1 00:00:08,440 --> 00:00:11,360 S1: What if the Bible doesn't just give us advice about money, 2 00:00:11,360 --> 00:00:14,960 S1: but reshapes the way we think about it entirely? Hi, 3 00:00:14,960 --> 00:00:18,840 S1: I'm Rob West. The messages we absorb from culture shape 4 00:00:18,840 --> 00:00:22,439 S1: our fears, our goals, and even where we look for security. 5 00:00:22,480 --> 00:00:26,680 S1: But Scripture offers a different foundation, one that brings clarity, freedom, 6 00:00:26,680 --> 00:00:30,880 S1: and purpose to every financial decision. Today, Ron Blue joins 7 00:00:30,880 --> 00:00:34,240 S1: us to explore how the Bible changes everything about money. 8 00:00:34,360 --> 00:00:38,920 S1: And then we'll take your phone calls at 800 525 7000. 9 00:00:39,120 --> 00:00:42,600 S1: This is faith and finance live. Biblical wisdom for your 10 00:00:42,600 --> 00:00:49,720 S1: financial decisions. Our guest today is Ron Blue, co-founder of 11 00:00:49,720 --> 00:00:53,520 S1: Kingdom Advisors and the author of numerous influential books on 12 00:00:53,520 --> 00:00:57,400 S1: stewardship and wise money management. He's been a pioneer in 13 00:00:57,400 --> 00:01:00,730 S1: the world of biblical personal finance and has been a 14 00:01:00,730 --> 00:01:03,529 S1: personal mentor to me for years. Ron, always a joy 15 00:01:03,530 --> 00:01:04,209 S1: to have you here. 16 00:01:04,250 --> 00:01:06,650 S2: Well, likewise. Rob. Good to be with you. 17 00:01:06,970 --> 00:01:09,570 S1: Ron. Let's jump right in. When you look at Scripture, 18 00:01:09,610 --> 00:01:13,450 S1: what's one core assumption about money that it quickly turns 19 00:01:13,450 --> 00:01:14,410 S1: upside down? 20 00:01:14,450 --> 00:01:18,809 S2: Well, I think everybody would look to money to provide security. 21 00:01:19,130 --> 00:01:21,810 S2: We all want to be secure and looking for the 22 00:01:21,810 --> 00:01:24,930 S2: answer to the question, how much do I need? But 23 00:01:24,930 --> 00:01:28,690 S2: Scripture says real security doesn't come from any money at all, 24 00:01:28,690 --> 00:01:32,569 S2: but it comes only from trusting God, and that's eternal security. 25 00:01:33,930 --> 00:01:37,090 S2: The culture trains us to pursue more. I mean, there's 26 00:01:37,090 --> 00:01:39,410 S2: billions of dollars being spent today to make all of 27 00:01:39,410 --> 00:01:40,450 S2: this discontent. 28 00:01:40,610 --> 00:01:41,090 S1: Yes. 29 00:01:41,290 --> 00:01:45,490 S2: Uh, and the Bible calls us to pursue faithfulness, uh, 30 00:01:45,490 --> 00:01:49,930 S2: and not what the culture promises. And money, uh, also 31 00:01:49,930 --> 00:01:54,330 S2: seems to promise certainty. But you know what? We all die. Uh, 32 00:01:54,650 --> 00:01:58,690 S2: and God offers eternal life and stability. That is, eternal 33 00:01:59,010 --> 00:02:00,330 S2: money will never buy it. 34 00:02:00,530 --> 00:02:03,410 S1: Well, for sure. And that really changes the lens, you know? 35 00:02:03,450 --> 00:02:06,210 S1: So many people feel like no matter how much they have, 36 00:02:06,210 --> 00:02:09,530 S1: it's never quite enough. So how does Scripture then reshape 37 00:02:09,530 --> 00:02:12,850 S1: the way we think about the idea of contentment and 38 00:02:12,850 --> 00:02:14,410 S1: where true security is found? 39 00:02:14,450 --> 00:02:17,169 S2: Well, that's one of the most significant questions that you 40 00:02:17,169 --> 00:02:20,770 S2: can ask in Hebrews 13 five says, be content with 41 00:02:20,770 --> 00:02:25,370 S2: what you have. Yeah. So really, contentment is a spiritual 42 00:02:25,370 --> 00:02:30,650 S2: choice and not a financial outcome. And and the Bible also, 43 00:02:30,690 --> 00:02:33,929 S2: by implication says that what you have is enough. And 44 00:02:33,930 --> 00:02:36,609 S2: that's defined by God because he's promised to meet all 45 00:02:36,610 --> 00:02:40,609 S2: of my needs and culture, never will meet my needs. Mhm. 46 00:02:41,370 --> 00:02:45,330 S2: And so we we grow secure and we grow peaceful 47 00:02:45,330 --> 00:02:50,730 S2: and joyful. Uh, and practice gratitude. Uh, when we don't 48 00:02:50,730 --> 00:02:53,850 S2: have to accumulate something, looking for something that'll never give 49 00:02:53,850 --> 00:02:59,380 S2: it to us. And, uh, basically fear kind of drives 50 00:02:59,380 --> 00:03:02,660 S2: all of this. It's the fear of not having enough, 51 00:03:02,660 --> 00:03:06,739 S2: the fear of losing what you do have. But God says, 52 00:03:07,139 --> 00:03:10,260 S2: I am the provider and I will always provide what 53 00:03:10,260 --> 00:03:11,660 S2: you need when you need it. 54 00:03:12,100 --> 00:03:15,180 S1: Mm. That is well said. Ron, here's another message. We 55 00:03:15,220 --> 00:03:18,100 S1: hear all the time that what we have is ours 56 00:03:18,100 --> 00:03:21,940 S1: to own and control. Scripture of course, flips that upside 57 00:03:21,940 --> 00:03:22,980 S1: down as well, doesn't it? 58 00:03:23,020 --> 00:03:26,980 S2: Oh yeah. The Bible clearly, clearly teaches that God owns everything. 59 00:03:26,980 --> 00:03:30,859 S2: He provides everything. He created everything. So naked I came 60 00:03:30,860 --> 00:03:33,179 S2: into the world naked. I'm going to leave. And while 61 00:03:33,180 --> 00:03:37,260 S2: I'm here, I'm a steward. And that shifts my whole 62 00:03:37,260 --> 00:03:42,180 S2: focus of life, from controlling and managing to one of 63 00:03:42,220 --> 00:03:47,620 S2: a responsible trustee for what God has entrusted to me. 64 00:03:48,060 --> 00:03:51,619 S2: So ownership says, what do I want? Stewardship says, what 65 00:03:51,620 --> 00:03:54,740 S2: does God want? And viewing money as belonging to God 66 00:03:54,740 --> 00:03:59,140 S2: changes how we save, spend, give, think and feel. So 67 00:03:59,140 --> 00:04:02,540 S2: it's a big deal when we recognize God's ownership. 68 00:04:03,500 --> 00:04:06,660 S1: Ron. He gives us differing amounts. How do we process 69 00:04:06,660 --> 00:04:08,620 S1: that in light of biblical wisdom? 70 00:04:08,740 --> 00:04:12,220 S2: Well, you know, uh, God treats us, uh, he loves 71 00:04:12,220 --> 00:04:17,380 S2: us equally, but he treats every one of us uniquely. So, uh, 72 00:04:17,380 --> 00:04:20,900 S2: he knows better than I do what I need, uh, 73 00:04:20,900 --> 00:04:23,180 S2: and can provide it. So can I trust him for 74 00:04:23,180 --> 00:04:25,460 S2: what I need? Saying what I have right now is 75 00:04:25,460 --> 00:04:28,299 S2: what I need. Because this is what God provided for me. 76 00:04:28,980 --> 00:04:34,219 S2: And I think this idea, I teach it in wealth transfer, 77 00:04:34,220 --> 00:04:37,020 S2: that if you love your children equally, you'll treat them 78 00:04:37,020 --> 00:04:41,979 S2: uniquely because they're unique human beings. As anybody that has 79 00:04:41,980 --> 00:04:46,380 S2: more than one child knows, uh, and uh, God treats 80 00:04:46,380 --> 00:04:52,580 S2: everybody uniquely. Uh, so that principle, uh, carries over how 81 00:04:52,580 --> 00:04:55,460 S2: I think about money and how I transfer money also. 82 00:04:55,860 --> 00:04:58,430 S1: Mm. That's well said. The key for us is the 83 00:04:58,430 --> 00:05:02,909 S1: next faithful decision. What's your next faithful step today. Ron 84 00:05:02,910 --> 00:05:04,830 S1: Blue has been our guest today Ron. Always a treat 85 00:05:04,830 --> 00:05:05,790 S1: to have you my friend. 86 00:05:06,350 --> 00:05:08,229 S2: Thank you Rob. Thanks for having me. 87 00:05:08,710 --> 00:05:11,590 S1: Ron Blue is the co-founder of Kingdom Advisors. He's written 88 00:05:11,589 --> 00:05:13,630 S1: more than 20 books on this topic. If you'd like 89 00:05:13,630 --> 00:05:18,029 S1: to find an advisor who shares this thinking, go to findacode.com. 90 00:05:18,070 --> 00:05:19,029 S1: We'll be right back. 91 00:05:29,950 --> 00:05:33,190 S3: The opinions offered during this program represent the personal or 92 00:05:33,190 --> 00:05:37,589 S3: professional opinions of the participants, given for informational purposes only. 93 00:05:37,910 --> 00:05:41,310 S3: Any information provided is not intended to replace advice from 94 00:05:41,310 --> 00:05:45,589 S3: a financial, medical, legal, or other professional who understands your 95 00:05:45,589 --> 00:05:47,110 S3: specific situation. 96 00:05:53,950 --> 00:05:56,109 S1: Well, I'm so glad you've joined us today for Faith 97 00:05:56,110 --> 00:05:58,909 S1: and Finance live. I'm Rob West. We're taking your calls 98 00:05:58,910 --> 00:06:03,350 S1: and questions at 800 525 7000. Again, that number is 99 00:06:03,350 --> 00:06:08,950 S1: 800 525 7000. Love having Ron Blue stop by. Always 100 00:06:08,950 --> 00:06:11,430 S1: a treat to have him in the studio. And you know, 101 00:06:11,470 --> 00:06:16,390 S1: as we think about these big ideas around God's perspective 102 00:06:16,390 --> 00:06:19,630 S1: of managing money, it does change everything. When we understand 103 00:06:19,630 --> 00:06:22,030 S1: that God is the owner and we are the stewards, 104 00:06:22,029 --> 00:06:25,710 S1: and that God is our provider, and that enough is 105 00:06:25,710 --> 00:06:29,550 S1: defined by God, not from the culture, and that security 106 00:06:29,589 --> 00:06:34,150 S1: grows from gratitude and trust, not accumulation, and that ultimately 107 00:06:34,270 --> 00:06:37,470 S1: money is a tool. Well, that changes everything about how 108 00:06:37,470 --> 00:06:40,430 S1: we approach money, because money is, in fact a good gift. 109 00:06:40,470 --> 00:06:43,789 S1: I mean, Scripture clearly reminds us that money is meant 110 00:06:43,790 --> 00:06:46,469 S1: to be enjoyed. King Solomon, considered to be the richest 111 00:06:46,470 --> 00:06:50,310 S1: man in the. In the Bible. He wrote everyone also 112 00:06:50,310 --> 00:06:53,910 S1: to whom God has given wealth and possessions and power 113 00:06:53,910 --> 00:06:57,120 S1: to enjoy them and to accept his lot and rejoice 114 00:06:57,120 --> 00:07:00,279 S1: in his toil. This is a gift from God. So 115 00:07:00,320 --> 00:07:03,520 S1: money and any gift God gives can add meaning to 116 00:07:03,560 --> 00:07:06,400 S1: your life, but it's not the meaning of life. We 117 00:07:06,400 --> 00:07:11,360 S1: also understand that money is highly spiritual. It really serves 118 00:07:11,400 --> 00:07:15,040 S1: as a means of exchange. But how we use it 119 00:07:15,160 --> 00:07:19,960 S1: is profoundly spiritual, because every financial decision has the potential 120 00:07:20,120 --> 00:07:23,000 S1: to either draw us closer to God or pull our 121 00:07:23,000 --> 00:07:26,400 S1: trust towards something else. Remember the Apostle Paul wrote, the 122 00:07:26,400 --> 00:07:29,440 S1: love of money is a root of all kinds of evil. 123 00:07:29,720 --> 00:07:31,880 S1: But I would say, thirdly, that money is meant for 124 00:07:31,880 --> 00:07:35,480 S1: kingdom impact. You know, everything you've earned, saved, built or 125 00:07:35,480 --> 00:07:39,400 S1: invested flows from God's hand is and it is intended 126 00:07:39,520 --> 00:07:43,120 S1: to serve people and glorify him. God is the giver. 127 00:07:43,120 --> 00:07:45,880 S1: Money is the tool. In other words, you can't serve 128 00:07:45,920 --> 00:07:49,560 S1: God and money. That's clear, but you can serve God 129 00:07:49,560 --> 00:07:54,040 S1: with money. It's a temporary tool to make an eternal impact. 130 00:07:54,080 --> 00:07:57,160 S1: And when we look at money that way, and we 131 00:07:57,160 --> 00:08:01,520 S1: ask the question that every dollar carries, will this serve 132 00:08:01,520 --> 00:08:05,120 S1: me or will it serve God? It is a game changer. 133 00:08:05,280 --> 00:08:07,000 S1: Because at the end of the day, as I said, 134 00:08:07,000 --> 00:08:09,440 S1: you can't serve God and money, but you can serve 135 00:08:09,440 --> 00:08:12,080 S1: God with money. And I hope you'll think about that. 136 00:08:12,080 --> 00:08:14,960 S1: And just by listening to this program each day, you'll 137 00:08:15,000 --> 00:08:17,760 S1: be confronted with some of these truths that point you 138 00:08:17,760 --> 00:08:21,520 S1: back to the Lord himself, to our position and identity 139 00:08:21,520 --> 00:08:24,680 S1: in him, not in the things of this world. However, 140 00:08:24,920 --> 00:08:28,520 S1: I realize you've got actual questions. You've got things going on. 141 00:08:28,520 --> 00:08:31,160 S1: You need to make decisions on a daily basis about 142 00:08:31,160 --> 00:08:33,720 S1: how you prioritize the use of money and whether to 143 00:08:33,760 --> 00:08:37,280 S1: pay down debt or invest. And how do you give wisely? 144 00:08:37,280 --> 00:08:40,320 S1: And what about investing for the future, the long term, 145 00:08:40,320 --> 00:08:43,120 S1: and how do you plan for that fourth quarter of 146 00:08:43,120 --> 00:08:46,000 S1: life with Social Security and retirement? What about preparing the 147 00:08:46,000 --> 00:08:49,160 S1: next steward? I mean, so many questions come up from 148 00:08:49,160 --> 00:08:51,480 S1: God's people that just want to be found faithful, but 149 00:08:51,480 --> 00:08:54,610 S1: also need some practical counsel and that's why we're here 150 00:08:54,610 --> 00:08:56,770 S1: each day. So if you've got one of those questions, 151 00:08:56,770 --> 00:08:59,730 S1: call right now. We'll begin to take those here in 152 00:08:59,730 --> 00:09:02,730 S1: just a moment. Beginning in Georgia with Anne's call the 153 00:09:02,730 --> 00:09:09,890 S1: number 800 525 7000. That's 800 525 7000. All right. 154 00:09:09,890 --> 00:09:12,410 S1: Let's begin with that first caller and go right ahead. 155 00:09:12,450 --> 00:09:15,370 S4: Hi. My name is Anne. I have a 78 year 156 00:09:15,410 --> 00:09:18,330 S4: old brother, and he has a mortgage on his home. 157 00:09:18,330 --> 00:09:21,569 S4: And the mortgage rates are, like 2.2%. So I want 158 00:09:21,570 --> 00:09:24,770 S4: to know if I should pay off his mortgage or 159 00:09:25,490 --> 00:09:28,569 S4: should we keep it since it's a low interest rate 160 00:09:28,850 --> 00:09:32,449 S4: and invest in something else? Yeah, invest it in another way. 161 00:09:33,050 --> 00:09:34,930 S1: Well, you know, here's what I would say. It's never 162 00:09:34,929 --> 00:09:36,770 S1: a bad idea to pay off debt. And if you 163 00:09:36,770 --> 00:09:40,050 S1: have a conviction from the Lord to be debt free, 164 00:09:40,050 --> 00:09:42,850 S1: I would say go for it and don't look back. 165 00:09:43,170 --> 00:09:46,490 S1: But if we start with the math, because really, this 166 00:09:46,490 --> 00:09:50,250 S1: is both a values and a stewardship conversation, not just 167 00:09:50,250 --> 00:09:54,730 S1: a math equation. But let's begin with the math. At 2.2%, 168 00:09:54,730 --> 00:10:00,650 S1: that mortgage is extremely inexpensive debt. Historically, a balanced investment 169 00:10:00,650 --> 00:10:05,370 S1: portfolio might do, you know, 7% over time, at least 170 00:10:05,370 --> 00:10:08,570 S1: 5 to 7% with a balanced portfolio. I mean, stocks 171 00:10:08,570 --> 00:10:13,570 S1: and bonds, which is meaningfully higher than 2.2. So from 172 00:10:13,570 --> 00:10:17,850 S1: a purely financial perspective, you know, it would usually make 173 00:10:17,850 --> 00:10:20,450 S1: more sense to keep the money invested. At the very least, 174 00:10:20,450 --> 00:10:23,370 S1: just keep it in a high yield savings account. Continue 175 00:10:23,370 --> 00:10:27,290 S1: to make the mortgage payments because the investments could outpace 176 00:10:27,290 --> 00:10:31,130 S1: the cost of the loan. And you retain the liquidity, 177 00:10:31,170 --> 00:10:33,810 S1: the flexibility, because you still have access to the money, 178 00:10:33,809 --> 00:10:38,170 S1: which it's a bit harder to get to once you, uh, 179 00:10:38,170 --> 00:10:39,570 S1: you know, put it into the home, you're going to 180 00:10:39,570 --> 00:10:44,050 S1: have to borrow it back out or sell the property. Now, 181 00:10:44,090 --> 00:10:47,610 S1: at this stage of life, you know, at 78, the 182 00:10:47,610 --> 00:10:53,780 S1: key priorities often become simplicity, Liquidity. Having access to the funds. 183 00:10:53,900 --> 00:10:58,339 S1: Peace of mind and estate planning. So the question really 184 00:10:58,340 --> 00:11:02,220 S1: becomes is the mortgage a burden or is it just 185 00:11:02,220 --> 00:11:07,220 S1: another manageable monthly bill? And you know, if again, you 186 00:11:07,220 --> 00:11:10,020 S1: have a conviction or he does to be debt free, 187 00:11:10,059 --> 00:11:13,740 S1: if the payment is stressful, you know, if his, uh, 188 00:11:13,740 --> 00:11:18,100 S1: you know, he just wants to simplify things, then paying 189 00:11:18,100 --> 00:11:21,740 S1: it off might make more sense than trying to squeeze 190 00:11:21,740 --> 00:11:24,700 S1: out a little bit of extra return. But let me 191 00:11:24,700 --> 00:11:26,660 S1: stop there and just get your thoughts on all that. 192 00:11:26,860 --> 00:11:29,860 S4: All makes sense. I mean, because he's debt free, other 193 00:11:29,860 --> 00:11:33,459 S4: than the, um, the mortgage on his home, um, he 194 00:11:33,460 --> 00:11:36,939 S4: has an emergency fund already, but I've always heard it's 195 00:11:36,940 --> 00:11:40,380 S4: good to pay off your mortgage. So that's what I'm saying. Well, 196 00:11:41,660 --> 00:11:44,780 S4: you know, but it's not a problem. You know, it's 197 00:11:44,780 --> 00:11:47,580 S4: not like squeezing into any of the other funds and stuff. 198 00:11:47,620 --> 00:11:52,740 S4: He's managing, um, to pay off his mortgage and meet 199 00:11:52,740 --> 00:11:55,060 S4: his daily needs and stuff. 200 00:11:55,380 --> 00:11:56,500 S5: But does he? 201 00:11:57,540 --> 00:11:58,380 S4: I'm sorry. Go ahead. 202 00:11:58,420 --> 00:12:00,660 S1: Sure. No, no, I'm sorry to interrupt. I was just 203 00:12:00,660 --> 00:12:04,260 S1: going to ask where. How does he feel about this? Uh, 204 00:12:04,380 --> 00:12:06,380 S1: would he like to be debt free, or is he 205 00:12:06,420 --> 00:12:09,100 S1: comfortable just continuing to pay this off over time? 206 00:12:09,660 --> 00:12:14,060 S4: Well, I'm his caregiver, so right now he doesn't have 207 00:12:14,059 --> 00:12:17,260 S4: really the capacity to make those decisions. 208 00:12:17,300 --> 00:12:19,940 S1: I see. Okay, so that's really your call. Yeah. So 209 00:12:19,940 --> 00:12:22,740 S1: I think, you know, here's the reality is, is it 210 00:12:22,780 --> 00:12:26,780 S1: wise to pay off debt? Yes. Is it something that, 211 00:12:26,820 --> 00:12:29,860 S1: you know, a priority that we should ultimately be completely 212 00:12:29,860 --> 00:12:34,300 S1: debt free, including our homes? Absolutely. But in this case, 213 00:12:34,300 --> 00:12:37,939 S1: given the fact that you're giving care, the money's there, 214 00:12:37,980 --> 00:12:40,740 S1: meaning you could pay it off at any time. It's 215 00:12:40,740 --> 00:12:44,740 S1: a very low interest rate. He's living modestly with everything 216 00:12:44,740 --> 00:12:47,820 S1: else because there's no other debt. He's living simply. And 217 00:12:47,820 --> 00:12:50,829 S1: for you, it's just kind of a simple monthly payment 218 00:12:50,830 --> 00:12:53,589 S1: with a very low cost of debt, meaning very low 219 00:12:53,590 --> 00:12:57,270 S1: interest rate. Then I don't think I feel compelled to 220 00:12:57,309 --> 00:13:00,910 S1: you going and paying this off immediately, especially because as 221 00:13:00,910 --> 00:13:04,270 S1: soon as you do, that money is now illiquid, meaning 222 00:13:04,270 --> 00:13:06,510 S1: you can't get to it if you needed it for 223 00:13:06,510 --> 00:13:09,829 S1: something else related to his care. And so I think 224 00:13:09,830 --> 00:13:12,870 S1: that might kind of skew in the direction of, let's 225 00:13:12,870 --> 00:13:15,390 S1: just keep paying this out over time at this very 226 00:13:15,390 --> 00:13:18,550 S1: low rate. But if it gave you more peace of mind, 227 00:13:18,550 --> 00:13:20,670 S1: or he had a conviction around it when he had 228 00:13:20,670 --> 00:13:24,110 S1: the capacity, you know, to to think about these things 229 00:13:24,150 --> 00:13:27,150 S1: or you're just looking to simplify things, never a bad 230 00:13:27,150 --> 00:13:29,990 S1: idea and just to get completely out of debt, including 231 00:13:29,990 --> 00:13:30,350 S1: your home. 232 00:13:30,390 --> 00:13:32,590 S4: All right. I have one more question for you. If that. Okay. 233 00:13:32,950 --> 00:13:33,990 S1: Sure. Real quick. 234 00:13:34,910 --> 00:13:38,710 S4: The same brother has property in another state. I want 235 00:13:38,750 --> 00:13:42,189 S4: to sell it, but it's next to our like family 236 00:13:42,190 --> 00:13:45,590 S4: property and they want us to sell it back to them. 237 00:13:46,710 --> 00:13:50,429 S4: I'm thinking we'll make more of an investment if we 238 00:13:50,470 --> 00:13:54,470 S4: sell it to the investment company, approach to selling it 239 00:13:54,470 --> 00:13:55,550 S4: back to family. 240 00:13:55,870 --> 00:13:59,470 S1: Yeah, yeah. Well, yeah, I mean that that can be 241 00:13:59,470 --> 00:14:01,550 S1: a little sticky. So let's do this. I'd love to 242 00:14:01,590 --> 00:14:03,750 S1: weigh in on that. And, uh, Barbara, I'm coming your 243 00:14:03,750 --> 00:14:06,390 S1: way as well there in Illinois. So, uh, after the 244 00:14:06,390 --> 00:14:08,870 S1: break in, if you don't mind holding, holding. I'd love 245 00:14:08,870 --> 00:14:11,190 S1: to weigh in on that question of how to think 246 00:14:11,190 --> 00:14:15,590 S1: about that property and the relational dynamics with family versus 247 00:14:15,590 --> 00:14:17,910 S1: selling it on the open market. So stay right there. 248 00:14:17,950 --> 00:14:20,310 S1: This is faith and finance live. We'll be right back. 249 00:14:25,270 --> 00:14:27,030 S1: Great to have you with us today on Faith and 250 00:14:27,030 --> 00:14:29,950 S1: finance live I'm Rob West. Hey we've got some lines open, 251 00:14:29,950 --> 00:14:32,870 S1: which just simply means if you've got a financial question, 252 00:14:33,030 --> 00:14:36,230 S1: we've got answers. Here's our promise to always give you 253 00:14:36,270 --> 00:14:39,390 S1: wisdom that we find rooted in God's word doesn't mean 254 00:14:39,390 --> 00:14:43,710 S1: we'll always get it right. Uh, because we're not always. 255 00:14:43,750 --> 00:14:46,110 S1: We're certainly not perfect, but we do know God's Word 256 00:14:46,110 --> 00:14:49,120 S1: is the source. And so we want to derive our 257 00:14:49,120 --> 00:14:52,760 S1: perspective and our worldview about money and the principles we 258 00:14:52,760 --> 00:14:56,760 S1: apply to today's decisions in Scripture. And we do that 259 00:14:56,760 --> 00:14:58,600 S1: each day as we gather together. So if you've got 260 00:14:58,600 --> 00:15:03,040 S1: a question, call right now 800 525 7000. That's 800 261 00:15:03,080 --> 00:15:06,320 S1: 525 7000. Before the break, we were talking to Anne 262 00:15:06,320 --> 00:15:10,040 S1: and Georgia. Anne is caring for her 78 year old 263 00:15:10,040 --> 00:15:15,080 S1: brother who is incapacitated. He's not able to manage his 264 00:15:15,120 --> 00:15:17,920 S1: financial affairs, so she's stepped into that. We were talking 265 00:15:17,920 --> 00:15:21,000 S1: about whether or not to pay off his mortgage, but 266 00:15:21,000 --> 00:15:23,120 S1: she had a follow up question, and that is he 267 00:15:23,120 --> 00:15:26,320 S1: has a piece of real estate in another property. She 268 00:15:26,320 --> 00:15:29,640 S1: would like to sell it to maximize the value of 269 00:15:29,640 --> 00:15:33,680 S1: this property that he owns, because it's a part of 270 00:15:33,880 --> 00:15:38,000 S1: his overall investments that she's using to care for him. 271 00:15:38,360 --> 00:15:41,560 S1: And she's got a or there's a cousin that would 272 00:15:41,560 --> 00:15:43,520 S1: like to buy the property. In fact, it was the 273 00:15:43,520 --> 00:15:47,530 S1: cousin that originally sold it to her brother. and, um, 274 00:15:47,610 --> 00:15:51,290 S1: she wants to just as asking, how do I navigate that? 275 00:15:51,290 --> 00:15:53,930 S1: I don't want to take a discount on it. I'd 276 00:15:54,290 --> 00:15:56,450 S1: be happy to sell it out on the open market. 277 00:15:56,570 --> 00:15:58,730 S1: But how do I think about it in light of 278 00:15:58,730 --> 00:16:01,890 S1: the fact that this there's a family member involved here 279 00:16:01,890 --> 00:16:04,890 S1: who may want this? And, you know, I think really 280 00:16:04,890 --> 00:16:11,250 S1: clear communication, uh, about this that's kind and objective is 281 00:16:11,250 --> 00:16:15,250 S1: really important. So I would start with the principle here 282 00:16:15,250 --> 00:16:19,130 S1: and which is as his caretaker, you have a responsibility 283 00:16:19,130 --> 00:16:22,490 S1: to act in his best interest. And that naturally means 284 00:16:22,490 --> 00:16:26,410 S1: selling the property at what's called fair market value, uh, 285 00:16:26,410 --> 00:16:28,970 S1: just as you would with any buyer. So you might 286 00:16:28,970 --> 00:16:33,130 S1: say something like, hey, because I'm managing my brother's finances, I've. 287 00:16:33,330 --> 00:16:36,050 S1: I need to make sure that anything we sell is 288 00:16:36,050 --> 00:16:38,370 S1: done at fair market value. We'd love for you to 289 00:16:38,410 --> 00:16:40,810 S1: have the property if you want it so it stays 290 00:16:40,810 --> 00:16:43,090 S1: in the family. But we need to treat it the 291 00:16:43,090 --> 00:16:46,090 S1: same way we would with any other buyer. and then 292 00:16:46,090 --> 00:16:50,490 S1: you would use an objective process to determine the market value, 293 00:16:50,490 --> 00:16:53,370 S1: not just something you come up with, but you want 294 00:16:53,410 --> 00:16:57,170 S1: to point to what's called an outside valuation, because that's 295 00:16:57,170 --> 00:17:01,170 S1: going to remove the emotion involved here, especially because there's 296 00:17:01,530 --> 00:17:05,250 S1: family dynamics involved. And the simplest way to do that 297 00:17:05,250 --> 00:17:09,250 S1: is to have the property appraised from a real estate 298 00:17:09,250 --> 00:17:13,050 S1: appraiser who is going to be able to determine the 299 00:17:13,050 --> 00:17:16,169 S1: market value of the property. And then if your family 300 00:17:16,170 --> 00:17:18,530 S1: member would like to buy it at that price, you'd 301 00:17:18,570 --> 00:17:23,090 S1: absolutely be open to that. And I would emphasize fairness 302 00:17:23,090 --> 00:17:26,970 S1: to everyone, as you know, making sure that you're doing 303 00:17:26,970 --> 00:17:29,610 S1: the right thing to serve him and making sure that 304 00:17:29,609 --> 00:17:33,610 S1: your family member doesn't overpay beyond what anybody else would 305 00:17:33,609 --> 00:17:36,370 S1: be expected to pay if they were to buy it. Now, 306 00:17:36,730 --> 00:17:39,330 S1: could this family member think that because it's in the family, 307 00:17:39,330 --> 00:17:43,290 S1: she's entitled to a discount? That's possible, but I think 308 00:17:43,290 --> 00:17:46,980 S1: that would be inappropriate in the sense that it she. 309 00:17:47,020 --> 00:17:51,980 S1: It's very reasonable for you to expect to get the 310 00:17:51,980 --> 00:17:55,260 S1: fair market value, especially given the role you serve in 311 00:17:55,420 --> 00:17:58,699 S1: as his caretaker and and his fiduciary. But does that 312 00:17:58,700 --> 00:17:59,580 S1: all make sense? 313 00:17:59,619 --> 00:18:02,740 S4: Makes a lot of sense. I didn't know the verbiage 314 00:18:02,740 --> 00:18:05,100 S4: to use. So I was writing down what you said. 315 00:18:05,140 --> 00:18:07,419 S4: And it makes a whole lot of sense to approach 316 00:18:07,420 --> 00:18:08,220 S4: it that way. 317 00:18:09,220 --> 00:18:11,460 S1: Very good. Last thing I'll say is to get that 318 00:18:11,460 --> 00:18:15,220 S1: appraisal done, you're probably going to want to contact a 319 00:18:15,220 --> 00:18:19,699 S1: local real estate professional in the area, uh, where the 320 00:18:19,700 --> 00:18:25,060 S1: property is located, and just ask for their recommended appraiser 321 00:18:25,300 --> 00:18:28,460 S1: and they'll all have one. And that would be very easy. 322 00:18:28,460 --> 00:18:33,580 S1: And then you've got an objective third party professional evaluation 323 00:18:33,580 --> 00:18:37,500 S1: of the property value. And whatever it is, is, is 324 00:18:37,540 --> 00:18:41,740 S1: what you would be expected to receive from your family 325 00:18:41,740 --> 00:18:44,540 S1: member or from someone else. So And thanks for your 326 00:18:44,540 --> 00:18:47,100 S1: call today. Call anytime if we can help. Lord bless you. 327 00:18:47,140 --> 00:18:48,859 S1: Let's go to Illinois. Barbara. Go ahead. 328 00:18:48,900 --> 00:18:51,060 S6: Hi, Rob. Thank you for taking my call. I have 329 00:18:51,060 --> 00:18:55,500 S6: a four part question. What are these? And at what 330 00:18:55,500 --> 00:18:59,020 S6: age are you supposed to start taking them? And is 331 00:18:59,020 --> 00:19:02,300 S6: it taxed when it's taken out? And is it on 332 00:19:02,300 --> 00:19:05,659 S6: all investments or just on the Roth IRA? 333 00:19:06,420 --> 00:19:09,700 S1: Yeah. Great questions. Uh, so let me start at the beginning. 334 00:19:09,820 --> 00:19:13,859 S1: When do you take a required minimum distribution? Most people 335 00:19:13,900 --> 00:19:18,580 S1: begin taking them at 73. There was a recent change 336 00:19:18,580 --> 00:19:22,500 S1: in the law. And if you were born in 1960 337 00:19:22,540 --> 00:19:27,379 S1: or later, uh, it's going to be now 75 as 338 00:19:27,380 --> 00:19:30,860 S1: the RMD age. So they've moved it up and it 339 00:19:30,859 --> 00:19:33,940 S1: has to be taken by April 1st of the year. 340 00:19:34,260 --> 00:19:39,619 S1: You turn the year following the, uh, when you turn 73, 341 00:19:39,660 --> 00:19:42,660 S1: unless yours is 75. And then it has to be 342 00:19:42,750 --> 00:19:48,070 S1: taken by December 31st. Um, you know, every year thereafter. Um, 343 00:19:48,190 --> 00:19:50,830 S1: what type of accounts do you have to take him 344 00:19:50,830 --> 00:19:53,190 S1: RMD on? You do not have to take it on 345 00:19:53,190 --> 00:19:56,350 S1: a Roth that does that does not qualify. We're talking 346 00:19:56,350 --> 00:20:03,030 S1: about traditional accounts. So traditional IRAs 401 403 B's. Anything 347 00:20:03,030 --> 00:20:06,670 S1: that was pre-tax meaning you got the deduction when it 348 00:20:06,670 --> 00:20:10,510 S1: went in has a required minimum. Once you get to 349 00:20:10,550 --> 00:20:15,709 S1: the appropriate age. Based on the current law, Roth IRAs 350 00:20:15,710 --> 00:20:20,350 S1: and Roth 401 s are not subject to that required minimum. 351 00:20:20,350 --> 00:20:22,310 S1: But let me stop there. Is that helpful? 352 00:20:22,470 --> 00:20:24,710 S6: Yes, it is very helpful. Thank you so. 353 00:20:24,710 --> 00:20:26,390 S1: Much. Was there a was there another part to that 354 00:20:26,390 --> 00:20:27,470 S1: that I didn't cover? 355 00:20:28,390 --> 00:20:31,590 S6: No. I asked if it was taxed but. Oh yeah. 356 00:20:31,630 --> 00:20:35,590 S1: And it is. Yes. As it comes out it is taxable. 357 00:20:35,590 --> 00:20:38,150 S1: It gets added to your taxable income for the year. 358 00:20:38,150 --> 00:20:41,710 S1: However there's one way to get around that and it's 359 00:20:41,830 --> 00:20:44,990 S1: if you want to take that required minimum and give 360 00:20:44,990 --> 00:20:48,390 S1: it to a charity like your church or another 501 361 00:20:48,430 --> 00:20:52,710 S1: C3 ministry, as long as you're 70.5, you have the 362 00:20:52,710 --> 00:20:58,510 S1: option of sending that money straight from the IRA to 363 00:20:58,550 --> 00:21:02,750 S1: the charity. It's called a qualified charitable distribution. It does 364 00:21:02,750 --> 00:21:06,310 S1: not get added to your taxable income. The charity gets 365 00:21:06,310 --> 00:21:10,550 S1: the full amount and it's counted against your required minimum 366 00:21:10,550 --> 00:21:13,870 S1: for the year. But you got to be 70.5. Make sense. 367 00:21:14,150 --> 00:21:15,670 S6: Okay. Yes. Makes sense. 368 00:21:16,030 --> 00:21:16,389 S1: Okay. 369 00:21:16,430 --> 00:21:17,270 S6: Thank you so very much. 370 00:21:17,510 --> 00:21:21,070 S1: You're very welcome. Hey, Christie. Coming your way in Indiana 371 00:21:21,070 --> 00:21:24,070 S1: right after this break. And perhaps your questions as well. 372 00:21:24,070 --> 00:21:26,430 S1: So if you've got one, now's the time to call. 373 00:21:26,430 --> 00:21:33,790 S1: Here's the number 800 525 7000. That's 800 525 7000. 374 00:21:33,830 --> 00:21:36,710 S1: You know, money, it can cause a lot of problems. 375 00:21:36,710 --> 00:21:40,230 S1: If we put it in its place. It was never intended. 376 00:21:40,230 --> 00:21:41,960 S1: We want to help you put it in the proper 377 00:21:41,960 --> 00:21:45,080 S1: place on this program. We'll do that right after this break. 378 00:21:52,280 --> 00:21:54,600 S1: Thanks for joining us today on Faith and Finance Live. 379 00:21:54,600 --> 00:21:56,840 S1: I'm Rob West. We're taking your calls and questions and 380 00:21:56,840 --> 00:21:58,840 S1: we've got room for you at the moment. Uh, plenty 381 00:21:58,840 --> 00:22:05,320 S1: of lines open at 800 525 7000. That's 800 525 7000. 382 00:22:05,440 --> 00:22:07,960 S1: Let's go to Indiana, Christy. Go right ahead. 383 00:22:08,600 --> 00:22:10,639 S7: Hi. Yeah, I just had a question. My husband and 384 00:22:10,640 --> 00:22:14,160 S7: I sold our previous home, and we weren't sure if 385 00:22:14,160 --> 00:22:16,760 S7: it would be better to pay off our our new 386 00:22:16,800 --> 00:22:21,879 S7: home or combine it with. We already have around 169,000 387 00:22:21,920 --> 00:22:26,000 S7: in a CD, plus the 300,000 that we made from 388 00:22:26,040 --> 00:22:29,240 S7: selling the home. So we were thinking it might be 389 00:22:29,240 --> 00:22:31,520 S7: better to put that money, combine it, and put it 390 00:22:31,520 --> 00:22:34,920 S7: somewhere to grow money. Or should we just pay off 391 00:22:34,920 --> 00:22:35,639 S7: our home? 392 00:22:35,680 --> 00:22:39,040 S1: Yes. Okay. And do you know the interest rate that 393 00:22:39,040 --> 00:22:39,760 S1: you have on it? 394 00:22:41,119 --> 00:22:43,320 S7: Actually I don't right off hand. I'm sorry. 395 00:22:43,359 --> 00:22:48,400 S1: Okay. Yeah. No problem. Um, so you have 169,000 in 396 00:22:48,400 --> 00:22:53,520 S1: a CD. You've got 300,000 310,000 from the sale of 397 00:22:53,520 --> 00:22:58,520 S1: your previous home. So you've got about $480,000. What did 398 00:22:58,520 --> 00:22:59,880 S1: you pay for the new home? 399 00:23:00,119 --> 00:23:04,840 S7: Uh, two, 280,000, I think, is what, or 290,000. But 400 00:23:04,840 --> 00:23:06,520 S7: I think we owe 280. 401 00:23:07,119 --> 00:23:09,720 S1: Okay, so you only put $10,000 down. 402 00:23:10,359 --> 00:23:11,000 S7: Right. 403 00:23:11,359 --> 00:23:15,840 S1: Okay. And, uh, this is your new primary residence. Is 404 00:23:15,840 --> 00:23:16,440 S1: that right? 405 00:23:17,000 --> 00:23:17,680 S7: Right. 406 00:23:18,000 --> 00:23:20,080 S1: And are you planning to stay in this property for 407 00:23:20,080 --> 00:23:20,880 S1: a long time? 408 00:23:21,520 --> 00:23:22,520 S7: Yes we do. 409 00:23:23,040 --> 00:23:26,760 S1: Okay. Yeah, I would I mean, I would just kind 410 00:23:26,800 --> 00:23:29,479 S1: of roll this into the next property and pay it 411 00:23:29,480 --> 00:23:34,400 S1: off for one reason. Until you get to a 20% down. Uh, 412 00:23:34,440 --> 00:23:36,640 S1: and right now, you're you're quite a bit less than that, 413 00:23:36,640 --> 00:23:42,330 S1: with only 10,000 against $290,000 home. You're paying private mortgage 414 00:23:42,330 --> 00:23:47,210 S1: insurance PMI, which is 1% of the mortgage balance, which 415 00:23:47,210 --> 00:23:50,010 S1: doesn't do anything for you. It's just an added expense 416 00:23:50,010 --> 00:23:51,930 S1: that you have to pay to the mortgage company because 417 00:23:51,930 --> 00:23:54,130 S1: you only have a little bit of equity in the home. 418 00:23:54,770 --> 00:23:58,290 S1: But beyond that, if you're at prevailing rates, let's say 419 00:23:58,290 --> 00:24:00,450 S1: you're at 7%. Or maybe you were a little less 420 00:24:00,450 --> 00:24:04,810 S1: than that, but at 7% with this money not being 421 00:24:04,810 --> 00:24:07,010 S1: in a retirement account, which it's not, it's in a 422 00:24:07,010 --> 00:24:10,770 S1: taxable account. If you were to go invest that, um, 423 00:24:11,170 --> 00:24:14,050 S1: you know, even if you were, your investments were, you know, 424 00:24:14,090 --> 00:24:17,930 S1: long term capital gains, uh, you know, you would need 425 00:24:17,930 --> 00:24:22,690 S1: to get eight, 8.5% so that after tax you would 426 00:24:22,690 --> 00:24:27,050 S1: just break even in terms of covering the cost of 427 00:24:27,050 --> 00:24:30,530 S1: the mortgage. Um, and that's quite a bit, you know, 428 00:24:30,570 --> 00:24:34,450 S1: that you would need to get consistently over time. Uh, 429 00:24:34,450 --> 00:24:39,570 S1: so I think for that reason, I'd probably Rather you, uh, 430 00:24:39,570 --> 00:24:42,530 S1: you know, just go ahead and pay it off. Get 431 00:24:42,530 --> 00:24:47,010 S1: rid of that mortgage payment that you have now. Save 100% 432 00:24:47,010 --> 00:24:49,930 S1: of that interest, which even if it's 6%, that's not 433 00:24:49,930 --> 00:24:52,570 S1: a bad rate of return guaranteed, which is what you'd 434 00:24:52,570 --> 00:24:55,970 S1: have as soon as you pay off that loan. Uh, 435 00:24:55,970 --> 00:24:58,490 S1: and then you get rid of the mortgage payment, which 436 00:24:58,490 --> 00:25:02,450 S1: means now, if you want to invest, you know, beyond 437 00:25:02,890 --> 00:25:05,649 S1: what you would need. I mean, so if you've got, uh, 438 00:25:05,650 --> 00:25:08,250 S1: you owe 280 on the house and you've got 480, 439 00:25:08,290 --> 00:25:12,409 S1: you still have 200,000 invested, 40,000 or 30,000 more than 440 00:25:12,410 --> 00:25:14,530 S1: you have now in the CD. And if you want 441 00:25:14,570 --> 00:25:17,530 S1: to keep adding to that, we'll take 100% of that 442 00:25:17,530 --> 00:25:20,490 S1: mortgage payment that you were sending to the mortgage company 443 00:25:20,570 --> 00:25:23,810 S1: and send that to your investment account and invest that 444 00:25:23,810 --> 00:25:26,930 S1: every month. But, you know, that gives you added peace 445 00:25:26,930 --> 00:25:30,209 S1: of mind. It gives you a guaranteed return equal to 446 00:25:30,250 --> 00:25:33,570 S1: the interest rate. You know, it, um, you know, really 447 00:25:33,570 --> 00:25:35,650 S1: saves you from taking, you know, a good bit of 448 00:25:35,650 --> 00:25:38,980 S1: risk so that you could pay the taxes and still 449 00:25:39,020 --> 00:25:41,460 S1: break even. And, you know, I think at the end 450 00:25:41,460 --> 00:25:44,619 S1: of the day, it's just really going to simplify things 451 00:25:44,619 --> 00:25:47,899 S1: and set you up so that when you, you know, 452 00:25:47,980 --> 00:25:50,780 S1: get into retirement and we haven't talked about your work status, 453 00:25:50,780 --> 00:25:53,300 S1: maybe you're already there, but it's just going to take 454 00:25:53,340 --> 00:25:56,419 S1: your largest expense off the table, which just makes it 455 00:25:56,420 --> 00:26:00,140 S1: a lot easier to balance the budget and live modestly. 456 00:26:00,140 --> 00:26:01,460 S1: But give me your thoughts on all that. 457 00:26:01,500 --> 00:26:03,740 S7: Yeah, that sounds good. We were kind of thinking that, 458 00:26:03,740 --> 00:26:05,900 S7: but we just weren't really sure because my husband's getting 459 00:26:05,900 --> 00:26:10,100 S7: ready to retire and he's, you know, so we just 460 00:26:10,500 --> 00:26:12,540 S7: was thinking that might be the better thing to not 461 00:26:12,540 --> 00:26:14,700 S7: have the monthly mortgage anyway. 462 00:26:14,900 --> 00:26:17,619 S1: Yeah. And if you said to me, listen, I've got 463 00:26:17,619 --> 00:26:21,900 S1: 480,000 in a 401 K, well, that'd be a whole 464 00:26:21,900 --> 00:26:24,100 S1: different ball game because in order to get it out, 465 00:26:24,340 --> 00:26:27,140 S1: you would have to pay a big tax bill on it. 466 00:26:27,140 --> 00:26:29,500 S1: But that's not what we've got. We've got money sitting 467 00:26:29,500 --> 00:26:33,300 S1: in a taxable account after tax dollars that would have 468 00:26:33,300 --> 00:26:37,379 S1: to be invested and then pay more tax on it when, 469 00:26:37,420 --> 00:26:40,580 S1: you know, especially as we're entering retirement, that's really the 470 00:26:40,580 --> 00:26:44,139 S1: ideal time to be completely debt free, including your home, 471 00:26:44,140 --> 00:26:46,939 S1: because it just really dials down what you need on 472 00:26:46,940 --> 00:26:50,100 S1: a monthly basis to fund your lifestyle, which hopefully the 473 00:26:50,100 --> 00:26:52,740 S1: lion's share of that will come from Social Security. And, 474 00:26:52,780 --> 00:26:56,619 S1: you know, any other retirement accounts? Uh, and potentially this 475 00:26:56,619 --> 00:27:01,100 S1: roughly 200,000 that you would have remaining. So I think 476 00:27:01,100 --> 00:27:03,420 S1: that's a good plan, Kristie. It'll give you guys plenty 477 00:27:03,420 --> 00:27:05,300 S1: of flexibility. And I think you'll be in pretty good 478 00:27:05,300 --> 00:27:08,340 S1: shape here. But we can help further. Don't hesitate to call. Uh, 479 00:27:08,340 --> 00:27:10,220 S1: let's go to Winter Haven. Manny. Go ahead. 480 00:27:10,540 --> 00:27:17,180 S8: Yes, Rob. Um, I just gifted my sister, uh, $35,000 481 00:27:17,180 --> 00:27:20,780 S8: so she can purchase a new car. And I wanted 482 00:27:20,780 --> 00:27:24,500 S8: to find out if, um, either her or I need 483 00:27:24,540 --> 00:27:26,500 S8: to report this to the IRS. 484 00:27:27,420 --> 00:27:30,980 S1: Uh, yeah. Great question. Um, are you married? 485 00:27:31,700 --> 00:27:32,500 S8: I'm single. 486 00:27:32,940 --> 00:27:37,310 S1: You're single. Okay. Uh, so you are not able to 487 00:27:37,470 --> 00:27:44,109 S1: give that amount quite that amount. So for 2026 the 488 00:27:44,150 --> 00:27:48,909 S1: annual gift limit is I believe it went up. Let 489 00:27:48,910 --> 00:27:52,270 S1: me just double check to make sure I give you 490 00:27:52,270 --> 00:27:54,470 S1: the the right amount. I believe it went up. Yeah 491 00:27:54,470 --> 00:27:59,869 S1: it's 19,000 per recipient. So you can give any individual 492 00:28:00,109 --> 00:28:03,830 S1: up to $19,000. And you can do that for as 493 00:28:03,830 --> 00:28:07,630 S1: many people as you want, um, for 2026. But if 494 00:28:07,630 --> 00:28:10,070 S1: you go over that, which clearly you did to, to 495 00:28:10,109 --> 00:28:13,750 S1: get up to 35,000, then you have to file a 496 00:28:13,790 --> 00:28:19,870 S1: gift tax return for the amount that's above 19,000. And 497 00:28:20,270 --> 00:28:23,350 S1: you'll report that to the IRS. Now, you won't owe 498 00:28:23,350 --> 00:28:27,149 S1: any tax on that because you're able to give based 499 00:28:27,150 --> 00:28:30,270 S1: on the current laws, uh, all the way up to 500 00:28:30,310 --> 00:28:36,600 S1: $15 million over your lifetime in total giving. But the 501 00:28:36,600 --> 00:28:38,720 S1: IRS does want to know about it, because they're going 502 00:28:38,760 --> 00:28:42,560 S1: to start applying it toward that lifetime tax exemption for 503 00:28:42,560 --> 00:28:47,120 S1: gifts and estate. So you do have to file that 504 00:28:47,120 --> 00:28:51,320 S1: gift tax form 709. So do you have to file it. Yes. 505 00:28:51,360 --> 00:28:53,880 S1: Is there going to be any tax owed. No. It's 506 00:28:53,880 --> 00:28:57,160 S1: just going to apply toward that lifetime exclusion. Does that 507 00:28:57,160 --> 00:28:57,800 S1: make sense? 508 00:28:57,840 --> 00:29:03,320 S8: Yes. Thank you very much. I appreciate the information. 509 00:29:03,680 --> 00:29:05,240 S1: You are very welcome. What you're going to want to 510 00:29:05,240 --> 00:29:08,480 S1: do is just make sure you let your CPA know. 511 00:29:08,520 --> 00:29:11,560 S1: Or if you do it yourself, using some tax software, 512 00:29:11,800 --> 00:29:14,160 S1: when you check the box saying you made a gift 513 00:29:14,160 --> 00:29:19,320 S1: this year and you type in 35,000, it'll just automatically, uh, 514 00:29:19,320 --> 00:29:21,480 S1: you know, pull up that gift tax form and include 515 00:29:21,480 --> 00:29:24,920 S1: it in the package. But don't leave that out of the, uh, 516 00:29:24,920 --> 00:29:28,320 S1: the information you provide to your CPA, if in fact, 517 00:29:28,320 --> 00:29:31,000 S1: you use a tax preparer. Manny, thanks for your call today. 518 00:29:31,000 --> 00:29:33,480 S1: We appreciate you being on the program. All right, folks. 519 00:29:33,600 --> 00:29:36,880 S1: we're up against our final break of the program. But 520 00:29:36,880 --> 00:29:38,479 S1: when we come back, we're going to dive into some 521 00:29:38,480 --> 00:29:41,120 S1: more questions. We've got some good ones coming up. We'll 522 00:29:41,120 --> 00:29:45,320 S1: talk about the able account A, B, L, e with 523 00:29:45,320 --> 00:29:48,040 S1: regard to those with disabilities and how you can put 524 00:29:48,040 --> 00:29:53,400 S1: money aside that doesn't impact their assistance that they are 525 00:29:53,440 --> 00:29:56,400 S1: seeking from the government. Uh, in terms of the money 526 00:29:56,400 --> 00:29:59,719 S1: in the able account, that's Carol's question. She's in Florida. 527 00:29:59,720 --> 00:30:03,840 S1: We'll tackle that one. And then Kim's down in South Carolina, 528 00:30:04,000 --> 00:30:07,280 S1: and she wants to, uh, talk about a property that 529 00:30:07,320 --> 00:30:12,040 S1: her father purchased and the LLC that that property sits in. Uh, 530 00:30:12,040 --> 00:30:15,840 S1: we'll probably get to, uh, Bob as well in Alaska and, uh, 531 00:30:15,880 --> 00:30:18,600 S1: deal with his situation. So much more to come on 532 00:30:18,600 --> 00:30:20,600 S1: faith and finance live. You're not going to want to 533 00:30:20,600 --> 00:30:23,120 S1: go anywhere. Hey, by the way, if you'd like to 534 00:30:23,120 --> 00:30:26,520 S1: find an advisor who shares your values and can bring 535 00:30:26,520 --> 00:30:29,920 S1: a biblical worldview to their professional financial advice that they 536 00:30:29,920 --> 00:30:32,930 S1: offer you, well, that's why we have the Certified Kingdom 537 00:30:32,930 --> 00:30:37,010 S1: Advisor designation. You'll find one at find. Okay, we'll be 538 00:30:37,010 --> 00:30:45,370 S1: right back. Thanks for joining us today on Faith and 539 00:30:45,370 --> 00:30:48,050 S1: Finance Live. I'm Rob West. We're going to head right 540 00:30:48,050 --> 00:30:50,890 S1: back to the phones here. Carol in Florida. Go right ahead. 541 00:30:50,890 --> 00:30:51,690 S1: How can I help? 542 00:30:52,970 --> 00:30:54,209 S9: Hi. Can you hear me? Okay. 543 00:30:54,490 --> 00:30:55,570 S1: Yes, ma'am. Sure can. 544 00:30:56,530 --> 00:30:59,930 S9: Okay. Wonderful. Thanks for taking my call. Yes. So my 545 00:30:59,930 --> 00:31:03,490 S9: daughter just turned 18, and I'm trying to decide if 546 00:31:03,530 --> 00:31:07,610 S9: I should open an able account and or some type 547 00:31:07,610 --> 00:31:11,770 S9: of disabled disability trust for her or both. She wants 548 00:31:11,770 --> 00:31:14,410 S9: to have a checking account, and she does. She does 549 00:31:14,410 --> 00:31:18,410 S9: not have any money management, um, education or experience, which 550 00:31:18,890 --> 00:31:22,810 S9: she still homeschools with, um, you know, with her delays. 551 00:31:23,330 --> 00:31:27,170 S9: But we don't want any of her government benefits to 552 00:31:27,210 --> 00:31:29,690 S9: be touched. We're waiting to hear back and praying for 553 00:31:29,690 --> 00:31:34,930 S9: favor with her disability claims. Um, so we're just not 554 00:31:34,930 --> 00:31:37,770 S9: sure which which route to go. And she gets a 555 00:31:38,690 --> 00:31:42,729 S9: survivor's benefit from her dad's death. And so that's the 556 00:31:42,730 --> 00:31:45,770 S9: only income that she'll get. Um, but we want that 557 00:31:45,770 --> 00:31:48,890 S9: to be allocated for some of it for savings and 558 00:31:48,890 --> 00:31:51,890 S9: some for her to be able to manage a few 559 00:31:52,370 --> 00:31:55,610 S9: expenses on her own to help her money management skills. 560 00:31:55,650 --> 00:31:59,770 S1: Got it. Got it. Yes. Very good. So, uh, you know, 561 00:31:59,930 --> 00:32:03,610 S1: they really can be used very well together, both of 562 00:32:03,610 --> 00:32:07,490 S1: these tools that you referenced. And that's usually the best solution. 563 00:32:07,730 --> 00:32:11,650 S1: So the able account is of course a tax advantaged 564 00:32:11,650 --> 00:32:17,210 S1: savings account, um, for individuals whose disability began before 26. 565 00:32:17,210 --> 00:32:20,010 S1: So it sounds like sounds like that applies here. Uh, 566 00:32:20,010 --> 00:32:23,570 S1: you could put an update. Um, it used to be 18,000. 567 00:32:23,610 --> 00:32:25,930 S1: I think it's a little bit higher than that now. Yeah. 568 00:32:25,970 --> 00:32:29,770 S1: The money grows tax free, and then the withdrawals are 569 00:32:29,770 --> 00:32:33,740 S1: tax free if they're used for qualified disability expenses. The 570 00:32:33,740 --> 00:32:37,460 S1: beneficiary can control the account, and up to 100,000 can 571 00:32:37,460 --> 00:32:42,340 S1: be saved without impacting those government benefits. And it has 572 00:32:42,340 --> 00:32:44,380 S1: a little bit more flexibility in terms of how it 573 00:32:44,380 --> 00:32:45,820 S1: can be used. I mean, it can be used for 574 00:32:45,820 --> 00:32:49,980 S1: housing and transportation and education and and medical care and 575 00:32:49,980 --> 00:32:55,500 S1: other things. Um, the special needs trust is also for 576 00:32:55,540 --> 00:33:01,260 S1: a disabled individual without, uh, again, disqualifying them from government benefits. 577 00:33:01,260 --> 00:33:05,500 S1: So similarly. But there's no contribution limits. So it can 578 00:33:05,500 --> 00:33:10,340 S1: hold large gifts or inheritances if there's life insurance proceeds 579 00:33:10,340 --> 00:33:13,100 S1: or you all are going to leave money for the 580 00:33:13,140 --> 00:33:15,940 S1: for the specifically for the care of the child. That's 581 00:33:15,940 --> 00:33:18,740 S1: where a special needs trust could come in, because you 582 00:33:18,740 --> 00:33:20,739 S1: can put quite a bit more really as much as 583 00:33:20,740 --> 00:33:24,780 S1: you want. It's managed by a trustee. And again, there's 584 00:33:24,780 --> 00:33:28,979 S1: no risk of exceeding the resource limits. To qualify for 585 00:33:28,980 --> 00:33:32,260 S1: government assistance, you're going to need an attorney to set 586 00:33:32,260 --> 00:33:36,820 S1: it up. It does have administrative costs. Um, the beneficiary 587 00:33:36,820 --> 00:33:39,540 S1: in this case, your daughter would not control the funds. 588 00:33:39,540 --> 00:33:44,020 S1: The trustee would. But working together, you know, it really 589 00:33:44,020 --> 00:33:46,420 S1: can be great because the special needs trust can hold 590 00:33:46,420 --> 00:33:49,820 S1: larger assets. The able account can be used for day 591 00:33:49,820 --> 00:33:53,780 S1: to day spending and flexibility. And the trustee can even 592 00:33:53,780 --> 00:33:58,260 S1: transfer money from the trust into the able account for expenses. 593 00:33:58,260 --> 00:34:02,140 S1: The beneficiary your daughter would want to manage personally. And 594 00:34:02,140 --> 00:34:04,540 S1: so again, that's where these things can, you know, be 595 00:34:04,540 --> 00:34:06,540 S1: really complementary to one another. 596 00:34:06,580 --> 00:34:09,900 S9: Right, right. Well, she wants to have her own checking account. Um, 597 00:34:09,900 --> 00:34:12,259 S9: so I'm looking into that right now. Capital one seems 598 00:34:12,260 --> 00:34:15,140 S9: to be the best one for her to being 18 599 00:34:15,580 --> 00:34:18,379 S9: and still be considered a teen, where the parent can 600 00:34:18,380 --> 00:34:21,379 S9: have not control, but at least view what's going on 601 00:34:21,620 --> 00:34:22,580 S9: to give guidance. 602 00:34:23,020 --> 00:34:25,740 S5: So I would agree with that. That's that's what I had. 603 00:34:25,739 --> 00:34:28,340 S1: For my kids as well. And it's a great tool. 604 00:34:28,540 --> 00:34:28,980 S5: Okay. 605 00:34:29,350 --> 00:34:31,630 S9: All right. Awesome. Thank you so much. I appreciate your 606 00:34:31,630 --> 00:34:32,669 S9: time and information. 607 00:34:32,910 --> 00:34:33,710 S5: Absolutely. 608 00:34:33,710 --> 00:34:35,830 S1: Listen, if you need further help, I'm going to have 609 00:34:35,830 --> 00:34:38,509 S1: you hold the line. We'll get your or give you 610 00:34:38,510 --> 00:34:42,790 S1: some information on one of our certified Kingdom advisors who 611 00:34:42,790 --> 00:34:46,310 S1: has a daughter with special needs. And he really has 612 00:34:46,670 --> 00:34:50,629 S1: developed quite a competency in special needs planning. And so 613 00:34:50,630 --> 00:34:53,430 S1: if you need, uh, you know, some assistance from somebody 614 00:34:53,430 --> 00:34:57,430 S1: who just shares your, your faith in Christ and really 615 00:34:57,430 --> 00:35:00,029 S1: specializes in this area, I know he'd be delighted to 616 00:35:00,030 --> 00:35:02,310 S1: have a phone call with you and just provide some counsel, 617 00:35:02,310 --> 00:35:03,350 S1: if that would be helpful. 618 00:35:03,590 --> 00:35:05,030 S9: Great. Thank you so much. 619 00:35:05,190 --> 00:35:06,190 S5: All right. You're welcome. 620 00:35:06,670 --> 00:35:09,710 S1: No problem. God bless you. Take care. Uh, let's go 621 00:35:09,710 --> 00:35:11,590 S1: to South Carolina. Hi, Kim. Go ahead. 622 00:35:11,630 --> 00:35:15,550 S10: Hi. Um, I'm calling about, um, my father passed away 623 00:35:15,590 --> 00:35:19,430 S10: ten years ago, and I am the executor of his estate. 624 00:35:19,469 --> 00:35:22,069 S10: The estate is closed. All is well. But he had 625 00:35:22,070 --> 00:35:26,070 S10: a piece of property that he purchased a condo several 626 00:35:26,070 --> 00:35:29,830 S10: years ago and under his LLC. I was able to 627 00:35:29,870 --> 00:35:33,150 S10: transfer his LLC from his name and put my mother 628 00:35:33,150 --> 00:35:37,230 S10: as the owner of the LLC, and then that LLC 629 00:35:37,510 --> 00:35:41,509 S10: is or the property is under an IRA. So I 630 00:35:41,510 --> 00:35:43,989 S10: was able to change the name of the IRA to 631 00:35:44,030 --> 00:35:46,509 S10: my mother as well, because she was the person who 632 00:35:46,510 --> 00:35:51,750 S10: inherited his property. So now we are trying to sell 633 00:35:51,750 --> 00:35:55,390 S10: the condo or the property, and whenever we got to 634 00:35:55,430 --> 00:36:00,350 S10: the closing table, they wanted us to produce a letter 635 00:36:00,350 --> 00:36:04,029 S10: from the Department of Revenue saying that there's no tax liability. Well, 636 00:36:04,030 --> 00:36:07,029 S10: it's been in this IRA slash LLC for the past 637 00:36:07,230 --> 00:36:10,350 S10: 15 years or so. And so there has been no 638 00:36:10,390 --> 00:36:16,109 S10: taxes filed. So we've been given advice to either remove 639 00:36:16,110 --> 00:36:19,750 S10: the property from under the LLC and dissolve the LLC 640 00:36:20,030 --> 00:36:22,670 S10: and put it in my mother's name, and then try 641 00:36:22,710 --> 00:36:26,390 S10: to sell or go back and try to file taxes 642 00:36:26,390 --> 00:36:29,200 S10: for the past ten years, which we've had no income 643 00:36:29,200 --> 00:36:32,520 S10: from the property or anything. Um, so that we can 644 00:36:32,520 --> 00:36:36,080 S10: get the letter from the IRS and just really don't 645 00:36:36,080 --> 00:36:37,800 S10: know what the next step should be. 646 00:36:37,840 --> 00:36:38,320 S5: Yeah. 647 00:36:38,719 --> 00:36:40,960 S1: Yeah, it's a bit complicated. You are going to need 648 00:36:40,960 --> 00:36:45,279 S1: some professional help from both the IRA custodian, but you're 649 00:36:45,280 --> 00:36:47,919 S1: going to want to hire a CPA who's familiar with 650 00:36:47,920 --> 00:36:51,560 S1: what are called self-directed IRAs and then possibly consult a 651 00:36:51,560 --> 00:36:55,480 S1: real estate or an estate attorney, but just generally. So 652 00:36:55,520 --> 00:36:57,719 S1: it sounds like the property is owned by the LLC. 653 00:36:57,760 --> 00:37:01,920 S1: The LLC is owned by an IRA. And then, uh, 654 00:37:02,080 --> 00:37:05,960 S1: your father's IRA then passed to your mom. And so 655 00:37:05,960 --> 00:37:09,480 S1: this is called a self-directed IRA, which is an IRA 656 00:37:09,480 --> 00:37:13,960 S1: that can hold real estate through a limited liability corporation. 657 00:37:14,200 --> 00:37:18,960 S1: So you generally don't want to move the property from 658 00:37:18,960 --> 00:37:22,359 S1: the LLC or the IRA before selling it. If it's 659 00:37:22,360 --> 00:37:24,920 S1: distributed out of the IRA, it could be treated as 660 00:37:24,920 --> 00:37:28,040 S1: a taxable distribution, and that could create a huge tax bill. 661 00:37:28,320 --> 00:37:31,080 S1: So the cleaner approach is usually to sell the property 662 00:37:31,080 --> 00:37:34,839 S1: while it's still owned by the LLC inside the IRA. 663 00:37:35,200 --> 00:37:38,440 S1: The sale of the proceeds would go back into the IRA. 664 00:37:39,120 --> 00:37:43,120 S1: So that would maintain the tax deferred status, which would 665 00:37:43,120 --> 00:37:46,040 S1: then allow your mom to just take the distributions as 666 00:37:46,040 --> 00:37:49,440 S1: she needs them and just pay tax at that time. 667 00:37:49,920 --> 00:37:54,080 S1: The unfiled taxes, though, are an issue. So if if 668 00:37:54,080 --> 00:37:57,279 S1: taxes related to the property or the LLC haven't been 669 00:37:57,280 --> 00:38:00,120 S1: filed for a decade, that's really got to be addressed 670 00:38:00,120 --> 00:38:04,320 S1: before the sale because, you know, those filings could include 671 00:38:04,320 --> 00:38:07,680 S1: state property taxes. You know, at the very least, you 672 00:38:07,680 --> 00:38:11,960 S1: need the LLC informational returns. There could be unrelated, unrelated 673 00:38:11,960 --> 00:38:16,240 S1: business income if the IRA generated certain types of income. 674 00:38:16,239 --> 00:38:19,640 S1: So that's where that CPA could help you get in compliance. 675 00:38:20,120 --> 00:38:24,800 S1: And then the IRA custodian, the self-directed IRA custodian, um, 676 00:38:25,530 --> 00:38:29,090 S1: you know, would have to help with the coordination in 677 00:38:29,130 --> 00:38:33,129 S1: terms of the transaction to sell the property itself. Does 678 00:38:33,130 --> 00:38:33,730 S1: that make sense? 679 00:38:33,770 --> 00:38:38,890 S10: Okay. Absolutely. And one last question with the the IRA, 680 00:38:39,290 --> 00:38:43,850 S10: if she has R&D now that she's of age, there's 681 00:38:43,850 --> 00:38:48,009 S10: no cash in the IRA. So where would she would 682 00:38:48,010 --> 00:38:51,450 S10: she pull the RMD from a different IRA that she has? 683 00:38:51,650 --> 00:38:54,650 S10: Or will it all come out once she sells the property? 684 00:38:54,690 --> 00:38:55,130 S5: Yeah. 685 00:38:55,489 --> 00:38:59,290 S1: Uh, does she have other IRAs that have cash in them? 686 00:38:59,969 --> 00:39:00,650 S10: She does. 687 00:39:00,690 --> 00:39:01,170 S5: Okay. 688 00:39:01,570 --> 00:39:06,890 S1: Yeah. It doesn't matter which IRA you take it from. Um, 689 00:39:07,010 --> 00:39:10,649 S1: but you have to get the total that is required 690 00:39:10,650 --> 00:39:16,890 S1: for the year. Uh, so, you know, usually self-directed IRAs, 691 00:39:16,930 --> 00:39:21,050 S1: you know, have some cash inside of them, uh, rental income, 692 00:39:21,050 --> 00:39:24,890 S1: or you might sell part of the asset. Um, you 693 00:39:24,890 --> 00:39:28,370 S1: could also distribute a portion of the asset, what's called in-kind. 694 00:39:28,650 --> 00:39:34,170 S1: But in this case, if there's another IRA that has cash, 695 00:39:34,210 --> 00:39:38,050 S1: there's no problem taking it all from one IRA, so 696 00:39:38,050 --> 00:39:41,370 S1: long as you get up to the total required minimum 697 00:39:41,370 --> 00:39:43,210 S1: for the year across all the IRAs. 698 00:39:43,489 --> 00:39:47,010 S10: Perfect. She's listening. So thank you so much for answering 699 00:39:47,010 --> 00:39:48,770 S10: those questions. It was very helpful. 700 00:39:49,290 --> 00:39:49,810 S5: Okay. 701 00:39:50,210 --> 00:39:54,330 S1: Thank you Kim. God bless you. Take care. Quickly to Alaska. Bob, 702 00:39:54,330 --> 00:39:56,129 S1: you'll be our final caller. And I have just less 703 00:39:56,130 --> 00:39:57,250 S1: than two minutes. Go ahead. 704 00:39:58,610 --> 00:40:03,770 S11: Yeah. Thank you for taking my call. I'm 72 years old. Um, 705 00:40:03,770 --> 00:40:07,049 S11: I have no debt, and I have no credit cards. 706 00:40:07,330 --> 00:40:12,650 S11: I left a abusive marriage of 30 years, uh, 14 707 00:40:12,650 --> 00:40:20,050 S11: months ago. And the ex-wife, uh, wiped out my savings 708 00:40:20,050 --> 00:40:26,220 S11: account and used my Social security as a slush fund. Um, 709 00:40:26,500 --> 00:40:31,260 S11: I see. Uh, $2,200 a month. And with the small 710 00:40:31,300 --> 00:40:35,740 S11: bills that I do have, I have 12 to $1300 711 00:40:35,900 --> 00:40:37,820 S11: left at the end of the month. And I was 712 00:40:37,860 --> 00:40:41,900 S11: just thinking, um, what do you think about me, uh, 713 00:40:42,739 --> 00:40:50,100 S11: getting a credit card and establishing. Establishing, um, credit history? 714 00:40:50,540 --> 00:40:51,060 S5: Yeah. 715 00:40:51,100 --> 00:40:54,100 S1: Yeah, I like that. First of all, Bob, I'm so 716 00:40:54,100 --> 00:40:56,819 S1: sorry to hear about what you've been through. And, uh, 717 00:40:56,820 --> 00:40:59,060 S1: I'm delighted to hear that you're on the other side 718 00:40:59,060 --> 00:41:05,140 S1: of that, uh, relationship that was, uh, destructive. Um. Yes. 719 00:41:05,140 --> 00:41:07,180 S1: I think that could be a good thing. I mean, 720 00:41:07,180 --> 00:41:10,739 S1: a credit card can be helpful. Um, especially if you 721 00:41:10,739 --> 00:41:13,299 S1: have no active credit accounts that could help you to 722 00:41:13,340 --> 00:41:18,540 S1: re-establish your credit history, could provide some fraud protection. Uh, 723 00:41:18,700 --> 00:41:21,500 S1: you know, versus, like, a debit card where if somebody 724 00:41:21,500 --> 00:41:24,060 S1: got Ahold of your account. You know, they could pull 725 00:41:24,060 --> 00:41:27,620 S1: the money out. The credit card has some protections on it, 726 00:41:27,620 --> 00:41:30,620 S1: and it's helpful for things like renting a car, booking travel, 727 00:41:30,620 --> 00:41:34,299 S1: things like that. Um, I would use one simple card, 728 00:41:34,340 --> 00:41:38,460 S1: use it for small regular budgeted purposes, pay the balance 729 00:41:38,460 --> 00:41:43,180 S1: in full every month. Start small if you don't have credit. 730 00:41:43,180 --> 00:41:45,700 S1: And that's a problem. You could start with a secured 731 00:41:45,700 --> 00:41:49,219 S1: credit card where you put a certain amount on deposit 732 00:41:49,219 --> 00:41:51,980 S1: with a bank, they issue a credit card against it, 733 00:41:52,300 --> 00:41:55,460 S1: and then you could charge your budget items and pay 734 00:41:55,460 --> 00:41:57,780 S1: them off. You may find that you have no problem 735 00:41:57,780 --> 00:42:00,620 S1: getting an unsecured card, but again, keep that limit low, 736 00:42:00,620 --> 00:42:03,580 S1: only use it for budgeted items and pay it off. 737 00:42:03,580 --> 00:42:05,580 S1: And that's just going to help you over time rebuild 738 00:42:05,580 --> 00:42:08,500 S1: your credit. So I like that a lot. NerdWallet or 739 00:42:08,500 --> 00:42:12,380 S1: Bankrate.com can help you determine which card to get. Lord 740 00:42:12,380 --> 00:42:14,940 S1: bless you Bob. We'll be praying for you. Thanks for calling. 741 00:42:15,100 --> 00:42:18,300 S1: Nathan Finance is a partnership between Moody Radio and Faith fi. 742 00:42:18,500 --> 00:42:21,140 S1: Big thanks to Josh, Tira, Taylor and Omar. We'll see 743 00:42:21,140 --> 00:42:21,740 S1: you tomorrow.