Pod Insights The Clark Howard Podcast 12.19.24 SAVE On Internet Service / American Train Travel About this episode One way you may be able to save money is through home Internet service. Do you really need the highest speeds? So many of us overbuy for what we actually need. Also, train travel in the U. S. has lagged behind other developed countries, but that is starting to change. More Internet Speed Than You Need: Segment 1 Ask Clark: Segment 2 American Rail: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Clark’s Tips To Save Money on Home Internet in 2025 T-Mobile Rolls Out New Pricing for Home Internet Plans Verizon Home Internet: Things To Know Before You Sign Up 1099 Income: Why Prepaying Your Taxes Is More Important Than Ever if You Have a Side Hustle Net Worth Calculator - Clark.com More people are riding Amtrak than ever before, and improvements are on the way Where To Put Your Cash When You’re Saving for a Purchase in Less Than 5 Years 17 of the Best High-Yield Online Savings Accounts in December 2024 Best Online Banks: Free Checking and High-Interest Savings Accounts High-Yield Savings Account (HYSA) Calculator What's the Best Savings Account for a Teenager? Warning: Why You Should Never Buy Visa Gift Cards Clark's Christmas Kids 2024 Clark.com resources Episode transcripts Community. Clark.com Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Disclosure in Podcast Description: A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 investment-grade and high-yield bonds. As of 9/26/24, the average, annualized yield to worst (YTW) across the Bond Account is greater than 6%. A bond’s yield is a function of its market price, which can fluctuate; therefore, a bond’s YTW is not “locked in” until the bond is purchased, and your yield at time of purchase may be different from the yield shown here. The “locked in” YTW is not guaranteed; you may receive less than the YTW of the bonds in the Bond Account if you sell any of the bonds before maturity or if the issuer defaults on the bond. Public Investing charges a markup on each bond trade. See our Fee Schedule. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. See https://public.com/disclosures/bond-account to learn more. Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 At Edward Jones, we believe rich is about taking care of what gives your life meaning. That's why your financial advisor personalizes your plan to help you preserve your progress and create something that lasts. Let's find your rich. Edward Jones. Member SIPC.
0:15 Speaker 01 UKG is the workforce operating platform with unified HR, payroll, and workforce management. Built to solve the unique challenges of frontline work. Powered by People First AI and decades of labor data, UKG turns workforce intelligence into real-time decisions around staffing, pay, compliance, and productivity, enabling every worker to confidently take action as work happens. Because when work works, everything works. Learn more at ukg.com/work. UKG, HR, Pay, and Workforce Management.
0:50 Speaker 02 It's great to have you here on The Clark Howard Show, where our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. I want to talk about one of the monthly expenses that there's a shift going on right before our eyes, and there are things you can do today that will save you money. I'm going to tell you how your home internet is like a hole in your wallet, and how to close that hole. And coming up later, so I get a lot of questions from
1:29 Speaker 02 people that are more like complaints. Why don't I talk about train travel? Because I almost never talk about train travel. But there's actually improvements going on in the Northeast Corridor, believe it or not, with train service and a few other places in the United States. I want to talk about that because air travel is actually slowing down, while travel by rail is starting to speed up. So, internet connections. You've got all the internet providers, well, when I say all...
2:07 Speaker 02 We got the cable monster that provides internet, maybe on your street, your home. And then we may have a local monopoly phone company offering internet. And they're a little bit tweetily d, tweetily dumb. They have been pushing higher and higher speeds, creating this perception in our minds that we need these faster and faster internet services in order to do all the things we want to do in our home. What do they do along with that? They keep moving the price per month higher and higher.
2:46 Speaker 02 Now, particularly the largest phone company in the United States for local phone service, AT&T, for home internet through a phone company. Verizon's kind of behind them on that. And then Comcast, the largest player using the Xfinity brand. They both love to do these teaser deals, offering you internet, often what they call one gig service. And then after a period of time, the price goes crazy. And they hope for inertia that when it goes from whatever that teaser rate is, that you'll
3:29 Speaker 02 suddenly pay them a fortune per month for that home internet connection. So what's become really clear, though, is that you don't normally have that need for speed that you're paying that huge amount per month for. In many cases, more than a hundred dollars a month for that home internet connection. Well, let me give you some reasons why you don't need it in many cases. First of all, in terms of buying it from the cable monster or the local monopoly phone company, in more and more communities around the country...
4:09 Speaker 02 Google is building out what they call G fiber. And they tend to undercut the cable monster and the local monopoly phone company by about 20 to 30%. But that's not the big savings. The big savings are coming from Verizon's wireless service. And to a bigger extent, T-Mobile with the T-Mobile Home product. That used to be available in very limited places in the United States. And now with so many others. And then the Verizon Wireless version. That is available in more and more places in the United States. And neither of these run at the kind of speeds.
4:53 Speaker 02 That are the ones pushed by Google's G fiber. Your cable monster or the local monopoly phone company. But at a much cheaper price per month. And the reality is. The cable companies are scared. And they are starting to offer slower speed internet as a defense. Against the T-Mobile offering and the Verizon Wireless offering for a home internet. And they're now offering speeds, a lot of times they'll have a promotional thing. Where you can get 300, it's called megabits service and then one gigabit.
5:37 Speaker 02 And at 30 bucks a month. And this is to try to fight back against these interlopers coming in to their business. And let me tell you, here's what you do. Unless you're a gamer where you really have that need for the enormous capacity. You're fine at that 300, you are fine at 100 megabits, you can stream all you want. I can tell you something, we used to have a vacation cottage in a rural area. And the fastest internet we could get, and there was no T-Mobile home, there was no Verizon Wireless back then.
6:18 Speaker 02 The only thing we could get was from a local phone company that the fastest speed was three megabits a second. I mean, much slower than you get on a cellphone now for data. And you try to stream something and it would do what they call buffering. And the show, whatever it was, would just freeze. And you couldn't watch TV, you just couldn't do it. That's it, three. Now, we're talking about people buying bargain service at a hundred or using one of these wireless services typically at 50 or 60. You'll be fine. I'm not talking about price per month, I'm talking about the speed of it. So you don't need to waste your money.
7:01 Speaker 02 And all you do is you try one of these slower speeds at a much lower price. And if everything's working fine, paying $30 a month, stop paying a hundred or so a month. Think about over the course of a year, how much money you're saving and every dollar counts. Krista?
7:22 Speaker 03 All right, this came in from Kip in Utah. I want to invest my tax withholdings and earn interest on that money. My plan is to not have my employer withhold funds next year and put that money into a separate high-yield savings account. At the end of the year, I would pay my taxes from that account. Is that a good idea or am I missing something?
7:41 Speaker 02 You're missing something. The IRS is all over this because Kip, they will charge you underpayment penalties. And you will pay, let's say you're earning 5% in a high-yield savings account. That's about what the best ones are doing, somewhere right around five. You'll be paying the IRS over 8% interest on all your tax bill due for underpayment of withholding through the year. In your case, non-payment of the holding, underpayment of income tax. So they have this all figured out and it's not the IRS that did that, Congress did. And there's a formula. So it's not gonna work.
8:24 Speaker 02 Have your employer withhold taxes and know there's no free lunch here.
8:30 Speaker 03 All right, Steve in Missouri says, "For the past few years, I've been tracking my household net worth, and I was wondering if you think that's important to keep track of. I don't recall you talking about net worth in any of your previous episodes, so I figured I would just ask what your thoughts are. Is it important to track or a waste of time? Thanks and go Chiefs."
8:50 Speaker 02 Steve, let's see, can they win again? We'll see coming up. I'm talking about the ring. We don't have Atlanta Falcons ever. Anyway, I think it's fantastic to have a household statement of assets and liabilities, having a net worth statement that you do every year in order to build towards having financial independence down the road. And the more you do it, it's like a positive affirmation that you're moving on the right path. I think that's true. And I think it also helps with goal setting. Because if
9:35 Speaker 02 you have a statement showing your assets, which would be value of real estate you own, money in the credit union, money in a bank you discount 80%, no, just kidding, money in a bank or credit union, money you have in various investment and retirement accounts and all that. And then the other side of it, what obligations do you have? What debts do you have? And so having that gives you a roadmap and it gives you, it's like taking your financial temperature each year. It doesn't have to be fancy, just a simple statement of net worth, assets and liabilities. And what's great is if you see a trend over the
10:20 Speaker 02 years with your liabilities going down at the same time your assets are building. And that is the absolute sweet spot with, if you've got a long trend line, you don't say how old you are, Steve, but if you have a long enough trend line, the goal, the perfect goal, is to hit the point at which you wish to bag work. Or fully achieve financial independence that you have essentially zero debts and you've got a really nice level of assets. And I think doing the net worth statement once a year helps you get to that ultimate goal.
11:01 Speaker 03 All right. This is from Rex in Indiana. I got a free Amazon Prime trial and purchased three items totaling around $55. A couple of days later, I got an email from them saying my package was delivered along with a picture of the package on a doorstep with a totally different rug from mine.
11:18 Speaker 02 Oh, boy.
11:18 Speaker 03 I contacted customer no service. They told me I needed to send them a picture of my state ID. I kept asking how my ID would help and the customer no service reps continued to give me canned responses telling me that it was their policy. I asked, why? Why do they have to have me send a picture of my ID instead of just a package on a random doorstep? I eventually asked for a refund on the items and they denied it, telling me they would still need a picture of my ID to do that as well. I pointed out my billing address for my credit card is also the same as my shipping address and asked why that wasn't enough, but I continued to get the same unhelpful response. Please help me decide what to do. I don't feel comfortable sending them my ID, but I would like some kind of resolution. They won't receive any more of my money after this.
12:04 Speaker 02 Okay.
12:05 Speaker 03 Understandably. It's a bad trial.
12:07 Speaker 02 Right. This is messy. If you want your money back, you're going to need to give Amazon a copy of your ID. And the reason is, this was a trial. They don't know that the trial offer didn't fall into the wrong hands. Somebody's playing games. The odds that you would play games for $55 is so extremely low, but the Amazon customer no service workers are very limited in what latitude they have. And so if a check mark they have to have is they got to have. Your photo ID, your driver's license, whatever it is, in order to decide you're really not a thief,
12:52 Speaker 02 then I would supply it to them. The odds that something bad would happen from you supplying that ID are not exceptionally high. It's for a very specific purpose. I think you just decide the value of the $55 versus the remote possibility that something bad happens from supplying the ID. And I can't make that decision for you, but that's the two things you have to weigh and balance. Amazon is a company that is not as customer friendly as it used to be. They're not as cheap as they used to be. It's because Amazon was totally focused for so long on growth.
13:37 Speaker 02 And when they were focused just on growth and not profits, everything was about having very aggressive pricing and unbelievable customer service. That era is over as they try to make money now. And so that's why, even for longtime Amazon shoppers, the experience is not what it used to be. They're not a bad company. They're just not what they were before. Coming up ahead, congestion between metro areas is becoming untenable. And believe it or not, I'm a skeptic who more and more sees the possibility
14:21 Speaker 02 that rail is going to actually be part of the equation in the United States.
14:29 Speaker 00 At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones. Member SIPC.
14:58 Speaker 01 UKG is the workforce operating platform with unified HR, payroll, and workforce management. Built to solve the unique challenges of frontline work. Powered by People First AI and decades of labor data, UKG turns workforce intelligence into real-time decisions around staffing, pay, compliance, and productivity, enabling every worker to confidently take action as work happens. Because when work works, everything works. Learn more at ukg.com/work. UKG, HR, Pay, and Workforce Management.
15:28 Speaker 04 Welcome to the 50th Hunger Games. Witness the beginning of the revolution. Hey Mitch, you've been trying to take down these games from the start. Film for IMAX. Make them remember you. The Hunger Games: Sunrise on the Reaping, November 20th, made in PG-13.
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16:14 Speaker 02 A while back, I talked about Brightline, which is doing something that nobody in America thought would matter at all. They're taking very congested corridors in the US and Florida and California, and they're building mostly privately financed, privately owned rail. And they've got a system underway that's going to have all kinds of additional tentacles. It goes Orlando down to West Palm, Miami, Fort Lauderdale. Said that in the wrong geographic order. And now they're building one from Los Angeles to Las Vegas. And you think about these routes, they end up along interstate system freeways or interstate type roads.
16:59 Speaker 02 And still, it's a wonderful thing for people because the congestion in corridors between major metros.
17:07 Speaker 02 In much of the country is so extreme and you think about areas in the United States where this is true. How about what's going on in Texas with the amount of traffic going on among the big four? Austin, San Antonio, Dallas, Houston. I mean, think about a corridor that somebody who's got the guts, who goes in and builds something, would really have something of value there to move people between and among those four metro areas. Because flying is a real hassle for flights of that distance. Driving, it's so unpredictable how long it will take.
17:51 Speaker 02 And I can tell you, spending a lot of time on the I-95 corridor and then on the five on the west coast, driving between Los Angeles and San Diego in reverse, oh. I mean, I remember the last time I drove San Diego to LA, a drive that if you didn't have all the congestion, it'd be an hour and so many minutes, took over five hours. So if it had a privately funded, high-speed rail, it would make such a difference. And the northeast is where there's by far the most congestion, but the government made
18:33 Speaker 02 a decision many, many decades ago that continues to be a curse on the northeast corridor. They don't have dedicated rail. Bright Rail, Bright Line built dedicated rail, so it doesn't have to worry about the freight train operators who couldn't care less if passengers sit forever waiting for a freight train to go by, so then the passenger rail could go. But we cannot build enough highways to deal with the congestion that's happening with how metro areas expand in size, expand in population, and how one metro area bleeds into another.
19:18 Speaker 02 The I-85 corridor from Charlotte, North Carolina through Atlanta, that corridor is now seeing incredible traffic jams at any time of the day or night. From Nashville, Tennessee, to Chattanooga, to Atlanta, same thing. There are these sectors, these corridors, that are ripe for doing what is so common everywhere else in the developed world. And that is to have high-speed, reliable rail as an alternative to getting on an airplane, or getting in your car with the big question mark, what kind of traffic you're going to
20:02 Speaker 02 be going through. So, just a thought, and you'll hear me from time to time talk about things that, in America, we need to rethink. This is one of those things, because a lot of Americans feel like we just don't do things as well as we used to, in so many areas. And we can, we got it. We just got to put a focus on it and get them done.
20:28 Speaker 03 I love trains. Absolutely love them.
20:31 Speaker 02 But, when would you ever?
20:33 Speaker 03 I know. But I've traveled and using trains, like, it's just such a game changer.
20:39 Speaker 02 When we went to China on staff trip, did you ride on the world's fastest train? It was the Maglev?
20:46 Speaker 03 Yeah, I did.
20:47 Speaker 02 In Shanghai? Wow, it was so weird to step on a train going 300 miles an hour. Well, we didn't step on it while it was going 300.
20:56 Speaker 03 And the one in Japan's called the Shinkansen?
20:58 Speaker 02 Shinkansen, that's an older technology, not anywhere as fast. The one that's the fastest of traditional trains, I think, is the Ave, I think is how you say it, across Spain. People rave about the Ave.
21:12 Speaker 03 All right, we'll go to some questions. Richard in Delaware says, "Hello Clark, I love your show. I wanted to ask where I could stash new home savings. I've been saving for a while now, and I was wondering, should I invest it, put it in a CD, and/or save in a high-yield savings account? I hope to buy a home in three years." We get a lot of people asking these questions.
21:30 Speaker 02 We do get this question. We get this question far more than we ever have. Because, well, we went through the years you didn't earn any money on savings. Now, the disparity where you've got the giant monster mega bank still paying as little as one one hundredth of one percent, then you have online banks paying as much as over five percent. It's a much more relevant thing and friends don't let friends put money in a savings account at Bank of America, Chase, Citibank, or Wells Fargo. And if you're doing it, it only means you need to stop hating on yourself and move your money. Okay, in your case, you can't be an investor.
22:14 Speaker 02 Three-year window, you are a saver. You don't know exactly when in that three-year window you might buy a home. So I would say, even though the interest rate can change daily, I would put the money in an online savings account. And putting in an online savings account is gonna earn you, if you look at, we've got a list, there are several lists out there, you're gonna earn roughly five percent on the money. The other thing is if you have an account with one of my favorite children, Vanguard, Schwaber, Fidelity, you can go into money market accounts with them, money funds, that will pay you a similar kind of rate, just right from your existing brokerage account.
22:57 Speaker 02 CDs, what's gonna happen with CD rates is really up in the air because financial markets are really worried about us having expanded deficits coming up at the federal level, which will lead to potentially higher interest rates. So, the shift in the psychology of the market means that right now, it's a better idea to just be a flat-out saver in online savings accounts, or in these brokerage money market accounts with one of the discount brokers.
23:31 Speaker 02 Instead of doing CDs and absolutely with a three-year window, no way do I want you putting that money in the stock market.
23:40 Speaker 03 Jamie in Georgia says, "My husband and I and young kiddos listen to your show all the time. The other day, my father asked the best way to gift $500 to each of my kids. He was thinking of a savings bond. They are eight to 12 years old. He prefers them to not get the money until their mid twenties. What do you suggest? I listened to a recent podcast where you said bonds were not the best option. What is? Preferably, it would be really nice for this money to grow. We already have a 529 plan, which we contribute to monthly for each kid. Thanks a bunch."
24:12 Speaker 02 Jamie, I have such a strong bias to answer your question. Just know I have like blinders on and I'm so focused for your eight to 12-year-olds that I would want your dad to use the $500 for each of your kids to have a custodial investment account at a discount broker, like Fidelity has the easiest program to be able to do this. And the money could go directly into a Fidelity Zero Fund, which has no commissions, no ongoing expenses.
24:53 Speaker 02 And your kids would have the double benefit that over the long haul, they're going to earn more into young adulthood with money invested instead of in savings bonds, or savings account, or anything like that. And you use it as an opportunity to teach the concepts of investing. And then depending on the maturity of your kids as they become 13 and older, Fidelity allows the kids to have limited control over the account to learn more and more about investing. But you wouldn't want to do that till you felt each of your three children had the maturity to support being able to have that control.
25:38 Speaker 03 And this is from Elise in Massachusetts. I wanted to share what Target is doing. I bought Target gift cards when they were having their 10% off sale and I used my Discover card which has targeted 5% cash back this quarter. The gift cards were just the card with no numbers or codes on them. The cashier has stickers in her drawer that have all the information. She scanned one to activate it and stuck it to the card. So no way for the bad guys to scan the codes in the store. The first time I've seen this. Such a great idea to cut down on gift card theft.
26:12 Speaker 02 Elise, I love this and the only way you'd have a problem would be if it was internal. You had a dishonest employee and that's so much better than what we have right now with these unactivated gift cards on racks that any customer, good or bad, could go and pick them up, take the cards out of the store, get the information off of them, take them back, put them back on the shelf in the store, wait for somebody to activate them and steal all the money. So it's great. I love that kind of innovation and I hope that the Target system stands the test of
26:53 Speaker 02 time to eliminate, or at least greatly reduce, the amount of fraud that just keeps happening called gift card draining. Where, and we're going to get the calls next month. Cause so many people next week are going to give gift cards to their gift recipients and then they're going to go use them, try to use them and there's going to be no money left on the gift cards given because of how easy the producers of the gift cards and the retailers and the restaurants have made it for criminals to swipe all the money. This is a step in the right direction, a retailer using a method, in this case Target,
27:38 Speaker 02 to try to prevent the gift card draining. Best gift to give somebody? Let's see if I have any. This, for those of you who watch our YouTube show.
27:49 Speaker 03 Thank you Clark.
27:50 Speaker 02 Yeah.
27:51 Speaker 03 Five dollars.
27:52 Speaker 02 I have a five, I have a 10 and I have a 20. So there you go, Krista.
27:59 Speaker 03 Thanks, I get the five.
28:02 Speaker 02 So for those of you not familiar with this, watching on the YouTube show, this is called money. It's actual cash printed by the US government.
28:13 Speaker 03 Mr. Abraham Lincoln is on there.
28:15 Speaker 02 Abe Lincoln's on the five. I got Hamilton on the 10. And then we got Jackson on my 20 here. These are real pieces of money.
28:25 Speaker 03 I think I like Jackson better.
28:27 Speaker 02 You like the Jackson? Okay. So the thing with this Jackson, I give it to you, other than the effect of inflation until you spend it, what do you still have?
28:36 Speaker 03 Twenty dollars.
28:37 Speaker 02 Twenty bucks.
28:38 Speaker 03 Unless I lose it, which...
28:39 Speaker 02 I give you, well, how are you gonna lose cash?
28:41 Speaker 03 I could lose just about anything. My father used to tell me I could lose my head if it wasn't attached to my neck.
28:47 Speaker 02 Why do two of the flakiest people ever to live work together on this podcast?
28:52 Speaker 03 Combined, it works out fine.
28:54 Speaker 02 But on the other hand, you go buy somebody a gift card, let's say for 20 bucks, and they go to use it, it's roulette. You don't know, because of all the theft of the value off gift cards, if you got 20 bucks in your hand or zero bucks in your hand. That's the advantage of giving somebody this stuff. And you know, a lot of places still accept these things, these pieces of cash. And so that's what I'd rather you give somebody, instead of giving them a gift card that you're playing roulette with your money. You wanna play roulette with your money? Go to a casino. But do you wanna play roulette with money that you worked hard for? That you're giving to someone you care about or love as a gift?
29:39 Speaker 02 And have it be a joke on you and them? You don't. Thanks so much for joining us today. Speaking of Christmas, I'll tell you something that's not a scam. It's Clark's Christmas Kids. Our 34th year taking care of the Christmas wishes of children in foster care. It's something that means so much to me, and I'm so grateful to all the generous listeners and viewers who have donated in prior years of this year to Clark's Christmas Kids. If you're not familiar with it, go to clark'schristmaskids.com. You'll see how you can help us take care of these children this year and beyond.
30:20 Speaker 02 Next year, our 35th year of Clark's Christmas Kids. And know what we're about for you here. The gift we give you is knowledge so you can save more, spend less, and avoid getting ripped off. And we'll see you tomorrow.
30:43 Speaker 00 At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones. Member SIPC.
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