Caller or Listener (2:20)

I mean, better than I did in high school. Right?

Clark Howard (2:22)

Well, when I started. Yeah, definitely better than I did in high school. When I started with the aura almost six years ago, it was typical that my sleep score was in the upper 50s. Wow. So it's really behavior modded me into much better sleep and better overall health.

Caller or Listener (2:39)

Randy in Ohio says, clark, first, thanks to you and your team for many years of Great information and guidance. I can certainly blame you for my success with money. And I'm grateful. Recently you talked about pay in four. I could tell your blood pressure was near nuclear levels as you discussed this. I too agree these are garbage and something life would be better off without in nearly all situations. But then I thought, how are these different than a plain old credit card? If somebody buys something with a credit card that doesn't pay the bill, the same thing happens, huge fees and their credit gets trashed. And how are these any different? I don't hear you talk about credit cards like this. It comes down to personal responsibility. I've been drilling simple advice into my children's heads for years. If you don't need it or don't have the money, don't buy it. The banks and other institutions will forever try to come up with ways to get into your pocket. This is just a new twist. And then it's signed forever a Clarky Randy.

Clark Howard (3:41)

Well, forever a Clarky Randy. Thank you. And so why was it that when I first was reading in the financial news years ago that the banks were just chomping at the bit to bring pay in for to the United States? Because pay in for first became popular in Australia and I was reading about how people who were already in debt were suddenly taking on more debt with this new pay in for thing. And I predicted the future, that the banks here would just love this, having more indebted Americans and with even higher levels of debt than they already had and that they'd score more money from it. And that's exactly what happened. Because it's about behavioral finance. Just like with credit cards, which I brought up just again like a month ago, that if you ask a consumer what the interest rate is on their credit card, they don't have any idea. Because there's this belief that, well, when the bill comes, we're going to pay it and that's what we tell ourselves and then we don't. So pay in four just magnifies it. It's like gasoline on the debt fire. Now what you said about your kids, how is it phrased if you don't need it and can't afford it, can't afford it, you don't buy it.

Caller or Listener (5:10)

If you don't need it or don't have the money, don't buy it.

Clark Howard (5:13)

Okay, so that's fact. And what happens is the desire, the temptation to have something right now is the problem that you pointed out so well with credit cards. So paying for the reason. I saw it as a train coming down the tracks and the light at the end of the tunnel was that train is that it feeds into that cycle in our brain that says, oh wow, I can have this right now. It's hard to overcome that. And it's all about teaching yourself that you don't play the bank's game. Remember, banks are all about. Think of them as benign drug dealers. They're trying to get you hooked so that you have to have their product. You're the one who has to fight back against the possibility of being addicted to unhealthy debt.

Caller or Listener (6:18)

Evelyn in California says, Mr. Clark, you smelled up the waiting room at all the doctor's offices. Yes, there is a shortage of Doctors in the USA. And yes, NPs and PAs are bridging the gap. You lumped DOs with them. A DO is on the same level as an MD. Both are qualified to practice medicine, having gone through very similar training. Actually, a DO has extra training in omm. I don't even know what that is, although so many choose not to do that. So please show them the respect they deserve.

Clark Howard (6:50)

Thank you very much, Evelyn. And I wasn't trying to diss dos. I was talking about how it was an unexpected benefit people who go to doctor of Osteopathic Medicine school and that they are helping with some of the shortage in primary care medicine. So it was not. I was not trying to dissipate at all.

Caller or Listener (7:17)

Okay. Brian in Florida says to help Clark with the question about software and computers on wheels. Many software vendors who provide software for vehicles provide periodic long term support releases designed to be more stable and have a longer support cycle, often 10 to 15 years. When OEMs go into production with LTS releases, they can provide active support for vehicles at least through its teenage years.

Clark Howard (7:45)

I don't remember the context of when that original.

Caller or Listener (7:48)

I think there was a question from someone about what happens like when these cars don't get supported anymore, they're just dead in the water.

Clark Howard (7:55)

Well, I mean the, the electric cars that depend on a continuous stream of over the air updates. That's why people worry they would become bricks. We haven't been able to test that yet because the electric vehicle makers have gone bust. Didn't have enough inventory on the roads to really know what kind of problem that would be.

Caller or Listener (8:19)

Steve in New York says, hi Clark, you don't stink, but there's a mild odor of last night's fresh fish wafting in the air. Regarding your response about the iPhone, open with face ID and pass keys. The writer specifically asked about open with face ID but you responded with a discussion on pass keys. They are not the same thing. You're correct in that passkeys are more secure than passwords. A passkey is comprised of an encrypted file on your device called a private key that is stored in a password manager icloud keychain on an iPhone or iPad, and it's mathematically related to a similar file on an authenticating service called a public key. To assure that you are who you say you are, you your biometric or device pin allows the keys to be passed to each other for authentication. You never see the key and it cannot be read because it is encrypted, which makes this authentication method nearly impossible to hack. This also works with Android devices, although the private key is stored in a different location. Open with face ID or fingerprint, depending on the device. Manages how an app is launched on an iPhone or iPad with this setting enabled on a per app basis, the app requires your biometric to open it. This is not a passkey, just an additional layer of protection. The passwords app on an iPhone can send the password, but it's only a password, not a passkey. Thanks for all you do. I enjoy hearing you help people save money in a practical way. And that was a couple people wrote in about that one.

Clark Howard (9:50)

So I want to thank Steve and the others because this indirectly relates to what we're going to talk about later in this podcast and how important the layers of security are. And I appreciate the explanation, although it almost went over my head. Did you follow? I get it, yeah, about how one is a different form of security for the other and same way, we're going to get more into that later.

Caller or Listener (10:21)

Buzz in Arizona says Clark doesn't stink, but I wish you'd give a little more detail when you mentioned that withdrawing contributions from a Roth IRA isn't taxable. A few years ago my wife made a withdrawal and I couldn't figure out how to report it correctly since it wasn't obvious in the tax software. I ended up paying taxes we didn't owe. I eventually realized you have to manually enter your basis the amount you originally contributed because it's not listed on the 1099R. Once you tell the software your basis, that's how the IRS knows the withdrawal was from contributions and therefore not taxable since I've amended that year's return and should get money back. A little more explanation on this topic might save others the same hassle.

Clark Howard (11:03)

Buzz, thank you. This is. You know, I mentioned from time to time one of the Reasons we do Clark stinks is exactly for this. So there's only so much detail that I remember to give or know to give. And when you post something like this and I say so, I say, okay, so you can pull out your contributions to a Roth at any time, just not your earnings. You don't have to wait till retirement age. And that's where I leave it. But there's nuts and bolts beyond that. That's exactly what you're talking about here. How to properly report that so that it is a non taxable event.

Caller or Listener (11:43)

Michael, California says. Hi, Clark. You often state that credit unions are superior to banks. Credit unions can stink too. Our local NPR station did an expose on our local credit unions and revealed they charge high fees, such as for overdraft transactions. Our largest credit union has relatively high mortgage rates and spends a lot of money on Advertising their CEO makes $13 million per year.

Co-host or Sidekick (12:08)

What?

Caller or Listener (12:09)

I don't think their members know any of this. I personally found lower mortgage rates in the private sector. I encourage all your listeners to dig into the details of a credit union before joining.

Clark Howard (12:20)

All right, so not all credit unions are created equal, as I've talked about before. Big credit unions, small in between. There are credit unions that are borrowers. Credit unions. There are credit unions that are savers. Credit unions. What do I mean by that distinction? There are credit unions that put a special emphasis on offering the most on the money you save, while others are not that great on what they Pay savers on CDs and savings accounts because their emphasis is on giving the best loan rates they can. And then you give an example that management of a credit union can basically hijack it and make it to enrich themselves as managers instead of serving the members who own it. And that's where members have to be on their game because members control the board or should. And if you got a bunch of bums running the place, you throw the rascals out. But the structure of a credit union versus a bank most times will make a credit union better than a bank because they're not getting up in the morning trying to figure out how to rip off their members. Where a bank isn't necessarily trying to rip off its customers. It's just trying to make as much profit as it can off of its customers, which culturally is the normal difference between a bank and a credit union.

Caller or Listener (13:51)

And Bernie in Colorado says you're not quite stinking, but you took an early morning shower and worked a long day. You neglected to mention getting a passport card along with a passport and keeping them separate.

Clark Howard (14:03)

So I actually do this and the passport card is doesn't have the same functionality as a passport. I think they're referred to as a book passport itself. You can use them to cross land borders, U.S. to Canada, U.S. to Mexico. But it's also a great thing to have if your passport gets taken. I use it when I go on a cruise as my form of id. When I'm off the ship I have my passport card and so it lasts as long as the passport you have gotten or renewed. And yes, you keep it separate from the passport itself and that is good advice. I want to thank everyone who took time to post today and if this is your first time watching or hearing a Clark Stinks, think about the diversity of things people posted about, details that that I got wrong, things I forgot to say, things I didn't know. That's how we all learn. We're all in this together. And the other thing about information that I give on the podcast is that the information changes. It's dynamic. It doesn't stay the same. And so there are times that I will give obsolete advice because I'm not up to date on a change I didn't know had happened. So I want you to know how much I appreciate it when you take the time to post on Clarkston. If you want to do so, go to clark.com clarkstonks now coming straight ahead, we're going to talk more about the risks that are happening to you right now with criminals going after you or your money.

Sponsor/Advertiser (16:05)

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Clark Howard (16:33)

The security risks keep morphing with criminals trying to get into your email, your brokerage account, retirement account, bank account, you name it. They want you. They want your money. And either they want to be able to take over everything potentially through your phone, or they want to take over individual accounts by being able to swipe access. And I want to start with a simple housekeeping thing and that is there is a specific security threat geared towards people who carry iPhones. That is something where they dig deep into your iPhone and are able to have access to everything on your iPhone. And there's a simple way for you to prevent this. And the people who do it are called Dark Sword hackers update your iPhone. It's so simple and it's so common that people on an iPhone or Android never get around to doing the updates. Well, right now there's known vulnerabilities that the spyware known as Dark sword can exploit. If you're not on the latest update for iPhone and then criminals have, I mean they're just there on your phone having access to anything they want to have access to. If you haven't done that update or don't even think about it, I want you to see if there's an update that's been waiting for you and get it done on your iPhone again. The greatest threats of the hackers or to iPhones in the United States is not true worldwide. But in the United States there's this very specific reason. Even though the market share is roughly 5050 in the US between iPhones and androids, in the United States, iPhone users generally tend to be higher income, have more assets. And so the criminals specifically here are trying to target iPhones to get access to your money and your identity. So that's why I want you to do the update really easy, really simple. Second thing is this came up in Clark stinks earlier and it's about how important you using the security tools that are available now, using biometrics, using two factor authentication, which is two factor authentication is just the overall kind of term that at one time just meant getting a one time use text. But what's become so key is passkeys and we've talked about pass keys in the past. It is a method that is far, far safer to protect your key accounts than you using traditional passwords. As you know, there's so many problems with passwords, they are so easily compromised. Pass keys to this point remain superior. If you're not familiar, passkeys are a digital method of verifying who you are that was developed by a cooperative effort of some of the largest technology companies in the world who actually, instead of fighting each other and hating each other, cooperated to create a safer environment for you with your accounts. And you may see when you're signing up for something or you go to sign in for something, they ask, would you like to use pass keys for this? The answer is you yes, I want to use pass keys and the technology behind it. You don't have to worry about the complexity that's behind the curtain. Irrelevant for you and me, except that it makes things safer. Using pass keys is ultra easy. Essentially your Phone becomes your friend when you go to sign into things is the easiest way I could describe it. And that was such an oversimplification. Krista, we'll probably have more Clark stinks clarifications next.

Caller or Listener (21:18)

All right, well, let's go to some questions that came in for you.

Clark Howard (21:20)

Sure.

Caller or Listener (21:21)

This one's from Julia in Colorado. I recently received mail from an independent solar provider about an option to subscribe to a community solar farm. The solar energy is generated at their solar farm and I would not have to put unsightly panels on my roof.

Clark Howard (21:37)

Unsightly panels. I look at them, I look at my solar panels on the roof and I see money, money, money.

Caller or Listener (21:46)

The energy company would receive the solar energy and apply the credits to my bill. I would pay for the solar energy credited to me, but a 10% discount, which would apparently be a savings to me every month. I've yet to hear about anything solar that is an immediate out of pocket cost savings. What are your thoughts, pros and cons on this idea of a community solar farm? Of course, space is very limited to sign up with like a laughing face. Thanks for all you and your team do to bring us news we can use.

Clark Howard (22:17)

Well, thank you. And community solar farms are legal in some states, not legal in others. And the idea is that you get economies of scale as a community owning that solar farm instead of it being owned by some big monopoly utility. So these plans generally are looked on very favorably. But it's all in the details and you want to see the contract for the community solar farm. In a normal co op kind of arrangement like this, you have the ability to leave the co op at any time without financial penalty. And that's what I always want in a community solar farm contract. You know, limited spaces, supposedly there would always be a wait list of people wanting to get in on the community solar farm. So why would there be handcuffs on you exiting with a 30 day or 90 day notice? So check the contract, make sure what you're Getting is a 10% discount from what the utility rates would have been otherwise using traditional power sources, and that you have the ability to exit without financial penalty on relatively short notice. 30 to 90 days, then you're good to go.

Caller or Listener (23:37)

Nathan in Wisconsin says, hi, Clark, I heard that if you're a veteran, you get more in Social Security. Is this true? And thank you for your service.

Clark Howard (23:46)

Well, you are so kind, Nathan. Thank you for what you did for our great nation. And I want to tell you, you have to have served in a specific window that the number of people who are are still eligible keep shrinking because the eligibility period for military service started when I was a little kid back in 1957 and continued till 2001 as I recall. So you had to be active duty military during those years, any point during those years to get the booster shot for Social Security benefits. And I don't know the political history of how that came about and more importantly why it cut off at 2001.

Caller or Listener (24:38)

Chris in California says tax season has me thinking about how the higher standard deduction is affecting deductions on charitable donations. We donate about $5,000 every year and plan to continue doing so, but receive no tax benefit. Is there a strategy for donating a lump sum in a single year that then pays the charities over a period of time and then we can itemize deductions in that year? I hear about donor advised funds, but I don't know much about them. Can you explain if this is a good option?

Clark Howard (25:09)

Yeah, actually Chris, you are so on the money. It's amazing. For some reason, Congress passed a law in 25 that specifically punished people for giving money to charity. It put in triggers where up to a certain amount, charitable contributions were no longer deductible. You got no benefit on your taxes and they cap the reduction in income tax that you get from a charitable deduction below what somebody's tax rate may have been. So what people are doing is they're bunching up multiple years of donations to charity all at one time if they can afford to do so. And you may not want to give all that money to a particular charity all in one lump sum. So what you do instead is you give this larger lump sum of money all at once to a donor advised fund. What is a da? It is where you get the charitable deduction all in one year. And then you get to nominate whenever you wish each year who you'd like to give donations to. Now the the big donor advised funds are run by my three favorite children, Vanguard, Fidelity and Schwab. The lowest cost donor advised fund is with Vanguard. So I have a Schwab donor advised fund. I have a Vanguard donor advised fund. And what Lane and I have done over the years is when we've had a particularly good income year, we've given more money to our donor advised fund. If we've had a bad year, we don't give any money to it. And charities we give money to all are donated to from our donor advised fund. Remember, you get the full tax deduction upfront in the year you fund the donor advised fund. You don't get any charitable deduction when you donate to the causes that you love when you donate to them. Because remember, you already got the charitable deduction when you donated originally to the charitable fund that you chose to give your money to. So if you Chris will go look, I don't know. Usually what people do is if they're with one of my three favorite children, they tend to open their donor advised fund with one of those three favorite children, whichever one they're with. The reason they're coupled together is that one of the smartest tax strategies you can do is you take a stock or ETF mutual fund, index fund, whatever you have in your brokerage account that you've had a big run up in value. Think about if you sell it, you have to pay capital gains tax. But if instead you donate shares to your donor advised fund, you don't pay capital gains tax and you get the full benefit of a charitable donation on what the stock, ETF mutual fund or index fund is worth at the time you migrate that money to the donor advised fund. So it's a double tax benefit and it helps you overcome the mean spirited nature of what the Congress did last year to punish charitable giving. What were they thinking anyway? So that was a Congress stinks right there. I want to thank you so much for joining us on this Friday. And what I love about my fellow Americans is nowhere else on earth are people as generous towards causes they care about, charitable things as Americans are. We are the most giving, kind people on earth. And how great is that? To end our week on with the podcast and know all weekend long, we're still here for you@clark.com clarkdeals.com if you've subscribed our newsletters, they'll keep coming through the weekend so that you can be Clark Smart and know the best ways to save as you shop, the best things to do to empower your wallet and empowerment is what we're about so you can save more, spend less and never, never not ever get ripped off. See you Monday.

Sponsor/Advertiser (30:14)

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