[User] Please transcribe this text

[Assistant] It's better to have the money there than to migrate the money to your own IRA with the pension.


[User] Please transcribe this text

[Assistant] Depending on how uh, financially strong your employer is,


[User] Please transcribe this text

[Assistant] You usually want to receive the pension as a monthly check.


[User] Please transcribe this text

[Assistant] Instead of receiving it as a lump sum.


[User] Please transcribe this text

[Assistant] The reason is, is it takes a lot of financial pressure off of you because you don't overspend or underspend with your assets. When you're receiving that monthly pension, you're going to know you have the 4,200. You're going to have whatever you're going to get from social security.


[User] Please transcribe this text

[Assistant] And those two alone may cover much most or potentially all of your monthly expenses. So then you can relax through retirement.


[User] Please transcribe this text

[Assistant] But the pension, unlike social security, will be something that erodes in value over time. $4200 a month now.


[User] Please transcribe this text

[Assistant] Is completely different than $4200 a month five years from now or ten years from now is inflation erodes the purchasing power of that money. And then that's where the money in your 401k comes into play.


[User] Please transcribe this text

[Assistant] That it is what fills in those gaps as inflation erodes the value of the pension. But having said all that, I have two other thoughts.


[User] Please transcribe this text

[Assistant] Before you migrate to this 1% person, I want you to go pay someone an hourly rate for advice. We have information on Clark.com in our investing section on how to hire someone at an hourly rate, like you'd hire an accountant to do an evaluation of the pension.


[User] Please transcribe this text

[Assistant] And to do an evaluation of your existing 401k to give you advice that will not at all be influenced by the 1%.


[User] Please transcribe this text

[Assistant] Keeping the 401k where it is or moving it to an IRA. And I want to tell you these


[User] Please transcribe this text

[Assistant] Questions at time of retirement for someone who's been a diligent saver.


[User] Please transcribe this text

[Assistant] Need to be really focused on and taken seriously.


[User] Please transcribe this text

[Assistant] And pay for advice, pay for it because you've got one chance to make the most efficient decision for your life you can.


[User] Please transcribe this text

[Assistant] And that's why before you would decide to use, uh, someone who's charging you an asset under management fee, like the common 1%, I want you to get straight out advice from someone who has no


[User] Please transcribe this text

[Assistant] Financial incentive to get you to make a decision one way or another. Very important.


[User] Please transcribe this text

[Assistant] And I want to tell you that we get so many questions every day. Obviously we can't get to, uh, most of them in the podcast.


[User] Please transcribe this text

[Assistant] And I'm so glad that now for 31 years we've had the ability for you to get one on one free advice from our Team Clark Consumer Action Center. And they are here to serve you 30 hours each week.


[User] Please transcribe this text

[Assistant] They're back from their Christmas break and are here to serve you again. You can see how to get that one-on-one advice. Remember it's free at Clark.com slash CAC. Have a great day and remember save more, spend less and avoid getting ripped off.


[User] Please transcribe this text

[Assistant] Why the difference? By the way, I didn't necessarily set out to achieve that score. I am very cautious about credit due to learning the hard way about the problems that occur when you don't pay the balance in full each month.


[User] Please transcribe this text

[Assistant] I have one credit card and a small house mortgage. That's it. The only reason I got the credit card was because you cautioned against making debit card purchases.


[User] Please transcribe this text

[Assistant] After getting the card, I took your advice and paid the balance in full each month. I generally charge the same amount each month and I increased my line of credit once in the past four years and then by a modest amount.


[User] Please transcribe this text

[Assistant] All of these things have netted me the current high score.


[User] Please transcribe this text

[Assistant] Next question is from Jonathan in Wisconsin. We just returned from a trip to Italy. I used mainly my Chase Sapphire Preferred Credit Card since the Chase website said no foreign transaction fees. When I checked my foreign transactions on Chase's website after coming home, they were a few dollars higher than any receipts I kept.


[User] Please transcribe this text

[Assistant] I usually use tap to pay while in Europe. Did that automatically convert each transaction to dollars, which I didn't want per your advice, when I tapped to pay? If not, any idea why each charge was a few dollars higher?


[User] Please transcribe this text

[Assistant] From Dylan in Illinois, do I have too much insurance? I'm a 33 year old homeowner with a newborn. My wife and I have about 1.8 million in assets. Good for you! Including our home equity. Great.


[User] Please transcribe this text

[Assistant] $15,000 personal property insurance for wife's engagement ring and auto insurance. All of these policies cost us about $400 a month.


[User] Please transcribe this text

[Assistant] Well this explains when I did my address change at the post office, it was more of a hassle than I thought. I didn't have enough identification, paperwork, and different things to get my address changed and I didn't understand what was happening. Now I do.


[User] Please transcribe this text

[Assistant] So we have a question from Michael in Alabama.


[User] Please transcribe this text

[Assistant] My son is a full-time student. We followed your advice and added him as an authorized user to our credit card without him knowing a few years ago. He also has a Credit Karma account, which shows that he has a 766 credit score.


[User] Please transcribe this text

[Assistant] He applied today for one of your recommended student credit cards, Capital One Saver student, and he was denied. Any idea why this would happen or what can, what we can do to help him build solid credit in his final two years of college?


[User] Please transcribe this text

[Assistant] I was stunned to be greeted with a pop-up informing me that I have to change to paperless statements or after three such notices will not be able to pay city online or on the city app anymore.


[User] Please transcribe this text

[Assistant] I did not make the change in the hope that the customer outcry might get City to drop that new requirement. Please Clark, spread the message that this is a customer no service move so City might reconsider.


[User] Please transcribe this text

[Assistant] Clarkies, let us know in the comments if you're watching on YouTube if you get this pop-up.


[User] Please transcribe this text

[Assistant] Our next question is from Joel in South Carolina. It's a tip, or more of a tip than a question. Be careful with multi-factor authentication. When you set up a second factor authentication for an account, which is a great idea, always create a backup authentication method.


[User] Please transcribe this text

[Assistant] Some accounts will let you do backup codes. Others let you provide authenticator apps and email, text or phone. I recently set up a paid account with Microsoft and only set up their authenticator app, but didn't set up another method. I then replaced my phone and could not get into my account.


[User] Please transcribe this text

[Assistant] I was stuck paying for an account I could not use. I was able to get it fixed through multiple support calls, but it was a huge pain.


[User] Please transcribe this text

[Assistant] And not easy. Tip to your listeners, if you use multifactor security on your accounts, set up more than one method.


[User] Please transcribe this text

[Assistant] Great to have you here on the Clark Howard Show where our mission is to serve you with information and knowledge that empowers you to make better financial decisions in your life. One way we try to help you is through our Team Clark call in center.


[User] Please transcribe this text

[Assistant] For all the details on how to reach us, go to Clark.com slash CAC for free one-on-one advice, guidance, and information. And okay, I did fall on my head.


[User] Please transcribe this text

[Assistant] Also, I got to tell you something that Southwest Airlines is doing that is a lump of coal for people is we are in the Christmas month and


[User] Please transcribe this text

[Assistant] Let's talk about something else. Normally I tell you not to spend money. Hold onto it carefully. Be convinced of a good reason to spend it.


[User] Please transcribe this text

[Assistant] But if you have some spare funds sitting aside, I got something I'd love for you to consider doing.


[User] Please transcribe this text

[Assistant] And that is donating to our 33rd annual Clark's Christmas Kids program to help children in foster care.


[User] Please transcribe this text

[Assistant] And a lot of these kids in foster care get nothing Christmas morning except for you stepping forward.


[User] Please transcribe this text

[Assistant] I'm going to say something positive about Big Bad Cell. Thirteen months ago,


[User] Please transcribe this text

[Assistant] Zelle, which is this app that the banks love to cram down your throat.


[User] Please transcribe this text

[Assistant] Zell was the subject of high profile hearings in the U.S. Congress.


[User] Please transcribe this text

[Assistant] And there have been billions of dollars stolen from consumers through the backbone of Zelle that the architecture makes it vulnerable tied right into your checking account for scamsters to be able to separate you from your money. That's why we see all these what are called pretext


[User] Please transcribe this text

[Assistant] That, uh, that you well may be a customer of, pretend there's a problem with your account or something like that. Well, these scams have been so ugly that Zell promised


[User] Please transcribe this text

[Assistant] From what I've read, and I'm not a party to the conversation, so I just have to, uhm, trust as much as I can that the information I've read that's leaked out of various meetings


[User] Please transcribe this text

[Assistant] That there was a fight among the banks that the banks didn't want to protect consumers. Some didn't want to, some did. And they've been in this rugby scrum behind the scenes this year. Well, finally,


[User] Please transcribe this text

[Assistant] Reuters reports that the banks have now come up with protections from Zelle and lenders are now required


[User] Please transcribe this text

[Assistant] Meaning banks, to use a tool that flags transfers that have certain key risk factors to them.


[User] Please transcribe this text

[Assistant] Number one, a payment to an account that's never had a transaction on the Zelle network.


[User] Please transcribe this text

[Assistant] And they believe that will greatly reduce all these pre-texting scams where someone pretends to be from your bank or from a company you do business with or something like that. In addition,


[User] Please transcribe this text

[Assistant] When they're scammed in a pretext. When you get something that looks like it's from your bank.


[User] Please transcribe this text

[Assistant] And it says you have to do this, that or the other. There's this problem with your account. We need to have you verify your status and all that. Well, you're verifying it, not with the bank, but you're verifying it with a con artist. So now,


[User] Please transcribe this text

[Assistant] Apparently, there's going to be protections. As one of the, uhm, lobbyists for the banking industry said,


[User] Please transcribe this text

[Assistant] Quote, the banks through Zelle without regulation, without legislation, have actually proactively gone and said, we're going to make sure that we are trying to address any kind of consumer issue or harm. End quote.


[User] Please transcribe this text

[Assistant] What's called imposter fraud protections is a really really positive step. Now,


[User] Please transcribe this text

[Assistant] Is it going to work on the ground day to day with each individual bank or credit union? Are they going to honor the new Zelle requirements? We'll see. But now for the first time, you have an effective tool.


[User] Please transcribe this text

[Assistant] Where people have been subject to the imposter scams. But here's what you need to know.


[User] Please transcribe this text

[Assistant] Don't wait for these new protections to rescue you after the fact and get your money restored. Anytime you're contacted by somebody who pretends to be with government, pretends to be with some organization or business you do business with, or with your own financial institution, and they're telling you you have to do this, that, or the other,


[User] Please transcribe this text

[Assistant] Know that when you're getting that big push of a sense of urgency to do this right away, that's your automatic alert and warning that you're this close to getting scammed.


[User] Please transcribe this text

[Assistant] Don't try to rely on these new administrative protections that Zell, better late than never, has put in place.


[User] Please transcribe this text

[Assistant] I would avoid using these apps as my first line of defense. I don't.


[User] Please transcribe this text

[Assistant] My wife uses Venmo, but she set up a separate bank account at a separate financial institution and only has enough money in it for transactions she's likely to do either receiving money or sending money with Venmo. That would be the second line of defense. And the third is be your own police officer.


[User] Please transcribe this text

[Assistant] Be aware that these scams are rife.


[User] Please transcribe this text

[Assistant] I don't recommend using Zelle even or any of the apps and my oldest brother owed me some money for the third time.


[User] Please transcribe this text

[Assistant] And so I called him and I said, remember I don't use celli. I said, oh yeaah yeaah. So now, how's he paying me?


[User] Please transcribe this text

[Assistant] People had adopted, meant over the years, M-I-N-T.


[User] Please transcribe this text

[Assistant] I mean, they are, they, people are like, this was, this was a real, uhm, piece of stability in their lives where


[User] Please transcribe this text

[Assistant] Have that sense of control where so often people feel out of control with their money.


[User] Please transcribe this text

[Assistant] And so at Clark.com, we put together a guide on, uh, that we are updating right now or has just been updated. That gives a number of alternatives from ones that are free from other providers like met was or are freemium.


[User] Please transcribe this text

[Assistant] Culture, where you get a stripped down version for free.


[User] Please transcribe this text

[Assistant] Get you into their world and then maybe lure you into something that has more, uh, bells and whistles and you'll pay for it.


[User] Please transcribe this text

[Assistant] Always, I'd rather have ads. Uh, and then there are others that are just straight paying for. And the one that people have been the happiest with over the years that you have to pay for


[User] Please transcribe this text

[Assistant] Is you need a budget. Why now? That that one has really stood the test of time. And many people found superior over the years to using ment in the first place. But the transition is going to be a pain for people.


[User] Please transcribe this text

[Assistant] And I really feel badly about it. You know, the new owner of Mint has, uh, repeatedly bought enterprises and then said, well, we bought them, but now we don't like how they do business. And they've done all kinds of things that have been disruptive to people.


[User] Please transcribe this text

[Assistant] It doesn't have the depth to it of these others, so.


[User] Please transcribe this text

[Assistant] You know, they were offering most of what they do for free.


[User] Please transcribe this text

[Assistant] And when they offer something for free, they can just say, ah well.


[User] Please transcribe this text

[Assistant] Just kidding. And that's exactly what happened in this case, but you will be able to successfully transition to an alternative that I think you'll find has enough of the elements you want, maybe even more than you knew you wanted and be happy with it.


[User] Please transcribe this text

[Assistant] The worst data breach we've had ever was the Equifax data breach where, uh, I mean, you name the portfolio of dossiers on personal information on more than half of American adults.


[User] Please transcribe this text

[Assistant] Out there, still causing havoc in people's lives. And this was by far the worst event we've had with people's data that anybody's ever known about. There could be something we don't know about. And the feds, the states basically did nothing.


[User] Please transcribe this text

[Assistant] Uh, over 50% of American adults. And I think that corporate America took a signal from that, that there was no point in them spending a lot of money on data security because there were no consequences. I mean, look at T-Mobile. How many data breaches has T-Mobile had?


[User] Please transcribe this text

[Assistant] The problem is there's no, uh, requirement under the law with any teeth.


[User] Please transcribe this text

[Assistant] To improve their data security. So data security is a joke with most American corporations and that's the problem.


[User] Please transcribe this text

[Assistant] Uh, the other thing is a lot of organizations collect way too much personal information.


[User] Please transcribe this text

[Assistant] I think about with us, we repeatedly have these conversations. If people sign up for anything with us, you know, newsletter, Clark.com, Clark deals, whatever, we collect the absolute minimum information possible


[User] Please transcribe this text

[Assistant] And so that's the, because for me, it's reputational harm, in addition to whatever harm would occur to you, would happen to you.


[User] Please transcribe this text

[Assistant] And so a lot of companies don't worry about reputational harm anymore because as you said, you've gotten six of these this year and it's like, what difference does it make? You're going to get another six letters next year. And so it is a thing that has not been a priority.


[User] Please transcribe this text

[Assistant] You should absolutely, if you don't have it already, put credit freezes in place with the three major credit bureaus, which will deal with the consequences of identity theft that are the most harmful to people


[User] Please transcribe this text

[Assistant] Uh, in the most direct impact where somebody applies for credit as if they're you and then you face a fight from behind to clear that up. Credit freezes are free. If you don't know how to do it or what they do, go look at Clark.com slash credit freeze.


[User] Please transcribe this text

[Assistant] You know, we just had that conversation and Lane and I, my wife and I were in the kitchen doing the dishes and I'm bringing them in from the dining room table.


[User] Please transcribe this text

[Assistant] We had company over and I was washing the dishes. And so I put them straight in the dishwasher.


[User] Please transcribe this text

[Assistant] So this, this battle of the sexes in our house is never going to be resolved. Uhm, okay, so first of all,


[User] Please transcribe this text

[Assistant] Uh, with new construction, I would take the risk with the $2,500.


[User] Please transcribe this text

[Assistant] Initial deposit to the builder that's non-refundable if you later don't go through with it. It's such a small amount versus a $470,000 townhouse. Take the risk with if you later decide to forfeit the deposit, you forfeit it.


[User] Please transcribe this text

[Assistant] On that property, because I assume that's what you mean by investment. You're gonna rent out this townhouse. What rent can you earn versus the monthly carry on it?


[User] Please transcribe this text

[Assistant] That the value of it from 470 is going to go up from here. It could go down or more likely scenario.


[User] Please transcribe this text

[Assistant] Housing prices remain sluggish for a number of years to come. So I would really think through


[User] Please transcribe this text

[Assistant] The numbers on this purchase before you move forward. Back to your original question. You said HELOC or 401k. I would say a third thing.


[User] Please transcribe this text

[Assistant] You go to a credit union, if you're not a member of a credit union already.


[User] Please transcribe this text

[Assistant] You would use rents from your tenant to pay off that five-year home equity loan over the next 60 months because it has a fixed rate. The HELOC is a floating rate.


[User] Please transcribe this text

[Assistant] And I prefer particularly with an investment property because even though there's a possibility interest rates go down, probability, possibly, I believe they're going to go down. What if they don't? What if they go the other way and you have a floating rate on that money you need to borrow for a down payment?


[User] Please transcribe this text

[Assistant] That was a lot to say, wasn't it? So anyway, I do believe that the housing market


[User] Please transcribe this text

[Assistant] Is, is people's incomes will go up over the next many years. Housing prices normally trend up with the cost of living plus maybe a percent and a half.


[User] Please transcribe this text

[Assistant] But in recent years they went up way more than the overall cost of living. And so ultimately you have a correction because you have to get back to where it's affordable for people to buy a home. Otherwise you end up like we are now with so many people on buyer strike. So that's why when I'm being asked by people,


[User] Please transcribe this text

[Assistant] You know, home prices went up so much from 2012 to now, and particularly the last four or five years. That's not what I'm expecting as we look forward.


[User] Please transcribe this text

[Assistant] And that's why buying an investment property at today's prices is a question mark, not necessarily a great decision. A lot of the companies that were buying Wall Street enterprises, they were buying bulk buying homes to rent out


[User] Please transcribe this text

[Assistant] Now we're kind of sitting there and they're not buying inventory in any meaningful numbers now because the numbers don't work for them.


[User] Please transcribe this text

[Assistant] I'd use that as guidance to know that the numbers may or may not work for you on owning that investment townhouse. May work out fine, it's just more risk than it would have been in the past. So coming up ahead,


[User] Please transcribe this text

[Assistant] I wanna talk about, uh, the devaluation of frequent flyer miles, hotel stay points, you name it.


[User] Please transcribe this text

[Assistant] The value of travel points from various providers, especially hotels, airlines,


[User] Please transcribe this text

[Assistant] With these points and having a lot of points in your account.


[User] Please transcribe this text

[Assistant] Is an opportunity cost, because those points,


[User] Please transcribe this text

[Assistant] Are becoming worth less and less. I want to give you an example. Southwest points.


[User] Please transcribe this text

[Assistant] Which generally have been a better deal than the ones from the three full-fare airlines of, uh, American United and Delta.


[User] Please transcribe this text

[Assistant] Then they were worth like 1.3 and then 1.2 and starting in January they're gonna be worth...


[User] Please transcribe this text

[Assistant] So if you have a Southwest Airlines credit card and you're earning those points,


[User] Please transcribe this text

[Assistant] What you get for those points is worth less and less. Uhm, several of the full fair airlines, you're now earning less than one cent value per point you have a mile, whatever they call it. And with hotels,


[User] Please transcribe this text

[Assistant] You're earning somewhere around seven tenths of a cent or less for those hotel points. I mean, it's just...


[User] Please transcribe this text

[Assistant] With the devaluation of travel points. So, you're paying an annual fee


[User] Please transcribe this text

[Assistant] For these, uh, airline tie-in cards, hotel tie-in cards, they've got very high annual fees. And so, do you know that for the airlines,


[User] Please transcribe this text

[Assistant] A lot of them lose money flying passengers in a typical week or month and they make all their profit.


[User] Please transcribe this text

[Assistant] From the credit card partner they have for frequent flyer points.


[User] Please transcribe this text

[Assistant] And you and I have been like fish with hook and mouth being reeled in. So a couple of things.


[User] Please transcribe this text

[Assistant] Unless you fly an airline or stay in a hotel over and over again.


[User] Please transcribe this text

[Assistant] And the real value of the tie-in with the cards is status or with an airline free baggage, uh, instead of having to pay baggage fees or potential possible for an upgrade once in a blue moon, whatever that it would be. Unless there's a tie-in that really makes it work, you shouldn't have the cards. So in my case, I fly a lot, about 30 weeks a year.


[User] Please transcribe this text

[Assistant] And I have the Southwest Rapid Rewards Credit Card.


[User] Please transcribe this text

[Assistant] And I'm not getting rid of it with the devaluation down to 1.1.


[User] Please transcribe this text

[Assistant] 1.15 cents per mile or point. I'm keeping it. And why would I keep it?


[User] Please transcribe this text

[Assistant] Because for the last 18 years, next year will be 19 years.


[User] Please transcribe this text

[Assistant] All year long that companion flies for nothing with you.


[User] Please transcribe this text

[Assistant] And it's not a limited number of seats. They, you book your ticket, you book them with you for nothing. So that made it worth it for me.


[User] Please transcribe this text

[Assistant] But if it was just for the points, no way, not any day. For most people, unless you travel a lot,


[User] Please transcribe this text

[Assistant] About 7 tenths of a cent to southwest is pretty much at the high end at 1.1 cents per mile, even with the devaluation. If you have southwest points, you can book


[User] Please transcribe this text

[Assistant] Travel in next year, this year, and you book at the old redemption rate of roughly 1.3 cents a mile.


[User] Please transcribe this text

[Assistant] And that's worth something. That'll save you some money. Particularly if you do it when Southwest is running a sale on tickets for 24 this month, which almost certainly they'll do at some point in December.


[User] Please transcribe this text

[Assistant] You want to book that travel then on the sale fairs because you're getting this year's redemption rate on points and you're getting the point redemption based on a sale fair.


[User] Please transcribe this text

[Assistant] So if you do want travel cards though, and you don't travel a lot on a particular airline, my advice still stands.


[User] Please transcribe this text

[Assistant] Uh, Capital One Venture Series or the Chase Sapphire Series. Either of those. It's better to be a free agent in the travel world than be tied into a particular provider.


[User] Please transcribe this text

[Assistant] Krista? This question? Do you want to share with people how useful you found your Marriott? Uh. Bonvoy points to be?


[User] Please transcribe this text

[Assistant] Yes, yes. You keep the money in your savings and let it continue. Hopefully you're earning 5 plus percent right now in your savings if you're not.


[User] Please transcribe this text

[Assistant] Move your savings somewhere else, and the, the mortgage escrow shortage letter you're getting, there's a plague of these going around.


[User] Please transcribe this text

[Assistant] Because of increasing in markets in the United States where values for taxes are reset every one to three years. People are seeing their property taxes go up and then as we talked about over and over again,


[User] Please transcribe this text

[Assistant] So many questions we've had from people with their homeowners insurance costs going up. So escrow shortages are a very common thing right now and paying is agreed.


[User] Please transcribe this text

[Assistant] Uh, next year is better than you giving them the lump sum.


[User] Please transcribe this text

[Assistant] But it is considered to be ethical and reasonable under the law that if there is a clerical error and the price of something is listed incorrectly, we were just talking about airline tickets a minute ago. This has been a big issue in the airline industry, retail as well, obviously.


[User] Please transcribe this text

[Assistant] When there is a clerical error, they are allowed to say,


[User] Please transcribe this text

[Assistant] Nope. I had this happen years ago on a Black Friday computer purchase that I bought online.


[User] Please transcribe this text

[Assistant] And then it didn't come, didn't come, and then it canceled. They said, this was a clerical error. This was a, uh,


[User] Please transcribe this text

[Assistant] An error by our ad agency and so we're gonna give you a $20 goodwill credit towards a future purchase instead of the laptop. And they were, they were within their rights to say that because if it's, if it's clearly an obvious circumstance of an error that was done procedural, clerical, whatever,


[User] Please transcribe this text

[Assistant] They can actually do it. The question always is, is it a good decision to do that?


[User] Please transcribe this text

[Assistant] Well Carson, uhm, I'm just glad that you listen and that you're happy to listen and you don't feel like your parents are being, uh, mean-spirited or abusive towards you, making you listen to our podcast. But your parents are right in this case.


[User] Please transcribe this text

[Assistant] With the SUV. And again, congratulations to you.


[User] Please transcribe this text

[Assistant] I'm saving the thousand in the Roth and I wish your aunt a full recovery from her illness. So here's why your parents are right and the rest of the family members are right to rent the two SUVs or minivans, minivans I think you said.


[User] Please transcribe this text

[Assistant] Because if you consider the depreciation of a vehicle per mile, the cost of actually operating it


[User] Please transcribe this text

[Assistant] Ensuring it, uh, the maintenance that comes sooner because of putting what would likely be as much as three thousand miles.


[User] Please transcribe this text

[Assistant] On those minivans going from Wisconsin to Florida and back.


[User] Please transcribe this text

[Assistant] It's a smart decision to pay the thousand dollars each to rent them, be able to put the miles on the rental company's fleet.


[User] Please transcribe this text

[Assistant] Instead of your own cars, your own vehicles, your own SUVs, whatever. And so, uh, your parents are right. Their relatives are right.


[User] Please transcribe this text

[Assistant] And I hope you have a good trip to Florida and tell your aunt, I wish her a full and complete recovery and keep saving money in your Roth IRA. I'm glad you're working already at 12 years old.


[User] Please transcribe this text

[Assistant] That's a great thing because that's how you were able to do a Roth. Keep it up because that money today will make you wealthy down the road. It's not just possible. It's pretty much guaranteed.


[User] Please transcribe this text

[Assistant] And I want to thank you so much for joining us today. Do we have a Clarkie today? We do.


[User] Please transcribe this text

[Assistant] No, it was automatically in my head, but you realize I was back to back Wisconsin. I know, I know. Yeah. And why you didn't meet at Culver's, I just don't understand your coffee shop. But anyway,


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[Assistant] I've had, okay, so I had to give a correction. I have had, I've never had a cup of coffee in my life, but I've had coffee ice cream.


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[Assistant] So I have had the sense of a coffee bean.


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[Assistant] And so, do you know the mean trick that my family played on me once?


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[Assistant] A coffee, a chocolate covered coffee bean. And the raisenets.


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[Assistant] Can you imagine you pop those in your mouth and suddenly those coffee bean things, those coffee bean kind of candies.


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[Assistant] Spit it out, brush my teeth, and it was still there. So I guess I have tasted a cold.


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[Assistant] Well, have a wonderful day and we look forward to being with you tomorrow. And I hope that you'll come up with some strategy now, not in January, for taking control of every dollar in your life.


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[Assistant] It's my pleasure to welcome you here to the Clark Howard Show. Our mission is to serve you with knowledge so you are empowered to make better financial decisions in your life. One decision I hope you've made is to


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[Assistant] Subscribe to this podcast and our free newsletters at Clark.com slash newsletters today. I had a question for you. Do you use autopay for credit cards? It can be a good thing or it can be a bad thing. I'm going to tell you how to know the difference also.


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[Assistant] There's so much talk about AI taking jobs, and at the same time, the job market is still crazy strong in the United States, even with the Federal Reserve trying to create unemployment. The job market's staying strong.


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[Assistant] So what are the areas where jobs are really, really going well?


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[Assistant] In spite of or because of AI, we're going to talk about that. Right now, we're going to talk about


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[Assistant] Credit cards and the questions I've had from people over time.


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[Assistant] About whether it's a good idea or a bad idea to set up auto pay on your credit cards.


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[Assistant] So it all depends on how your bank behaves.


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[Assistant] Here's why. The advantage of auto pay.


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[Assistant] Is, as I've shared with you in the past, the number one factor


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[Assistant] On your credit score. Number one is that you pay every bill you get every month on time and things will happen, particularly summertime and at Christmas patterns are broken and people just overlook a bill and they don't pay it. And then that just demolishes your credit reputation, credit standing.


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[Assistant] And so if you call a credit card company, you say, Oh, I had the money. I just forgot.


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[Assistant] They'll say, well, nothing we can do about it, but if you'd set up autopay, you're not going to have to worry about that.


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[Assistant] So auto pay is a way to make sure you're in the clear.


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[Assistant] Is potentially great, particularly for the segment of people who pay their bills in full every month, but who could eat up their credit standing by overlooking a bill.


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[Assistant] Doing auto pay is fine or you could be like my wife who pays all our bills now and she's, she says she's analog and she has this big binder.


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[Assistant] And she, for every credit card she's got this thing, well, you know, that one's due this day and blah, blah, blah. And she writes down that it's been paid.


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[Assistant] And so there's never a doubt that something was paid when it was supposed to be.


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[Assistant] By doing it that way and that's where she's comfortable with paper and then she goes online and pays it.


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[Assistant] But she could just as easily because we do pay our credit cards in full every month. Set up autopay.


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[Assistant] And have them automatically pay in full.


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[Assistant] A lot of companies do that who have company cards where they make sure that the credit cards are paid every month.


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[Assistant] But where people are getting burned, new report from the Consumer Financial Protection Bureau is credit card companies with people that don't pay their balances in full.


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[Assistant] Are making the payments required ultra small that auto pay and people are paying


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[Assistant] Much more interest and running balances much longer and bigger balances by setting up autopay


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[Assistant] With a number of credit cards. I saw another story in the wall street journal.


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[Assistant] About how this is a big profit center for the banks.


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[Assistant] Because of the money they're making with the small


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[Assistant] Minimum payments that they're taking out by auto pay.


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[Assistant] Now with many of the auto pay systems, you can set it up where you're, if you can't pay your balance in full, but you can set it up where you're paying more than what that minimum is.


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[Assistant] That the, that you're being manipulated by the bank.


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[Assistant] So they can score more of this massive interest they're charging on credit cards. So auto pay


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[Assistant] Is not necessarily one thing or another. It's not necessarily a no brainer great thing to do with your credit card bills. At the same time, it can be


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[Assistant] Really a good thing to do. It all depends on how you use it. And again, the ethics of the bank that you're doing the auto pay on a credit card with.


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[Assistant] And with other things, let me name some other things. So many of us live in apartments, a third of us. Setting up your apartment rent to pay auto with them is a great idea because if


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[Assistant] You forget to pay the rent on time or you're traveling or whatever the,


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[Assistant] Late fees are so gigantic on an apartment doing that. If you live in a condominium setting up where you pay


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[Assistant] The condo fees automatic because the late fees on a condo association do association dues so extremely high. So auto pay works fine there. So using auto pay as a tool can be effective and more and more


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[Assistant] It's how people are doing things as they get billed electronically and they pay by autopay. But one thing you better not forget, check the bills, check the statement because when it's on auto, you may not be checking them and you may be paying for something you shouldn't be paying for Krista.


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[Assistant] I would think of PayPal being the equivalent of like a bank or credit union and you have to give it to them.


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[Assistant] The law that Congress passed requiring this reporting by the various payment services at $600 or more as a threshold was really dumb. I don't know what they were thinking and Congress needs to repeal that


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[Assistant] And put in a much higher threshold. The whole idea is to capture


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[Assistant] Taxes from people who are running a side business.


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[Assistant] Who are not paying taxes as they, as they are required to on the net profits of the business. And that's why the whole reporting thing, obviously it's ridiculous to have set the level at $600. Maybe it's 5,000, 10,000, something like that, where then the only people you would, you would have getting


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[Assistant] The tax notices would be people who actually are running some kind of side business. You're fine selling your iPhone. Even if it's reported, there's going to be no tax due because you're selling it. You're selling it for less than you paid for it. Therefore there's no profit, nothing to worry about. It's just extra hassle.


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[Assistant] That was lame when Congress came up with this requirement.


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[Assistant] So just so you know, we've had this, this competition going on because I went on and on about how brave firefighters are. And then it caused this trigger from police officers saying, wait, why are you talking about them and not talking about us? And so it's sometimes playful, sometimes not this case playful. All right. So Steven, you obviously have an enormous work ethic because you are in a position when you retire to have sufficient resources


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[Assistant] To live the rest of your life, probably without working with that firefighter pension and the money you've saved.


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[Assistant] But you want to get right back into it and get working again. Do not buy a franchise anytime soon. First, take a little bit of time for yourself. Enjoy yourself.


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[Assistant] You have worked hard. You have gone into burning buildings voluntarily. Uhm, take some time.


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[Assistant] Three months, six months, a year, whatever. Just take that time for yourself. You earned it. Second,


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[Assistant] Don't want you buying a franchise with your 457 B money. Third,


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[Assistant] When you decide that you're ready to consider buying a franchise, know my rule, you don't go in to buy that franchise, you go work


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[Assistant] In a franchise location as an employee doing anything.


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[Assistant] Say, you know, I'm a retired firefighter. I want to do something else. And you go work there. Whatever it is you'd be doing at that franchise. Don't mention even the hint that you're thinking you might want to own one. Go work in one for


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[Assistant] You'll know with the questions to ask, you'll know the ups and the downs of that franchise completely different than the whole sales pitch. The next thing is you don't take.


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[Assistant] The money that you've so diligently saved in that 457B and use it to buy a franchise. You actually do if you need to borrow the money to start that business. If later, uh, let's say the business does not work out and you have debts from it, then


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[Assistant] That would be the point at which you might take money from the 457 and pay it off, but definitely not upfront and take your time.


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[Assistant] Sadie, I'm glad that everything with your move went well other than this and the problem with the...


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[Assistant] The retroactive bill for gas, something comes up continually. We hear that repeatedly, not just with one way rental trucks. We hear it with rental cars all the time. You name it. Um, what I do, I always get


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[Assistant] The gas receipt at the gas station. Inevitably when you fill up near an airport, they're out of paper in the pump. I then have to go inside and get the paper receipt. Uhm, you should be able to look online if you paid with a credit card or even a debit card and find the charge or the, the, the purchase if it's a debit card.


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[Assistant] And be able to provide proof to the one-way rental truck company that you did in fact purchase that fuel.


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[Assistant] I always take a picture of the fuel gauge when I return a vehicle. Recently, I was going through deleting photos on my phone. I had so many pictures.


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[Assistant] Uh, fuel gauges, one after another after another.


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[Assistant] That I was enough time out that I could delete. It was funny that I had so many of them. So your advice to others, so valuable. And yes, I shoot that video with the outside of a vehicle.


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[Assistant] Car, truck, whatever, when I return it so that there's no doubt the condition I returned it in.


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[Assistant] When Krista went through a phase, you moved from house to house to house to house to house. Krista, when she'd move,


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[Assistant] Within, I don't think she slept for like 36 hours.


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[Assistant] The entire house, everything would be put away.


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[Assistant] No unpacked boxes anywhere all in a day and a half. I don't know how you ever did that.


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[Assistant] Well see, when you can turn disorder into a benefit, that's always great, right?


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[Assistant] Okay. Not saying you have anxiety. No, I do.


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[Assistant] That's good. All right. Coming up ahead, I promised earlier.


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[Assistant] You know all this talk about how AI is going to destroy the job market and all that. All that changes is the nature of jobs. That's no comfort to you if the job you have is one that AI takes away.


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[Assistant] The, this list with you, because I want you to think wider. I don't want you to look at change as always being a negative.


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[Assistant] Change often brings about great things for us, society, and the world.


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[Assistant] You know, it's pretty much an article of faith that the jobs that exist today, you look 20 years out, 70% of those jobs will not exist.


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[Assistant] There are people who like, well this is what I do, this is what I'm gonna do, and that settles it. But that's not life.


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[Assistant] Life changes constantly in so many different ways. And the job market, certainly that.


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[Assistant] So I saw a list in a Business Insider column of what are the job categories


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[Assistant] Number one growth job in the United States.


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[Assistant] Overall being a software developer, something I could not do.


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[Assistant] But I know several people who have kids that doing software development is something they're attracted to and something that they want to study and do. Typically it does require a bachelor's degree to get a good job as a software developer. And the typical wage is around 130,000 a year. That's typical.


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[Assistant] Second category that's big growth moving forward being what's called a financial manager. There's so many people needed in this profession and the average age of people


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[Assistant] Who work as financial managers has gotten really, really, really old.


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[Assistant] And it's a real opportunity for people that are younger because it's a fast growing area is we are required to make decisions


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[Assistant] That people in prior generations did not have to make about money.


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[Assistant] Median or average typical wage, 140 grand a year. Typical education, a bachelor's.


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[Assistant] I find this interesting, you're going to hear this pattern as I go through, as I've looked through this list.


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[Assistant] People are really down on college overall.


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[Assistant] But the jobs that are out there that are fast growing and pay well, so many of them require college and so many are in the healthcare field. The third one in healthcare is health services managers and


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[Assistant] Big gain in employment over the next decade, average wage about 105,000 a year, bachelor's degree again. The next operations managers for companies, big gains in employment, meet average wage just under a hundred grand bachelor's degree again and fifth fastest growing field medical again.


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[Assistant] Average wage, about 125,000. That requires a master's degree. And,


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[Assistant] Registered nurses comes in sixth for growth.


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[Assistant] And bachelor's degree required in most cases for being an RN and typical average wage around 85,000. And I could go on and on, but the point is I've got healthcare, then computer again, data scientists again, related to computing average wage over a hundred grand bachelor's degree.


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[Assistant] Over and over again, bachelor's degree, information security analysts. I make more about 115,000 a year, big gains coming. So the general trend is that anything involved directly or tangentially to data processing, computers, whatever programming, big job growth moving forward.


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[Assistant] And really good pay. Healthcare with an aging society. Big area of growth. Good wages.


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[Assistant] In healthcare generally, not every job in healthcare.


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[Assistant] And one field that is desperate for workers and I'm going to stop at 13.


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[Assistant] Because a lot of people consider it to be the unlucky 13.


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[Assistant] People do not want to go into accounting.


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[Assistant] Accountants are desperately needed in the marketplace.


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[Assistant] If accounting is something you are interested in, generally requires a bachelor's.


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[Assistant] Accountants are very, very, very much needed and short staffed. And this is an area that is one of those things like that sounds as dull as watching paint dry.


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[Assistant] Unless you like watching paint dry and then accounting sounds great. No, it's a great career field for the right individual and the demand, the need for you is huge. Krista.


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[Assistant] So, isn't it just rich that Congress required that private employers keep dependence on healthcare plans till 26, but the government didn't require that of itself.


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[Assistant] The good news, Ed, is that, uh, for


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[Assistant] Your child who's turning 23 in just a few months, she is going to be able to buy at extremely low cost, if not free of monthly premiums, an individual healthcare plan at healthcare.gov. Um, Congress passed during COVID.


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[Assistant] Statute that continues, I think through 25 that allows people to buy individual health plans.


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[Assistant] That based on their income and as a student, the income would be obviously very low that she will be able to buy a plan, maybe


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[Assistant] At no monthly premium or extremely tiny monthly premium.


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[Assistant] On healthcare.gov. Shouldn't need to look yet. The premiums aren't established for next year. Should want to look in January.


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[Assistant] With the change in status coming in February that she gets tossed off your plan and the good thing about it is


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[Assistant] When you have a change of status situation like your daughter,


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[Assistant] It can be at any time of the year that you enroll in healthcare.gov. It doesn't have to be.


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[Assistant] For January to December of a year.


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[Assistant] So I'd say you have your priorities in the right order. You absolutely want to fund your HSA in full and congratulations on getting your PhD and doing the Roth, putting the max in it.


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[Assistant] And I don't know what kind of income you're going to be earning if you're going to earn enough.


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[Assistant] With your level of education that you might be ineligible to do a Roth at some point because


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[Assistant] If you're an employer offers a 401k and you're eligible for it and you


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[Assistant] Go beyond the threshold of income eligibility for Roth.


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[Assistant] Even though you don't want to contribute to the 401k, you would still be ineligible for the Roth. That's not an issue. Do the Roth. Pay on the student loans and as you can afford to.


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[Assistant] I think it's a good idea even without the employer badge to contribute to the employer 401k when you can afford it.


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[Assistant] And by good company, what that means is that it's a low cost 401k plan provider. If it's a high cost provider, anything that's a bank based plan, an insurance company,


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[Assistant] It's going to be very important. That's wonderful you're getting it. It's going to be very important that you are diversified away.


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[Assistant] And have money in things like the Target Retirement Fund.


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[Assistant] A Roth IRA, if you end up participating in the 401k.


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[Assistant] And the target retirement fund kind of choice so that you're well diversified and not so heavily.


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[Assistant] With your future based on what happens with the company stock.


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[Assistant] Yeah, and first of all, why you're with one of the four giant monster megabanks, that's a conversation for another day. Get away from them.


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[Assistant] They will just, they'll just as they'll rip off your kids, they rip you off every day doing your banking with one of the four giant monster mega banks.


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[Assistant] Uhm, having said that, for these, uh, Coogan accounts, there are, the whole idea of this was where parents would take advantage of a child actor.


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[Assistant] And the child would work really hard acting as a minor instead of acting up as a minor and all of the money would be gone when they reached adulthood because the parents blew it. The idea of these required trust is that at least a portion of the money a kid earns is sheltered away from


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[Assistant] Where parents could take advantage of it. That's the idea. And so there's a lot of


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[Assistant] Compliance that the financial institutions have to live up to.


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[Assistant] In order to offer these accounts, there are credit unions that do this and uh,


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[Assistant] You can go to a credit union to do so. There are also, uh, financial planners that specialize in serving the acting community.


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[Assistant] And offer compliant plans for this. If the goal was to invest.


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[Assistant] Finding a fiduciary fee only financial planner who will charge you fees for managing this for your kids, but will invest as you wish in index funds for the kids.


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[Assistant] Would be a great choice. Index funds would be a very appropriate choice for this with very young children to give them time in the market for that money to grow.


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[Assistant] Having it in one of the giant banks, they're gonna have no more money, maybe less.


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[Assistant] When they reach adulthood and what they put into the plans.


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[Assistant] And congratulations to them because it's a really hard business to be in and they've made it work.


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[Assistant] Yeah, there are, I mean, if you look with, uh, Dr. Google or whatever search engine you look and you put in, uh, looking for


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[Assistant] Well, usually it's going to be an actor-based, actor-oriented credit union. Normal credit unions not going to have...


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[Assistant] You did see? I did. When I looked through something. I'm surprised. I'm surprised. See, you always teach me stuff.


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[Assistant] So if you have a question that's very specific,


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[Assistant] And you've got a problem, you need advice, you need guidance. You know, we provide that for free. 30 hours each week.


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[Assistant] At our Team Clark Consumer Action Center, where you can get that free one on one advice.


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[Assistant] And if you want to know how to do it, how to get that advice, go to Clark.com slash CAC. And what we're all about is giving you ways to save more, spend less, and avoid getting ripped off. Have a great rest of your day.


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[Assistant] Definitely question me. Question everyone. I believe in that.


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[Assistant] She says, but don't worry, I do go back during the day to catch up on what I missed. And I know my family gets tired of me saying, but Clark says all the time, I've benefited in so many ways as I'm avid about travel and savings. You mentioned a few days ago about the benefits of laddering CDs on Schwab.


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[Assistant] Find that if I put non-callable in my search, the rates go down significantly. Should I not be avoiding the callable CDs?


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[Assistant] Sean in Virginia says, Clark, you spoke about the need for Congress to challenge the ticket sellers oligopoly.


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[Assistant] Why isn't something, isn't this something the Federal Trade Commission could take on instead of the expensive lawsuits against tech giants that the FTC has pursued with very limited success?


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[Assistant] Frank in New York says my car was recently hit by another driver while I was parking in a parking lot.


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[Assistant] The insurance company is giving me the option to receive a paper check.


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[Assistant] Or have the payment direct deposited to a debit card.


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[Assistant] Any risk with the direct deposit or should I just wait for the paper check?


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[Assistant] It's like, you get, supposedly you'll get a driver sooner, and you'll have priority and stuff, and I have-


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[Assistant] Yes, and I have a perfect rating on Lyft and Uber, but I-


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[Assistant] I checked my Lyft and I checked Lyft and we were taking these drives and Lyft was definitely consistently more expensive at least on this last trip to Boston.


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[Assistant] And the same thing happened to me. I never had someone not change, so I would cancel the ride and my daughter...


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[Assistant] Would use her Uber because she uses Uber a lot and it was cheaper and faster like to get there and I talked to my Uber driver.


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[Assistant] On the way to the airport and he said that definitely for him, he makes a lot more right now with Uber and in the past when I talked to Lyft drivers, you know, a few years ago, they said it was like 30% more than Uber.


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[Assistant] And so there's definitely some incentives, at least in Boston, that Uber is offering. And I think that's why some of these people cancel the rides because maybe they're driving for both and they get an option to drive with Uber.


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[Assistant] All year long, I saved the Sam's Club cash accumulate from my Sam's MasterCard with my Sam's Plus membership.


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[Assistant] Then at the end of the year around November, I go into SAMS and cash it out.


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[Assistant] This year I'm expecting about $600 to $650 in cash back. That covers all that I need to spend on holiday gift giving. I also use the Upside app for gas and dining.


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[Assistant] And we'll have about $75 from that app to have actual cash sent to me.


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[Assistant] Fetch is another app I use and I can trade my points in for gift cards for people.


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[Assistant] I love your show and even have gotten my 82 year old dad listening to it too. Huge shout out to him, Marv in Iowa.


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[Assistant] You did have an update on the Christmas shopping because we talked about that before there was new information about manufacturers discounting.


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[Assistant] Wendy North Carolina says not a question or complaint, but I want to thank Clark for his info about discount cell phone service. I don't think I've been living under a rock, but I've never heard of Visible before the podcast.


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[Assistant] Switching from, from a big company is saving me over $700 a year. Maybe small potatoes to some, but every dollar counts to this soon to be retired teacher.


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[Assistant] And shout out to Dallas Cox, the amazing, amazing writer on Clark.com.


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[Assistant] Stephanie in Ohio says, my daughter is starting graduate school in January and needs a car.


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[Assistant] Her school was paid for, but should she take out a car loan or a school loan to pay for the car? If a school loan, what is the best place to get a graduate school loan?


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[Assistant] I'm so happy that I caught Clark stinking it up because I finally get to submit a Clark Stinks. In a recent episode, someone asked about contributing to their Costco employee stock purchase plan.


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[Assistant] Clark correctly identified the risk around owning too much company stock, but did not mention


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[Assistant] That many stock purchase plans offer their employees the ability to purchase the stock at a discount.


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[Assistant] This discount means that when the stock purchase happens, the employee will see an immediate gain in the shares


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[Assistant] And depending on what the price locks in, where the price locks in.


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[Assistant] The realized gain could be as much more than the upfront discount.


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[Assistant] For example, my company offers a 15% discount


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[Assistant] But due to our plan details, I regularly see a 30 to 40% gain.


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[Assistant] When the purchase happens, depending on the purchase plan details, it could be a good idea to contribute to the plan and then diversify once the purchase happens to take advantage. Sunny.


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[Assistant] Clark, you definitely don't stink, but I wonder if you have a double standard. You always mention that a used car buyer should get their perspective purchase inspected by an independent mechanic to see if the car is good before it's purchased.


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[Assistant] However, you were selling your car or vehicle as you like to say, if you were.


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[Assistant] Selling your car to an individual. Would you be happy handing over the keys for that person to take your car to a mechanic?


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[Assistant] What if the person takes your car on a joyride and causes damage or what if they don't come back?


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[Assistant] I think that's a big risk to take as a seller of a car, Katherine.


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[Assistant] A recent question asked the best option for renting a car in Italy. Specifically, they were going to Rome, Naples and Pompeii.


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[Assistant] The advice was somewhat okay, but you didn't serve them as well as you could have.


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[Assistant] There's no need to rent a car at all. All of these three places mentioned are connected to the high speed train line. You can get to them faster on the train, it's more comfortable, and you don't have to pay for gas or parking.


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[Assistant] Not to mention all the time it takes in all three places it takes to find parking. I know, I live in Italy.


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[Assistant] The only time you would need a car is if you're going to the far south, uhm, and it's pronounced in Calabria or Puglia.


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[Assistant] Otherwise, the rest of the country has amazing train connections which are far cheaper than driving. Thanks for all you do, Ken.


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[Assistant] Wow, did Clark take a job cleaning portable toilets or something? In a segment expressing- I did!


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[Assistant] Expressing concern about how AI could be used to fake his endorsement of junk products like variable annuities or extended warranties.


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[Assistant] Clark did most of the work himself by providing clean sound bites of him saying the things he would never say.


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[Assistant] In all seriousness, I think you should go back and edit those hypothetical statements out of your podcast and recordings. Now all AI has to do is fake you saying the name of the fraudulent products because you've done the hard part for them. David.


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[Assistant] Clark stinks worse than a hockey bag left in the garage in the summer.


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[Assistant] You said that Buy Now Pay Later is a horrible credit product. Compared to what?


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[Assistant] How do credit cards get a free pass when their users who pay off their cards every month are called deadbeats by the issuing banks?


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[Assistant] Watch this quick clip and see that not all of these products are created equally and they sent a link.


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[Assistant] Shame on you, Clark. Do your homework before labeling all of anything as bad. I love the podcast. You've been a fan for a long time and will continue in spite of your human frailties. John.


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[Assistant] You brought the fact that insurance premiums have skyrocketed lately and you immediately defended the companies by trying to explain and justify why they need to raise their premiums. I understand as to why this could happen.


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[Assistant] But what about the money they spend on advertising? They're everywhere competing with each other for new customers.


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[Assistant] Practically every other commercial on TV has to do with insurance.


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[Assistant] Shouldn't there be some control as to how much they can spend for advertising? I know we're capitalists as a whole, but this is really getting out of hand.


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[Assistant] I've never had to file a claim, knock on wood, but every year my premiums go up, I feel that all I'm doing is funding their advertising budget.


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[Assistant] You should also take into account how much money is spent on marketing.


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[Assistant] I know you don't watch much TV, but you should notice while you're watching your football games, right?


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[Assistant] Go Jets, Jets, Jets, well they spell it J-E-T-S, Jets, Jets, Jets, Omar.


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[Assistant] You give great advice normally. I took your advice about low-cost providers on retirement accounts only to find out from my accountant that if your employer offers one and you elect not to use it, you lose a ton of the tax advantages.


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[Assistant] Please make sure to share all the details in the future because it costs me and my family this tax year. Otherwise, love what you do, Edward.


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[Assistant] I'm guessing that they didn't participate in their company's 401k, and so the- OH!


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[Assistant] I'm looking for your opinion on the vehicle battery life of my car and the current resell opportunity.


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[Assistant] We've been considering a new Tesla anyway because I am unsure of the vehicle, really the battery life of a Tesla. Also, it seems like the computer system is not as efficient as it once was with slow startup times for the car.


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[Assistant] Debbie in Oregon says, I have loved your show for years. I'm currently being bombarded with text, email and phone calls from a scammer claiming I applied for a credit with Bank of America.


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[Assistant] I've never used Bank of America, I'm with a local credit union. I've ignored, deleted, or blocked every attempt to contact me.


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[Assistant] I froze my credit about seven years ago. Am I safe as is or is there something more I can do to stop their attempts? Also, I wanted to tell you I grew up with a very frugal father.


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[Assistant] My family owns four cars ranging from a 2001 to 2013.


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[Assistant] We paid cash for all, even the two we bought brand new in 06 and 07.


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[Assistant] My college age son says we should own a car from this century, but I cannot justify replacing a reliable car just for fun.


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[Assistant] We bought the 06 Sienna when he was a baby and it's still going strong.


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[Assistant] Andrew in Alaska says about a month ago I submitted a dispute on my credit card for a fraudulent charge for a hotel in California


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[Assistant] The amount was nearly $500 and there were two other charges of $6 and $8 that I also disputed. They issued me a new card and I received a conditional credit for the smaller charges, but for the bigger charge there's been no movement whatsoever.


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[Assistant] I've contacted customer no service three times and was told to be patient as I've never submitted a fraud dispute on a credit card.


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[Assistant] How patient should I be? Is the issue required to act on this and resolve it within a certain time frame?


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[Assistant] It's my pleasure to welcome you here to the Clark Howard show. This is a day that means so much to me, September 11th. And it's such a crazy thing because I have three children and they vary in age quite a bit. My two younger kids, uh, have no connection to September 11th. One was born four years after the other was two years old.


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[Assistant] It to them, it might as well be the revolutionary war, the civil war or Pearl Harbor. Um, but for those of us who were here on that day, 22 years ago, it was a life changing event and it, it caused so many changes in my life as an individual and the unity


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[Assistant] Is something that I yearn for again in the United States. I hate to see us so divided because nations have so much trouble in times of division and out of the horrific


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[Assistant] Events of that day in the tragic loss of thousands of lives. We saw a unique american purpose and spirit and i hope that at some point we will reclaim that.


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[Assistant] And in the, in our history as a country, we've had times of great division. It feels like they're never going to end. The good news is at least in the past, they always have. And I hope that we will find our way back to common purpose in the United States. Now I want to move from that, which is hard to do to what we're going to talk about today on our podcast. And you know, we're about you.


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[Assistant] Being empowered with knowledge that you can put to work in your life.


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[Assistant] So you make better financial decisions. That's what we're about. And the home market has done a hard pivot that benefits some and has been a crushing blow for others.


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[Assistant] Some trends in the market that are actually your friend. If you are trying to buy a home and also I want to talk about student loans. Now that payments have come back into play, gosh, that was a long payment holiday. What's the drill now? If you're faced with student loans,


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[Assistant] And also there's a type of student loan I never ever, ever want you to take out.


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[Assistant] Unless there's an overriding reason for doing so. But now let's talk about the home market. So builders are seeing and sellers are seeing what's known as price resistance.


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[Assistant] And sellers of used homes, existing homes are on seller strike. And we've talked about the frozen market for a good while.


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[Assistant] And just briefly to recap, if you've never heard me say this, people in homes that might normally cycle through aren't doing so.


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[Assistant] Because if they have a mortgage, they got a mortgage at, uh, maybe two, three, uh, at most probably 4%. And if they sell, move somewhere else,


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[Assistant] They're now looking at a mortgage of 7% plus or minus. And so it makes them.


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[Assistant] Frozen in place where they are, even if there'd be a more suitable neighborhood or house or whatever to move to. So what it's done is it's made the new home construction market a much bigger part of the decision making process for first time home buyers or even for repeat home buyers. And then those builders are seeing a problem with price resistance.


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[Assistant] As the buyers come in, they'd love to buy in their neighborhood, but they can't afford to. So for the first time,


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[Assistant] Home sizes are going down instead of continuing their relentless march bigger.


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[Assistant] The very nature of how homes are being designed is going through a massive change.


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[Assistant] One of the things that is dying along the way from what I've been reading is bathtubs. I mean, who, who would ever think about the fact that a bathtub


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[Assistant] Forces a higher cost on a builder and ultimately a buyer because it means the bathroom


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[Assistant] To have usable space has to be larger because of the space that tub takes up. And that has led to the three quarter bathroom where there's a stand up shower, a sink and a toilet and a lot of building plans back to Jack and Jill bathrooms.


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[Assistant] Where for a while it had been the thing where every bedroom would have its own bathroom. Now going back to what was known as a Jack and Jill, where two bedrooms connect to a bathroom and share it. And,


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[Assistant] Getting rid of whatever vestige there was of formal living rooms. Gone, gone. Formal dining rooms. Gone, gone. And so,


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[Assistant] Shrinking that square footage with one wrinkle, more and more builders.


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[Assistant] Are building for smaller numbers of people in a house building more bedrooms than they may have been building smaller bedrooms, but they're not really bedrooms. They're designed to be home offices for people that are working part time or full time from their home instead of from an office facility. So less square footage, less for you to maintain less for you to heat and cool.


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[Assistant] I think there's advantage to this because the irony is


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[Assistant] Homes have been twice as large as they were two generations ago. And the number of people living under the roof of those houses, less than half that were living in them two generations ago.


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[Assistant] Meaning we now have more than four times the square foot per person in a new construction home than we had two generations ago.


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[Assistant] And a lot of those rooms, you ask people, well, how often do you use this room, this room, this room, this room? And what's the answer, Krista?


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[Assistant] Never cobwebs in them. So this is necessity being the mother of invention. The other trend that you may find is, or is not your friend is in a lot of markets in the country.


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[Assistant] Where townhouses were not part of the picture. Townhouses are part of the thing.


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[Assistant] I've saw a development recently by a toll brothers. Do you know they are?


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[Assistant] Toll Brothers is a new construction company that builds for the mass affluent market for, uh, higher income, not super wealthy, but higher income individuals and has always been big single family homes. They're now building a lot of town homes to get the price points down where people can afford to buy them.


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[Assistant] So what our expectations had been with homes going through a significant change now brought about by


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[Assistant] Increased construction material costs that have moderated.


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[Assistant] Increased labor costs for construction workers have not moderated land costs up and interest rates up has led to necessity being the mother of invention to changes and what we actually focus on with a home to make them


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[Assistant] All right. If you're a Clark Stinks extraordinaire, get your pen ready or your computer keyboard ready because I'm going to predict interest rates on mortgages headed down and not yet, but when they do head down,


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[Assistant] They're gonna go lower than I thought before.


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[Assistant] I think they're going to hit somewhere in the fives. That will be the new bargain interest rate. So if you take out today's interest rate at seven or so percent,


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[Assistant] I believe there will be an opportunity in the next 24 to 36 months to refi. Mark your calendar and call me out as wrong. If it turns out I've blown it.


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[Assistant] Well Tom, thank you for that and congratulations to you and your partner for having been such incredible savers. Seriously. Having three million? Is that what you said? Three million? Uh, wow. I mean,


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[Assistant] If you look at the 4% withdrawal method in retirement, that means you can withdraw $120,000 a year more or less and never run out of money.


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[Assistant] And of course inflation adjusting over the years with that selling the house. You have not made a compelling argument to me about selling your house yet. It is mortgage debt free. It has a great value to it. $700,000.


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[Assistant] And to do an interim move into a rental.


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[Assistant] Your math is okay, but not perfect because the 2900 by your estimation you'd earn.


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[Assistant] On a savings account is taxable as ordinary income.


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[Assistant] You're going to end up based on whatever your tax rate is with a meaningful amount, less than a net 2900 after that savings is taxed. So unless you're just want out of the house and you want to ride the market for a while, I would not do this double move.


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[Assistant] I would wait till market conditions improve or you find.


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[Assistant] What would be an appropriate replacement house for you, potentially a downsizing


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[Assistant] And then you make the double move. You sell at that time, the house you're in and.


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[Assistant] Instead of moving twice, the double move is you sell your house, move into the new one, you find that inventory pops up. You say, that's where we want to live. Boom. Cause you're not affected.


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[Assistant] By the high interest rates since you'll be paying cash for whatever you buy as a replacement.


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[Assistant] So, gosh, we got a lot to unpack here, Alicia.


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[Assistant] First things first, if you did decide you wanted to sell the house, wait till it's repaired because people see what they see.


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[Assistant] And if they see that, well, that whole side of the house is having to be rebuilt because a car came flying in the house. That's not a good technique to get a good price for selling your house. Uh, I would absolutely wait until it is fully repaired.


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[Assistant] And you've got a fresh canvas there for people to look at. Second, it's not a good time for you to make this switch.


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[Assistant] And you'd be going into a high one somewhere else, uh, rent to own.


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[Assistant] I'm not a fan of it's, they generally don't work out. So I've kind of boxed you in, right?


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[Assistant] So you've got the psychological damage, the fear that is visceral for a parent that your precious baby


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[Assistant] Was in danger of dying from a car running off the road. So crazy question. Is there an appropriate place to build what would look like an ornamental wall that would provide protection for


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[Assistant] Your baby's bedroom if a car did run off the road.


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[Assistant] I mean, anything would be cheaper.


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[Assistant] If you could build a safety barrier in some way.


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[Assistant] Would be much cheaper, much less disruptive to your finances than picking up and moving.


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[Assistant] And there will be a point, as I just mentioned a minute ago, that I believe interest rates will be more favorable, but I would prefer if you can consider these ideas that you stay instead of moving at this time.


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[Assistant] Zero that I'm neutral on auto extended warranties. And that's like the only one I'm neutral on. I hate all extended warranties generally. Um, and no way that I ever would have bought one on a car. Number one, number two on a Toyota. Are you kidding me?


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[Assistant] Toyota's historically have been so reliable that there's not a chance


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[Assistant] Not even a centella of chance that I would ever buy one.


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[Assistant] And this has been a refrain over the years.


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[Assistant] We had the thing where Best Buy had a fake Clark thing.


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[Assistant] That showed me buying these products I hadn't bought and showed these extended warranties.


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[Assistant] That I bought on the fictional items, and when people would raise my name as an objection, the Best Buy salesperson would pop it around and say, see, Clark says that, but that's not what he does. I mean, this has been a problem forever because retailers make more money


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[Assistant] From extended warranties than anything else they sell.


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[Assistant] That's where the money is. So they're going to tell you any story they can dream up to try to get you to buy an extended warranty.


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[Assistant] And the answer is no, I didn't buy their extended warranty and no, I'm never buying an extended warranty on anything because the math is so terrible. Eight cents back in benefit.


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[Assistant] For every dollar paid in, meaning that every dollar of extended warranty.


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[Assistant] The mass says overall people lose 92 cents of every one of those dollars. Don't fall for them. Don't buy them. And when the TV salesman tells you, aren't you going to protect your investment? A TV is not an investment. Enough said. Coming up ahead, we got to talk about student loans for people


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[Assistant] Coming up, going into schools of various types, and for people who already have them.


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[Assistant] That the net cost of going to colleges is no longer going up. I mean, they may list a fake retail price for tuitions.


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[Assistant] But there's such resistance right now for multiple reasons.


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[Assistant] Demographics, we have a smaller number of people coming to college age. And so colleges have fewer people to fill their classrooms, enrollments falling at any number of universities and the universities know they have a pricing problem. Plus people are learning how deadly student loan debt is.


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[Assistant] So colleges are making deals. Um, relatively speaking.


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[Assistant] And so tuition costs versus family income as a percent of family income declining now.


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[Assistant] To pay extra to go to what seems to be a prestigious college.


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[Assistant] Or is it better to hold the costs down and hold the borrowing down? Well, according to research that's been done by a number of


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[Assistant] Researchers and there was a really nice write up about this in the LA times that the major


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[Assistant] That your son or daughter or if you yourself are the, uh, student or would be student, the major, the course of study is much more important than the prestige of the university.


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[Assistant] So if you are going after a skill that is in high demand stem and you are getting that skill that is in high demand and a variety of engineering, science, tech, medicine to name four fields for broad fields. If you are,


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[Assistant] Getting a skill set that is the workplace really values and pays nice money. You can go to a local college state supported school with very low tuition and maybe never have to borrow a dime and student loan money. You can go into the military and use benefits you receive


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[Assistant] As a way to thank you back to you.


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[Assistant] To provide you with educational benefits and avoid student loans.


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[Assistant] You can do my thing of going to community college for a couple years.


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[Assistant] And then transferring to a four year or junior and senior year and reduce the cost of college by an enormous amount. And something has become very popular in most of the nation states is four year college colleges that are designed


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[Assistant] Kind of like community colleges in terms of their cost structure.


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[Assistant] But four year colleges where you don't even have to worry about transferring somewhere else. And these four year colleges, which are a big deal in California, Texas, and Florida,


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[Assistant] Three of the nation's most populous states and have forever been a thing in New York state. You can go to a four year state school that you could commute from home.


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[Assistant] But even if it feels a little like high school, you're in college at very low cost and you're coming out with a degree.


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[Assistant] People from the Northeast US are familiar with CUNY, what used to be called CCNY. It's City University of New York. It's one of the largest public college education systems in the country. And the tuitions are crazy low. And this kind of idea has spread more and more in the United States.


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[Assistant] Is a way for school to be extremely affordable leading into a good career path and I'm not even mentioning


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[Assistant] The opportunities that exist that don't require college, but I've covered that a lot recently, so I won't get into that now. One thing I want you to avoid, like the plague, private student loans, private student loans.


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[Assistant] The interest rates and terms on private student loans are so hideous.


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[Assistant] It's why they account for only 7% of the loan market. 93% is in the federal student loan program. So the marketplace has spoken


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[Assistant] And the taxpayer subsidies, right or wrong, provided on student loans.


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[Assistant] Make them so superior, so preferable to private student loans. Do not take them out and


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[Assistant] Last thing, if you are in federal student loans, you've now had to resume payments know that


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[Assistant] There are a number of ways now that are brand new that did not exist prior to COVID, the COVID holiday that started back in 20 and continued for the three plus years. The new payment plans being offered are far more favorable to students than were offered before.


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[Assistant] And the rules on ultimate loan forgiveness and return from meeting your commitments to pay loans far more clear and far more accessible than they were before. If you're not aware of this, you don't know what's available to you. Go to the website of the U S department of education.


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[Assistant] And look at the availability with the new student loan payment plans.


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[Assistant] Cause odds are they fit you and fit you well. Krista?


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[Assistant] With how you're handling this is fantastic. Second, I think your lender is mistreating you.


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[Assistant] I want you to go find your loan document for your vehicle loan.


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[Assistant] What you see is interest calculated as simple interest. Simple interest means that the interest is recalculated every time you make an additional principal payment and every dollar you paid


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[Assistant] No longer has a dollar of interest against it.


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[Assistant] There are unethical vehicle lenders. There are banks that are dishonest.


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[Assistant] That when you prepay this paying three months at a time instead of one month at a time.


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[Assistant] What they're doing is they're putting the money almost like into suspense.


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[Assistant] Not giving you credit for it against principle.


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[Assistant] And you end up paying all the interest you'd have to pay on the loan, even if you took the full period of time to pay it off. In other words, they're cheating you.


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[Assistant] Now if your loan document says that they are using one of two dishonest, awful methods of calculating interest known as rule of 78 or sum of digits,


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[Assistant] Instead of either of those, instead of saying simple interest, then the lender gives you no benefit for pre-paying on the loan.


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[Assistant] It turns out that your loan is a simple interest loan.


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[Assistant] You need to contact the lender and the consumer financial protection bureau and get that loan recalculated


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[Assistant] Showing those as not prepayments against future months, but as prepayment of principal on your loan, showing the lower loan balance and in turn a wiping out of an enormous amount of interest you would owe on the loan. If this is confusing to you in any way, go Google or whatever search engine you use,


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[Assistant] Rule of 78, sum of digits, and simple interest. And you'll have an explanation that'll make it clear


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[Assistant] How the lender, if you have a central simple interest loan is cheating you.


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[Assistant] As for feeling a need to leave a small balance open, you don't need to do that. You will have shown a good record with an auto loan, paying it as agreed.


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[Assistant] And that will be part of your credit history.


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[Assistant] You're reducing the amount of obligation on that loan, which improves your underwriting


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[Assistant] For the mortgage loan you're taking out on a home. If you don't have credit cards yet more than six months before you buy a home.


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[Assistant] I want you to get at least one credit card I'd prefer too.


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[Assistant] Use them sparingly, but I want you to have more types of credit than just that vehicle loan.


[User] Please transcribe this text

[Assistant] So Josh, uh, the five mile thing, have no idea where that came from.


[User] Please transcribe this text

[Assistant] I've had uh, multiple occasions where I've been told


[User] Please transcribe this text

[Assistant] If I don't take the gas option, I have to bring back the gas receipt, and I always do. The funny thing is...


[User] Please transcribe this text

[Assistant] I have never once been asked for the gas receipt. Uh, the five mile thing became a thing years and years and years ago when Denver airport moved


[User] Please transcribe this text

[Assistant] From Stapleton Field, which was adjacent to downtown Denver, to the prairies northeast quite a distance from the city of Denver, and there were no gas stations near the airport.


[User] Please transcribe this text

[Assistant] Cause if you filled up in Denver, by the time you got to the airport, you didn't have a full tank anymore. You're looking at me like I'm crazy.


[User] Please transcribe this text

[Assistant] Doesn't include airplanes. They had a, they had a baggage system at Denver that had never been used anywhere in the world before and it didn't work. And so they built this massive, magnificent airport and they couldn't use it for a couple of years because