DiscoverThe Clark Howard Podcast05.30.24 The Magic Number For Retirement / Investing: A Cautionary Tale
05.30.24  The Magic Number For Retirement  /  Investing: A Cautionary Tale

05.30.24 The Magic Number For Retirement / Investing: A Cautionary Tale

Update: 2024-05-30
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Clark Howard addresses the common misconception that Americans need $1.5 million to retire comfortably, emphasizing that most successful retirees don't have that much. He encourages listeners to focus on building good financial habits, starting with small, consistent savings. He also warns against private equity investments, highlighting the high risks and fees involved. Clark then provides advice on how to help a college-bound son build credit and offers suggestions for solo female travelers in the U.S. Finally, he debunks the need to pay for credit monitoring services, explaining that most credit card companies provide free access to credit scores.

Outlines

00:00:00
Introduction and Retirement Savings

This Chapter introduces the Clark Howard Show and its mission to empower listeners with financial advice. Clark discusses the common perception that Americans need $1.5 million to retire comfortably, but argues that this figure is misleading and that most successful retirees don't have that much. He emphasizes the importance of building good financial habits and starting to save early, even if it's just a small amount.

00:19:06
Avoiding Investment Scams

This Chapter focuses on a common theme of financial exploitation: investment scams. Clark distinguishes between publicly traded investments and private placements, warning listeners about the high risks and fees associated with private equity investments. He highlights the dangers of Ponzi schemes and emphasizes the importance of being cautious when approached with investment opportunities that promise high returns with low risk.

00:24:49
Building Credit for College Students

This Chapter provides advice on how to help a college-bound son build credit. Clark recommends adding the son as an authorized user on an existing credit card, which will establish a credit record for him. He also suggests the Discover Student Card series as a good starter credit card for college students.

00:26:54
Solo Female Travel in the U.S.

This Chapter offers suggestions for solo female travelers in the U.S. Clark recommends big cities with good public transportation, such as Chicago, Boston, Washington D.C., and New York City. He also encourages listeners to consider joining solo women traveler groups or taking group tours.

00:31:23
Credit Monitoring Services

This Chapter debunks the need to pay for credit monitoring services. Clark explains that most credit card companies provide free access to credit scores and that credit monitoring services are often a waste of money. He also mentions Credit Karma as a free alternative for credit monitoring.

Keywords

Retirement Savings
The process of accumulating funds to support oneself financially during retirement. This includes various strategies like contributing to 401(k)s, Roth IRAs, and other retirement accounts, as well as investing in stocks, bonds, and other assets.

Financial Independence
The state of having sufficient financial resources to live comfortably without relying on employment income. This often involves having a diversified portfolio of investments, a paid-off mortgage, and a substantial emergency fund.

Private Equity
A type of investment that involves investing in non-publicly traded companies or assets. These investments are typically illiquid, meaning they cannot be easily bought or sold, and carry higher risks than publicly traded investments.

Ponzi Scheme
A fraudulent investment scheme where returns are paid to existing investors from the contributions of new investors, rather than from actual profits. This scheme eventually collapses when the flow of new investors dries up.

Credit Monitoring
The process of regularly checking your credit report for errors and unauthorized activity. This can help you protect your credit score and prevent identity theft.

Authorized User
A person who is granted permission to use a credit card account, even though they are not the primary account holder. Adding an authorized user can help build credit for the authorized user, especially if the primary account holder has a good credit history.

Discover Student Card
A credit card specifically designed for college students, often offering features like lower interest rates, rewards programs, and educational resources. This card can help students establish credit and learn responsible credit management.

Solo Female Travel
Traveling alone as a woman. This can be a rewarding experience, but it's important to take precautions to ensure safety and security, such as staying in well-lit and populated areas, being aware of surroundings, and informing trusted individuals about travel plans.

Public Transportation
A system of transportation that is available to the general public, such as buses, trains, subways, and trams. This can be a convenient and affordable way to get around in cities and towns.

Q&A

  • How much money do I need to retire comfortably?

    Clark Howard debunks the myth that you need $1.5 million to retire comfortably. He emphasizes that most successful retirees don't have that much and that building good financial habits and starting to save early is more important than aiming for a specific dollar amount.

  • What are some red flags to watch out for when someone pitches me an investment opportunity?

    Be wary of investments that promise high returns with low risk, especially private equity investments. These often involve high fees and lack liquidity, making it difficult to get your money back if things go wrong. Ponzi schemes are another common scam to watch out for.

  • How can I help my son build credit before he goes to college?

    Add your son as an authorized user on one of your existing credit cards. This will establish a credit record for him and make him eligible for a college student credit card. The Discover Student Card series is a good option for starter credit cards.

  • What are some safe and accessible cities for solo female travelers in the U.S.?

    Clark recommends big cities with good public transportation, such as Chicago, Boston, Washington D.C., and New York City. He also suggests joining solo women traveler groups or taking group tours.

  • Do I really need to pay for credit monitoring services?

    No, most credit card companies provide free access to your credit score. You can also sign up for a free credit monitoring service like Credit Karma.

Show Notes

How do we determine our “magic number” - the amount we need to retire? Clark weighs in on the debate about how much it takes to be financially secure, and how to start and keep making progress. Also today -private placements, hedge funds, limited partnerships, private equity - beware of this type of non-traditional investment “opportunity”. Even when they’re legit, there’s no liquidity, and extremely high expenses. It pays to know why you need to avoid investing with anyone who is not a fiduciary.


  • How Much Do You Need To Retire?: Segment 1

  • Ask Clark: Segment 2

  • Risky Investment Pitches: Segment 3

  • Ask Clark: Segment 4


Mentioned on the show:


Thank you for listening today, Clarkies! If you want to be part of our “Clarkie” segment, call 404-981-2071 to leave a comment or story. We may play it during a future episode!

Clark.com resources


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05.30.24  The Magic Number For Retirement  /  Investing: A Cautionary Tale

05.30.24 The Magic Number For Retirement / Investing: A Cautionary Tale

Clark Howard