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[Assistant] And that they're from the fraud department or security department or whatever, and they are going to help you.


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[Assistant] Shut down the breach. Shut down the fraud.


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[Assistant] What they're actually doing again is predicting the future because if you fall for it, they are now going to create.


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[Assistant] And the keys to the kingdom, almost always, are two factor authentication.


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[Assistant] To your email or to your text. Those are the two most common ways.


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[Assistant] The criminal pretending to be from the fraud department will be asking you to give them that code and that code


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[Assistant] Allows them to then have access to your account.


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[Assistant] Change the username and password, change the email address on it, and then they voila have suddenly gained access to who knows what it could be. It could be your bank account, your credit card number, your savings, and the worst case scenarios of all.


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[Assistant] When they gain access to your investment account or accounts. I've noticed that in statements I get from the investment houses,


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[Assistant] That there's warnings month after month after month now.


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[Assistant] About all these imposter scams where people pretend to be from their fraud departments. Their fraud departments are not contacting you routinely telling you, oh, uh, we're trying to verify that you


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[Assistant] Wanted us to send a hundred thousand dollars out of your account to whatever.


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[Assistant] That's the setup. They create a sense of urgency and fear in you to act right away. And there are many other flavors.


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[Assistant] Uh, the imposter scams. I can't even, I mean, we'd be talking from now till next week if I started telling you all the different ways people are doing the cons. Know this, it's all about creating this sense of alarm, fear,


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[Assistant] An urgency and before you realize it, because you're like, Oh man, what am I going to do? This is happening. You've given information that has allowed the criminals.


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[Assistant] Wait a minute, I'm totally befuddled. How did Venmo get your money back?


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[Assistant] That is a rare, rare thing. Right. And how lucky that was. Alright, so the Google thing. If you Google a company customer service number, a tech support number, they


[User] Please transcribe this text

[Assistant] Why Google doesn't seem to care and fix this? I don't know. It's a fact.


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[Assistant] You need to go to the website of an actual company to find their actual tech support. Like go to apple.com to find apple care. Never trust. Never ever.


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[Assistant] Not ever trust a Google search for a company customer service or tech support number or an airline phone number or anything like that. They are all phony, baloney and Google looking at you


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[Assistant] Why aren't you fixing this? Why aren't you fixing this? And Apple care? Why don't you care? Should we call it Apple no care?


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[Assistant] No, they're, they're actually beyond ads. If you go look, Krista, you got the ads first.


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[Assistant] It is a terrible problem because you expect when you see the ads that they're going to be phony. But then you go past the ads and you look at the results, they're also phony.


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[Assistant] Well, I'm so glad Alex, you found a new opportunity and that you're taking it on knowing that you won't have normal benefits. So there's a couple ways to play this.


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[Assistant] One is if you expect that


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[Assistant] In the next year or so, you will transition into an employee with benefits. What you do, this is weird, hang with me.


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[Assistant] Is you set up a shadow savings account with one of the online banks and put in it, you're not going to earn a lot in the meantime, but put in at what simulate what would have been going into from your paycheck from a 401k when you do receive benefits, then you


[User] Please transcribe this text

[Assistant] Start contributing the 401k well beyond the percent of your pay you would normally do. That money you put aside till you got into a position with a 401k


[User] Please transcribe this text

[Assistant] Is money that you can use for the deficit spending you're now creating in your life because you're putting max dollars into the 401k. And that way you get all the money into a tax sheltered environment.


[User] Please transcribe this text

[Assistant] And you essentially are playing catch up by putting in a much larger percent of your pay on the 401k. And once you've depleted the money, you've put aside


[User] Please transcribe this text

[Assistant] In that savings account, after you've done that, then you can reduce the amount you're contributing to the 401k so you have enough to live on. And that's how, that's if you expect it to be a relatively short period of time.


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[Assistant] Uh, less than two years til you're able to contribute to a 401k. If it's longer term, you wanna say something?


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[Assistant] That is true. If you, very good point, if you were being 1099, not W2, you could do a sep, which is


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[Assistant] A way that you can put aside large sums of money into a retirement account roughly somewhere close to 25% of your pay max into a retirement account and have it grow


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[Assistant] Tax free. If it's just a W2 job, but without benefits, then do what I said is an option. If you think it could be long term though, that you're not able to contribute to a 401k, I'd want you to do the next best thing, which would be a taxable investment account that you only put in


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[Assistant] Uh, things like broad market exchange traded funds, or broad market index funds. They have very favorable treatment long term in the tax code. Yes, you will owe tax eventually.


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[Assistant] But at the far more favorable long-term capital gains tax rate. Not as good as being in a retirement account at work, but the next best thing.


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[Assistant] So, very interesting. This has come up enough.


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[Assistant] That, uh, Southwest Airlines has come up with a new fare class that is roughly $20 more per ticket


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[Assistant] That allows the purchaser of the ticket to have the value of the money used for whoever they want rather than the value staying with the individual whose name the ticket is in. The person, the money does not go back to the person who paid


[User] Please transcribe this text

[Assistant] As tradition in the airline industry, the money stays with the person named on the ticket.


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[Assistant] So you hope that whoever it is you were taking is somebody who you stay together with and the money can be used later other than them using your money to go with somebody else at some future date. And that's why Southwest has made this accommodation for people.


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[Assistant] And I wish the other airlines would. They'd make more money.


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[Assistant] They say, okay, this ticket's $20 more if the payer wants to have access to the funds in the future.


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[Assistant] Uh, it's just running against the grain that Southwest has done that because everybody else, the money stays with the person named on that ticket. It's just the way it plays. And


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[Assistant] Uh, hopefully you'll have a good long time of life and enjoyment together, Justin.


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[Assistant] And I want to thank you so much for joining us today. Remember what we're about. You learning ways to save more, spend less, and don't let anyone ever rip you off.


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[Assistant] Anyway. You're in double trouble today.


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[Assistant] Since I use AutoPay for all my cards, this fits right into my standard process. It does have a very short grace period of maybe only three days. By the way, their high interest savings is over 5% if you can meet the $40,000 minimum balance requirement, Tim.


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[Assistant] You missed the mark when you responded in Clark Stinks to the US about the USPS. You didn't respond back to the original complaint, which was your dismissal of the need for daily deliveries. Instead, you spoke of the agency's constitutional origin and Congress's impact to operations. Duh!


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[Assistant] We know that, but many of us do want consistent, reliable daily service. Just saying, Jeffrey.


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[Assistant] Brave is actually built on top of Chromium, Google's open source browser, so it still phones home to Google. Microsoft Edge and Opera are also Chromium based.


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[Assistant] They are about all that is standing away from Google's monopoly on the web. P.S. I love the show. I tune in as much as I can. Jordan.


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[Assistant] Going up to 20% with a 2 million dollar exception.


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[Assistant] I am not or never have been in the law or insurance business. Please let me know if I stink making this suggestion. Gary.


[User] Please transcribe this text

[Assistant] Love your show. Just thought it was stinky that you didn't mention Amex Gold when talking about travel cards. It offers four times points on dining and groceries and gives you a $10 dining credit and $10 Uber credit, bringing the $250 fee down to $10. It's a better card than the platinum for someone who isn't a frequent flyer, Miguel.


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[Assistant] Here is my attempt to provide an answer to the question. The question asker was essentially trying to understand how and why stocks or mutual funds invested in stocks compound in value over time.


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[Assistant] In the short term, the price of a stock will fluctuate wildly, but over time it will track the value of the underlying business, thus compounding in value.


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[Assistant] It is easier for most people to visualize compound growth with a fixed rate of return, i.e. an interest rate, but it's the same, the same principle applies with variable rates of return such as earnings growth from stocks. Aaron.


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[Assistant] It won't be rude, but I think your answer to Kevin from Utah stinks. Kevin said he'd been reading articles saying the US government was going to take 401ks and use that money to prop up Social Security and Medicare.


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[Assistant] Was there anything people could do? You rightly referred to these articles as scare lines instead of headlines, yet instead of answering his question directly by saying no, there is no truth to those rumors. However, I can see the traditional 401k and IRA going away because the government gets its tax money today instead of in the future.


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[Assistant] You talk through an entire word salad answer featuring the following talking points.


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[Assistant] How this happens in developing countries, the rule of law, and then you explain how traditional 401ks and IRA benefit higher income earners, but not most taxpayers.


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[Assistant] Then thankfully you say, the money won't be stolen by the government and then go on to explain the likelihood of a change occurring to considering the state of congress. I'm a thorough enough listener to hear your answer of no, the government won't be stealing your 401k money through all the words.


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[Assistant] But I fear listeners who are more apt to believe that the government steals didn't hear that same no. Shannon in DC.


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[Assistant] I dropped my Kirkland Signature 30 roll bag of toilet paper when I heard you advise a listener to give significant control over her financial future too.


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[Assistant] Wait for it. Not a spouse, not a parent, not a financial advisor, a friend of a friend. You advise the listener to follow a friend's request to assume financial responsibility for a person immigrating to the US if the friend could be trusted.


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[Assistant] The problem is that even if your listener could trust their friend in many ways, their friend cannot know whether a third party friend can be relied upon to be financially responsible.


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[Assistant] It's not a matter of trust. It's a matter of not being able to know whether another person who has been given significant control over your financial future is willing or able of not negatively affecting your financial future.


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[Assistant] Your listener's friend can't know either. I trust my friends in many ways, but I'm not going to rely on or trust to determine whether I will co-sign for their mortgage. I believe the answer should be no. Trustingly yours, a decades long Clark Howard fan.


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[Assistant] Was somebody wanting them to sign to be financially responsible for them while they're in the process of the green card for immigration?


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[Assistant] No, I think you were just saying it's about being able to trust in what a risk it was.


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[Assistant] And then as they would do in one of these Instagram things where they ask people what they're wearing, how about your accessories?


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[Assistant] Yeah, that's what I use it for, asleep. But yeah, you do let it tell you what kind of day you're having.


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[Assistant] Oh, and I also want to say, I still am not getting to all of them, so I'm sorry, I can't read them all. There's too many. Uhm, there are too many. What does that say about me? No.


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[Assistant] Go on, that's great. The Clarky segments, by your own admission, brought you joy and did not interfere with the podcast at all. I think if it was something you enjoyed, all the people you helped should be able to get over it. Or they can just end the podcast when it plays. Sean in Mobile, Alabama.


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[Assistant] Alright, so here's, I think, a compromise. I'm going to open up the Clarkies voicemail box again, if you want to call in, uhm, not with consumer questions, uhm, and if we, in once in a while we'll play one. How's that sound?


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[Assistant] Of course you don't stink, Clark, but I sometimes wish you would provide more balanced answers. Recently you congratulated and offered advice to an obviously well-provisioned person who is being forgiven $700 a month of student loan debt.


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[Assistant] Your advice was to reallocate the money for leisure, fun, travel, adventure, and an added investment. Could you have also asked him to be thankful to the less fortunate taxpayers who did not incur such debt but will end up footing the bill for his good fortune?


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[Assistant] Love your show, Steve, and I had a few people write in with similar sentiments.


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[Assistant] Please, please, please stop apologizing to the do-gooder, food-shaming police for savoring a cheeseburger and a Pepsi every once in a while, Will.


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[Assistant] People care about you, I'll say that. And so does Will, wants you to enjoy yourself.


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[Assistant] Yeaah. I feel like you might be preserved. Like, from all the food you could preserve this.


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[Assistant] Perhaps this stink is your foot this time. You're in your podcast this week when you responded to the question about the dealer adding mandatory charge for anti-theft system on the vehicle. You failed to share with listeners why this is a deliberately deceptive practice.


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[Assistant] The reason is the dealer adds the anti-theft tracking devices to all of their vehicles to make repossession of the vehicle much easier if the purchaser defaults on the loan or there is some other issue.


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[Assistant] Clark doesn't stink, but he sure is laying the Clarkies down by not recommending an awesome around the town EV with 259 miles of range with everything on it for right at $25,000 brand new, including


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[Assistant] $7,500 on the spot tax credit. It's the 2023 Chevrolet Bolt and there are tons of brand new 2023s on dealership lots. The Bolt was a Motor Trends 2017 Car of the Year and the LG battery issue has been fixed. I bought one five months ago and Chevy even paid to install a Level 2 charging outlet at my house.


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[Assistant] Awesome car for around town and then some. Love the show Steve B in Six Mile, South Carolina.


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[Assistant] Clark, you did not come out smelling like roses on this one. When a young couple asked you for trip advice to Europe, you said, I'm paraphrasing, pick the one with the best deal.


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[Assistant] They are not buying shirts at Costco. They were thinking of Berlin, Austria and Prague. So if they found a trip to London, Dublin and Edinburgh for $400 less, they should go there. The cheapest travel memories are not necessarily the best ones. Thomas in North Carolina.


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[Assistant] We all understand the math and logic for Clark to take Social Security at age 70, but Clark is well off and financially sound. It would help our country if Clark and others would take the benefit at age 62 and just ride it out.


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[Assistant] Clark gets his money now and the federal government has more money to distribute to those that need it. Come on Mr. Howard, first you drive a Tesla and now you're trying to drain the federal coffers? Be a patriot and give back by taking social security early. Your biggest fan, Dr. Nate, aka Dr. Cheap.


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[Assistant] Your thoughts on how to protect our biometric or la- biometrics or lack of thoughts, it's just out there, are so disheartening. The way that you protect them, don't give it out. Man, at the airport, stand in line. Don't do the special programs. And while we're at it, make sure that the body scanner is one that doesn't show the naked body.


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[Assistant] Backscatter versus millimeter wave. It only becomes acceptable if we accept it. If more of us say no to having our information out there, or in this case, even worse, our biometrics, all of these programs will slow.


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[Assistant] You only have one chance with this. Once you give your biometrics out, you never have that privacy again, Erica.


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[Assistant] Clark, your suggestion of getting a rider on your homeowners insurance for the Rolex stinks like the broccoli that went bad in my fridge. A far, far, far better choice for jewelry is to get a policy with a big jewelry


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[Assistant] What do you call that in French? Jewelers Mutual. Years ago, a claim for my engagement ring caused our homeowners policy to be cancelled. We have used this company ever since. It is very reasonable too. Jennifer.


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[Assistant] That weekend, Joel Guy was outgoing, friendly, and happy.


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[Assistant] In a way, Michelle Tyler had never seen him before. Outgoing, friendly, and happy.


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[Assistant] You saw it in the picture from the, from the front porch. Smiling, happy.


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[Assistant] That's who Joel Guy was that weekend. He was not someone planning on committing a murder.


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[Assistant] His father was stabbed at least 41 times, his mother at least 32 times. That is anger. That is rage. That is not happy and outgoing.


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[Assistant] This was not Christmas. This was not when that was going to occur.


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[Assistant] That's why we have to look at every fact to see if this adds up. Because just from that very start, outgoing, friendly, and happy does not add up to what's happening.


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[Assistant] Anything that reduces the speed and velocity of the gas coming out, so uhm, I've, I've,


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[Assistant] known of, uh, people using, uhm, coke bottles, uh, air, air fuel, or, I'm sorry, air filters, uhm, fuel filters, anything like that, uhm, it can, let's say, just slow down that gas coming out of the gun.


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[Assistant] It's great to have you here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you can make better financial decisions in your life.


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[Assistant] Today I'll start by responding to your advice to me in our weekly Clark stink segment and later, oh boy, spying on you while you drive in your car.


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[Assistant] Believe it or not, there are automakers doing that. I'm going to tell you who's up to no good.


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[Assistant] Now we get to hear where you feel the advice I gave is no good in today's Clark Stink section.


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[Assistant] Yeah, Jerry, I've been trying to get my arms around this as well, because it's become much harder.


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[Assistant] To make the old formulas work with how much real estate prices have gone up and the cost of new homes effectively are homes for purchase.


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[Assistant] Is completely out of whack versus the cost of monthly rent, which is why I've been discouraging people from buying investment real estate these days because it's just so hard to make the numbers work. Uh, you saying that .7 would be a, uh,


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[Assistant] A fair substitute today is still a worthwhile investment decision. I'm still trying to work on that and see if


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[Assistant] If I'm really giving outdated formulas by sticking to the 1%, so I'll take this as another


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[Assistant] Clear signal that I need to keep working on it and come up with a more modern answer than the Dallas Cowboys.


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[Assistant] Mindy, uh, gosh, you're right. You're right. It's, it's, uh, insensitive and it's a poor choice of words. I choose to wear the, this shirt was $6.91. I choose to wear it because I don't value clothing.


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[Assistant] And so I don't choose to spend money on it. I'd rather have money in my pocket. Now do you know that uhm, have I mentioned that my wife Lane repeatedly asked if she can update my wardrobe and


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[Assistant] Come up with new attire for me and I just, that just doesn't feel like me.


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[Assistant] No, they were able to pick out two toys. Two. They were able to buy two items at Dollar Tree when they were a dollar.


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[Assistant] They never set foot in a Toys R Us when that was the big thing ever with me because I didn't want them to, to suddenly see there was this entire array of toys that cost an arm, a leg and a foot. And, uh,


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[Assistant] Irene, okay, I don't know what context that was, but...


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[Assistant] It's completely true that the insurance industry plays this low ball game. Uhm, at the same time, there's been a real problem, particularly


[User] Please transcribe this text

[Assistant] In the state of Florida where there's been this game going on where roofers have been ripping off insurance companies, which ultimately causes rates to go up on homeowners insurance.


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[Assistant] Replacing roofs that maybe didn't need replacing or charging exorbitant amounts and the insurance companies were forced to pay


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[Assistant] Is my frustration and skepticism about what's going on with the, uh, unsavory part of the roofing industry. There are a lot of people in the roofing business obviously that are honest, decent, hardworking people doing a very dangerous job.


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[Assistant] There's also been a crooked side to the roofing industry that ultimately has cost all of us more money.


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[Assistant] Because the simple is not simple in terms of the rules for it. It has very complex rules for paperwork and implementation and if an employer ever messes up on the paperwork,


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[Assistant] Then you got a problem. The beauty of what fidelity does is fidelity, uh, keeps employers in compliance with the rules for a simple. The step that you hear me talk about


[User] Please transcribe this text

[Assistant] Is actually what should be called the simple because it has minimal paperwork and very easy to do and it can be done pretty much with any financial house.


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[Assistant] The simple is a more involved thing to set up. There are very tight deadlines on the simple and it's really too technical a product for me to spend a lot of time talking about.


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[Assistant] Oh Michael, I know that I have been inconsistent and confusing on solar. Okay, so you're going to have to indulge me a bit because this requires significant explanation.


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[Assistant] What's happened is the power companies, the monopoly power companies, which unfortunately most states still have this antiquated monopoly power model, they


[User] Please transcribe this text

[Assistant] They are so powerful in, that's a bad pun, in state legislatures and they control the utility commissions in the states that they get the statutes written.


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[Assistant] Almost impossible in many states for a consumer to have any benefit from slapping solar up on their roofs. That's what's happened is they have changed the rules of the game


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[Assistant] To discriminate against individuals running essentially their own power company on their roofs.


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[Assistant] And the problem is corruption. The problem is that power at one time needed to be a monopoly. Power no longer needs to be a monopoly. Power in a modern era should be distributed. So yes,


[User] Please transcribe this text

[Assistant] If we had a true free market going on with how power was done, it would,


[User] Please transcribe this text

[Assistant] Completely make sense to slap those panels up on your roof or if you have a yard in your yard on sticks, whatever they call those posts.


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[Assistant] Because the game has been manipulated by the monopoly power companies and their buddies in the legislatures. It has made it uneconomical in many states now for an individual to put solar up and now the deck is stacked.


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[Assistant] Where the most efficient way to do it is with these large solar farms. So the reason my answer changed


[User] Please transcribe this text

[Assistant] Is because of what happened, not in the economics of it, but in the politics of solar.


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[Assistant] Jackie, Bill, great to have you here. Uhm, okay. So,


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[Assistant] What you face when you're with a bank based brokerage.


[User] Please transcribe this text

[Assistant] Has Wells Fargo signed a fiduciary agreement with you, meaning that they are legally required to do what's in your best interest. Be very rare, if ever, the bank-based brokerage would do that. Second, you're paying 1% for asset management on their part.


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[Assistant] But the other problem you will find often with the bank based brokerages is the fees on the funds they put you in.


[User] Please transcribe this text

[Assistant] A bank based brokerage like the Wells Fargo advisors.


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[Assistant] So check to see what the fees are on the underlying expenses.


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[Assistant] Of the funds you're in with Wells Fargo and as Wells Fargo signed a fiduciary agreement with you. If they are not operating as a fiduciary, they are unacceptable as a choice to handle your money.


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[Assistant] I love this, Micah. Okay. So Micah, on YouTube, there are videos one person after another.


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[Assistant] Who is as obsessed with carry-ons as I am. And they lay out everything they pack, how they pack it, how they use the vacuum packs.


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[Assistant] We'll lay it out when I do a one week trip.


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[Assistant] 10 day trip, lay out everything I take, and then you get to see me sitting on my suitcase to get it to zip so it stays carry-on size. What I actually do is, you know how the suitcases have the expander things, the carry-ons? So I expand the suitcase.


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[Assistant] So, uh, here's confessions I need to confess. So Micah, uh, took my family, two of my three kids, my wife and I, and my middle child's boyfriend, and we went to Australia.


[User] Please transcribe this text

[Assistant] And we were there for, I think it was like 11 days.


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[Assistant] And I said, I got everybody do the carry on and I said, I promise we'll be, we shouldn't have any problem at all finding a wash and fold on the trip. Guess what? We had trouble finding a wash and fold and


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[Assistant] I still have family members that are sore at me that we did not


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[Assistant] Take bigger suitcases and check them. So Micah, even in my own household, they're like, look what you did to us.


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[Assistant] And, uh, then I'll end up buying something heavy and I have to get a cart. And they bust me so hard. They say, oh really? You need a cart today, huh? Yeaah.


[User] Please transcribe this text

[Assistant] How about, uh, if you get drinks like my wife loves.


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[Assistant] Pellegrino, which we talked about is now cheaper. So, you know, and she only likes the Pellegrino in the glass bottles.


[User] Please transcribe this text

[Assistant] She didn't like it in the, in the plastic.


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[Assistant] Now that I eat fish all the time with my new heart healthy diet, I'm eating a lot of salmon.


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[Assistant] Southwest had great snacks they gave out, but now they've cheaped out and they're insulting their passengers by giving these little sawdust packs. Have you ever seen them? Are they a pretzel?


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[Assistant] They taste, well there's pretzels in there that have no taste at all. They just, they are in the shape of pretzels. So I don't know what they are. And then they give you these little, I don't know what those are. And then they give you something that's like, like their version of a Cheez-It.


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[Assistant] I don't, I don't know what is going on with management at Southwest right now. Cause did you see the thing on the new seats they want to put in planes?


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[Assistant] No, I did not. Oh man, they are getting trashed online and then they've gone into that, that thing that corporations do where they hide from the media and the public instead of addressing how much people hate.


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[Assistant] The new seats because apparently it's like sitting on just sheer metal with a decorative cover on the metal.


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[Assistant] They give you, they give you a much lower price and you're in a, you're in a, what do you call those, five point.


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[Assistant] I'm sorry about all that digression here. You're still with us. Yes, yes. So coming up ahead, we're going to talk about something that's not funny at all. General Motors and a handful of other automakers are selling their customers down the river and it is inexcusable.


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[Assistant] This freaks me out. Okay. Auto insurer says, hey, if you let us track how you drive,


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[Assistant] We'll set your rates by that and we won't raise your rates, we'll only lower them. And you decide if you're gonna have that device in your car. That's fine with me. You have made a decision to allow the spying in return for you potentially getting a lower price.


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[Assistant] What General Motors has been doing for at least the last two years is only seeing the light of day is inexcusable. And I know the lawyers are going to have fun with this one. GM has the OnStar stuff.


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[Assistant] And in the thing where they tell you they value your privacy, you're giving them permission.


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[Assistant] You, if you drive a GM car, that you've got activated the OnStar stuff, GM has sold


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[Assistant] Down to every nth of your driving, minute by minute.


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[Assistant] To LexisNexis, which is a big database company, and you have the right to see your report.


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[Assistant] If you haven't heard about this, you Google it or whatever search engine you use, you'll see news report after news report after news report about GM selling its customers down the river.


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[Assistant] So this guy out of nowhere.


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[Assistant] Gets a 21% premium increase for his insurance.


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[Assistant] He can't find out what's going on and other insurers want to charge him a fortune.


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[Assistant] So an insurance agent said, hey, let me tell you what's going on. GM selling your data to LexisNexis.


[User] Please transcribe this text

[Assistant] You have a right to see it like you would see a credit report. So he asked for the report.


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[Assistant] Tracking everything about his driving, according to this New York Times story.


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[Assistant] A hundred and thirty pages just detailed every single time they were in the car, he or his wife. Start times, end times, distance driven, heartbreaking, sharp accelerations.


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[Assistant] Everything about their drive. And then they sell that to auto insurers. Again, no idea this is going on. This is insane. This is ridiculous.


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[Assistant] GM should be ashamed of itself. It's gotta be so little money GM is making selling its customers down the river.


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[Assistant] I saw in a story in the New York post about people selling their GM cars because they were so furious that GM was doing this. This is not at all acceptable behavior and it's not just GM Honda, Kia, Hyundai are also selling off this data.


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[Assistant] They are selling it to Lexus, Nexus and other brokers. Not okay. This is wrong. Unacceptable. Again,


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[Assistant] You use the technology features in your car.


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[Assistant] As part of the benefit of driving that car.


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[Assistant] For that automaker to turn around and put in their legal notices


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[Assistant] When it says, oh here's your terms of service and it goes page after page after page.


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[Assistant] Who reads that? Nobody reads that stuff, right? Why would you? You shouldn't have to.


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[Assistant] This is not the way things should work.


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[Assistant] The reason this stuff goes on here is we don't have in the United States what's so common in other countries. We don't have a privacy law.


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[Assistant] Because our Congress hasn't done anything about this. But this is just not the way life should work.


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[Assistant] The GM feature is called OnStar Smart Driver.


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[Assistant] If you have activated OnStar Smart Driver in your car.


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[Assistant] GM is selling you, selling you, selling your data to great harm. Know it.


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[Assistant] And even if you enjoy the features of OnStar Smart Driver, I'd say you gotta shut it down. Shut it off.


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[Assistant] You know, I wish that an MBA school


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[Assistant] They spent one second talking about business ethics and the right way to treat a customer. Cause this ain't it.


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[Assistant] I'd be angry as all get out. Cause if you have a Tesla.


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[Assistant] It's basically a computer on wheels. I would be absolutely furious if Tesla was doing this.


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[Assistant] Is Tesla has a rep in the insurance industry.


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[Assistant] Because of the speed of a Tesla and the acceleration, they're looked at as more dangerous cars and people pay higher.


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[Assistant] Insurance rates, Tesla wouldn't want to add anything to that reputation by showing, Oh yeah, that person did go zero to 60 in 2.9 seconds.


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[Assistant] You are eligible for Ross. The rules for Traditionals are different, but I'd like you to do, uh, cause you're in a Sep.


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[Assistant] And that's pre-tax money going in. I want you to do a Roth.


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[Assistant] Is your second savings. The Roth limits phase out. It's like 230, 230,000, 233, something like that. So you're absolutely fine doing Roth contributions as well as doing the SEP.


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[Assistant] The auto manufacturers, so many brands now are way overstocked with new vehicles. And so they bought, brought back factory subsidized financing. I think in the article you read, I talk about pre-qualifying at a credit union or an online bank for financing.


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[Assistant] And then if the dealer can beat it or the manufacturer can beat it.


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[Assistant] You know that it's a really great deal. So you do want to pre-qualify because it's part of the process.


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[Assistant] Uh, being able to comparison shop and knowing if the loan rate you're being offered is better. Right now a lot of manufacturers are back to offering subsidized vehicle loan rates because they know that's been a real dissatisfier for people.


[User] Please transcribe this text

[Assistant] In an era of higher interest rates. So if they come in and essentially buy down the interest rate for you.


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[Assistant] Then that is, is a real incentive to buy one of those unloved new cars sitting on dealer lots.


[User] Please transcribe this text

[Assistant] Okay, so Josh, if she is saving this money, I'm supposing, and I may be jumping to a conclusion that she's working, which would make her eligible for a Roth IRA, migrating this money


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[Assistant] The legal right to do this, to move it into the 529, naming you as the owner, her as the beneficiary.


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[Assistant] You would then be able to do just as you said. It would not hurt her for financial aid. It would, uh, qualify


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[Assistant] She doesn't, it's not good for her to be the owner of the 529. As far as for her own kids someday, if she didn't need it.


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[Assistant] That would be up to you because you would be the owner of the account.


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[Assistant] You would change the beneficiary well down the road.


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[Assistant] To your grandkids from your daughter.


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[Assistant] But the easiest answer of all, the simplest of all, is if she is working,


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[Assistant] And she works enough over the next two years before entering college that she has enough earnings to move that 12,000 into a Roth IRA because you can do up to 7,000 each year.


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[Assistant] Then you've solved the problem anyway, because assets in a retirement account do not count.


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[Assistant] Towards eligibility for financial aid in college. And that's fantastic that your 15 year old has managed to save


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[Assistant] That much money already. Those are lifetime habits that change her future.


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[Assistant] And I want to thank you so much for joining us today. I hope you have an absolutely wonderful weekend and we look forward to serving you next week with additional ideas for you to save more, spend less and avoid getting ripped off.


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[Assistant] It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. Did you receive our newsletter today?


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[Assistant] I hope you did because if you're not on the list, it's so easy to subscribe to our free newsletters that are priceless at Clark.com slash newsletters. In this episode,


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[Assistant] I have something for you to do, an assignment for you to do.


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[Assistant] Before you go to any doctor's appointment, I can't believe what I'm going to tell you, you need to do. And also I've always said that the way you treat your employees will ultimately directly impact the health of your business and how happy you make your customers.


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[Assistant] There's a war going on right now behind the scenes where you and I are pawns.


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[Assistant] Is there's these knock down drag out fights between medical practices, hospitals, labs, you name it, between the providers and the insurers.


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[Assistant] And these fights are becoming so ugly.


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[Assistant] That it used to be that each year you might have to make sure


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[Assistant] That your doctor was included, or the hospital that you use was included, or whatever it is.


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[Assistant] Was included in your health plan. That would be a once a year thing as there'd be annual


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[Assistant] Ups and downs on what was included in your plan and who was included in your plan. But what's happened of late.


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[Assistant] Is the wars have become 12 month wars, continuous wars between the providers and the insurers. So you could have seen your doctor in January have another appointment in April and between January and April


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[Assistant] The doctor that was in your insurance plan no longer is in your insurance plan. And you go to see the doctor in April.


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[Assistant] And instead of being treated in network, suddenly you're out of network.


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[Assistant] And then you end up with a big bill. Think about when you and I go to.


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[Assistant] A doctor's office. What do they ask at the front desk? Has there been any change in your insurance? Now you need to ask that question back.


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[Assistant] Either by calling before you go, or when you show up for that appointment,


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[Assistant] Because if they're not, as you know, with so many health plans, there's a big difference.


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[Assistant] And what's covered and what's paid by insurance in network versus out of network. This thing going on.


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[Assistant] As best I've been able to determine has no coverage under the No Surprises Act, which we've had several questions related to, of late.


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[Assistant] No surprises really has to do with when care is rendered in a, in network facility, but somebody sees you you don't even know about.


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[Assistant] When you may not even be conscious who's out of network and you get some kind of eye popping bill, you're not legally responsible for paying that amount of money.


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[Assistant] Because they were out of network. That's what, that's one of the elements of no surprises. That does not apply when you're going to a facility and because last time you went, it was in network.


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[Assistant] This time it may not be, you're out of network now, because you voluntarily went there, and so every time you're with a provider or a facility, you have to re-verify, and hope they know what they're talking about, that you are in network. Why we have to do all this?


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[Assistant] The burden falls to us to make sure that we are in fact


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[Assistant] In network because the stakes in dollars can be so big between in and out.


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[Assistant] Well no thank you for what you're doing because what you're doing is unreal. And if you're not aware, this will be our 34th year.


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[Assistant] of Clark's Christmas Kids where we collect donations for children in foster care so they can have gifts at Christmas. What you're doing is a much bigger gift.


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[Assistant] Uh, you are bringing these children into your life, adopting into your home. That is just...


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[Assistant] So what happens with the HSA? So you already know this part that if, uh, you have people under your roof that are Medicare or Medicaid,


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[Assistant] So what the two of you are going to look at moving forward is you're going to do the individual limits.


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[Assistant] On the HSA and with both of you participating in HSA's, you should be fine. You should be able to put aside, as I remember, pretty much an equivalent amount


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[Assistant] Were in an HSA, then that would affect your overall limit. But since both of you are, you should not have any meaningful difference in big dollars that you're eligible to put aside.


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[Assistant] This is something that I remember when, uh, the second president Bush.


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[Assistant] I proposed something equivalent to this, uh, generation ago. And I was so excited. We were doing radio then. I was so excited on the radio show that we were going to get away from this crazy employer-based thing we do in the United States.


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[Assistant] Which is so dumb when you think about how many jobs people have over a lifetime and instead having an individual equivalent of a 401k.


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[Assistant] So there is a loophole you qualify for Andrea, but it still will limit you to the Roth contribution limits because your employer does not offer a 401k.


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[Assistant] You're eligible to do a Roth IRA even though you exceed the income limits. But you're, uh, if you're making enough money,


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[Assistant] To exceed the 401k contribution limits, I'd want you to do the Roth IRA. And by the way, confirm.


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[Assistant] Independently what I've said, just because I don't want you a year from now to say, Clark, you said I was eligible and I wasn't.


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[Assistant] Regardless, you would still be able to do the back door Roth, but you should be fine doing.


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[Assistant] Uh, Roth IRA because there's no employer offered plan that then the income limits don't apply. But you should also consider opening an investment account.


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[Assistant] To put money into and put it in something like a total stock market index fund or ETF or something like that.


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[Assistant] It will give you the opportunity tax favored.


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[Assistant] To put aside more money for your future, not necessarily for retirement.


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[Assistant] Then you're eligible to do with the hard cap of seven grand into a Roth IRA because you do need to be, if you're earning enough money to not be eligible, you're still not going to be saving enough money for your future.


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[Assistant] Yeah, absolutely. So, Andrea, uh, this is something I've done a lot of work in because we're a small company and we offer a really good 401k to our employees.


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[Assistant] And the cost of small employers doing so, which your small employer you work for may not even be aware that this is something they can offer. And the real pitch on that is the owners benefit the most. Typically, there would be a real benefit to the owners of the small business.


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[Assistant] To set up one of these low cost 401ks. And we did address this on the podcast last year.


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[Assistant] This is a great question, and it's something that, that we've addressed before, is that Google has become a curse in this area. That, uh, these con artists have figured out how to set up referral businesses


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[Assistant] Where they pretend they register all kinds of domain names that are so localized, they even look like they're in big cities, they're from a particular area of a big city.


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[Assistant] Who you're actually gonna have come, you don't know if they're crooks, you don't know who they are.


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[Assistant] Exterminator business has gone through repeated what are called roll-ups where locally owned exterminators have been purchased by, uh, private equity outfits many times and they roll up hundreds or thousands of local providers into one of these roll-ups.


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[Assistant] And so they keep all the local names, but they have no real connection at all anymore to the local provider. But in this case we're talking about


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[Assistant] Yeah, uh, Facebook, local Facebook groups, uh, where you ask other people in your immediate area, hey, who do you recommend for a plumber? Who do you recommend for a locksmith? Who do you recommend for this, that, or the other? And that way you're able


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[Assistant] Dramatically improves what you're asking for that you do get somebody local, but when you're like on next door and you have people saying, Hey, I gotta tell you, I used, uh, Jake as a plumber. He was the greatest I've ever had. And so you want Jake, right? So,


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[Assistant] So get away from Google. Doing a Google search for a local service provider


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[Assistant] Is a recipe for disaster. And it's the kind of thing Google could clean up.


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[Assistant] They have made no effort in this area because obviously all they're chasing are the dollars. So coming straight ahead.


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[Assistant] Speaking of dollars not making sense.


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[Assistant] How a lot of businesses treat their workers so badly. I love the free enterprise system. I love capitalism and I believe that capitalism rewards those who run great businesses and the core to running a great business


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[Assistant] Is not necessarily the product or service a business offers. Especially with service businesses.


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[Assistant] It's how that business treats its employees. And in turn, that the focus is strictly on the customer. And so in good businesses, it always starts with what I referred to through the years


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[Assistant] A weird way, I mean that when you treat your employees well, they're motivated. They tend not to turn over as much. They understand the purpose and goal of serving that customer and they do so. And I've talked in the past about the oddities involving Dollar General. And recently there was a Dollar General where people showed up to shop at it.


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[Assistant] And it had a sign on the door that all the employees had quit and the store was closed. And uh,


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[Assistant] Dollar General looks so bad, it's funny because I just talked a couple months ago about all the issues involved with how Dollar General treats its workers allegedly like dirt. And so, this is a thing.


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[Assistant] How you treat people matters. Dollar General I had to bring in.


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[Assistant] Uh, people from other stores to reopen that store. If you wanna, uh, if you wanna read about it, just use your search engine. You'll see, uh, some very colorful stories about it.


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[Assistant] Recently happened with the McDonald's franchise where all the employees just quit at once and the McDonald's was closed. McDonald's are locally owned and operated. And I guess that local operator was not treating the employees well. I mean, it really does matter and you know it. I know it. When you go to a business and you're greeted with a smile,


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[Assistant] And you see the same people working there again and again. You know, that's a place where the workers are appreciated and treated well. It's, business is hard.


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[Assistant] But we make it harder as a business owner on ourselves when we forget that we got nothing if we don't treat those employees well. Walmart,


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[Assistant] Which used to have a horrible reputation in how it treated workers.


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[Assistant] Has set up a school to treat its managers, thousands of them.


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[Assistant] How to serve the workers better. The managers serve the employees. And then in turn, how to provide better service to the customer.


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[Assistant] And you're rolling your eyes cause you went to Walmart and you got there and there were no registers open and the self checkout was bad and all that. But it takes a while to turn around a big ship. The idea is,


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[Assistant] Cause Krista and I have been together since 1997. How many times have you heard me in, gosh is that 27 years?


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[Assistant] I mean, it's, it's what it is. So just, you want to make more money? Let's just get right to cold. You want to make more money as a business owner? It all starts.


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[Assistant] With treating the employees who work for you with respect and all the rest. And I, if I had a dollar for every time I heard a business owner say all through my life, Oh, nobody wants to work anymore. Nobody cares anymore. Employees, blah, blah, blah, blah, blah, blah, blah, blah. Okay. Let me tell you.


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[Assistant] Every generation has always thought the generation that came behind them was lazy and didn't care.


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[Assistant] So know that it's up to us as owners of businesses to motivate.


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[Assistant] And it goes from the film era to the digital era and you don't adjust quick enough. I mean, you got to have the right product in the marketplace, but it really is in many ways so simple. Respect for each other.


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[Assistant] So, a bond, uh, whether it's a traditional bond or a municipal bond,


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[Assistant] Or a U.S. Treasury bond. They are kind of a blend of an investment and a savings vehicle.


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[Assistant] And there are times that bonds have been what's known as ballast. They've been a real good protector for you in times that your stock holdings have done really poorly. Well, we've been through a time period that bonds were really ugly.


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[Assistant] And that's because when interest rates were artificially suppressed by the Federal Reserve and then interest rates started to rise, the value of bonds collapsed and so they were an ugly


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[Assistant] Way to save slash invest. Well now, as interest rates have normalized, being in bonds has become a smart thing again.


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[Assistant] And I rode my, I've had bonds as a portion of my portfolio all through the years. I rode them up, I rode them down through the manipulation of rates by the Federal Reserve, and now I'm recovering. It was a rough time in between.


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[Assistant] But having municipal bonds, particularly if you're in a higher income tax bracket, are a good part of a portfolio.


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[Assistant] And the value of bonds goes up and down with time. But I hold a lot of municipal bonds because I am in a higher tax bracket and I avoid federal tax on them just like you're asking.


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[Assistant] And it is something that's recommended. Now, I don't buy individual


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[Assistant] Bonds of any kind. I buy bond funds.


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[Assistant] And so if this is something you're interested in, know that the best source for bond funds, municipal, US treasury, or corporates,


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[Assistant] Vanguard dominates the bond space because being a co-op, the fees you pay for owning


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[Assistant] Bond funds or bonds through their funds are much lower than they are elsewhere. And so vanguards, bond,


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[Assistant] Portfolio of municipals in your case, you should look at it.


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[Assistant] And build a portfolio mixed of different maturities.


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[Assistant] Uh, the big four that Vanguard has, long-term municipals, intermediate-term municipals,


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[Assistant] Short term, and then they have something that's unusual, they have limited term, which are


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[Assistant] Longer than short, shorter than intermediate, and usually a mixed portfolio works best as part of


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[Assistant] Let's go back a step when the card was cancelled because of the fraudulent charges.


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[Assistant] What I would say to you about that is that if this ever happens again and it will with, it seems inevitable with all our credit cards that a fraudster gets hold of the number.


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[Assistant] Or charge. They move it over to the new number automatically.


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[Assistant] Uhm, so this would not have happened in most cases. If you did have a new card number issued and it happened, then


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[Assistant] This would be a normal area of dispute on your part being hit with a collection on your report. But when something does go to collections for whatever reason, and you're in a position to pay the money,


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[Assistant] That is the point at which you negotiate. Say, here's the deal. This is what happened. I'm happy to pay you the money, but I need you to remove it from my credit report. And they say, oh, we don't do that. Say, okay, then I don't give you money.


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[Assistant] You use the money as your lever to get that item removed from your report.


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[Assistant] Because once you pay the money, you have no leverage and that item stays there for seven years. You're allowed to add a statement to your credit file, but I find that other than mortgage lenders, nobody reads it. So


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[Assistant] The initial hit on your credit from this one collection from you having golden credit.


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[Assistant] Over 780, you're at 80, you were at 802, you probably dropped.


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[Assistant] Is your credit score. And that stings a lot and hurts you.


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[Assistant] You're not going to have to wait a full seven years for your score to come back. The collection has been paid and each year your score should go up. Two years out, it should already be recovering from that collection incident. But in the future, use any situation like this, the money they want,


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[Assistant] As the leverage you need to get that item cleared from your report because after, time is the only healer.


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[Assistant] An aura is in. Thank you, Mark. My wife just did that. Her aura stopped holding a charge. She contacted customer service in Europe, where aura is based. Same thing happened for her. They sent her.


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[Assistant] I don't know if it's a reconditioned or whatever, but she got a new one that holds charge just fine and so that is a great suggestion for others. I'm having to charge my aura ring constantly now cause


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[Assistant] I need to take Mark's advice and replace it. Uhm, Aura by the way suddenly is facing a lot of new competition. There have been a lot of very positive reviews about the


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[Assistant] For having a health or fitness ring. And it's just so great because if you want to obsess about improving your sleep, which is one of the key things to improving your health.


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[Assistant] I've been able to significantly over the years, over the last four years,


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[Assistant] And following Aura's continuous nagging, I have significantly increased the amount I sleep each night.


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[Assistant] And I'm really proud of that. Have you been able to improve yours at all yet?


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[Assistant] You know, Aura just sent something out saying that they found the number one factor that


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[Assistant] Hurts people sleep in the early hours of bedtime is.


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[Assistant] One time you shouldn't put your phone down when you're looking for fantastic advice.


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[Assistant] Have a wonderful day. Remember what we're about. You learning ways to save more, spend less and avoid getting ripped off.


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[Assistant] John in Michigan says every year I find out that someone who had worked on my wheels, brakes, or tires torqued the lug nuts wrong and didn't tell me. The repair can cost 50 to 100 dollars.


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[Assistant] I'm beginning to think I should forget tire rotations on older tires. Remove the hubcaps before taking the car in so I can see if the studs and lugs are intact.


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[Assistant] There was an article in Pop Mechanics saying the need to be hand-torqued and not to trust torque sticks or air wrenches which busy shops use. This makes no sense to me, but I assumed you would know. It makes perfect sense to me.


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[Assistant] The Upgrade Cash Rewards Elite card offers 2.2% cash back on everything, but it isn't listed on Clark.com as one of the recommended best cash back cards. It appears to have a non-standard payment mechanism where any balance you carry is considered a loan that then takes on specific installment payments. Do you mind sharing your input on this card?


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[Assistant] Something I also wanted to mention is if you're married and you're not working, you can do a spousal IRA, a spousal Roth IRA. Uhm, and a lot of people don't realize they can do that. And I also just want to say, because I've seen this happen to a lot of women, uhm, that you should definitely


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[Assistant] Try to have access to all of your accounts. If you're, if you're married, you should have insight into everything. All the logins and like you and Lane I know go through your accounts regularly and look at where everything is. It's just, I've seen people, including my mother, who have no idea how to access anything and if something were to happen,


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[Assistant] And you're, and you're on your own with it. It's just, I think it's just good to have the knowledge anyway and just be a participant. Cause a lot, I've seen some people who sort of buried their head in the sand, like I don't need to handle that, but it really is important to know what's going on.


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[Assistant] Alright, we'll go to questions. Beth in Illinois says, I'm so happy to see you address how to delete Google information. That was on Clark.com.


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[Assistant] Yet I hesitate because we've been hearing for a long time that Google tracks everything, everything. Can we really trust a website that offers data deletion going backwards and ongoing in the future? Or is this trickery to pull us into something even more sinister and damaging where our privacy is concerned? Thanks a lot.


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[Assistant] Alex in Texas says, Mr. Howard, as a child who grew up... You're gonna say that? Well, that's what Alex is trying to be polite. As a child who grew up listening to you in my parents' old 1990s Honda Accord, you should take pride in how many people you have impacted over the years. I am 30 now, working with a government salary as my income source.


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[Assistant] I own a home at 2.85% that I rent out. I have almost 200k invested between my RothTSP and Roth IRA account.


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[Assistant] I have never had any debt besides a mortgage and purchased iBonds throughout the year as my emergency savings account. Somewhat unexpectedly, I will soon be stationed outside the USA for around three years. I set aside almost 40k in savings for a home down payment that is no longer needed in the near future.


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[Assistant] What are some good mutual funds or ways that I can invest the money for a future liquidation in around five years? And to all the listeners, you don't need a fancy salary with weird insta snap gram side hustles. Focus on what is important.


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[Assistant] Live well below your means, student debt is avoidable, and anyone worth knowing doesn't care what kind of car you drive.


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[Assistant] But how does that account for promotions and merit increases? This is a good problem to have, but contribution caps limit abilities to meet a growing target. How can I account for a moving goal post when reading X times my salary?


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[Assistant] It's great to have you here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you can make better financial decisions in your life. Up first today, there's new news.


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[Assistant] The car market is going through a dramatic reversal.


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[Assistant] In your household, you're not sure if that child's gonna go to college someday.


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[Assistant] There's not a risk of you getting hit with massive tax and penalties.


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[Assistant] Because you can convert the money over time up to 35 grand under current law.


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[Assistant] Once your child's an adult into their own Roth IRA and give them a big, big booster shot towards building financial security and retirement. But there's also another thing that's changed.


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[Assistant] With the new FAFSA, that's the form you have to fill out.


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[Assistant] For determining eligibility for financial aid for college.


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[Assistant] And that is that grandparents historically have been the funders of a lot of money for kids college.


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[Assistant] But the way financial aid was figured for college, grandparent assets in a 529 transferred to a kid, grandkid, really, really hurt them for financial aid.


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[Assistant] Through their college years. There were all kinds of strategies where a grandparent would wait.


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[Assistant] To use any of the money from the 529 till a kid was a junior, grandkid was a junior in college and all these weird workarounds and now the process no longer


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[Assistant] Discriminates against grandparent saving for a grandkids college education. And truth be told, a lot of grandkids schooling from any kind of private school,


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[Assistant] All the way into college, grandparents end up paying in many cases a good chunk if they can afford it.


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[Assistant] For a grandkids education, because the parents may not have the resources. So the 529 plan,


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[Assistant] Is the right way to do it. Now, having said that,


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[Assistant] If you've never heard me explain this, it's really important for you to know. 529 plans are sponsored by the states.


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[Assistant] Many of the state plans are much better than they used to be. And there are really some great plans now. No commissions, very low cost.


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[Assistant] But there's also some real dirt in 529 plants. Some really terrible ones.


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[Assistant] There are, uh, life insurance agents that will try to convince you that the best way to put money aside for your child is in a life insurance policy? No. No. No.


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[Assistant] Needs to be a portion of a meaningful portion needs to be invested. Like even if it's just a third of it invested in, uhm,


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[Assistant] With what was going on with used car values. I'm not telling you anything you don't know if you bought a used car or even knew during the COVID cycle.


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[Assistant] And some people get tired of the car they got. They dump it, trading it in on something else. And then what happens is you pay for the new vehicle and your loan also has a transfer of what they call negative equity added into it.


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[Assistant] Is the upside down of the used vehicle you're getting rid of. So now you're making two payments every month in that one. You're still paying off the vehicle you traded in and you're paying for the new one you got or the newer used one you got. That's ugly. So what happens if you're upside down?


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[Assistant] If you're upside down and alone, you keep driving what you got. No fun.


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[Assistant] I know it's no fun, but cars are so much more reliable than they used to be.


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[Assistant] It used to be, you know, a car hit a hundred thousand miles. It was going to be nothing but trouble moving forward.


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[Assistant] Today, nothing but trouble starts more often at 200 or 250,000 miles on the odometer. Even if you're tired of it, it's not necessarily tired of you. And the best answer with negative equity is to keep driving. Now, on the other hand, if you're looking for a newer used car or vehicle right now,


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[Assistant] The reality is the prices have become much more favorable than they were. Even though loan rates are higher, the prices have been coming down so much. And


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[Assistant] Shopping for something today is much more favorable. Recently we covered how to buy a new vehicle now that you're in control in the marketplace and so many dealer lots are just overwhelmed


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[Assistant] With cars coming in, they don't have customers for, for new cars, except a couple of brands. So,


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[Assistant] You now have real pricing power in the market again.


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[Assistant] But again, don't be tempted by that if the vehicle you already have.


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[Assistant] You owe, owe, owe on it so much more than it's worth. Chris, I was talking to a guy just last week who was in a bad accident.


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[Assistant] And his car was totaled. The other car was totaled. They were both, both drivers were injured. Somebody blew through a red light, T-boned him. He's, he's okay. Has one cut healing on his head, but his wallet is not okay because he's so far upside down.


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[Assistant] It doesn't even matter if it's the other party's fault, you're only paid what your vehicle is worth at the time that the accident happens. And the good news, both drivers will recover fully physically, but his wallet is going to be hurt for a good long time.


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[Assistant] When you're, when you're taking out, if you're taking out a loan, that's a longterm loan.


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[Assistant] You're gonna be upside down in your loan for pretty much the life of that loan.


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[Assistant] And so gap insurance is an additional expense that you can actually shop around for.


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[Assistant] That covers that gap, so if you do have your vehicle stolen, not recovered, or totaled in an accident,


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[Assistant] You're covered for that difference between the worth of the vehicle and that's down here and your loan that's up there.


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[Assistant] This is, this is really hard. I'm not going to sugar coat. So when, when they wholesale that, uh, Mitsubishi,


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[Assistant] It's going to be a low price they receive for it when they wholesale it out.


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[Assistant] And so you're gonna get, build some, uh, some junk fees and that gap and...


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[Assistant] Normally, if you don't have the money, you're going to have to work out a payment plan with them for it. And I don't know what else led to it.


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[Assistant] But I will tell you, bankruptcy attorneys tell you that many of the filings they do involve


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[Assistant] Post-repossession judgments that people suffer.


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[Assistant] Over a car repossession or SCV repossession, whatever. And so if you are prepared,


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[Assistant] Moving forward psychologically to just pay for it.


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[Assistant] You can negotiate what the payout is.


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[Assistant] And the total amount, because any dollars they receive from you is more than they usually do when a vehicle is repossessed. You want whatever deal you reach, whatever payment plan, whatever total amount you'll pay, that must be in writing.


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[Assistant] And then whatever you agree to, you gotta make the payments, cause otherwise, the...


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[Assistant] With that repo on your credit, the smart move is to buy whatever junk or car you can buy for whatever cash you can come up with.


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[Assistant] And drive a car that you don't have a loan against to give your credit time to heal and your wallet time to heal. And Solomon, I'd love to hear from you later how you're doing financially.


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[Assistant] So I love this question, Chuck, because what's happened with the car market, I don't know if your daughter wants to buy new or used.


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[Assistant] Uh, but especially in the new car market, there are significant differences from metro area to metro area, depending on the competitive nature of a market. And so as an example, if your daughter is going to live in the San Francisco Bay area,


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[Assistant] And is gonna want a fuel efficient vehicle.


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[Assistant] An electric vehicle, plug-in hybrid, hybrid, anything like that.


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[Assistant] That is so in demand on the west coast because of how expensive gasoline is on the west coast. Uh, electric or hybrid or plug-in hybrid will be much cheaper back east or uh, especially in the midwest.


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[Assistant] Where you're talking about in Wisconsin, then it'll be on the west coast. You then have to factor in, you gotta get it out to the west coast. And uh, hybrids are very strong in the marketplace. Electric vehicles are very weak in the marketplace right now.


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[Assistant] Now below the cost of gas engine equivalents.


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[Assistant] With gas being five, six dollars a gallon in the Bay Area.


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[Assistant] There's a big advantage to buying, uh, if you're interested in price, buying a used electric vehicle to have out there. Again, not buying it on the west coast unless there's a great rebate available


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[Assistant] In California, which could be a factor. So this is not an easy question to answer, but is best answered by using one of the car tools like CarGurus or, uhm,


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[Assistant] Auto trader or something like that and see what prices are in different zip codes on different models. And you'll just got to take a lot of notes. You'll see the regional price differences for specific makes and models in different markets around the country.


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[Assistant] No, cause you register, you pay, you pay the tax and the market where you register.


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[Assistant] Okay, so the easy button is driving the company car.


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[Assistant] And you have to keep a log, usually, of personal miles that you drive. Actually, you gotta do this in either case.


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[Assistant] And those, there'd be some formula of imputed income, you're billed for the personal miles. If your husband just drives the company car only on company business, then you don't have to worry about that. Uhm, but if your husband drives an older car,


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[Assistant] It's almost always to his advantage to take the mileage rate as long as they're paying a good mileage rate. I forget what the IRS rate is right now, somewhere 57 and a half cents or something like that per mile. Uh, the employer will tend to offer whatever the IRS allowance is. If it's an older car that's heavily depreciated, then driving his own car


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[Assistant] Would actually usually be the best deal if.


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[Assistant] Your husband likes new wheels or drives new wheels or newer wheels or an expensive car, then he's much better off with the company car. This is all dollars and cents based on


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[Assistant] From the employer. So it's just what he would be happiest being in day after day as he's driving around for work.


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[Assistant] And, uh, those people who like fancy new wheels, never a deal.


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[Assistant] On the reimbursement from an employer driving your own vehicle.


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[Assistant] Want to thank you so much for joining us on today's podcast. Hope you have a wonderful rest of your day.


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[Assistant] And remember what this is all about. It's about your personal control of your wallet moving forward, that you learn ways from us how to save more, spend less and avoid getting ripped off.


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[Assistant] It's my pleasure to welcome you here to the Clark Howard Show, where our mission is to serve you with advice and information that empowers you to make better financial decisions in your life.


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[Assistant] Today I want to talk about a new trend in housing that I absolutely love.


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[Assistant] Communities are popping up around the country that make it feel like you're living at the beach without the high cost of insurance, high cost of upkeep, and does that sound like that's impossibly too good to be true? Well, actually, it's not with an asterisk. Also, I have


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[Assistant] Absolutely excellent news to share with you when it comes to teenagers and their wallets and their maturity. I'm gonna talk about that. So I had an opportunity


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[Assistant] Two years ago, to go to a new type of design community.


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[Assistant] And what I didn't realize when I visited it, that it's part of something happening


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[Assistant] In states around the country, mostly in the south.


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[Assistant] There's a lot of problems with people.


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[Assistant] Getting affordable insurance, being able to afford homes at or near the coasts.


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[Assistant] And so this development I saw was, uh, probably, I don't know, 12, 15 miles from the beach and it was a community with a big, um,


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[Assistant] Not quite a water park, but a big lagoon had some slides, had a sandy beach and all this and


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[Assistant] I read a long form story in the real estate section of the wall street journal about how this is happening.


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[Assistant] And state after state after state, the developers...


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[Assistant] We're kind of like how developers used to build communities around golf courses and they'd sell the golf course lots for more money. They're building these big lagoons and


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[Assistant] They're able to sell lots that have views of the lagoons for a lot more money than they would have been able to sell lots otherwise. In the neighborhoods, you don't have individual household pools anymore. You have these community lagoons with these big pools.


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[Assistant] And there's a technology behind how they keep the water clean.


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[Assistant] And safe to use that makes these.


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[Assistant] communities much cheaper to have these big lagoons and maintain them.


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[Assistant] And there's things about this that did not occur to me when I visited this place a couple of years ago, two, three years ago. Anyway, and I loved it when I saw it was that people are able to buy a home a lot cheaper than they would be able to closer to the beach. They have this community,


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[Assistant] To this lagoon for all different kinds of things. A lot of them you can take canoes out on and kayaks and stuff like that as well. Is use them as a place to hang, to go swimming. Uh, a lot of them will have the, uh, slides.


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[Assistant] Not like a water park, but they'll have some slides. And this is really neat as a way to create a sense of community and create a fun thing. My wife's reaction when I was so excited about this a few years ago was that it seemed so artificial to her. I don't care.


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[Assistant] We're creating something that's a great environment for people to live in at a more affordable cost and the angle I didn't think of.


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[Assistant] And he said, you know, one of the big factors and I didn't really register it till this last week is how little


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[Assistant] Homeowners insurance costs for people, because they don't have to have flood insurance, they don't have to worry about hurricanes.


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[Assistant] And I missed that as being such a big piece of the puzzle too.


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[Assistant] If you look at, uh, one of these communities in Texas, or anywhere along the Gulf Coast, you look at, uh, the entire state of Florida, you look at South Carolina and North Carolina up the East Coast,


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[Assistant] About, you know, all this debate. Are we having global warming? Not having global warming. I don't care about that. The reality is we're having more frequent storms. We're having larger claims and all the rest.


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[Assistant] And human beings adapt. We come up with ways to deal with the circumstances we're dealt. And this is that kind of example.


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[Assistant] You create people like being near water. You create the opportunity for them to be near water.


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[Assistant] Was it man-made instead of natural? Yea, but think how many...


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[Assistant] Lakes we have around the country that were also man-made, that were built from dams on rivers. So I like this kind of thing.


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[Assistant] And I know we're going to face a lot of challenges from weather changes. And the reality is human beings


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[Assistant] Relatively. Except in some of these communities, if you live, uh, lagoon front,


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[Assistant] You know, that's like, uh, that's like playing Monopoly, you know, beyond Park Place. Those lots, those are expensive.


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[Assistant] So Calvin, your employer that you recently left will send you a document written somewhat in English, lawyerese, explaining what your options are. Your options with that much money are that you can leave the money behind in the 401k you had at that old job.


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[Assistant] And that would be usually where I'd start. Especially if the 401k you had at the old, that you have at the old employer.


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[Assistant] Is managed by Vanguard or Fidelity. One of the, uh,


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[Assistant] Vanguard, the lowest cost fidelity, a low cost provider of 401k plans. I don't mean they have.


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[Assistant] From Vanguard or Fidelity, you couldn't leave it there. Uhm, if...


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[Assistant] Your, uh, plan administrator is any insurance company or any bank?


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[Assistant] The paperwork you'll receive in this kit for what's known as a trustee to trustee transfer. And I want you to move the money from that 401k, either a


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[Assistant] To your new employer's 401k, if it is, if you have one and you're eligible for it, and it is administered by Vanguard or Fidelity, you move it there,


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[Assistant] Or B, if it's not, you move it to your own IRA.


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[Assistant] To, with, uhm, Vanguard or Fidelity. So, in that Vanguard or Fidelity IRA,


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[Assistant] What I'd like you to do, you asked IRA or mutual fund.


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[Assistant] You do inside an IRA is where you own funds.


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[Assistant] And you move it over to the IRA, and then the easiest answer, you're 27.


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[Assistant] You put it in a target retirement fund for about year 2065.


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[Assistant] And target retirement funds have extremely low costs and they handle all in one fund with your 30,000 they'll allocate based on how far you are from retirement in a variety of stock fund kind of choices along with other things. And then as you age,


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[Assistant] And then later, if you end up at an employer with a good plan,


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[Assistant] I didn't realize that. As long as you don't co-mingle those IRA funds with any other IRA funds, it stays portable and it can go back into a new employer's plan.


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[Assistant] Insurance that does a number of different things. You can buy insurance that is for just.


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[Assistant] Medical overseas, but what people most often want, not as important with Europe, is a medevac that


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[Assistant] And depending on the circumstance, even back to the United States in a medical, uh, air transport, there are policies you can buy for that. So it's anywhere from one that just provides, uh, medical to one that provides


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[Assistant] Extreme medical transport and everywhere in between. So your wife, if she's on Medicare, may not have coverage.


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[Assistant] For being outside the United States. And so there are these policies you can buy. Go to Insure My Trip to kind of get a feel of this or other sites like that that are aggregators that show different types of policies from many different kinds of companies. And even see what might be available to her.


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[Assistant] Daughter, granddaughter may have health insurance that covers outside the United States. And then if they are covered, then the only question becomes one of these, uh, medevac kind of things, which is normally something people would do if they're on an adventure


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[Assistant] Uh, adventure trip somewhere not in the developed world. That's when most often people focus so heavily on having one of these medevacs.


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[Assistant] I think it stinks to high heaven and if this is the one we've received from other listeners and viewers from Citibank, classless, trashy,


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[Assistant] Action on Citibank's part. And if it's another bank that decided that imitation was the best form of flattery to copy Citibank, this stinks. Now what we were told by Citibank, this was an experiment to see if it cost them customers or if they just saved money by doing this. And this is just a terrible decision. I have no problem


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[Assistant] With Citibank, or any other institution, for new customers saying, this is our deal doing business with you. Like, you know, some of the cable monsters do. Where they say, well you sign up with us, you're gonna have to do this, this and this, you'll have to pay more.


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[Assistant] If they do that when you start as a customer, fine.


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[Assistant] It's despicable for Citibank or any other bank to do this.


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[Assistant] Your card with, if it's Citibank or whoever, we don't know the- No. I would go ahead.


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[Assistant] I just think this is low brow, low class, not the right way to treat a customer. It breaks trust. You don't change the rules in the middle of a game.


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[Assistant] So uhm, and then the alternative is if you're wishy-washy about the card you have, you use this as a signal that you're done with them and you're gonna dump it. By the way, I wouldn't be surprised if you call up and they put you with one of those customer retention specialists.


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[Assistant] And you're really serious, you're gonna dump them? That they don't turn around and say, okay, well we'd love to keep you, so we'll waive that fee for you.


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[Assistant] And any new customer say that's the deal, but leave your existing loyal customers alone. Just my opinion. So,


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[Assistant] I got something I'm really jazzed about, really excited about involving teenagers. I can't wait to share it with you straight ahead.


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[Assistant] Talk about an if then. I was having a conversation with a teenager just two days ago.


[User] Please transcribe this text

[Assistant] Who is working a part-time job while she's in college.


[User] Please transcribe this text

[Assistant] And now it's not at all unusual for a teenager to be able to get a job that pays 15 an hour and north. And this


[User] Please transcribe this text

[Assistant] Is real opportunity and it's funny how people pick up economic signals.


[User] Please transcribe this text

[Assistant] A long cycle, really a generational cycle.


[User] Please transcribe this text

[Assistant] Where a lot of teens came all the way up through high school never having a paying job.


[User] Please transcribe this text

[Assistant] Which was mind blowing for me because I grew up in an era where you worked.


[User] Please transcribe this text

[Assistant] And I grew up in a state before there was enforcement of child labor laws. I started working at a business at 11 years old.


[User] Please transcribe this text

[Assistant] You know, the last 20 years who didn't work while they were in school, it just wasn't thought about. There was so much talk about, you know, doing a year long sports and traveling teams. And when would you ever do that? And you got the school activities, all that. But I think work, not too much, but working has a lot of value and I've really come


[User] Please transcribe this text

[Assistant] Down to the side, that 15 hours a week during the school year,


[User] Please transcribe this text

[Assistant] Is the max any team should be working. And then the summer during holidays, you can work.


[User] Please transcribe this text

[Assistant] According to the U.S. Department of Labor that put out a report in the last couple of weeks is way up. Isn't it funny how pay can be a signal?


[User] Please transcribe this text

[Assistant] And suddenly people are like, that working, that sounds like a good idea. But the experience you get.


[User] Please transcribe this text

[Assistant] And the way you learn, cause when you come into a job as a teen, you're a low person on the totem pole usually. And you get to learn


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[Assistant] The right way to treat people. Cause you get some experience with people who don't treat you right, right?


[User] Please transcribe this text

[Assistant] And the other thing is jobs are plentiful enough.