07.23.25 Assignment: Save On Home Internet / A Big Bank Restart

Summary

Podcast Summary: The Clark Howard Podcast – July 23, 2025

Episode Title: Assignment: Save On Home Internet / A Big Bank Restart

Host: Clark Howard

Release Date: July 23, 2025

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Clark Howard dives deep into practical strategies for reducing monthly expenses, particularly focusing on home internet services, while also addressing significant updates in the banking sector. Additionally, he answers listener questions on a variety of financial topics, providing insightful advice to help listeners make informed decisions.

Saving on Home Internet

[00:39]
Clark kicks off the episode by emphasizing the importance of tackling recurring monthly bills to achieve substantial savings. He identifies internet service providers (ISPs) as one of the most notoriously problematic industries in terms of customer satisfaction.

“What industry in surveys ranks the lowest of any industry surveyed or close to the lowest to depending on which survey and which year it is? Internet service providers...” [00:39]

He critiques the monopolistic tendencies of major cable companies like Charter (Spectrum) and Comcast (Xfinity), highlighting their history of hidden fees, arbitrary price hikes, and poor customer service. Clark explains how the lack of competition has allowed these companies to dictate unfavorable terms to consumers.

“The cable companies were put under a tight collar. They were not allowed to grow because of all the criminal behavior at Wells Fargo.” [14:56]

However, Clark notes a positive shift in the industry as new competitors emerge from unexpected sources, including former monopoly phone companies and aerial service providers. This increased competition is driving prices down for proactive consumers who shop around for better deals.

“Prices are going two ways at once with the cable monsters… they are going up to people who don't shop around and they're going way down for people who do shop around.” [05:55]

Clark assigns listeners the task of actively shopping for internet services, leveraging the newfound competition to secure more favorable rates and better service quality.

A Big Bank Restart: Wells Fargo’s Transformation

[16:44]
Clark revisits his long-standing criticism of Wells Fargo, a major U.S. bank previously marred by unethical practices. He acknowledges the bank’s historical misconduct, which led to stringent restrictions on its growth and operations.

“For more than a decade I've referred to Wells Fargo as being a criminal enterprise, impersonating a bank.” [16:44]

However, Clark observes a notable change in Wells Fargo's recent operations under new leadership. He concedes that the bank appears to have reformed its practices, leading to the lifting of previous restrictions and allowing it to function as a standard financial institution once again.

“Wells Fargo, for the last several years under new leadership, seems to have cleaned up its act and the collar has been lifted.” [16:44]

Despite this positive turn, Clark remains cautious, urging listeners to remain vigilant and considering alternative financial institutions like Schwab, Fidelity, Vanguard, credit unions, and local banks that often offer better deals and a more personal relationship.

“Schwab, Fidelity, Vanguard… offer much better deals to you with your money than you get from traditional banks.” [20:15]

Listener Questions and Answers

1. Home Equity Agreements vs. HELOCs

Listener: Kathy from Florida
Question: Explanation of home equity agreements and their viability compared to traditional HELOCs.

[06:26]
Clark explains that home equity agreements involve signing away a portion of the home's future value in exchange for upfront cash, without the obligation to repay the principal. This contrasts with HELOCs, which are loans that must be repaid with interest.

“They say, hey, we'll give you money. You never have to pay it back… they get a portion of the increase in value.” [07:08]

He advises that while these agreements can be a last resort for homeowners needing funds for urgent repairs or to maintain their home, they generally aren’t recommended as they lack transparency and established trustworthy providers.

2. Stock Trading and Tax Implications

Listener: Chris from London, originally from North Carolina
Question: Clarification on how frequent stock trading can lead to unexpected tax liabilities.

[09:30]
Clark breaks down the tax implications, highlighting that short-term capital gains (from holding stocks for less than a year) are taxed as ordinary income, which can be significantly higher than long-term capital gains rates.

“The tax code is set up to punish you… taxed at a punitive rate known as ordinary income tax.” [10:01]

He advises against speculative trading and encourages holding investments longer to benefit from lower tax rates.

3. Employer-Sponsored Annuities

Listener: Guillermo from Colorado
Question: Evaluation of a new retirement product offered through an employer.

[11:03]
Clark critiques the employer-offered annuity, pointing out its high fees and unfavorable tax treatment compared to traditional retirement accounts like 401(k)s and Roth IRAs.

“The expenses involved on it are typically about 12 to 15 times more expensive…” [11:56]

He advises prioritizing established retirement savings vehicles over complex and costly annuity products that primarily benefit salespeople.

4. Remote Work vs. Local Employment

Listener: Ronald from Georgia
Question: Whether to accept a salary reduction for a local in-person job to avoid potential layoffs from reverting to office-based work.

[20:58]
Clark recommends taking a pay cut to secure a local job that offers better quality of life, especially if relocating to a high-cost area would negatively impact one's financial and personal well-being.

“I would do it because… it would be a significant deterioration and quality of life for you.” [21:20]

5. Building Credit for a Teen

Listener: Daniel from Arkansas
Question: Managing credit for a 19-year-old who is about to get his own credit card.

[22:37]
Clark explains that while adding a teen as an authorized user on credit cards can help build their credit, any mismanagement could affect both the teen and the primary cardholder. He suggests that once the teen has his own credit card, removing him from the parents' accounts can isolate any potential negative impact.

“Your credit affects you and him… your difficulty with credit would also become his difficulty with credit.” [23:03]

6. Saving Strategies for Future Goals

Listener: Phil from Georgia
Question: Advice on allocating savings for a home purchase and wedding within the next few years.

[23:57]
Clark commends Phil’s disciplined saving habits and recommends maximizing contributions to a Roth IRA while continuing to save in a high-yield savings account for immediate goals like a home and wedding. He also advises evaluating the costs of current retirement accounts and optimizing investment strategies for long-term benefits.

“Max out the Roth. Keep piling money into the online savings account so you've got the money you need for a significant down payment on a home and to pay for the wedding.” [24:45]

Final Thoughts and Upcoming Content

Clark wraps up the episode by highlighting the positive changes at Wells Fargo but remains cautious about relying solely on large banks due to their historical issues. He emphasizes exploring diverse financial institutions for better rates and customer relations.

He also teases upcoming content, including a segment called "Clark Stinks," inviting listeners to provide feedback and engage with the show’s content.

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Join the Conversation:
Submit your questions and feedback at www.clark.com/askclark.

Future Episode Teaser:
Next Friday, tune in for "Clark Stinks," where Clark addresses listener feedback and discusses controversial topics to empower you with knowledge for better financial decisions.

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By addressing both major financial challenges and listening meticulously to audience queries, Clark Howard continues to provide actionable advice aimed at enhancing financial well-being and promoting smarter consumer habits.

Transcript

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[Clark Howard]

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 to make better financial decisions in your life. And one area where you can make a big difference in your life is I want to help you tackle your monthlies, those bills that you just pay month after month. Today I want to tell you one area you can pick up some big savings with not that much time to make it happen. Also, you're going to think I've lost my mind. I got something to tell you. Positive about Wells Fargo. Yeah, it's really true. It's coming up later. Okay, what industry in surveys ranks the lowest of any industry surveyed or close to the lowest to depending on which survey and which year it is? Internet service providers, they have a service reputation well deserved and earned in the toilet. Where did that come from? Because for so long most of us have only had the option where we live, maybe one company to provide Internet, if we were lucky, two. And what happens is you take two industries that have dominated the availability of Internet that started life as monopolies and they never got past that monopoly minded attitude. If you wanted to see in the Pictionary next to customer, no service where it came from, it's from the cable guy. So what's happening now is the big cable companies have so treated people with such utter contempt and dishonesty with how they provide service and how they con you on the plans saying, oh, we have this deal that is X number of dollars per month, but by the way, we didn't tell you it's another 47% and made up junk fees on top of that. And by the way, six months later, one year later, we're going to double the cost of it on you and you're going to be happy we did that to you. And by the way, if we miss the appointment, coming to your house jokes on you. And guess what's happened now? There's choice this is like if you watch those old, old cartoons. Where would you ever see them? With Wiley Coyote running out, not realizing he went off the cliff and then looks down. That's what's happening to the cable companies because they were used to dictating terms to you and you were gonna like it, and providing you horrific customer no service. And you are going to like that, too. And what are people doing? They're disconnecting the number of subscribers. Say that word three times to the cable companies for Internet. Think the two bigs, which are Charter using the name Spectrum and Comcast using the name Xfinity. And why did the marketing geniuses come up with fake names for these two companies? Because the reputation of Comcast and Charter was so in the sub basement down there with the rats that they had to come up with new marketing names rather than fix the problem, which is not being trustworthy service providers to you as a customer. So what happened is the cable companies didn't realize they weren't going to own the universe anymore. And interestingly enough, there's now competition coming from a variety of sources. From the sky, from the air, and even from, believe it or not, the monopoly, the former monopoly phone companies. So now the prices are going two ways at once with the cable monsters. For your Internet. They are going up to people who don't shop around and they're going way down for people who do shop around. And you will find that now more and more, you are no longer a captive. And so that is your assignment to shop. Whether it comes through a wireless provider, phone company, cable company, whatever, you now have power you have not had before. And I'm sorry. Sorry. I have longstanding frustration with the cable monsters and I think you need to change your names again. Start over a third time.

[Listener]

All right, we'll get to some questions now. Kathy in Florida says I'm seeing more and more companies offering an alternative to a HELOC or HELOAN that they call a home equity agreement with or Home Equity investment.

[Clark Howard]

Yep.

[Listener]

Would you please explain how these work? Whether they can be a good idea for some people or whether they are outright garbage and to be avoided at all costs if they're ever a good idea for some people. Are there any companies you would recommend or any companies you would definitely avoid?

[Clark Howard]

Thank you. This is definitely a trend because I'd say over the last year and a half, you have asked me this question different ways is the third time.

[Listener]

Yeah. People have so much home equity and. Yeah, right.

[Clark Howard]

So what this is is where you agree to sign away equity in your home in return for cash. So when you take one of these out where a home equity line of credit or a home equity loan line of credit's floating rate, a loan is a fixed rate. When you take those out, you've taken on a debt obligation against your equity. And when you sell your place, you pay that off and you get whatever the net equity is paying off. Your if you have a first mortgage, paying that off and paying off the HELOC or the home equity loan. What you do with these products, and they're using a variety of different names in the marketplace, is they say, hey, we'll give you money. You never have to pay it back. What they do is they then not only get their money back when you sell, they also get from the date that they have lent you the money and they've established a value on your home, whatever it's worth, five years, 10 years, 15 years from now, they get a portion of that. So they get their money back and they get a portion of the increase in value. So who would this be? Potentially, I wouldn't say good, but the least bad option, if you are in a position where you cannot afford to maintain your home, it needs repairs, it needs a new roof, it needs something in order for you to continue to occupy it, and you can't do it and you don't want to sell because you don't want to lose the house you own, then it is a least bad option to give up a portion of the value of the home, essentially, and the future increase in value of the home to an investor. Is there anybody I recommend for this? No, it doesn't yet have a clear established record of the good players, the mediocre, and potentially the sketch ones.

[Listener]

All right. Chris is in London in the uk, but he's originally from North Carolina. He says question for you. You always talk about people trading stocks too much, creating tax issues. I don't understand how that's an issue. If you start the year with $10,000 and end up with zero, your net loss was $10,000 and there are no taxes. If you end up with $30,000, your net gain is $20,000 and you would owe tax on $20,000, but you have $30,000, so it should be okay, right? I don't understand the math where it becomes a surprise to owe on taxes.

[Clark Howard]

Thank you, Chris, and hope you enjoy living in one of my favorite cities on earth. Love the Elizabeth Line, by the way. If you go there as a tourist, anywhere you ride the Elizabeth line, you want to do that anyway. So the tax code is set up to punish you. If you buy a stock and hold it for less than a year, you were taxed at a punitive rate known as ordinary income tax. If you own it a year and a day, you're subject to what's known as long term capital gains, which is a much lower tax rate. Depending on income in that year could be as low as a 0% tax rate. So that's why it's designed to get people not to be speculators holding things for very short periods of time and get them to be investors. And by the way, you never want to buy something that's so speculative that in just a very short period of time it goes from 10,000 to zero.

[Listener]

And this is from Guillermo in Colorado. Our HR department recently invited employees to attend a new retirement option lunch and learn session. The product is offered through a major insurance carrier. It's billed as a new retirement plan option to help diversify your retirement planning options that provides a guaranteed annual income of 5% of your income base starting at age 65 for the rest of your life, even if the market dips. I visited the website for this product and it's described as a collective investment trust cit, delivering benefits through a group fixed contingent deferred annuity contract with a guaranteed lifetime withdrawal. Withdrawal benefit. Word salad anyone? I'm instantly suspicious thanks to you because of the word annuity in there. Am I right to avoid this? Okay, how confusing for most of us.

[Clark Howard]

Okay, so for sure all this is is for some reason your employer is giving their kind of seal of approval through HR to allowing insurance people in to try to sell an annuity. Now the idea of this one is these employer provided or sanctioned ones, they do a payroll deduction from you, they put money into the annuity and you pay in for a number of years. Whatever your account is worth later on, they then pay it out, annuitize it for for your retirement. The good part of this is that often these plans sold through employers don't have what are known as surrender periods, meaning you don't get punished for exchanging out of theirs into potentially another annuity elsewhere. What's the bad of it? The expenses involved on it are typically about 12 to 15 times more expensive in embedded expense fees versus what would be in a traditional employer, 401k or even having your own Roth IRA. The money is then taxed. The money you would get from this in retirement is taxed at ordinary income tax, which is the highest possible rate, instead of as an example, if you were putting money into your own Roth ira, the tax on the money in retirement is taxed at exactly 0%. So this is an expensive product. Not only is it expensive on the administrative fees, it's also expensive and how you're treated later in retirement. Anything like this comes way after funding a 401k, fully an employer and fully funding a Roth IRA. And I think that it's bad judgment on the part of an HR department to make it seem like this is a benefit they're offering you. The benefit is to the salespeople, commission salespeople that are being allowed to come in and have a pre sale done by the company say hey this is a great thing. We want you to know about helping the salesperson sell you something. That is really a way down the list choice if ever. It's not a scam, just a bad deal. Coming up ahead. I'm going to say something not bad about Wells Fargo. I actually said that.

[Listener]

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[Clark Howard]

For more than a decade I've referred to Wells Fargo as being a criminal enterprise, impersonating a bank. And that's a really harsh thing to say about the fourth largest bank in the United States, one of the largest banks in the world. Why would I say that? Because Wells Fargo behaved like a criminal enterprise for a long time, cheating people so many different ways. I'm not going to rehash that. Wells Fargo was not given the death penalty, not destroyed as a financial institution. Almost nobody went to prison, but Wells Fargo was put, let's call it, on serious probation. Wells Fargo received treatment that is almost unheard of. They were not allowed for about the last decade to grow as a bank. All the other banks of whatever size, from the biggest to the smallest, what do they do? They try to go out there and get more deposits and do more lending and get people to sign up for their credit cards and blah, blah, blah, blah. Wells Fargo was put under a tight collar. They were not allowed to grow because of all the criminal behavior at Wells Fargo. So I have repeatedly warned you that with Wells Fargo it was only a question of when, not if, they were going to do something dirty to you. Well, that was then, this is now. Wells Fargo, for the last several years under new leadership, seems to have cleaned up its act and the collar has been lifted and Wells Fargo is allowed to be a regular bank again. And it's a shame that the people who engaged in criminal behavior at the bank overwhelmingly got away with it, did not go to prison. The people who suffered may have received compensation, but harm was done to them. The reality is it's time for me to accept that they have changed. So you have heard me say for the last time that phrase that I used for about the last decade. And products that Wells Fargo offers. If you like being with one of the four giant monster mega banks, you can consider them along with the other three, which are bank of America, Chase and Citibank. Those four banks control more than half of banking in the United States. All the other thousands of banks fight over the remaining market share because of the size that these four enjoy. So if you see a solicitation from Wells and it's really great and you want to do it, I'M not going to say anymore. What are you thinking? It's only a matter of when, not if that's over. Unless they pick up old habits there in the clear now. One interesting thing, Krista, do you know who's bigger than all these big banks?

[Listener]

Who?

[Clark Howard]

Schwab, Fidelity, Vanguard. The money has moved overwhelmingly out of the banking sector to people who are the equivalent, let's call modern financial centers that as a general rule offer much better deals to you with your money than you get from traditional banks. And I am still obsessed with my love for credit unions because they're owned by you, the member and it's a different kind of relationship with them and I still love small local banks. None of that has changed.

[Listener]

Okay. Ronald in Georgia says I work remotely for a company located in a high cost of living area so my salary is inflated compared to a similar job that I could get locally. I have concerns that we may eventually go back to working in the office five days a week meaning I would be out of the job. Would Clark recommend I take a hit of 10 to 20% in salary to secure an in person job?

[Clark Howard]

Wow. That's a. Would you rather that is bad and bad if you if you work remotely and they're going to order you back in five days a week and you're not going to do that and you see an opportunity available to you local where you are now and you can go ahead and transition on your terms on your time schedule. I would do it because by your own telling, if you were forced to relocate to the high cost area to keep a paycheck coming in, it would be a significant deterioration and quality of life for you. Yes. Reading the tea leaves. I would go ahead and find a job that's local that gives you the quality of life and expensive living that you're more comfortable with.

[Listener]

Daniel in Arkansas says, I've used your advice of helping our 16 year old son establish his credit score when he started his first job by making him an authorized user on four of my credit cards but not giving him the plastic. He's always used his USAA debit card for purchases and has never used credit. At 18 he needed a new to him truck for his new job and obtained an auto loan. His credit score was 810.

[Clark Howard]

Oh isn't that awesome.

[Listener]

Now at 19 he's preparing to work traveling jobs. He will need a credit card for expenses and is going to apply for his own credit card. You've warned us that if we give him one of our cards and he mismanages it the result could affect our score. However, we haven't heard if there's any impact to our score. If he mismanages his own cards while still linked to our cards, not in his possession, should I remove him from my credit cards after he receives one that is solely his?

[Clark Howard]

You can do whichever you want to about that. His credit. Let's say USAA gives him a USA credit card and at the same time he's an authorized user on four of your cards. If he doesn't handle that USAA credit card or whoever else's credit card, well, that only affects him. Your cards that you're giving him authorized credit on, you're not affected at all by him, but he is affected by you. Let's say you were no longer able to handle those credit cards like he did and he was still an authorized user. Your difficulty with credit would also become his difficulty with credit. So in other words, his credit with only it being his credit does not affect you. Your credit affects you and him.

[Listener]

Phil in Georgia says, I'm 26 and a school teacher. I have very low expenses and I'm able to save about $2,000 a month even after I invest about 4% in a 403B and about 10% in a Roth IRA.

[Clark Howard]

Congratulations to you.

[Listener]

It's amazing. I have about $30,000 saved in a High Yield savings account as well. My question is, what should I be doing with my extra money? I have been saving it because I plan on paying for a house and wedding within the next few years. But should more money be going elsewhere? I've considered a brokerage account or more to the Roth, but the savings account gives me a 3.6 APY. So I felt it's okay right now to be a big saver. Thanks for your help. And let's cross our fingers Michael Penix gets it done this year. That's amazing. A school teacher at 26 saving that much money.

[Clark Howard]

Isn't that wonderful? So, Phil, this is your call because you're doing all the right things. The 403B, you know, I'm not thrilled with generally the 403Bs available to school teachers. They tend to have very high costs. If there's no match from the school district, even if you left what you're doing right now, I'd rather see you again. If there's no match from the school district, I'd rather see you take the 403B to zero and increase the Roth IRA to 14%. So you're still saving the same amount of money, but it's in a Roth. I hope that you're doing the Roth with one of my favorite children, one of the ultra low cost companies, and putting your money in the Target retirement fund based on your age for year 2065 or 2070. As far as the goals you have, and this is so great that you've already saved so much money. The goal you are trying to achieve, buying a house, paying for a wedding. You need a lot of money for that. So continuing to save in a high yield savings account is just fine. Or you can boost what you contribute to the Roth to get to where you're contributing the max in a year. But you've got so much money available to save. Max out the Roth. Keep piling money into the online savings account so you've got the money you need for a significant down payment on a home and to pay for the wedding. And just so wonderful as a school teacher not making a lot of money that you are saving so well, saving so much. That's going to change the trajectory of your life long term. And I hope you've enjoyed today's podcast. You know what's coming up on Friday. We've got Clark Stinks coming your way. You hear me say something you don't like? You hear me say something you think I'm just flat out wrong? I want to hear from [e-mail] clarkstings as we end each work week with Clarkston most Fridays and know what we're about every day is you being empowered with knowledge so that you save more, spend less and avoid getting ripped off.