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[Assistant] So Rob, uhm, I'm going to turn this right on its head. There's going to be a great opportunity buying


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[Assistant] Used electric vehicles. They even qualify in many cases for


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[Assistant] There's a lot of product out there that people that


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[Assistant] Want to have the latest greatest with the most range in this and that and the other that I'd say the either or you pose has a third thing you should consider.


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[Assistant] And that's by a used one. Make sure though with any used electric vehicle that you have a robust warranty remaining on the battery pack. And that if you're buying, uh, under a manufacturer program that you have


[User] Please transcribe this text

[Assistant] On used electric vehicles are even more useless.


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[Assistant] Then third-party warranties on gas engine vehicles. But you're looking for the most efficient use of your dollars? It would be buying a used one.


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[Assistant] What I would do in this case, for whatever reason, this second card has no role in your life.


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[Assistant] And Scott, you've not said if you have cards from other issuers.


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[Assistant] But if the only cards you have are these two, only one of which you use for one issuer, you're in a heap of trouble if that issuer suddenly decides they don't like you. And then you have no cards and it's harder to get cards at that point.


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[Assistant] What I'd like you to do is find a card from somebody else.


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[Assistant] That would be a compelling use card that has whatever it is, an interest rate if you run balances or


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[Assistant] Has rewards that you'd really like that are really nice. You can look at


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[Assistant] Our sections on Clark.com for info on either of those. And then.


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[Assistant] When you get that other card, go to your current issuer and say, you know, I'm not really using this other card of yours a lot.


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[Assistant] Can we do just what you ask? Can we combine the limit on both and just have one card instead of two? The worst they can say is no.


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[Assistant] Okay, so collections disappear after seven years regardless. They age out.


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[Assistant] And, uh, many of them become less significant over time anyway.


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[Assistant] You have done a phenomenal job. Think about how you've not just a little bit, but solidly rebuilt your credit standing. I want to repeat what you said as I close out this podcast, Jonathan.


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[Assistant] At one time you had 33 bad collections, three repossessions. Thanks to working with a credit counselor, you're now rock solid, paid down the debt, you're debt free,


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[Assistant] And you have reward credit cards meaning you've totally rebuilt your credit standing and that leads me to what my dad


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[Assistant] But something he used to talk about that I remember, like he said it today, is life is 99 rounds and there are rounds you're going to be knocked to the canvas. You're going to have to dust yourself off.


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[Assistant] Get back up, put your mouth guard back in and go back in the ring. Life will always have the unexpected. It'll have


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[Assistant] The blind tackles, it will have all those things that happen blindsided tackles and we can't just give up at that point. We push through, we work through and we take on a problem till it's solved. And the old trade expression, how do you eat an elephant one small bite at a time?


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[Assistant] You tackled the problems you had with all those bad debts and conquered them. And I want you to take inspiration from Jonathan and remember when you face difficulties in your life, not necessarily just about your wallet, whatever it is, remember what my late father said, 99 rounds. Some are going to be good. Some are going to be great. Some are going to be terrible and some are going to be in between, but don't give up on yourself.


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[Assistant] Pick yourself up and work your way through till you're winning again. Have a great day.


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[Assistant] Like my daughter was looking for mom jeans as a style.


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[Assistant] This used to be a joke, but now they're in style. It's okay, sorry. New year!


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[Assistant] Oh well, we had Dennis and, well there were a lot of people. We had Dallas from HLN who used to work at HLN. We had Keith who used to work at HLN as well. Uhm, and we're gonna post some behind the scenes on that on your social media accounts.


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[Assistant] The person she's working for said she doesn't need to do this, but my wife has paid for classes and training from our own accounts and intends to write them all off on our taxes.


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[Assistant] I'm just not sure if that's the correct and best way to proceed. What are your thoughts and what other items does she need to consider when working as a contract employee? And FYI, she has a full-time job as well, so this is just on the side.


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[Assistant] And it may be worthwhile to redeem the bond and transfer the principal to another savings vehicle. It should be noted that US savings bonds are exempt from state taxes, whereas a new savings vehicle may not be. A recent check of US savings bonds I hold with an issue date of 11 of 2010 are only paying an interest rate of 0.6%.


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[Assistant] You know, when my kids were little, I remember we got a gift, we were gifted a Monopoly game for them. And instead of the cash money, it had, everybody got a debit card. And it had a little swiping machine. And I was like, oh, oh.


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[Assistant] And you're on TikTok too, by the way, under ask underscore Clark.


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[Assistant] I feel like I should have dropped comp and collision a while ago. However, I'm wondering how this would affect coverage on rental cars. I have three credit cards, but none of them offer rental car coverage. Since my car is so old, I do run a car from time to time for longer road trips. How would dropping comp and collision affect my coverage?


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[Assistant] Billy in California says I just placed an Amazon order for a couple of things that were shipped and sold by Amazon and that qualified for free shipping.


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[Assistant] But when I selected free shipping during checkout, it only wanted to credit about a third of the shipping cost. I ended up having to have Amazon call me and they gave me a courtesy credit for the difference during the checkout process. Clark, have you heard of this issue before?


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[Assistant] So you know, I haven't seen that happen when I've ordered stuff either, but it has happened sometimes where it looks like you can get Prime on one of the items, you know, since we have Prime.


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[Assistant] And Tom in Washington says, Clark, I can get a great Kirkland brand box of candy in Chicago, liquor Belgian chocolates, but I can't get it in Washington. I contact Costco and the person on the website doesn't know, the warehouse people don't know, and you can't write Costco to ask. So I turned to my mentor.


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[Assistant] Why should we in Washington be deprived of one of the best things I've tasted within the Kirkland label? Perhaps you could invite them on your show to explain.


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[Assistant] Who can remember all that? No, I think, I think we just put the link in front of you so you would be able to click on it if you would like. But if you just go to Clark.com, you can see that guide.


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[Assistant] You stink like a forgotten pair of sweaty socks. You forgot to mention that Robinhood is now offering Roth IRA services and are matching 1% of your contribution for free. How can you forget this Clark? This is supposed to be your favorite child.


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[Assistant] All jokes aside, thanks for everything you do. I'm 25 and I've already have accumulated 100k plus in my Roth retirement accounts thanks to your advice, Jay.


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[Assistant] As an urban planning enthusiast, I got, got so excited when Clark brought up induced demand and how speeding so much, spending so much money on widening and maintaining roads is unsustainable. I was hoping he would talk about how in many situations public transportation is the solution. But then he went full on crazy.


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[Assistant] Clark's idea is totally impractical for businesses and individuals who operate on their employers and customers schedules and not theirs, which is almost everyone except for people like him who get to pick and choose when they get on the road.


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[Assistant] Come on, Clark. Academics who study this as their job all agree the common sense solutions are for increased public transit as well as better mixed zoning. That's from Brad. And then there's another one too. Do you want to respond to Brad first?


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[Assistant] Regarding tolls on the freeway, I call those lanes the expense account lanes for the wealthy, and I just can't believe that we have implemented this discriminating practice. You have lost touch with the low income. Stay in your lane, poor people.


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[Assistant] I worry about single moms or low wage earners that need to be at work or daycare on time.


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[Assistant] Who needs that lien more than a struggling single parent that needs to pick up their child from daycare or pay a huge penalty if they're late?


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[Assistant] People can barely pay for gas, let alone a $10 fee to be in the lane they need more than anyone. So sad when I see those empty lanes built for the well-to-do people on an expense account with no limit. What do you propose for the poor? Carol.


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[Assistant] You do not stink and I really appreciate your podcast. I just wanted to let you know I tried following your advice to not put up our flag on the mailbox just in case someone tried to steal a check or whatever we're trying to mail.


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[Assistant] My husband and I tried this out. We put our bill in with a check in our mailbox and left our flag down. The man man just stuffed all our new mail on top of our letter and didn't take it. So it looks like we'll be using our flag, Shannon.


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[Assistant] Okay, many about this topic as well. I'm going to read two of them. Clark recently promoted


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[Assistant] Using the pay at the table QR code for settling a restaurant bill. The fee to use this code is more than 5% of the bill.


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[Assistant] R did not say. I haven't seen it either, but I'm gonna watch for it for sure.


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[Assistant] Fees, fees, fees. Uh, your comments about loving new- the new human replacing robots and automated checkout kiosks at restaurant tables stink worse than the time my child left his milk cup in my car in August. I've been there. I've been there.


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[Assistant] Save the worst for last. I don't go out to dine in a restaurant, especially a nice one, to have a machine thrust in front of me or at the table to replace a server. We like talking to our servers and the human interaction. We also refuse to take out our, to use our phones to pull up a menu or order from. Not doing it.


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[Assistant] I heard Clark's explanation of financing a car for no more than 42 months. I would not say that advice stinks, but I want to add some perfume to make it smell a little better. My dad taught me a trick over 30 years ago. He said buy a car and finance it for a length of time that is half of what you think the car will last.


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[Assistant] You make the payments to the finance company for 42 months until the car is paid for. Then you continue making payments for the next 42 months into your own savings account.


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[Assistant] At the end of the 84 months, you will have at least enough for a really good down payment on a new car. You pay for the car and then make it pay you back can.


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[Assistant] And this one's from Steve in Michigan. You say the longest auto loan term should be 42 months. Over the years, I've purchased more than five cars with 0% 60 month auto loans through a credit.


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[Assistant] Clark, you stink and here is why. You told your listeners to decline rental car auto coverage if your auto insurance covers it. I was in LA and rented a car for five days. I did sustain a dent that was bigger than a one dollar bill. If I claimed this on my auto insurance, the rates would go way up.


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[Assistant] You are self insuring for any damage under $3,000 to $5,000 when you rent.


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[Assistant] Practically speaking, when you consider you're not going to make the claim,


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[Assistant] But the rental car price, once the, the rental car place, once the car is exactly as you rented, go with high daily coverage. I don't travel that much. Sean.


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[Assistant] Clark, you don't stink, but your stereotyping of older bosses demanding employees return to the workplace after being virtual during COVID sure does. Several of my colleagues of the mid to younger generation thrive on the collaborative team building environment that working in person does with renovated offices that remove walls and lowered cubicle heights making for a room


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[Assistant] Making room for a flow of ideas and solution. This is typically not in the older boss playbook.


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[Assistant] The work from home option was there in part to keep people employed during global health crisis, not a promised future way of doing business. Ron.


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[Assistant] It does. I mean, we also offer, you know, gatherings. We've always had employees in different states too that have worked from home. So it wasn't a big shock to our


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[Assistant] Whatever town we decide to have them in, or we do the yearly staff trips that you take us on, and I think that's very helpful too, to get together with everyone and, you know, just be able to be in person.


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[Assistant] Okay, Clark smells like aged fondue when he talks about people not paying off their house. It makes me cringe a bit when he says don't pay off your house if it's 4% or less interest. He fails to mention this makes sense only if you invest the money and that's from Nate.


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[Assistant] Okay, one more quick one that a lot of people wrote in about. Not totally a stink, but a chance to point out a unique feature of the iPhone. A caller asked if there was a good way to protect an iPhone in a situation that the waiter or sales clerk abscons with their phone to process a digital gift card or credit card, etc.


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[Assistant] iPhone does in fact have a feature for just this purpose. The steps are a little involved and a video walkthrough does it the most justice, but search for iPhone Guided Access Setup.


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[Assistant] This feature will, does exactly what the caller asked. You get a setup guided access ahead of time, then open up whatever app you want them to have and push the lock button three times quickly.


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[Assistant] It gives them only access to the app you had open when you put it in guided access. Think giving your phone to a stranger to take a picture.


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[Assistant] Giving your phone to a friend to show them something, giving a merchant your phone to take out of your site. And that's from Tim and many others.


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[Assistant] Megan in Alabama says, my daughter just got engaged and is planning her wedding for spring next year. We have to plan ahead so that we can get the venue, wedding dress, coordinator, caterers, flowers, photographer, DJ, etc. And most require deposit or full payment.


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[Assistant] We're trying to minimize costs and yet provide her the best for her special day. With that being said, we're going to have to borrow the money


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[Assistant] Where would the best place be to take out a loan during this economy? My husband said he could borrow against his retirement, but would rather not. Please provide us some direction.


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[Assistant] And there's so many, I mean, your daughter did an amazing thing when she got married. She chose to get married on a day that people usually don't get married. She did so many things to save money.


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[Assistant] Joel, who has his own podcast now, but it was on the team forever. He had a beautiful wedding.


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[Assistant] Instead of buying flowers, his wife was so crafty, they made these beautiful paper flowers. There's so much out there right now on Pinterest and everywhere else about how to do weddings that are beautiful but without a lot of money that hopefully they can get creative.


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[Assistant] Okay, Alex in Maryland says, how can I get the best deals on hotel rooms? Well, that's pretty wide open, isn't it?


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[Assistant] I would also add that you can, uhm, if you have a credit card that offers, you know, it's like a travel credit card, you can look at their booking engine too.


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[Assistant] I use American Express and Chase, so I always check those too. And I actually recently got a better deal on Amex. Uh, we stayed the same chain twice. I got a better deal on Amex with one of the stays, so I booked through them and it gave us a free upgrade and breakfast and all that and late checkout.


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[Assistant] But the hotel had a deal that nobody else had for this other night at the same chain, so I booked through. So it does take work. You have to look a lot, right?


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[Assistant] Okay, uhm, David in Texas says beware of Costco.


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[Assistant] My wife and I spent almost an hour and a half today to sign up after we've heard so many good things about Costco for years. We gave them all our personal information. When it was time to pay for our $120 membership, we found out they don't take Mastercard.


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[Assistant] Our credit is frozen, so we left feeling highly annoyed.


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[Assistant] Please let the public know they only take Visa. We'll stay with Sam's and Aldi.


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[Assistant] You should take, you should do a world tour of Costco's, like maybe we should give an itinerary on the website.


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[Assistant] Uh, I work for a non-profit that rescues, uh, rescues kids from sex slavery. I love nature.


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[Assistant] What are ways that frugal savers in the lower middle class like myself can grow our worth?


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[Assistant] We sat down and discussed our goals for the year, financial and non-financial, and came up with a short no answer to, we want to save X amount in cash. We, uh, we're saying, we're saying cash as we're thinking with the economic slowdown, it might be a good to be, it might be good to be liquid. We currently have an emergency fund of 15k.


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[Assistant] Uh, background. We both work full-time. We're 26 and 27. She contributes 15.


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[Assistant] We live off of my salary with hers only going to child care. What do you think we should do, uh, what we should aim to save? What do you think we should aim to save?


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[Assistant] Efforts to contact the business went nowhere and they ignore our emails and have no phone number to call. Please warn your listeners as I have learned the hard way to check and make sure the business


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[Assistant] I have been around for a long time and also has a phone number where someone actually picks up the phone. I strongly believe that this company is hiding behind selling an inferior product.


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[Assistant] Alright, we have a question from Cheryl in Michigan. Our 40th wedding anniversary is December 2023.


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[Assistant] We're interested in a trip to South Africa to celebrate. What airline and timeline would you recommend? We're flexible on the timing. Also, do you know any must-sees?


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[Assistant] Oh, I'm sorry. This is, uh, go back to Michael in Illinois. I'll finish with Leslie. Uh, I have a 2.25 home mortgage rate. I have been paying quite a bit extra principal to try to pay off the mortgage sooner. Is this wise? Would that be extra money? Uh, would that extra money be better off invested in the market?


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[Assistant] Post surgery, I found that my insurer tried to bill my nurse on this, this.


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[Assistant] It's my pleasure to welcome you to the Clark Howard show where our mission is to serve you and empower you. So you make better financial decisions in your life. I want to reach as many people as possible and you can help me doing that by leaving a review where you listen to our podcast.


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[Assistant] And Krista has a recent review that she's going to read. Hi Krista!


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[Assistant] But thank you for the kind words. Alright, today's podcast, I want to talk about something coming ahead.


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[Assistant] Where the power company where you would maybe offering you a special deal. It's maybe special for them, not for you.


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[Assistant] And we'll talk about whether these deals pass the quote unquote smell test. And then another question for you. When you're trying to figure out your 401k, your Roth IRA, you have an investment account, you're better off in mutual funds or index funds.


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[Assistant] Or their index fund cousin or sibling, an ETF index fund index. We're going to talk about what over time proves to be generally the best. And I want to start talking about the power companies. So power companies have


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[Assistant] Uh, difficult time right now. We're in a transition of sources of power as we use a continuing mix of coal, natural gas, some parts of the country, hydro.


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[Assistant] Solar wind, uh, will eventually probably include geothermal in this.


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[Assistant] It's become much more complicated to provide those kilowatts for your power.


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[Assistant] And in some parts of the country, we have a problem with transmission lines where we don't have enough transmission capacity. So it's become a much more complicated business providing power to homes, businesses, factories, the rest.


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[Assistant] And so power companies are trying to shift some of the capacity burden to you and me.


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[Assistant] And they're doing so with teasers where they say, hey!


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[Assistant] We're going to offer you this incredible deal on power if you, certain times of the day,


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[Assistant] Also with an additional wrinkle in certain parts of the country where the power companies trying to prevent brownouts or blackouts are offering you incentives where they take control of, as an example, your air conditioner.


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[Assistant] And make you sweat a little when their capacity goes down. When they just don't have enough capacity left.


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[Assistant] There's multiple things out there. The problem for you and me as consumers with busy lives


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[Assistant] Can you truly manage the power use in your house? Because if you go to one of these time of use plans and you're not able to actively manage your use of power in your house, all you're doing is almost certainly raising what you pay for power at your house.


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[Assistant] Okay, so isn't that weird? So they may say, okay, from 11 o'clock at night till 6 o'clock in the morning, we're going to charge you a penny a kilowatt for your power. And you're like, man, that's like free! And it is virtually free power.


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[Assistant] The rest of the 24 hours, you're paying potentially a giant rate per kilowatt hour. And when's almost all power being used? The rest of those 24 hours. So some people


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[Assistant] Or in a position based on how they work, how they live, whatever, that this works great for you. Let's say you have an electric vehicle. So you set it up where it only charges in those hours where power is virtually free.


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[Assistant] Then for you, it's a steal, right? Well, you also have to think about when are you doing laundry? When are you doing other things in your home? And if you're now working at home,


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[Assistant] As a hybrid worker or whatever, you're not having to go to the office.


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[Assistant] Your power use during peak demand times may be much higher than it was when you used to go to an office.


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[Assistant] You're gonna get, potentially you haven't yet, you will get fancy, uh, brochures, colorful brochures in the mail, traditional mail. You'll get email notifications offering you these time of use rate plans. But just know it is the rare individual


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[Assistant] Most people with time of use meters end up paying more. So you gotta know yourself, your own life situation before you accept one of these supposedly bargain offers that turn out usually to be anything but a bargain. Now the second wrinkle I mentioned is getting a discount


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[Assistant] For allowing a power company to take control of your air conditioning when they're peaking, meaning peaking is when they're running out of available kilowatts and then you're facing the potential in your area or in your state of brownouts or blackouts.


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[Assistant] Which could happen a number of places during a heat wave in particular. So I am happy to participate in that and I've done so before. It's not available to me now where I live. But I did have that and I was happy to do it. And what would happen when demand was going crazy,


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[Assistant] They would turn my air conditioners off for a period of time, air conditioner off for a period of time. And then I get hot in the house, but I got a reward every time they needed to do that. I got a cash bonus and it helped the power grid stay more reliable. That's the case where.


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[Assistant] My self-interest benefited and I was doing something good for the overall community.


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[Assistant] That I'm fine with because it was only, other than sweating a little, it was just a straight out win for me and for others. Krista? Okay. You ever done any?


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[Assistant] You're not willing to sweat to keep the power system reliable, is that what you're telling me?


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[Assistant] Okay, so here's the thing with Amazon, uhm, is that Amazon, for 70% of what it sells, is basically eBay.


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[Assistant] You know, Amazon is a marketplace for more than two thirds of the goods sold on the site.


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[Assistant] They are a listing service. They may also be providing fulfillment. So you're not even thinking that you're not really buying from Amazon. Amazon is only fulfilling the order. They may even be delivering it with Amazon delivery trucks, but you're buying from a third party.


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[Assistant] Under the umbrella of Amazon. So if you get in your mind with most sellers, it'll say, it doesn't give a lot of disclosure, but if you look closely at a listing, it'll say this is being sold by, uh, Krista's


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[Assistant] Non-fulfillment, uh, Black Friday deals site, or whatever it says. No, it'll, it'll say, you know, you're buying from Clark's whatever, or whatever the seller is. It'll say that. And then you know you're not buying from Amazon, because remember, you have a very


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[Assistant] A relatively small chance that what you're buying is actually coming from Amazon itself. So it is, uh,


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[Assistant] Amazon's lending an air of credibility to that seller. And I wanted to say something about this that I have not said in a while.


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[Assistant] A lot of times sellers are selling a multiple


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[Assistant] That same sellers selling the cheapest on eBay of the three outlets. And so if you're not hooked into, well, I want to have delivery in three days or two days or whatever, that is a big advantage you have specifically with Amazon.


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[Assistant] Uhm, some of the Walmart.com stuff gets delivered same day, now.


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[Assistant] If that's not as important to you, comparison shop on eBay because you don't have


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[Assistant] Any kind of service guarantee from Amazon.


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[Assistant] With those items you're buying that are third party. So if time is not of the essence, buy it at the site that's cheapest. That's a long way of saying Amazon's not going to do anything for you because the third party sellers did not honor the Black Friday deals.


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[Assistant] This is someone who plans their lives so thoroughly. Brian, I'm so impressed. Four years out, you know you're going to go to Scotland?


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[Assistant] When you go in four years, Scotland may still be on the pound, but by then they may be on the euro, because Scotland wants to break away from the United Kingdom, uh, potentially. But, uh, the key with money,


[User] Please transcribe this text

[Assistant] Is to use a credit card that has no foreign currency, uh, junk fees. Those are very widely available now. And then you're getting, uh, the banker's buying rate which is a wholesale rate.


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[Assistant] On the exchange of money, you're getting a really great deal.


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[Assistant] on money as you need it as you purchase things. Scotland, if you go back not that many years ago, credit cards were not widely accepted. They are now. Uh, in addition, if you need walking around money,


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[Assistant] You want to have an ATM card from a financial institution that allows fee free ATM withdrawals, which there are many now available to do that too.


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[Assistant] Because then you're able to get money, walking around currency, pounds, euros, whatever, you're able to get them without any foreign currency junk fee.


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[Assistant] And those are the best ways for you to do actual in-store purchasing with a credit card.


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[Assistant] Or getting cash from an ATM as you need walking around cash.


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[Assistant] If you don't do a, a foreign travel alert, then you go to use your credit card, you go to use your debit card, uh, you know, go to the ATM, whatever, and you're going to get declined. And that's a hassle.


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[Assistant] Anytime you give out your social security information, even the last four, you're creating potential danger down the road.


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[Assistant] With your identity, uh, in this case, it is necessary because they're likely, potentially, if the settlement's large enough to each person, they're gonna have to issue a 1099. And so, for that reason, it is, your question was, is it safe?


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[Assistant] No, anytime you hand out your social security number, you are reducing the level of safety in your life from identity theft.


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[Assistant] Is it a legitimate use of providing your social security number? Yes. So what you're judging is you're judging the potential risk of yet one more place that your, uh, social security number is out there, this case your last four, and the same time you're creating


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[Assistant] Leans towards giving the last four so you get your money.


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[Assistant] And if you've not frozen your credit yet with Experian TransUnion Equifax, do that.


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[Assistant] Because that's the best line of defense we have against the problems that come with identity theft. And credit freeze is free. It's relatively quick to set up now and very painless to temporarily thaw when you do need to apply for credit. It affects none of the credit you already have.


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[Assistant] Clark.com slash credit freeze, which we've been talking about for 20 years, I guess.


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[Assistant] So coming up, I'm going to talk about when you are investing.


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[Assistant] Where are your dollars most efficiently working for you, getting you long-term the best return? We're going to talk about that. Hope springs eternal and there are companies well-meaning that market, that build and market mutual funds that are what are known as actively managed where professional managers


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[Assistant] Generally unbelievably bright men and women who work their tails off attempt to come up with portfolios of stocks or bonds.


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[Assistant] Or stocks and bonds depending on the type of mutual fund and they with both their head and their heart believe that they are going to be able to design a fund that because of their expertise, their design, their stock and bond picking,


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[Assistant] That they're going to be able to outperform the market. Well,


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[Assistant] First time research was done on this was 50 years ago. And what did the research find?


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[Assistant] That in spite of the best efforts of these unbelievably bright people that they could not beat just a simple index fund.


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[Assistant] Now you go back then there weren't their cousins or siblings, ETFs, exchange traded funds, which are another way people buy an index. An index is simply owning.


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[Assistant] Uh, segments of the stock market or the bond market, the most well known is the S&P 500 where you own the 500


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[Assistant] Largest publicly traded companies in the United States, but there are a variety. I'm really into the total stock market where you own thousands of companies, little pieces of them. And then there are bond equivalents and all that. Well, time after time, the math is tested over longer periods of time. Do you make more money just buying?


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[Assistant] The list of, the list of stocks or do you do better with somebody who again is


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[Assistant] Is it either an individual brainiac or a team of incredible minds?


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[Assistant] Who were picking and choosing individual items. This company, that company, the other company, and building a fund.


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[Assistant] Of those companies that they pick that they think are going to do the best over a period of time and over and over again.


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[Assistant] Just simply buying that index fund wins. In fact, I just saw the latest analysis of it.


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[Assistant] Uh, very thorough story written in the New York Times about it, and they tested


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[Assistant] That are people actually picking individual stocks and bonds zero, zero beat a simple index fund. Now, why is it?


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[Assistant] That a simple index fund where all you're doing is you're trying to be average. You're just trying to ride with the markets up or lately down.


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[Assistant] It's because of the expenses involved in having all those brainiacs run an actively managed fund.


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[Assistant] You're paying much higher fees. And if you've listened to me for any number of years, you always hear my obsession about the fees on your investments.


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[Assistant] You know how we have a system set up where we rip off school teachers in the United States on their retirement plans with expenses that can be as much as a hundred times.


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[Assistant] What you may have in a traditional employer 401k.


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[Assistant] And so teachers end up with much less money in retirement.


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[Assistant] Saving the same amount of money as anybody else in America would be saving in a plan, which to me is a national scandal.


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[Assistant] And I talk about 529 college savings plans and how much it matters that you put your money in the lowest cost plans.


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[Assistant] And then here we have this latest study by S&P Dow Jones finding yet again that doing the lowest cost funds, which are index funds, will over time make you more money than even investments chosen by the brightest minds in the investment community in the United States and the world.


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[Assistant] And so that's why over and over again, I talk about my favorite children.


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[Assistant] Vanguard, Schwab, Fidelity, because everything's about low cost in the case of Fidelity with their zero funds, zero cost.


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[Assistant] On going into index funds and that means every dollar you put to work is working for you. The thing over time is you want to invest in things that have no commission and that have extremely low expenses or in the case of fidelity with the zeros, no expenses so that every penny you have working is working for you, not for somebody else. The other aspect of this


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[Assistant] If you're doing a traditional investment account instead of a retirement account,


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[Assistant] Like a Roth IRA 401k, something like that.


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[Assistant] And Christy, your first question comes in this area of types of investment accounts.


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[Assistant] So this is a very, very interesting question that has, uh, two key wrinkles to it. One.


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[Assistant] If the 401k you're offered by your employer offers the option of you doing a Roth 401k,


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[Assistant] The Roth 401k is superior to you doing a traditional investment account. In either case, you're putting in after-tax dollars, but the difference is a regular investment account when you sell those investments,


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[Assistant] You're going to be subject to long-term capital gains, which is a favorable tax rate, but you're still paying a tax. In the case of a Roth 401k, you're putting the money in. It grows through the years. When you spend the money in retirement, you spend it all tax free.


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[Assistant] So if your employer offers the Roth 401k option, that is clearly superior to the investment account. Now where's the second wrinkle? What if you are not planning to work till normal retirement age?


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[Assistant] Then having money, even though it will be taxed at this more favorable capital gains tax rate, having money in a traditional investment account is a potential significant advantage to you because the investment account money, as long as you hold things in there a year or more, you qualify for the preferred tax rate.


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[Assistant] And you have this money that is available to you at any age, not retirement age. So you'd have to have


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[Assistant] A couple of things going on before doing a traditional investment account


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[Assistant] So if you have that and you're not intending, uh, significantly early retirement, that's where you put more money.


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[Assistant] Okay, uhm, how long is this podcast gonna be? Is this gonna be like two hours? Alright, I will summarize this. Uh, annuities are a disaster for retirement. They are pushed so hard


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[Assistant] By non-fiduciary commission salespeople. What's a non-fiduciary? That someone who is allowed to sell you stuff that's better for them than it is for you.


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[Assistant] The reason they push annuities so hard is annuities have massive, gigantic, humongous expenses and commissions. And they may also have something embedded in them called surrender charges.


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[Assistant] Which means you could have money with them for up to 15 years and you divorce the insurance company, you decide to pull your money out of it.


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[Assistant] You could then be hit with massive fees just for pulling your money out.


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[Assistant] They stink. There's a family show. I won't say any of the words they actually do, which is much more severe than stink.


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[Assistant] Annuities are a product that is sold, not bought, meaning that people buy them because the salesperson was good enough to convince you, smart enough, able enough to convince you that this is some kind of El Dorado.


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[Assistant] Cause the whole pitch with the annuity garbage is that you won't lose money.


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[Assistant] That you'll get part of what the returns may be in the market.


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[Assistant] But if the market goes way down, you're not going to lose money. That's the pitch. Okay. The reality is.


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[Assistant] The annuity contract will typically be about 175 pages and 174 and a half of those pages are things that are not good for you. And the conditions where that annuity will never lose money


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[Assistant] Are so limited by all the exceptions in that contract that they are dirtbag products.


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[Assistant] Am I being strong enough there? I think so. Is that pretty clear? Dirtbag products? Okay. So.


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[Assistant] Doing low-cost traditional retirement investing.


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[Assistant] Far out runs annuities. Now there are certain types and annuities are a cuss word on our show, but there are certain types of annuities that can make sense in your life that are annuities that are purchased at the time of retirement or for later in retirement. One is a longevity annuity and I'm not going to get into all the explanations of these and another is an immediate payout annuity where


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[Assistant] You're basically creating your own secure pension and retirement, but annuities to accumulate money for retirement are a hideous product or is whichever are, they are terrible for you and don't do it.


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[Assistant] If you really want to do something like that, then start, uh,


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[Assistant] Driving down the road with no seatbelt, ignore all stop lights, just drive like that because that's kind of what you're doing with your money saving it for retirement. It is the equivalent of extreme reckless driving on the roads.


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[Assistant] Yes, always you want a fiduciary, which is somebody who legally is required to do what is in your best interests.


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[Assistant] I never have, uh, never have done that. Uh, not only have I not recommended it, I've never done it. So the car rental company at the counter, the sales people at the counter, the rental car agents, they many times are under extreme pressure.


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[Assistant] To get you to buy all the ancillary pseudo insurance coverages.


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[Assistant] And that's where all the profit is for the car rental company.


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[Assistant] But before you rent a car is when you find out if you're covered otherwise.


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[Assistant] So you want to check with your own automobile insurer and see if you're covered for temporary use of a rental car.


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[Assistant] Almost always you are for a period of up to 14, 15 or 30 days. Second, I want you to have a credit card that provides, uh, coverage in addition to what you're offered by your own automobile insurance. And that one too allows you to eliminate anything you might consider buying from the car rental agency.


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[Assistant] I have a list at Clark.com if you travel regularly of the best credit cards for you to carry.


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[Assistant] So that you can avoid buying any of the stuff you're being offered at the car rental counter.


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[Assistant] Always shoot video with your phone and or take pictures of the rental car that you are renting any marks on it, dense, anything like that.


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[Assistant] You want to document that on your phone before you leave. When you return, you again shoot video or take pictures so that if later the car rental agency alleges that you have damaged the vehicle,


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[Assistant] You have the documentation that you did nothing at all to that vehicle because otherwise that could be a real hassle if not a meaningful expense. So I want to thank you so much for being with us today.


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[Assistant] Have the ability to help us out with our 32nd year of Clark's Christmas Kids. Please go to Clark'sChristmasKids.com and you'll see the donate now button.


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[Assistant] And make a difference in the life of a foster child this Christmas. Thank you very much.


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[Assistant] That happened in the film, yeaah. Uhm, Tom Cruise was in that, it's 2002 was the film and you were identified by your eyeballs so people would do...


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[Assistant] Back alley surgeries to get someone else's eyeballs to hide your identity.


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[Assistant] And there were at least four parents who wrote in with similar things. Their students are going to be studying abroad in the spring or summer. So I'm sorry to those I didn't read, but hopefully it was also they had questions about taking cash out as well. So if you could address- Sure.


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[Assistant] Well, some of them earlier this year renewed at .069%. And now they are offering 3% on 12-month CDs. I also started an online bank


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[Assistant] An online bank savings account because of your suggestion and that bank is offering 4% on 12 month CDs. The penalty is 180 days of interest for early withdrawal from my credit union. Would it be worth it to take the penalty and put the CD in at 4%?


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[Assistant] Often I pay them off before the statement bills and then my statement shows a zero balance. I was recently told by someone who heard a professor in an economics class say that you shouldn't pay off the credit card before the statement bills. Is that true?


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[Assistant] The car will definitely be deemed totaled by the insurance company. There will be a $2,000 to $3,000 insurance payout. With the current used car market, we are thinking of sinking a few more thousand to bring it back alive.


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[Assistant] But I don't think I will be able to get a $5,000 to $8,000 used car with a strong body. That was what saved my kid with no, with no injury.


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[Assistant] Should I get a newer used car instead and if so what make and model?


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[Assistant] Owen in Florida says being single, I don't really buy much from Costco and there are a lot of other discount stores closer to me.


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[Assistant] With that in mind, and the fact that I am being charged over $100 for a membership fee,


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[Assistant] Is it really worth it to buy my eyeglasses from Costco?


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[Assistant] With some very scary instructions on how to move the chip to get them to work.


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[Assistant] I don't know, we have one at home and we don't really use it because it's just been a struggle with the software and getting everything to work. Maybe it's us, but.


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[Assistant] It's my pleasure to welcome you here to the Clark Howard Show, our mission is to serve you and empower you so you make better financial decisions in your life.


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[Assistant] One of the best decisions you can make is actually free. Signing up for our daily newsletters at Clark.com slash newsletters.


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[Assistant] Beyond that, something I'm asked about a lot is robo investing.


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[Assistant] He's had a really confusing strategy.


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[Assistant] For helping would be customers or existing customers with robo investing. And I think they've grown up with it. They've changed the program and I think now is a good time to give you fidelity as an alternative. If you want guidance, you want advice and I'm going to tell you how it works. And also in this episode, the airlines are fighting mad.


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[Assistant] About a proposed regulation that I may soon ask you to post comments on because the


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[Assistant] The airlines are going to do everything they can to astroturf this, you know, astroturfing is that's where you put all these fake objections online in the federal record where you get people, you pay people, or you get your employees and their family members to post stuff so that they'll think people reviewing a final rule


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[Assistant] To benefit the public will think, oh, this must be terrible.


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[Assistant] To have to tell people the truth about what they'll really pay for an airline ticket before they buy it. I'll tell you all about that coming up and there's homework you should be doing anyway before this proposed rule that I hope goes into effect actually happens. So let's talk fidelity. Fidelity is a huge financial house controlled by


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[Assistant] Closely held by a family, one of the wealthiest families in the world. And fidelity is a really innovative company, but one area they have not had a clear strategy on is this idea of people who want to do a lot on their own, but need some guidance or would like to have more help than just a little guidance. They would like to have somebody,


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[Assistant] Being like, uhm, a shepherd helping them through.


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[Assistant] Unbelievably well with something they call PAS, Personal Advisory Services, and it requires $50,000 or more, which eliminates a huge number of people.


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[Assistant] Cause who's just sitting there with, ah, I got 50 grand. I'm going to put in the stock market or put in investments. So a lot of people.


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[Assistant] Trying to climb that ladder, they can't get to the first rung at 50 grand. And that seems to be a trend at Vanguard that they're organizing principles more and more about serving people who have a lot of money instead of serving people that are just trying to get there. So fidelity has responded to the Vanguard offering with a new fidelity go.


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[Assistant] And if you say, I'm in fidelity go, that's not new. The new fidelity go is really different and it requires 25,000 still a fair amount of money, but a lot more people have 25 grand than have 50. And so you pay an advisory fee of 0.35%, basically a third of a percent to have


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[Assistant] The ability to talk to humans for personalized financial planning. So sounds a lot like Vanguard's personal advisory service, right?


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[Assistant] Personalized fidelity, personalized planning and advice and which is what they used to call


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[Assistant] Their advisory service, but now the whole thing's going to be called fidelity go. I hope I haven't confused you here. The point is that you're able to get human advice guiding you towards the goals you're trying to reach.


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[Assistant] To help you plan a portfolio or even do it for you.


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[Assistant] Once you have that 25,000, if you don't have 25,000, they'll give you robo advice only where


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[Assistant] The algorithms tell you this should be what you're invested in. This should be the mix. This is how much you should have in this. This is how much you should have in that. This is how much you should have in the other.


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[Assistant] From zero to 24,000 cause fidelity, you need $1 to open. You can do the fidelity go robo 25,000 or more. You can have the personal advice. Now the 0.35 standard in the industry is that you pay 1% of your investments to the investment advisor, but generally the one percenters


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[Assistant] Aren't interested in people till you got a lot, a lot, a lot of money measured in hundreds of thousands of dollars. And so this is an opportunity for you to get


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[Assistant] Direct advice from an individual, a financial professional advising you about how to reach your goals, what your money should be on, talking about your plans, your future, asking you questions you haven't even thought about and paying a very low fee for that one-on-one guidance. So if you are a fidelity person,


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[Assistant] And you're looking for some guidance. Check out the new fidelity go and see if it fits.


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[Assistant] The pieces of the puzzle that you feel like you're missing right now in handling your planning, your goals, and your investments. If you're looking for a place that's not


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[Assistant] As expensive as where you've been or you're not sure they're really there for you, this would be an opportunity for you if you have a smaller nest egg, but 25 grand or more to look at as a place to invest. And so the big three financial houses,


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[Assistant] All used to be Vanguard Fidelity and Schwab all used to be about all self-serve investors. There was no thought about advice. And this is a new era where people are looking for more guidance. And so the three big financial houses are looking for ways to do this.


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[Assistant] And at the same time offer you a compelling value, a price, and hopefully a service that you find is useful. And this is the latest version from one of the bigs from Fidelity.


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[Assistant] So really, Wendy, with Fidelity, Schwab, and Vanguard, the index funds


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[Assistant] Which is Fidelity's zeros are all index funds. Schwab has its very cheap index funds. Vanguard has its very cheap index funds. Fidelity's though the zeros are zero cost. They're also inexpensive that really it's almost like a marketing issue with Fidelity, Schwab and Vanguard. So,


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[Assistant] It goes back to the, really what I was just talking about.


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[Assistant] It's what's the overall package of services you want. As an example, Schwab.


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[Assistant] And not be with a traditional giant monster mega bank or anything like that. You can do your banking and your investing with Schwab. Vanguard on the other hand is just about investing.


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[Assistant] Is terrible. In fact, they're pretty much out of any of the cash management and banking stuff and fidelity is kind of in between those two. They all have their various forms of providing advice and guidance.


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[Assistant] Vanguard has virtually no physical offices you can go to. Schwab and Fidelity have the physical offices. So, there's not a compelling, uh, cost equation


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[Assistant] If you're doing index based investing or you're doing exchange traded funds. So it's just whichever one has the features you're looking for, the convenience and the tools that work for you because the costs between them now are so similar that cost would not be how I would make a decision.


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[Assistant] So if your current employer is a larger employer, Pat,


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[Assistant] They're both very good 401k administrators. They're both good providers. There's,


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[Assistant] To move a fidelity administered one to a vanguard one.


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[Assistant] The underlying fees of that 401k with Vanguard should be very, very low. And then you have.


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[Assistant] The elimination of having to have two 401ks, you have just one moving the money over. Uhm, if your employer is smaller, then the fee issue becomes fuzzier and


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[Assistant] Particularly if your old employer was a larger employer, I would keep the older 401k that's fidelity administered in place. Uh, but if, uh, the larger a company, almost always the much lower the overall administrative costs of your 401k plan are, and that would be the reason if your current employer is a very large one to go ahead and move all that money.


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[Assistant] So if you use PayPal and pay with a credit card, there are many cases you're going to have to pay a fee. Some you will, others you won't.


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[Assistant] You'll have to pay the merchant processing fees for using a credit card. Just depends on who you're paying with PayPal. The credit card protections depend on the circumstances for which you are using PayPal. And anytime I'm buying merchandise from anybody,


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[Assistant] I use PayPal tied into a credit card, just as you're saying.


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[Assistant] Because I think that is a much better idea, Sarah. So...


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[Assistant] This is one of those things that I guess you would say it depends on the nature of how you tend to use PayPal. If it is merchant related services, simply having it tied in with a credit card is a great idea, probably the best idea.


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[Assistant] Tied in PayPal, you're going to have to have an extra fee involved. Then having the separate account with an online bank tied into it with only the amount of money you're going to use tied in is a great idea. Uh, my wife has done this with Venmo where she has a separate account


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[Assistant] That is tied into the Venmo cause there are a lot of circumstances where something may be involving kids school.


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[Assistant] They want to be paid by Venmo is, that one came up to me in my mind earlier because we've had to do that.


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[Assistant] I don't know, do you ever have to do that? All the time. Okay. And if you pay by credit card on Venmo, you're paying the extra two and a half percent?


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[Assistant] So our situation is the same as Krista's. PayPal, we have both forms of payment and Venmo, we only have one, which is the online checking account where we don't have to risk


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[Assistant] Having somebody come in and steal a huge amount of money. They can only steal what's there. Uh, recently there was a zero dollar airfare


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[Assistant] It was advertised all over the place. It was a real attention getter. No fair.


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[Assistant] So why didn't our Clark deals team talk about it on the website newsletter? I'm going to tell you straight ahead.


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[Assistant] Frontier airlines recently for the fall, cause fall is, uh,


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[Assistant] Soft travel time for the airline industry, particularly for leisure travelers, except for obviously Thanksgiving, Christmas, New Year's.


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[Assistant] People look at Clark deals in addition to all the deals on stuff we post and restaurant bargains, things like that. We post travel deals and we didn't post that one. And the reason why was the deals team went on Frontier site and started pricing out


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[Assistant] What the zero dollar tickets actually cost you to fly when you added in all the junk fees. We even had one of the cases where


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[Assistant] The free ticket ended up costing $200!


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[Assistant] By the time all the fees were added in 200 for a free ticket and


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[Assistant] So it didn't include taxes, junk fees, seat selection, baggage fees, blah, blah, blah, blah, blah.


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[Assistant] And there were actually cheaper fares available on the then Southwest sale.


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[Assistant] Where the fares were $59 and up, but that was the whole thing. You paid the 59 and you got your, your free bags and everything else. And so we weren't going to.


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[Assistant] Being like a fish with the hook and mouth and write free airfare when it was just to come on. What this to me is a symptom of what the


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[Assistant] Federal government's trying to do with the new rulemaking, what's known as, uh, when the government makes a rule.


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[Assistant] It can be what's known as an interim rule. It goes into effect right away. It can be a proposed rule.


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[Assistant] That is, this is what we're thinking of doing. They open up a comment period and then they go through the comments and they come up with a final rule. Then the final rule is what it is.


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[Assistant] Well the airlines are freaking out. Absolutely freaking out. Because the new proposed rule, if it goes into effect, as written,


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[Assistant] It will require that when you're shopping for airfare, you will be able to say


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[Assistant] Before you get quotes from a multi quote site or, you know, where you go to, uh, like,


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[Assistant] Google flights or you go to Expedia or anything like that. Priceline you'll be able to put in.


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[Assistant] We check one bag. We'd like to have one carry-on. We'd like to have a seat assignment.


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[Assistant] Whatever the things are, you'll be able to put in the criteria and then it will show you the comparison of the fairs. And I think how different that is because the game today is to get you to go on and see a fair and get excited and click on it. And you think about, um,


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[Assistant] You can't even put a bag in the overhead bin. You can't even do a carry on. You can't do it. You can't even pay for it. I mean, man, that's tough stuff. And then these baggage fees are out of control. So my thing, let the market compete, but give you the tools and the information so you can make a smart decision. It's been my thing about healthcare for a long time.


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[Assistant] Treat what something's going to cost you as if it's a state secret because they don't want you comparison shopping. The airlines are playing a different game has an old name. I think from the 1960s called bait and switch. They get you. They lure you in.


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[Assistant] Or a deal on American united or Delta where they're advertising affair, but it's basic economy. There was an American recently. I thought this was a kick.


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[Assistant] It was a deal from the East Coast to Los Angeles. And it popped up at 129. So I click on it.


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[Assistant] And then I'm looking, that's basic economy. What was regular economy? $469.


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[Assistant] So 129 for basic economy, 469 for regular economy.


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[Assistant] No seat assignment, last to board, blah, blah, blah, blah, blah, blah, blah, blah. So wouldn't it be a lot better if they weren't able to tease me into their website and instead I knew I needed this, I want this, I want that.


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[Assistant] And you're able to put in that criteria and then you see the fair. Why do the airlines hate that so much? Why do they fight it so much?


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[Assistant] Because they want to trick you. They want to fool you. They want to tease you to click and say, okay.


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[Assistant] Well I want this, I want this, I want this. What happened to my 149 dollar fare?


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[Assistant] Now it's 379 or 259 or whatever. So I love this. And if the airlines really do start astroturfing this and posting all those fake comments, telling how awful this is and how it's the end of life as we know it, I'll give you the information on how you can post comments in support of it. If you're in support of it, having to have disclosure of price before you buy.


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[Assistant] The same issue has been going on with the hotels. I mean, this stinking thing with the hotels. All right. There was one yesterday I saw that in addition to the hotel room rate, there was what they called an urban amenities fee.


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[Assistant] Christy, you want to guess what an urban amenities fee is?


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[Assistant] I was trying to think of what that could possibly be. Sidewalks? It was a bunch of nothing.


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[Assistant] It was, I mean I looked and it was just funny, it was just a way that they could advertise a lower price on the room. There's a park nearby that you can use? There actually is a park by this particular hotel.


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[Assistant] I could read the description, but it was all like written by a lawyer to charge the fee.


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[Assistant] With charging these fees, the one that, that upset my brother recently was you go to, he was going to Vegas, you go to Vegas and they have the,


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[Assistant] So what does the resort fee cover? It covers internet in your room. And I think that's about it.


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[Assistant] And we talked, if you remember back in the spring, we talked about the hotels in Vegas. I think this has gone to LA too, where you.


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[Assistant] Uh, Shay's lounge reserved for you at the pool now. These fees are variable.


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[Assistant] And they can be quite large. So the idea of nickel diming and dollaring you after you bought something really disturbs me and disturbs a lot of people and


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[Assistant] There's a position in the marketplace, particularly in hotels with hotel chains that have no junk fees added on that have no surprises that later the gotcha. And I love that, but hotels should be able to disclose


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[Assistant] Just like this proposed rule would do with the airlines.


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[Assistant] Well thank him for his service to our great nation. I am really appreciative of him doing so in a time of an all volunteer military.


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[Assistant] So normally, uh, you're just gonna have to buy tickets. The reward card's not gonna get it done for you.


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[Assistant] Unless you were charging really high volume on an airline card. As a general rule, Raleigh...


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[Assistant] Is going to be a significantly cheaper airport to fly into than Fayetteville and


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[Assistant] If you use, I mean, I really love hopper and google.com slash flights.


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[Assistant] You set up fare alerts on Google flights, set them up both to Raleigh and to Fayetteville. And when deals pop up, they will alert you and there are certain.


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[Assistant] Going to visit your son and his family and coming back and as a practical matter in a market.


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[Assistant] Like Raleigh, you're going to find Tuesdays, Wednesdays and Saturdays, Saturday afternoon after two o'clock, especially are going to be the cheapest three days of the week. But that's only significant to the point that the bargain fairs that pop up from time to time are going to be your most important friend. So since you can visit, um, like every other month you plan to go when a sale comes along, that's when you jump on it. Also,


[User] Please transcribe this text

[Assistant] Sign up for Southwest Airlines rapid rewards there. Raleigh is one of their markets. If they serve where you live, oh, they serve everywhere in California. Um, you'll find that.


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[Assistant] To redeem for free trips and the formula for redeeming is so clear you could consider getting


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[Assistant] The Southwest Airlines rapid rewards card on one of their signup bonuses, which the one I saw yesterday was 80,000 points.


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[Assistant] And that would convert into a lot of free tickets. The annual fee is reasonable enough. That might be the one I would do.


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[Assistant] Yeah, they're not going to extend them. Delta did, um, several COVID related extensions and they seem to mean at this time that those are going to die on January 31st of next year. So just, if you can take a trip now, go somewhere, uh,


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[Assistant] I mean, you got, you live in Georgia, it's Delta's largest.


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[Assistant] Flight base and the world is Atlanta. So you can go anywhere.


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[Assistant] And take somebody with you on one of the off peak sales that are going to happen for obviously January after we get out of the new year is a very, very cheap time to travel, maybe go somewhere in


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[Assistant] If you can do December after the Thanksgiving travel boom.


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[Assistant] And then before the 15th of December, that's a really low price point.


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[Assistant] And then you'd have the redemption of the companion pass. But I think only people that are.


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[Assistant] Delta 360s, which is Delta's highest level of frequent flyer. It's like a secret membership society that only the 360s


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[Assistant] Get what's called waiver of rules and restrictions on things like certificates that would have a set expiration date.


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[Assistant] Don't do it. Uh, first of all, there are these sketch sites where you can sell your points and


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[Assistant] It's really an iffy proposition. Uhm, 60,000 points.


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[Assistant] Uhm, you can do redemptions for non-travel things. Don't recommend it. I would... You can donate them too, can't you? Oh, you could donate the 60,000 points. You don't get a charitable deduction for it. Oh, you don't.


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[Assistant] But you could donate your points to a cause that really matters to you. Um, or your brother could just hang on for a while or someone in the family that wants to fly Brenda, your brother could give them free travel. That would be a great thing to do. And Delta publishes a list is several of the airlines do.


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[Assistant] Where they show which Redemptions are on sale.


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[Assistant] To what markets in the United States or.


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[Assistant] Which markets have deals on redemptions, but the best thing to do


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[Assistant] With frequent flyer miles is use them for travel or for upgrades and 60,000 won't buy you a huge amount of travel.


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[Assistant] But particularly when they offer the mileage redemption specials.


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[Assistant] It might buy tickets coast to coast or something like that. So it takes me full circle to my favorite reward there is.


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[Assistant] For any credit card, which is? Cash. Cash!


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[Assistant] That's right. Um, you know, I have the Citi double cash card.


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[Assistant] And they complicated double cash recently and have all these.


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[Assistant] Points things you can do or do cash. I did a redemption yesterday. It took me under a minute.


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[Assistant] And suddenly I had $320 in cash that posted to my account.


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[Assistant] Is a payment against it. I know people don't think it's exciting to use the money to pay your bill.


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[Assistant] Seems really good to me because they gave me that money and like here it is and I just used it to pay the cash.


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[Assistant] And you know, double cash used to be the only 2% card. Now there's a bunch.


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[Assistant] of two percent cash back cards. But, you know, with the cash, you don't have to worry. The owner says, Oh, we have no allocation of those seats today. Or it's going to be double miles for you to use it on that trip or anything like that.


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[Assistant] What did you think? You thought you could use that during a holiday? What's wrong with you? So, cash is king.


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[Assistant] Because nobody can tell you what day of the week you can use it.


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[Assistant] Or that all the allocations of cash are gone. And I want to thank you.


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[Assistant] So much for listening today. Know that we are here for your empowerment. This is here for you. And if you have a question, a problem, a concern, and you want some one-on-one guidance, we've been offering that for almost 30 years.


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[Assistant] You can talk with a member of Team Clark at our Consumer Action Center for free. You want to see all the scoop about how to do that? Go to Clark.com slash CAC.


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[Assistant] It's my pleasure to welcome you to the Clark Howard Show, where our mission is to serve you and empower you so you make better financial decisions in your life.


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[Assistant] So open enrollment season for healthcare is upon us and I want to help you with some of the options you've got to work your way through.


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[Assistant] I'm also going to address how to buy a car the right way now that the market has actually started slowing down. So open enrollment has different meanings, different aspects. There are those of us who work for a mid-size or larger employer where we're given a kit each year where we pick


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[Assistant] What health plan we're gonna go into, what other benefits we might buy.


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[Assistant] And the employer may or may not offer some allocation of money where they subsidize the various premiums, uh, they offer maybe short term disability, long term disability, life insurance, dental insurance, uh,


[User] Please transcribe this text

[Assistant] And maybe a few other stray things that are offered and you pick and choose and you end up with an amount that's deducted from your pay each month. And there are people who are having to buy coverage for themselves.


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[Assistant] Which is actually a very small part of the insurance market. What you buy on the federal state exchanges that the umbrellas, uh, healthcare.gov. And then if your state has its own exchange, it will take you directly to the state thing to pick what's known as a compliant plan. That's one that.


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[Assistant] Gold, there's, uh, virtually no platinum plans anymore, but you pick in that.


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[Assistant] Determines what deductibles you'll have and what out of pocket you'll have. And then at what point you're covered with no limit on the coverage. If you end up with something that's really catastrophically expensive, there are some wrinkles that you can buy. There are certain kinds of federal plans where you can buy catastrophic coverage. And so there's some variety there for you if you're self employed as of now.


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[Assistant] The, the additional support from the feds on what premium costs are for so many people that went into effect in 20 during the pandemic, those are still going on.


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[Assistant] So for people who buy their own individual policy, the premiums for many people for most are being subsidized by your fellow taxpayers. So the cost of buying a fully compliant plan is cheaper for yet another year than it would be if you were paying the prices as would be required as the law was originally written.


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[Assistant] For people who buy coverage at work, depending on the size of the employer and how many options they offer


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[Assistant] You may have different levels of deductibles you can buy in your health plan. The higher the deductibles you take, the lower your deduction from pay each month. You really have to think through what's going to be cheaper at many employers


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[Assistant] Taking the higher deductible and having the lower out of pocket each pay period will actually end up costing less


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[Assistant] Have the option of an HSA eligible plan from your employer. If you are generally healthy or you're at the other extreme where you have a significantly expensive chronic condition, an HSA can be a grand slam for you. An HSA eligible plan allows you in addition to having your health coverage,


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[Assistant] You've triggered eligibility to put money into the greatest tax deal Congress has ever offered us as working people or business owners. Because the HSA is the health savings account is an account that you get to put in pre-tax dollars.


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[Assistant] The money grows tax free in your HSA.


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[Assistant] And then the money in the HSA used for eligible medical expenses is spent tax free.


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[Assistant] So you get all those earnings tax free, you use pre-tax dollars to go into it and then you spend it tax free. I mean, it's unbelievable. It's even better than my beloved Roth IRA is a place to stash money. Now, remember I said, if you are extremely healthy, don't draw in medical a lot. The HSA is incredible.


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[Assistant] Chronic conditions, the HSA eligible plan is awesome.


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[Assistant] Because it has a tight cap once you meet your deductibles, you're done with what you're paying out of pocket. From that point forward, the HSA eligible insurance is paying for stuff. So for people in the mushy metal who have ongoing medical expenses,


[User] Please transcribe this text

[Assistant] You don't have a lot of money to draw on if you were to have large deductibles. Going in the traditional employer plan is best for you if you, uhm, if,


[User] Please transcribe this text

[Assistant] Your doctors recognize you on site when you come in the door, but not that you're there every week, then you're probably better off in the traditional health plan your employer is offering. With HSAs, if you go into one and you're in an HSA plan,


[User] Please transcribe this text

[Assistant] And let's say you're an entrepreneur, you own your own business, you're in good shape financially, you never want to use


[User] Please transcribe this text

[Assistant] The money in the HSA account to pay your deductibles. To pay the money that you're having to pay out of pocket for healthcare. You want to pay that money straight out of your pocket.


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[Assistant] And let that HSA keep growing.


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[Assistant] Tax free, not tax deferred, tax free for decades. It ends up being a huge pile of pre-tax dollars that accrue to you tax free that you can use tax free much later in your life. Unbelievable. And you know what else? HSA money does not have to be with these terribly high cost administrators that sadly a lot of employers use.


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[Assistant] HSA money can be with low cost providers.


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[Assistant] Like Fidelity or Vanguard or something like that. Fidelity has been really big in this area and you can invest that money again because you're not using it for current medical expenses. You're using it way down the road. You can grow that money in investments at ultra low costs.


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[Assistant] And have it build up this giant stash of cash for much later in your life. So that's like a quick windshield survey of open enrollment. But I wanted to add one thing I neglect to mention until somebody asked me the question. Employer provided life insurance. A lot of employers provide you through open enrollment.


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[Assistant] With a certain amount of life insurance free. It's a term policy meaning as long as you're there, it, you know, you're working there, you have this insurance and you die unexpectedly, it will pay.


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[Assistant] Or given the option, which you usually will, to buy additional life insurance in that plan.


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[Assistant] Only do it if you're not going to medically qualify to buy your own level term insurance policy. Because employer insurance that you have to pay for for life insurance usually is not a deal. You want to instead take the coverage that you can buy on your own in a level term policy and I got a


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[Assistant] A good explanation about how Level Term works and how to buy it on Clark.com.


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[Assistant] The other thing a lot of people overlook that's offered in open enrollment is long-term disability.


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[Assistant] A percent of your income, usually 60 or 70 percent in the event


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[Assistant] You are not able to work because of a disabling injury or illness or whatever it is. So disability insurance is a really, really valuable thing to have. It's not particularly cheap, but through the employer plan, if it's offered, please grab a hold of long-term disability. Krista?


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[Assistant] Yeah, so the best way to do that is go to one of those independent places that, that, uh, we do any lab test kind of thing there in any


[User] Please transcribe this text

[Assistant] Uh, mid-size or major metro area in the country.


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[Assistant] Where you can go in whatever blood test you need pretty much. They offer them there. The price sheets are completely transparent. You can shop them online before you even go to one.


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[Assistant] So you'll know if in fact it would be a lot cheaper than going to the traditional, uh, Quest or LabCorp to have it done when it's not covered by insurance. Quest and LabCorp dominate, uh, the testing market for hospitals and doctors and it,


[User] Please transcribe this text

[Assistant] They're all designed with these very high retail prices.


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[Assistant] And then the negotiated insurance prices, when something's not covered by insurance, the prices from LabCorp and, uh, and from


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[Assistant] Quest. Quest. How could I forget Quest? I pay their bills a lot.


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[Assistant] Uh, will be astronomical and that's why you go to these independent lab testing places.


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[Assistant] Okay, go back a step, if you would please, and explain those two terms to people who have no idea what you mean.


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[Assistant] You know, that is such a terrible story, Kate.


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[Assistant] We have, I can't recall another time we've ever had a call about an orthodontist where somebody took the cash discount upfront that they ended up with the problem you had. This is almost like, um, oh, maybe a one off, but it does show the risk with any product or service paying upfront that you could end up getting hurt. You also have the option


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[Assistant] Uh, I hate for you to have to do this, Kate, but you can sue the, um, the now retired orthodontist in small claims court in Virginia and likely pretty easily get a judgment for the money that you have paid for services that, uh, that insurance is reimbursing.


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[Assistant] The money that you're due back, obviously you're due back that money. And I think you'd have a really solid


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[Assistant] Case and small claims court, if you want to pursue that route.


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[Assistant] So this is, uh, this is a interesting either or, because with the Christian co-ops,


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[Assistant] Uh, which are allowed under separation of church and state.


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[Assistant] It is a pooling, it is a risk pool, it is not insurance. So what happens is the,


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[Assistant] Uh, the Christian Health Network decides what they will pay for and what they won't. Uh, they also, if


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[Assistant] Unfortunately, in a pool, too many people end up with a catastrophic illness. They may not have the funds to reimburse those costs.


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[Assistant] So the cost of being in one of the Christian health networks is a tiny, tiny fraction of the $10,000 a year that your husband would be paying for health coverage. And then on top of it, you've got a family deductible of another 10,000. So you got $20,000.


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[Assistant] That you're laying out as a family for health coverage and you're like $20,000.


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[Assistant] We could do these small premiums to the Christian Health Network and we would never spend anywhere near that and we'd get reimbursement for stuff.


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[Assistant] And the Christian health networks are great for routine kind of issues. What we're talking about here is the outside risk.


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[Assistant] Something where you have enormous medical bills.


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[Assistant] That's where the Christian health networks have not been able to come up with the money in so many cases.


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[Assistant] And that's where you could be exposed to enormous financial risk. So you, this is a certain amount of, I wouldn't call it a gamble. It's an educated guess and you have to make that decision for yourself, knowing the general health of your family and make the best decision you can because upfront and in a typical year, the Christian health network would be a whole lot cheaper.


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[Assistant] Something that has been astronomically expensive lately but is gradually getting cheaper.


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[Assistant] Buying a new or used car. We're going to talk about that. When somebody asks me for help to buy a car right now, it's like, uh, pick your poison.


[User] Please transcribe this text

[Assistant] Do you want Hemlock or do you want something else? I mean, it is tough, tough, tough to be a consumer right now in the vehicle market. And the only situation that people really should go forward with buying a car right now. And when I say car, I mean,


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[Assistant] Automotive transportation could be a truck, SUV, whatever is if your vehicle is toast or you had it totaled in an accident.


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[Assistant] Is the value of used cars that had gone up 70% now is up only 40 some odd percent from where it was three years ago.


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[Assistant] And the price of used cars is on a tick downward. That's why I told you recently,


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[Assistant] That car max stock just got hammered because


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[Assistant] Then Wall Street had expected all the analysts and all that. They just got eaten up because the used vehicle market is going through a overdue correction. We had all these crazy, unique,


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[Assistant] One time factors that piled one on top of another that led to this massive run up in used car values. And I'm not going to belabor the point I'll just say very quickly.


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[Assistant] The supply chain disruptions with new cars, the factory shutdowns from COVID building new cars and


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[Assistant] The rental fleets having sold off their products to try to survive in 20 when nobody was traveling, they created this


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[Assistant] Massive demand for used vehicles because they couldn't get new to replenish their fleets. So now fast forward to late 22, where are we? Well, automakers one by one are getting better at producing vehicles. Tesla just reported a record quarter of vehicle sales


[User] Please transcribe this text

[Assistant] And the sales were not enough for Wall Street. So Tesla stock got hammered even though their sales were way up from where they had been.


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[Assistant] When they were suffering from severe supply chain disruptions and one automaker after another, uh, you look at the two big American companies, GM and Ford, both producing far more product than they were earlier this year. So they're figuring out how to unlock those supply chain disruptions and they're getting the parts more and more they need. Although Ford got a black eye recently,


[User] Please transcribe this text

[Assistant] Cause they ran out of the little oval things that say Ford that are like a iconic thing that go on in front of a Ford vehicle. They ran out of those.


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[Assistant] And so they had vehicles they couldn't ship because of that. I mean, one little part.


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[Assistant] That costs like nothing of everything on a vehicle. Shut down shipping. But automaker by automaker. They've adapted their building vehicles. They're sending them to dealers and where dealers had none on their lots.


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[Assistant] There's still low inventory compared to normal numbers.


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[Assistant] But the new vehicle thing is gradually improving.


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[Assistant] At a time with interest rates rising on vehicle loans, going up a fair amount, the affordability issue for a buyer will cause people to go on buyer strike for new vehicles. Unless, unless the prices start to come down. I mean, this is as classic economic supply and demand as you could have. And the used vehicle market was so disrupted because


[User] Please transcribe this text

[Assistant] of those rental car fleets and then people substituting buying a used car for a new because they couldn't get a new car.


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[Assistant] So the whole thing is going to come gradually, steadily back into equilibrium, which is why


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[Assistant] Unless you gotta get a vehicle now. Don't. Don't. You know, you see somebody riding down the road in a vehicle that looks really cool to you.


[User] Please transcribe this text

[Assistant] Let me tell you, that vehicle's gonna look a lot more cool.


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[Assistant] Down the road, and by down the road I mean in time, if you wait, because it will be cheaper. Dealers have gotten really used to, uh, selling, holding all the cards,


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[Assistant] And selling the inventory they've had that's been scarce.


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[Assistant] Above MSRP, manufacturers suggest retail price, selling vehicles.


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[Assistant] at many thousands above and you look at the luxury brands.


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[Assistant] They've been selling those at 10, 20,000 or more above manufacturer suggested retail price. And for some of the luxury brands,


[User] Please transcribe this text

[Assistant] That will continue because people in the upper income strata still don't seem to be worried about money.


[User] Please transcribe this text

[Assistant] And they're still buying those for now. Stock market stays down a lot longer. Then that strata will lose some of that confidence.


[User] Please transcribe this text

[Assistant] And these, uh, interest rates to borrow money to buy a vehicle continue their steps higher


[User] Please transcribe this text

[Assistant] It means that the prices of both new and used are going to trend down. You know, they went up like a rocket.


[User] Please transcribe this text

[Assistant] Back, uh, really late twenty into twenty-one and then they stayed up.


[User] Please transcribe this text

[Assistant] And then the used ones, the roller coaster reached its peak.


[User] Please transcribe this text

[Assistant] And instead of coming back down where your stomach meets your throat, they're coming down really.