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It's great to have you here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. And I want to talk about the renting versus buying a home and how the decisions you make may be different going forward than they've been to this point.
Also, gosh, all the inquiries I'm getting from people saying, what do we do? What do we do? Mom or dads or mom and dads, long-term care policy, the premiums have gone through the roof. Do we just pay the higher ones? Do we let it lapse? What do we do? How about if it's you and you're the person with the policy, you get the huge increase? What do you do? We're gonna talk about that. So buying a home, renting a place,
It's funny because some of us on the Clark team were talking about that recently. You know, the joys of homeownership versus the curse of homeownership, renting and not having to worry about it. I mean, the mentality in the United States, I can tell is shifting away from people being fixated on being a homeowner versus being a renter.
This is one that used to be a slam dunk. You want it to be a homeowner. And this is especially a present issue for people who are fortunate enough to have a second home. Having that second home, is it a joy? Is it a burden? Whatever.
So right now, it's more difficult to think about buying a home because the effective cost of rent is a general rule in most places in the United States is much, much lower than what the effective cost per month is for mortgage payment and all the other expenses of owning a house.
roughly a third of Americans historically ran. It'll move up or down a few points in a year. But now it's like, hey, should I be a renter? And there are other factors to consider is the problems you see that people are having from storm damage or fire damage or whatever.
that owning a home, the difficulty of ensuring it and all that, it makes it a tougher deal. So buying a home has very specific advantages. And right now, everything you read is about, or here is why buying a home is a nightmare, or owning a home is a nightmare. But there are real advantages. There's the sense of community, of permanence, of neighborhood,
And those things, you can't measure with dollars and cents. If you have school-age kids or preschool-age kids that are going to be going through school, being able to have consistency in where you are and the schools your kids will attend. They're not having to constantly change schools. You can't rent that place anymore and you go somewhere else.
having the friend group that your kids get to be with. And then over time a home does become a hedge against inflation. Because even though the cost of maintenance and repair and taxes may go up, the cost you're having to pay every month for mortgage stays pretty much level.
And even if you have a mortgage at a higher interest rate from recent times, the time will come where you can refi. Rents, though, over time, climb with general housing inflation. We've just spent an unusual circumstance where rents right now are so much lower. A lot of markets have the cost of buying a home.
The insurance industry meltdown for homeowners insurance is a nationwide problem but has real inflection points in certain states where it's just an all-out disaster. California, Florida, both come to mind right away parts of Texas. I mean, this is a real present concern. It will not be a long-term one.
but it is a present issue. Why do I say it won't be long term? Because the insurance industry will adapt and adjust and will stabilize. It will, but right now it's a mess. Second homes present a different issue. What happens with second homes is people go through a cycle with them. When they first have one, they're really, really happy about it. They love going there. They look forward to being there.
It was a dream to have that. But then as you go through the years in the age and whatever, the second home becomes less desirable. In Florida right now, second homes for a lot of people feel like an albatross. I read stuff all the time about people reassessing. Do they really want to have that home in Florida? Because, you know, storm after storm, the insurance market meltdown, climate change factors, all those things figure in.
So first homes, long-term, if you are a long-term or in something, I think that having ownership of a home ultimately makes sense. If you're not really settled in an area, renting makes sense. Owning a second home may or may not make sense. Financially, it really doesn't. But from those things I talked about, lifestyle and all that, it certainly could.
Okay, this question came in from Rebecca in Georgia. I've been a longtime online bank user. I've also held a traditional set of accounts at Wells Fargo primarily because when I set up the online banks, originally they required a link to another bank to find them. And occasionally I have a need for a notary. I've also been using the checking and debit card recently to segregate funds for a family member who struggles not overspending on credit cards.
So the bank is now imposing fees, which I've never had with them. I'm exploring other options. My question is, is there any reason to need a brick and mortar these days or can I go purely online? Great question. Banks are closing branches as fast as they possibly can. The only exception has been Chase Bank that has been the complete marvel of the industry with how they are still opening branches using them almost like billboards.
having them open. But my question for you, other than the notary, which I'll tell you with notaries, there are now notary services all over the country, that when you need one, you just hire one. It's really simple. Yeah, you're going to pay them some money, but nothing compared to what you're having to pay and all those monthly bank fees to a giant monster mega bank like Wells Fargo. I ask you, how routinely do you ever go to a bank branch?
I don't have a bank account than a bank. But my credit union, I'm never there. Never. I do the equivalent of banking with Charles Schwab. Maybe I'm in a branch once every 18 months. And they don't have many offices in the city because they know most people are never going to walk into one. So I think you're absolutely fine today if you answer, yeah, I'm really never going in a Wells Fargo.
to dump them, dump their fees, go to an online bank where you don't have any of those fees. Arthur and Florida says, I have a Capital One Saver One credit card and a city double cash card. My total charges for a month averaged 900 to $1,100 for either card. My city card is 2% on any purchase. My Saver One is 3% on dining and pretty much 1% on everything else. Which card should I be using? Okay, both.
you use the saver cart only for restaurants if that's the only bonus category to get to three percent and use the double cash everything else because then you're earning minimum two percent not the minimum one percent that you are routinely with the saver cart saver is like savoring the food when it's spelled it's cute so
That's dining only, double cash, everything else, and your blended probably average earn in a month will be like 2.3, 2.5, depending on how much you eat out.
Now a couple of fun ones, Scott says I was in Paris last week and was looking forward to going up the Eiffel Tower. One of my favorite Clark stories was having your family climb the stairs because you didn't want to pay for the elevator. I was excited to go up the Eiffel Tower for free via the stairs. I was disappointed when I got there to see that they now charge 14 euros for the pleasure of climbing up stairs. Inflation, I guess?
Okay, so we did have to pay to go up the stairs. It wasn't 14 when I took the kids. I was 2012 that I took them, but it was much cheaper than going in the elevator, which is why we did the stairs. Do you know last month my wife Lane and I were in Paris? We were staying like a three-minute walk from the Eiffel Tower.
and it was so fun to just walk by and see it we never went and climbed it and certainly didn't ride the elevator
Ken in Alabama says, why does Clark wear such huge headphones during the podcast? In sharp contrast to Chris's lack of even any visible earbuds, Clark's headphones look like a torture device from a Saw movie. Okay, so if you ever watch our YouTube show, like obviously Ken does, who sees my, what we call, cans, right? It's a sports caster like headset. Sports caster headset because
I can't stay still. So I always mess up the audio because I'm always turning away and I'm walking because we stand when we do this because you have more energy if you stand than if you sit. So I'd always be moving from the microphone. The audio would be messed up. So by wearing the sportscaster headset, wherever I turn my head, up, down, left, right, whatever.
The mic is still exactly in the right position. So there may be headsets now that you can have little tiny ear things like, what are you wearing? I don't wear earbuds at all.
So there may be a mic I can wear that just attaches to my head, because we don't need the dance. But it has to be high quality, that's the problem. Yeah. These are the ones that you see football commentator use, basketball commentator, because the sound quality of the mic is the best there is.
other than the huge mic that Krista uses that's also a broadcast quality mic and actually has even better sound. So coming up, we just talked about something so lighthearted. We're talking about something really dead serious. The insurance industry basically has abandoned people as they age who in good faith bought care for older age.
What are we going to do about it? What should you do if you're in the middle of that situation? And what's the best thing for you to do since overwhelmingly we're going to need, at some point in our lives, if we live a long life, we're going to need care in some form of assisted living or help with things. What should we be doing to prepare? I'm going to talk about the present and the future straight ahead.
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that in older age, you're gonna need some form of assist with living. Either within home care, being in a facility, a long-term care facility, maybe being in a nursing home. I mean, those odds are pretty strong. Roughly three quarters of us who live to an older age are gonna need help. So a lot of people in good faith for decades bought
a product called long-term care insurance. So one time was sold by hundreds if not more than a thousand insurance companies. The insurance companies blew it. The actuaries way underestimated how many people would live a long time and also need in that long-term care. And the policies failed. So the insurers put people into what are known as death spirals.
There's a Baron's Magazine story last month talking about what people with Genworth, which was one of the big long-term care insurers, how they're suffering because Genworth has been pushing through rate increases as high as almost 150%.
so someone's been paying for years and years and years and years and they're older now and they're getting hit with a hundred and fifty percent increase and you can't pay it the policies dead or you accept a much lower benefit that won't do much
This is when the insurance industry is just like, well, well, yeah, it didn't work out for us. So it's not going to work out for you either. And their promises weren't worth the paper they were written on.
Barron's in particular takes aim at AARP. AARP was getting commissions, getting money for guiding people to go to a particular provider for long-term care policy. And AARP said, this is the quote, well, that it passively licenses its intellectual property to commercial benefit providers and receives royalty payments in return.
Wow. Wow. What kind of PR or something other is that? Meaning, hey, anybody who pays us will take their money and they can use our name. That's not good. So as a result, I'm looking at a chart here. Nobody buys long-term care policies anymore.
i mean basically nobody and so that means how are you going to pay if you do need assistance later in life and how about people that don't have family that will be able to help them because what's filling in the void so often now is adult children are taking care of their older loved ones are older parents and there are a lot of situations that's not going to be there so there is no perfect answer to it
on the first thing I brought up about the big premium increases. If you've been paying a long, long time and you don't like it but you have the resources and you can afford to keep the policy in place, pay the premium increase, pay the increase. But what does somebody do today who's hearing me or watching me and you're trying to figure out what do you do down the road?
How do you take care of down the road? What should you be doing? So you can buy a policy from the insurance industry now that will give you a set benefit. What happened with these policies is like my late mom had one that just automatically paid all the costs that she incurred over
I think it was eight years in long-term care before she died at 92, but it paid everything. That doesn't happen anymore. So you can buy an insurance policy
that usually is embedded inside a whole life insurance policy that will pay you to your survivors, either the death benefit you purchased or make that available to you as what's known as a living benefit for long-term care.
And that is the least bad alternative I know of today for people who can afford it and have means. The truth is most people don't have a lot of assets, don't have a lot of means, and end up having your state pay for it.
through the state Medicaid program. Medicare doesn't pay, but the Medicaid program ends up paying for most assisted living in the United States, most nursing home care in the United States. But if you're in the muddy middle and you have decent assets but you're not crazy rich,
Because if you're crazy rich, you may spend more paying for long-term care than you pay for your lifestyle as is today. But if you're in that muddy middle, looking at one of these whole life policies may be the best alternative available at this time. Krista, that was not a happy topic. Well, it's reality.
Ron in Colorado says, I've listened to your show since the 90s and I've learned so much. Thank you for all the wonderful helpful advice you and your team provide. I've accumulated substantial amount of assets. I'm 69 single, healthy, never married, no kids, and my tool to brothers live a thousand miles away. I have a lot of acquaintances where I live. However, I don't have any close friends nearby. I need someone to act on my behalf if I'm incapacitated and handle my estate when I die.
What do you suggest? I'm not comfortable with my situation and have to get my state in proper order. It'll take a great weight off of my mind. Ron, you know, as more and more of us are single in society and a lot of people don't have kids today, we don't know where we turn in this case.
And what has become more and more the case is you hire a lawyer as your fiduciary who is the one you pay to be in a position to be your advocate and ultimately handle your estate later.
And I'd be surprised if it's different in Colorado than other states. That is the most common thing that happens if you take care of this in advance. You hire a lawyer and you can have them be both your durable power and durable power attorney for health care. I prefer
that for the healthcare thing, that if one of your older brothers know a thousand miles away, if they are willing to be your durable power of attorney for healthcare, which means they're the one who is in your stead, helps make decisions if you're incapacitated, you can't say what your wishes are.
And many states now have what are known as statuatories, which are documents that are fill in the blank, that you state your wishes on a series of questions, and then you state who your messenger is, who carries out your wishes, and that could be one of your brothers. It could also be the lawyer that you hire
to handle the other things. Based on the dynamic of your family and the situation you described on the healthcare side, it could be either of your brothers or you could name both one to serve and the event one can't or choose not to, the other would serve.
or if it feels simpler to you and better to you, the lawyer who you're having handled your estate is also the one that would be carrying out your healthcare wishes. This is from Chelsea in Minnesota. The last day I saw one of my two car keys was months ago. I have thoroughly searched my house many times, but still haven't turned up. We would like to sell or trade in the car as our teen son is getting too tall to sit in the backseat.
Most places or individuals want two keys for the largest sale value. It costs several hundred dollars to get the key replaced at a dealership. I see ads for online and in-town locksmiths who may be able to program my fob for less, but I don't want to waste money on something that doesn't work or risk having someone make a copy for themselves and come steal my car from my driveway. What's the least expensive and most trustworthy option for getting a car key with a fob replaced?
Okay, this is a wonderful question, and the marketplace has changed on this. There are now companies that all they do is do this. They are mobile services, people who shop regularly at discount stores and warehouse clubs will see their road shows that set up at a Sam's Club, a Costco, a Walmart, whatever, and they make
the key right in front of you. They program the FOB right in front of you and they are all priced at a fraction of what it is to get a replacement FOB programmed at a dealership.
You can order a blank fob if you've lost the fob like you have. You can order a blank fob online for a much lower price and pay the dealership programming fee. A lot of cars though now have the ability to program the one you order self-service instead of having to program at a dealership. I've also taken the fobs I ordered online to the locksmith.
And they've done it. So this is something that's gotten much easier. If you are a Sams or Costco member, they will put for your local club usually online what road shows or have road show events. And when they're happening, you may well see that your local club is having
a fob event is one of their events because there's so much demand for this because who has not lost a key to a vehicle i'm looking i don't see a hand anywhere and i am so flaky
I lose everything. I mean, people who make fun of me wearing cargo, you know, pants with cargo pockets. I wear them because then I know exactly, okay, my wallet goes here, my phone goes there, my keys go here because I am so flaky.
All right, here's a question from Thomas. He says, I'm trying to sell my own vehicle. I know I have to be careful of scams. People are asking for the VIN number. I'm reluctant to give that out and tell them they can get it when they see the car. What do you think about handing out your VIN? OK, so Thomas is funny because we're on two different sides of mentality about this. I always tell somebody looking for a used vehicle to get the VIN.
Because if you look at any used vehicle seller online now that's a dealer, almost always they list the Venn number there. So if you want to, before you would ever go look at the vehicle, you can run vehicle title history.
We have a way for you to do that for free on Clark.com, but you could buy temporary access to one of the VEN check services. And what you're seeing there, you're seeing if a vehicle's been in a major accident that was reported in insurance industry database or the REC is really important or the title history. And so there's very useful information there, Thomas, that people want to see
And it's not necessarily for some bad purpose they're asking. It's actually protecting themselves. I remember years ago when Krista was trying to buy a vehicle, a used vehicle, and she would call up people or send a message asking for the van. And what would you say? 90% of the people you called hung up on you?
No, I would say at that point, maybe like half of the people just were like, no, wouldn't give it to me because there were bad ads. But then when I had the cars inspected, most of them failed the inspection. I remember how many inspections did you pay for before you found a vehicle that was okay? Was it three? I mean, it was four, I think. Four. Because I did a total of five. Yeah. So I paid for five, but four didn't work out.
And so that's what you need to know. Why is it I'm so insistent about you having a used vehicle inspected is one of the most important parts of buying a used vehicle because used vehicles have histories and a lot of times they're not so good. And so having it inspected
as part of purchasing one is so good because there is no lemon law except I think in three states for buying a used vehicle. You buy it whatever problems there are and the courts have made it clear that no matter what somebody tells you it does not matter and the sticker if you go to a dealer says as is no warranty on almost all of them.
And it even says in there, you can't rely on anything said to you. Anything you do buying one is your problem. That's why having the mechanic inspecting the vehicle of your choice is money well spent. Because you think, why do I spend the money for that? The mechanic said the car is good.
Yeah, that's why you spent the money to know that before you spend the big money buying a vehicle, it was good. Or in Christa's case, avoiding trouble four times on cars that look good with the fifth being the lucky charm. And that did turn out to be a good reliable vehicle as I remember. So that's the thing. So Thomas, there's a legitimate reason.
why people want that vent. There may be some bad things people do possessing a vent, but I'm not sure what those would be.
And I hope you have a wonderful, wonderful day. And it's been our pleasure being with you today here on the podcast and the YouTube show. And if you're not subscribing right now and you just kind of found your way to us, wherever you like listening to podcasts, just click that subscribe button on YouTube, click the subscribe button. And on YouTube, I want you to know that when you subscribe to us,
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