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Faith & Finance Live - How to Save for Major Purchases · Utah's Hope

0:08
S1: One of the simplest ways to stay out of credit
0:11
S1: card debt is to save up for major purchases before
0:13
S1: you make them. Hi, I'm Rob West. When you plan
0:17
S1: ahead for expenses you know are coming, you can pay
0:20
S1: with money you already have instead of borrowing from tomorrow's income.
0:24
S1: Today we'll look at a simple way to do that.
0:26
S1: And then it's on to your calls at 800 525 7000.
0:31
S1: This is faith and finance live. Biblical wisdom for your
0:34
S1: financial journey. Now you may be thinking, isn't that what
0:40
S1: my emergency fund is for? Not exactly. Your emergency fund
0:44
S1: is there for the unexpected, the transmission that suddenly goes out,
0:48
S1: an unplanned medical bill or a temporary loss of income.
0:52
S1: What we're talking about today is different. It's intentionally setting
0:56
S1: money aside for a larger expense. You can reasonably anticipate
1:01
S1: replacing a roof, buying your next vehicle, taking a vacation,
1:05
S1: or making a major home repair. You'll sometimes hear this
1:09
S1: called a sinking fund, but whatever you call it, the
1:12
S1: principle is simple save a little at a time now
1:15
S1: so you don't have to borrow later. That takes patience.
1:19
S1: And in a culture built around instant gratification, patients can
1:23
S1: be a powerful financial habit. It can also be an
1:27
S1: important part of faithful stewardship. Proverbs 2120 says, precious treasure
1:32
S1: and oil are in a wise man's dwelling, but a
1:34
S1: foolish man devours it. Wisdom doesn't require us to spend
1:38
S1: everything available to us today. Sometimes wisdom means looking ahead,
1:43
S1: preparing patiently, and allowing time to work in our favor.
1:47
S1: So how do you get started? Well, first you need
1:50
S1: to define the goal. Let's say you expect to need
1:53
S1: a new roof and estimate the cost at $7,500. Now
1:57
S1: you have a specific target. Next, determine how much you
2:00
S1: can realistically save each month. If you can set aside $500,
2:05
S1: you'll reach 7500 in 15 months. If $500 isn't realistic,
2:10
S1: that's okay. Maybe you start with 100 or 200 and
2:14
S1: look for opportunities to increase it over time. The important
2:17
S1: thing is to begin. You might redirect money from another
2:21
S1: spending category, put part of a bonus or tax refund
2:24
S1: toward the goal, or send some of the savings from
2:27
S1: a cancelled subscription into the account. Small amounts add up
2:31
S1: when you consistently give them time. Each deposit represents progress
2:36
S1: toward greater financial freedom. Instead of wondering how you'll pay
2:40
S1: for a major expense when it arrives, you're gradually preparing
2:43
S1: for it. That can reduce financial stress and give you
2:47
S1: more flexibility when the time comes to make the purchase. Next,
2:52
S1: keep this money separate. Consider opening a dedicated savings account.
2:56
S1: Rather than mixing the money with your everyday checking emergency
3:00
S1: savings or other financial goals. When the dollars have a
3:04
S1: clearly defined purpose, you're less likely to spend them somewhere else.
3:09
S1: Then automate the process if you can. You might schedule
3:12
S1: a transfer every payday or once a month. That turns
3:16
S1: saving from something you have to remember into part of
3:19
S1: your normal financial rhythm. And remember, your emergency fund and
3:24
S1: retirement accounts have different jobs. Using retirement money for a
3:28
S1: purchase today can trigger taxes, and depending on your age
3:32
S1: and circumstances, possibly penalties. Not to mention the loss of
3:36
S1: future growth, your retirement savings are meant to provide for
3:40
S1: a future season, so whenever possible, let them keep doing
3:44
S1: that job. As you plan, it can also help you
3:47
S1: make your goals smart, specific, measurable, attainable, relevant, and timely.
3:54
S1: Be specific about what you're saving for and how much
3:57
S1: you'll need. Make it measurable by tracking your progress. Keep
4:01
S1: it attainable so you don't become discouraged. Make sure the
4:04
S1: purchase is truly relevant to your priorities and give yourself
4:09
S1: a reasonable target date. If you miss the date, that
4:12
S1: doesn't mean you've failed. Adjust the plan and keep going.
4:16
S1: The larger lesson is that good stewardship often happens long
4:20
S1: before the purchase itself. It happens when we patiently prepare, exercise,
4:25
S1: self control, and make intentional decisions with what God has
4:29
S1: entrusted to us. And if you're looking for a place
4:32
S1: to save toward those future expenses, Adelphi Christian Banking is
4:36
S1: our recommended banking partner here at Faith and finance. Along
4:40
S1: with checking savings and credit card options, Adelphi offers a
4:44
S1: high yield money market account with an exceptional rate of 4%
4:48
S1: on balances up to $100,000 for the first year. It's
4:53
S1: another opportunity to consider not only how you manage your money,
4:57
S1: but also the financial institutions you choose to work with.
5:00
S1: You can learn more at faith.com/banking. As you consider whether
5:05
S1: a Delphi is right for you, here's what you need
5:07
S1: to know. Membership eligibility is required, and while this institution
5:11
S1: is not federally insured, each account is privately insured up
5:14
S1: to $250,000 with American share insurance. If you want to
5:18
S1: learn more, go to faith.com/banking. We'll be right back.
5:35
S2: The opinions offered during this program represent the personal or
5:38
S2: professional opinions of the participants given for informational purposes only.
5:42
S2: Any information provided is not intended to replace advice from
5:46
S2: a financial, medical, legal or other professional who understands your
5:50
S2: specific situation.
5:57
S1: Great to have you with us today on Faith in
5:59
S1: Finance Live. I'm Rob Westwell. In just a moment we'll
6:01
S1: begin taking your calls and questions. So now is the
6:04
S1: time to call 800 525 7000. That's 800 525 7000.
6:11
S1: The team is standing by. So whatever you're thinking about
6:14
S1: today in your financial life giving, saving, spending, we'd love
6:17
S1: to tackle it with you through the lens of biblical wisdom.
6:21
S1: And again, we will dive into those questions here in
6:23
S1: just a moment. 800 525 7000. Hey, an enormous thank
6:29
S1: you to so many of you who participated in our
6:31
S1: fall share last week. What a privilege to come alongside
6:35
S1: you and serve you each day and then to see
6:37
S1: you respond. So many of you, thousands of you stepping
6:41
S1: in to fund the work of Moody Radio is just incredible.
6:45
S1: And we're very, very grateful for your support and thankful
6:50
S1: that we were able to make the progress that we made.
6:53
S1: So I just want you to know from the bottom
6:55
S1: of our hearts, we are incredibly grateful for your role
6:59
S1: in supporting this work here at Moody Radio. Uh, coming
7:03
S1: up in our final segment today, Bob Dole stops by.
7:06
S1: We'll get Bob's take on what's moving the markets. A
7:08
S1: lot going on, a lot in the news, a lot
7:11
S1: related to our economy. Uh, Bob will weigh in on
7:14
S1: all of it straight ahead. And of course, we will
7:17
S1: be taking those phone calls here in just a moment. Again,
7:20
S1: the the lines are open. Calls are coming in 805,
7:24
S1: two five, 7000. Again, that's 800 525 7000. In the
7:30
S1: news today, Congress has approved the bipartisan Clergy Act legislation
7:35
S1: that would give certain pastors and other religious workers a
7:38
S1: second chance to participate in Social Security. The Senate passed
7:42
S1: the measure unanimously on September 30th, following a 350 to
7:47
S1: 5 House vote in April. The bill now awaits President
7:51
S1: Trump's signature. Under current law, ministers who receive an exemption
7:55
S1: from Social Security and Medicare taxes on ministerial earnings generally
8:00
S1: cannot reverse that decision. While the Clergy Act would establish
8:04
S1: a one time opportunity to revoke the exemption with coverage
8:09
S1: beginning in 2029 or 2030. Now, participating ministers would begin
8:14
S1: paying applicable self-employment taxes and could earn credits toward future
8:20
S1: Social Security and Medicare benefits, subject to eligibility requirements. Guidestone
8:26
S1: and other Christian organizations have welcomed the legislation, saying it
8:30
S1: could strengthen retirement security for ministers who opted out earlier
8:35
S1: in their careers. The IRS would provide additional guidance if
8:38
S1: the legislation becomes law. Obviously a topic a lot of
8:42
S1: our listeners are interested in, so we'll keep a close
8:45
S1: eye on it. All right. Let's dive into some questions. Today.
8:47
S1: We're going to begin in South Carolina. Deborah, you'll be
8:49
S1: first up. Go right ahead.
8:51
S3: Hi, Rob. Thank you for taking my call. Of course
8:54
S3: I have. I have a question about we want to
8:59
S3: make an addition to our home. And the price came
9:03
S3: in at like 35,000. Um, and we're trying to figure
9:07
S3: out the best way to finance that. Um, so we
9:11
S3: do have, um, my husband and I are both retired
9:15
S3: and we both joined social Security. Um, we do have about,
9:20
S3: we have like 16,000 emergency fund. Um, and so we're
9:27
S3: just trying to figure out the best way to finance
9:31
S3: an addition to the home.
9:33
S1: Yes. Very good. Well, tell me about the first mortgage
9:36
S1: that you still have, if any, on the property.
9:40
S3: Um, we, we have the home we're in. We did,
9:44
S3: um we called in last year as a matter of fact,
9:47
S3: and we. With movement mortgage.
9:50
S1: Oh, great.
9:50
S3: And so we have lot. Yes, we have like 100,000
9:55
S3: in equity that we could pull if we wanted to. Um,
10:00
S3: through that.
10:01
S1: Okay. Yeah. And, uh, what is the current interest rate
10:04
S1: on that first mortgage that you have?
10:09
S3: Um, 7.9. The, the home we're in now.
10:15
S1: Yes.
10:17
S3: I want to say 7.5.
10:20
S1: Okay. And it's a forward mortgage or a reverse mortgage.
10:24
S3: It's a reverse mortgage.
10:26
S1: Reverse mortgage. Okay. And so do you have a line
10:28
S1: of credit against that that you can access 100,000? Okay.
10:34
S1: Got it. Yeah. So your options at this point would
10:36
S1: be to go ahead and draw the 35,000 for the
10:39
S1: addition from the line of credit, which obviously the payment
10:42
S1: would be optional at that point. That's helpful because you
10:45
S1: all are on a fixed income retired living on Social Security. Um,
10:49
S1: I know you said you have 16,000 in emergency savings.
10:52
S1: What are you spending on average per month.
10:57
S3: Average per month I. Monthly income is like 10,000 and
11:02
S3: we spend probably half of that. So we have like
11:07
S3: 5000 left over.
11:08
S1: Okay. And what are you doing with that 5000. Typically.
11:15
S3: Shopping.
11:17
S1: Okay. All right. So you have, uh, fixed expenses that
11:22
S1: total about half your income. And then the other is discretionary.
11:25
S1: And so if you were to buckle down, you could
11:27
S1: put that in savings or put it against the reverse mortgage.
11:30
S1: But because you have some surplus, it ends up finding
11:32
S1: its way into something on a monthly basis, which is
11:35
S1: basically lifestyle spending. All right. Very good. Yeah. You know,
11:40
S1: I mean, I think obviously it's up to you. Uh,
11:42
S1: you have this 100,000 in equity that's available from the reverse.
11:46
S1: The payment would be optional. The home is going to
11:49
S1: likely continue to appreciate. I'd love for you to build
11:52
S1: that emergency fund up. You know, let's say your monthly
11:56
S1: obligations really are 5000. I'd love for you to have
11:59
S1: 30,000 there. I'd love for you to double that. So
12:02
S1: I think one thing would be to really dial into
12:05
S1: that budget, to answer the question, how much is enough
12:08
S1: for your lifestyle spending? Does it mean we can't enjoy
12:12
S1: anything and have some extras in there? You certainly can.
12:15
S1: I think the question is what are your goals? And
12:18
S1: if your goals are number one, to get that emergency
12:21
S1: fund up to 30,000, what would it take to do that?
12:24
S1: Could you take a couple of thousand a month and
12:27
S1: make that part of your obligations, if you will, and
12:30
S1: just go ahead and set that up automatically to go
12:33
S1: to savings? If you could do that, I would feel
12:36
S1: a lot better that you were heading toward having a
12:38
S1: fully funded emergency fund, which in retirement, I think six
12:41
S1: months is really a minimum. And then I would rather
12:45
S1: you not pull the money from the retirement accounts if possible.
12:49
S1: That's going to trigger higher taxes. It might trigger a
12:52
S1: larger portion of your Social Security to be taxable. It
12:55
S1: could also increase your Medicare premiums. So I think you
12:59
S1: pulling that from the reverse would probably be the best case.
13:03
S1: But again, I would probably prioritize, you know, can we
13:07
S1: enjoy this season and some of the surplus we have,
13:11
S1: but can we also accomplish some of our goals, which
13:13
S1: could be okay once we get to six months on
13:16
S1: the emergency savings, we're going to take that 2000 a
13:19
S1: month in my example, and go ahead and apply it
13:22
S1: to the reverse mortgage to at least pay off that
13:25
S1: $35,000 loan that you took out for the addition. Now,
13:30
S1: at the end of the day, you're increasing the value
13:32
S1: of the home and you've got that equity to use.
13:35
S1: And so if you didn't, that wouldn't be the end
13:37
S1: of the world. It just reduces how much it's going
13:39
S1: to be available at death for you to pass on
13:42
S1: to your heirs. But I wouldn't pull that from retirement
13:45
S1: if it were me. Does that make sense?
13:47
S3: That makes a lot of sense. And we're already set up.
13:50
S3: We're putting 2000 a month into savings. That's how we
13:53
S3: got to 16. And each month that that's already automatically
13:57
S3: set up. So what you're saying is go ahead, get
14:00
S3: that to that 30,000. And then we could pull that
14:03
S3: out of the reverse mortgage line of credit.
14:06
S1: Yes. Or go if you want. You're ready to do
14:09
S1: the addition, you know, and you've got the bid. Multiple bids.
14:12
S1: You know what it's going to cost. I don't have
14:14
S1: a problem with you doing it and going ahead and
14:16
S1: tapping the reverse. I just want to make sure you're
14:18
S1: on track to get to a fully funded emergency fund.
14:22
S1: And it sounds like you're already on your way there.
14:24
S1: So I feel good about both options. Thanks for your call.
14:27
S1: We'll be right back. Thanks for joining us today on
14:37
S1: Faith and Finance Live. I'm Rob West. We're taking your
14:40
S1: calls and questions today. Lines are open. So if you've
14:42
S1: got something in your financial life you're wrestling with, we'd
14:45
S1: love to hear about it. Help you think about it.
14:48
S1: In light of biblical wisdom, the number to call 800
14:51
S1: 525 7000. The team is standing by. We'd love to
14:54
S1: hear from you today. We'll get to as many questions
14:57
S1: as we can during the broadcast. Let's head out to Indiana. Hi, Joyce.
15:01
S1: Thanks for calling. Go right ahead.
15:03
S4: Hi. Thanks for taking my call. Yes, ma'am. Appreciate it.
15:08
S4: I've got a little over $100,000 that's sitting in a
15:12
S4: money market right now, just in cash. I started it
15:15
S4: out as a Roth IRA. Then I went to a
15:19
S4: Roth CD and. And now my advisor is telling me
15:23
S4: that the best rates would be if I went to
15:26
S4: a mega MYGA, I could get over 6% interest. Would
15:32
S4: you recommend that?
15:33
S1: Yeah. It's not necessarily a bad investment in the sense
15:37
S1: that it can offer guaranteed interest for several years, but
15:40
S1: there are important differences between a CD and Miga for short.
15:45
S1: What's essentially a multi-year guaranteed annuity? So this is an
15:50
S1: insurance product from an insurance company in terms of the
15:53
S1: principal protection instead of FDIC insurance or NCUA. In the
15:59
S1: case of a credit union with a CD, you're getting backing.
16:03
S1: The backing of the insurance companies, financial strength, which if
16:07
S1: they're highly rated, you know, triple A or A plus,
16:12
S1: something like that. Um, you know, then I would say
16:15
S1: overall it's a pretty solid option. Uh, the interest rate
16:19
S1: obviously is fixed in both cases and to your point
16:22
S1: or to your adviser's point, uh, you know, often these
16:25
S1: guaranteed annuities are offering an interest rate slightly higher than
16:28
S1: you'd be able to get from a CD. Um, the
16:32
S1: surrender charges can be substantial. And so that's probably one
16:35
S1: of the biggest Guess drawbacks. There are clearly early withdrawal
16:39
S1: penalties for a CD, but usually, at least in the
16:42
S1: early years of the multi year guaranteed annuity, you've got
16:45
S1: a pretty substantial charge. If you want more than, let's say, 10%
16:49
S1: of the funds, the interest is taxable on the CD.
16:54
S1: And with the annuity, it's deferred typically until withdrawal. And
16:59
S1: I would just say, you know, generally the CD is,
17:03
S1: is you're looking for safety and flexibility. The multi year
17:06
S1: guaranteed annuity, typically longer term savings and tax deferral are
17:12
S1: the primary issue. So the only concerns would just be
17:16
S1: first around liquidity because you can get the money locked
17:20
S1: up here for 3 to 7 years or longer. If
17:23
S1: you're trying to enjoy avoid those surrender charges. And then,
17:28
S1: you know, advisor compensation, they may receive a commission for it.
17:32
S1: You just want to understand how they're compensated. Usually that's
17:35
S1: why they have those surrender charges. And the tax deferral
17:39
S1: can be, you know, I think really beneficial. But earnings
17:43
S1: withdrawn are generally taxed as ordinary income. Um, which is,
17:48
S1: is different than the, the way it's taxed on the CD.
17:51
S1: So overall I don't have um, an issue as long
17:54
S1: as you have other assets and you're okay with the
17:57
S1: fact that you're locking up the money a little bit longer. Um,
18:01
S1: but overall, I like the fact that you can do
18:03
S1: a little bit better in terms of the overall interest rate.
18:06
S1: So what portion of your total investable assets, Joyce would
18:11
S1: this represent?
18:13
S4: Um, maybe about half.
18:16
S1: Okay. And do you feel like you have enough liquidity
18:18
S1: with the other half that you could wait the 3
18:21
S1: to 7 years to get it?
18:23
S4: Yes. They're all in CDs.
18:25
S1: Okay. Yeah. Great. Yeah. So I think I, I certainly
18:28
S1: wouldn't put everything in, but as long as it's half
18:31
S1: or less, uh, and you're happy with the rate and
18:34
S1: you've done the tax planning and you understand the implications
18:37
S1: of how that will play into your overall financial plan
18:39
S1: down the road, then I would certainly be fine with
18:41
S1: this approach.
18:43
S4: So are you saying that, um, it started out as
18:47
S4: a Roth and he's telling me it's still a Roth? What?
18:50
S4: I have to pay taxes on the on the gain.
18:53
S1: Ah. Got it. Yeah. So the, the multi year guaranteed
18:56
S1: annuity is inside a Roth I missed that. Um, so
18:59
S1: that would give you the tax free growth. Uh, the
19:02
S1: earnings can grow tax free. And then the qualified withdrawals
19:05
S1: are tax free. Um, and then the insurance company of
19:09
S1: course would, would give you that guaranteed fixed interest rate. So, um,
19:13
S1: you know, I think that's, uh, you know, that can
19:15
S1: be an extra tax benefit. Absolutely. And again, as long
19:19
S1: as you're hitting that target rate that you're looking for
19:24
S1: and you're okay with the fact that you're locking it
19:26
S1: up for a period of time, then I think it
19:28
S1: makes a lot of sense.
19:29
S4: Okay. Uh, if you have a five year one of these,
19:34
S4: would you have to have surrender charges at the end
19:36
S4: of that?
19:37
S1: No.
19:37
S4: If it's a without surrender.
19:39
S1: Yeah. If you've, uh, if the period for the multi
19:42
S1: year guaranteed annuity is five years, it would be fully
19:45
S1: available without surrender charges at the end of the five years.
19:49
S4: Okay. All right. That's good. And my the place I
19:52
S4: want to go with is just a the a m
19:54
S4: best rating is a and that's the top one that
19:57
S4: they offer. There's a B plus plus. But this one
20:01
S4: is an A is is that good enough?
20:03
S1: I would be comfortable with a yes.
20:06
S4: Okay. All right. Well thank you very much. Appreciate it.
20:10
S1: All right. Any time, Joyce, if we can help, don't
20:12
S1: hesitate to call back. Let's go out to Indianapolis. Hi, Debbie.
20:15
S1: Go right ahead.
20:16
S5: Hi. Thanks for taking my call. Yes, I was just wondering,
20:20
S5: could you advise on some mortgage companies that might be there,
20:26
S5: a Christian here in the Midwest or just in Indiana?
20:29
S1: Yeah, I'd be happy to. Our friends at Movement Mortgage
20:32
S1: have been longtime underwriters of the program here. I personally
20:35
S1: know the CEO. It's it's run by believers. Um, you know,
20:40
S1: they don't put the fish on the business card, so
20:43
S1: to speak, because they, they just want to serve all
20:45
S1: folks with integrity and in a God honoring way. But
20:49
S1: I can tell you their heart is really for the gospel.
20:52
S1: And in fact, they take the profits. And this has
20:55
S1: happened with over $100 million in profits. And they put
20:59
S1: it into what they call movement schools in key parts
21:03
S1: of the country where they can really have an impact. Um,
21:07
S1: it's an incredible organization. It's called Movement mortgage and the
21:11
S1: place to, to go to learn more. Debbie is faithfully.com/movement.
21:16
S1: That's faithful.com/movement. Does that make sense?
21:22
S5: Yes. Thank you.
21:23
S1: Okay. Happy to help. Call any time. Well, we're going
21:26
S1: to take a break coming up in our final segment today.
21:28
S1: Bob Dole stops by. He's our go to guy on
21:31
S1: the markets. We'll get Bob's take on what's moving the
21:34
S1: markets today. And essentially the S&P 500 closing near flat.
21:39
S1: Dow Jones up a bit but a lot going on
21:42
S1: today with regard to the Middle East. Also Russia and Ukraine.
21:47
S1: Diesel fuel back in uh in the spotlight just given
21:51
S1: the elevated gas prices and much more. We'll get Bob's
21:55
S1: take on the overall health of the economy. Plus your
21:57
S1: questions stick around. Glad to have you with us today
22:08
S1: on Faith and finance live. Hey, if you love the program,
22:11
S1: we'd love to invite you to be a supporter of
22:14
S1: the ministry here at Faith five. We're listener supported, and
22:17
S1: one great way to support the program is to become
22:19
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22:23
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22:26
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22:29
S1: all of the great resources partners receive for issues of
22:32
S1: our magazine, every new study or devotional, including our field
22:36
S1: guides and our our next field guide field guide number two.
22:39
S1: How do I prepare the next steward? Giving you an
22:42
S1: intentional really system, if you will, to biblically pass on faith, virtues, relationships,
22:49
S1: and money to the next steward is due out in
22:52
S1: the next couple of weeks. We'd love to put it
22:54
S1: in your hands. Learn more about becoming a faith partner
22:57
S1: when you head to faith.com/give. That's faith fi.com/give. We've got
23:04
S1: some lines open today. We'll get to as many calls
23:05
S1: as we can between now and the top of the hour. 805.
23:09
S1: Two five 7000. You can call right now. Let's go
23:12
S1: to Chicago. Louise, how can I help?
23:15
S6: Yes. Thank you for taking my call. Sure. I have
23:18
S6: a term policy that will expire on November the 25th. Um,
23:24
S6: it's a it's a ten year, uh, Premium, and I
23:28
S6: received a notice from the insurance company that that once
23:33
S6: that expired, a conversion of $173.58 will be reflected on
23:39
S6: the original term of $250,000. Yes, I had been. I
23:45
S6: asked them to do a comparison, because I'm no longer
23:48
S6: interested in the $250,000. When I did that ten years
23:52
S6: ago because of other assets that I have. Yes. And
23:56
S6: so what they're asking what the conversion was for $50,000
24:00
S6: to $100,000, what would be the annual premium? And they said,
24:06
S6: that's 22, excuse me, 2391 per year, which will increase
24:11
S6: my monthly expense to $173 a month. My question is,
24:18
S6: because I have other assets and I am no longer
24:22
S6: interested in maintaining that high amount and with other assets
24:27
S6: in my age, would that be beneficial to continue this
24:33
S6: policy or just let it lapse? Yeah, I'm in that dilemma.
24:39
S1: Yeah. And I can totally understand why. Louise. Well, first
24:42
S1: of all, well done. I'm glad you went with the
24:44
S1: term policy. Initially. It's the most cost effective way for
24:49
S1: you to offset a risk during your working years. And
24:52
S1: that risk, most notably, is that if something were to
24:55
S1: happen to you, you were to pass away. Your income
24:58
S1: goes away. You were to you would have potentially a
25:02
S1: loved one. A dependent could be a spouse, could be a,
25:06
S1: a child that would be counting on that income and
25:08
S1: that would create a hardship for them at your passing.
25:12
S1: Once we reach retirement, that's usually no longer the case
25:15
S1: unless you have a lifelong dependent or some other circumstance.
25:20
S1: But in your case, to your point, you're now Retired.
25:24
S1: You have other assets or you're about to retire, and
25:29
S1: therefore you don't need this life insurance. If something were
25:32
S1: to happen to you, it wouldn't require, uh, you know, any, uh,
25:36
S1: anyone wouldn't face a hardship or have a risk associated
25:41
S1: with your income going away. And therefore it served its purpose,
25:45
S1: but it's no longer necessary. And a lot of people
25:48
S1: will say, well, wait a minute. I just kind of
25:49
S1: threw all that money away. And, you know, we often
25:52
S1: put this life insurance in a different category than all
25:55
S1: of our other insurance in our minds. Because think about it,
25:58
S1: you know, if you had a car and you know
26:01
S1: you have insurance for that car, you hope you don't
26:04
S1: ever have to take advantage of it because you hope
26:06
S1: you don't have an accident. I think the same thing
26:08
S1: is true here. You're offsetting a risk with life insurance.
26:12
S1: But once that risk is gone, we no longer need
26:15
S1: the policy. And so therefore we let it lapse. You
26:18
S1: in this case would recapture at $50 a month, $600
26:22
S1: a year in premium or at the new premium. 173
26:26
S1: a month, about $2,000 a year that you could put
26:29
S1: into savings and. And continue to build your assets. And
26:34
S1: I just think from what I'm hearing, there's really not
26:37
S1: a need for this. And therefore, it served its purpose.
26:40
S1: You're entering a season where insurance is going to become
26:44
S1: much more costly. And therefore, I would say for most
26:47
S1: people in this situation, you would just want to let
26:49
S1: it lapse.
26:51
S6: Wonderful. I heard you say that before on another program
26:56
S6: a while back. And so now I'm faced with it.
26:58
S6: I just wanted confirmation and wisdom advice on what should
27:02
S6: be my next move as opposed to lowering that amount
27:06
S6: when really I have other assets that could potentially help
27:12
S6: offset some.
27:13
S1: Yes, ma'am. I think that's exactly the way to think
27:15
S1: about it, but I appreciate you checking in. Louise. Thanks
27:17
S1: for being a faithful listener. Lord bless you. Uh, 800
27:20
S1: 525 7000. We're going to stay in Chicago, Nancy. How
27:23
S1: can we help you?
27:26
S7: Um, yeah, I have had, um, a pretty large amount
27:30
S7: of debt for myself since Covid and health issues and
27:35
S7: things like that have come up. And I've been, I've
27:37
S7: been trying different programs to see if I could pay
27:41
S7: it down. I did the minimum. I got my thousand dollars.
27:45
S7: I kind of followed it. Dave Ramsey kind of thing.
27:48
S1: Sure.
27:48
S7: But it's just, it's, it's just keeps growing and growing.
27:52
S7: And it's just, it's hard to get anywhere. But and
27:57
S7: I know there's a lot of programs out there where,
27:59
S7: you know, you can consolidate that all. And then, but
28:03
S7: I don't want to not pay them for three months
28:06
S7: and have someone else collecting that money. So I was
28:09
S7: wondering if there was a safe place for me to
28:11
S7: do that kind of consolidation without, you know, giving up,
28:16
S7: you know, without just stop paying them and all of that.
28:19
S1: Yeah, there absolutely is. So I'm delighted you called today
28:23
S1: because what you're describing, where you stop paying and then
28:26
S1: start putting that into a bit of a savings account
28:30
S1: so that you can come back or somebody on your
28:32
S1: behalf can come back and negotiate a lower pay off
28:35
S1: is called debt settlement. And I don't recommend it. It's
28:38
S1: going to trash your credit could put you in a
28:40
S1: situation where you get a judgment against you. At the
28:43
S1: very least, you'll have collection agencies calling, and I just
28:46
S1: don't want you in that position. There is a solution.
28:50
S1: And for anyone who has credit card debt, I usually
28:52
S1: find greater than $4,000. My preferred approach is not debt settlement,
28:57
S1: it's debt management. And so essentially, we partner with Christian
29:01
S1: Credit counselors. They're a nonprofit organization. They've worked with thousands
29:06
S1: of our listeners and they've been around for 35 years.
29:09
S1: This is not a loan consolidation. Your debt stays right
29:13
S1: where it is. You get the convenience of one monthly
29:17
S1: payment without taking on another loan. They work with your
29:20
S1: creditors to move you into the credit counseling program inside
29:25
S1: each credit card company, and they all have one. And
29:27
S1: that's going to secure the lower interest rates, generally between
29:31
S1: 0 and 10%. Depends on which creditors you have, but
29:35
S1: that's versus what you're paying now, which is probably somewhere
29:38
S1: between 22 and 30%. And the combination of that reduced
29:43
S1: interest rate plus the level monthly payment, they're going to
29:46
S1: give you a monthly payment that's not going to decline
29:50
S1: as the balances come down. And the combination of those
29:53
S1: two factors allow you to to pay that debt off
29:56
S1: about 80% faster, generally within 3 to 5 years.
30:01
S7: Oh, okay. Great. That would be great. I just, I,
30:04
S7: I don't know if I just feel like I don't,
30:07
S7: I don't get a lot of money from Social Security.
30:09
S7: And that's all I have. And I have 17,000 in debt.
30:13
S7: And I just, I don't do that anymore. But it's just,
30:17
S7: it seems like I've been trying for a few years
30:19
S7: now and just not making very much progress.
30:22
S1: Well, this program is exactly what you need. And the
30:25
S1: primary reason is because of what you just said there
30:27
S1: at the tail end. It's it's not for somebody who's
30:30
S1: still in a situation where they're living beyond their means
30:33
S1: and accumulating more debt, you've solved that issue. You're living
30:36
S1: on a budget. You just need to retire that old
30:40
S1: credit card debt. This is the way to do it.
30:43
S1: Just head to faith.com/cc that stands for Christian Credit counselors faith.com/ccc.
30:52
S1: And Nancy, we appreciate your call. We'll be right back
30:54
S1: with Bob Dole and a few more questions. Stick around.
31:05
S1: You know, as we think about managing God's money God's way,
31:08
S1: we have to start with the understanding that God owns everything,
31:11
S1: you and I. Then, well, we have a high calling
31:13
S1: as money managers for the King of Kings. And that
31:16
S1: includes how we spend, how we give, and how we
31:20
S1: save and invest. And, you know, when it comes to investing,
31:22
S1: for so long, God's people had really not considered how
31:26
S1: their faith intersects with their investments, especially when you own
31:30
S1: shares of a mutual fund or a stock on the
31:32
S1: secondary market, you would often say, well, that's disconnected from
31:36
S1: the actual company. No, it's actually ownership. You own a
31:40
S1: very small percentage in many cases of an actual company.
31:44
S1: The question is, what does that company do? And does
31:46
S1: that line up with your values? Well, that's what Bob
31:49
S1: Dole does. He manages billions of dollars. You'll see him
31:52
S1: regularly on CNBC and Fox business, but he joins us
31:56
S1: each week in this program. He's a Christ follower and
31:59
S1: a good friend. Uh, and just updates us on the market.
32:02
S1: And Bob, I think more and more Christians are just
32:05
S1: becoming aware of this idea that my faith can align
32:08
S1: with every part of my financial life, including my investments. Right?
32:13
S8: Absolutely. And you nailed it. All parts of our life
32:17
S8: are to be lined up with God's Word. Uh, and
32:22
S8: we think about how we spend money, what we give to,
32:25
S8: how we earn money. And that's natural, I guess, is, uh,
32:29
S8: Americans to line that part up with, uh, our faith,
32:33
S8: but the investments need to be there as well. We
32:36
S8: don't want to invest in companies that are making products
32:39
S8: that maim, kill, or addict people. Conversely, we want to
32:43
S8: invest in companies who are doing good, doing God's good work.
32:46
S8: So you nailed it.
32:48
S1: Excellent. Well, Bob, I appreciate your leadership in this space.
32:50
S1: And by the way, folks, if you want to check
32:52
S1: out the investments at Crossmark, just go to Crossmark global.com.
32:56
S1: All right, Bob, let's start at the high level here.
32:58
S1: The bull market turned four years old on Monday. Uh,
33:02
S1: many investors wondering, are we going to reach that fifth birthday?
33:06
S1: What say you?
33:07
S8: Well great question. Uh, you know, the chances are better
33:11
S8: than 5050 that we will, um, you know, as you know,
33:15
S8: the markets go up, uh, between two, uh, two and
33:20
S8: three times as much as they go down. So if
33:23
S8: we know nothing, which a lot of times I feel
33:26
S8: like I know nothing, you bet on an up market
33:28
S8: for the next 12 months. Absolutely. Um, just make sure
33:31
S8: the companies you own, along with the faith in line
33:34
S8: we just talked about are companies that are, uh, reasonable
33:38
S8: valuations and generating cash flow to promote their growth.
33:43
S1: And the bottom line is, as you shared in this
33:45
S1: week's dolls deliberations, the US economy overall has been pretty
33:49
S1: solid shape, right?
33:51
S8: It has consumers are working. Uh, the unemployment rate is
33:55
S8: only 4%. That's near all time lows. So a lot
33:58
S8: of people are working. Um, we know that, uh, they're
34:01
S8: spending money, uh, at all levels. Yeah. The lower end
34:05
S8: consumer has been squeezed a bit with higher gasoline prices
34:08
S8: and the like, but, um, the squeeze is not as
34:11
S8: much as it usually is because they've benefited from the
34:15
S8: good economy, too. And then you go up the income
34:17
S8: spectrum and people are spending a lot of money. Corporations
34:21
S8: are investing. Capital expenditures are booming along partly because of AI.
34:26
S8: So the economy is doing just fine. Thank you.
34:29
S1: Uh, obviously monetary policy is always front and center. Where
34:32
S1: do you think that's headed?
34:34
S8: Well, if inflation continues to be above the Fed's 2% plan, parenthetically,
34:41
S8: my thinking thinking is it's nearly 100% of the case.
34:44
S8: The Fed's not done raising rates. Um, and we look
34:48
S8: at it this way. Interest rates are not punitive. They're
34:51
S8: higher than they've been in the last bunch of years.
34:53
S8: But relative to history they're not that expensive. Uh, yeah,
34:57
S8: they they've gone up enough to hurt the housing industry
35:02
S8: and mortgages, etc.. Um, but they've not held investments back.
35:06
S8: They've not held the markets back. So there's probably more
35:09
S8: work for the fed to do.
35:10
S1: Bob, what are your thoughts on the bond market? Now, obviously,
35:14
S1: a lot of folks over the last several years have
35:16
S1: seen the bond portion of their portfolio struggle. And now
35:21
S1: we're seeing a lot of attention on the ten year Treasury.
35:24
S1: And just a lot of focus there with interest rates.
35:27
S1: Where do you think we're headed?
35:28
S8: Yeah. So so yes, to recap, um, interest rates bottomed
35:32
S8: at the middle of Covid. Since then, bonds have been
35:35
S8: irregularly lower as interest rates have been irregularly higher. So
35:38
S8: it's been a difficult bear market. Um, we saw the
35:42
S8: other day when the ten year Treasury had a 5.27%,
35:47
S8: and you take the price earnings ratio for the stock
35:50
S8: market and invert it 5.27%, meaning bonds for the first
35:56
S8: time in years are valued similarly to stocks. So long
36:01
S8: and short of it is, if you got room to
36:04
S8: own a few more bonds in your portfolio, now's probably
36:06
S8: not a bad time. That doesn't say interest rates aren't
36:09
S8: going higher. We could have more, but I'd like to
36:12
S8: say a 520, ten year is a lot more attractive
36:15
S8: than a 420, ten year.
36:16
S9: Yeah. Very good.
36:17
S1: Bob, we appreciate your thoughts, my friend. Thanks for being here.
36:20
S8: Have a good week.
36:21
S9: Bye bye. All right. That's Bob Dole.
36:22
S1: He's CEO and CIO at Crossmark Global Investments, a leader
36:26
S1: in faith based investing. If you want to learn more
36:27
S1: or sign up for his weekly investment commentary, I rely
36:31
S1: on it each week. Just go to Crossmark global.com. All right,
36:34
S1: let's get to as many calls as we can here
36:36
S1: before we round out the program. We're going to head
36:38
S1: to Florida. Mary, how can I help?
36:41
S10: Yes, I am getting ready to retire at the end
36:45
S10: of the year. And I have a job, which means
36:49
S10: I'll be getting about 30 to $35,000. And I need
36:54
S10: to know what to do because I heard if I
36:56
S10: use it all up, my tax bracket is going to
36:58
S10: be very high.
36:59
S9: Mhm. Yeah.
37:00
S1: So for the benefit of our listeners, Mary is referring
37:03
S1: to the drop program. So that's a a deferred retirement
37:07
S1: option plan, and it's commonly offered through government pension systems. Um,
37:12
S1: you know, I would favor a direct rollover of that
37:16
S1: drop money into a traditional IRA versus a taxable lump sum. Uh,
37:22
S1: your main options with the drop, if the drop money
37:25
S1: is in fact pre-tax, uh, would be to take the
37:29
S1: lump sum. Uh, but to roll it over to that IRA. Um,
37:34
S1: and as long as you have that eligible rollover, you
37:37
S1: would not pay any income taxes immediately and the taxes
37:41
S1: would be deferred until you withdraw the money. The other
37:45
S1: option is you leave it in the drop or you
37:47
S1: choose the installment. Some plans offer those options, and you
37:52
S1: could look at the payout rules and the interest rates
37:54
S1: and the, the tax treatment. Um, but really it just
37:57
S1: comes down to do you need the money, uh, now
38:01
S1: or in the future? And would you like the Systematic
38:05
S1: monthly amount coming to you? Or would you prefer, you know,
38:09
S1: just to keep it in a tax deferred environment, roll
38:13
S1: it out and then be able to access it down
38:15
S1: the road as later withdrawals as needed. And then you
38:18
S1: would pay the tax on it at that time. Does
38:21
S1: that make sense though?
38:24
S5: Yeah.
38:25
S10: What about the, um the rewards program you said could
38:29
S10: I put it in there.
38:30
S1: Yeah. You could, you know, a lot of folks between
38:33
S1: the time of when they retire prior to taking Social Security,
38:38
S1: they find that's the sweet spot for Roth conversions because
38:42
S1: essentially anything gets converted from the pre-tax to the Roth
38:46
S1: after tax retirement plan. You're going to add that amount
38:50
S1: to your taxable income in the year of the conversion.
38:52
S1: So the reason the the period between retirement and when
38:55
S1: you start drawing Social Security is so attractive is that
38:59
S1: your income is dropped because you're no longer working and
39:02
S1: you haven't started taking Social Security so you don't have
39:06
S1: that income. And so therefore you're in the lowest tax
39:10
S1: bracket and it's pretty cost effective for you then to
39:13
S1: start transferring up to a certain amount. And you'd want
39:16
S1: to work with your CPA on that amount to stay
39:19
S1: in the lower bracket, but you could convert up to
39:22
S1: a certain amount each year, get it into the Roth,
39:25
S1: and then you'd have these two accounts growing for the future.
39:29
S1: One of them, the pre-tax, would have required minimums starting
39:32
S1: at age 73, and when you passed it on to heirs,
39:36
S1: they would have to pay the tax on it as
39:38
S1: they take it out. Often they would do that in
39:41
S1: the prime of their working years. So that could be
39:43
S1: pretty expensive versus whatever you can get into. Roth would
39:47
S1: grow tax free, no required minimums. And if you ultimately
39:51
S1: pass it along to an heir, they take it out
39:53
S1: tax free as well. The key is just working with
39:56
S1: your CPA or accountant or financial planner to determine the
40:00
S1: optimal amount, if any, to convert in any given year
40:05
S1: based on your other income and your tax picture.
40:09
S11: Oh, okay. Thank you.
40:11
S1: Does that make sense?
40:13
S11: Yes, it makes sense.
40:15
S1: Okay. Any other questions, Mary, before we let you go?
40:18
S11: No.
40:19
S10: That's it. Thank you very much. You've been very kind.
40:21
S10: You have a great evening.
40:23
S1: All right. Lord bless you. Thanks for being on the
40:25
S1: program today. Well, folks, we're near the end of the program.
40:29
S1: A great opportunity for me to remind you about the
40:33
S1: importance of our partners that come alongside us here at
40:36
S1: Faith Fi. You know, I mentioned our field guide, how
40:39
S1: to prepare the next steward, which is our next resource
40:43
S1: due out from Faith Fi. And we are really excited
40:46
S1: about helping you think through thinking through what it looks
40:50
S1: like to, first of all, choose the next steward, which
40:53
S1: is ultimately either heirs or ministries or both. And then
40:57
S1: how do we intentionally pass spiritual character, relational and financial
41:03
S1: capital before each other in that order, if you will.
41:08
S1: Because remember, we need to pass wisdom before wealth. And
41:12
S1: one of the things we tackle in the section on
41:15
S1: transferring financial wealth is this idea that if your next
41:20
S1: steward is a person and not a ministry, we want
41:22
S1: them to practice with real financial decisions before transferring significant
41:27
S1: responsibility and then reflect together. So the idea is we
41:32
S1: would think about what does it look like to give together?
41:34
S1: What does it look like to save together? What does
41:36
S1: it look like to spend together on the give side?
41:39
S1: You may pray about a need, select an organization and
41:43
S1: go ahead and entrust them with part of the family's
41:46
S1: giving budget. Help them see and celebrate the impact of
41:49
S1: the gift and do that together prior to them receiving
41:53
S1: whatever inheritance might be coming that way. Uh. Save together.
41:57
S1: Could you choose a goal and save a portion of
41:59
S1: every dollar received. Explore how patients and different savings tools
42:04
S1: can prepare them for future needs and opportunities, and research
42:08
S1: investments together that even align with your values. And then
42:12
S1: finally spend together. What does it look like to maybe
42:15
S1: turn over a portion of the budget, or give them
42:17
S1: the finances for a particular trip if they're a little
42:20
S1: older coming up and, and let them work on comparing
42:24
S1: options and making trade offs and practicing wise limits. All
42:28
S1: of these things are around this idea of what does
42:31
S1: it look like for us to truly prepare the next
42:34
S1: steward so that when they receive the finances, we've transferred
42:37
S1: wisdom before wealth. It's called how do I prepare the
42:41
S1: next steward? It's our new field guide and it's out
42:43
S1: in the next two weeks. Hey, big thanks to my
42:45
S1: team today, Ryan, Simon, Taylor, Tyra, Michael and everybody here
42:49
S1: at Faith by Faith and Finance Live is a partnership
42:52
S1: between Moody Radio and Faith Fi. Come back and join
42:54
S1: us tomorrow. We'll see you then. Bye bye.