3 Ways to Invest

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage. My grandma loves iced tea. It's her thing. So I go to hang with grandma for a bit, and I see she's holding her big plastic cup with her tea, but the cup is literally sitting inside one of grandpa's sports socks. And I'm not making this up.

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Nor does a crown endure to all generations. Wise words from Proverbs 27, and especially when we invest. This is Money Wise Live, where the Bible informs all of our financial decisions. That would be the do it yourself approach, sometimes called self directed investing. Now, why would you choose this method of investing?

Most likely because you don't like paying fees for someone else to do it for you. And of course, if you do choose to go it alone, you really have to stay on top of things. Now, that doesn't mean you watch the market every day and decide to buy or sell at the drop of a hat. We're not trying to encourage day trading here by any means.

Here's the key to a successful DIY approach. You have to keep your emotions in check no matter what the market is doing. These days, technology allows you to make a trade with the push of a button, but you still have to stay disciplined and stick to a long range plan. And even though you're taking active control of your investments, you can still put your money into mutual index or target date funds that lower your risk and reduce the need for frequent trading. Now, the greatest danger in self directing your investments is that you'll fall victim to market swings selling out of fear when the market takes a tumble or buying out of greed when the market is hot.

You have to keep your emotions in check and stay the course. Now, let's move on to investing method number two. And it's the newest, frankly, it's using what's known as a robo advisor.

And sorry, you sci fi fans out there. It has nothing to do with robots. A robo advisor is sophisticated computer software algorithms. And robo advisors are now offered by most of the big online brokerage houses. So we're talking Fidelity and Vanguard, among many others.

Now, how do they work? Well, you input some basic information, we're talking your age, perhaps a retirement goal, then the robo advisor or the computer algorithm recommends a diversified portfolio tailored to your needs. With an emphasis on low cost exchange traded funds and bonds. The benefit is you get a prepackaged investment portfolio tailored to your needs, but at a much lower cost.

We're talking about an annual fee of maybe one quarter of 1%. Now the robo advisor will automatically rebalance and diversify your portfolio. However, for financial and estate planning, you're essentially on your own robo advisors don't do that, at least not yet that might be coming. So a robo advisor is an expensive way to automate your long range investing.

And as you might guess, the last investing method involves an actual human being. Of course, we're talking about hiring a real live financial advisor. This would certainly be for folks who want more than just investing advice. As the name implies, a financial advisor can assist you in all areas of your finances from investing to tax strategies, of course, even estate planning. Financial professionals come with various specialties, but for the widest range of assistance, you probably want to go with a certified financial planner, they would have a fiduciary responsibility to give you advice that's best for you, even if it doesn't make them the most money. And of course, no matter what type of financial advisor you need, you can find ones that share your values or Christian worldview by choosing a certified kingdom advisor. It's easy to do just go to our website money wise live.org and click Find a CKA. Now, going with a financial advisor will cost more than the other methods, but there's two main benefits with this approach. It can actually be the most cost effective because the more you pay up front allows you to receive advice that will pay for itself with increased gains and reduce taxes.

Second, going it alone or hiring a robo advisor will get you not the personalized advice that you get from a real professional. Yeah, we'll finish this up right after the break. Let me remind you of our phone number. It's open and ready for your calls.

800-525-7000. Welcome back to Money Wise Live. I'm Rob West.

Steve has the day off today. This is where God's word meets your financial decisions and choices. We're glad that you decided to spend some time with us today. Phone lines are open. We're taking your calls and questions on anything financial. Here's the number 800-525-7000.

That's 800-525-7000. We were talking just before the break about the options you have when it comes to investing God's money. Clearly, we should be seeking a return on our investments.

We see that plainly demonstrated in the parable of the talents. We should put God's money to work. We recognize a portion of what he entrusts to us beyond what we're using to provide for our families after careful consideration and prayer should be saved for the future, whether that's a short term, medium term or long term goals that we might have. God-given goals that align appropriately with our values and priorities. And to the extent we're saving for, let's say, retirement, that season of life where God redirects us to another assignment, perhaps beyond our ability to work for pay, then we need to be able to support that lifestyle that we believe God has ordained for us. And so we need to set something aside for the future.

Well, how do you go about that? Do you want to invest it yourself? Do you want to use more of a more of a technology driven solution? We were talking about robo advisors, and these are growing dramatically as a part of the fintech movement with not only some upstart fintech companies like Betterment and Wealthfront, but also with the traditional brokerages like Fidelity and Vanguard getting into the game. And then there's that third category, which is using a financial professional.

And I think for most folks, this is where you ought to be when it comes to being a steward of what God has entrusted to you, especially as you begin to build some wealth. I think having that objective third party is really critical. And by the way, this was the question we asked on our Facebook page today.

You can find us when you search for MoneyWise Live at Facebook. We said, why do you think it's helpful to have a financial advisor? And Bob said, well, objectivity for the same reasons lawyers shouldn't represent themselves. That's great thoughts, Bob.

Richard said because the current U.S. system is convoluted and complicated. And Matt said it's better to have someone else seeing where your money is going. Matt also made a great point. He said that even leading financial experts have financial advisors.

Think about that. Ron Blue was here just the other day, and Ron was sharing that even he has a financial advisor. So you're talking about somebody who's written 20 books on personal finance that also has a financial advisor.

And he makes a key observation, and that is I can't hold myself accountable. And so having that third party that can engage my wife and me in this area of money management and accountability, asking the hard questions is really a key role for a financial professional. I'll finish again, though, with something we said before the break, and that is it's really important in my view that you have somebody who shares your values, who's not only a competent, time-tested advisor, but also somebody who's really been specially trained in the application of a biblical worldview to financial decision making.

For us, that means they've attained the Certified Kingdom Advisor designation, and you can find one of those professionals at our website, MoneyWiseLive.org. All right, just a couple of additional lines open, 800-525-7000. Let's go to our first caller of the day and welcome Barry in North Carolina. Barry, you're on MoneyWise Live.

Hey, I really enjoy you guys' show. Thank you. I'm married and 64 years old. I was self-employed until 2008 when I was in a real bad trucking accident. I got hit by a tractor trailer.

But I'm still here, and the Lord has sought it that I should not go home yet, and I can still work some. I became disabled, of course, and I'm on disability. I managed to save close to $20,000.

One part of it is in a CD that's coming mature this next month. The other part is I opened, I thought it was a Roth IRA back when I was working. I put in my company's name, and so it's on the information sheet about the company. It says a STEP IRA, and so I'm not sure what that means. But anyway, I heard you and Rob talking about, or Steve, about a high-yield interest rate savings accounts like Allied, American Express, there's none in Ponce.

They all have 0.50% interest. I don't have a big nest egg. I don't have a 401k, so I don't have very much money. And I'm at my age where now I don't have another 30 years, so I was wondering what the best thing to do, or which route should I go with what money I got, or if it's even worth it. Well, it absolutely is, because whatever God has entrusted to you, whatever you've been able to save through your hard work, limiting your lifestyle, being able to put something aside for the future now and in the days to come as you continue to save for that next season, we want to be careful stewards of that, and I think that means that money needs to be working for us in a way that's appropriate.

You're not taking too much risk, you're properly diversified, which comes right out of God's Word with a long time horizon and the right investment mix. We need to put this money that you've been describing in different buckets, so let's talk about bucket number one, and this is money that you want access to. We typically call that your emergency fund.

I'd like for you to have three to six months expenses. Is that the money that's been in the CD, or do you have savings that you could access in the event of the unexpected, separate from the CD that's maturing? Yeah, I do have some savings. It's a money market that I have with my credit union. Okay, very good. So when you look at this CD that's maturing, is that money you plan to use in the next ten years?

Hopefully not. I was looking at it's not going to make very much interest. It started out with a pretty decent amount of interest when I did this a year or two ago, but the interest now is really, really low in the credit union. I was wanting to see if I could move that money or how to move that money into a high-yield savings account.

Yes, sir. No, that makes sense, and so I think with that money market, if that's not yielding a decent rate, that's your emergency savings or a portion of this CD. I would think in terms of getting that up to perhaps six months expenses, and I would look at a high-yield savings account. It's a bit of a misnomer in this low interest rate environment, although rates are moving up. We haven't seen the high-yield savings rates move up quite yet with them. The banks are enjoying keeping a bit more of that spread as the Fed is going to be looking to raise rates.

So high interest savings are still around 0.5%, and you're right. I like Ally Bank. I like Marcus at Marcus.com, which is a retail operation of Goldman Sachs. I like Capital One 360. Any one of those, you will get no fees. You'll be able to open as many accounts as you want for different savings buckets.

You'll get that half a point to maybe 0.6%, and as short-term interest rates move up, the high-yield savings will move up with it. Once that six months is funded, Barry, and we're looking at money, if you don't have any two- to three-year, maybe five-year or less goals for that money, then I think you can put it to work, whether that's that SEP IRA, which, by the way, stands for Simplified Employee Pension. It's a retirement account for folks who are small business owners, don't have access to a 401k. That or your Roth or any other longer-term money, I would look to deploy. If you have assets of less than, let's say, $75,000 to $100,000, you're probably going to be needing to do that yourself.

I'll give you two options. One would be a robo-advisor like Fidelity or Schwab, the Schwab Intelligent Portfolios, which I mentioned earlier. You would answer a series of questions. They'd build a low-cost portfolio for you using exchange-traded funds. Again, low-cost, meaning around a quarter of a point management fee, and you're going to capture the overall moves of the market, not individual companies, but the broad market moves in both the stock and bond portfolio that's appropriate for your age. If you wanted to be a little more hands-on but with some professional guidance, you could visit with our friends at soundmindinvesting.org.

They would be a great resource for you. But I appreciate so much you thinking about this. It's the right question to be asking as you are a careful steward of what God has entrusted to you.

It's time for us to pause. We'll be back with many more of your questions as we continue to look at God's Word related to what you're dealing with every day as you're a steward of what God has entrusted to you. All the lines are full, but we may have room a little later in the broadcast, and we'll be back with much more on MoneyWise Live. This is MoneyWise Live, where God's Word intersects with your financial life. Taking your calls today, and we're going to head right to Nashville, Tennessee, and welcome Alex to the broadcast.

Alex, go right ahead. Hi, thank you for taking my call. I appreciate your great service.

Thank you, sir. My question is, I'm right now 57 and turn to 58 on August, but unfortunately, I don't have any 401k. But I have wrote an array in Primerica.

It's not a lot of money, like $5,000. So, 401k in the company where I work, they are offering me for the one they are matching on Tuesday, I'm going to sign. So, can I transfer the one of the Roth IRA, which I have in Primerica, to 401k?

No, sir. Unfortunately, you can't. There's different tax treatment going on with the Roth IRA. Then even a traditional IRA. And even then, typically, they wouldn't accept those funds once it gets to an IRA. If you have, let's say, an old 401k, and you're moving to a new employer who also has a 401k, in many cases, they'll let you move that in.

You have to verify that with the plan administrator. But in this case, because it's already an IRA, and in addition to that, it's a Roth, which you didn't get the tax deduction, but that money is growing tax-free, you would not be able to transfer it into the traditional 401k. So, what I would recommend, Alex, with that matching, I think you're making the right move here in that beginning to contribute systematically to this 401k, take advantage of those matching dollars, which is free money, makes a lot of sense. Make sure you pick the right mix of investments inside the 401k that's appropriate for your age and objectives. If you need some help with that, you could seek that out. And then with the Roth IRA, I would probably suggest, if there's not a whole lot of money in there, you do one of the two options I mentioned to the previous caller.

Either visit with our friends at soundmindinvesting.org to consider some mutual fund options that could be used for investing these dollars, or look at transferring that to one of the firms that offer more of an automated robo-advisor type solution like Schwab or Betterment or Wealthfront, and hopefully that'll help you today. We appreciate your call very, very much. Let's stay in the state of Tennessee and welcome Teresa to the broadcast. Go right ahead. Thank you so much for taking my call.

Sure. I recently became an executor for a family member who has a retirement fund that has both a Roth and a regular IRA in it, and it has designated beneficiaries. My main question is just I want to handle it responsibly as I contact them for that notification. Is there a way that unnecessary taxes and penalties can be avoided as that's dispersed? Is there a right way and a wrong way to go about doing that so that you don't incur unnecessary taxes or expenses by the way you handle it? Yeah, it's a great question, Teresa, and I appreciate you wanting to be a faithful steward of your dad's estate, especially as you've been named executor. Taxes really shouldn't be an issue. The taxes typically would be paid by the estate, but given that the exemptions are so high, there would probably not be any estate tax here. If you passed away in 2020, it's $11.5 million that you have to get above in terms of the total value of the estate before estate taxes kick in.

In 2021, it's $11.7 million. So we're talking a significant estate here. Beyond that, with the will, that would pass according to the probate court and they would direct you as to the process of distributing any funds and when that transfer can occur. With the beneficiary named accounts, like an IRA where there are beneficiaries listed on the account, you would just provide the death certificate and information to the brokerage firms and those would pass directly to those that are inheriting those. And then the IRS provides the guidelines at that point as to how that money is distributed. So it will be taken out according to those schedules and often depending on whether it's a spousal IRA or it's an inherited IRA non-spouse, there'll be different methods by which you can take it out over expected life or over a 10-year period and then taxes are paid as that money is distributed. So I think you're doing the right things. I don't think you have to be terribly concerned about doing something wrong because there really aren't going to be any tax implications here for most people, just given how high that bar is for estate tax.

And again, once it gets to the beneficiaries, they will handle that in terms of their own taxes moving forward with their CPA and we appreciate your call. Let me remind you before we head to our next break that the MoneyWise app is available. If you've not downloaded it yet, we would encourage you to do that.

You'll find it in your app story that the Apple or Google Play store and it's the best digital envelope system I've ever used. Plus, our community is there where you can ask questions and receive encouragement as a steward of God's money and all of our content in the Discover tab from the leading voices in Christian finance. Go download it today. We're going to pause for a brief break. We'll be right back with MoneyWise Live. Don't go away. This is MoneyWise Live. We're so glad you're along with us today. I'm Rob West.

Steve Moore has the day off today. Hey, let's take an email question. We take your emails and read as many of them as we can on the air periodically.

And if you have one you want to send along, we'd certainly love to receive it. Questions at MoneyWise.org or you can go to our website MoneyWiseLive.org and click ask a question and you'll get a personal response from one of our MoneyWise coaches. Today's email comes from Sally and she's calling from Eugene, Oregon. And Sally writes, should all of us have our accounts frozen with our credit bureaus? And what Sally is talking about is a credit freeze. Each of the bureaus, Experian, Equifax and TransUnion, all by law, have to offer you the ability to freeze your credit report at no cost.

You will have to make that request either through their website or by calling them or through the mail. But essentially, my recommendation there is typically you can always choose to do it. Typically, I would say if you know your information has been compromised, which seems to happen often these days, or you know that you've been the victim of identity theft, you would absolutely want to freeze your credit. That's essentially going to place a PIN number on your credit report so that if anyone tries to open an account in your name, and this would be someone fraudulently trying to do that, they wouldn't be able to do so because there would be a PIN number that would need to be provided in order to allow the lender to access the credit report. And if they didn't have the PIN number, because that's something you only know, then that would stop them in their tracks.

So you could do it. It's going to add that extra layer of protection, but also an extra hassle factor, if you will, when you're trying to open a new account or seeking some credit. So I typically say if you know your account or identity has been compromised, go for it.

Otherwise, it's really up to you. And we appreciate you all sending those questions. And again, the email address questions at MoneyWise.org. Let's go back to the phones to Indianapolis, Indiana. Bill, you're next up on MoneyWise Live. Go ahead, sir.

Okay, thank you for taking my call and got a quick question for you. I had an uncle that he was a financial planner, but this is back in the day where people would give him their paycheck and he would give them an allowance and he would pay their electric bill and department store bills and all that kind of stuff. You know, unheard of today. He believed it so much. He gave his check to his boss and his boss did the same thing for him.

A piece of advice that he gave my dad. And I think my dad followed through with it because I remember I was a teenager and not paying attention to this stuff. But my dad paid. We had a mortgage burning party or something and we all went out to eat when I was like 17 and they had bought a 30 year mortgage house two or three years before I was born. My uncle told my dad, if I got this straight, take half of your payment for your house payment and send it in two weeks early. If your payment is $600 and it's due on the first, if you send 300 the 15th of the month prior, and then 300 on the first, not to pay an extra penny, but you're just paying that off. He said you'll pay your mortgage in like 12 years less and therefore the 17 years my, you know, we had this burning party and and all that. And did I misunderstand that or is that, you know, I think with paying an extra payment of 13 payments a month or something, you got to come up with that money to do that. But in his scenario, you're just paying, you know, early and you don't have to pay anything extra.

And if I'm wrong, I want to know. OK, Bill, first of all, I love the idea of burning that mortgage once you pay it off. And by the way, I do encourage folks to really press into paying off your mortgage. There'd be some financial professionals, financial professionals that would say, no, hang on to that, quote unquote, tax deduction and put that money to work in a higher interest or return environment and continue to keep your mortgage. I'd say no. If you have the ability beyond an emergency fund, beyond the giving that the Lord's led you to do, beyond providing for your family and short term savings goals, if you have the ability to pay down that mortgage early, you go for it.

You won't look back. Now, this idea of the 13th payment, it's you probably have it slightly wrong, Bill, because if you just pay the same amount, but you do it on the 1st and the 15th instead of doing it all in one payment, it's probably going to be received by the mortgage company, the mortgage servicer and applied as one payment, even though it was two half payments on two different days of the month, which if you don't get any additional money going to principal is really not going to help you. And typically they, you know, it's going to go to the scheduled monthly payment anyway, which means you're going to stay right on that same amortization schedule than you were given when you started. Where folks typically when they talk about 13 payments are going is what's called a biweekly mortgage payment, which don't pay anybody to do this.

You can do this yourself. And it's this idea that you would send a half payment every two weeks, which means you're going to end up sending 26 half payments or 13 full payments. So in doing that payment every two weeks, not 1st and 15th, but every two weeks, you're going to end up sending those 26 half payments or 13 full payments, which means, of course, one extra payment a year. Now, where is that one extra payment going? Well, every time you get to a place where you're making an extra half payment beyond the scheduled monthly payment, that's going directly to principal. If you're paying that in properly and the mortgage servicer is applying it properly and that 13 payments a year is going to take a 30 year mortgage and cut it down on average to about 25 years. So that's knocking five years off that 30 year mortgage by just you sending that one extra payment a year and doing that every two weeks.

A half a payment does for many folks kind of smooth that out and make it very palatable from a budget standpoint. Does that make sense, though, Bill? Sure.

Sure, it does. Yeah. Very good. Well, thank you for your time. Yes, sir. I hope that clears it up and we appreciate your call very much.

Let's go south to Florida. Rose, you're next up on MoneyWise Live. Go ahead. Hi, thank you for taking my question.

Yes. I am eligible to retire from my job and my options are to take a lower annual pension along with a lump sum or take a higher annual pension with no lump sum. And this is proving to be a really difficult decision in part because it sort of gets into guessing at your life expectancy to see which option is going to give you the most money over the longest time. And I was just wondering if there is a biblical perspective that might help me discern, you know, the better way to go, which would be most biblical. And are there any scriptures that touch on any aspects of this decision? Yeah. Yeah. Well, I appreciate that question, Rose, because clearly you want to honor the Lord with your decision, which is why you want to make sure scripture aligns with this decision.

And I would say specifically from my vantage point related to the nuance of do I want to take the lesser payment with the lump or do I want to take the full lump sum with the, or excuse me, full lump sum with lesser payment or partial with the larger. You know, you won't find anything specifically in God's word to that end. I think the idea here is to recognize everything you have is from the Lord. He is your provider. He will never abdicate that to anyone else. And it's all his right.

Everything we receive is his. So we want to be a careful steward of that. I think at the end of the day, you know, this really is a financial computation equation first. And then secondly, it's an it's an issue around what gives me the most peace of mind and really frees me up to do what God has called me to do. I would want you to visit with a financial professional, Rose, to make this decision. They're going to look at the internal rate of return to determine which is more convenient for you.

They're also going to look at your needs from a lifestyle standpoint to make sure whatever you do shores up your income so you know that your obligations are met. And then finally, with the lump sum, make sure that you still have some money left over for things that come down the road. We appreciate your call today. We're going to pause for a brief break. This is Money Wise Live.

We'll be right back. Matthew 621 says, For where your treasure is, there your heart will be also. In other words, your heart follows your money. And as we deal with your questions and comments today here on Money Wise Live, we recognize that money issues are ultimately about your heart.

What matters most to you? And we want to make sure that our money is a reflection of what of what God is doing in our lives, that our goals are based on really honoring and glorifying him with what he's entrusted to us. That's our aim and objective here each day as we tackle your financial issues from a biblical perspective. Hey, do you need help with your spending plan, getting out of debt, developing a giving plan? Well, we have Money Wise coaches that would be delighted to come alongside you at no cost.

They'll meet with you virtually, properly, socially distanced because you're just gathering between two computers, right? And they'd love to walk alongside you, encourage you, help you set up a spending plan and teach you some of these principles we talk about here on the radio each day. You can connect with a coach when you visit our website, Money Wise Live.

Just click the button that indicates that, MoneyWiseLive.org, and we'll get one of those coaches connected with you. All right, our phone lines are open. 800-525-7000.

800-525-7000. Let's go to Escondido, California. And Sonja, you're next up on Money Wise Live. Go ahead. Thank you for taking my call, and thank you for your ministry.

I'll go as quick as I can. I'm a 76-year-old single woman, fairly newly single, own a house, very low house payments. I'm in a situation right now where I'm able to put between three and four thousand dollars a month in savings, but it kind of disturbs me to put it there and just see it sitting. I don't need to pay off my house early because I'll never get it paid off anyway.

I have three kids and they are financially exceedingly comfortable. So I just don't know what to do with that money. I mean, I know I need to hold on to it, but is there something that I can do other than leaving it in savings? I did just buy some silver, but not much.

Do you have suggestions? Yeah, let me ask just a couple of questions if you don't mind. What do you have currently in that savings account that you've been adding to all these months? $33,000 and it hasn't been very long that I've been adding because I bought a very nice car, a used car, and had to buy my ex-husband out of my home.

So I've just been now kind of starting about the last year, starting to be able to save. Yes. And do you have other assets like investments available, Sonya?

I had to turn those over to my ex-husband in order to keep the house. I see. Okay. I don't, however, have Social Security retirement from my work and alimony. I see. Okay, very good.

Well, last question. What would be the total of your monthly expenses, roughly? With or without my social and my retirement? Set the income aside for a second. When you total up all the bills and the obligations that you have, both fixed and discretionary, all of the spending that happens in a typical month, what would you say that number is, roughly? Around $3,000. I just replied, so my house payment is low. Okay, very good. It takes me about $3,000.

Yeah. Well, you know, I like in your position where you've got your income covered, you've kept your lifestyle at a minimum. As you said, you're living modestly. You don't have a lot in the way of assets to tap into down the road if you were to need them. I like the idea that you would have a year's worth of expenses in a liquid account that's safe and accessible. I'd probably put that in a high-yield savings account.

And then beyond that, which one month from now, if you're saving $3,000 a month, you'll be there at $36,000. Then, if you want beyond that to put this to work, are you comfortable taking a little bit of risk with this money, meaning that you're looking for a higher return but it could lose value, or are you more concerned with it being protected? I'm pretty conservative. I am. Actually, very conservative.

Okay. So then you probably don't want it in the stock market. One of the challenges that you have right now is that you could put this into longer-term bonds or a diversified bond portfolio, but you'd have to recognize even then as interest rates head up, the prices of the bonds would move down. So you'd want to be investing on a dollar-cost average basis, which as $3,000 a month is available, that's going to be something that you'll be doing. So as you buy in, you're buying the bonds or the bond mutual fund at different prices based on where interest rates are, but you're locking in that return that's going to be better than you might find in a CD or a savings account, going to be more stable than a stock portfolio, especially if we were to get into a recession and the stock market were to head down, and it's going to give you a little bit more return so you'd see some growth on that. I would visit with our friend, Sonia, at Soundmind Investing, at soundmindinvesting.org. They would have some wonderful recommendations for you on how you could begin systematically investing in some bond mutual funds that would be high-quality bonds that would, again, give you some of that stability, but also a little bit better return than you're seeing right now. And I would really focus on keeping that $36,000, that one year's worth of expenses, stable, liquid, secure, but also right now earning the prevailing high-yield rates, which if you, again, go to Marcus or Capital One or Ally, you're going to get about a half of 1% a year, and as interest rates move up over time, we'll see that number increase. So I think you're in a great spot.

I think the key right now is for you to continue to build up what you have each month so that if you need it down the road for long-term care or some major expense, then that would be available. Also, don't neglect any giving opportunities. The Lord may bring your way as you have some access to contribute to those in need. So hopefully that's helpful to you. We appreciate your call very much today. Let's head to Chicago, Illinois, and welcome Kathy to the broadcast. Go right ahead.

Hi. My husband's a pastor, and as you know, pastors get a parsonage allowance, and that can continue into retirement if they're part of a denomination and their retirement's in the proper place. So with that said, should we, if we have just recently inherited some money, should we pay off our mortgage, in which case we would lose the parsonage allowance?

We have about $50,000 still we owe on our house mortgage. I see. All right.

So the parsonage allowance is only until the home is paid off, and then at that point, could it be used for other expenses related to maintaining the home or no? I don't know. Yeah, we're just trying to decide if we should wait and not pay off our house.

You know, we have about four years left. Yeah. Okay.

Very good. The other question I guess I would have is, I mean, we don't want to not pay it off simply to just continue to receive that, that offset, given that that's for the home. But at the same time, you can make a very good case, Kathy, that there could be a better use for that money. So tell me about the rest of your financial life in terms of your investments. Do you feel like you're on track with retirement savings? Do you have a fully funded emergency fund?

What other considerations might you have for this inheritance? Well, I really wish you could talk to my husband, but we are not on a good retirement right now. I mean, we've been in the ministry about 28, 29 years at a church and we're in our early 60s. So yes, we could use this money I've inherited toward our retirement or we could pay off our house and then use that money we would pay off every month for our mortgage towards our retirement. So those are the big things right now.

Yeah. Well, I could really make a strong case that you're already on track. I mean, let's set the parsonage payment aside for a second and just look at this from a financial planning standpoint. I would want you to have that home paid off by the time you reach retirement. And arguably, you're already on track to do that with that home being paid off in four years and you're 60, roughly. So I think taking this money that the Lord has provided through this inheritance and putting it to work and seeing that as money that is to be used at least 10 years down the road, and having a properly diversified yet conservative portfolio given the proximity to retirement would make a lot of sense as opposed to just dropping that on the house right now, even though you'd free up that monthly payment, you would have the ability to go and invest the full amount today. So I think that's the direction I'd go. But I think you all could benefit, Kathy, from some time spent with an investment or financial planning professional just to look at kind of where you're at. Are you on track ahead or behind? What do you need to consider? And begin to think about that retirement season of life to make sure you do have a plan that syncs with your lifestyle and the financial needs that you're going to have and what will be available to you down the road.

So that's my best advice and I would encourage you to perfectly consider seeking out a financial professional. We appreciate your call today. Let's go quickly to Lavanda in Illinois. Go right ahead. Hi.

It's a very simple question. I have received an offer. If I spend five hundred dollars on a new credit card, they'll give me two hundred. I already have three credit cards.

I already I pay them off monthly. Is there a catch? Should I not do it just because that might cause some other problems? Yeah. No, I don't see a problem necessarily. That sounds a bit rich in terms of the benefit that they're describing here. I mean, clearly, if you pay five if you spend five hundred dollars, even if you pay it off, they're going to get the merchant rebate. And clearly they're hoping that you'll continue to use the card and at some point run a balance and they're going to start earning fees off of the interest in addition to the merchant rebate. And if you were to get behind, then all the other things that come with that sounds like you're responsible. So if you've read the fine print and that's what you in fact would get, there may be a slight dip to your credit score temporarily because you'd have an inquiry on there. So I would just go back and read the fine print.

But there's nothing inherently wrong other than that slight dip temporarily in your credit score with you opening this account, assuming you've managed your credit wisely and you're not going to get into debt over this. So hopefully that's helpful to you, Lavonda. We appreciate your call very, very much. Well, folks, we are about out of time today, but we appreciate so much all of your calls. You know, here's what we want to do each day on this broadcast. We want to understand God's heart as it relates to our money, because we know there's twenty three hundred verses in God's word that deal with money and possessions. And the reason for that is because there's so much to say about our money and our hearts and ultimately our walk with the Lord. Hey, let me say thank you to my amazing team today, Deb Solomon, producing Jim Henry on research, Amy Rios engineering and Gabby T answering our phones today. Money Wise Live is a partnership between Moody Radio and Money Wise Media. Would you come back and join us tomorrow? We'll be here for another edition of Money Wise Live. God bless you.