You’ve probably seen the sales flyers that scream an ultra low price at you in huge print. It gets your attention, but you don’t notice the tiny type beside the price that says, “after rebate.” People often see the price after rebate, but they don’t always get around to doing the work to get that price. In the end, they end up paying more. Statistics show that with a $10 rebate, about 90 percent of people never file and get their money back. When it’s a $50 rebate, only about 35 percent never redeem it, according to Business Week. Yes, there are a lot of hoops to jump through when filing rebates, but sometimes you have to do a little work to get the reward. Some people do all the work but never cash the check. Why? The envelopes the checks come in are designed to look like junk mail, so people trash them. It’s called “slippage” in the industry, and you need to be aware that it’s going on. Two companies have user friendly programs and Clark likes to give them credit. They are Costco and Staples, and Clark would like others to follow in their footsteps.
We’re in the early stages of paperwork going strictly electronic in doctor’s offices and hospitals, according to the Dallas Morning News. People will no longer fill out a bunch of paperwork on a clipboard when we walk into the doctor’s office. Instead, you will write your information on an electronic pad. And each time you enter information, it will create a trail of records that will be available to you whenever you need it. It makes things safer and more efficient for patients, and it saves the medical office a ton of money. In other financial news, IKEA, Home Depot and other large furniture stores are offering instant store credit plus 20 percent off if you sign up in the store. It sounds like a great deal right? Well, it automatically lowers your credit score when you sign up. So don’t give in no matter how good it sounds.
Have you heard of “spear phishing?” it’s the newest, dangerous form of e-mail phishing. It’s more insidious than regular phishing because the person sending it knows exactly who you do business with and what kind of accounts you have. So the e-mails they send are very convincing and people open them without hesitation. They could come from a credit union, stockbroker or friend’s e-mail address. And once you open it, the crooks have access to your account numbers and passwords. If you open one of these e-mails and realize it’s not a legitimate communication, you need to assume that someone has installed what’s called a “Trojan Horse” on your computer. Until you’ve loaded a spyware program like “Spybot – Search and Destroy” or Norton, do not go to any of your financial accounts and log in. The program records your keystrokes and then the crooks sell this information to the highest bidder. Banks have another year to let your information out without protection, so practice extra caution with e-mails from now on.
What are the chances that your teenager or young child will have any meaningful social security benefit? Little to none. The math simply doesn’t work when you consider the number of people who will be working versus the number of retirees. Clark thinks Democrats will have to fix our problems with social security, but something needs to be done. Our neighbors across the pond are actually going through the same thing and their idea is one we should consider. The Labor party in Britain has proposed that the country increase the eligibility age, increase the benefit and require mandatory personal accounts. Clark is a proponent of having a mandatory personal account requirement and no social security at all for people below a certain age. It’s a bit radical but we need something. In Britain, people would have to put a minimum of 4 percent of your pay into a personal account, and your employer would match it. You can put up to 16 percent. But the reality is that people don’t save unless they’re made to. Otherwise, people wait for the government to take care of them. And that is not going to be possible in the future. You have to consider your own future now. Yet, overwhelming, people who earn less than about $45,000 a year don’t save any meaningful retirement. That needs to change.
The National Highway Traffic Safety Administration is supposed to publish regular safety bulletins and establish safety guidelines regarding cars. But the organization doesn’t want to upset the automakers. On the other hand, the insurance industry wants you to buy safe vehicles because it saves them money. As a result, the industry has created a non-profit group called the Insurance Institute for Highway Safety, which does comprehensive testing on cars and how they will do in accidents. There are gold and silver level awards given to cars that perform the best. In the large car category, the Ford 500 and the Mercury Montego got a gold award. The Audi A6 got the silver award. In midsized cars - the largest part of the market - the Saab 93 and the Subaru Legacy. The Audi A-3, A-4, the Chevy Malibu (if you get side air bags), the Volkswagen Jetta and Passat. In the small car category, only one car won the gold award. It was the Honda Civic 4-door. Not a single mini-van won an award, nor did any Volvo vehicles, which were once thought of as the safest cars on the market.
Clark is happy to be average when it comes to investing. Why? If you go for the average, you will make money over time. All of the funds listed on Clark’s “Investment Guide” page are mostly index funds. And index funds are the epitome of average. Instead of trying to be on top of the stock market, you basically buy little chunks of lots of companies with lots of other people. Index funds have minimal costs. Even better, these funds perform much better than other funds. The Wall Street Journal commissioned a study into the performance of index funds versus mutual funds. In a year, an index fund would beat 57 percent of managed mutual funds. Over five years, it goes up to 70 percent. And over 25 years, it goes up to 95 percent. So, it’s much easier for the index fund to make money over time. In other investing news, ETFs are growing and you may want to consider one of those. But beware of pitches for what are called “separately managed accounts.” Salespeople are targeting the wealthy and nearly wealthy, especially doctors and lawyers, to buy these. But you’d be much better looking at tax-managed portfolios instead.
