S1: The following programme was pre-recorded so our phone lines are
S1: not open.
S2: We all want the best for our kids, but knowing
S2: what's truly best isn't always easy. Hi, I'm Rob West.
S2: You've probably heard it or said it yourself. I just
S2: want my kids to have what I didn't. It sounds noble,
S2: but it can sometimes lead to financial trouble. Today I'll
S2: talk with doctor Art Rayner about how that mindset can
S2: push parents into debt. And we have some great calls
S2: lined up. But we won't be taking your calls today
S2: because we're pre-recorded. This is faith and finance. Live. Biblical
S2: wisdom for your financial decisions. Well, we're delighted to have
S2: our old friend Art Rayner with us today. He's the
S2: director of the Institute for Christian Financial Health, the organization
S2: that certifies Christian financial counselors, or CERT CFCs. Art, it's
S2: great to have you back with us.
S3: It's always an honor. Thank you for having me.
S2: There are a lot of folks, as you know, struggle
S2: with wanting to give their kids the best chance in
S2: life and yet not break the bank while doing it.
S2: You have an article on faith. Com titled six Things
S2: that Can Lead Loving Parents into Debt, and I want
S2: to get right into them. So what's the first one?
S3: Sounds good. The first is keeping up with the Joneses,
S3: trying to maintain the lifestyle of those around you. Your
S3: neighbor or coworker dresses their children in a high end clothing,
S3: and so you want to do the same. Or your
S3: neighbor sends their children to a private school, so you
S3: decide to follow suit, even though you can't really afford
S3: the cost. The Joneses are a frustrating crew to chase
S3: because they're always shifting the standard, right? As soon as
S3: you feel that you have arrived, they move it slightly
S3: out of reach again. So we need to be careful here.
S3: There will always be other parents who spend more on
S3: their children, but they may be using debt to finance it.
S3: You could be chasing a facade.
S2: All right, so don't get trapped into debt by keeping
S2: up with the Joneses. I love it, number two.
S3: It's one you might not think of spending time on
S3: social media. The images that you see on Facebook, Instagram, Twitter, TikTok,
S3: whatever are simply the filtered versions of those that you follow.
S3: The constant barrage of great vacations, child accolades, and perfect
S3: family moments can make you feel like you're a bad
S3: parent at times. You can easily create unrealistic expectations and
S3: try to buy your way to feeling better about yourself.
S2: Yeah, the best version of someone's life on social media
S2: has certainly added to the comparison trap. All right, that's two.
S2: What's number three?
S3: Yeah. So this one is easy to fall into, thinking
S3: your kids won't succeed in life if they don't have
S3: it all. You know, extracurricular activities have entered a whole
S3: new realm. Travel leagues, academic and athletic camps and private
S3: tutoring have become just a commonplace. Now, unfortunately, there's a
S3: cost to all of these activities and experiences eating up
S3: time and money. Now our extracurricular activities. Good. Yeah, absolutely.
S3: But are they worth going into debt? Absolutely not.
S2: Oh, boy. I know this one all too well. A dancer,
S2: a soccer player, two basketball players. We've certainly been down
S2: that road. You have to be careful. All right, what's
S2: number four? Art.
S3: And that is caring more about your child's future career
S3: than their future character. Often the focus of our parenting
S3: is centered on getting our child into a good school,
S3: or setting them up to have a good career. Those
S3: are important, but they're not the most important. The most
S3: important part of parenting shepherding our child's heart is difficult
S3: and time consuming, but it's also less costly.
S2: Yeah. And the one can never make up for the other,
S2: that's for sure. All right, What's number five?
S3: It's the one that you mentioned in the beginning, wanting
S3: to give your kids what you didn't have growing up.
S3: You probably remember a time when, as a child, you
S3: didn't get something you wanted. Maybe it was a new bike.
S3: Maybe as a teenager it was a certain car. You
S3: or your parents, they just couldn't afford it. And you
S3: remember how you felt. Now, as a parent, you don't
S3: want your child to experience those exact same feelings you had.
S3: So when they ask, they get even if the purchase
S3: requires a credit card.
S2: Oh boy. And that's a tough one. And it leads
S2: right into the last one we've got just 30s.
S3: Yeah, that's right. Not considering how lacking something actually helped
S3: you as a kid. You remember liking something as a kid,
S3: but do you also remember what resulted from not being
S3: able to get that item? You may have resorted to
S3: more creative play. Um, if you were a teenager, you
S3: may have gotten a job. Those moments in your childhood
S3: helped you in your growth as an individual. Now, don't
S3: you want your children to have the same opportunity?
S2: Absolutely. Boy, those are really good. And I really appreciate
S2: you stopping by our really good stuff.
S3: Thanks for having me.
S2: That was doctor Art Rayner, director of the Institute for
S2: Christian Financial Health. You can learn more at Christian Financial Health. Com.
S2: All right. We're going to head to a break. So
S2: don't go anywhere. Still a lot more to come even
S2: though we're away from the studio today and you shouldn't
S2: call in. We have some great questions that you're really
S2: going to enjoy. As we continue to apply God's wisdom
S2: to your financial decisions. We'll be right back. Thanks for
S2: joining us today on Faith and Finance Live. Hey, a
S2: quick email before we head to the phones. This one
S2: comes to us from Emily. By the way, if you
S2: have a question you'd like, read on the air. We'd
S2: love to hear from you. Send it along to ask
S2: Rob at Faith Philly.com. That's ask Rob at Faith. Dot com,
S2: Emily writes I'm employed and currently receiving Social Security income.
S2: I tithe on my salary. Should I also tithe on
S2: my Social Security income? I love your program and listen
S2: at work. Thanks. And Emily, thanks for this question. Clearly
S2: you're wanting to be a generous sower. Be faithful in
S2: your giving to the Lord, and I appreciate that. Um,
S2: here's my perspective. First of all, the tithe is a
S2: great beginning point for our giving. It's we're no longer
S2: under the Law of Moses. And yet, uh, we I
S2: think we should give proportionately. We see that in the,
S2: in the New Testament for sure. We should give sacrificially.
S2: And so starting with this idea that we would recognize
S2: God's ownership and give in proportion to our income, the
S2: tithe is a great principle to apply to that. Uh,
S2: so you would give, in the case of a tie,
S2: the 10th of your increase. The question is, is your
S2: Social Security increase? Uh, if you tithe on your gross
S2: income throughout your working life, clearly a portion of what
S2: you're getting from Social Security is a return of what
S2: you put into the system. The challenge is it would
S2: take an army of CPAs to figure out what portion
S2: is yours, what portion was your employer's contribution? Because remember,
S2: they paid half of the FICA tax. And then what
S2: portion was the growth that occurred while it was in there?
S2: And so I think for that reason, I would probably
S2: take the perspective that let's look at anything we receive
S2: from the Lord as a gracious gift from the Lord,
S2: no matter what its source was, whether it's SSI or
S2: Social Security or disability or an inheritance or a paycheck.
S2: And just say, Lord, I'm going to demonstrate my trust
S2: in you as my provider, knowing that your provision is complete.
S2: And I want to be partnered with you in giving
S2: in proportion to how you've prospered me. That would be
S2: the approach that I would take, as opposed to trying
S2: to figure out what portion falls into which bucket. But
S2: at the end of the day, Emily, I realize that
S2: the heart behind this is that you want to honor
S2: the Lord. And so I would just be on your
S2: knees if you're married. You and your husband. Just asking
S2: the Lord, what would you have me to do? And
S2: I think as long as you follow the leading of
S2: the Lord, you give cheerfully as an act of worship.
S2: I don't think the the percentage or checking a box
S2: is really the most important thing. So hopefully that's helpful
S2: to you as you think and pray through this. Uh,
S2: before we head to the phones in the news, there's
S2: more evidence of a budding buyer's market in real estate.
S2: That's right. According to a new report by Redfin, about 44%
S2: of home sales in the first quarter involved sellers giving
S2: buyers concessions. As the housing market starts to favor buyers,
S2: they now have more options to choose from, and that
S2: brings negotiating power. Concessions are essentially arrangements between a buyer
S2: and a seller to adjust the price or other terms
S2: of the sale, for various reasons that could be issues
S2: discovered in a home inspection or other issues as well
S2: high mortgage rates, home values, and economic uncertainty continue to
S2: be a drag on home sales. But with inventories rising,
S2: sellers have more competition, so listings are now at a
S2: five year high. According to Redfin report, that competition is
S2: translating into more leverage at the closing table for home buyers.
S2: So if you've been waiting to get into this housing market,
S2: I realize interest rates haven't come down as we expected
S2: they would in 2025 thus far, and they probably won't.
S2: Most economists are thinking we'll finish the year somewhere around
S2: six and a quarter. That's just an estimate. Certainly could
S2: be higher or lower than that. But that's where consensus
S2: is right now around 6.25. So if you have the
S2: money to make that purchase, meaning you've got that 20%
S2: down payment, you're not going to spend more than 25
S2: max 30% of your take home pay on principle interest,
S2: taxes and insurance, and therefore it fits well within your budget.
S2: This may be that time during this buyer's market, which
S2: is quickly emerging for you to go ahead and enter
S2: this housing market. By the way, if you need a
S2: mortgage partner on that, our friends at Movement Mortgage would
S2: be delighted to serve you. You can go to movement.
S2: All right. Let's dive into your questions. Today. We're going
S2: to begin in New York. Uh, Nick, thanks for your patience, sir.
S2: Go ahead.
S4: Hey, Rob. How are you doing, man?
S2: I'm doing great. Thanks for your call.
S4: Hey. You bet. Hey, great. Great way to tee it off.
S4: Because my question is actually all about mortgages and expected
S4: interest rates. And most importantly, I'd say the biblical principle of, uh,
S4: not being a slave to debt. And, uh, I'm just
S4: faced with some options here. So I bought a house
S4: a year ago. Um, did it just as you just described. Um,
S4: thank God, where I paid over 20%. Um, my mortgage
S4: payment is less than one third of my take home pay,
S4: and I'm doing pretty good. I was having in the
S4: back of my mind that I would refinance when rates
S4: came down, and so I have been stockpiling money in savings. Actually,
S4: I put it in T-bills while I wait instead of
S4: putting it on the mortgage principal directly. Yeah. And my
S4: question is, um, I'm trying to pay off the house
S4: completely as fast as I can. So would you suggest
S4: I pause putting 15% in my retirement to accelerate that
S4: goal of being completely out of debt, or should I
S4: continue to faithfully contribute towards retirement as well as do
S4: this at the same time?
S2: Yeah. Boy, it's a great question. Talk to me about
S2: your desire to be debt free. I understand that's really strong.
S2: Is that out of just a desire to minimize the
S2: amount of interest you pay and therefore really the financial
S2: side of the equation is the primary driver, or is
S2: there some conviction there that you just really feel like
S2: you need to be out of debt as soon as possible?
S2: You've thought through that, you've prayed through that, and that's
S2: really the driver. I realize it could be some combination
S2: of the two, but which side would you come down on?
S4: I think you're right. It's a combination of the two.
S4: I think that, you know, like there's there's two types
S4: of people in this world, those who pay interest and
S4: those who earn interest.
S2: Right.
S4: And sometimes we do both, but they work against each other.
S4: So if I'm looking to build wealth so, you know,
S4: I can live life like nobody else and give like
S4: nobody else in the future, then I'd like to not
S4: be the type of person who pays interest.
S2: Yeah, I hear some Dave Ramsey coming through there. Are
S2: you are you a Dave Ramsey fan?
S4: I am.
S2: All right. That's great. Well, Dave's a good friend. He
S2: he absolutely has. Um, and I think he would, you know,
S2: what he would say is get out of debt as
S2: soon as possible. And, and, you know, I love that idea.
S2: I mean, I'm big on getting out of debt and
S2: staying there. I think listen, you've done a lot, right, Nick? Uh,
S2: I mean, you're in a really strong financial position. I think.
S2: Now your opportunity. And I'll send you something that I
S2: think could be a great starting point in thinking and
S2: praying through this here in a moment. But, uh, I
S2: think you're in a position where you're probably going to
S2: or have the potential to over accumulate. So I think
S2: it's going to be important for you to begin to
S2: think and pray through what your financial finish line is
S2: so that you can accelerate that giving. Um, because I think,
S2: you know, it's wise to save for the future. But
S2: I think we all have to answer the question, how
S2: much is enough? And that's both for lifestyle and accumulation.
S2: And just given how quickly, you know, you've gotten yourself
S2: in a solid position here, especially once that mortgage is gone.
S2: You know, you've got your emergency fund, you're debt free.
S2: I suspect you're going to stay there. Just hearing that
S2: conviction in your voice. Um, you know, you're going to
S2: be able to sock away a lot of money and
S2: you could build that quickly. And I think quickly get
S2: to the place where you say, do I really need
S2: all this? Especially with the glide path on where you
S2: could end up when you get to that retirement season
S2: of life. So I would say, well, let me ask this.
S2: What is the interest rate on that mortgage?
S4: That's a great question. And that's definitely a factor. So
S4: the interest is six and a half.
S2: Okay.
S4: So if it was only like, you know 3 to 4,
S4: you know I could see your point. But that's one
S4: of the driving factors is.
S2: Yeah.
S4: It's a high rate.
S2: Exactly. So I would say go after it. I probably
S2: wouldn't back down on the retirement plan. But any other surplus,
S2: including the money that was in the T-bills, I'd put
S2: that on the mortgage as soon as possible. Let's stay
S2: on the line and we'll talk off the air. I'll
S2: be right back. Hey, great to have you with us
S2: today on Faith and Finance Live. I'm Rob West, your host.
S2: Our team is away from the studio today, so don't
S2: call in. But coming up a little later, we'll have
S2: more of your questions right here on the program. Hey,
S2: let me take a moment to mention the Faith fi app.
S2: We'd love for you to download it. Just head to
S2: your app store wherever you download apps and search for
S2: Faith fi. That's Faith fi. You can manage your money.
S2: You can access the best content in biblical finance podcasts, articles,
S2: and videos. You can also participate in our Faith fi community,
S2: where you can post questions and get answers from others
S2: on their stewardship journey. You'll find it in your app store.
S2: Just search for Faith fi or if it's easier, head
S2: to our website at Faith Philly.com. That's Faith fi and
S2: you'll see the app right there on the home page.
S2: Now let's head back to the phone calls we have
S2: lined up. I had a chance to finish up with
S2: Nick in New York. Off the air here during the break.
S2: And you know, the other question he raised is, you know,
S2: he's been putting money aside in T-bills, his surplus that
S2: eventually he wants to put toward the mortgage, thinking that, well,
S2: I'm going to refinance. And, you know, a year or two,
S2: once I can get down at least a point and
S2: a half, maybe two points on that 6%, 6.5% interest rate,
S2: I'm paying. So he's waiting until he gets down to, to, uh, perhaps,
S2: you know, four and a half, maybe 5%. Well, that's
S2: going to be a while. Uh, you know, that could
S2: easily be two years, maybe less, but it certainly could
S2: be two years. And what we talked about is, you know,
S2: I don't think there's any reason to wait until the
S2: refi that really should have no bearing on money that
S2: you're going to put toward the mortgage, in fact, that
S2: money toward the mortgage now, with the higher interest rate,
S2: actually is going to give you more benefit than when
S2: it's applied. Or if you wait and apply it to
S2: that new mortgage, that's a lower interest rate. So he's
S2: putting it in T-bills, he's paying tax on the interest.
S2: And then he's going to put eventually that toward the mortgage.
S2: Let's get that toward the mortgage now and save the
S2: equivalent of today's interest rate, which is a 6.5%. So
S2: he's going to move forward with that. He's also going
S2: to think about, you know, I'm comfortable in his position
S2: with him staying fully invested or contributing to a retirement plan,
S2: which is that full 15%, because we usually say 10
S2: to 15% toward the 401 K, I'm comfortable with maintaining
S2: that and then just putting whatever surplus he has toward
S2: the mortgage. But certainly if he wants to ratchet that
S2: down and prioritize getting out of debt, including his mortgage,
S2: I don't have any issue with that. I think that's
S2: never a bad choice. See, this is one of those
S2: where you know what? Either is a great option. It
S2: really comes down to my values and my priorities in
S2: terms of how I set goals, not anything else. So boy,
S2: what a great conversation and appreciate Nick being on the
S2: program today. Let's head to um. Tom is in Maryland
S2: waiting patiently. Go ahead Tom.
S5: Rob. Your expertise overwhelms me, But, uh, a couple of
S5: weeks ago, you talked to a gentleman. Sounds like he
S5: and I are in the same boat. Uh, he was
S5: a he's a veteran and pulled in $1,800 a month.
S5: I'm a veteran. Pulled in 1900, a month. And without
S5: getting into a bunch of weeds, uh, negligence on my part.
S5: I ended up paying a penalty on my Social Security premium.
S5: The question is, can I. Is there any way that
S5: this penalty can be waived because of hardship?
S2: Yeah. So you're talking about the premium related to Medicare
S2: Part B, is that right?
S5: Right.
S2: And why did you have that? Was that because you
S2: enrolled late or something else?
S5: Exactly.
S2: Okay. Yeah. Um, so, yeah, I mean, with with regard
S2: to that late enrollment penalty, uh, there are some cases
S2: where that can be waived, but it really depends on
S2: the situation. Um, you know, essentially, if you, uh, enrolled
S2: late because of incorrect advice from a federal government source,
S2: you can request a waiver called Equitable Relief. Uh, it
S2: could be reduced or waived if there was a delay
S2: due to unusual circumstances, like an illness or family member's
S2: death or kind of a local disaster or something like that. Um,
S2: but you would need to provide a written explanation. Apart
S2: from that, you know, there's not a whole lot you
S2: can do about it that I'm aware of just because,
S2: you know, they give you that window of time to
S2: get in. And if you don't, they assess the penalty
S2: and there's a lot of people paying it, unfortunately, which
S2: is why we try to make as as many people
S2: aware of that window as possible. But it does take
S2: a pretty significant extenuating circumstance that you would need to
S2: document and request the waiver to see if they would
S2: approve it.
S5: Gotcha. Thank you so much, Rob.
S2: All right sir. God bless you. And we appreciate your
S2: kind remarks about the program. Call anytime. Uh. Let's see,
S2: back to New York. Hi, Doug. Go ahead.
S6: I was hoping you could help me with my frustration
S6: regarding my 401 K.
S2: Okay.
S6: I had a couple, uh, noticeable losses here for the
S6: Covid and the tariff situation. And it seems when the
S6: stock market bounces back, I can never recover. You know,
S6: close to the 100% that the stock market bounces back to.
S6: And is that primarily where the mutual funds are invested
S6: in the stocks or what are your thoughts on that?
S2: Yeah, totally is Doug. I mean, you know, when when
S2: we look at the market, we we often say the
S2: market did this or the market did that. The question is,
S2: what part of the market are we looking at. And
S2: you know, a lot of times we'll look at either
S2: the Dow Jones which is just 30 companies. We might
S2: look at the S&P 500, which are the 500 large
S2: cap stocks here in the US. Or we might say that,
S2: you know, look at the Nasdaq, which is largely technology based,
S2: although it goes beyond that. But that's the highest concentration.
S2: And so those represent sectors of the market. But there's
S2: a whole, you know, other part of the market. I mean,
S2: the Russell 3000 obviously is a much broader look at
S2: a segment of the market. There's the bond market. So yeah,
S2: it really does come down to what sectors of the
S2: market you're in. And that's going to really drive both.
S2: You know how quickly you see it decline. Uh, given
S2: the economic conditions and factors driving the declines and how
S2: quickly we recover. So a good example of that would be,
S2: you know, just the last several years, a lot of
S2: the the run ups in the market have been around
S2: the Magnificent Seven, um, largely tech driven because of AI
S2: and some of the innovations, you know, these mega-cap companies
S2: that really, you know, were the driver of the market. Well,
S2: they were the quickest to fall and, you know, have
S2: not recovered as quickly either. And so, yeah, it's ultimately
S2: going to come down to what mix of investments do
S2: you do you have are they the right mix for you. And,
S2: you know, that's obviously going to have everything to do with,
S2: you know, how quickly they recover and why the market
S2: sold off in the first place. So I think if
S2: you want to dive into this more fully, it would
S2: take an advisor to really unpack how you're invested. Stay
S2: on the line. We'll talk a bit more off the air. Well, folks,
S2: we're going to head to a break. But let me
S2: remind you, we're out of the studio today. Our team
S2: is not here, so don't call in. But much more
S2: to come just around the corner on faith and finance. Live.
S2: Stick around. Great to have you with us on faith
S2: and finance. Live. I'm Rob West. Let me remind you
S2: that we're not live today, so don't call in. But
S2: we have great information lined up ahead in the program
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S2: back to the phones here. We've got two lines open.
S2: You can call right now 800 525 7000. Let's go
S2: to Arkansas. Lynn, thanks so much for your patience. Go
S2: right ahead.
S7: Hi. Thank you. Yeah. I wanted to know when you
S7: change insurance companies. I had a claim for a new roof,
S7: and my insurance went up quite a bit anyway. Um,
S7: and you are talking to a new company and your.
S7: Do they know, uh, like, do they research on the
S7: internet or something to see if you've had a claim
S7: And are your rates higher because of that?
S2: Interesting. Yeah. So you had a claim recently, is that right?
S7: Uh, yeah. And what was funny about it was that
S7: two roofers told me I didn't need a new roof,
S7: but I had a leak, and they came out and said,
S7: you need a new roof anyway, so I got it.
S7: But then my rates went up and they went up
S7: the month that I got my next payment, which was
S7: quite a bit, I mean like 170 over what I
S7: was paying, which was kind of a shock.
S2: Got it. Yeah, that makes sense. Yeah. Unfortunately, when you
S2: switch homeowners insurance companies, the new insurer will usually access
S2: your claim history. There's a a national database called clue,
S2: which is short for the Comprehensive Loss Underwriting Exchange. And
S2: through that they can usually claim your claims history. I
S2: think that goes back 5 to 7 years. So if
S2: this was recent, you know, your roof claim would likely
S2: show up with the date and the details and the
S2: fact that it was from storm damage and so forth. Um,
S2: you know, a single roof claim, especially for an unavoidable
S2: weather damage like hail or wind or something like that, um,
S2: you know, would likely not drastically raise your rates. Uh,
S2: you know, those are seen as less risky than frequent
S2: or maybe preventable claims. Um, you know, there could be
S2: an increase. Obviously, you saw one with your previous employer
S2: and it would be it could be factored in here.
S2: But I think, you know, the key for you is
S2: to shop around, um, really comparing quotes from multiple insurers. Now, remember,
S2: the price is not the only issue to look at. Um,
S2: because you want to make sure you're with somebody that
S2: gets good reviews with regard to, you know, customer service
S2: and that they, you know, will follow through quickly on
S2: your claim and, you know, give you a good comprehensive coverage.
S2: If you want to get a copy of your clue report,
S2: you can actually get a free copy annually just to
S2: see what the insurers will see. And I can give
S2: you that phone number if you're interested. Um, but the
S2: the other option I would throw out at you is, um,
S2: you know, higher deductibles obviously can lower those premiums. That's
S2: going to mean more out of pocket costs. You're going
S2: to want to have that money in your emergency fund.
S2: But if you did and you don't have claims often, then, um,
S2: you know, that that could save you some money over
S2: the long haul. But yeah, let me give you that
S2: phone number. Do you have a pen handy?
S7: Yes.
S2: All right. It's 86631280768663128076. And you can request that report.
S7: And what is the report called?
S8: What do I show you.
S2: The clue report which stands for Comprehensive Loss Underwriting Exchange
S2: and you can get. My understanding is my team is
S2: saying you can get one of those free annually.
S7: Okay, great. Thank you very much.
S2: All right. Thank you, Lynn, we appreciate your call. God
S2: bless you too. Oklahoma. Hi, Larry. Go ahead sir.
S9: Hi, Rob. Thanks for taking my call.
S10: Yes, sir.
S9: Uh, I have a, uh, non-profit property I'm wanting to
S9: sell and give, and I'm going to give it, of course,
S9: to another non-profit or a 300 and 1C3. Is there any, uh,
S9: forms or anything I need to do, or is that
S9: taken care of at the closing of the sale? I'm
S9: I'm pretty green when it comes to stuff like this
S9: right here.
S10: Yeah. No problem.
S2: Uh, help me with something, though. You said you. I
S2: understand you want to sell it and give it, uh,
S2: the proceeds or give the property before the sale to
S2: a non-profit. We could talk about that. But you said
S2: it's it's already a non-profit property. What do you mean
S2: by that?
S9: Yeah, it's basically it's a non-profit, uh, that has went
S9: basically just dried up. And but with the property and
S9: the buildings are there, I'm going to sell that and
S9: take the proceeds and give it to a 501 C3 organization.
S10: Okay.
S2: All right. Uh, so that so it belongs essentially to
S2: the the nonprofit that you already had. Um, and you're
S2: closing that down, is that right?
S9: It's already closed down. Yes, sir.
S10: Okay. Got it.
S2: Yeah. Makes sense. Um, yeah, that's an interesting one. I
S2: would certainly, uh, talk to your CPA about that. Um,
S2: you know, because it's a little different in that it's already,
S2: you know, owned by, um, a 501 C3 under the IRS. So,
S2: you know, it's going to be need to be sold, um,
S2: you know, at a market value to avoid what's called
S2: private inurement. But I think in this case, you know,
S2: it's less of an issue because you're wanting to to
S2: give it away. Um, do you know of a non-profit
S2: who will take the property itself, or are you wanting
S2: to get it sold first? Um, you know, under the
S2: the nonprofit, and then just give the proceeds?
S9: Well, the the, uh, the church I'm wanting to give
S9: the proceeds to is a 500 1C3. And, you know,
S9: because I haven't I'm still just doing the legwork on
S9: all this right here. And like I said, I'm pretty green. Uh,
S9: but I've been doing a lot of research and trying
S9: to make sure I do all the right things, you know?
S10: Yes. Okay.
S9: Yeah. But the way it's going to go is already
S9: a 500 1C3.
S10: Yeah.
S2: And have you, uh, talked to the church about that,
S2: to let them know that that you want that to
S2: come their way?
S9: Yes. Well, I'm fixing to, but like I said, I
S9: want to get my ducks in a row before I
S9: actually announce it, you know.
S10: Got it. Yeah.
S2: Got it. Uh, yeah. So the normally what would happen
S2: is the nonprofit's board would would approve the dissolution. Maybe
S2: that's already happened and then the transfer of the property
S2: to the church. So you would want to have a
S2: a board meeting. You document the decision in the minutes
S2: and then pass a resolution. This sounds more formal than
S2: it is. Specifying the property transfer aligns with the mission.
S2: And then, um, you know, you could you could reach
S2: out to the church and let them know that that
S2: decision had been made by the nonprofit's board, and they
S2: can help you facilitate that direct transfer of that donated
S2: of that property that's being donated to the church via
S2: a deed transfer. You'd want to hire a real estate
S2: attorney to help you with that. So I think those
S2: are the steps. I've got to hit a break. Stay
S2: on the line. We'll finish up off the air. We'll
S2: be right back. I'm so thankful you're joining us today
S2: on Faith and Finance Live. I'm Rob West. Hey, just
S2: a quick reminder. Our team is away from the studio today,
S2: so don't call in. But in just a few moments,
S2: we're going to get to some questions that we lined
S2: up in advance that I know you'll find very interesting,
S2: but let me take a moment just to invite you
S2: first to be a supporter of this ministry here at
S2: Faith fi. You know, we bring you this broadcast every
S2: day as a listener supported ministry only because of your
S2: generous support. So maybe you listen regularly. Maybe you've been
S2: able to apply some of the wisdom from God's Word
S2: that you've heard in your financial life, or it's just
S2: help you to be that wise and faithful steward, and
S2: you'd like to be a part of our team. Well,
S2: one way you can do that is by investing in
S2: this work through a one time gift, or even by
S2: becoming a faith life partner. And this is a really
S2: important time between now and June the 30th, which is
S2: the end of our fiscal year for us to stay
S2: on track, finish out the budget year strong and prepare
S2: for another year of ministry. I just invite you to
S2: join us on this journey when you head to Faith.
S2: Com and click give a gift of any amount before
S2: June the 30th would be a big help. Again, that's faith. Philly.com.
S2: And just click give and let me say thank you
S2: in advance. Your gift will make a huge difference. All right,
S2: back to the phones we go. Let's see out to Oregon. Hi, Jane.
S2: Thanks for your patience. Go ahead.
S11: I'm confused about this, so I hope I don't confuse
S11: you in the process.
S2: Okay.
S11: But, yeah, um, I sell on eBay, and I haven't
S11: done my taxes for 2024 yet. And some couple of
S11: months ago, when I was starting to do them, eBay
S11: had a flag up there and I think it said
S11: something like, um, 1099 K is ready or something like
S11: that K or something. It may have had more letters
S11: after it. And so I click on that and it
S11: says I didn't make enough money to, to have that.
S11: What does that mean. Is that I mean it's obviously
S11: money that I made. Do I have to add that
S11: to my Social Security or do I not not have
S11: to add it. Is it going to be the same
S11: from now on? I, I went online and all they
S11: do is confuse me more. Um, but some things said
S11: there were different amounts or intimated that there were different
S11: amounts for different years to come. Can you clean that
S11: up a little bit for me?
S2: Yeah. Uh, so essentially, um, you know, it sounds like
S2: you're getting it's the 1099 K that would have your
S2: 2024 sales. Yes. You did. And so, um, you know,
S2: they you had some sales activity, but it sounds like
S2: maybe you didn't meet the IRS threshold. Um, you know,
S2: they would normally issue a 1099 K if your gross
S2: sales exceed $5,000. Uh, would be the typical way that
S2: that would happen. Or if your state has a lower
S2: threshold threshold. So it sounded like sounds like their system
S2: flagged that you didn't qualify because your sales perhaps were
S2: below 5000 and and no other, you know, triggers applied. Um,
S2: but even without that 1099 K, you have to report
S2: all taxable income from eBay on your 2024 return. Um, and,
S2: you know, it's probably not a bad idea for you
S2: to have a professional look this over. Um, you know,
S2: if you're casually selling personal items like clearing out your closet,
S2: it's considered hobby income. Uh, you know, you would report
S2: your profits, um, you know, on your 1040 schedule, one
S2: is other income. Um, but, you know, if this is
S2: more of a business, um, you know, with intent to
S2: make a profit, then you'd report the the net income
S2: on schedule C, uh, but you do need to, you know,
S2: track your sales. You can use their hub, their seller's
S2: hub for that, and then download a transaction report, regardless
S2: of whether or not you get that 10.99 K.
S11: Okay. Okay. That's what I wanted to know. They were
S11: not clear on that when I was trying to find
S11: it on Irs.gov or whatever it is.
S2: Okay. Got it. Yeah. I mean, the the key is,
S2: you know, whenever you have income, you need to report it.
S2: It may or may not be taxable depending upon what
S2: you've earned and how what other income sources you have.
S11: Okay. Well, that's what I thought. But the way the
S11: way they've approached me, like you don't need it. I'm going. What?
S11: All right.
S2: Thank you so much. God bless you, Jane. Appreciate you
S2: being on the program. Uh. Let's see. To Tennessee. Patricia,
S2: how can I serve you?
S12: Um, I am taking early retirement, and I understand that
S12: I can only make $24,300 in earned income this year,
S12: and it looks like I'm going to go over that
S12: just a little bit. So I was wondering, how did
S12: they tax that? Did they tax it. Anything over the 24,300,
S12: or do they text the whole thing?
S2: Yeah. And so you're talking about Social Security?
S12: Yes.
S2: Yeah. Um, well, essentially what you're talking about there is, um,
S2: so there's the penalty that reduces your benefit temporarily. You
S2: will eventually get that back in the form of a
S2: higher check once you reach full retirement age. But they're
S2: going to reduce your benefit for one by $1 for
S2: every $2 you go over that threshold. Um, so that's
S2: the first issue is the penalty. And then there's the
S2: issue of whether or not your Social Security benefits are taxable.
S2: And that has to do with your total income. Which
S2: issue are you calling about today, the penalty or the
S2: taxes or both.
S12: I guess both.
S2: Yeah. Okay. Um, and so uh, so that, do you
S2: understand that issue around the, the temporary reduction in the benefit.
S2: So every dollar every $2 you go over that threshold
S2: you're going to they're going to reduce your benefit by
S2: a dollar. Um, now that threshold goes up in the
S2: in the last year before your full retirement age. But
S2: prior to that it's a dollar for every $2 you
S2: go over. But again, that's temporary because when you get
S2: to full retirement age, you will get that back in
S2: the form of a higher check until you've been repaid.
S2: And there's not a direct schedule for that. It's probably
S2: going to take ten years or more to be fully
S2: repaid back, but you will eventually get it.
S12: So they're they're going to take back anything over the 24,300.
S2: But.
S12: One, the whole 24.
S2: Yeah. So anything beyond that threshold, the 24,000, they're going
S2: to reduce your benefit by a dollar for every $2
S2: you go over.
S12: Okay. Did they take it out of the Social Security check?
S12: Or do I do that at the end of the
S12: year with taxes?
S2: No. They're going to reduce the check after they see
S2: what your total. You know, once you exceed that threshold
S2: and you're reporting your income and they're getting, you know,
S2: as they get that and they determine you've gone over,
S2: then they're going to start withholding it automatically from your check.
S12: Okay. Can I ask one more quick question about passive income?
S2: Sure.
S12: How is passive income. Added in with your social Security?
S12: Is it taxed at the same rate?
S2: Yes. Well, so, um, are you talking about in terms
S2: of the total taxes you'll pay? Uh, you know, the
S2: taxes on income, on Social Security have to do with
S2: something called combined income. And so combined income is your
S2: adjusted gross income from wages and investments plus nontaxable interest
S2: plus half of your Social Security benefits. Fits, um, so
S2: that then you total all that together. And that's your
S2: combined income that will ultimately determine what percentage, if any,
S2: of your Social Security is taxable. The most you'll have
S2: is up to 85%. Um, but in terms of passive income, um,
S2: you know, the, the nontaxable interest and the AGI, um,
S2: you know, passive income. Normally when somebody says that they're
S2: talking about rental income or dividends and interest or capital gains, um,
S2: you know, all of that, uh, increases your AGI. So
S2: it would be factored in.
S12: Okay. I appreciate your help. Thank you so much.
S2: All right. God bless you. Thanks for calling today. Uh,
S2: let's see out to Texas. Hi, Robert. How can I
S2: help you?
S13: Uh, yes, sir, I, oh, $47,000 on my house. It's
S13: probably worth around 75 to 80,000 now. Uh, my father
S13: in law is thinking about moving in with his wife,
S13: which is a weird situation, I know, but he only
S13: owes 24,000 on his house. But there's a lot of
S13: problems with it. If I sell, I make 40,000 before taxes.
S13: If I sell my house for 75, do I get
S13: taxed for the full 75 or just the 30,000 I
S13: make from what I owe on it?
S2: Yeah. So the the when you sell an appreciated asset
S2: like a home, there's capital gains tax. Um, and so
S2: the capital gain has nothing to do with whether or
S2: not there's a mortgage on the property. It has everything
S2: to do with how much you made on that home.
S2: And when you put that profit, that capital gain, together
S2: with all of your other income, then that will determine,
S2: you know, whether or not you have a long term
S2: capital gain and what the rate is. So are you
S2: going to make a profit on it?
S13: Um, I bought it for 50,000. Yes.
S2: Okay. And you think, uh. And did you put money
S2: into it to that improved the value of it over time?
S13: No, I haven't done anything to improve it.
S2: Okay. Um, and so you think you're going to make
S2: about $30,000 on it?
S13: Uh, in in theory, that would be a good goal. Yes.
S2: Okay. All right. So I think, you know, that's really
S2: the driver there. So you're going to put that 30
S2: let's say you make 30. You're going to put that
S2: together with your income. Do you file single or married.
S13: Um married.
S2: Okay. So if that gain plus all of your other
S2: income together taxable income minus deductions, if that goes over
S2: 94,000 as married filing jointly, then you're going to pay 15%
S2: on that gain. Um, if you're under 94,000, then, um,
S2: you know, then you'll have zero. But that includes not
S2: only all your income, but the gain itself. I hope
S2: that helps. Robert, thanks for your call today, sir. God
S2: bless you. Before we wrap up today, what a great
S2: opportunity for me to remind you why we do what
S2: we do. You see, this program each day is focused
S2: on equipping you, providing you hope and encouragement, pointing you
S2: back to God's Word in this high calling of being
S2: a money manager for the King of Kings. You see,
S2: you and I are stewards. God owns it all. We
S2: don't have stewardship rights. We have stewardship responsibilities, and we
S2: want to get that right. So we look to God's Word,
S2: and we know that when we come together and share
S2: our stories and ask questions and renew our minds with
S2: the scriptures, well, we're going to eventually be on that
S2: path to hear one day. Well done, good and faithful servant.
S2: That's our goal, folks. We couldn't do this without the
S2: amazing team we have here. Amy and Dan and Taylor
S2: and Jim want to say a big thanks to everybody
S2: here at Faith by Faith and Finance Lives, a partnership
S2: between Moody Radio and Faith VI. And we'll see you
S2: next time.