May 8, 2008
Clark created a lot of excitement about Series I bonds recently. They were a great deal up until April 30. But as of May 1, Clark is no longer recommending them. That's because the government has reduced the fixed rate of return to 0%. That's just nuts! So you might want to dial back if you're on a payroll saving plans where you get Patriot Bonds or I bonds. Both are now practically useless as savings tools.
However, they will continue to be a decent deal if and only if you purchased before May 1. People who bought between last fall and April 30 are earning 4.28%. That will bump up to over 6% in November. And if you bought in the late '90s, wow, you're getting a phenomenal deal and should hold onto them for the full 30-year term. Remember that, as an added bonus, all savings bonds are exempt from state tax.
So let's reiterate what Clark wants you to know: If you already own I bonds, they remain a good deal. But if you are planning on buying them, stop! They are no longer a Clark Smart buy.
May 8, 2008
The ancient Greek philosopher Aristotle is credited with teaching the following: "We are what we repeatedly do. Excellence then, is not an act, but a habit."
Everyone has both good and bad habits. Clark used to eat ice cream nearly every single day of the year. Then he discovered his cholesterol was too high during a checkup. His doctor suggested cutting back on the frozen dairy treat; he didn't advise going completely cold turkey. Clark had to reprogram his brain to not have a pint of ice cream after dinner. Now he only indulges about once every 2 weeks. On the flip side, he has a good habit of exercising nearly every day.
You can actually will yourself to develop good financial habits. You can create a savings habit where there hasn't been one. Many people do this by setting up a 401(k) to automatically take money out of their check before they get paid.
You can also do the same thing with T. Rowe Price's Automatic Asset Builder, which takes a minimum of $50/month from your paycheck and pops it in a Roth IRA.
But you've got to make that conscious, mechanical decision to make a change. Then over time, it will become automatic. One of the easiest ways to begin saving is to use a change jar at home and empty out the coins in your pocket every night. Other talk show hosts suggest saving your singles when you break a larger bill.
The key is to analyze yourself and see how you can make a change. You may fall off the wagon several times, but you need to keep at it.
May 7, 2008
If you're getting ready to retire, you don't want to outlive your money. That's why Clark often recommends an immediate payout or lifetime annuity from your insurance company. That allows you to get a check each month for the rest of your life. But if you die early, your heirs won't receive anything. That can be a problem.
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May 2, 2008
It's no surprise that people are becoming more careful with their money. Research shows that folks are more interested in what people like Clark have to say. He's like a firefighter and the economic house is on fire -- they want him to put it out.
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May 2, 2008
Are you afraid to open your own mail for fear of seeing your 401(k) statement? Clark recently spoke to one man who referred to his plan as a 301(j) because it keeps going the wrong way!
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