S1: Today's faith and finance live is actually not live, so
S1: our phone lines are not open.
S2: Plans fail for the lack of counsel, but with many
S2: advisers they succeed. Proverbs 1522. Hi, I'm Rob West. When
S2: it comes to managing money wisely, many of us could
S2: use some help. But how do you know you've found
S2: the right financial advisor? Today we'll explore a few key
S2: questions you should ask when hiring someone to help with
S2: your financial decisions. Sharon Epps is here to help us
S2: navigate that process, and we have some great calls lined up.
S2: But we won't be taking your calls today because we're prerecorded.
S2: This is faith in finance. Live. Biblical wisdom for your
S2: financial decisions. Well, Sharon Epps is with us again today.
S2: She's president of Kingdom Advisors and a regular contributor here
S2: on the program. Sharon, great to have you back.
S3: It's really good to be here.
S2: You know, it may seem overwhelming to find a financial advisor, Sharon,
S2: that's a good fit for you. Yet when you're prepared
S2: to ask the right questions, the decision becomes much clearer.
S2: So you are suggesting that we think in terms of
S2: categories of questions. I'd love for you to dive into that.
S3: Well, it won't surprise you. Our first category is values alignment,
S3: and we'll cover three categories in total today. But this
S3: one is the top because it means that my advisor
S3: shares my worldview and can integrate it into his or
S3: her counsel, and I can be more confident in the
S3: advice they give me. So a key question here is
S3: what role does faith play in your financial advice? Their
S3: answer can help determine if the advisor truly integrates biblical truth.
S3: The goal is to find someone who doesn't just respect
S3: your values but shares them. There's a big difference between
S3: an advisor who's a Christian and one who actively discusses
S3: financial decision making with a biblical lens.
S2: Yeah, that is really helpful, and I would totally agree.
S2: That is the first question you want to ask. All right.
S2: What's another insightful question someone can ask to better understand
S2: values alignment?
S3: Well, ask the advisor their definition of financial success. You
S3: want to listen for whether they're looking only for returns,
S3: or if they're considering how they might encourage your stewardship, generosity,
S3: and faithfulness. They should understand that money is a tool
S3: and not a goal, and that biblical alignment brings clarity
S3: and peace in the planning process.
S2: That's so good. And of course, it's good stewardship to
S2: consider performance. So let's shift to competency. Is that another
S2: major category?
S3: Absolutely. That's the second one. We want to be sure
S3: that our prospective advisor is technically competent. And we want
S3: to know that they've got industry designations and experience serving
S3: clients like you. So as you ask them about their
S3: certification and years of experience, consider a key question like,
S3: tell me about clients that you serve who are similar
S3: to me and how you've served them. And without naming names,
S3: those advisors should be able to share stories of impact
S3: with similar clients.
S2: I love that this is so helpful. All right, what's
S2: the third category?
S3: Well, the third category is process and compensation. The advisor
S3: should clearly explain the ways they're compensated confidently. Ask them, hey,
S3: I want to be sure I'm clear on the ways
S3: you make money. Could you walk me through the fees
S3: and commissions for a client like me? Not only are
S3: advisors required to disclose this, excellent advisors want to make
S3: sure that you really understand. You also want to be
S3: clear on their process. So the key question is what's
S3: your process for creating a financial plan. And they should
S3: be able to outline a clear step by step approach
S3: with the timeline and information required and the fees.
S2: Yeah. And I think kind of the overriding theme here
S2: is you want an advisor with the heart of a
S2: teacher who wants to lead with making sure you're understanding
S2: everything it is.
S3: Yes.
S2: So if listeners, Sharon, want to find someone who meets
S2: these standards and perhaps a few more. Where do they go?
S3: Well, we would encourage you to go to faith.com and
S3: click on Find a Professional. You'll find Certified Kingdom advisors
S3: who have been vetted for integrity, technical excellence and their
S3: biblical worldview. We just talked about. You'll also find a
S3: downloadable PDF that has some ideas for advisor interview questions.
S3: Whether you're getting started or you're actually looking to reevaluate
S3: the advisor you have. You can rehire your advisor every year,
S3: by the way. It's a great place to begin.
S2: That is so good. Again, faith com just click find
S2: a professional and Sharon they'll be able to find that
S2: really cover the gamut in terms of the financial decision
S2: making categories.
S3: Yes they look at different types of financial professionals as
S3: well as those that are located close to you.
S2: Sharon, as you think about and you walk alongside so
S2: many of these advisors, what's the big change that they
S2: go through as they explore God's Word in the training?
S3: Well, the biggest thing is they begin to feel the
S3: weight of stewardship of their responsibility, of what God's given them,
S3: and even what the clients have, and helping guide them
S3: to make an eternal impact.
S2: It makes all the difference, folks. Find a C in
S2: your area when you go to faith. That's faith. Com
S2: and just click Find a Professional at the top of
S2: the page. Sharon, thanks for stopping by.
S3: Great to be here.
S2: Well folks, we're going to head to a break. But
S2: let me remind you, we're out of the studio today.
S2: Our team is not here, so don't call in. But
S2: much more to come just around the corner on faith
S2: and finance live. Stick around. Thanks for joining us today
S2: on Faith in Finance live. I'm Rob West. We're so
S2: glad you're along with us today. Now we're away from
S2: the studio, so don't call in. But in just a
S2: moment we'll be taking some questions that we lined up
S2: in advance. You won't want to miss those, but first,
S2: let's tackle a couple of emails. These come into us
S2: regularly at Moody Radio.com. This first question comes to us
S2: by way of Hannah. She writes, we recently sold our
S2: house for a good profit and we're wondering how to
S2: tithe on it. Do we tithe on the full amount
S2: we received or only what goes above the initial price
S2: and interest we paid? You would tithe on the difference
S2: between the sale price, Hannah, and the initial purchase price.
S2: So you don't have to look at anything else other
S2: than what is that true increase in the value of
S2: the property. Because when we're giving a tithe, it is
S2: based on the increase, the profit. So no matter what
S2: asset it is, whether it's a stock or a piece
S2: of real estate, it's simply the difference between the sale
S2: price and the original purchase price. That increase, then you
S2: would apply a 10% tithe and then give that to
S2: your local church. I think that's a great idea. This
S2: next one comes to us from Karen. She writes, I
S2: have a 401 K and I'm wondering how I can
S2: invest according to my values with the options that are
S2: available in it. It seems like the only options are
S2: big companies that I'd rather not be invested in. Do
S2: you have any suggestions? Well, yeah. If you don't find
S2: one of the faith based investing fund families in your
S2: 401 K, now I would contact your 401 K custodian
S2: and tell them that you're interested in values aligned investing
S2: and that you'd like to suggest the addition of some
S2: of these fund families like Praxis, like Timothy plan like
S2: Eventide like one ascent or Guidestone. It may not happen
S2: right away, but as they start to hear from more
S2: and more of their 401 K account holders, they're eventually
S2: going to add those, and they're always reevaluating what new
S2: funds need to be in the plan. So just because
S2: they're not in there now doesn't mean they won't be
S2: in there next year. And so I would reach out first. Second.
S2: You can also see if you have something called a
S2: brokerage window. That's just simply the opportunity for you to
S2: invest beyond the menu of choices in your 401 K.
S2: In anything that's available through that custodian. And odds are
S2: if it's a Fidelity or Schwab or one of the
S2: big brokerage firms, you'd be able to get access to
S2: one of the faith based investing companies. The third option
S2: just put enough in your 401 K to get the match,
S2: and then put the rest up to the annual contribution
S2: limit in a Roth IRA or a traditional IRA. And
S2: then you most certainly could invest in the faith based
S2: investing fund families when you do that. All right. Let's
S2: get to those phone calls that we lined up in
S2: advance right now. We're going to begin in Florida today. Hi, Chris.
S2: Go ahead.
S4: My question, Rob, is I'm retired, living on Social Security.
S4: I have no debt. My all my expenses are paid
S4: off whenever I have a significant project that I'm only
S4: pulling in about 1900 a month on Social Security. So
S4: whenever I have a project for the house or whatever,
S4: I pull it out of my. Um, I believe it's
S4: an IRA that that my broker has set up for me. And, uh,
S4: what I'm wondering from your expertise is, is that, um,
S4: is that the best way to go about financing these
S4: projects so that I can remain debt free and I
S4: don't have to finance anything and incur any interest?
S2: Yeah, it's a great question. And let me just say,
S2: first of all, Chris, kudos to you. You're in a
S2: strong position being debt free. You know that IRA is
S2: obviously money you worked hard to set aside during your
S2: working years. Now you're retired 69, living on Social Security.
S2: So that's what it's there for. The the only thing
S2: we're going to want to keep an eye on is
S2: just what that withdrawal rate looks like. To ensure that
S2: we can keep this IRA around for as long as possible,
S2: to the extent that Social Security alone is not enough
S2: to cover your living expenses, especially as some of those
S2: expenses can grow in the future, namely around long term
S2: care and medical related expenses. So what what is your
S2: balance roughly on that IRA? And then if you look
S2: at the last 12 months, how much have you pulled out?
S4: Um, in the last 12 months, uh, just I have
S4: not I took a recent distribution of a taxed distribution
S4: of 25,000 out, and that was it for this current
S4: calendar year. Um, before that, I've still got, uh, half.
S4: I've still got about 5000 in a savings account. That
S4: is a remnant of the 10,000 I withdrew in 2024.
S4: So I'm very frugal with my money, and I kept
S4: that distribution from 2024 around in case I came up
S4: short or got hit with any unbudgeted expenses that would
S4: put me over the over the ability to pay with
S4: the 1900 a month Social Security.
S2: Got it. Yeah. That's great. Glad you're you're doing that.
S2: It sounds like you're being really judicious about how you're
S2: using that money. The 25,000 that you mentioned. Is that
S2: what's needed but you haven't taken, or have you already
S2: taken that as well?
S4: I took that out, uh, about a month ago, and
S4: that was taxed. Whenever my broker sends me the money,
S4: he withdraws 10% in tax off of that right off
S4: the top.
S2: Sure. Yeah, that's a good practice that way. That's a
S2: head start on what you'll ultimately owe. Even if that's
S2: not enough, at least you've got something that you know
S2: is offsetting that tax liability. What is the balance on
S2: that IRA roughly.
S4: Before all this market turmoil started up? I think it
S4: was right around the beginning of the year. It was
S4: about 1,000,002. And honestly, Rob, I hate to sound like
S4: a chicken, but after my broker called me to congratulate
S4: me with going over the million mark, I. Lately I
S4: have not looked at the account. It was down slightly
S4: in the first quarter, but I haven't actually looked at it.
S4: Probably in several weeks.
S2: Yeah. Good. Well, that's probably a good thing, because the
S2: last thing you'd want to do would be to react
S2: emotionally and call him and say, hey, let's get out
S2: of the market. And so I'm glad you have an
S2: advisor overseeing it, because that, you know, makes sure that
S2: we're not acting on an emotional basis. We've got hopefully
S2: a rules based, you know, approach to investment management. Sounds
S2: like he's doing a good job at grew you know,
S2: from that $1 million mark to now 1.2. I'm sure
S2: it's down. You know, it may be back close to
S2: the million, depending on kind of what your allocation is,
S2: but I'm okay with that. You know, I think just
S2: in terms of a rule of thumb, if you were
S2: to think about limiting and you've, you've, you know, gone
S2: far under this, which is great limiting to your annual
S2: distributions to, you know, no more than 4% a year,
S2: which would be on your case, 48,000 on the 1.2,
S2: obviously a little less than that if the balance has
S2: come down. But as long as you're staying under that,
S2: that's why this money is there. I think you're taking
S2: out an appropriate amount. So it should continue to grow
S2: despite these withdrawals. And the last thing we'd want to
S2: do is take on debt, you know, and pay interest
S2: when you've got this money sitting there for this purpose. So,
S2: you know, I think you're in great shape. I'd say
S2: continue to do this. And given how little you're pulling out,
S2: I think you've got, you know, even a bit more
S2: room there, um, for you to do other things, you know,
S2: if you wanted to do some work on the house
S2: or take a trip or something like that.
S4: You nailed it, Rob. I was going to ask you
S4: about that because that after the current project is done with, um,
S4: I had planned on getting back on track with home renovation,
S4: and I'm very judicious with that. A lot of people
S4: from my church, we have a lot of, uh, craft
S4: type people, carpenters and and builders stuff. So they normally, uh,
S4: are my go to.
S2: I love it. One other thing. Once you're 70.5, I
S2: understand you're not there yet. That'll be the time for
S2: you to look at doing qualified charitable distributions. Any giving
S2: you're doing at a cash you ought to replace with
S2: qualified charitable distributions. And then you can get that money
S2: out without paying any tax on it. Uh, hang on
S2: the line. I want to send you a copy of
S2: our magazine. We'll be right back. So thankful to have
S2: you with us today on faith and finance live. I'm
S2: Rob West, your host. Now our team is away from
S2: the studio today, so don't call in. But we lined
S2: up some questions in advance that I know will be
S2: helpful to you. Had a great call there just a
S2: moment ago, and we were able to finish up off
S2: the air a bit more as we talked with the
S2: previous caller, just about, you know, how we can manage
S2: the money that we have in that retirement season of life. Uh,
S2: you know, as we as we chatted with Chris, I mean,
S2: he's in a really strong position, really being judicious about
S2: what he takes out of his IRA. But that's what
S2: that money is there for. Now, I hit on something
S2: right there at the tail end that I want to
S2: make sure to circle back on, because I think a
S2: lot of people miss this, and that's the opportunity once
S2: you're 70.5, to do what's called a qualified charitable distribution,
S2: this is specifically money coming out of an IRA. Can't
S2: be a 401 K. It's got to be an individual
S2: retirement account in a traditional, um, but you can take
S2: money out of that, which normally, you know, the money
S2: goes into that traditional IRA either by way of rollover
S2: or direct contributions pre-tax. So you remember, the money that
S2: went into that account was excluded from your federal and
S2: state taxes. So you got the deduction on it. And
S2: then normally you pay tax on it as income when
S2: it comes out. The only way to get the money
S2: out tax free, which means it went in without paying
S2: any tax on it. It's also coming out without any
S2: tax is when it goes direct to charity or your church.
S2: And when you use that qualified charitable distribution, you're getting
S2: that money out of that IRA and you're never paying tax,
S2: which means you get to satisfy your required minimum if
S2: you have it. Or at the very least, you get
S2: to hang on to cash you've already paid tax on
S2: in your checking or savings account and just have that
S2: money go straight from your IRA to that ministry or charity.
S2: And it's a huge opportunity because now you've got more
S2: going into the kingdom because there was never any tax
S2: paid on it, which is just an enormous blessing. And
S2: so a lot of folks will just say, you know what?
S2: I'm giving X amount for my checking account every month
S2: to my church, or I might be sending a systematic
S2: contribution here to Faith Fi, but instead I'm going to
S2: have that money instead of going out of after tax accounts,
S2: I'm going to come out of a pre-tax account through
S2: the qualified charitable distribution and go straight to that ministry
S2: and never pay any tax on it. What an opportunity.
S2: So don't miss that. If you're 70.5, you can do
S2: up to $105,000 out of an IRA through a qualified
S2: charitable distribution. You just call your broker or your broker dealer,
S2: like Schwab or Fidelity or Edward Jones or Merrill Lynch,
S2: whoever you have your IRA with, and just say, I
S2: want to do a qualified charitable distribution. They'll send a
S2: check straight to the ministry. Let them ministry know it's coming,
S2: and then you can report that on your 1040 that yes,
S2: it was a withdrawal, but it gets offset on the
S2: line below it because it was a qualified charitable distribution.
S2: And so no tax is paid even though the withdrawal occurred.
S2: So don't miss that. It's a phenomenal opportunity for you
S2: that are in that fourth quarter of life. You've got
S2: IRA money and you want to give generously. All right.
S2: Let's get back to the phones. Let's go to Maryland. Hi, Ingrid.
S2: Thanks for your patience. How can I help you?
S5: Oh, yes. I would like to know, um, I have, um,
S5: a backup guard is, um, from a store here in Frederick, Maryland,
S5: and it's like seven 700, close to a 800. And
S5: I also have to pay all the bills. Like my
S5: cell phone on cricket.
S2: Yes, ma'am.
S5: And, um, I also have to pay, um, Xfinity for
S5: for my, um. Um.
S2: Yeah. For your cable or your internet.
S5: For the internet, for the internet. And I also have
S5: other bills like the Potomac Edison. I'm very behind on that. Um.
S2: Okay.
S5: I have to pay $172.60.
S2: Yes, ma'am.
S5: And I have a water bill that is outstanding, too.
S5: And it's $246.28.
S2: And, Ingrid, are you just having trouble kind of making
S2: all of that work with the limited income that you have?
S5: Yes.
S2: Yeah. Very good.
S5: Because I only have I only have Social Security SSI. Uh,
S5: and that is $967 per month. Per month?
S2: Yes, ma'am. Okay. Yeah, Listen, I know that can be
S2: a real challenge. And I appreciate your call today, and
S2: I'd like to help with this. Um, here's what I'd
S2: like to do if you'd be willing to get on
S2: the phone, um, with one of our certified Christian financial counselors.
S2: These are men and women who have been trained to
S2: come alongside God's people and help them, uh, to manage
S2: God's money. And they're very adept at situations like this
S2: where there's limited resources and you're just trying to to
S2: balance it all. And perhaps if, if you'd be willing,
S2: they could help you look at all the look at
S2: the income you have, look at the bills you have
S2: and develop a plan for how you cover each of
S2: these bills throughout the month. Now, the extent to which
S2: there's just not enough money there to make it go around,
S2: we're either going to need to try to cut back
S2: or eliminate some of those expenses, or find a way
S2: to get some additional income. That may not be possible,
S2: but it's it's the other side of the equation. But
S2: in either case, they can be an encouragement to you,
S2: pray with you, and just look at the overall situation
S2: and help you figure out how to manage it. So, uh,
S2: would that be helpful for me to have somebody give
S2: you a call that could help you navigate all of this?
S5: Yes, please.
S2: All right. Very good. Listen, Ingrid, there's not going to
S2: be any cost to you. We're going to pay for
S2: it here at Faith VI, just as our gift to you.
S2: And we'll cover, you know, two or 3 or 4 sessions,
S2: whatever you need, uh, from the certified Christian financial counselor. And, uh,
S2: they'll just be available to you to serve you. So
S2: you stay on the line. Our team will get your
S2: phone number. And then one of our certified Christian financial
S2: counselors will reach out to you. We'll pay for it,
S2: but I'm confident they'll be a blessing to you. And
S2: I'm going to ask the faith and finance community to
S2: be praying for you as well as you steward God's resources.
S2: Sounds like you're doing a great job. I realize it's
S2: not easy, but, uh, we want to help you along
S2: the way. So stay that right there and we'll get
S2: somebody in touch with you. Well, folks, before we head
S2: to this break, let me remind you, if you haven't
S2: checked out faith. Com. That's faith. Philly.com. I'd love for
S2: you to do that. You'll find the best content in
S2: biblical finance there for you to grow in your understanding
S2: of managing money God's way. You'll find our community and
S2: the money management system. It's all there at Faith. Philly.com. Now, again,
S2: a reminder we're not here today, but more of your
S2: questions that we lined up after the break. Great to
S2: have you with us today on faith and finance live.
S2: By the way, we're not live today. We're away from
S2: the studio, so don't call in. But we have some
S2: great questions that we lined up in advance. By the way,
S2: this ministry is entirely listener supported. That means we rely
S2: on your financial gifts and support to do what we
S2: do on the air every day. If you consider a gift,
S2: we'd certainly be grateful. Just head to our website. faith Philly.com.
S2: That's faith. Dot com and click the give button. Thanks
S2: in advance. You know, periodically we hear from folks that, uh,
S2: write into us via email and we try to tackle
S2: a few of these questions, uh, whenever we're able to.
S2: Let's do a couple of those right now. Uh, this
S2: first one comes from Lori. She writes, I will be
S2: full retirement age in August. I'm still working, so my
S2: Social Security will be a surplus that I want to
S2: put toward my home. I still owe $82,000 on it,
S2: but I also know that it needs a lot of repairs.
S2: Does it make more sense to put this extra cash
S2: flow for repairs, paying down the mortgage, or a little
S2: bit of both? And I would just say, Lori, first
S2: of all, if your home does need repairs, um, let's determine,
S2: you know, first of all, are they imminent or are they,
S2: you know, more renovations? If they really are truly repairs,
S2: we probably want to go ahead and get those done. Uh,
S2: just so we don't cause any damage to the home.
S2: So I would say this surplus income is a great
S2: opportunity for you to do that. I would start there now. Obviously,
S2: the ability to fund any of that, you know, out of, uh,
S2: you know, any other cash flow is great. But I
S2: would see all of the surplus that you have, including
S2: the Social Security, as a way to fund those repairs
S2: without taking on debt. Um, so I think that's absolutely
S2: the priority use of that. Um, I would say after that,
S2: let's make sure we've got a fully funded emergency fund. Um,
S2: you know, as you head into retirement, I'd love for
S2: you to have a good six months living expenses, if
S2: not a little bit more in that season of life.
S2: And then once those two goals are met, um, you know,
S2: I would say the home repairs are fully funded and
S2: you're back up in kind of working order. Um, you've
S2: got your fully funded emergency fund. Then let's take that
S2: money and put it toward the mortgage principal. That will,
S2: of course, reduce future interest costs and give you more
S2: cash in retirement. Once you can pay off that house
S2: and reclaim what is probably your largest expense. Uh, the
S2: second one is a question that we've got here is
S2: from Mikisha. Here's what Mikisha writes. What's the difference between
S2: getting a debt consolidation loan or working with a debt counselor? Well,
S2: this is a great question, and it's one that comes
S2: up a lot. Um, debt consolidation versus what I'll call
S2: debt management. So debt consolidation is a loan. It essentially
S2: is where you roll multiple debts into a single new loan.
S2: Typically with a lower interest rate. Now you're still fully
S2: responsible for repayment. And you'll need good credit to qualify
S2: for favorable terms. It's also dangerous, though, because what I
S2: experience is that most folks who get a debt consolidation loan, uh,
S2: end up doing so to take the pressure off without
S2: actually changing the habits that led to the debt in
S2: the first place. And so you've got to identify what
S2: was the root cause. Am I just treating a symptom?
S2: The debt because of lifestyle spending beyond my means? Or
S2: am I truly, you know, resolving the situation? I've already
S2: handled the habits, and now I'm just looking to, you know,
S2: eliminate the debt as quickly as possible with as little
S2: interest as possible. Typically, this is just my experience. Typically,
S2: what I find is most people that get a consolidation
S2: loan haven't done the hard work to change the habits
S2: that led to the debt in the first place. So
S2: then they call me back six months later and say,
S2: all right, Rob, now I've got the consolidation loan. And
S2: guess what? The credit card debt is back. So I
S2: want to avoid that. Um, now when it comes to
S2: debt management, that is my preferred way, without a doubt,
S2: for you to get this paid off once and for all.
S2: Keep in mind, when we do the debt consolidation, roll
S2: everything together, even if there's a lower interest rate, typically
S2: we have a longer payback period. So what that just
S2: simply means is if we have a lower rate but
S2: we pay back over a longer runway, you know, we're
S2: probably going to end up paying the same amount anyway.
S2: And that's one other reason I don't like it. With
S2: debt management, the debt stays right where it is. If
S2: you're with Capital One on a credit card, you're going
S2: to stay with Capital One. You're at Citi, you're going
S2: to stay with Citi. But what happens is each of
S2: these credit card companies have a department they call credit counseling.
S2: And they all have an approved interest rate. And it's
S2: always lower than the prevailing rate typically. Keep in mind,
S2: the average interest rate right now is about 23%. Typically
S2: credit counseling rates are between 0 and 10%, often between
S2: 0 and 8. So a dramatic reduction, you know, in
S2: many cases 50% less or more. Um, and so that's
S2: great because that just means now I've got a larger
S2: percentage every month with the same payment going to principal
S2: reduction with that lower interest rate. The other key is
S2: you have accountability because you're paying through Christian credit counselors. Thirdly,
S2: they're going to help you do a budget that's great.
S2: That's just an added benefit. And then fourth, and this
S2: is a big one. Don't miss this. You know what
S2: happens with credit counseling is you have a level monthly payment.
S2: See if you've ever been paying back credit card debt.
S2: You've probably noticed that as the balance comes down, the
S2: minimum payment comes down because it's a percentage of the balance. Well,
S2: what's your, you know, likely response to that? Well, I'm
S2: just going to pay as little as possible because I
S2: don't see myself getting out of this debt anytime soon.
S2: So I might as well put that money to other
S2: good use. Well, that just extends the repayment period. But
S2: with credit counseling, you have a level monthly payment that
S2: fits into your budget. And because that payment doesn't come
S2: down with the balance every month, it's a larger percentage
S2: of the overall debt that was owed, which is great.
S2: And you put those two things together, the fact that
S2: we've got a dramatically lower interest rate and the fact
S2: that we've got a level monthly payment, All of that
S2: together results in, on average, you paying that debt back 80% faster.
S2: That's a game changer. And so this is absolutely my
S2: preferred way. Now keep in mind there's many credit counseling
S2: agencies out there. They're all non-profit. They have to be.
S2: But the one that we've worked with for a long,
S2: long time, and they've worked with literally thousands of our listeners,
S2: is Christian credit counselors. You'll find them on the web
S2: at Christian Credit Counselors. So Mikisha long answer to a
S2: short question, but I would stay away from debt consolidation.
S2: I would absolutely do debt management or what's called credit counseling.
S2: And I would use Christian credit counselors. Now, let me
S2: take just a moment and mention one other option that
S2: I don't like, but folks will often use. And it's
S2: not debt consolidation. It's not debt management. It's a third option.
S2: It's called debt settlement. Now here's what happens there. With
S2: debt settlement, you will find a company. And by the way,
S2: there's a lot of bad actors in this space. So
S2: this is just another reason to stay away from it.
S2: But with debt settlement, they will ask you to stop
S2: paying your creditors. I know it's crazy. Uh, they're going
S2: to tell you that. Well, if you stop paying, they're
S2: going to get into collections, and that's going to create
S2: the environment where we can come in behind you and
S2: negotiate a reduced settlement. But guess what? Number one, you're
S2: not honoring your obligation. And I think as Christ followers,
S2: we need to. Number two, uh, you know, you are
S2: putting yourself in a position where you're going to trash
S2: your credit because you're stopping payment. So you're going to
S2: get into collections. You know, it could be charged off.
S2: There could be a judgment that's legal, a legal judgment
S2: against you. All of that's going to hit your credit
S2: report just creates a real mess. So that is not
S2: what you want to do. So bottom line, these are
S2: the three kind of most common ways people pay back
S2: debt debt consolidation, debt settlement and debt management. My preferred
S2: approach again, debt management and our friends at Christian Credit
S2: counselors.org and help. By the way, if you have less
S2: than 4000, you probably don't need it. Just snowball it.
S2: Smallest to largest balance. Free up as much as you
S2: can in your budget. Put as much toward principal every
S2: month as you can. Got over 4000. That's where debt
S2: management really shines. Well, folks, we're going to take one
S2: more quick break and then back with our final segment today.
S2: But if you need assistance from a financial or legal professional,
S2: we'd love for you to visit Faith Philly.com and click
S2: find A.K.A. again, that's Faith Philly.com and click find A.K.A.
S2: that stands for Certified Kingdom Advisor. Our preferred designation for
S2: financial advice from a biblical worldview. We're back with much
S2: more just around the corner. Stick around.
S1: This is faith in finance. Live with Rob West. Hey,
S1: if you hear a phone number mentioned today, please ignore
S1: that number and don't call us because today's broadcast was
S1: previously recorded, but we think the upcoming information will help
S1: you and make you a wise steward of what God's
S1: given you. So please stay tuned.
S2: Let me take just a moment and tell you about
S2: what it means to become a faith life partner, and
S2: then we'll head to the phones. Anthony's holding patiently in Wisconsin.
S2: Faith VI partners are those that support the listener supported
S2: work of Faith VI. They come alongside us each month
S2: with a gift of $35 or more, which is huge
S2: because as a listener supported ministry, the only way we
S2: can bring you this broadcast is through your listener support.
S2: And so these are the men and women that say,
S2: I love the program, I've benefited from it. I want
S2: more people to get this message. I'm not getting this
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S2: with you to the tune of $35 a month or
S2: more now, as a way of saying thank you. And
S2: because we know that if you're a faithful partner, you
S2: want to be a good steward of God's resources. We
S2: produce some world class resources that we send out to
S2: our partners. But you would get four copies of our beautiful,
S2: really thoughtful, magazine faithful steward. It's gorgeous and really incredible content.
S2: You get four issues a year mailed to your door. Plus,
S2: every time we come out with a study or devotional,
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S2: of the details. All right let's round out the broadcast
S2: today as many calls as we can. Anthony thanks for
S2: waiting patiently there in Wisconsin, sir. Go ahead.
S6: Yes. Yes, sir. Uh, first off, I want to thank
S6: you for your program. I try to listen to it daily. Awesome.
S6: Just the the financial, the financial, uh, advice from a
S6: Christian perspective is invaluable. But, uh, my question is, my
S6: wife and I are going to be purchasing a home,
S6: hopefully this year. We have a purchase agreement already lined up. Um, Uh,
S6: the homeowners right now, actually, they're looking for a new house,
S6: and they have a home equity line of credit that
S6: they're going to use to purchase their home from the
S6: from the sale of the home that they're living in.
S6: And my question is, uh, the credit union that we're
S6: going through, they're offering us the, you know, the standard
S6: 30 year mortgage with one monthly payment. Yeah. But, uh,
S6: my wife and I, we we try to do extra
S6: payments at least once a month, maybe once every two months.
S6: And the loan officer said that they offer a biweekly
S6: payment plan. And I just wanted to get some of
S6: your insight on that. What would be better? Which one
S6: would be best? You know the pros and cons of both.
S2: Yeah. Well, it's a great question, Anthony. And I love
S2: you sending extra to the principal because that's really going
S2: to pay off. I mean, if you just send the
S2: equivalent of one extra payment a year, it'll take a
S2: 30 year mortgage and make it like 26 years, depending
S2: on the interest rate. Uh, but it's going to cut
S2: years off, which is awesome. And you know, that's a
S2: that's a real savings in interest. Now here's the thing.
S2: I like the biweekly payment option. And I'll explain for
S2: the rest of our listeners what that is in just
S2: a moment. Um, the only thing I don't like is
S2: if in doing that, by setting it up through the
S2: credit union, if they're going to charge you a fee,
S2: you don't need to do that because you can essentially
S2: do this on your own. Now, if they're willing to
S2: do it and not charge anything, that's great. The other
S2: thing is you don't want to have to do it.
S2: You want it to be an optional thing. Because if forever,
S2: if for any reason you ever needed to just go
S2: back to the the one standard payment a year instead
S2: of the the half payment every, uh, you know, two weeks,
S2: you would want that option. You don't want to have
S2: to be forced into doing the biweekly payment. Does that
S2: make sense?
S6: Yes, sir.
S2: Okay. But essentially you can do this on your own. Now,
S2: let me explain how this works for the benefit of
S2: the rest of our listeners. So think about this. When
S2: you make a mortgage payment, you make one payment each month.
S2: So you make 12 per year. And that's just the
S2: way most people pay their mortgage with the biweekly mortgage payment.
S2: Or some people call bi monthly. Essentially, you make a
S2: half payment every two weeks. Okay. Now when you make
S2: a half payment every two weeks, there are 26, uh,
S2: you know, two week periods in a year, which means
S2: you're making 13 monthly payments. You're making an extra payment
S2: every year. And so by getting into that, you know,
S2: biweekly option where you send a half payment every two weeks, essentially,
S2: if you can get into that rhythm you're going to
S2: every six months, you're going to send an extra half payment.
S2: Every year. You're going to send an extra the equivalent
S2: of one full payment. That's great because again, that one
S2: extra payment a year makes a dramatic difference in the
S2: total payback of that mortgage. The key is I don't
S2: want to pay for the option to do that because
S2: it shouldn't cost you anything, and I don't want to
S2: be required to do that. But apart from that, I
S2: really like it. Is that helpful, though?
S6: Yes, sir. It makes sense.
S2: Awesome. Well, Anthony, all the best to you and your
S2: bride on purchasing that home. That's going to be a
S2: real blessing. Just make sure you don't get stuck with
S2: a home that you you can't afford. I realize homeownership
S2: is really challenging right now, and, um, you know, you
S2: don't want to stretch and buy a house that's beyond
S2: your means, but as long as you keep it within
S2: your means, typically that means around 25% of your take
S2: home pay for principal interest, taxes, and insurance with a 20%
S2: down payment, then it'll be a real blessing to you. Hey,
S2: thanks for calling today. Call anytime. We appreciate you being
S2: on the program, by the way. Stay on the line.
S2: I'm going to send you a copy of Faithful Steward.
S2: I think it'll be an encouragement to you. Uh, let's
S2: go to Texas. Hi, Lizette. How can I help?
S7: Hi, Mr. West. Uh, I have a question. My husband
S7: and I, we have a whole life insurance policy, and
S7: we've been paying it for about ten years, and we
S7: only have 19,000. We should have 24,000. But that's what
S7: it shows. I and we we were thinking if we
S7: should cancel it, they would only get 16,000.
S2: Yes. Okay. What is the death benefit on that list?
S2: Do you know?
S7: I believe it's 150,000.
S2: Okay. And do you all need that death benefit? I mean,
S2: if something. Well, first of all, who who is it?
S2: Who's life is insured? Is it your husband.
S6: Or.
S7: My husband?
S2: Okay. Payable to you?
S7: Yeah. And we have two children, so we're all in there.
S2: Okay. But the. But you're the beneficiary. So if he
S2: passed away, the 150,000 would come to you, right?
S7: Yes.
S2: Okay. And if he passed away, would that create a
S2: hardship for you? because you lose income.
S7: Um. Uh, yeah. He's the one that provides mostly for
S7: our home. Yeah, I work part time.
S2: Got it. Yeah. So that's the real purpose of this
S2: and that. You know, I would prefer you see this
S2: life insurance as offsetting that risk that exists that if
S2: he were to be called home by the Lord and
S2: he passes away, that would be a, you know, create
S2: a challenge for you because his income is gone. But
S2: the most cost effective way to get that life insurance
S2: is not through a whole life policy where it's combined
S2: with a savings vehicle. It's through what's called term insurance,
S2: which is pure insurance. You're simply paying the cost every
S2: month for the mortality expense, what it actually costs, based
S2: on the actuarial tables, to insure his life for a
S2: set period of time, based on his health and the
S2: amount of coverage that you want. But I suspect that
S2: 150,000 wouldn't be enough. But the nice thing about term
S2: insurance is, you know, maybe you get a ten year
S2: policy on his life. So that between now and when
S2: you all retire, where at that point, hopefully you've got
S2: enough in the way of assets and income sources like
S2: Social Security, where you no longer need his income. Uh,
S2: he wouldn't have it anyway if he's retired. And then
S2: you don't need that insurance anymore, you drop it. But
S2: while he's still working, you've got plenty of insurance so
S2: that if he passes away, you've got enough to be
S2: able to, you know, fund your lifestyle for the rest
S2: of your life. Well, the the most cost effective way
S2: for that insurance is term insurance. So here's what I
S2: would consider doing. And you know, remember we only have
S2: a couple of minutes together on the air here. So
S2: if you want to get an advisor to get in
S2: the middle of this, that would always be the better option.
S2: But just my kind of high level thoughts are let's
S2: determine how much insurance you need. You know, what would
S2: it take for you to replace his income, at least
S2: between now and when, you know he was planning to
S2: retire instead of 150, you may decide that's 3 or
S2: 4 or $500,000, and then let's go see what it
S2: would cost to get a ten year term policy for
S2: that amount on his life payable to you. And then
S2: I suspect it's going to be perhaps less than the
S2: policy you're already paying. And once it's in force. And
S2: that's the key, we wouldn't want to do anything until
S2: that policy is in force. But at that point, then
S2: you could cancel the whole life, reclaim the 19,000, maybe
S2: use that to shore up your emergency fund. And now
S2: you're no longer paying for the whole life policy. You've
S2: got the cash value to do something else with, and
S2: you have more life insurance for the next decade so
S2: that if something happens to him, you're good. And then
S2: once you all get to retirement, you don't need that
S2: policy anyway, and you drop it. Does that make sense?
S7: It does. Thank you. Thank you so much for your advice.
S2: All right. You're welcome. Lisa, thanks for calling today. We
S2: appreciate you very much. Well, folks, I hope today's broadcast
S2: has been a blessing to you. I hope it's helped
S2: you to think about your role as a steward in
S2: managing God's money, that were to hold it loosely and
S2: give it generously. By the way, speaking of giving generously,
S2: each quarter we spotlight a ministry that we just love
S2: the work they're doing in the name of Jesus. And
S2: this quarter, it's the ministry heart for Lebanon. And, you know,
S2: let me take you to Psalm 82 as we wrap
S2: up here today. Verses three and four give justice to
S2: the weak and the fatherless, uphold the rights of the
S2: afflicted and the destitute. You know, as stewards of God's resources,
S2: we're called to invest in what matters for eternity. And
S2: an urgent need right now exists in the country of Lebanon,
S2: where girls face exploitation and early marriage and a future
S2: shaped by fear instead of hope and our partners. Hartford,
S2: Lebanon is a Christ centered ministry that is meeting the
S2: needs of these young women, sharing the hope and love
S2: of Jesus, building up their identity which is preventing a
S2: lot of these tragedies that are involving exploitation. If you'd
S2: like to be a part of, uh, sharing Jesus with
S2: three girls, you can do that when you go to faith. Com.
S2: Or text the word faith to 98656. That's faith to 98656. Well, folks,
S2: it's been a joy to be along with you today.
S2: Thanks for inviting us into your story. What a joy
S2: it is to encourage you with God's Word as you
S2: seek to be that wise and faithful steward. Our goal
S2: that you'd see God as your ultimate treasure. Let me
S2: say thanks to my team today. I couldn't do it
S2: without him. Amy, Dan, Gabby, T, and Jim. Faith and
S2: finance lives a partnership between Moody Radio and Faith fi.
S2: Have a wonderful day and come back and join us
S2: next time for another edition of Faith and Finance live.