Pingo.com - Cheap international calling

Clark often promises to help you avoid getting ripped off. But what happens when you rip yourself off? Clark is very upset about a report he read on TheStreet.com talking about employers offering 401(k) debit cards! Employers don't like the paperwork hassle of employees taking loans against their 401(k), but this type of debit card offers a way around the paperwork. 401(k) debit cards have been around for about 5 years and they're gaining in popularity. Clark wants you to know that they're a horrible idea. People are being told it's such a great deal to borrow from yourself -- because you pay yourself back instead of a bank. But this is a fallacy. Here's why: Money in a 401(k) is pre-tax dollars, while you have to use after-tax dollars to pay yourself back. So you might pay $1.50 in real money to pay back $1 to your 401(k).

But wait, it gets worse. If you lose your job, the money is due back in the plan right away. If you can't pay back the loan, you trigger a huge tax burden and penalty because the borrowed money is treated as a premature distribution from your 401(k). You'll incur around 40 percent tax and penalty. So say you borrowed $10K from your 401(k). You will now owe the IRS around $4K you may not have because of your job loss. There are some desperate situations where borrowing against your 401(k) may work, but Clark says you must exhaust all other possibilities first. The feds should have never approved this 401(k) debit card. Clark believes 401(k) contributions should be mandatory and withdrawals should be banned.

For years, Clark has been warning parents about the dangers their children face when using MySpace and Facebook. Recently both of the social networking sites stepped up to the plate with procedures and initiatives to safeguard minor users. Just as parents across the country breathed a collective sigh of relief, a disturbing study done by the University of New Hampshire was published in the Journal of Pediatrics. The study found that kids are in greater danger from predators in chat rooms and via IM than on the social networking sites.

As a parent, you need to monitor what your child is doing online. The rule in Clark's house has been that his teenager was not allowed to have a computer in her room until she turned 16. Meanwhile, his 8-year-old is only allowed to surf websites that are on a favorites list that he and his wife set up for her. Be sure to control your child's buddy list when it comes to IMs. You have to know and approve of every person on there to keep your child safe.

Clark almost never puts a guest on the air, but a couple of times he's invited a personal finance columnist named Jonathan Clements on the show. Clements does a lot of great research into behavioral economics. One of his most recent articles addressed the age-old question: Are men or women better investors? It turns out women end up with less money over time because, as Clements argues, they're hard-wired to be conservative to a fault. They also live longer on average, so they have less money that has to stretch over a longer period of time.

Here's a disclaimer: This is a generalization, and there are differences from person to person. But generally, women tend to pick "safe" choices like CDs. Men, on the other hand, trade excessively and hurt themselves by buying and selling too much. Yet the average man ends up with a lot more money at the end of a working lifetime -- even accounting for income differences. If a woman puts money in CDs, she barely keeps up with inflation and loses in the long term. We are hardwired to fear loss more than appreciate gain. Clements suggests that we should each try to learn a bit of investing style from the opposite sex.

A listener recently gave Clark a tip about Pingo.com, a website that offers a virtual calling card for ultra-cheap international calling. Please note that Clark has not personally tried this service yet. He's just passing along the information for you to make your own decision. Pingo is not a free service; you have to pay $12 to sign up and are immediately credited with $5 in calling time. So the net initial cost is $7. Some of the cheap rates advertised on the Pingo website include 3 cents/minute (Mexico) and 2 cents/minute (Russia). Clark plans to try this service when he travels to Italy and Switzerland next month. He'll keep you posted!