Clark was in Washington D.C., last weekend with various other radio talk show hosts. He doesn’t normally look forward to going to D.C. in winter because the weather is so cold. But this past week it was beautiful. And the big fuss in Washington last week revolved around Federal Reserve Chairman Alan Greenspan. Greenspan usually talks about inflation and deflation and boring topics, but last week he decided to take on the social security topic. He floored some when he said that there is no way social security can fund the retirement of all the baby boomers who will soon be dependent on it while still benefiting the generation following them. Clark agrees wholeheartedly and he thinks people should not lambaste Greenspan for saying this. If you’re under age 50, you are going to have to pay for your own retirement. It’s a fact. Clark would much rather see social security continue for those who are age 50 and above, and then the funnel of money coming in for everyone else should stop. We’ve already paid way too much. Clark likes the idea of siphoning a portion of our pay for our retirement, say 10 percent. And then we could put in as much as we’d like.
Clark has had many callers who want to switch cell phone carriers but are upset over the fact that they have to buy a new phone. Well, the good news gets even better. Three of the nation’s six cell phone providers are using the same phone technology, so you may not have to buy a new phone. The three companies – AT&T, Cingular and T-Mobile – are all using GSM (Global System Mobile) or are converting to GSM. Some customers who have been with Cingular or AT&T for a while will not be able to do this. But if you have a GSM phone, you will be able to take your new phone with you to a new provider. T-Mobile even gives you an “unlock code” after three months, so you can take your phone with you. It also means that if you travel a lot overseas, you can simply buy a chip, put it in a phone and use it overseas. AT&T, however, refuses to give the unlock codes out. But Clark has found a way around it. There are several Web sites out there that will walk you through the steps of reprogramming your phone. One of the sites, thetravelinsider.info, charges $5 to help you with the process. If you switch to Sprint, Nextel or Verizon, you cannot take your phone with you! These three all use a different technology, so it won't work.
Gasoline prices are at an unfriendly climb these days and the rise doesn’t seem to be subsiding. Prices are up about a quarter in the past two months and seven cents in the past two weeks. Gas prices vary tremendously depending on where you are in the country. People in California are paying $2.20 a gallon for regular gasoline. But regardless of where you are, the price has gone up because of supply issues. That is because the nation doesn’t have in reserve enough refined gasoline. Refined gasoline is what you get after you take a barrel of oil and refine it into gasoline. So, even if there is enough oil, only so much refined gasoline can get through the funnel. It’s leading to spot shortages around the country. The next most likely time for a spot shortage will be in late Spring when many areas of the country start making gasoline cocktails. These are special formulas of gasoline designed to deal with massive problems of auto pollution. They are not national standard formulas, and various states have different formulas. There should be just a few choices and states would be able to pick Choice A, B or C. But the reality right now is that even though gas prices will continue to go up and down, the price over time will steadily rise.
Clark has an office in the home and he uses it all the time. However, he does not deduct it from his taxes because his home office is not considered a principal place of business. So, that makes it ineligible. About 30 million people have offices in the home, working full or part time. And people often wonder if they can deduct it. The first question to ask is if you are working from home for the convenience of your employer. If so, you are eligible. For example, all of the reservation agents for the airline, JetBlue, work out of their homes. There is no reservations office. So, all of those agents qualify. The IRS used to disallow the majority of these home office claims. But now, even if you have part time use of an area, you may be able to deduct a portion of your home. The IRS has a form to help you calculate home office deductions. You may be able to include things like homeowner’s insurance, utilities, repairs and even things like your property tax and mortgage interest. You must have a real business with real revenue, though. Don’t just make it up. Are you thinking about doing your taxes at one of the H&R Block stores in Wal-Mart? Think twice about it. A Pittsburgh Post Gazette reporter said that your information is not private. The reporter was repeatedly able to get social security numbers, date of birth and other information off these forms. H&R Block officials said it was “hard to believe” that this was true. She said the forms are kept private and are not in plain view. What do you think?
You need to remember to be smart about protecting your family and its finances in the event of your untimely death. It’s a very real subject, but one that people don’t like to think or talk about. The good news is that the cost of insuring your life is dropping like a rock. Clark speculated a while back that the change in actuarial tables was going to lead to lower insurance prices. The tables estimate how long people are likely to live, and the numbers are going up. So, prices are going down. The Boston Globe reports that, depending on your age and circumstances, insurance prices are dropping 15 to 50 percent for term insurance. This is the kind Clark likes you to get because it is simple and pays a healthy death benefit to your survivors. It’s very easy to buy, too. And prices have dropped so much that you may want to consider renegotiating your contract. Not every company has cut costs, but it’s a good idea to shop around for the lowest cost A++ rated company. Also, Kiplinger magazine recently rated term life insurance policies that pay you very handsomely if you live past the maturity date. It’s a new kind of term life policies that cost you more throughout the years, but if you live through the term you are rewarded. Kiplinger said the average rate of return is 6.4 percent. But Clark is still a fan of the simple term life policies.
With the job market being so transparent at the moment, Clark encourages people to go back to school to do what they love. Traditional universities have only recently started adjusting to the non-traditional market, meaning students outside the core 18-24 market. But one company has had tremendous success serving the non-traditional market of mid 20s to mid 40s. It’s the University of Phoenix. Years ago 60 Minutes did a profile on this company that was terribly negative. Yet, the program continues to attract student and make massive profits. Last year alone, this company made a quarter of a billion in profits. Most universities depend on the kindness of alums and many charge an arm and a leg in tuition. The endowment of Harvard University is the only one that beats the market value of the University of Phoenix parent company stock. The program is now in 29 states across the country. Traditional universities despise UOP because they claim an education with a discount can’t be a good education. It’s just not true. But if you are a non-traditional student who would like to learn a new skill, going to a non-traditional university may be for you.
