The Clark Howard Podcast – Episode Summary: May 6, 2025
Title: Ask An Advisor With Wes Moss
Host: Clark Howard
Guest: Wes Moss, Fiduciary Financial Advisor
Release Date: May 6, 2025

Introduction

In this episode of The Clark Howard Podcast, host Clark Howard welcomes fiduciary financial advisor Wes Moss to the segment “Ask An Advisor.” The discussion delves into critical personal finance topics, primarily focusing on the viability of buying a home in the current market and essential questions to ask when engaging with a financial planner. Listeners are also invited to submit their finance-related queries, fostering an interactive and informative dialogue.

Is Buying a Home Still a Good Investment?

[00:33] Wes Moss:
Wes Moss opens the conversation by addressing a frequent listener question about the current state of the housing market. He emphasizes that while housing remains a strong long-term investment, the decision to buy a home now must be weighed against market volatility and personal financial stability.

Key Points Discussed:

1. Long-Term Stability:
   Moss underscores that housing typically serves as a “forced savings plan,” offering stability and protection against inflation over a decade or more. He notes, “housing is a way to protect against inflation” and highlights the significant financial relief homeowners experience when their mortgage is paid off, particularly in retirement.

2. Market Volatility and Trends:
   He illustrates that while housing prices generally appreciate by 3-4% annually on average nationwide, short-term fluctuations can be substantial. Referencing the period from 2006 to 2016, Moss explains how housing prices plummeted post-financial crisis and took years to recover, cautioning against the assumption that buying a home will always yield immediate profits.

3. Leverage and Investment Growth:
   Using a hypothetical scenario, Moss demonstrates the power of leverage in real estate investment. For instance, purchasing a $500,000 house with a 10% down payment ($50,000) can result in significant appreciation and returns. He states, “you get a lot of leverage” and explains how this can lead to an impressive compounded rate of return over time.

4. Current Market Conditions (2025):
   With housing prices having surged by 50% since 2020 and mortgage rates being historically high, Moss acknowledges the challenges for prospective buyers, especially younger individuals. However, he maintains that for those with a long-term horizon, buying a home remains a sound investment strategy.

Notable Quote:
[07:30] Wes Moss:
“There’s nothing like being in retirement with your shelter paid for. It opens up spending freedom dramatically.”

Five Essential Questions to Ask a Financial Planner

Transitioning from the housing market discussion, Wes Moss introduces the framework of the “Five Ps” — five critical topics to address when working with a financial planner. This segment provides listeners with a structured approach to evaluating and collaborating with financial advisors.

The Five Ps:

1. Planning:
   Moss emphasizes the importance of defining clear financial and life goals. He advises, “If you were to ask your advisor right now, what are your three top life or financial goals,” encouraging introspection and deliberate goal-setting.

2. Portfolio:
   Aligning investment strategies with personal goals and risk tolerance is crucial. Moss discusses balancing aggressive and conservative portfolios to meet individual financial objectives.

3. Protection:
   Protecting assets through insurance is vital. Moss highlights the necessity of umbrella insurance and life insurance, especially for business owners to ensure business continuity in adverse events.

4. Passing It On:
   Estate planning and legacy considerations are essential. Moss advises on trust planning and tax-efficient methods to transfer wealth to future generations, ensuring that financial legacies are preserved as intended.

5. Paying Yourself and Paying Taxes:
   Efficient tax planning and structuring withdrawals are critical for maximizing retirement income. Moss discusses strategies for minimizing tax liabilities and optimizing withdrawals from various accounts.

Notable Quote:
[19:14] Wes Moss:
“These five Ps are constants in life. Planning, portfolio, protection, passing it on, and paying yourself and your taxes.”

Listener Questions and Expert Answers

The episode features insightful answers to several listener-submitted questions, providing tailored financial advice and practical strategies.

1. Frank from Florida: The 4% Rule and Time Horizons

Question:
Frank in Florida asks about adjusting the 4% withdrawal rule for shorter investment horizons, such as 20 or 25 years, and whether a sliding scale applies.

Wes Moss’s Response:
Moss acknowledges the importance of reconsidering withdrawal rates based on time horizons. He explains that for a 20-year horizon, the safe withdrawal rate can increase to approximately 5.5%, though still not as high as some might expect due to inflation considerations. He advises balancing between maximizing withdrawals and ensuring long-term portfolio sustainability.

Notable Quote:
[09:10] Wes Moss:
“How do you max out what we pull out of the investments without running out? It goes up to about five and a half percent.”

2. John in Arizona: ETFs vs. Individual Stocks in Brokerage Accounts

Question:
John questions whether holding ETFs in a brokerage account is preferable to owning individual stocks for long-term investment and rebalancing purposes.

Wes Moss’s Response:
Moss highlights the benefits of ETFs, particularly their diversification and lower volatility compared to individual stocks. He notes that while individual stocks may offer opportunities for significant gains, managing a large portfolio for effective loss harvesting is challenging. Thus, ETFs are often more practical for most investors.

Notable Quote:
[12:20] Wes Moss:
“ETFs give you immediate diversification right out of the gate.”

3. Henry in California: Safe Investments for Down Payment Savings

Question:
Henry seeks advice on whether to keep his $150,000 earmarked for a home down payment in a U.S. Treasury bond fund making 4%, or consider alternatives like CDs offering 4.25%.

Wes Moss’s Response:
Moss recommends maintaining funds in money market mutual funds due to their liquidity and safety, aligning with Henry’s goal of accessibility for a home purchase. While CDs may offer slightly higher returns, the lack of liquidity poses a risk if funds are needed unexpectedly.

Notable Quote:
[14:32] Wes Moss:
“Keep your safe money safe.”

4. Cody in Florida: Selling vs. Renting Out a Home Before Traveling Overseas

Question:
Cody, a retired law enforcement officer, contemplates selling his mortgage-free home valued at $350,000 to fund international travel, expressing concerns about capital gains and the hassles of managing rental property abroad.

Wes Moss’s Response:
Moss advises selling the home, particularly due to the low capital gains taxes applicable if the property has been a primary residence for two out of the past five years. He also points out the logistical challenges of maintaining rental property overseas, suggesting that the proceeds could significantly bolster Cody’s retirement income.

Notable Quote:
[35:15] Wes Moss:
“I wouldn’t want to have rental property in another country. Too much trouble.”

5. Aaron in Ohio: Choosing Between Different S&P 500 Funds

Question:
Aaron is conflicted about whether to stick with Vanguard’s VVIAX or switch to Schwab or Fidelity’s S&P 500 index funds for better integration with donor-advised funds and lower expense ratios.

Wes Moss’s Response:
Moss emphasizes that all major institutions offer comparable S&P 500 funds with minimal differences in performance. He recommends choosing based on convenience, user interface, and existing relationships with financial institutions. Cost differences are marginal and typically not a decisive factor.

Notable Quote:
[38:50] Wes Moss:
“They’re all almost right in that same range. I would default back to where is it most convenient for you.”

Closing Thoughts

In wrapping up, Wes Moss reiterates the importance of comprehensive financial planning through the Five Ps framework. He underscores that proactive and ongoing conversations with financial advisors can provide peace of mind and ensure that personal financial goals are met effectively.

Notable Quote:
[29:14] Wes Moss:
“If you can understand those core Ps and are always thinking about them with your advisor, you can get a lot of peace of mind.”

Conclusion

This episode of The Clark Howard Podcast, featuring Wes Moss, offers valuable insights into real estate investment, strategic financial planning, and practical advice tailored to individual financial circumstances. From assessing the merits of homeownership in fluctuating markets to navigating retirement withdrawals and optimizing investment accounts, the episode equips listeners with the knowledge to make informed financial decisions. By addressing common listener questions, Moss provides actionable strategies that cater to diverse financial needs, reinforcing Clark Howard’s mission to empower individuals in achieving financial freedom.

Remember: For personalized financial advice, consider reaching out to a fiduciary financial advisor like Wes Moss. Submit your questions at www.clark.com/askclark and take control of your financial future today.