3 Questions (and Answers) About Giving Stock

This time of year, it's always good to reflect on our giving, with Hebrews 13, 16 in mind. Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God. Year's end is rapidly approaching, a time when we're, well, perhaps feeling just a bit more generous. Today, Rob West talks with Jeff Carver of the National Christian Foundation about a different way to be generous. Then it's your calls at 800-525-7000.

I'm Steve Moore. Three questions and answers about giving stock. That's next on MoneyWise Live. Rob, Jeff Carver is a relationship manager in the Twin Cities for the National Christian Foundation. He has 25 years of experience working at the intersection of business and ministry, and today he has some insights on how we can be more creative with our giving.

Well, that's right, and it's a way we can be wise and generous at the same time, and we're all about that. Jeff, great to have you with us today on the program. Yeah, thanks so much for having me, Rob. Delighted. Of course, we're talking about giving appreciated stocks or mutual funds, and Jeff, I'd love for you to start out by explaining why it's important to get familiar with this option, even if someone isn't quite ready to take advantage of it.

Sure, Rob. Well, we're in the midst of a crazy year here with 2020 and COVID-19, and everyone's finances are in a bit of a different place. For some, investment portfolios have grown, and the idea of giving stock is timely, and for others, they may just be starting out, where they may have had a challenging year financially, and the idea of giving stock may be more appropriate in years to come. Yeah, so for some, this is a way to be more generous right now, and for others, as you point out, it's a very worthy goal for the future. So tell us about making charitable gifts of stock.

How does it work? Well, let me maybe just start with a little bit of a story. I got a phone call a couple weeks back from one of our clients. Joe is an engineer and a young executive at a company here in the Twin Cities. Joe and Katie give about $30,000 a year charitably, about $20,000 to their church and about $10,000 to other organizations that they're passionate about. They were interested in a couple of things. Number one, the possibility of giving appreciated securities. Number two, how might they pre-fund some of their charitable giving for the future?

So in the event that maybe they have a little bit more challenging year financially down the road, they've got some resources set aside to be able to honor those commitments that they've made. So Joe has had the opportunity to participate through his company in an employee stock purchase program, and that program enables him to purchase stock from his company and then hold it for a period of time. And over the last couple of years, that initial round of shares that he purchased has appreciated.

In fact, it's doubled. And so what we discussed was the possibility of looking at gifting shares of stock instead of cash for this year. So what Joe would do is what we call at the NCF a give, then sell. So most of us think about selling our stock maybe, and then at the end of the year making a gift of cash, but we turn that kind of upside down. And so we encourage givers to think about giving first, so giving those shares of appreciated securities, and then allowing the NCF to sell those shares under its public charity tax exemption. And in doing so, what happens is the NCF is able to avoid taxes related to capital gain on those shares that have been gifted. So what Joe and Katie are looking at doing is making a gift this year of $40,000 in stock that he's purchased through that employee stock purchase program. We will turn around and sell those shares and avoid approximately $6,000 in capital gains taxes. They then will receive an immediate tax deduction on their income taxes for the full fair market value of $40,000. And then in doing so, what they do is they position themselves to be able to make that gift of about $20,000 to their church over the next year, support those ministries that they're passionate about to the tune of about $10,000 over the next year, and then set aside the last $10,000 for future giving.

I love it. So they're actually giving more than they would have given before by taking this asset and using that as the giving engine, if you will, and everybody wins and money is into the kingdom that perhaps wouldn't have been there otherwise. Well, when we come back, we'll explore this in much greater detail. Yeah, we sure will.

Jeff Carver with us today at the National Christian Foundation, talking about some different and creative ways to do your year-end giving. And we'll come back and take some calls later in the program on any financial topic that's of interest to you, 800-525-7000. And we'll be right back. How did you feel the last time you made a not so good decision? As Pastor Andy Stanley points out, our decisions are like the steering wheel of our life. And so you get decision making right, you get life right. In his new book, Better Decisions, Fewer Regrets, you'll learn five critical questions to apply to every decision you make so you can feel confident you're getting it right.

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Or call 800-557-1985. Jeff Carver is with us today. It's MoneyWise Live. Your host is Rob West. We're talking about the benefits of giving appreciated stocks, mutual funds, other securities. There are benefits to that that lots of people don't necessarily think about. Right, Rob?

Well, that's exactly right. And Jeff, to that point, you know, 90% of giving is done in the form of cash, and yet only about 10% of our wealth is held in cash, which means if most of our wealth is on our balance sheet, that is assets, we're missing a huge opportunity for giving. And this idea of giving stocks and mutual funds plus business interests and real estate and any other assets is really an exciting giving opportunity, isn't it?

Yeah, you bet, Rob. And in fact, it's really one of the most incredible untapped opportunities in the kingdom. So many of us think about giving in terms of our income on an annual basis. And very few of us think about our charitable giving as it relates to the other assets that we hold or the assets that sit on our personal balance sheet. So while many of us have heard or even have participated in gifting of appreciated securities, there's also the opportunity to give all sorts of other assets, including real estate, whether it be farmland or investment property or even closely held business interests, such as maybe shares in a family owned business like a C Corp or an S Corp or an LLC or a partnership.

Yeah, exactly. Well, Jeff, just before the break, you were talking about this young engineer who had purchased some company stock and it actually doubled in value over time. And then he and his wife were able to give this to their church and other ministries and maximize that gift by giving directly to their donor advised fund, which allowed all kinds of tax benefits and ultimately more dollars getting into the kingdom. You know, this donor advised fund is an incredible tool or a vehicle for giving that can receive not only stocks and mutual funds, but other assets like you just described. For those who are just learning about a donor advised fund, maybe for the first time, just talk quickly about what that tool is. Well, a donor advised fund, or as we call them at the NCF, a giving fund is really a charitable savings account. So it's an account in which individuals or couples or families can make gifts of cash, appreciated securities or other assets. You receive an immediate income tax deduction for the fair market value of what you've gifted, and then you can invest those resources and see them grow over time. So you have the flexibility of gifting now and then granting out either immediately over time or even saving those resources to be able to grant out at a future date.

Yeah. Well, it's an exciting tool. And as you mentioned, tremendous benefits. All right, let's get back specifically to this idea of gifting publicly traded securities, stocks, mutual fund shares, etc. These would be of course, held in a taxable account held for at least a year where there's meaningful appreciation and you describe this give then sell approach through the National Christian Foundation, where you get the full benefit in terms of the deduction and the charity gets the full use of the money without any capital gains tax being paid, plus the fair market value income tax deduction as well. There are some other benefits though, Jeff, to this strategy.

I'd love for you to describe those. Well, there's cash flow considerations. So the ability to fund charitable giving from your investments, even in a season when cash is tight.

So it's been fun this year in the midst of what has been a challenging season financially for many. We've had many givers that have been able to continue to support the organizations they're passionate about because they parked charitable assets over the course of the last several years. And that has enabled them to be able to continue to honor those commitments. Additionally, there's the benefits related to flexibility and timing, the ability to gift now and grant later. And finally, there's a benefit of some additional investment flexibility that you provide your financial advisor when you gift stock.

Let's talk about that for a moment. For folks who have a financial advisor, Jeff, and we certainly hope most of them do, what are those advisors likely to say about donating appreciated stocks? Most financial advisors are aware of the benefits of giving appreciated securities, Rob.

But for those that are not, we'll include some resources on a web page we've set up in partnership with you. And it's at MoneyWise.org slash N-C-F. So you can direct your advisors there. The benefits for financial advisors are really twofold. Number one, the opportunity to rebalance your portfolio. So by gifting shares in one asset class, then using the cash that you would have given to charity to instead rebalance your portfolio by purchasing shares in a different asset class. And then secondly, financial advisors love the ability to reset your cost basis.

Even when you repurchase the same shares that you've gifted, you can realize the benefit of resetting your cost basis on those shares, which has the effect of reducing taxes down the road when you ultimately sell them. Yeah. And in my experience, Jeff, advisors really love that flexibility. But perhaps there's some that have some hesitations. What would you say there? Well, really, the only hesitation that we run into with any regularity is that some financial advisors have not worked with their clients in the past to facilitate gifts of stock or they just haven't worked with the N-C-F. But that's where our team really comes in. We are thrilled to connect with financial advisors, explain the opportunity and help walk them through the process.

Yeah, great. Obviously, the other party involved here is the charity itself or your church or ministry. How does giving stock or appreciated mutual fund shares benefit my church or favorite ministry? Well, ministries love when givers give stock, and they primarily do so because it actually enables givers to give more. Many givers choose to pass along those additional tax savings that they realize in the form of their stock gift to charity.

And so going back to our example a little bit earlier with Joe and Katie, they would realize an additional tax savings about $6,000. And they may choose to actually gift those additional dollars that they save to charity, increasing their support. So ministries love that. And they also love when givers give out of their investment portfolio rather than just their income because it opens up the opportunity to gift from our full pool of resources. Many of our givers give stock, Rob, periodically into an N-C-F giving fund to pre-fund future giving. Then when times are a bit tighter, they're able to consistently maintain their support to churches and their favorite charities.

Yeah. Jeff, just a few seconds left. We're so thankful for our partnership with N-C-F because you come alongside givers to help them give efficiently and effectively and do it in community as well. So talk about, as we wrap up here today, N-C-F's role in this and how you all can help. Well, Rob, we've talked a lot about kind of the transactional side of making charitable gifts. But really the thing that N-C-F and our team of people both in Atlanta and our 30 offices across the country are most passionate about is the transformational opportunities that come when we really step into our journey of generosity. I love it. Well, we're so thankful for our partnership and appreciate you stopping by, Jeff, today to talk about this really exciting giving opportunity. Thank you so much.

Really appreciate the opportunity to be on with you and with your listeners. Jeff Carver of the National Christian Foundation has been with us today. More information about ways you can be more generous with the resources God's entrusted to you. Visit MoneyWiseLive.org slash N-C-F, MoneyWiseLive.org slash N-C-F. And we'll be right back with your calls at 800-525-7000, 800-525-7000. This is MoneyWiseLive. The financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst. In splitting heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now, instead of forcing your heirs to do it later. Splitting heirs will foster a real appreciation for the precious resources that God has entrusted to you.

And it's available when you click the Store button at MoneyWiseLive.org. I wonder if anybody recently is just sick to death of conflict. Anybody know what I'm talking about? Where it's just one thing after another. When was the last time you just simply said, does it always have to be this hard?

Can't something just be easy? This whole sense, every bit of this is setting him up for a fresh revelation. And I pray whatever is going on in your life, let me tell you something. If you miss the fresh revelation, you've missed the reason you're there.

So what a shame it would be, because it'll be for nothing. Whatever situation we're in, it is to set us up for a fresh revelation to God. So our chins better be straight up or we are gonna miss it. He is setting Abraham up and he's setting him up with that sense of, can't we just get some peace here? My will, your will, keep your hands off my will. And in most of our conflict about what is belonging to us. This is mine and this is yours.

Don't touch mine. Conflict. Does it turn out all these many years after she died that Gilda Radner was right all along?

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He's Rob West. I'm Steve Moore. Here's our phone number. If you'd like to chat about anything, 800-525-7000.

Anything financial of course, 800-525-7000. Rob West, your host, and we're having some little technical wrinkles here today. Are you there, Mr. West?

I am, just in a remote location, but glad to be with you. Well, we won't get into it, but it really is vital, Rob, that you pay your phone bill. I'm just going to leave it at that. I'll keep that in mind. Especially being the person you are and the ministry that you represent, sir.

But anyway. Well, hey, I guess we're kind of, even though it's not yet December, like it or not, we are into the Christmas season as far as giving and buying is concerned and hopefully budgeting. Anything you want to say about that before we dive in and take some calls? Well, I would just say now is the time to really be thinking about how you can make this season special, keep Christ at the center and not finish the season with debt. And the way to do that is to not get caught up in the trappings of competing with somebody else for the biggest and the best gift. Let's focus on things that are meaningful, and let's do it in a budget-conscience way so we can bless those that we love, but more importantly, share the love of Christ everywhere we turn. And if we do that with intentionality, we'll start a new year without some bills to follow.

Amen to that. Okay, one more time. Here's the phone number. If you'd like to speak with Rob West today about anything financial that you might be wondering about, thinking about, considering, give us a call.

800-525-7000. We begin by going up north just a little bit from where we're located. Green Bay, Wisconsin. Hi, Penny. Nice to have you there. And how can we help you?

Hi. Well, I have a question about estate planning. I'm in my 50s, and yes, I should have done it years ago, but I did not. And the thing is, last year for Christmas, my mom gave me the Suzy Ormond gold suitcase, which has estate planning stuff in it. And then my husband, his relative is in the nursing home, and she had a company do all of their estate planning. I looked on your website for your estate planning. I'm talking POA, living will, that kind of thing, and the regular will. And at this point, I'm just curious what your thoughts are. It seems like it's easy to go with a company to have them do it all, and we just hand everything over, but I want to be cost effective with this too.

Yes. Well, I'm so glad you're asking this question, because the things, Penny, that you're referring to are really important. I mean, we need a will, because that's going to allow your wishes to be spelled out with regard to the things that God has entrusted to you. With regard to a living will, that's going to be really important, because that's going to tell others what your personal choices are about end-of-life medical treatment, health care directives, same thing. Not necessarily a trust, if things are simple and we don't have any lifelong dependents, you're not looking for an anonymous hand in place prior to your death and a simple will, plus some of these other things, the health care directive, the power of attorney, those are going to really cover it. Now, as to who should do that, I always prefer having an estate planning attorney. It's going to vary by state, how those documents are drafted, what needs to be in them. We certainly wouldn't want to cut a corner and have something not be effective for you when you need it, because it wasn't done properly.

Yes, there are a number of online kind of turnkey solutions and they can be very cost effective. I just always prefer for you to sit across the table from somebody who has the knowledge and expertise, who can ask the right questions and then get the documents done in a cost effective way, but have them done appropriately. Then I would say, in addition to that penny, revisiting them every couple of years or when your life situations change. So where do you go for that? Well, I connect with a certified kingdom advisor there in Green Bay. You can go to our website, MoneyWiseLive.org, type in your zip code, find a CKA and ask for a referral to a godly estate planning attorney. You could certainly compare the cost with that professional for the items you're talking about, POA, wills, living wills, to an online solution.

But if it fits in the budget, I'd rather you go to a professional estate planning attorney who has that competence and expertise. What do you think, Penny? Does that help? Does that make sense? Yeah.

And then that's what I was kind of wondering. The other question, my in-laws are kind of in the same situation. They're in their late seventies and they don't have a will yet either. And so that would be in that situation, it would be a best idea to just to find an attorney in the local area. Yes, ma'am. That would be my recommendation because that's, again, going to make sure everything's done appropriately given the laws of the state in which that they live and make sure that everything is thought through. And perhaps a question or two that will be asked by that estate planning attorney might prompt additional thinking or considerations that you haven't thought of that can be reflected in those documents as well.

So I would offer the same advice for those folks as well. Penny, thank you very much. God bless you. Let's go to let's see.

How about Chicago? Doris, having a little technical phone issue here. Are you are you with us today? Yes, I am. OK, great.

Great. And what's your question for Rob? Thank you for taking my call. My question is, my private client at my bank called me to tell me that I had too much money in my checking and my savings account. And we made an appointment.

I made an appointment to see him about two weeks ago. And when I called to see if he was going to be available, he told me that he tried to discuss ways to, you know, things that he wants me to take out an investment account. And I really do not need another investment account.

Let me just tell you this, Doris, because we're coming up against a break here. There is no reason you need to invest that money if it's money that has been earmarked for savings. I would leave it right there. As long as it's in an FDIC insured savings account, it's protected up to two hundred and fifty thousand dollars.

And don't let anybody tell you you need to invest it if that money is intended to be there for your emergency reserves. And thank you. We appreciate that call. You're listening to Money Wise Live.

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Never Enough, Three Keys to Financial Contentment, available when you click the store button at MoneyWise Live. With SRN News, I'm John Scott. Even after his administration last week agreed to begin the formal transition of power to Joe Biden, President Trump maintains he is contesting widespread voter fraud. Mr. Trump continues to cite thousands of contested votes in battleground states which fell into the Biden column as vote counting continued in the days following Election Day. Moderna says it will ask U.S. and European regulators to allow emergency use of its COVID-19 vaccine. As a new study, results confirm that the shots offer strong protection, wrapping up the race to begin limited vaccinations. Moderna just behind Pfizer and its German partner BioNTech in seeking to begin vaccinations in the U.S. in December.

On Wall Street, the Dow lost 271 points today, the Nasdaq was off 7, and the S&P dropped 16. This is SRN News. Well, as we wind down 2020, moving into the very last month of the year and why not? If we can help you with anything financial, Rob West is here taking your calls today.

800-525-7000. You know, it's a little, maybe it's refreshing, I don't know, to joke a little bit about 2020, Rob. We're already, I think, for 2021.

I mean, how much worse could it get? But at the same time, we know that God is totally in control. Nothing takes him by surprise, that he loves us, that he's promised to meet our needs, and that he's there. Whether it's the good times, the bad times, the confusing times, none of this confuses him. And I think we can almost relax and have peace in that, don't you think?

Boy, can we ever. I mean, if there was ever something to hold on to, it's the promises of God. But here's the thing, Steve, I think we need to, as the Scripture encourages us to do, constantly be renewing our minds, because we can be swept up in bad thinking by getting too fixated on the things of this world, the things that are uncertain, the things that are changing. Instead, we need to focus back on the Lord, our provider and sustainer, and as you said very appropriately, nothing caught him by surprise in the midst of this. So I think we need to return to God's Word and turn down the noise of this world and turn up God's voice in our lives. Exactly. Our faith in Christ has nothing to do with outside circumstances.

Easier said than done, but the absolute truth. All right, here's our phone number again, 800-525-7000, up to Coeur d'Alene, Idaho. Hi, Lori, what's on your mind? Hi, how are you guys today? Great, thank you.

Very good. We have a small business where we sell modular homes. We've sold one this year and have an opportunity to sell another one, but I'm wondering if we should hold off until January 1st because of the difference in the administration. Can you help me on that?

Can you enlighten me on what you think the tax burden will be, one over the other? Yeah, well, that's a great question, Lori, and obviously these are properties that are investment properties, not your personal dwelling, is that right? I lost you there for a second, Lori, is that correct? It is a business.

Very good. Yeah, so I would say to you, we just don't know what the future of the tax law will look like. Certainly as we change from one administration to another, if that's what happens, then there could be changes on the horizon, although I think given the way the Congress is looking, we may not see a lot of changes. Bottom line is, we just don't know whether it's next year or the following. What we do know, though, is that the capital gains taxes are very low right now. And so if this is a long-term capital gain, I think perhaps it's a great opportunity for you to lock in the tax burden that you at least know would be the case today, as opposed to an unknown down the road.

So if it were me and you had the opportunity, I'd probably go ahead and liquidate the property now, as opposed to waiting, just given some of the uncertainties and the fact that in this low, low tax environment, there's probably only one direction they're going to head, and that's up, whether that's next year or further down the road. Thank you. How's that sound?

How's that feel, Lori? Very much. All right. That helps a lot. Thanks very much.

God bless you. Next, it's Veronica, Fort Lauderdale, Florida, and what's your comment or question for Rob? Hello. Thank you for taking my call.

Yes, ma'am. My question is, I'm looking to purchase a car because I understand that because of the pandemic, it's been a rough year in the car industry, and there should be some pretty good sales, especially on pre-owned cars. So I did look at a car. The dealer said he pulled my credit. He claimed I had good credit and offered me 4% on a used car. So after the fact, I did some more reading, and I read where people pulling multiple pulls on my credit for a car loan to actually affect my rating and make my standing for a good interest rate go worse. So I was confused about that, and I wanted to know some... Just could you shed some light on it in layman's terms so I can understand what is really going on?

I'd be happy to, Veronica. You're asking a great question that needs to be considered as you think about seeking credit for any purpose, whether that's for a car or a mortgage or something else. Here's the way that works. There's two types of credit pulls. There's one that you initiate yourself that has no impact on your score, and there's one initiated by a lender for the purpose of determining whether to extend you credit. One's called a soft pull.

That's the one you initiate. The other is a hard pull. The hard pull does factor into your credit score. As you're seeking additional credit, it does slightly raise your risk level in terms of the way the algorithms are built, because you're out there looking for new credit. Typically, a hard pull might pull your score down temporarily 20 or 30 points.

Now, here's the thing you need to know, though, about shopping for that car. Any hard pulls by a lender within a two-week period for the same purpose, meaning you're seeking a car loan for the purchase of a car and you're exploring multiple lenders, during a two-week window, all of those pulls are going to be treated as one. That will only impact your score one time, which gives you then the freedom to go out and shop it. Now, when you get beyond the two weeks, if another hard pull is initiated, that could bring your score down slightly more. Just keep in mind, as long as you keep it in that two-week window, any potential decline of your credit score has already been done, and so you'll then have the freedom to go out and find the very best rate possible. So I have to do it within this two-week window, so that it'll be considered like one pull? That's exactly right, because when you get beyond that, if another lender pulls your credit, even for the same type of loan, it's going to impact you again. Now, again, 20 or 30 points is not major, unless you're right there on the bubble, where you have to get above a certain number to qualify for a particular interest rate, and that second inquiry or that second hard pull pulls you down below that, that could have an impact on your credit score. So that's why it'd be best for you to get it done in those two weeks. Veronica, we're glad you called in today, and we hope that helps you.

Thanks so much. And Rob, as far as checking your credit score, some people do it a lot, some people only do it when they think about it. Is there any good number, any normal number, any recommended number for the average family? Well, you know, Steve, it's really changed because of the accessibility to your credit score. There are so many people that are now making available at no cost credit scores. Most of your credit card companies, if you have a credit card, and by the way, if you do make sure you pay off that balance every month, if you can't cut it up, but if you do, many of them are making scores available monthly with a monthly update at no cost. NerdWallet, some of the other lenders out there, Credit Karma, I shouldn't say lender websites offer free scores. So I would call it monthly just because that might be one of the first places you'll see where fraudulent activity will show up, meaning somebody's opened an account in your name without your permission, fraudulently, it will have an impact on your score, it might alert you to something going on that you can then follow up on and take care of it.

So I would say, if you have access to a free score, go ahead and do it every 30 days. Okay. All right.

Sounds good to me. And I'll tell you what else sounds good, ringing phone lines. That means we have someone to say hello to.

After all, it is a call-in program. We're Money Wise Live. He's Rob West. I'm Steve Moore, and you'll find us at 800-525-7000. Check around. We'll be right back.

Hi, I'm Barry McGuire. I'm here to help you understand how urgent and how fun it is to share your faith at every opportunity through the eyes of a layman. You know, without understanding Bible prophecy, it's impossible to understand what's going on today. But the prophecies have always seemed so remote or removed from our current circumstances are now being fulfilled before our very eyes. It seemed that America would never give up its sovereignty and allegiance to its president to join a one-world government led by the Antichrist. But here we are in absolute turmoil over our nation's leadership, as is every other country in the world. Who would have ever thought that the fulfillment of Bible prophecy would become our most powerful tool for leading people to Jesus? But that's where we are today, because the accuracy of Bible prophecy regarding the birth, life, death, and resurrection of Jesus Christ and the times we now find ourselves living in confirm the truth of the Bible to every unbeliever who is generally seeking truth. There is nothing more exciting than knowing God is using you to move people closer to Him.

Join us at igniteamerica.com. Welcome to High School Prep Debate. Our topic tonight, religious expression in the classroom. Please help me welcome our dignified debaters from Central High School in Michigan and Jefferson High School in Virginia.

All right, let's get started. Central, give us your opening argument on religious expression at school. The founding fathers of our country would roll over in their graves if they knew prayer and Bible clubs were meeting at school. There's no place for it. We're here to educate, not indoctrinate. And Jefferson, your opening statement, please. Oh, religion is like ice cream.

There's lots of choices, and we should sample as many choices as we can. I mean, who can say one religion is better than another? Religious expression at school should be encouraged.

Getting tired of all the talk? How can you debate the important issues without any morals or values? You have to have truth. Otherwise, the answers to critical issues are capricious. Jesus said the truth will set you free, and the Lord Jesus is truth. Many people adopt an attitude toward marriage and finances that it'll all work out somehow.

But sadly, it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's Way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy. Money and Marriage God's Way is available when you click the Store button at MoneyWiseLive.org. Okay, by now you've probably heard us mention the new MoneyWise app. It's based on the tried and true envelope budgeting system, but we think it's far more high tech.

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App.MoneyWise.org, and you'll also find it in your Apple app store or Google Play. Let's go back to our phones. Canton, Georgia. Hello, Renee. Welcome to the program. What's on your mind? Hey, I am currently looking for a job. I'm working one day a week. I'm in the medical field, and due to COVID, our office is pretty much closed. I am in need for a car, and I can't take on any payments, obviously.

So I am thinking of taking out of my 401k just to purchase a car and have it done and over with, and I want to know what your thoughts are on that. Yeah, tell me about your current car situation, Renee, and by the way, let me just back up for a second. I'm really sorry to hear about your situation and grateful for your work in the healthcare field. I know this has been an incredibly difficult year for so many, but most importantly for those in certain sectors of the economy and the industry, certainly healthcare being one of those in so many ways.

So we're just going to pray that we get past this quickly, and certainly don't forget God is your provider, and let's keep focused on his promises even in the midst of this difficult season. What is it, do you have a car right now looking to replace it, or are you without a mode of transportation currently? I do have a car. It's on its last legs, but I do have a car, yes, and it's paid for. Okay, and are you having to put a lot of money in it, Renee, to keep it running?

Yes. Okay, how much would you say you've put in over the last 12 months? About $1,500 or $1,600. Okay, and do you have reason to believe that will continue, or could you be past the worst of it and you might get a bit more time out of the car given the repairs that you've done over the last year? No, because right now it's a lot. It's like the transmission, they just told me I need to get a transmission, the windows don't work, the heat just went out, so it's several things at once right now. And it's got 275,000 miles on it, so that's to be expected, I guess. Yeah, absolutely. I like the fact that you've taken this to the end of its useful life, but it sounds like perhaps it's beyond that at this point, so I certainly understand.

Well, here's the bottom line. You need transportation if you're going to be able to work, and so I understand that. The 401k is typically one of my last resort options. Certainly it would come before putting it on a credit card or something like that, but keep in mind it's expensive money that you're going to access, whether that involves a penalty, the taxes that will be due, not to mention that this money will no longer be available for you to grow for the future, and yet I realize that this is an unusual season and you've got to have some reliable transportation.

So I think the key will be if you are going to take a withdrawal, just understand on the front and the implications of that, whether that's a penalty, any taxes due, and set that money aside, and then spend as little as possible for a reliable car. Now, you may want to look around or ask at your church. There may be somebody who's willing to help, especially in a season like this, understanding you're in the healthcare field and what you've been going through. Perhaps somebody in the churches would be willing to bless you with a good car at a reduced price. I'd start there. Next would be AutoTrader and CarMax, but I think the key is to keep it down as low as you can, pulling out as little as possible, and obviously moving on towards some reliable transportation.

I think lastly, anything you could get on a private sale, if you were to sell this car, I realize you wouldn't get much, but anything that you could get could be put toward that new purchase. But I would start at your local church. I ask the Lord to intervene here and provide something for you even miraculously, and we'll see what God's people do as you make this need known.

Yeah. Renee, we know you're in Canton, Georgia, and you may or may not be aware of the fact that I'm sitting in Gainesville, Georgia today, and Rob is sitting in Atlanta, Georgia today. Between the two of us, we have a lot of friends, and they are generous folks, and you never know it. It's the giving time of year, so we'll ask all of our listeners to pray about your situation, and perhaps someone is sitting on a car they don't need.

Perhaps someone is feeling extra generous this time of year, and they'd like to contact you and bless you in some way. If they will contact us at MoneyWise, we'll figure out a way to contact you and see if maybe something like that would work out, or you could call back the number that you called today. Maybe that would be best, calling back the number you called to get on the program today, and we can work it that way. But nonetheless, as Rob said, God has a plan for you. We'd rather you not pull from your 401k, but give that some prayerful consideration.

Let's see what God does, and please bless us by letting us know how he works this out for you. We're glad you called. God bless.

Miami, Florida. Hello, Norma. What's on your mind today? Hi, how are you? Thank you for getting my call.

I have a question. I have a health saving account through my work, and I'm using it for me and my husband. We're both 60. My question is, is it smart to invest? Because I have like almost 4,500, and I could invest and leave the other money aside, but I'm not sure if I should touch that money because I have a deductible a year, which is 2,700, but we haven't used it, thank God, this year.

And every time I go to the doctors, I tell my husband, we're both working. We don't need to get any money from the saving account. So I don't know what should I invest? The first thing I would look at is any minimum balance that's required in the account prior to investing.

You want to obviously meet that threshold first. Then keep in mind, you've got a high deductible health plan, which is what qualifies you for the HSA in the first place. So perhaps even though you haven't used it up to this point or a lot of it, because you haven't had a lot of medical bills, what you want to make sure of is that if you had something unexpected, a magical emergency that were to come up, that you have enough liquid funds in your HSA that you don't have to sell any investments, because anything you invest, we want a five to 10 year time horizon. With that said, Norma, one of the reasons I love the HSA is for the reason you're describing, that you can build up money, especially if you're healthy, you're maxing out your contributions every year if you're not using it, especially when you get out of the ages where you have small children that have a tendency to make lots of office visits on a frequent basis, you can put that money to work and it can be a great additional asset for your retirement. So I would just say, make sure you've accommodated for the high deductible for a medical emergency.

But beyond that, if you have reason to believe it's money, you can just let go until retirement, and you're not going to need it, then absolutely, I would look at your investment options provided by your plant administrator in your HSA and put that money to work. Norma, thank you. We're glad that you got through today. Let's try to squeeze Corinne in calling from Orlando. Just a couple of minutes and what's your question for Rob West? Hi, yes, thanks for taking my call. And I just wanted to say, well, I have a house and friends will tell me he should refinance it for the time to do it.

And I did inquire on it, I didn't get much info yet. But basically, the pros and cons of refinancing, because friends are telling me you can take out equity, you can deposit it and do investment, because my house has more than doubled since I bought it 10 years ago. And it's worth double more than double than what it is now.

So they're like, take out 100,000 and put it in an account. You know, so I'm getting all kinds of advice, but I just want to know what to do. Yeah, I hear you.

Well, a couple of thoughts on that, Corinne. First of all, I would say, I'm delighted to hear that it's risen so much in value, that's a great thing. But I wouldn't see that as an asset to tap into. Remember, as far as I'm concerned, the goal for that home is for you to be completely out of debt for that home to continue to rise in value, and for you to owe nothing on it. The only way for you to do that would be to continue to pay it down just as quickly as you can. And do that religiously, even perhaps adding more to that payment as you're able to and as long as your other more pressing priorities are met. The only reason why you'd want to refinance is this is an incredibly low interest rate environment, in fact, historically low. We've not seen these rates in years and probably, you know, in the future won't see them again for a long time. So if you can save at least a percentage point on the refinance, you plan to stay in the home for five to seven years, and you don't extend the term meaning if you had a 30 year mortgage and you've got 25 years left, don't go back to a new 30 year mortgage go 25 or even 20 years. But I wouldn't be pulling money out as some have suggested to you to invest.

Because remember, the goal is to get that paid off and be completely out of debt. Green, we hope that helps you. We wish you the very best. And with that, we're going to have to bid you would do and the same thing here, Rob West. Always a pleasure, sir. We'll come back tomorrow and do it all over again. Okay. I'll look forward to it, Steve. Thanks.

All right. And again, thank you for tuning in. If you enjoy this program, would you do us a big favor?

Let a friend know. It really helps us to expand our reach and our ministry when others know who we are. Thank you also for your generous donations that help us. Well, keep the bills paid, if you will. You can find out more about who we are and you can make a generous donation, a donation of any size when you visit MoneyWiseLive.org. And then finally, my thanks to Amy, Erin, Dan and Jim for their technical expertise today. MoneyWiseLive is a partnership between Moody Radio and MoneyWise Media. Drive safely and join us again tomorrow.