Living Large In Lean Times

Last Updated Aug 14, 2011 6:26 PM EDT

Clark Howard's new book is out and it is a winner! Clark has made a very successful career of helping people achieve more value for their money, which I suspect will particularly resonate with readers in our current economy and stock market. So if you too want more for your money, then this is the book for you. I recently interviewed Clark on his new book.

At the core of his approach is the need to lower ego and to make the right financial choices. Clark believes that once the basic Maslow Hierarchy of physiological and safety needs have been met, everything else is about ego and choice. It's therefore critical that one gets more satisfaction from saving and making the right choices to reach financial freedom, than from the temporary rush of buying new cars or big houses.

The book is filled with hundreds of ways to buy, spend, and save smarter. Here are some of my favorites.

You are not what you drive

Clark told me that the single most important thing a consumer can do to save relates to their car. He was preaching to the choir with that one, since I've noted driving a millionaire's car (an inexpensive car for ten years) can make about $1.9 million versus the luxury route.

Clark offers great tips in this area, such as the advantages of buying a used car, as well as how to get the best direct no-hassle price on line. He strongly advises consumers to steer clear of leasing a car. And if you have to finance a car purchase, Clark recommends that the loan not be longer than 42 months. In the quest for the most reasonably priced gas, he urges consumers to scope out the best price online and to buy regular gas. Clark also cautions people that they shouldn't fall for the auto industry urban myth that oil needs to be changed every 3,000 miles.

Travel well

Clark is a big fan of Hotwire and Priceline, as I am. He called me from a hotel room he booked for $59 a night, noting that the CNN employees traveling with him, and staying at the same hotel, had to use their corporate rate of $159 a night.

This book offers some great tips on using Hotwire and Priceline that I had never even thought of. For example, by looking at Hotwire's package rates with a car, but not booking it, one could get a good idea of the hotel name and exact location not disclosed on the hotel only booking. Why didn't I think of that? He also gives the some online forums that I've used for years where people name the hotels and prices they got from Priceline and Hotwire.

Complain to the top

Customer service seems at an-all time low to me. Most people try to resolve an issue by calling an 800 number and spending an annoying length of time on hold, only to be told by a rep there is nothing that can be done but they want you to know how much they value your business. Clark gives some great ways to reach corporate executives who actually have motivation to resolve your issue. I can personally tell you there are some corporate officers who are glad they don't have to deal with me anymore.

Invest Frugally

Though investing is only a small part of the book, as well as what Clark is about, we are on the same page. I discussed with him the irony of people I knew who became millionaires by living frugally, who then turned their wealth over to brokerage firms and were charged tens of thousands of dollars annually to underperform.

More of Clark's advice is to buy term insurance over various flavors of permanent insurance. He's a fan of funding college with 529 plans and sticking with the low cost direct sold plan over the more expensive advisor sold plans. Clark recommends staying in state if you get a tax deduction but going to a low cost state like Utah if your state has no deduction.

He has some tips in finding the highest rate insured CDs, and warns against "can't lose investments" and chasing what's hot, like gold today. While not in the book, Clark is a fan of index funds to minimize expenses.

What this book can do for you

I consider Clark Howard to be the media's "anti-Cramer." Cramer gives exciting advice on gambling likely to transfer your wealth to others. Clark Howard, on the other hand, appears regularly on TV and radio to give practical advice on getting the most for you money and improving your financial status. He also does it in a fun and enjoyable way.

I've only scratched the surface of what's inside this book. I consider myself pretty advanced when it comes to getting good deals, but there are dozens of new web sites I'm now using after reading thanks to Clark's book.

If you are the type of person who enjoys both a good read and living large without spending a bundle, then pick up a copy of Living Large in Lean Times. Clark's book may actually be the one exception to avoiding can't lose investments.

Author's note: My thanks to my friend Stephanie Nelson, the Coupon Mom, for introducing me to Clark Howard.

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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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