1 00:00:03,040 --> 00:00:07,280 S1: This faith and finance live is actually prerecorded, so please 2 00:00:07,280 --> 00:00:08,320 S1: don't call in. 3 00:00:08,600 --> 00:00:12,040 S2: Many investors feel attention today. They want their portfolios to 4 00:00:12,080 --> 00:00:17,640 S2: reflect biblical convictions, yet they're navigating volatility inflation and uncertainty. 5 00:00:17,920 --> 00:00:20,720 S2: Hi I'm Rob West. Do you have to choose between 6 00:00:20,720 --> 00:00:25,000 S2: faithfulness and financial performance? The answer may surprise you. Today 7 00:00:25,040 --> 00:00:29,120 S2: Stella Ty joins us to explore how discipline values aligned 8 00:00:29,120 --> 00:00:33,440 S2: investing can pursue both impact and competitive returns, even in 9 00:00:33,440 --> 00:00:36,680 S2: uncertain times. Then we have some great calls lined up. 10 00:00:36,680 --> 00:00:39,200 S2: But we won't be taking your live calls today because 11 00:00:39,200 --> 00:00:43,519 S2: we're pre-recorded. This is faith and finance live. Biblical wisdom 12 00:00:43,520 --> 00:00:51,000 S2: for your financial decisions. We're delighted to welcome back our 13 00:00:51,000 --> 00:00:55,080 S2: friend Stella Ty. She leads Stewardship investing impact and analysis 14 00:00:55,080 --> 00:00:59,080 S2: at Praxis Investment Management, one of the country's oldest faith 15 00:00:59,120 --> 00:01:02,830 S2: based mutual fund families and of course, a trusted underwriter 16 00:01:02,830 --> 00:01:05,350 S2: of this program. Stella. Great to have you back. 17 00:01:05,830 --> 00:01:07,190 S3: Thanks for having me, Rob. 18 00:01:07,510 --> 00:01:10,950 S2: Stella, a lot of investors today feel a real tension. 19 00:01:10,950 --> 00:01:14,910 S2: They want their portfolios to reflect their Christian convictions and 20 00:01:14,910 --> 00:01:18,950 S2: contribute to good in the world. Yet they're also navigating volatility, 21 00:01:18,950 --> 00:01:23,790 S2: inflation and economic uncertainty in seasons like this. Stella, it's 22 00:01:23,790 --> 00:01:27,110 S2: easy to think I need to focus solely on returns. 23 00:01:27,110 --> 00:01:30,590 S2: I can't afford to think about impact. Does that resonate 24 00:01:30,590 --> 00:01:31,630 S2: with what you're seeing? 25 00:01:32,069 --> 00:01:36,950 S4: Yeah, it absolutely does. Um, impact investing sounds wonderful in 26 00:01:36,950 --> 00:01:40,590 S4: strong markets. Uh, but when things get choppy and investors 27 00:01:40,590 --> 00:01:44,750 S4: feel rattled, there's this pull to step back from doing 28 00:01:44,750 --> 00:01:49,270 S4: good and focus purely on survival. I think there's also 29 00:01:49,270 --> 00:01:54,030 S4: a spiritual element to this tension. Um, people of faith 30 00:01:54,030 --> 00:01:57,710 S4: know they shouldn't pull back from caring about justice, about 31 00:01:57,820 --> 00:02:02,380 S4: stewardship and communities that need investing. But they're also worried. 32 00:02:02,780 --> 00:02:05,980 S4: They're wondering, can I really afford to invest with my 33 00:02:05,980 --> 00:02:10,460 S4: values right now? Will my returns suffer? That really is 34 00:02:10,460 --> 00:02:11,420 S4: the right question. 35 00:02:11,660 --> 00:02:15,940 S2: Yeah. That's right. And so the dilemma isn't just psychological. 36 00:02:15,940 --> 00:02:19,980 S2: There's actually a theological dimension to this as well isn't there. 37 00:02:20,139 --> 00:02:24,340 S4: Mhm. Yeah. Yeah. Exactly. Um I think that's where our 38 00:02:24,340 --> 00:02:29,300 S4: faith actually becomes an anchor. Uh, Avast, like Proverbs 21 39 00:02:29,340 --> 00:02:32,780 S4: five says that the plans of the diligent lead surely 40 00:02:32,780 --> 00:02:37,419 S4: to abundance. But everyone who is hasty comes to poverty. Um, 41 00:02:37,419 --> 00:02:40,739 S4: and so there's a difference between being responsive to markets 42 00:02:40,740 --> 00:02:44,820 S4: and being reactionary. And when we're anxious, we tend to 43 00:02:44,820 --> 00:02:49,020 S4: make decisions driven by fear rather than conviction. And that's 44 00:02:49,060 --> 00:02:51,459 S4: often when we make our worst choices. 45 00:02:51,660 --> 00:02:54,340 S2: Yeah. Let's talk about that discipline piece for a moment. 46 00:02:54,340 --> 00:02:58,660 S2: How does praxis approach stewardship during seasons like this, when 47 00:02:58,660 --> 00:03:00,220 S2: discipline really matters. 48 00:03:00,580 --> 00:03:05,540 S4: At practice, we return to fundamentals in three ways. So first, 49 00:03:05,940 --> 00:03:09,620 S4: we're committed to financial rigor regardless of the market cycle. 50 00:03:09,940 --> 00:03:15,020 S4: And that means serious analysis, ongoing evaluation of risks and opportunities. 51 00:03:15,220 --> 00:03:18,500 S4: And we use a team based approach for decision making 52 00:03:18,940 --> 00:03:24,220 S4: so that individual emotions don't drive the ship. And then second, 53 00:03:24,380 --> 00:03:30,180 S4: we integrate impact considerations without compromising those fundamentals. And these 54 00:03:30,220 --> 00:03:34,340 S4: work together. They're not in opposition to one another. And 55 00:03:34,340 --> 00:03:39,260 S4: then lastly we maintain a long term orientation that's rooted 56 00:03:39,260 --> 00:03:43,300 S4: in stewardship and not in speculation. And another was I 57 00:03:43,620 --> 00:03:47,980 S4: think of here is, um, a Hebrews 1211, which reminds 58 00:03:47,980 --> 00:03:53,180 S4: us that discipline seems painful rather than pleasant, but we 59 00:03:53,180 --> 00:03:57,770 S4: know that later it will yield a peaceful fruit of righteousness. Really? 60 00:03:57,770 --> 00:03:59,210 S4: That's what stewardship is. 61 00:03:59,530 --> 00:04:04,210 S2: Hmm. So you're saying, Stella, that impact and performance aren't 62 00:04:04,210 --> 00:04:07,450 S2: actually intention. They really are meant to work together. Is 63 00:04:07,450 --> 00:04:08,050 S2: that right? 64 00:04:08,450 --> 00:04:12,730 S4: Yeah, that's exactly right. When the market is choppy, is 65 00:04:12,770 --> 00:04:17,290 S4: actually when this becomes most visible. Because when you're managing 66 00:04:17,410 --> 00:04:20,650 S4: both with discipline and conviction, you're less tempted to panic, 67 00:04:20,650 --> 00:04:25,250 S4: sell or to chase returns. You're really making decisions grounded 68 00:04:25,250 --> 00:04:28,289 S4: in something that's deeper than the next headline. 69 00:04:28,610 --> 00:04:31,650 S2: That's right Stella, for those who are drawn to investing 70 00:04:31,650 --> 00:04:35,370 S2: in line with their faith but still worry about compromising returns, 71 00:04:35,370 --> 00:04:38,250 S2: what do you want them to understand about Praxis approach 72 00:04:38,250 --> 00:04:39,250 S2: to performance? 73 00:04:39,570 --> 00:04:43,530 S4: That's a good question, Rob. The short answer is performance 74 00:04:43,529 --> 00:04:48,650 S4: is a core responsibility. It's not secondary and it's not 75 00:04:48,650 --> 00:04:51,530 S4: an add on to impact. It's really foundational to an 76 00:04:51,529 --> 00:04:52,610 S4: investment strategy. 77 00:04:53,010 --> 00:04:56,000 S2: Well, we'll talk about what that impact looks like just 78 00:04:56,000 --> 00:04:59,359 S2: around the corner. How do you actually choose companies and 79 00:04:59,560 --> 00:05:02,200 S2: do you take a variety of strategies? How does it 80 00:05:02,200 --> 00:05:05,760 S2: play out in your investment? Stella Ty is here today. 81 00:05:06,040 --> 00:05:11,440 S2: Stella leads Stewardship investing impact and analysis at Praxis Investment Management, 82 00:05:11,440 --> 00:05:14,200 S2: an underwriter of this program. Hey folks, we're going to 83 00:05:14,240 --> 00:05:16,719 S2: pause now for a brief break, but we'll be back 84 00:05:16,720 --> 00:05:38,560 S2: with much more on today's faith and finance live. Do 85 00:05:38,560 --> 00:05:42,120 S2: you have to choose between faithfulness and financial performance and 86 00:05:42,120 --> 00:05:45,840 S2: you're investing? Well, we're talking about that today. Stella Ty 87 00:05:45,880 --> 00:05:49,919 S2: is here today. She leads stewardship investing impact and analysis 88 00:05:49,920 --> 00:05:53,870 S2: at Praxis Investment Management, an underwriter of this program and 89 00:05:53,870 --> 00:05:58,310 S2: one of the country's oldest faith based mutual fund families. Estella, 90 00:05:58,310 --> 00:06:00,870 S2: we've been talking about the fact that you don't have 91 00:06:00,870 --> 00:06:04,630 S2: to sacrifice performance when it comes to investing in a 92 00:06:04,630 --> 00:06:07,110 S2: way that aligns with your values, but I want to 93 00:06:07,110 --> 00:06:09,590 S2: talk about what that actually looks like for your team 94 00:06:09,589 --> 00:06:12,270 S2: at Praxis. How do you put that into practice day 95 00:06:12,270 --> 00:06:12,710 S2: to day? 96 00:06:13,110 --> 00:06:17,310 S4: Yes. Um, so at Praxis, it comes down to something 97 00:06:17,310 --> 00:06:21,350 S4: we call benchmark tracking. And I know that sounds technical, 98 00:06:21,350 --> 00:06:25,710 S4: but it's actually quite simple. Um, my colleague Benjamin Bailey, 99 00:06:25,750 --> 00:06:30,390 S4: who leads our investment team, recently wrote about this. And 100 00:06:30,390 --> 00:06:33,630 S4: the core insight is that when you screen companies based 101 00:06:33,630 --> 00:06:38,350 S4: on values, that's, you know, for faith governance, labor practices, 102 00:06:38,470 --> 00:06:43,630 S4: things like environmental stewardship, you're not removing the best performing 103 00:06:43,630 --> 00:06:48,950 S4: companies from the opportunity set. You're making thoughtful decisions about 104 00:06:48,950 --> 00:06:52,310 S4: who you own. And when you do that with rigor, 105 00:06:52,350 --> 00:06:56,789 S4: you can still track the overall market very closely. The 106 00:06:56,790 --> 00:07:02,030 S4: key is something that's called optimization. We're not trying to 107 00:07:02,070 --> 00:07:05,870 S4: beat the benchmark. We are trying to match it. We 108 00:07:05,910 --> 00:07:10,429 S4: minimize what's called tracking error. The difference between our returns 109 00:07:10,430 --> 00:07:13,590 S4: and the broader market returns. And why are we doing this. 110 00:07:13,910 --> 00:07:17,390 S4: Because if you match the market while excluding companies that 111 00:07:17,390 --> 00:07:20,630 S4: don't align with your values, you get the returns you 112 00:07:20,630 --> 00:07:24,470 S4: expect and you also get the stewardship that you really 113 00:07:24,470 --> 00:07:25,150 S4: care about. 114 00:07:25,430 --> 00:07:28,190 S2: Yeah. That's fascinating. So in other words, you aim to 115 00:07:28,230 --> 00:07:31,710 S2: keep pace with the market. But by investing in the 116 00:07:31,710 --> 00:07:34,350 S2: right kinds of companies that align with your values. 117 00:07:34,630 --> 00:07:39,670 S4: Yeah, precisely. Uh, this is tested most in volatile markets. Uh, 118 00:07:39,670 --> 00:07:44,670 S4: when uncertainty is high, investors are watching closely and they're asking, 119 00:07:44,830 --> 00:07:47,830 S4: you know, are we keeping up? Are we falling behind? 120 00:07:48,390 --> 00:07:52,980 S4: The answer is We are designed to be consistent over time. 121 00:07:52,980 --> 00:07:56,460 S4: So not every quarter, not every month, but over four 122 00:07:56,460 --> 00:08:01,580 S4: market cycles. Faith based investors should expect competitive returns. That's 123 00:08:01,580 --> 00:08:02,340 S4: our commitment. 124 00:08:02,540 --> 00:08:07,340 S2: Yeah, well, we've talked about staying invested and holding realistic 125 00:08:07,340 --> 00:08:11,140 S2: performance expectations. I want to dig into the heart of it, 126 00:08:11,140 --> 00:08:14,940 S2: the impact side of it, because impact isn't automatic. I 127 00:08:14,940 --> 00:08:17,780 S2: know it takes strategy that you all are committed to there. 128 00:08:17,780 --> 00:08:22,580 S2: At Praxis, you all just released your Real impact report. 129 00:08:22,860 --> 00:08:26,540 S2: What question were you hoping that report would help investors answer? 130 00:08:27,300 --> 00:08:31,620 S4: Uh, the impact report is really about making impact visible 131 00:08:31,620 --> 00:08:35,780 S4: and tangible. Um, so many investors have heard about impact investing, 132 00:08:36,220 --> 00:08:39,180 S4: but they're not quite sure what it means in practice. 133 00:08:39,220 --> 00:08:43,460 S4: Are we talking about screened funds, direct investments in communities, 134 00:08:43,460 --> 00:08:48,530 S4: shareholder advocacy? Uh, and the answer is yes to all 135 00:08:48,570 --> 00:08:53,610 S4: of these things. The Praxis Impact framework we call impact 136 00:08:53,610 --> 00:08:59,210 S4: X actually encompasses seven distinct strategies. And in our report, 137 00:08:59,210 --> 00:09:02,890 S4: we will walk you through what each one looks like. 138 00:09:02,929 --> 00:09:06,810 S4: How it works. We'll show real stories of change, and 139 00:09:06,850 --> 00:09:10,370 S4: we'll help investors understand that impact isn't one single thing. 140 00:09:10,690 --> 00:09:12,970 S4: It's an ecosystem of approaches. 141 00:09:13,450 --> 00:09:17,450 S2: Yeah, and that diversity of approaches really matters, especially in 142 00:09:17,450 --> 00:09:18,770 S2: uncertain times. Right. 143 00:09:19,210 --> 00:09:24,010 S4: Yeah. Yeah, absolutely. Actually, one of the key lessons in 144 00:09:24,010 --> 00:09:28,770 S4: the report is that different impact strategies work together at 145 00:09:28,770 --> 00:09:32,890 S4: different points in the market, different market cycles and different conditions. 146 00:09:32,890 --> 00:09:38,090 S4: So for example, if you think about something like shareholder advocacy, uh, 147 00:09:38,290 --> 00:09:41,210 S4: where we are pushing companies to change their labor practices 148 00:09:41,210 --> 00:09:46,370 S4: or their governance, um, pretty incredibly effective. But it takes 149 00:09:46,370 --> 00:09:50,480 S4: time and it can face a regulatory headwinds. And we've 150 00:09:50,480 --> 00:09:53,959 S4: seen that recently where certain resolutions are harder to bring 151 00:09:53,960 --> 00:09:56,880 S4: all the way to a proxy vote. So when that 152 00:09:56,880 --> 00:10:01,040 S4: pathway becomes more constrained, we will lean more heavily into, 153 00:10:01,480 --> 00:10:06,959 S4: let's say, direct community investing or into engagement or into screening. Um, 154 00:10:07,559 --> 00:10:12,800 S4: the flexibility to work across multiple strategies means impact doesn't 155 00:10:12,800 --> 00:10:17,000 S4: stop when one approach, let's say, uh, hits friction. 156 00:10:17,200 --> 00:10:20,040 S2: Yeah, that's a really important insight. So let me ask 157 00:10:20,040 --> 00:10:23,160 S2: you about a specific example. Screening is perhaps the most 158 00:10:23,160 --> 00:10:27,520 S2: familiar impact strategy avoiding companies you don't want to own. 159 00:10:27,520 --> 00:10:30,640 S2: But I suspect there's a story that might illustrate this 160 00:10:30,640 --> 00:10:32,920 S2: about something more active than screening. 161 00:10:33,440 --> 00:10:36,880 S4: Yeah, there's a great example of that. Praxis has been 162 00:10:36,880 --> 00:10:41,240 S4: involved in a long term shareholder advocacy effort, uh, with 163 00:10:41,240 --> 00:10:46,189 S4: one of the nation's largest utilities that's been serving the southeast. 164 00:10:46,630 --> 00:10:50,630 S4: And instead of divesting, we used our ownership stake with 165 00:10:50,630 --> 00:10:55,429 S4: this company to encourage them to bring in meaningful change, 166 00:10:55,470 --> 00:10:59,750 S4: particularly in three areas. One of those areas was ensuring 167 00:10:59,790 --> 00:11:04,510 S4: a just transition for workers and the communities where the 168 00:11:04,510 --> 00:11:11,270 S4: coal plants are and are retiring. Second was setting science 169 00:11:11,270 --> 00:11:16,589 S4: based emissions reduction targets, which align with global goals. And 170 00:11:16,590 --> 00:11:21,630 S4: then the last one was planning responsibly to grow electricity 171 00:11:21,670 --> 00:11:26,510 S4: demand that's tied to renewable energy. And so the company 172 00:11:26,510 --> 00:11:30,710 S4: was willing to publish their just transition metrics. And we 173 00:11:30,750 --> 00:11:34,150 S4: are now tracking progress. And this has been a real 174 00:11:34,150 --> 00:11:38,430 S4: sign of partnership when you think about this. This is 175 00:11:38,429 --> 00:11:44,069 S4: what patient, um, active engagement looks like. It's steady long 176 00:11:44,190 --> 00:11:48,110 S4: term work. It's showing up consistently. Uh, and we want 177 00:11:48,110 --> 00:11:51,910 S4: to build a win win win outcomes. Uh, let's say 178 00:11:51,950 --> 00:11:54,510 S4: for the company, for the employees, for the customers, for 179 00:11:54,510 --> 00:11:58,310 S4: the investors. Uh, and so in this strategy, rather than 180 00:11:58,350 --> 00:12:03,870 S4: stepping away, we stay invested because we believe that transformation happens. Uh, 181 00:12:03,870 --> 00:12:07,590 S4: when you accompany companies, uh, that are willing to operate 182 00:12:07,590 --> 00:12:08,550 S4: more sustainably. 183 00:12:08,870 --> 00:12:12,790 S2: Yeah, that's really exciting. And that's an important distinction, I think. 184 00:12:12,830 --> 00:12:15,750 S2: It sounds like it takes real conviction about why you're 185 00:12:15,750 --> 00:12:19,110 S2: investing in the first place to achieve these outcomes, doesn't it? 186 00:12:19,150 --> 00:12:23,390 S4: Yeah. Uh, our faith calls us to pursue justice, to 187 00:12:23,429 --> 00:12:27,310 S4: love mercy, to work for human dignity, and also calls 188 00:12:27,309 --> 00:12:30,830 S4: us to patience, to long suffering, uh, to seeing the 189 00:12:30,830 --> 00:12:34,030 S4: image of God in people and in companies that aren't perfect. 190 00:12:34,630 --> 00:12:38,950 S4: And so shareholder advocacy and proxy voting and engagement, uh, 191 00:12:38,950 --> 00:12:42,270 S4: these are expressions of those beliefs. We're not giving up 192 00:12:42,270 --> 00:12:45,660 S4: on anyone. We are saying, how can we help you 193 00:12:45,660 --> 00:12:47,459 S4: move in a better direction? 194 00:12:47,780 --> 00:12:51,940 S2: Yeah. Stella, for someone who's interested in pursuing impact but 195 00:12:51,940 --> 00:12:55,580 S2: maybe feels overwhelmed by all the different pathways, where would 196 00:12:55,580 --> 00:12:56,860 S2: you encourage them to begin? 197 00:12:57,780 --> 00:13:01,540 S4: Uh, first, begin with clarity about your own values and 198 00:13:01,540 --> 00:13:06,020 S4: financial goals. Don't try to optimize for everything at once, 199 00:13:06,020 --> 00:13:09,660 S4: but perhaps start by asking what really matters to me. 200 00:13:10,220 --> 00:13:13,140 S4: What kind of world do I want to help build? 201 00:13:13,620 --> 00:13:17,699 S4: And then find find an advisor, ideally one who's familiar 202 00:13:17,700 --> 00:13:21,780 S4: with faith based investing options, who can help you explore 203 00:13:22,020 --> 00:13:27,020 S4: what's available. The beautiful thing is, you don't have to 204 00:13:27,020 --> 00:13:30,300 S4: be an expert. Funds like Praxis will do the research 205 00:13:30,300 --> 00:13:33,100 S4: and the engagement and the strategy work for you. And 206 00:13:33,100 --> 00:13:35,740 S4: your job is to say, I want my money to 207 00:13:35,780 --> 00:13:40,140 S4: reflect my values and then trust the process because every 208 00:13:40,140 --> 00:13:45,329 S4: small portfolio change, uh, when it's multiplied across, many investors 209 00:13:45,490 --> 00:13:48,010 S4: will actually move the markets towards justice. 210 00:13:48,410 --> 00:13:51,490 S2: Wow. That's powerful. We're so thankful for our partnership and 211 00:13:51,490 --> 00:13:53,570 S2: your time today. Stella, thanks for being here. 212 00:13:54,170 --> 00:13:54,490 S4: Thank you. 213 00:13:54,530 --> 00:13:54,970 S3: Rob. 214 00:13:55,330 --> 00:13:58,250 S2: Our guest has been Stella Tai with Praxis Mutual Fund 215 00:13:58,250 --> 00:14:02,290 S2: since 1994. Praxis has offered investment products designed to meet 216 00:14:02,290 --> 00:14:06,810 S2: the practical needs of everyday investors, while supporting positive change 217 00:14:06,809 --> 00:14:11,010 S2: through impact strategies that go far beyond screening. If you 218 00:14:11,010 --> 00:14:14,650 S2: want to learn more, go to Praxis Investor. Com. That's 219 00:14:14,650 --> 00:14:18,890 S2: Praxis Investment. Com we'll be right back on Faith and 220 00:14:18,890 --> 00:14:35,770 S2: finance live. Stick around. Great to have you with us 221 00:14:35,810 --> 00:14:38,570 S2: on faith and finance live I'm Rob West. Let me 222 00:14:38,570 --> 00:14:41,760 S2: remind you that we're not live today, so don't call in. 223 00:14:41,760 --> 00:14:45,200 S2: But we have great information lined up ahead in the program. 224 00:14:45,200 --> 00:14:48,840 S2: Coming your way. Let's begin today in New York. Michael, 225 00:14:48,840 --> 00:14:50,200 S2: you be our first caller. Go ahead. 226 00:14:50,720 --> 00:14:54,040 S5: Hey, Rob. Uh, first time caller. I appreciate listening to 227 00:14:54,040 --> 00:14:56,400 S5: you and all the advice you got. Uh, I wish 228 00:14:56,400 --> 00:14:59,080 S5: I was calling about an investment or something, but it's 229 00:14:59,120 --> 00:15:04,440 S5: actually kind of the opposite where I didn't know about it. Um, 230 00:15:04,840 --> 00:15:08,480 S5: prior to our marriage, my wife had, um, a bunch 231 00:15:08,480 --> 00:15:12,080 S5: of student debt. It started off at 50, and we 232 00:15:12,080 --> 00:15:16,600 S5: recently checked on it. It's actually grown to 65,000. And 233 00:15:16,640 --> 00:15:19,520 S5: this is a little heavy for us. It's hard to handle. 234 00:15:19,560 --> 00:15:23,400 S5: We've been praying about it and seeking, you know, direction. Um, 235 00:15:23,400 --> 00:15:25,920 S5: I was wondering what kind of advice you have and 236 00:15:26,080 --> 00:15:30,320 S5: how would that affect me? And because we filed jointly. So, like, 237 00:15:30,360 --> 00:15:34,600 S5: what's this? Uh, what are some solutions or ways to 238 00:15:34,600 --> 00:15:35,280 S5: attack this? 239 00:15:35,600 --> 00:15:39,560 S2: Yeah, yeah. Well, I know this can weigh heavy. Uh, 240 00:15:39,560 --> 00:15:42,440 S2: especially when it comes as a surprise. So I totally 241 00:15:42,440 --> 00:15:45,800 S2: understand that. Um, you know, with regard to where you 242 00:15:45,800 --> 00:15:47,640 S2: all go from here, I think the key is what 243 00:15:47,640 --> 00:15:51,680 S2: you have initially is clarity. You just need to know, okay, 244 00:15:51,720 --> 00:15:54,640 S2: regardless of the fact that we're not excited about it 245 00:15:54,640 --> 00:15:56,880 S2: and we wish it didn't exist, we need to know 246 00:15:56,880 --> 00:15:59,360 S2: where we stand. And so you getting to a place 247 00:15:59,360 --> 00:16:01,840 S2: where you say, okay, this is what's owed today, even 248 00:16:01,840 --> 00:16:04,800 S2: though it's higher than what was originally borrowed, what is 249 00:16:04,800 --> 00:16:08,640 S2: the interest rate? Who is the loan servicer? What type 250 00:16:08,640 --> 00:16:11,920 S2: of loan is this? I mean, getting all of that information. 251 00:16:11,960 --> 00:16:14,520 S2: What is the monthly payment and then what flexibility do 252 00:16:14,520 --> 00:16:16,600 S2: you have? For instance, do you know if this is 253 00:16:16,600 --> 00:16:18,560 S2: a federal student loan or private. 254 00:16:19,000 --> 00:16:21,960 S5: Yes, it is federal. And um, it's set on an 255 00:16:21,960 --> 00:16:25,800 S5: income based payment for her. And now she's been a 256 00:16:26,200 --> 00:16:29,640 S5: she's been a stay at home mom, um, for about 257 00:16:29,640 --> 00:16:33,120 S5: six years. So she's had zero income and she's homeschooling 258 00:16:33,120 --> 00:16:36,200 S5: the kids. And, you know, I believe, like, that's her 259 00:16:36,400 --> 00:16:39,670 S5: her role right there. So that's why we weren't really 260 00:16:39,670 --> 00:16:43,710 S5: focused on it. But, um. Yeah. So her payments are 261 00:16:43,750 --> 00:16:45,390 S5: actually $0 a month. 262 00:16:45,710 --> 00:16:48,630 S2: Yeah, yeah. Which is one of the challenges now, it's 263 00:16:48,630 --> 00:16:51,310 S2: nice that you have that flexibility if you need it. 264 00:16:51,470 --> 00:16:56,350 S2: But those income driven repayment options, uh, that drop those 265 00:16:56,350 --> 00:16:59,950 S2: payments in this case all the way to zero, it's 266 00:16:59,950 --> 00:17:02,910 S2: not covering even the monthly interest. And so as that 267 00:17:02,910 --> 00:17:06,510 S2: interest continues to accumulate, uh, you know, that's why her 268 00:17:06,510 --> 00:17:10,950 S2: balance is larger now than when she borrowed. Um, and so, 269 00:17:11,070 --> 00:17:13,949 S2: you know, really we need to look at how we 270 00:17:13,950 --> 00:17:17,790 S2: can get back to, uh, a payment that's realistic, that 271 00:17:17,790 --> 00:17:19,950 S2: starts to get you on a track to getting this 272 00:17:19,950 --> 00:17:23,590 S2: eventually paid off. Um, where are you all at financially? 273 00:17:23,630 --> 00:17:26,389 S2: I mean, do you have the ability to dramatically increase 274 00:17:26,390 --> 00:17:29,390 S2: the monthly payment you're sending personally? 275 00:17:29,390 --> 00:17:33,750 S5: No. Um. I'm struggling. We're basically living paycheck to paycheck. 276 00:17:34,070 --> 00:17:38,060 S5: I've only made 50,000 the past two years. So this 277 00:17:38,060 --> 00:17:43,260 S5: is an unexpected expense where? That's why we're a little 278 00:17:43,300 --> 00:17:44,379 S5: blindsided by it. 279 00:17:44,420 --> 00:17:47,859 S2: Yeah. Yeah. Got it. Well, you don't want to refinance 280 00:17:47,859 --> 00:17:50,260 S2: it because, you know, if you went to a private lender, 281 00:17:50,260 --> 00:17:53,380 S2: you would lose those income driven repayment options that are 282 00:17:53,380 --> 00:17:57,820 S2: offered by the federal loan program. And even though it's 283 00:17:57,820 --> 00:18:01,340 S2: not a great situation in that it's not even covering 284 00:18:01,340 --> 00:18:03,740 S2: the interest, at least it allows you to stay current. 285 00:18:03,740 --> 00:18:05,780 S2: Because the last thing you want, the only thing worse 286 00:18:05,980 --> 00:18:08,300 S2: than what you've discovered, would be for you to get 287 00:18:08,580 --> 00:18:11,380 S2: into a situation where you're past due, and then you've 288 00:18:11,380 --> 00:18:13,980 S2: got all the the levers that can be pulled all 289 00:18:13,980 --> 00:18:16,660 S2: the way to garnishment. So you certainly don't want that. 290 00:18:16,780 --> 00:18:19,100 S2: So I think the key for you all is to 291 00:18:19,140 --> 00:18:22,220 S2: to try to, you know, dial back your spending plan 292 00:18:22,220 --> 00:18:24,580 S2: to the best of your ability. I realize you have 293 00:18:24,580 --> 00:18:27,460 S2: limited funds, you've got a growing family, and this is 294 00:18:27,460 --> 00:18:30,020 S2: a challenge. And so we want to look first at 295 00:18:30,020 --> 00:18:32,060 S2: the income side. What can you do to get your 296 00:18:32,060 --> 00:18:35,970 S2: income up. Can you, you know, advance your skills. Um, 297 00:18:36,010 --> 00:18:38,050 S2: do you need to look at getting a second job 298 00:18:38,050 --> 00:18:40,170 S2: for a period of time? You know what could be 299 00:18:40,170 --> 00:18:43,090 S2: done there? Could she even do some things from home? 300 00:18:43,210 --> 00:18:45,290 S2: I totally get her wanting to be a stay at 301 00:18:45,290 --> 00:18:47,970 S2: home mom. It's amazing. And it's the most difficult and 302 00:18:47,970 --> 00:18:51,290 S2: the most needed job of any. So I'm not saying that's, 303 00:18:51,650 --> 00:18:53,530 S2: you know, she needs to move away from that. The 304 00:18:53,530 --> 00:18:56,490 S2: question is, just what can you do? You know, I 305 00:18:56,490 --> 00:18:59,850 S2: think the key for you, Michael, is really to start 306 00:18:59,850 --> 00:19:03,290 S2: to look at what is that plan moving forward that 307 00:19:03,290 --> 00:19:05,209 S2: could get us to a place where we're actually at 308 00:19:05,250 --> 00:19:08,850 S2: least making some progress. And so you may want to 309 00:19:08,890 --> 00:19:12,210 S2: start with, you know, that spending plan and just say, 310 00:19:12,210 --> 00:19:15,090 S2: is there any options? Do I have any options on 311 00:19:15,090 --> 00:19:17,530 S2: the income side we always want to start there. Is 312 00:19:17,530 --> 00:19:19,970 S2: there a way to get that up. And then secondly, 313 00:19:20,130 --> 00:19:23,530 S2: what can we do to keep it in good standing. Uh, 314 00:19:23,530 --> 00:19:28,330 S2: but ultimately try to dial back spending with the household budget. Um, 315 00:19:28,330 --> 00:19:34,130 S2: you know, prioritizing the main things housing, food, utilities, Transportation. Um, 316 00:19:34,250 --> 00:19:37,690 S2: and then, you know, looking at what can go in 317 00:19:37,690 --> 00:19:41,290 S2: this season, you know, maybe you eliminate, uh, your retirement 318 00:19:41,290 --> 00:19:44,410 S2: savings or something like that, just for a season while 319 00:19:44,410 --> 00:19:46,609 S2: you start to get to a place where you're making 320 00:19:46,609 --> 00:19:50,290 S2: some progress. Um, and, you know, you really need an 321 00:19:50,290 --> 00:19:54,609 S2: emergency cushion. I mean, at least 500 to $1000. And 322 00:19:54,609 --> 00:19:56,680 S2: then ultimately, we can build that up to 3 to 323 00:19:56,680 --> 00:19:59,649 S2: 6 months expenses. Um, do you all have any credit 324 00:19:59,650 --> 00:20:01,490 S2: card debt or other high interest debt? 325 00:20:01,890 --> 00:20:05,129 S5: No, um, only the mortgage on the house. But I 326 00:20:05,290 --> 00:20:08,210 S5: faithfully pay my credit cards every month. 327 00:20:08,410 --> 00:20:11,250 S2: Okay, great. Yeah. So that's a good sign. I mean, obviously, 328 00:20:11,250 --> 00:20:14,050 S2: you have discipline. You're managing things well, even though there's 329 00:20:14,050 --> 00:20:18,409 S2: limited resources. Um, you know, I think the the option 330 00:20:18,410 --> 00:20:21,409 S2: here is, you know, take full advantage of that income 331 00:20:21,410 --> 00:20:24,050 S2: driven repayment. But what can be done to start to 332 00:20:24,090 --> 00:20:28,130 S2: get some, some positive movement toward that? Just recognize it's 333 00:20:28,130 --> 00:20:30,169 S2: going to be with you for a while and you know, 334 00:20:30,210 --> 00:20:33,919 S2: that's okay. Um, at least you're current on it. But, 335 00:20:33,960 --> 00:20:36,359 S2: you know, as your income grows, we can't let your 336 00:20:36,359 --> 00:20:39,080 S2: lifestyle spending grow with it. We're going to have to 337 00:20:39,119 --> 00:20:43,239 S2: really stay disciplined on keeping your lifestyle spending capped so 338 00:20:43,240 --> 00:20:46,520 S2: that any additional income, you know, whether that's bonuses or 339 00:20:46,520 --> 00:20:49,720 S2: raises or, you know, you taking on something part time, 340 00:20:49,880 --> 00:20:52,360 S2: even for a period of time, you know, goes to 341 00:20:52,400 --> 00:20:54,960 S2: getting you guys in a way where you're you're making 342 00:20:54,960 --> 00:20:59,479 S2: some positive movement, uh, ultimately toward, uh, these student loans. 343 00:20:59,480 --> 00:21:01,199 S2: So I think that's really where you need to go 344 00:21:01,200 --> 00:21:04,040 S2: from here. I'd be happy to provide one of our 345 00:21:04,040 --> 00:21:07,479 S2: certified Christian financial counselors to you at no cost. Uh, 346 00:21:07,480 --> 00:21:09,320 S2: just to help you look at your budget, see if 347 00:21:09,320 --> 00:21:12,040 S2: there's anything you're missing, if that would be helpful to you. 348 00:21:12,080 --> 00:21:14,040 S2: It doesn't sound like that's the problem. It sounds like 349 00:21:14,040 --> 00:21:16,440 S2: it's mainly on the income side, but if you feel 350 00:21:16,440 --> 00:21:18,600 S2: like that would be helpful, I would certainly be able 351 00:21:18,600 --> 00:21:19,560 S2: to provide that. 352 00:21:20,080 --> 00:21:21,920 S5: Okay. Yeah. I do appreciate that. 353 00:21:22,359 --> 00:21:25,160 S2: Yeah, absolutely. Let's do this. Michael, you stay on the line. 354 00:21:25,160 --> 00:21:27,200 S2: We'll get your information. This will be somebody that can 355 00:21:27,200 --> 00:21:30,630 S2: look over your situation, see if you're missing anything. Help. 356 00:21:30,630 --> 00:21:33,990 S2: You kind of fine tune that spending plan. And let's 357 00:21:33,990 --> 00:21:36,230 S2: see if we can't get to a place where you 358 00:21:36,270 --> 00:21:40,030 S2: can get off of that $0 monthly payment and start 359 00:21:40,030 --> 00:21:43,310 S2: to at least start making some progress, even just a 360 00:21:43,310 --> 00:21:46,710 S2: little bit on a monthly basis so the balance isn't growing. 361 00:21:46,910 --> 00:21:48,790 S2: And call back any time if we can help you. 362 00:21:48,790 --> 00:21:51,270 S2: Thanks for being on the program today. Just a quick reminder, 363 00:21:51,270 --> 00:21:53,629 S2: we're not here today, so don't call in, but we're 364 00:21:53,630 --> 00:21:55,910 S2: going to head to a break and much more coming 365 00:21:55,910 --> 00:22:05,709 S2: just after this. Stay with us. So glad to have 366 00:22:05,710 --> 00:22:08,550 S2: you with us today on Faith and Finance Live. Our 367 00:22:08,550 --> 00:22:11,470 S2: team is away today, so don't call in. But we 368 00:22:11,510 --> 00:22:13,870 S2: lined up some great questions in advance and we'll be 369 00:22:13,869 --> 00:22:16,149 S2: going to those here in just a moment. Let me 370 00:22:16,150 --> 00:22:18,830 S2: also remind you that the advice that I give each 371 00:22:18,830 --> 00:22:22,750 S2: day on this program is general in nature. We offer 372 00:22:22,750 --> 00:22:26,510 S2: principles and ideas that apply at a high level. They 373 00:22:26,510 --> 00:22:30,179 S2: are not personalized. So that's why you should always seek 374 00:22:30,180 --> 00:22:33,419 S2: professional financial advice. And if you'd like to find a 375 00:22:33,420 --> 00:22:36,659 S2: professional who shares your values, we of course, here at 376 00:22:36,660 --> 00:22:40,899 S2: Faith and Finance Live recommend the Certified Kingdom Advisor designation. 377 00:22:40,940 --> 00:22:43,540 S2: These are men and women who've met high standards, and 378 00:22:43,540 --> 00:22:46,540 S2: they've been trained to bring a biblical worldview of financial 379 00:22:46,540 --> 00:22:50,340 S2: decision making. You can find one at Faith Comm Oklahoma's 380 00:22:50,340 --> 00:22:51,979 S2: Where Forest is located. Go ahead. 381 00:22:53,220 --> 00:22:56,700 S6: I appreciate your show and listen to you almost every day. 382 00:22:57,020 --> 00:22:57,460 S2: Awesome. 383 00:22:57,460 --> 00:23:00,820 S6: Thank you. I have a question. Uh, my question is 384 00:23:00,820 --> 00:23:04,859 S6: I've got a Roth IRA at a brokerage and would 385 00:23:04,859 --> 00:23:10,980 S6: like to transfer it to another brokerage where it is currently. 386 00:23:11,020 --> 00:23:14,619 S6: It's been there more than the five years that's required. 387 00:23:15,540 --> 00:23:19,260 S6: If I transfer it to the new brokerage, does that 388 00:23:19,260 --> 00:23:25,220 S6: five year time period start over, or is the five 389 00:23:25,260 --> 00:23:29,530 S6: year that it's already Had remain in effect. 390 00:23:29,930 --> 00:23:33,570 S2: No, it's from when you originally opened the account, first 391 00:23:33,570 --> 00:23:36,449 S2: of all. And it only has to do with, uh, 392 00:23:36,609 --> 00:23:39,689 S2: you know, the the contributions themselves can be withdrawn at 393 00:23:39,690 --> 00:23:43,689 S2: any time, tax free. But it's the earnings, um, where 394 00:23:43,690 --> 00:23:46,570 S2: the Roth has to be open for at least five years. 395 00:23:46,930 --> 00:23:50,410 S2: And the clock starts on January 1st of the year. 396 00:23:50,450 --> 00:23:54,410 S2: The first Roth IRA was funded. Not not each time 397 00:23:54,410 --> 00:23:58,410 S2: you add money, um, and and you moving from one 398 00:23:58,410 --> 00:24:02,090 S2: brokerage firm to another has no impact on that five 399 00:24:02,130 --> 00:24:06,050 S2: year clock. Um, and so, you know, you you should 400 00:24:06,050 --> 00:24:08,850 S2: be in good shape here. Um, if you open the 401 00:24:08,850 --> 00:24:12,530 S2: first Roth more than five years ago, then those earnings 402 00:24:12,530 --> 00:24:13,970 S2: are going to come out tax free. 403 00:24:15,330 --> 00:24:20,690 S6: Okay, okay. Well, I've actually talked to two different brokerages 404 00:24:20,690 --> 00:24:23,970 S6: and got two different answers. So I thought I'll call you. 405 00:24:24,890 --> 00:24:28,330 S2: All right. Very good. I'm glad that you did. I 406 00:24:28,330 --> 00:24:30,570 S2: appreciate you being a faithful listener for us. If I 407 00:24:30,609 --> 00:24:32,330 S2: can serve you in any way along the way, don't 408 00:24:32,330 --> 00:24:34,730 S2: hesitate to reach out. Hey, stay on the line. We're 409 00:24:34,730 --> 00:24:37,250 S2: going to send you a copy of our magazine. Faithful steward. 410 00:24:37,250 --> 00:24:39,609 S2: I think you'll enjoy it. We appreciate your call. Uh, 411 00:24:39,609 --> 00:24:41,850 S2: let's go to Texas. Hi, Robert. How can I help you? 412 00:24:42,330 --> 00:24:44,170 S7: Hey, Rob. Thanks for taking my call today. 413 00:24:44,330 --> 00:24:45,090 S2: Absolutely. 414 00:24:45,730 --> 00:24:51,250 S7: So, uh. Uh, unfortunately. And then yet fortunately, quite surprised. We've, uh, 415 00:24:51,250 --> 00:24:54,649 S7: come into some inheritance due to my father's passing. Mhm. 416 00:24:55,490 --> 00:25:00,450 S7: So it's going to be about 200,000, um, after taxes 417 00:25:00,450 --> 00:25:04,889 S7: and all those things. Uh, and our mortgage is 175 418 00:25:04,930 --> 00:25:08,690 S7: is what we owe. We don't have any other, uh, bills, 419 00:25:08,690 --> 00:25:12,290 S7: all of our vehicles. Everything's paid off. But, uh, the 420 00:25:12,290 --> 00:25:14,530 S7: question is, should we pay off that mortgage to get 421 00:25:14,530 --> 00:25:17,810 S7: out from underneath the house payment and interest and those things? Yeah. 422 00:25:17,850 --> 00:25:20,250 S7: And then, uh, what should we do with the rest? 423 00:25:20,250 --> 00:25:24,880 S7: Or should we just continue on making those payments and 424 00:25:24,880 --> 00:25:29,640 S7: then invest that money. Yeah. Still got kids in elementary school, 425 00:25:29,640 --> 00:25:32,359 S7: and I've got them in college, so I've got five 426 00:25:32,400 --> 00:25:33,320 S7: of them spread out. 427 00:25:33,520 --> 00:25:36,679 S2: Great. Yeah. Sounds like you're very blessed. Uh, and I'm 428 00:25:36,680 --> 00:25:39,479 S2: sorry to hear about your father's passing. Couple of questions. Uh, 429 00:25:39,480 --> 00:25:41,320 S2: what is the interest rate on that mortgage? 430 00:25:41,880 --> 00:25:43,080 S7: So 6%. 431 00:25:43,280 --> 00:25:46,560 S2: Wow. Okay. And, uh, do you have an emergency fund 432 00:25:46,560 --> 00:25:49,160 S2: separate from the 200,000 you're going to be receiving? 433 00:25:49,960 --> 00:25:52,479 S7: Uh, yes, I do about 20,000. 434 00:25:52,520 --> 00:25:55,000 S2: All right. And any other debt whatsoever? 435 00:25:55,720 --> 00:25:56,640 S7: No, none. 436 00:25:56,680 --> 00:25:59,200 S2: All right. What about retirement? Are you on your way? 437 00:25:59,240 --> 00:26:01,159 S2: Have you been contributing consistently? 438 00:26:01,800 --> 00:26:06,880 S7: No, we don't have any retirement or, uh, that all was, uh, uh, 439 00:26:06,920 --> 00:26:10,760 S7: used up when our, our company sold and, uh, we 440 00:26:10,800 --> 00:26:12,879 S7: went a little period of time with nothing, so. 441 00:26:13,080 --> 00:26:13,800 S2: I see. Yeah. 442 00:26:13,880 --> 00:26:15,960 S7: We're starting over there. Have nothing put away. 443 00:26:16,240 --> 00:26:19,400 S2: I understood, you know, the the challenge is in order 444 00:26:19,400 --> 00:26:24,110 S2: to generate that 6% guaranteed return that you'd get by 445 00:26:24,350 --> 00:26:27,550 S2: paying off that mortgage. You know, you would need to 446 00:26:27,590 --> 00:26:31,630 S2: generate somewhere between 7 and 8%, maybe even a little 447 00:26:31,630 --> 00:26:35,150 S2: higher than that, uh, in order to get the after 448 00:26:35,190 --> 00:26:39,070 S2: tax return. Um, that would need to be generated to 449 00:26:39,109 --> 00:26:43,510 S2: cover that guaranteed 6% risk free return by paying off 450 00:26:43,510 --> 00:26:46,030 S2: the mortgage. So I think that is going to be 451 00:26:46,030 --> 00:26:48,990 S2: the better option. And as a result, what I would 452 00:26:48,990 --> 00:26:52,469 S2: probably do is go ahead and pay it off, um, 453 00:26:52,670 --> 00:26:57,390 S2: and then aggressively take that mortgage payment and drop that 454 00:26:57,390 --> 00:27:01,149 S2: into retirement accounts, uh, and try to, you know, use 455 00:27:01,150 --> 00:27:04,990 S2: these next, you know, 15, 20 years, you know, whatever 456 00:27:04,990 --> 00:27:07,390 S2: however long the Lord leads you to, to work for 457 00:27:07,430 --> 00:27:10,750 S2: pay until he redirects you to something else to really 458 00:27:10,750 --> 00:27:14,350 S2: aggressively build those retirement assets. But what a great place 459 00:27:14,350 --> 00:27:16,550 S2: that will be in terms of, you know, the peace 460 00:27:16,550 --> 00:27:19,149 S2: of mind that you'll have, uh, you know, you can 461 00:27:19,190 --> 00:27:21,699 S2: you'll have some money left even after you pay off 462 00:27:21,940 --> 00:27:25,140 S2: the house, you know, because you only owe 175. So 463 00:27:25,140 --> 00:27:27,980 S2: you could use that to seed the retirement account. And 464 00:27:27,980 --> 00:27:30,220 S2: then the only question will just be, you know, what 465 00:27:30,260 --> 00:27:32,340 S2: retirement account do you use? And that's going to be 466 00:27:32,340 --> 00:27:34,620 S2: a function of whether you have a retirement plan at work, 467 00:27:34,619 --> 00:27:37,220 S2: if you're a W2 employee or if you have your 468 00:27:37,220 --> 00:27:40,300 S2: own business, do you have something set up? Do you 469 00:27:40,340 --> 00:27:42,220 S2: know which direction you'd go there? 470 00:27:42,619 --> 00:27:46,060 S7: Yeah, we well, at work they do have a 401 K, 471 00:27:46,100 --> 00:27:50,220 S7: but they don't contribute anything to it. Okay. And so uh, 472 00:27:50,540 --> 00:27:53,859 S7: and they just established it probably 4 or 5 months ago. 473 00:27:53,859 --> 00:27:57,060 S7: So it's, it's not really anything to look at. So 474 00:27:57,060 --> 00:27:58,780 S7: I would probably need to find something. 475 00:27:59,100 --> 00:28:02,340 S2: Yeah. Uh, well, I mean, the nice thing about that 476 00:28:02,340 --> 00:28:05,500 S2: is even if they don't, uh, do any kind of match, 477 00:28:05,500 --> 00:28:08,260 S2: which is too bad. Um, but even if they don't, 478 00:28:08,300 --> 00:28:11,260 S2: the nice thing is it gives you the ability, uh, 479 00:28:11,260 --> 00:28:16,540 S2: because you're over the age of 50 to put in 30,500, 480 00:28:16,580 --> 00:28:21,580 S2: I believe it is this year, um, in 2025, which just, 481 00:28:21,619 --> 00:28:23,540 S2: you know, nothing else is going to give you that 482 00:28:23,540 --> 00:28:27,100 S2: kind of, uh, the, you know, ability to contribute at 483 00:28:27,140 --> 00:28:29,940 S2: that level. And the key for you guys is just 484 00:28:29,940 --> 00:28:31,939 S2: to get as much as you can into a tax 485 00:28:31,940 --> 00:28:36,100 S2: deferred environment. Um, so I think between that 401 K 486 00:28:36,100 --> 00:28:39,420 S2: and then you could each have Roth IRAs and, you know, 487 00:28:39,500 --> 00:28:41,260 S2: you could between you and your wife, even as a 488 00:28:41,300 --> 00:28:44,660 S2: non-working spouse, she can have a Roth as well. Again, 489 00:28:44,660 --> 00:28:47,540 S2: over the age of 50 you could put in 8000 apiece. So, 490 00:28:47,740 --> 00:28:50,020 S2: you know, between the two of you, you could put 491 00:28:50,020 --> 00:28:54,380 S2: in that, uh, that 16,000, then another 30 K, uh, 492 00:28:54,500 --> 00:28:57,780 S2: you know, into that, uh, that 401 K and that's 493 00:28:57,820 --> 00:29:00,180 S2: I mean, I'm not saying you have this much to 494 00:29:00,220 --> 00:29:02,219 S2: put in, but you could put in up to 46 495 00:29:02,220 --> 00:29:05,580 S2: grand a year, which is amazing. So, you know, I 496 00:29:05,620 --> 00:29:08,180 S2: kind of like the option of you paying off the house, 497 00:29:08,180 --> 00:29:10,820 S2: but how have you guys been talking about this and 498 00:29:10,820 --> 00:29:11,740 S2: how are you leaning? 499 00:29:12,380 --> 00:29:15,380 S7: Well, we've talked about it and we're we're we're able 500 00:29:15,380 --> 00:29:17,660 S7: to make it happen. We're able to pay those bills, 501 00:29:17,660 --> 00:29:20,650 S7: but it does keep it pretty tight, particularly with one 502 00:29:20,650 --> 00:29:23,610 S7: in college, one going into college and then still trying 503 00:29:23,610 --> 00:29:24,930 S7: to plan for two more. 504 00:29:25,130 --> 00:29:27,410 S2: Yeah, okay. Yeah, the key would just be and I 505 00:29:27,410 --> 00:29:30,370 S2: realize those are legit expenses and they add up. Believe me, 506 00:29:30,370 --> 00:29:32,690 S2: I've got two in college right now and two more 507 00:29:32,690 --> 00:29:34,930 S2: still to come. So I know how expensive it is. 508 00:29:35,170 --> 00:29:37,290 S2: I think the key would just be try to preserve 509 00:29:37,290 --> 00:29:40,050 S2: as much of that mortgage payment to try to get, 510 00:29:40,050 --> 00:29:43,250 S2: you know, into tax deferred retirement accounts as possible. So 511 00:29:43,250 --> 00:29:45,650 S2: you're starting to build that nest egg for the future. 512 00:29:45,770 --> 00:29:48,690 S2: There are other ways to pay for college grants and 513 00:29:48,690 --> 00:29:52,330 S2: scholarships and, you know, community college for a period of 514 00:29:52,330 --> 00:29:55,770 S2: time and working during the summer. And maybe one becomes 515 00:29:55,810 --> 00:29:58,650 S2: a resident assistant to cover their room and board. I mean, 516 00:29:58,690 --> 00:30:01,730 S2: you may need to get creative, but there are no 517 00:30:01,730 --> 00:30:04,090 S2: other ways to fund retirement. And so I would really 518 00:30:04,090 --> 00:30:08,050 S2: prioritize kind of recapturing as much of that payment, if 519 00:30:08,050 --> 00:30:10,490 S2: not the whole thing as possible, and get that into 520 00:30:10,530 --> 00:30:12,010 S2: retirement plans. Okay. 521 00:30:12,250 --> 00:30:13,969 S7: Very good I appreciate it. Thank you. 522 00:30:14,010 --> 00:30:16,970 S2: Absolutely. Thanks for your call, Robert. We appreciate you. Hey, 523 00:30:16,970 --> 00:30:19,000 S2: before we head to this break, just a quick reminder. 524 00:30:19,000 --> 00:30:21,320 S2: Our team is away from the studio today, so don't 525 00:30:21,320 --> 00:30:24,240 S2: call in. We did line up some great questions in advance, 526 00:30:24,280 --> 00:30:26,080 S2: and when we come back from this break, we'll have 527 00:30:26,080 --> 00:30:29,600 S2: an opportunity to hear some of those questions. Let me 528 00:30:29,600 --> 00:30:32,160 S2: also remind you that if you have a question, you'd 529 00:30:32,160 --> 00:30:34,760 S2: like to get in front of us and get an 530 00:30:34,760 --> 00:30:38,240 S2: answer to. You can always send it in electronically. That's right. 531 00:30:38,240 --> 00:30:40,960 S2: The way to send an electronic question is just to 532 00:30:40,960 --> 00:30:45,880 S2: head to Moody Radio.com. You'll see the form there on 533 00:30:45,920 --> 00:30:48,920 S2: that page where you can submit your question. We try 534 00:30:48,920 --> 00:30:51,320 S2: to get to a few of those each week on 535 00:30:51,320 --> 00:30:56,720 S2: the air again. Moody. Radio.com. Back with more on Faith 536 00:30:56,720 --> 00:31:05,640 S2: and finance. Live right after this. Stick around. So thankful 537 00:31:05,640 --> 00:31:07,720 S2: to have you with us today on Faith and Finance live. 538 00:31:07,720 --> 00:31:10,360 S2: I'm Rob West, your host. Now our team is away 539 00:31:10,360 --> 00:31:13,400 S2: from the studio today, so don't call in. But we 540 00:31:13,400 --> 00:31:16,150 S2: lined up some questions in advance that I know will 541 00:31:16,150 --> 00:31:20,270 S2: be helpful to you. Let's go to Ohio. Ron. Go ahead. 542 00:31:20,270 --> 00:31:21,150 S2: Thanks for your call. 543 00:31:21,590 --> 00:31:25,950 S8: Hi, Rob. I have a question about the RMD and 544 00:31:26,430 --> 00:31:31,070 S8: I am 72.5 roughly. I'll probably have to start taking 545 00:31:31,070 --> 00:31:36,590 S8: it next year, but if I would pass up, what 546 00:31:36,590 --> 00:31:40,390 S8: happens then? Does it stop? And then my wife is 547 00:31:40,390 --> 00:31:44,590 S8: required to take it when she turns 73. Or how 548 00:31:44,590 --> 00:31:45,270 S8: does that work? 549 00:31:45,310 --> 00:31:48,830 S2: Yeah, it's a good question. So, um, you know, under 550 00:31:48,830 --> 00:31:54,070 S2: secure Act 2.0, which started in 2024, um, if you 551 00:31:54,070 --> 00:31:58,470 S2: pass after reaching the age when the required minimums are required, uh, 552 00:31:58,910 --> 00:32:03,430 S2: she does not automatically stop all distributions. So it really 553 00:32:03,430 --> 00:32:06,670 S2: just is determined by how she wants to proceed. So 554 00:32:06,670 --> 00:32:09,790 S2: one option she has is rather than leaving it as 555 00:32:09,790 --> 00:32:16,190 S2: an inherited IRA, she has the ability, uh, to roll 556 00:32:16,190 --> 00:32:21,910 S2: that money into her own IRA. And then at that point, uh, 557 00:32:22,070 --> 00:32:26,230 S2: you know, ultimately, uh, she becomes the owner and then 558 00:32:26,230 --> 00:32:30,709 S2: would follow her own RMD schedule, i.e., she wouldn't be 559 00:32:30,710 --> 00:32:35,950 S2: required to take RMDs until she hits 73 herself if 560 00:32:35,950 --> 00:32:40,110 S2: she leaves it, however, in an inherited IRA and uses 561 00:32:40,110 --> 00:32:45,830 S2: the spousal election, then she can delay or moderate distributions 562 00:32:45,830 --> 00:32:50,190 S2: based on the new rules, um, using the uniform lifetime 563 00:32:50,230 --> 00:32:53,350 S2: table rather than being forced into a set schedule like 564 00:32:53,350 --> 00:32:57,150 S2: a ten year payout, which would be for a non-spouse. Um, 565 00:32:57,190 --> 00:33:01,510 S2: so bottom line is money doesn't just automatically stop because 566 00:33:01,510 --> 00:33:05,510 S2: you passed, but depending on how she takes it and 567 00:33:05,510 --> 00:33:09,830 S2: the options she has, she could either just continue as 568 00:33:09,830 --> 00:33:13,580 S2: you have, or she can stop it altogether and roll 569 00:33:13,580 --> 00:33:16,100 S2: it into her own account, and then use her age 570 00:33:16,340 --> 00:33:19,020 S2: to to start it up again. Or, you know, she 571 00:33:19,020 --> 00:33:22,500 S2: can continue on a modified basis and her CPA could 572 00:33:22,500 --> 00:33:24,100 S2: help her sort all of that out. 573 00:33:24,740 --> 00:33:30,780 S8: Okay. Now, these, uh, retirement accounts are joint accounts. I mean, 574 00:33:30,820 --> 00:33:35,020 S8: she's a beneficiary anyhow. Or does that change anything or. 575 00:33:35,060 --> 00:33:38,220 S2: Well, there are no joint retirement accounts, so there's only 576 00:33:38,220 --> 00:33:42,100 S2: a single owner, and then there's a beneficiary. Uh, so, 577 00:33:42,420 --> 00:33:45,220 S2: you know, retirement accounts in her name are hers. They're 578 00:33:45,220 --> 00:33:49,820 S2: in your name. They're yours. She's the beneficiary. You pass away, 579 00:33:50,500 --> 00:33:54,420 S2: then you know she receives it as an inherited IRA. 580 00:33:54,460 --> 00:33:57,979 S2: But because she's a surviving spouse at that point, she 581 00:33:57,980 --> 00:34:00,500 S2: has the ability to leave it as an inherited IRA 582 00:34:00,500 --> 00:34:04,180 S2: and use the IRS table or move it into her 583 00:34:04,180 --> 00:34:08,860 S2: own owned IRA, which then is fully hers and subject 584 00:34:08,860 --> 00:34:12,330 S2: to her own rules at that point with regard to 585 00:34:12,370 --> 00:34:13,410 S2: required minimums. 586 00:34:14,130 --> 00:34:18,530 S8: So she can say, okay, I'm just going to leave 587 00:34:18,530 --> 00:34:22,650 S8: that in my account. And the RMD, she can elect 588 00:34:22,650 --> 00:34:25,810 S8: to stop it until she reaches that age. 589 00:34:26,170 --> 00:34:27,969 S2: That's right. She would need to move it out of 590 00:34:27,969 --> 00:34:30,930 S2: the inherited IRA and roll it into her own. But 591 00:34:30,930 --> 00:34:33,290 S2: that would be simple to do. And then she could 592 00:34:33,290 --> 00:34:36,610 S2: stop it at that point and then restart it at 593 00:34:36,610 --> 00:34:42,010 S2: her own age of required minimum, currently 73. Other option 594 00:34:42,010 --> 00:34:44,930 S2: would be she leaves it right where it is as 595 00:34:44,930 --> 00:34:48,250 S2: an inherited IRA, and then she wouldn't be subject to 596 00:34:48,290 --> 00:34:51,850 S2: the ten year distribution like a non-spouse. She would use 597 00:34:51,850 --> 00:34:56,410 S2: the IRS table based on her age to determine how 598 00:34:56,410 --> 00:34:58,770 S2: much needs to be taken out each year. So bottom 599 00:34:58,770 --> 00:35:01,010 S2: line is she's going to have a lot of flexibility 600 00:35:01,010 --> 00:35:04,089 S2: if this plays out the way you're describing where she's 601 00:35:04,090 --> 00:35:07,130 S2: going to be able to do just about anything she wants. Ron, 602 00:35:07,130 --> 00:35:10,010 S2: I hope that helps. Thanks for your call, sir. Tanya, 603 00:35:10,010 --> 00:35:11,720 S2: thanks for your patience. Go right ahead. 604 00:35:12,160 --> 00:35:15,040 S9: Thank you. Rob. Thanks. Thank you for your service to 605 00:35:15,080 --> 00:35:18,040 S9: the Lord and to all of us listening. Thank you. 606 00:35:18,080 --> 00:35:21,399 S9: My question is, my husband and I are helping guide 607 00:35:21,400 --> 00:35:25,760 S9: our young adult son, build credit. And I've been listening 608 00:35:25,800 --> 00:35:29,680 S9: to you regarding this and you've shared about secure credit cards. 609 00:35:29,960 --> 00:35:34,000 S9: I'm also wondering if and how a utility bill can 610 00:35:34,000 --> 00:35:38,000 S9: help build his credit. You've mentioned something about this, and 611 00:35:38,000 --> 00:35:40,720 S9: you talked about reporting that somewhere, and I wasn't sure 612 00:35:40,719 --> 00:35:45,800 S9: where that reporting goes when you report the utility information. 613 00:35:46,080 --> 00:35:52,560 S2: Yeah, yeah. Um, you know, really utilities don't typically, um, 614 00:35:52,680 --> 00:35:56,160 S2: you know, offer any kind of credit. Um, you know, 615 00:35:56,200 --> 00:36:00,920 S2: I like the secure credit card for those just starting out. 616 00:36:00,960 --> 00:36:03,359 S2: You know, that's usually the best option. That's a great 617 00:36:03,360 --> 00:36:05,719 S2: way for a young adult to build credit. They put 618 00:36:05,760 --> 00:36:10,109 S2: a cash deposit, say, 300 to $500. That becomes their 619 00:36:10,110 --> 00:36:13,910 S2: credit limit. And then by using it responsibly and paying 620 00:36:13,910 --> 00:36:16,029 S2: the balance on time and in full each month. And 621 00:36:16,030 --> 00:36:20,870 S2: I'd recommend probably a small recurring bill that's a budgeted item. 622 00:36:20,910 --> 00:36:24,670 S2: Maybe it's a media subscription or something they're planning for 623 00:36:24,710 --> 00:36:27,589 S2: that just hits that that secured credit card. They pay 624 00:36:27,590 --> 00:36:29,710 S2: it off, and that's just going to establish a rhythm 625 00:36:29,710 --> 00:36:34,390 S2: of on time payments to the credit card company that's 626 00:36:34,390 --> 00:36:37,190 S2: then reported to the bureau, and it's going to be 627 00:36:37,190 --> 00:36:40,230 S2: well below the limit. So it might be, you know, 628 00:36:40,270 --> 00:36:43,710 S2: $18 a month with a limit of 500. That's great 629 00:36:43,710 --> 00:36:48,950 S2: because it can keep the credit utilization very low. Normally. 630 00:36:48,950 --> 00:36:51,950 S2: To your point, utility bills don't get reported to the 631 00:36:51,950 --> 00:36:55,190 S2: credit bureaus unless you miss a payment or the and 632 00:36:55,190 --> 00:36:58,870 S2: the account goes to collections. Now the new option is 633 00:36:58,870 --> 00:37:04,189 S2: something called Experian Boost boost. And you could just put 634 00:37:04,190 --> 00:37:07,430 S2: it in your search engine. And this is where the 635 00:37:07,790 --> 00:37:12,710 S2: credit bureaus are starting to allow you to link a utility, 636 00:37:12,750 --> 00:37:15,830 S2: a phone, even a streaming payment. So they show up 637 00:37:15,830 --> 00:37:18,270 S2: on your credit file and it can give you a 638 00:37:18,270 --> 00:37:24,430 S2: small lift. Um, and so I would look at Experian Boost, um, 639 00:37:24,670 --> 00:37:28,910 S2: as one option to accomplish what you're describing. The other 640 00:37:28,910 --> 00:37:30,990 S2: thing you can do, and I'd be careful here because 641 00:37:30,989 --> 00:37:35,470 S2: this is a little dangerous. Um, you can add your 642 00:37:35,469 --> 00:37:38,430 S2: son as an authorized user on your account. Now, here 643 00:37:38,430 --> 00:37:41,390 S2: would be the parameters. Number one, you would do that 644 00:37:41,390 --> 00:37:44,910 S2: just to give him the benefit of the credit only. 645 00:37:45,110 --> 00:37:47,469 S2: I wouldn't give him, you know, the credit card and 646 00:37:47,469 --> 00:37:50,910 S2: just let him start charging on it. Um, and number two, 647 00:37:50,950 --> 00:37:53,750 S2: you need to recognize that all of your credit, good 648 00:37:53,750 --> 00:37:57,790 S2: or bad, flows. Now to his credit report. So if 649 00:37:57,830 --> 00:38:00,910 S2: you've got, you know, your credit utilization is high. Let's 650 00:38:00,910 --> 00:38:04,790 S2: say you're, you know, your credit limits, you know, 10,000 651 00:38:04,989 --> 00:38:08,580 S2: and you were carrying a balance over 3000. Meaning more 652 00:38:08,580 --> 00:38:12,859 S2: than 30%. That's not great. Even though it's an on 653 00:38:12,900 --> 00:38:16,460 S2: time payment, it's not good from a credit utilization standpoint. 654 00:38:16,460 --> 00:38:20,420 S2: So you would only want to do it if you understand, uh, 655 00:38:20,460 --> 00:38:22,620 S2: number one, he's not going to be charging on it. 656 00:38:22,620 --> 00:38:26,419 S2: Number two, any, you know, history from your account is 657 00:38:26,420 --> 00:38:28,100 S2: going to flow over. And if you all missed a 658 00:38:28,100 --> 00:38:30,460 S2: payment that would show up on his credit report. So 659 00:38:30,460 --> 00:38:33,020 S2: you just need to be careful there. Um, but if 660 00:38:33,020 --> 00:38:35,500 S2: you're really just looking for the utilities, that's where I 661 00:38:35,500 --> 00:38:37,980 S2: would check out Experian Boost. Does that make sense? 662 00:38:38,540 --> 00:38:41,580 S9: Yes, that makes sense I thank you, I'd rather be 663 00:38:41,580 --> 00:38:44,819 S9: safe and keep things secure than, um. Can I have 664 00:38:44,820 --> 00:38:45,740 S9: a follow up question? 665 00:38:45,780 --> 00:38:46,660 S2: Absolutely. Go ahead. 666 00:38:47,540 --> 00:38:50,220 S9: Okay. Because my husband and I, we have no debt. 667 00:38:50,260 --> 00:38:52,700 S9: We've been had no debt. We have no house payment, 668 00:38:53,140 --> 00:38:55,940 S9: house debt or anything. And we've been doing this for 669 00:38:55,940 --> 00:39:00,380 S9: many years. Um, when when we do have one credit 670 00:39:00,380 --> 00:39:02,859 S9: card that we have together. And he was on that 671 00:39:02,860 --> 00:39:06,049 S9: with me and we thought we were doing this. We 672 00:39:06,050 --> 00:39:08,969 S9: thought we were doing the authorized user for him so 673 00:39:09,290 --> 00:39:11,969 S9: he would keep his credit going along. We have great 674 00:39:11,969 --> 00:39:17,570 S9: credit 800. But but when we found out that his 675 00:39:17,570 --> 00:39:21,049 S9: credit went away because he was on the card, we 676 00:39:21,050 --> 00:39:24,730 S9: were thinking we were both getting building credit with our 677 00:39:24,730 --> 00:39:28,210 S9: credit card, but we found out that his just disappeared. 678 00:39:28,250 --> 00:39:31,370 S9: Do you have to be specific saying it's an authorized 679 00:39:31,370 --> 00:39:34,969 S9: user and he should with the credit card companies, he 680 00:39:34,969 --> 00:39:38,049 S9: should be getting credit too because I don't know what 681 00:39:38,050 --> 00:39:38,730 S9: happened there. 682 00:39:39,890 --> 00:39:42,690 S2: Interesting. Yeah. So there's a couple of options here. Number 683 00:39:42,690 --> 00:39:44,969 S2: one is, you know, there's there's two ways you can 684 00:39:44,969 --> 00:39:47,850 S2: go about this. One is a joint credit card. This 685 00:39:47,850 --> 00:39:51,089 S2: is not as common, but it is available where you 686 00:39:51,130 --> 00:39:54,650 S2: are co-owners. Uh, you have both have, you know, the 687 00:39:54,650 --> 00:39:59,009 S2: same responsibility in terms of liability. And it's it's absolutely 688 00:39:59,010 --> 00:40:01,290 S2: being reported to both credit files because you have a 689 00:40:01,290 --> 00:40:06,160 S2: joint credit card. The other is an individual owner with 690 00:40:06,160 --> 00:40:08,600 S2: an authorized user, and if you do it that way, 691 00:40:08,760 --> 00:40:11,520 S2: I would make sure you each have a card and 692 00:40:11,520 --> 00:40:14,600 S2: you're the authorized user on the other one, because if 693 00:40:14,600 --> 00:40:17,480 S2: one of you passed away, uh, you, you know, would 694 00:40:17,480 --> 00:40:21,040 S2: have a challenge in terms of there'd be a disruption 695 00:40:21,040 --> 00:40:24,239 S2: while you get a new card open. And so I 696 00:40:24,239 --> 00:40:26,320 S2: think it's just always good to have one that's in 697 00:40:26,360 --> 00:40:29,439 S2: each person's name. Uh, you would want to check with 698 00:40:29,440 --> 00:40:33,759 S2: that particular creditor. Most credit card companies report to the 699 00:40:33,760 --> 00:40:38,040 S2: credit file of both the owner and the authorized user. Um, 700 00:40:38,040 --> 00:40:41,000 S2: it doesn't happen always. And so that could be what's 701 00:40:41,000 --> 00:40:43,640 S2: going on here is you have a creditor that just 702 00:40:43,640 --> 00:40:47,440 S2: doesn't report to the authorized user account. Most of them do. 703 00:40:47,440 --> 00:40:50,000 S2: But I would just call and ask that question because, 704 00:40:50,280 --> 00:40:52,600 S2: you know, if they're saying we're reporting it, then something's 705 00:40:52,600 --> 00:40:55,239 S2: wrong there. It should be showing up with the history. 706 00:40:55,840 --> 00:40:58,560 S9: Okay. Well, thank you for answering my questions. 707 00:40:58,600 --> 00:41:01,319 S2: Absolutely. No problem. Thanks for your call today. Let's go 708 00:41:01,320 --> 00:41:03,200 S2: to Texas. Hi, Archie. How can I help you? 709 00:41:03,600 --> 00:41:06,520 S10: I want to know what it takes to. Are the 710 00:41:06,520 --> 00:41:12,719 S10: concerns and changing financial advisors, either within the investment company 711 00:41:12,719 --> 00:41:15,839 S10: or actually moving out of the investment company? How does 712 00:41:15,840 --> 00:41:16,280 S10: that go? 713 00:41:16,719 --> 00:41:20,840 S2: You know, it's not difficult, Archie, to change advisors. Most 714 00:41:20,840 --> 00:41:24,920 S2: of the time, you can transfer your account what's called in-kind, 715 00:41:25,239 --> 00:41:30,800 S2: meaning your investments move over as is. The only reason 716 00:41:30,800 --> 00:41:35,320 S2: that wouldn't work is if your advisor has you in, 717 00:41:35,360 --> 00:41:39,920 S2: let's say, a mutual fund that the new custodian does 718 00:41:39,920 --> 00:41:43,439 S2: not allow. And so they don't have a relationship or they, 719 00:41:43,480 --> 00:41:47,080 S2: you know, it's a particular fund family that, that they don't, uh, 720 00:41:47,080 --> 00:41:50,400 S2: you know, have on their platform. And in that case 721 00:41:50,440 --> 00:41:54,680 S2: that would need to be liquidated. But in most cases, 722 00:41:55,080 --> 00:41:58,040 S2: you know, the portfolios, you know, as soon as you 723 00:41:58,080 --> 00:42:01,030 S2: sever the relationship with the advisor, the Advisor. The advisor 724 00:42:01,190 --> 00:42:05,270 S2: loses trading privileges, or he or she would no longer 725 00:42:05,310 --> 00:42:08,390 S2: be able to make changes in the account. And then 726 00:42:08,430 --> 00:42:13,070 S2: the new advisor would submit a transfer request and the 727 00:42:13,110 --> 00:42:17,190 S2: portfolio would come over in kind and in the same, 728 00:42:17,350 --> 00:42:19,790 S2: you know, investments that it was in. And then at 729 00:42:19,830 --> 00:42:22,390 S2: that point, the new advisor would then be able to 730 00:42:22,430 --> 00:42:25,950 S2: to take over and begin making changes and swapping things 731 00:42:25,950 --> 00:42:29,509 S2: out or just managing it as is. But it's it's 732 00:42:29,510 --> 00:42:33,950 S2: typically fairly simple. You just, you know, the new custodian 733 00:42:33,950 --> 00:42:37,549 S2: would handle the transfer paperwork. The whole process usually takes 734 00:42:37,550 --> 00:42:38,510 S2: a couple of weeks. 735 00:42:39,070 --> 00:42:39,629 S10: Thank you. 736 00:42:40,150 --> 00:42:42,830 S2: Okay. Thanks for your call, Archie. We appreciate you being 737 00:42:42,830 --> 00:42:45,550 S2: on the program today. Thanks to my team today, Amy, 738 00:42:45,590 --> 00:42:48,110 S2: Dan and Jim, thank you for being here as well. 739 00:42:48,110 --> 00:42:51,430 S2: Faith and Finance Live is a partnership between Moody Radio 740 00:42:51,590 --> 00:42:53,509 S2: and Faith five. I hope you have a great rest 741 00:42:53,510 --> 00:42:55,470 S2: of your day and come back and join us next time. 742 00:42:55,469 --> 00:42:56,710 S2: We'll see you then. Bye bye.