The Clark Howard Podcast

The market is now past a 52 week low and global markets are in panic mode. Global markets are related to an undeclared war between Putin and the U.S. The U.S. has become the world’s most important energy market - natural gas and oil combined. Putin is exploiting the outbreak to undermine the U.S. economy in an attempt to destroy the U.S. hydraulic fracking industry by flooding the world market with oil Russian can produce at a cheaper price per barrel. Putin has engineered a collapse in the price of oil by making it clear he’ll flood the market beyond demand to starve the U.S. oil industry for revenue. This has led markets to expect recession. Oil prices collapsed by unprecedented amounts today. Unless this corrects in the next several days, we’ll see a 30 to 50 cent per gallon drop in gas prices over the next few weeks. But Putin’s long game is to destabilize the U.S. using the backdrop of depressed demand for fuel due to the outbreak, as a way to drive a dagger through the U.S. economy.The SEC has released several warnings about phony emails circulating claiming treatments and cures for coronavirus. These ‘pumps and dumps’ are occurring heavily in social media and elsewhere, claiming biomedical breakthroughs. In reality, crooks buy stock in a failed enterprise and try to bid up the price by lying to people. As soon as they run the price up, they sell their shares and investors are left with nothing. Be wary of ‘incredible opportunities’ to score money. State and federal authorities are also warning against fake charities soliciting to provide relief to coronavirus victims. Only give to organizations you know are real to avoid the scams.AT&T TV is being heavily marketed at $49.99 – but after clicking to sign up, the junk fees kick in. There are massive penalties to cancel a 2 year contract. No other streaming service asks that. Sleazy, underhanded, deceptive and wrong. Driven by fear and desperation, they impose a 2 year contract and only tell you the price for the first year, but you can’t get out of the second year at double price + junk fees – without paying a massive termination fee. Ridiculous. DirecTV and AT&T internet customers will get the pitch. Know it’s garbage and there are much better alternatives. Hopefully AT&T will come to its senses and compete with integrity. Rebuttal welcome. This is a lousy way to treat brand loyal customers and others. Their other streaming service, AT&T TV NOW gives you the ability to cancel with no penalty. Confusing much? See our streaming guide   Learn more about your ad choices. Visit megaphone.fm/adchoices

Pitches to get into private real estate ventures are prevalent now. Investors own percentages of several properties from dozens to thousands. With little disclosure required in private placements vs. publically traded ventures, the big pitch promises boosted returns. When you put your money in, you're relying on their promises and you can not get your money out of these illiquid investments. Often there are huge commission fees involved. If you don't care to own and manage individual properties, buy public investments from low cost Vanguard, Schwab or Fidelity. They all offer REITs you can buy in and out of at will, no commissions.Christa reads listener posts about how Clark has missed the mark in his advice this week. If you have a "Clark Stinks" to share you can leave it here. Learn more about your ad choices. Visit megaphone.fm/adchoices

Life insurance agents are only there to pitch policies with some kind of add-on - the equivalent of a savings or investment account, or something they claim can be used for retirement, will ultimately pay for itself, etc. They have to push ultra-complicated policies to gain more commissions. A straight up policy isn't worth their time. Complicated policies have very high commissions and high costs for consumers. Think whole life, variable life, universal variable life, index universal life etc. When the name gets long, it gets bad for your wallet. For those of use who earn less than $400k, level term life insurance makes sense - derisively referred to by agents as 'just death insurance'. The purpose of life insurance is to provide for the living after you're gone - replacement of income for family. And nothing does that more efficiently or cheaper than level term insurance. In general, buy 10 times what you earn per year. Level term offers coverage for 10 to 30 years that pays only if you die during the term. If you outlive it, it pays out nothing. But premiums are hyper cheap and won't impact your living standard. See our buying guide to insure and protect your family.For investors, fears of market losses are common. The market bottomed in 2009, essentially tripled by 2016 and has risen since. Many believe we're on borrowed time. Investing goes through cycles, and some investors are compelled to move their money into safe, stable choices, like CDs. But even if the market fell off a cliff next week and stayed that way for a few years, for anyone in their 40s or younger, this would have no long term effect. It might actually make you more money to just stay the course and leave your money well diversified. The easiest answer for most of us is the target retirement fund closest to the year of your retirement. Remember when the market tanks, every contribution buys more shares for the same money. When the market eventually recovers, it boomerangs to give you more money than you would have had in a steady market. Declines are your friend the younger you are. Closer to retirement your portfolio should be more conservative, but you don't stop putting money into the market. Just dial back risk at 60, as you may live another 30 years. Being older doesn't mean you bag investing. You simply reduce risk, done automatically by target retirement funds, while maintaining opportunity for meaningful gain over time.  Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re moving into the home renovation season. The National Association of Realtors and National Association of the Remodeling Industry | NARI conduct value studies and have found that a homeowner will get back 50 cents on the dollar for a kitchen remodel. So a 10k kitchen redo will increase the value of your home $5900 at best. The return on adding a master bedroom suite also yields around half. What does pay? Hardwood flooring, HVAC updates and insulating come close to recovering costs. Clark’s simple rule: The reason you renovate or add on to a home is enjoyment. Don’t con yourself into thinking you’re investing for a positive return in cash.People are stretching their dollars by taking advantage of how much things depreciate from new to used, particularly in the area of high end women’s clothing. Nordstrom is now actively selling used clothes, joining Macy’s and others. Independents include ThredUp, and TheRealReal. Used furniture is another high depreciation category – not so much for upholstered furniture. If relocating, check Freecycle and Craigslist for furniture.  Learn more about your ad choices. Visit megaphone.fm/adchoices

The SECURE act has brought changes to how retirement accounts work, how they're taxed and inherited. Pre-taxed money goes into traditional IRAs. Contributions + earnings are all taxable upon withdrawal. With SECURE Act changes and tax rates only expected to rise in the future due to massive budget deficits, there's a big advantage to convert money over time from traditional to Roth IRAs. Once you pay the taxes at today's lower rates, that money becomes tax free for the rest of your life. Also, it's best for beneficiaries to inherit a Roth IRA vs. a traditional. If you have IRA money and can pay the tax, come up with a plan to steadily move the money over years. Exception: those who make more than $350k a year. Everyone else will see benefit from moving money to a Roth. Business owners have the responsibility to treat employees well and let them know their voices are heard. Truth: Most employers aren't very good at truly appreciating the people who work for them. But valuing employees is key to success. You treat employees well, they in turn treat the customers well - everybody wins. Lip service doesn't count. Actions do. How do you let your workers know they're truly valued? Interests have to be aligned. Employees need to understand how they benefit from the success of the business. A paycheck isn't enough. Many workers now need to know that what they're doing benefits society. If you as a worker feel you're not valued and the workplace is unpleasant or the culture is corrosive, search the strong job market and find a place that really does value you.  Learn more about your ad choices. Visit megaphone.fm/adchoices

The pharmacy business is shifting and market share is moving to a smaller number of players. CVS and Walgreens are taking a huge volume of prescriptions. Many with employer insurance use mail order pharmacies. Others are free agents using supermarkets, warehouse clubs or independent pharmacies. If you don't have pharmacy benefits, check your options. Take Walmart's $4 Rx list with you to doctor appointments for direct prescribing there and save. Know that the cheapest overall place is Costco pharmacy, and Good Rx provides transparency and potential discounts. Some pharmaceutical manufacturers provide help with costly prescriptions. Some PBM - pharmacy benefit managers via employment - will not approve some costly meds. If you have an Rx benefit that turns you down for coverage, many drug companies offer enormous help with a coupon to obtain that med free for a year or at a monthly discount. The more questions you ask and the more you look around, the more you'll save.See our continually updated cell phone plan guide to pay as little as you can for reliable service. Now there's a plan offering unlimited talk and text for free, via ads- from TextNow, with a $10 SIM card. Unlimited data with Wi-Fi, otherwise talk & text only when roaming. TING allows use over multiple networks including Verizon and Sprint, and offers purchase of minutes and text blocks for under $10 a month. You can also buy data, but it's not a deal if you need a lot.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Recently Clark discussed how AT&T issues refunds on stored value cards. These cards are intentionally tricky to spend down – disallowing partial payments by design to keep some of your money through ‘breakage’. Several tax preparation services are now trying to sell customers on accepting their refunds on stored value cards or even Amazon gift cards. These cards have ridiculous junk fees – monthly fees, per transaction fees etc. Putting a tax refund on any kind of spending card is a bad idea. The best use of a tax refund is to pay down debt or contribute to a Roth. Don’t fall for these pitches. They’re all about you spending, paying fees, and giving them the ‘breakage’ money left on the card that you end up forfeiting. It’s your money! Christa reads listener posts about how Clark has missed the mark in his advice this week. If you have a "Clark Stinks" to share you can leave it here. Learn more about your ad choices. Visit megaphone.fm/adchoices

Being stuck in an apartment lease when you need to move quickly is a long time problem. Very few leases have any kind of out. Now, a company called Landing, designed around the lifestyles of young adults, rents through membership agreements. You rent an apartment within their system, and are allowed to move to any other property in the Landing system on 3 days’ notice – no penalty. This allows the nomad in you to wander. You pay $200 a year for this advantage. If you choose to move outside Landing, you need to give 30 days’ notice – still no penalty. Landing operates in several states now with plans to be in most major cities by year’s end. Wouldn’t this work well for retirees as well as a way to travel and experience new places? Landing provides ultimate flexibility. Units come furnished so moving is easy.MGM resorts has been hit by a massive data breach affecting roughly 11 million people. Criminals got email, phone numbers and physical addresses – ‘phone book information’. Marriot suffered a large breach a year and a half ago. Potentially half a billion people around the world are exposed through hotel chain hacks. Consider having a specialized email address. Don’t compromise your main personal email at the heart of your life and data. Have a separate email address for commercial activity.The core to saving on meds is to be proactive. Before a provider writes a script, you can check costs and offer an alternative. Have a pricelist from your pharmacy, check your prescription drug plan. You can use a discount program like GoodRx and spend less by not going through insurance. See our guide comparing 5 major prescription drug programs: SingleCare, GoodRx, Blink Health, RxSaver and WellRx. Among the 15 common meds tested, RxSaver was consistently the cheapest, but that doesn’t mean it will always be. GoodRx came in next. We discovered that using 2 of these is likely to get you the best price. Clark checks his insurance coverage and then otherwise. It’s surprising how often meds are cheaper outside insurance using a discount program. There’s great advantage to checking up front before a med is prescribed. Medical professionals don’t know costs. It’s up to us to manage what we pay. Learn more about your ad choices. Visit megaphone.fm/adchoices

The investment industry is going through consolidation that will lead to fewer players. Weakened mutual fund companies, stock brokerages and investment houses are merging. A small number of huge players will emerge. All this has come about because of the enormous strength of the big 3 discounters. Vanguard, Fidelity and Schwab have essentially demolished the competition. Traditionally, investors paid massive fees to bank investment arms or full commission stock brokers. Some still do but the movement is to lower costs. Full commission outfit Morgan Stanley is buying discounter E*Trade, ostensibly to sell E*Trade customers on their products. It’s important to know what you’re buying with any organization you invest with. Understand what you’re getting and what you’re paying.The FTC warns the phony check scam is roaring back, now successfully targeting young adults – those in their 20s and 30s who have never been check writers. They’re less likely to suspect a check is bogus, especially if it clears. In addition to elder loved ones, make sure the young adults in your life know that if they get a UFO check with instructions to deposit, keep part of the money and do something else with the rest, they’re about to get scammed big time. The check that cleared will usually bounce in 4 to 6 weeks, and they’re liable for all that money.   Right now there are various disasters associated with trading in a car. Simple rule: DON’T trade in a car that is not paid off. Around 30 – 40% of people are dumping cars they’re upside down in. Danger zone. There are dishonest car dealers that know they can’t get a loan to cover an upside down trade, so they’ll encourage the customer to buy a new car with a fresh loan, and just default on the vehicle they wanted to trade in, and turn it in to the lender. In the auto industry, this is called ‘kicking the trade’. These dealers are NOT telling people that allowing a repossession will ruin their credit for 7 years. The lender sells the vehicle at auction, and in most states you’re liable for the difference between what it sold for and your balance plus expenses. You no longer have the vehicle, your credit is ruined and you’re responsible for all the money the lender lost. This eats up your future. If you hate your car and owe on it, tough it out, keep driving it and pay off that loan. Get out of the cycle of owing more on vehicles than what they’re worth. Long loans leave you upside down, and paying way too much interest. Learn more about your ad choices. Visit megaphone.fm/adchoices

The coronavirus is spreading but know fatality rates are very low. It is creating enormous impact on economies around the world. The U.S. travel industry is hard hit. Airline and cruise line stocks are down and Expedia is laying off 3,000 people. Expect more lay off announcements as part of a response to economic slowdown. It’s unlikely we’ll follow much of the rest of the world into a recession cycle this year, because it’s an election year. But the tremendous job engine we’ve seen in the last 9 years will slow, pause or reverse. This is our signal to do what we can to prepare by getting our finances in order. Rethink impulse purchases. Build up a reserve of cash. Consider how you’d handle fewer work hours or a lay off. We may go into a growth recession, wherein technically the economy is still growing but the job market is weak. This is a yellow caution light moment in the economy. Interest rates are an economic tell more than stocks, and expectations are for lower interest rates moving forward. Look at what you’re spending and what you owe. Think through what you can do to get your finances in order to prepare.Wells Fargo committed criminal acts against its own customers for a full generation, with cheating scandals that go back to 1998 according to Federal prosecutors. In the court filing they only admitted to unlawfully misusing customers’ sensitive, personal information. They paid a $3B fine and avoided criminal conviction, prosecution deferred. If Wells Fargo doesn’t engage in anymore such activity over the next 36 months they will not face criminal prosecution. WF engaged in massive ID theft, cheated their auto loan and mortgage customers and cheated their checking and investing customers over a generation and no one is going to prison. If you rob a bank, you get 20 years. But if a bank robs you, the executive leaves with $millions in their private jets for the country club – no jail.Around 5 regional supermarket chains have filed for bankruptcy over the last month. Many will disappear. Americans have changed our profile on how we buy foods, now more price focused. Supermarkets at all price points are pushing private labels more than ever. Most feared is Aldi – which is around 93% private label. An industry survey reveals Aldi is the cheapest place to shop, with a 40% price advantage over traditional mainstream supermarkets. Competitors are cutting hours to lower their costs. New England based Market Basket follows, WinCo is 3. Lidl is 4 in pricing followed by Trader Joe’s, a corporate sibling to Aldi. Amazon is also trying to complete. They’ve just opened their first of what they hope to be a chain of cashier free stores. They reportedly intend to sell this technology platform to other retailers to eliminate check-out lines, a convenience for shoppers and cost saver for retailers. Learn more about your ad choices. Visit megaphone.fm/adchoices