Pod Insights The Clark Howard Podcast 04.15.26 Two Sides To AI In Real Estate / Study Abroad An A+ Move About this episode The real estate market is traditionally at its height in the spring. This year, AI is factoring into home sales in two distinct ways. While AI slop infests listings, AI is improving the mortgage approval process. Know what to look out for as a homebuyer. Also, is studying abroad worth the cost? At a time when grads’ job prospects are jumbled by market upheaval, a new study shows that a semester overseas can boost a graduate's starting salary by thousands. And the advantages don’t end there. Clark explains how some students are taking the idea a step further. AI In Real Estate: Segment 1 Ask Clark: Segment 2 Study Abroad - OUI!: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Why You Can No Longer Trust Real Estate Photos The Unsettling Rise of AI Real-Estate Slop 3 Places You Should Never Invest Your Money - Clark Howard What Is Umbrella Insurance and Do You Need It? - Clark Howard Why Study Abroad Can Lead To Higher Starting Salaries For U. S. Graduates - Forbes Preparing to study abroad requires knowing what might go wrong during and after the trip NYTimes: How to Prepare for Your First River Cruise When Do You Need a Travel Agent? - Clark Howard Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices. Visit megaphone.fm/adchoices
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1:05 Speaker 02 I'm so glad to welcome you here to 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. Today, the real estate market is at its traditional selling season now. And there's something going on with listings this year that there were hints of last year, but much more common this year that I want you to know about. And later, I got something that's going to sound so crazy ridiculous, but just hang with me later when I talk about it.
1:47 Speaker 02 Lot of college students, most campuses have the ability to do a semester abroad. There's a reason that sending them on that junket actually is worth it career wise. Yeah, I'll tell you later. But right now I want to talk about a reality with real estate listings. And it's so clear that this trend is not your friend.
2:15 Speaker 02 As a buyer and you just gotta know what's going on and it's where AI, AI, AI. I mean, it's, it's an AI tool where an unfurnished home, condo or apartment has full decorating in it that's not really there. Or there are things that are blemishes, let's say, in a home that don't show. Landscaping that doesn't exist that does show. And so when you're looking online and you're thinking, oh, man, look at that family room.
2:57 Speaker 02 That is the greatest primary bedroom ever. You're being conned to come look by the virtual staging is the most common name for it. And so you think what you're seeing is what you're getting. And then you get there and it's like, it's no different than just with more modern technology. What happens when you look at a resort and they're showing you this magnificent beach, wide, beautiful sand beach. And you get to the resort and all there are are rocks or a dirty shore.
3:40 Speaker 02 That is something that's been going on for years and years and years and years and years. But what's new is with the potential largest purchase you'll make in your life, that you're being lured in. So sometimes you can tell that the pictures are fake. Other times you're just shocked when you get there. And I just want you to know that this is a big part of how the game is played. And again, this is a negative perspective on AI. Let me give you a positive one.
4:17 Speaker 02 Developers have come up with new tools using AI to process loan approvals in minutes instead of weeks. This is using some of the methods that you'll hear me talk about in other things, like when I talk about where you're able to get real legitimate life insurance without a physical exam. And these things where we just assume that getting a mortgage or getting a home equity line of credit or whatever is going to be just a hideous nightmare.
4:58 Speaker 02 It is the one part of owning a home or buying one that is going to get steadily better over the next few years. Now, we're not seeing it in any big way in the mortgage market yet, but it is already happening with home equity lines of credit with essentially instant approval or decline of you for a HELOC instead of weeks and weeks and weeks of, well, we need this document for the fourth time, or we need that one for the second time, or whatever, where it's a blizzard of paper of proof you have to provide for various things.
5:38 Speaker 02 In this case, AI is your friend, not your enemy, making that process almost painless, other than you have to pay back whatever money you borrow. Krista?
5:50 Speaker 03 Okay. Questions for you, Clark. This one came in from Gordon in Oregon. Gordon says, Clark, I recently received an email from my credit union telling me that they offer an investing opportunity through them and that I can set up a brokerage account. I know how you feel about bank affiliated brokerages, but I'm wondering if you have the same general reservations about brokerage options from a credit union. And I know just recently this came up with the online banks offering.
6:15 Speaker 02 Right. So with the credit unions, I've never seen a credit union offering that was really any different than how it works in the bank-based brokerages, that you're paying high commissions, you're not necessarily working with a fiduciary, and the drag on your long-term return.
6:39 Speaker 02 Is so great because of all the fees and commissions that are involved. So I have not found, there may be somewhere, some credit union that's doing clean, cheap investing, but I haven't seen it yet.
6:55 Speaker 03 Okay. Frank in North Carolina says, Clark, I'm 51 and I've been contributing the max plus catch-up money to my company's 401K. Each year, the 401K does not meet the qualifications, so I get a refund check in March. This year, it was almost $7,000. Any suggestions on how or why I should put this money in to go toward retirement? I am considered a high-income earner through my employer's 401K plan, and that's the reason for the refund.
7:24 Speaker 02 Okay, so let me explain this because most people are not going to experience this, but if you work for a smaller employer, you likely are. If you are what's known as a highly compensated employee, under the federal code, you have clawback of what you're allowed to contribute to an employer-sponsored retirement plan. The reason employers originally were offering free money to employees who contributed to a 401K was to try to get people lower on the income scale at an employer, lower paychecks,
8:05 Speaker 02 to participate so that the big shots at the higher end could. It gets really hard, though, at a lot of smaller companies to get enough of the people with smaller paychecks to participate in the 401K. They may not be thinking of that employer as a long-term play. So the government says, nope, nope, those contributions are disallowed, and you get the money back. So what I've recommended in the past to people in this situation is that they do a non-retirement investment account that goes straight into simple, broad index funds that will generally
8:47 Speaker 02 generate no tax bill or insignificant tax bill each year. And then it's outside of your retirement portfolio and is not specifically limited to when you can have access to the money later in life. You only have to have money in an investment account one year for more favorable tax treatment. And so that is, in my mind, the best default is to go into ETFs that mimic broad index funds, like a total stock market index fund, or an international index fund, bond index fund, something like that. And you build an outside of retirement portfolio
9:32 Speaker 02 that way to get around the limits that are being imposed on you in a retirement plan at work.
9:39 Speaker 03 And for 2020, I did find for 2025, it's always based on your prior year's income.
9:45 Speaker 02 26, you mean.
9:46 Speaker 03 Well, for 2025, it was based on 24, and that amount was 160,000. But I'm looking for the 2026.
9:53 Speaker 02 Your income's above 160, they come and slap you down.
9:57 Speaker 03 Mm hmm. Okay. Next question's from Patrick in Texas. Here's a tip. We saved almost $1,000 a year by canceling our umbrella insurance policy and raising our auto and homeowners liability coverage. Our umbrella policy for $1 million coverage had increased by about 50% to $1,330 a year.
10:19 Speaker 02 For a million bucks?
10:20 Speaker 03 We've heard a lot of people saying these huge increases in umbrella insurance costs.
10:25 Speaker 02 I missed that. Really?
10:28 Speaker 03 We learned that raising the auto and homeowners liability coverage to $2 million each would only cost us an extra $400 per year, and we would get more protection. We got higher coverage and saved almost $1,000 a year.
10:43 Speaker 02 That is fascinating. And you just taught me something. You just taught me something, Krista, that I was not aware that there's a pattern of big, big increases in the cost of umbrella policies. Umbrella policies tended to start at a few hundred dollars a year per the first million dollars of coverage. And the numbers that we just had here, four times that, that is news to me. I don't know how I missed that.
11:13 Speaker 03 And also, I did see that the 2026 amount is also $160,000 a year to be considered a highly compensated employee by the IRS under the code for the prior question. Yeah, just wanted to make sure I wrap that up.
11:28 Speaker 02 Yeah. So it's an odd thing, if you think about it, that the government says, save, save, save for your future. You can't just depend on social security. And then turns around and says, but you can't save as much as you want.
11:42 Speaker 03 Right. And it's like you've talked about on the podcast, it can really vary where you live. If you live in like the Los Angeles area, Boston, other places, you know, the salaries don't go as far in terms of even being able to get housing or anything like that. And so they are going to really vary. So it's sort of, you know.
12:01 Speaker 02 I was talking with my daughter who lives in Los Angeles, where she was saying, hey, you know, a friend of mine moved to, I forget where in the country it was in the Midwest, and they were able to buy a home for half of what she pays and rent on her 320 square foot apartment. And then we had a question the other day from someone who had, was living, I forget where in the Midwest, and was, had a crazy low cost of housing. So it really is so different, one place to another. And the cities that have the highest housing
12:43 Speaker 02 costs in the country tend to be on both coasts. And you know what city used to be a lot more affordable and is now way up on the list of most expensive in the United States?
12:55 Speaker 03 Where?
12:55 Speaker 02 Miami.
12:56 Speaker 03 Oh, wow.
12:57 Speaker 02 Because, you know, starting in 20, during COVID, so many people moved from various places in the country to Miami, specifically, not Miami, Fort Lauderdale, specifically to Miami. And the housing costs are crazy now.
13:15 Speaker 03 Wow.
13:16 Speaker 02 Sunshine every, almost every day of the year, warm weather.
13:22 Speaker 02 Pretty nice.
13:23 Speaker 03 I get it. I get it.
13:24 Speaker 02 But coming up, we're going to talk about going much further afield than going from somewhere else on the West Coast to the Midwest, or from wherever to Miami. We're going to talk about why going overseas could ultimately make you more money through your working lifetime.
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16:02 Speaker 02 Okay, this is so weird. When you think about something that seems so out of the box and such a privilege, which it is, it's people that are at college, being offered the opportunity for a junior year overseas, a semester abroad, a summer semester outside the United States. And it really reeks of junket. And it can be. And if you have ever been to Florence, Italy during fall or spring college semester, you would think that in Florence, alone in Italy, English was the official language
16:47 Speaker 02 because there's so many American college students in Florence. And they're having a good time. Don't know how much studying's going on. But if your kid's trying to convince you that you should let him or her spend a semester abroad, the story I read in Forbes that people who do, when they graduate, in a very tough job market right now, by the way, people graduating from college, high school, going to some professional school, whatever, they're having, unless it's a field that's in high demand, this has been the toughest spring for this year's graduates to find jobs.
17:31 Speaker 02 So anything that has you stand out is really valuable. Well, the experience of living overseas makes you stand out with potential.
17:41 Speaker 02 Employers means your knowledge of the world is wider. The experiences you have may be deeper as a result. And the cool thing is, a lot of times, the tuition, the cost of doing it is not appreciably higher, some cases lower than what it is being in the US for a semester. But the average amount more that a graduate earns from having had as part of their college experience, a semester overseas, or if it's a full year, $4,000 plus more is what the average is you make on your first job.
18:23 Speaker 02 The reality is, it's not always going to be true, but what you earn initially becomes more a base of what you can earn over time. And while we're on this subject, I want to mention that a lot of American teenagers are learning more and more about doing their college overseas. There's a joke about colleges across England and Scotland that you think you are in the United States on a college campus because there are so many people with American accents in Germany, Canada, a number of different countries.
19:04 Speaker 02 American teenagers are choosing to go to college overseas and get this, in most cases, the tuition is lower than it is in the United States if you get your degree overseas. And the advantages career-wise, I mean, they're off the charts. So often, and in many cases, it's straight finance, that someone going off to college isn't going off anywhere, they're staying local. And that's the cheapest way by far to get a college degree. But if, in your family culture...
19:43 Speaker 02 Kids go to sleepaway college is what I call it, wherever it is. They might have much more career mobility and you may pay less if they go to college overseas instead of the United States. Exposure to other places in the world, in my mind, is one of the greatest mobility factors for career and earning power for careers. Being exposed to other cultures, other economic systems, other ways of doing things makes you a much more interesting and employable person. Just my belief.
20:25 Speaker 03 All right.
20:26 Speaker 02 Oh, and Clark stinks. Clark.com/ClarkStinks is where you can go post if you hate what I just said.
20:33 Speaker 03 Kurt in Pennsylvania wrote to you with this one. My wife and I want to travel to Europe in the next 12 to 24 months. She doesn't like to be away from home for longer than seven to eight days and we are in our mid 40s. We like the idea of a river cruise because of the ease of travel and it's planned, but they are geared towards older couples. Planning it ourselves seems overwhelming with multiple cities, hotels, airfare, train travel, tours, et cetera. Where do we look for a travel agent or advisor or planner to help us? We're thinking of Northern Italy, Austria, Germany, Switzerland. Need some advice on how to make this a great but not break the bank trip.
21:11 Speaker 02 Okay. It's absolutely true that the average age of the average passenger on a river cruise is up there in years. However, there are now, because that market's getting more and more crowded, there are now river cruise companies that specialize in what is now being called in the travel industry adventure river cruising. Have you heard that term before?
21:38 Speaker 03 I have not, no.
21:39 Speaker 02 Yeah. So adventure river cruising is the industry coin phrase that's becoming more common in use. That means that it's geared towards people in their, you're right in the wheelhouse. Forties and fifties instead of retirement age, pre-retirement, retirement and well into retirement age. And so the shore excursions are much more vigorous. They may involve the kind of stuff you love, Krista, which is going on crazy mountain hikes and stuff like that. So you want what's known as a cruise only agent, or you want a travel agent who specializes in
22:22 Speaker 02 cruises. So in the cruise only industry, it's even specialized there. There are people who are generally the less experienced agents specialize in just run of the mill ocean cruises. And then the more experienced people specialize in luxury cruise ships, the smaller ones, and the river cruises across Europe. And you want one of those people. How do you find them? Start watching videos on YouTube of just as you may be viewing us right now on YouTube. Start watching videos. You'll see there'll be a lot of reviews of various river cruise lines
23:07 Speaker 02 posted by agents who specialize in doing them. You'll find somebody potentially who will be great at being able to zero in on a river cruise that would work for your age, your interests, and how active you want to be on that river cruise. Now, on the not being gone more than eight days, that ain't gonna work. This is something you gotta be realistic about with your wife, because you gotta get over to Europe. You need to arrive minimum two days before your river cruise starts. Because if you have a flight problem, and they're more common than
23:48 Speaker 02 you realize, the river cruise leaves without you, as your money does as well. So you gotta build in buffer time at the beginning. You need to orient yourself to the time change. And then coming back, you need a much smaller buffer, but you need a buffer for getting back from wherever the river cruise ends. I hope that helps. Also, anybody you know who is in your general age range who's done a river cruise, they may have a river cruise specialist they've worked with.
24:21 Speaker 03 And if you don't go on a river cruise, just I would say, choose two places, two cities, whatever it is, and you can training in between, maybe, but that it would be a lot to try to do in a week.
24:33 Speaker 02 Yeah, everything you said, if you, if you go do a land trip to Europe, absolutely fine for you to go seven or eight days. And as Krista said, less is more. So often when people go to Europe for the first time, they pack too much in, they try to go to too many places, and it all kind of becomes a blur, and you come home exhausted instead of relaxed.
24:58 Speaker 03 Okay, Caleb in South Carolina says, for years, I've used virtual credit card numbers with nearly all online transactions. I wanted to share an issue I recently had while traveling overseas that was brand new to me. Before leaving the US, I booked a train ticket between two cities in England using a virtual card number. Only after the booking was finalized was I shown a pop-up message indicating that the physical credit card would be needed in order to claim boarding passes upon arrival at the train station. There were no e-tickets provided via email or the railways app. On the booked day of travel, my wife and I arrived at the station and made our way to the self-service kiosks for printing the boarding passes. I thought perhaps the system would know that the virtual
25:42 Speaker 03 card is associated with the physical card in my possession, but no such luck. We were saved only by the fact that I came prepared with the full details of the virtual card number that I used to purchase the tickets. We had to stand in line to speak to a customer service agent. He was harsh in his demeanor, telling us multiple times that we must have the physical card in order to claim tickets, but in the end, he extended some mercy because I promptly had the virtual card information available. I want to let other listeners know of this possibility when traveling abroad. I might expect this in certain other parts of the world, but not in England.
26:15 Speaker 02 So this is popping up in the US as well with airline tickets. There's so much credit card fraud that there are times that people refuse travel. We had a question on the podcast from somebody who has refused travel for an airline flight because of a virtual number. So
26:34 Speaker 03 They just didn't have the card with them, I think.
26:36 Speaker 02 They didn't have the physical card with You need to know you cannot use a virtual number. And travel is a big money item and it's one you'd really like to use virtual numbers with. But it's no longer a safe practice to use a virtual number because of having to present the card.
26:57 Speaker 03 Even if you use a physical card to book it, bring it with you on your trip.
27:00 Speaker 02 Well, I mean, I was just at a hotel in Portugal a month ago and they were looking at my, they flipped it over, they were looking at my card number, they were looking at the screen. I knew what they were doing. They were making sure that the number used to prepay the hotel room was the same one that I was presenting.
27:21 Speaker 03 Well, you look shady and sinister.
27:22 Speaker 02 I do look shady. I mean, would you trust this face? No, you wouldn't.
27:28 Speaker 03 Okay. Pat in Florida says, Clark travels all over the world. Does he speak any other languages than England, English? If not, how does he?
27:38 Speaker 02 English? No, I don't speak English.
27:40 Speaker 03 How does he communicate in foreign countries?
27:44 Speaker 02 Okay. This is where you get really spoiled speaking English versus other languages. It's your first language. It has become, I've been able to be so lazy now because so many people around the world under 40 years of age speak some level, some amount of English. And then when I need it, I have Google Translate. Now, I speak poor travel Spanish, having taken many years of Spanish in school and then having traveled all over South America and
28:21 Speaker 02 Central America and Mexico through my life, traveling in Spain a lot. I can ask the most basic questions and not understand the answers given back to me pretty much. But anyway, it's not the problem that you might think it is that I am a language idiot and speak English and almost no Spanish.
28:48 Speaker 02 I've traveled to every continent except Antarctica. And I'm not going to Antarctica, as we've discussed before. But the seals, I don't understand the noises they make anyway.
28:59 Speaker 03 So I have traveled with you to other countries because you're so amazing, taking us on trips to places you find on sale around the world. And I would say something else you do that I like to do is you always learn some basics of whatever country you're in. Like, please, thank you, good morning, good evening, things like that. You know, they're not hard to to learn.
29:18 Speaker 02 And they'll know that you obviously are a tourist and appreciate so much that the greeting you give is in their language, whatever it is.
29:29 Speaker 03 And then, do you speak English is great to know, too.
29:32 Speaker 02 Oh, they come, they come right back to me.
29:35 Speaker 03 I know, but it's, but I mean, it is nice to, it's polite.
29:38 Speaker 02 That happens to me in Latin America, too, because I'll do a greeting in Spanish. And they know clearly I didn't study enough in school.
29:48 Speaker 03 It happens to me in French, too. And I like, I love speaking it and practicing, but they always come back to me in English and I feel like a fool.
29:56 Speaker 02 So my wife, Lane, insists that she's not fluent in French. But when we're in France, she greets people in French and her pronunciation and accent are so good that they come straight back to her in French. That's something I'm really jealous of. And then Grace of our crew runs our social media, speaks six languages, I think. Yes. Six. That is amazing and can switch from one to another to another in just a second. So in any language, do you know what today is for us in the US? Tax Day!
30:38 Speaker 02 And I want to mention again, something I mentioned last week on the podcast YouTube show. If you're facing today and you don't have the money to pay your tax bill, you must file for an extension. And an extension. Is an extension of time to file, not time to pay. But if you let today pass and you don't even just file an extension, or if your return's ready and you owe money and you don't have the money to pay, you go ahead and file the return, send what you can. And then as long as you got the money, the IRS, it's months before they even figure out
31:20 Speaker 02 that you haven't paid them everything and how much you owe and when are you going to get it to them? The failure to pay penalty is a fraction of the failure to file penalty. So if you're facing not having the money, still file your return or file for an extension. And then whatever money you can send, you send. And then every month or whenever you can, send more. Eventually, there's a procedure where you can file for a payment plan, but that's down the road. The most important thing, don't let the clock strike midnight tonight without doing one of those two things.
32:03 Speaker 02 File for an extension or file your return. And I know, I know, tax day is not a fun day for many people who owe money. Also, it's an embarrassment. I have only been able to file my return on time twice in the last 15 years because of the complexity of my life and owning various businesses. I always have to file for an extension and it feels like I'm disorganized, not together that I always have to file for an extension, but I do. But anyway, know what we're about is your empowerment with knowledge.
32:46 Speaker 02 So you can save more, spend less, and don't ever let anybody rip you off. And we'll see you on Friday with Clark Stinks.
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