Just, that's just for the first trial date.

• 38:20Speaker 00

  Is, is the, the, the job title of judge still sexy like from like 50 years ago?

• 38:26Speaker 03

  Like, well, I wasn't around.

• 38:28Speaker 00

  You'd have to ask the judges.

• 38:31Speaker 00

  Like, like back in the day, I was a banker. Like a banker was like, you know, a sexy job. You get to learn multiple things about multiple industries. A lot of kids don't want to go into banking, for instance, like nowadays. Is it, that's still, is it the case for, you know, the bench?

• 38:46Speaker 03

  You know, I can't speak specifically to the bench. What, what I can say is this, I don't think it's an easy job. I think to do the job right, the judges work incredibly hard. Right? I mean, if you think it's, I'll, I'll pick on your old industry. If you think it's banker hours, you're wrong. Right?

• 39:02Speaker 00

  Yes.

• 39:03Speaker 03

  I mean, I remember being a younger lawyer, you know, working every Saturday and a lot of Sundays. I go into the Sequoia Sandwich Shop here downtown and every single Saturday, there was at least one, if not one or if not more of the, our civil judges, just the civil judges having lunch at Sequoia because they're at the courthouse doing work on a Saturday, right? So it's an incredibly difficult job. And I, I, this is an important point. You're making somebody mad every day.

• 39:34Speaker 00

  Yes.

• 39:34Speaker 03

  Right? Every single day. Because every case there is adversarial, there's a dispute, and you're the one that's deciding those disputes. And, and so I think for that reason, it's, it's, it's just a really difficult job. You know, I applaud anybody that wants to do it.

• 39:52Speaker 00

  Yeah. A great conversation. We have one more listener question. I think Matt and Chris can help us with this one too. In our state, doesn't employers have to offer health insurance if they have a certain amount of full-time employees? 16% higher in a year? How can the state expect us to cover that after forcing us to offer 401k?

• 40:17Speaker 03

  I don't know that the state cares.

• 40:21Speaker 03

  The answer is yes, I'm not an HR expert, but I do believe that once you have so many, I don't remember what the cutoff is.

• 40:28Speaker 00

  Fifty federally, it's fifty employees, full time.

• 40:31Speaker 03

  Yeah, or there's like severe penalties, right?

• 40:34Speaker 00

  Correct.

• 40:34Speaker 03

  Yeah. And so, but, but you get, you know, I think that there is a business decision made a lot of times by employers. You know, if you've got forty nine employees, Sammy, and you're thinking, hey, I got, I got extra work. I want to expand to that fifty two marker, right? I think there's probably some decision making that happens where it's like, I'm not going to expand. I don't want to deal with the, the additional rules and regulations for somebody that employs fifty plus.

• 40:59Speaker 05

  That or they bring on two part timers and they're not forcing that, right? I mean, that there's.

• 41:03Speaker 00

  And that's what you see a lot of like national companies doing, especially fast foods. I mean, most of the employees are into twenty five, thirty years, thirty hours or less.

• 41:12Speaker 03

  Oh, right, right, right. No full time.

• 41:14Speaker 00

  And, and large banks do, large banks do it, Wells Fargo's, Bank of Americas. I mean, a lot of the employee, Chase, a lot of the employees are part timer.

• 41:22Speaker 03

  To, to avoid having to pay them health insurance.

• 41:25Speaker 00

  The benefits in general, in general. Now, that's, that's why I've always supported local, small banks because that's not something they do. I mean, I mean, shout out from my end to Mission Bank, my former employer, one of the few banks that still does training today. A lot of banks don't. That's why you don't see a lot of kids going from college into banking.

• 41:48Speaker 03

  Yeah, yeah, no, well, I'll echo your comment on, on small banking. Our, our firm banked with Wells Fargo for decades and we made the, the decision to switch about fifteen years ago to smaller local bank. And the difference in service is phenomenal. I mean, it's just phenomenal. To Wells Fargo, we were just a peon, they didn't care about us.

• 42:12Speaker 00

  Yeah, you, you guys were on my comment list. I've always wanted to bank you guys.

• 42:17Speaker 03

  Hold on, we're difficult, we're difficult.

• 42:22Speaker 00

  Interesting, you know, the, the gentleman that asked the, the question, you can, you can feel a little bit of that.

• 42:30Speaker 03

  Frustration.

• 42:30Speaker 00

  Frustration, yeah.

• 42:32Speaker 03

  Well, look, you know, anytime we pass a, a, look, you, you hit, hit it right on the head with people using part time employees. You know, we, we pass these rules because we want to help out employees, right? We want to make sure employees have health insurance and benefits and things like that. But you've got to also think of, okay, well, what's the, what's the byproduct of this? What's the, you know, there's a cause and there's an effect. And the effect is, well, employers go, wait a second, this is costing me, in the case of say, a Chase bank, right? It's costing probably billions of dollars a year in benefits. Well, we'll just eliminate those full time positions and we'll have two part time positions instead.

• 43:13Speaker 03

  And so, you know, you, you've got to look at the, the consequences of these actions and the consequences of some of this regulation.

• 43:20Speaker 05

  Well, what, you zag laborers as an example, right? So, I mean, there were certain wage orders where certain ag employees were exempt from certain overtime laws. Okay. And so, um, there was a lobby up in Sacramento to get those laws changed. And listen, this is clearly an industry where the people are very much taken advantage of from time to time. So I understand that. But they ended up passing law where certain of these wage orders no longer existed. And so, certain ag workers were no longer exempt from some of the overtime laws. And so what the farming entities did was they just started to work them forty hours a week. And then these employees are coming to the farmer and saying, wait a second, I'm not making as much money as I was.

• 44:03Speaker 05

  I can't, can't continue to support my family. And the response is, I'm really sorry, but this is the law that I now have to follow, right? And so again, Matt, I mean, you're talking about like the cause and effect. I think the intent was pure, but I don't think they realized the impact that it would have on the actual worker, right?

• 44:20Speaker 00

  And, and also sometimes even the employer, I mean, in this case, if the employer has to cap, maybe it disrupts, you know, the, the busy season. And now you have to hire more people so you can harvest everything all at once. So it does not go bad on the vine if it's grapes or if it's something else.

• 44:37Speaker 03

  Well, and you talk about the unintended consequences of all these insurance premium increases. What, what will inevitably happen is the employer, if, if you still have an employer that's going to provide you with health insurance, they're just going to pass the cost of that insurance on to you. Whether it be in an actual, you know, pass through cost or, you know, they're going to reassess wages. They're going to reassess raises and bonuses because, you know, the cost of, of that health plan went up sixteen percent this year. So that what otherwise may have been bonus money.

• 45:06Speaker 05

  Higher, higher premium plan.

• 45:08Speaker 03

  Right.

• 45:08Speaker 05

  Right? I mean.

• 45:09Speaker 03

  Higher deductible.

• 45:11Speaker 05

  Higher deductible.

• 45:12Speaker 03

  Yeah, right.

• 45:13Speaker 05

  There are always a higher premium.

• 45:15Speaker 00

  The, the last couple of years, been a lot of talk about insurance in general in the state of California. How it's been maybe mismanaged, maybe not affordable, a lot of. But when you look into the insurance companies, they have record profits.

• 45:33Speaker 05

  Did you read my article?

• 45:38Speaker 00

  A little bit of it, yes.

• 45:39Speaker 05

  Yeah. And, and listen, I only touched on a few of the, the publicly traded companies in that article. And I think, uh, it's not unique to just them. The insurance companies are making record, record, record profits right now. But they're suggesting to the consumer that it's crisis time. They're getting hit with too many lawsuits, they're paying out on too many cases. And for that reason, all of your premiums are going up. Just look at the numbers. The, the, the proof is in the pudding, as they say. They're making record profits, Wall Street has noticed, okay?

• 46:12Speaker 03

  See, if, if I had been smart, right?

• 46:16Speaker 03

  I would have bought stock in State Farm to at least hedge the increase in my premiums, right?

• 46:24Speaker 00

  Yes.

• 46:25Speaker 03

  That's the smart play. And, and so again, you know, if I'm, if I, if, maybe I should do this. Buy stock in, in Anthem Blue Cross, right? To, to hedge against the sixteen percent premium increase. You guys, you guys worked that out for me.

• 46:42Speaker 00

  Yes, definitely, definitely.

• 46:43Speaker 04

  That's not, that's not investment advice. Disclaimer.

• 46:47Speaker 03

  Yeah.

• 46:47Speaker 00

  Great, great show as always. Thanks, thanks, Matt, thanks, Chris.

• 46:51Speaker 05

  Thanks for having us.

• 46:51Speaker 00

  Great having you guys like always. Who do we have tomorrow, Stephen?

• 46:55Speaker 03

  That'll be Taxman Tuesday with local CPA, John Duffield and yourself and Sherid Wait. But until then, be smart, be safe.

• 47:04Speaker 00

  Be money wise.