Hope you're having a great holiday week. I am off on adventures. So this is a best of addition of the Clark Howard podcast. I hope you enjoy it and that you have an enjoyable holiday week.
I'm so glad you're here with us and welcome to the Clark Howard Show, where our mission is to serve you with advice and information that empowers you so you can make better financial decisions in your life. We serve you many different ways with our websites, our podcasts, newsletters, social media, and our Team Clark Consumer Action Center, where you can get one-on-one free advice 30 hours each week,
If you've got something on your mind and you'd like one-on-one advice, no, we've got it for you. And you can find out how to get it at clark.com slash CAC. In this episode, I want to emphasize something I talked about in the past. And that's when you're thinking about moving to a new city or new state. I want you to rent before you buy. And I want to give you some direct proof why this is so important.
And also, those of you who see me on the YouTube show, you know I'm not interested in fashion, but I'm really excited about a new trend in fashion that can save you a lot of money. Speaking of money seems like a quick way to lose a lot is to pick up and move somewhere else, buy a home right away, and then go, oops!
I thought that was what I wanted to do. And then you got to get out of what you just got into. And even in a rising market, you lose money almost always when you turn and flip fast. I have an example for you from the New York Post.
All right, so last year or so, 700,000 people from around the country moved to Florida. Huge in migration. Also, 500,000 people left Florida in the same time 700,000 went there. A lot of people thought it was paradise-found. A lot of others felt it was paradise-lost. A vacation and living somewhere are two entirely different things.
So you may go somewhere like, as I've told you in the past, I love, love, love going to Hawaii. But I don't know that I would ever enjoy living there year round or even much of the year. So when I go to Hawaii, I always rent and I will not buy because it's just a whole different thing living somewhere every day.
And the case of Florida, it's so easy to rent right now. It's so hard to buy. And if you're looking at condo, you got all the question marks with what's happening with condo fees, what's happening with the insurance because of the hurricane risk and insurers leaving the market.
If wherever you want to go, you decide, hey, I want to go live in Arizona and you vacation in Arizona year after year. But again, living in Arizona is different. I know. I have a brother who lived there for almost 40 years. Summer wasn't so fun because it felt like you were in an easy bank oven all the time. I remember once going there to visit my brother.
in August and walk off the plane and you walk out to the curbside. And it is like you walked into an oven in August 115 degrees and yeah, it's a dry heat, it's hot. So I ask you, is you think about living somewhere else?
It can be as simple as you thought you wanted to live in this part of town and you get there and you buy a place and you realize, that wasn't where I wanted to live at all. I should have been over there. Rent, rent, rent first. And then you'll know if a place is right or not. I mean, think about Florida is at peak in migration like forever. And still, when you look at the end and you look at the out,
The net is certainly not as big as you might think it would be because people found it was not what they thought it would be. Even if they'd vacation there year after year after year, please hear me on this. Any place you're thinking of moving, rent first.
Okay, we'll go to questions now. Yeren in Texas says we purchased carbon, I think it's carbon monoxide detectors that are linked to our home alarm system in September of 2019. There's such a problem.
At least two of these started chirping, make that sound. And the alarm company told us that we had to replace them because they only last a few years. It seems very wasteful that we have to replace these systems when they wear out. The industry should provide a low-cost, user-replaceable sensor cartridge that can be proactively replaced every so many years.
Yeah, and the carbon monoxide detector thing has been a problem for so long. And a lot of times the chirping your hearing, you think it's a smoke detector and it's the carbon monoxide detector, there's no necessity that I know of for a carbon monoxide detector to be integrated into a smoke and fire alarm in a house.
You've got different issues. Carbon monoxide detector is a silent killer carbon monoxide. You want just to be woken up and know to get out and buying a freestander carbon monoxide detector. I saw one the other day at Aldi for 1499.
is by one, you have one in every sleeping quarters of the house. I already bought one from my son for his dorm room in college. You want to have carbon monoxide detectors. By the way, usually many of the carbon monoxide detectors will tell you you want them low, not high, and not have them integrated as part of a security system where you have to then pay a service visit for a burglar alarm company to come out and change it out.
This is something you think about all the horrific reports of people dying on vacations from carbon monoxide poisoning because of mismanagement of hotels. Just have these in your home to keep your family members safe.
and you carry a portable one when you travel. I do, but I remember we had the car stinks about it because I bought some off-brand one on Amazon and people were like, how do you know it's any good? Just spend a little more and buy a brand name. I haven't done that yet, but I travel with it in my backpack and just take it out of hotels.
John in Texas says, I need you to tell me if I've made a costly mistake. We put an extension on the back of our house last year and used mostly the sale of mutual funds, non-retirement funds, to pay for it over the course of the four months of construction. The project cost was about 110k. We've approximately $500,000 of equity in our house. That's fantastic.
I'm wondering if I would have been better to take out a HELOC or home equity loan to pay instead of using mutual funds because now I'm staring at an $18,000 tax bill. I generally don't like debt, but I'm wondering if I made a mistake in this case. So I don't think you did. Remember, you cleared 110 grand from the sale of those mutual funds meant you paid a 15%
capital gains tax rate. That's so much more favorable than generally what income tax rates are. So paying for it free and clear. You own it free and clear. There's no payment. You can take money. You would have been putting towards a he heart payment or a home equity loan.
And instead, you're replenishing your investments dollar cost averaging in, which is really valuable right now because the stock market is so fully valued. Some people believe it's in rarefied air. So we're in a time that dollar cost averaging is extra favorable, where every month in little amounts, you start replenishing the money. So HELOC rates are high right now. Home equity loan rates are really high right now.
Avoiding the debt, I think, is a perfectly acceptable idea and one that will help you sleep better at night. Emma Colorado says, Clark, thank you for your optimism in sharing your wealth of knowledge. I wanted to see what you think of this. You want me to name it?
this investment company, Titan investing that promises you have to chase the highest high yield rates. Thank you for what you do, sincerely loyal treadmill listener. Well, I hope you're enjoying your treadmill and so Titan.
Titan is kind of its own thing in the investment world. And it's neither a good thing nor a bad thing. At base, they are a robo investing kind of tool where you can buy robo portfolios for free. They do a lot of different things. They do a lot of alternative kind of investments. They do, I think they're crypto also.
It's not my kind of flavor of investing, but I would call them neither bad or fantastic. I'd say they're somewhere kind of a mixed bag. And if you use them just for robo investing,
That's absolutely fine. They use portfolios that would accomplish what you're looking for, that you would use. If you did better men or wealth front, or you use the robo-investing tools at Vanguard, Schwab, Fidelity, others, I think for that it's fine. I haven't seen anything on fiduciary on the site either. If you're doing... I'm just saying if you're... You're just doing robo-investing. They are an investing tool.
But I don't like crypto. I don't like alternative investments. It's not my area, which is why you're not hearing me say, oh, this would be great. It's not my overall picture of what I'm interested in doing is someone investing. I guess we call it a lukewarm kind of response to that.
And there are Robo Investing sites we've reviewed on Clark.com too, if you're interested in that. Yeah, Robo Investing is so wonderful because it allows you, if you just don't know how to build a portfolio, these are tools that allow you to build a portfolio appropriate for your goals, your age, and the level of risk you're willing to take on.
And the robo modeling is there'll be variations from one model to another, how they would take the same data inputs and build a portfolio, but they're more at the margins and differences rather than giant differences. Coming up ahead, fashion advice remain not, but fashion advice concerning your wallet straight ahead.
I am so excited that all three of my children and my wife all buy used clothing. That's right, they're running around in used rags.
You know, the rag trade, clothing trade. And that is what's going on in the United States. There was a report recently that the used clothing market is growing seven times faster in the U.S. right now than the new clothing market. Americans treat clothes as almost disposable items now.
I was visiting a society of St. Vincent to Paul store and I was telling you the manager about what they face with sometimes there are times that actually too many clothes are coming in.
And they don't sell them fast enough because the volume of clothes being donated is so large, not that they don't want you to donate. But I mean, it's a symbol a sign of the times that people are donating clothes or selling their clothes secondhand in such large numbers because people used to buy a small number of clothes
and wear the same things for years. They'd wear them till they wear out. Today, fashion trends continually move, especially in women's clothing. And so clothes are looked at as almost like, yep, this season, they're gone.
So if you're someone who likes style, let's just call it that, you like style, but you don't like the high prices that come with it, buy what other people decided, eh, not for me anymore. And you're gonna save so much money, so much money coming back in your pocket. And they'll only use clothes I buy or dress up clothes.
And why would I as a guy only by dress-up clothes used? Because then never dress up anymore, really.
And so if I need a new to me suit and I go and I buy one in a second hand shop, it's been worn almost not at all. On the other hand, most men, the other clothes they have, again, they wear them till they got holes in them. So much better opportunity at the high end. I remember I got a great pair of dress shoes at a good will once.
and I wore them out with holes in the bottom of the soles, but I did not have them. What do you call them? Were you going to resold? I didn't do that because I paid like $12 for them, but it cost me much more to get them resold. So, Krista, I wear, as you know, through the years where I used suits. They had a whole new shoes. Yeah. I remember that. I think it's great. What's wrong with that?
The cheapest I ever paid for a used suit was $1. $1. I remember that. People get upset about, sorry, go ahead. People get upset about what? Use clothing like it's gross. And I'm like, if you go to a hotel, you're sleeping on sheets. Somebody slept. Don't freak people out about sleeping on somebody else's sheets. I'm just saying like it's the same thing. They're cleaned and you clean them and it's all good. I'm all for it.
All right. You want questions now? I'm ready. Ken in California says I recently attempted to make an online purchase with a merchant based in the UK with my credit card. The card was refused due to so-called 3D authentication. The next day I called the bank. I made 13 attempts to get a live operator through their endless loop automated attendant. What does that tell you about being with a giant monster mega bank?
A half hour later, I finally got a live operator. She wasn't familiar with the 3D authentication beyond its name, but she called back and said the only way to make a purchase is to call into the bank each time to get an authorization. Given that you can't get a live operator on the phone without extraordinary effort, I can only infer that I can no longer make purchases where this 3D is required.
This is another example of security overkill where merchants are passing their problems onto the backs of consumers, but they're going to wind up out of business if people can't complete a purchase.
and unlucky 13. Okay, you then got the wrong information from the customer no service person. All right, so here's how it works. Merchants are getting just clobbered by stolen credit card numbers for online purchases of all different kinds, domestic, international, you name it. So now there are these systems
that the big credit card people have done American Express. These, I assume, MasterCard has one as well. Don't know about Discover. What these systems do is they add a layer of verification involved. It's almost like a form of two-factor authentication for the card. Now, you being told you have to call in every time?
not at all how it works for whatever reason the normal authentication process that would come with three d which all that is is it's a commercial i guess it's a commercial product for having a additional step of verification
on a card, not present transaction. In other words, somebody's buying over the internet, over the phone, something like that, where you're not standing there in a retail store or restaurant presenting a card. As an example with American Express, it'll often pop up a screen for an American Express validation process. And depending on the algorithm and what risk it expects, it may then send a text
It may send an email, chase in particular, and city, two of the largest issuers, both have systems where they send a text where they first decline a transaction. And then it will say, hey, if this is one you really meant to make, do blah, blah, blah.
and you validate that you were trying to make that purchase they'll tell you to go back to the website and put the purchase back through and it'll go through the second time almost always whatever happened with your lame bank that they couldn't explain to you that that's how this is supposed to work
I don't know, but it is a giant monster mega, so what do you expect? So this is something that is an additional layer of friction when you buy online because of all the problems with stolen credit cards. And this is so important to merchants because if I present a card at a retail store and the card's hot, it's a stolen card,
But the retailer got an approval code, they're not responsible because the card was present. On the other hand, let's say that retailer also has a .com, and I do a transaction through the .com, present that card, they get an approval code.
They get stuck with the bad charge because the card was not present. And that's why there are these additional steps of security that are not supposed to be anything other than a minor irritant to you and turned out to be a big pain in the rear end because, well, your bank didn't have its act together.
Roger and Georgia says, I was approached by a professionally dressed person wearing an AT&T badge at my local Target store near the electronics department. This salesperson proceeded to ask me who my current carrier was and what iPhone I had. I told him I had Verizon and an iPhone 14.
After typing on his iPad, he said he could get me a $1,000 off of a new iPhone 15 Pro with trade-in, and my bill would be a fraction of what I was paying with Verizon. I said that seems too good to be true, and I would have to think about switching. I then asked if their coverage was as good as Verizon. He told me the AT&T owns T-Mobile and Verizon Towers.
I called BS and walked away. Is this guy really from AT&T? What are retail stores like Target and Costco? Why are they allowing these salespeople in their stores? How much time do we have for me to address this? OK, you might need to go get a nice cup of coffee or something. This could take a while. So I'm going to abbreviate this.
All right, so the person may be an AT&T employee likely is an AT&T contractor. They get paid to lead, generate, and get new customers. What's in it for Costco? What's in it for Target? They're getting money for basically allowing those cell phone people or contractors in the store.
Second, never, ever, ever, not ever trust what you were told in a T-Mobile, AT&T, or Verizon Store, or when there's one of their salespeople or contractors in somebody else's store. I don't know how many lies are told that I hear over and over again from people where they say, well, they told me I was going to pay blah, blah, blah, and then the first bill came and it was so much money.
And what matters under the law? Only what you signed your name to on that iPad.
not what the salesperson told you. Never, ever sign up for service from any of these representatives until you have had a chance to read what you're signing your name to because this is garbage telling you that you're gonna pay a fraction of what you're paying to Verizon by switching to AT&T. We have all the prices for you, of all the companies and all their plans,
And I can tell you that AT&T, Verizon, and T-Mobile, they used to be referred to by the old T-Mobile CEOs Tweedily D and Tweedily Dumb. Now they're Tweedily D, Tweedily Dumb, and Tweedily Dumber. And they're all pretty much in the same general price categories now and trying to push rates up on everybody. So unless you have end writing right before you when you sign your name,
The promises made don't believe them. Next thing, that AT&T owns all the towers that T-Mobile and Verizon use.
Okay, here's what's actually going on. There are big companies, some of them publicly traded, that own almost all the cell phone towers in the United States. And then they lease space to the various cell phone carriers and then other parties as well on those towers for various purposes.
And the cell phone industry, a good while ago, generally got out of the tower business and owning towers and discovered they were better off with engineering specialists owning the towers and leasing the space. But please remember the most important thing.
Never, ever trust what you were told by a cell phone company, employee or representative, the only thing you can trust is what's in writing that your name is going to be signed to, period.
Isaac in Washington says, I wanted to ask your thoughts about using a cash management account connected to my brokerage instead of a checking account. It means you're brilliant. The cash management account I've been using with Fidelity gives 2.7% on your balance, covers ATM fees, lets you deposit checks and gives you a debit card. So I've been much happier with them than with the giant Monster Mega Bank I was with before.
The account also has overdraft protection so you can connect to your brokerage. So recently I've been keeping a $0 balance and having all the money I spend out of this account come directly out of a money market fund in my brokerage. It feels pretty good to think that every dollar I have is earning 5% at least. There may be some downsides to having no checking account, but I haven't found them yet. I just wanted to let your listeners know
and ask you if I'm missing something. And by the way, I learned about this account on your website. So I'm pretty sure you already endorse it, but I don't think I've ever heard you talk about it. So I should explain. You don't use endorse. Endorse means pay to play. Pay me money. I'll say, this is great. We don't do that. But as for Fidelity's account, originally in 1978, maybe,
Fidelity started Fidelity Cash Reserves, which was an earthquake in the banking and financial industry. Fidelity has been at the forefront
of having cash management accounts that you could use as your everything account tied in as like a nexus of your investments, your savings, your credit card, checking the whole shebang. Fidelity has been at this a long time, two generations plus, with having these cash management accounts
They do it really well, and Vanguard doesn't offer this anymore, and the Fidelity product is actually superior to the Schwab product. So they do, as best I know, the best job of this, of anybody, vastly superior to a bank, as you have discovered, and also superior to their direct competition. So they are doing a great job with it,
Here's nothing you're missing. You're using it to its max if you are also using the Fidelity 2% cash back credit card and good for you. And I hope you have an absolutely great rest of your day. I look forward to serving you tomorrow. And remember, the key principles that I want you to have. Learn ways to save more, spend less, and avoid getting ripped off.
