Student Loans vs. 401k

You finally have your budget working. You're living below your means and you have some extra cash to work with. Now what?

Hi, I'm Rob West. For more than 40 million Americans with student loan debt, that's a tough question. Accelerate those payments or boost retirement savings. I'll talk about that first today. Then take your calls at 800-525-7000.

You can call that 24-7, 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, the average student loan debt continues to creep up.

It's now nearly $40,000. At the same time, study after study shows that Americans are not saving nearly enough for retirement and depending too heavily on Social Security. So when student loan borrowers have extra resources, they have to make a decision. And both choices, paying down debt faster or pouring money into their 401k, have their advantages. For example, your 401k contributions are made with pre-tax money.

It's deducted from your adjusted gross income at tax time, meaning you'll pay less to Uncle Sam. That money is only taxed when you withdraw it in retirement when you'll probably be in a lower tax bracket. Still, if you're young, your first instinct might be to let the 401k slide for a few years, you know, just until you catch up on other things.

But don't wait. Time is critical when it comes to investing. It matters just as much as the amount of money you put into the retirement account. That's because of compound earnings.

The more time you give the assets in your portfolio, the more and the faster they'll grow. The brokerage firm Fidelity has made some estimates for how much of your income you need to put into retirement, depending on your age. If you start at 25, 15% of your income will probably work. If you wait to age 30, they say you'll need to put in 18%. And at 35, 23%, almost a quarter of your salary.

So as they say, time really is money. Another 401k advantage, your employer may offer matching contributions up to a certain percentage of your salary. Let's say that's 6% and you're earning $45,000 a year. You put in $2,700 a year and your employer kicks in another $2,700.

When was the last time someone offered you that kind of free money? So saving regularly for retirement as much as you can is something you'll never regret. And if your employer doesn't offer a 401k, you'll want to open your own IRA to get many of the same advantages. But what about the other side of the argument using your extra cash to pay off your student loans faster?

Well, it has its financial advantages too. Obviously, the quicker you pay off that debt, the quicker you can redirect that money into other things like building up three to six months living expenses in your emergency fund, saving for a house and of course, putting more money into retirement. And your credit picture will improve. For example, your debt to income ratio will go down making it easier to qualify for a mortgage once you've saved up at least 20% for a down payment to avoid paying private mortgage insurance. Plus, paying off your student loans early means you'll pay a lot less interest on them.

That's especially helpful if you have private loans with higher interest rates than on federal student loans. So you see both options, saving for retirement and paying off student loan debt faster have their merits. So which one do you choose? Well, there are far too many variables to determine which is better from a dollars and cents perspective.

But what if you didn't have to choose one or the other? Instead of either or, you could put a percentage of your extra cash into each of them 50-50 or 60-40 if you feel more strongly about one than the other. You should also know about a growing trend by employers to offer student loan repayment assistance to their workers. In fact, that should be one of your considerations if you're entering the workforce or looking to change jobs.

You'll want to ask prospective employers if the company offers that kind of help. Under current law until 2026, employers can give a total of 50-250 dollars per employee per year for student loan repayment and that money is tax-free. Now, all of that's great, but you know what's better than paying off student loans?

Not having them in the first place or keeping the amount as low as possible. So parents, open a 529 plan to save for your kid's education and students, put some of your Christmas and birthday money aside for college, study hard and look for all of the scholarship and grant money you can find. That way, you'll keep borrowing to a minimum and then after you graduate, the decision to pay off loans or save for retirement will be a lot easier. All right, your calls are next, 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Delighted to have you with us today on MoneyWise Live. I'm Rob West, your host. Our phone lines are open today. We'll take your calls and questions in just a moment. Here's the number 800-525-7000.

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Again, MoneyWiseLive.org, just click the donate button and thanks in advance. All right, it's time to take your calls and questions today. What's on your mind? We'd love to hear from you and see if we can give you some counsel from God's Word to help you move forward with confidence. Here's the number 800-525-7000. We're going to begin today in Erie, PA. Hi, John.

How can I help you, sir? Well, yes, I was calling in regards to my current church has some reserve funds that have been being held in either savings or money markets, CDs, and as you're aware, those accounts aren't paying any very much interest at the time. So the question has been proposed of whether it would be right for the church to maybe look into other areas such as mutual funds or possibly even real estate in order to get a better return on those funds. So I was calling for your opinion on what your thoughts are on a church, buying mutual funds or even real estate.

Yeah. You know, I'm not a big fan of that approach, John, for a couple of reasons. Number one, I believe you should have reserves. And I think as the leadership of the church, both the pastor and the pastoral staff, as well as the lay leadership, largely a finance committee, I think you need to establish a philosophy for the reserves. How much do you want to have in place so that if there is a disruption in income or some kind of decline or an unexpected need or expense, that the funds would be there?

I think, you know, typically I would look to six months. Some churches may decide they want upwards of a year. I would say probably not more than a year, at least from my perspective, if I was on that committee, because point number two is the reason those funds have been given to the church is to be able to use for ministry, both to support the pastoral staff and the needs of the staff, but also the building and operations of the church. And, of course, and I would say even just as important, if not more important, the ministry functions of the church to reach the lost and to edify and equip the body. And, you know, the extent to which we have excess beyond what would be a prudent amount of reserves that's available, I would say let's get that into ministry because that's why it was given and that's the role of the church. And so I think to both take beyond that funds that we would then put at the risk of the market, which I don't think is prudent for the church to be taking on risk with funds given for ministry purposes and to not deploy them and to hold them in other asset classes when they could be used, you know, for the work of the church, I just would have a challenge with that if I were sitting on that committee. And so as much as I'd love for you to get a better return, and I think you should be seeking out the very best high-yield savings return for business as possible, whether that's through a savings account or certificates of deposit for your reserves, I think that makes some sense. And you can check locally. You could look at, you know, some of the national credit unions like Evangelical Christian Credit Union, ECCU, or Thrivent Credit Union.

You may find some more attractive rates there. But beyond that, taking and putting it at the risk of the market, not to mention the illiquidity that comes with that, which means that, you know, if you don't have the right time horizon on it, you may have to take a loss on it to access the funds if they're needed. That, combined with the fact that it's not being deployed for ministry purposes, which was the intent behind the gift in the first place, you know, I would just stay away from that if it were me. But give me your thoughts.

Yes, I respect your opinion. And it definitely would not be, you know, we would still keep an emergency fund, what you often refer to as an emergency fund for, you know, individuals. Do you have a scripture that you would go to to kind of back that up? I mean, I understand what you're saying completely, but I was just wondering if you had a reference or, you know, a particular book of the Bible you would refer to. No, not necessarily, because clearly seeking a return on God's money is prudent.

We see that modeled throughout scripture that we are to seek a return. But I think, you know, the intent of these funds in terms of how they were and why they were given, clearly, as we see demonstrated in the early church in Acts, you know, we would see the money being used actively to meet the needs of the people within the church, those that had needs and being able to share with them, as well as to be able to fund the operations of the church, including the staff. We don't see any examples of churches taking in resources and then, you know, deploying those as investments to try to grow that. It was to actively support the work of the church.

And so that would be what I would look to if we wanted to see a biblical model for how gifts to a church, in this case, the early church, were given. And I think, you know, we'd have to put a time horizon on this of 10 years if we wanted to put it in mutual funds, certainly five years or more. And, you know, that doesn't seem to match with the idea that these would be reserves. And if it's not your reserves, and it's really just surplus beyond what would be a prudent amount of reserves, and you're willing to attach a five or 10 year time horizon to it, then I would ask, isn't there a better use of that for the kingdom right now or in the near future?

And, you know, shouldn't we think about deploying it? Now, if it's for a very specific purpose, a building campaign that's coming up, you know, five years from now, we want to build with cash. And so, you know, we're saving for a very specific thing.

That's one thing. But even then, I wouldn't put that at the risk of the market because donors are giving these funds for a specific purpose and they may not be available if we were to have a major decline. Let's say you're invested in mutual funds, we get into a recession, and now this portfolio is down 30%.

You know, if I were a giver, I might be a little concerned that the gifts I were given to be put in the ministry are now no longer available because they were put at the risk of the market, and they can't be used in that way. So I just think for all those reasons, I think, you know, I would either look to deploy them right away beyond what would be a reasonable amount for an emergency reserve. And if I'm not because I'm saving for a specific purpose, then I would be looking to protect that capital and make sure that it's available. So when I'm ready to deploy it for ministry purposes, it's there. And I don't have to wait for the market to recover.

I don't have illiquidity issues, those types of things. That's just my perspective, but that would be the direction I would go. So think about it, pray about it, talk to your leadership about it and let us know what you decide. And John, we appreciate your call today. Well, folks, we've got some lines open today. We'd love to hear from you. Here's the number 800-525-7000.

That's 800-525-7000. We can chat about savings or investing. Perhaps you want to talk about paying down debt or maybe where we started today. What about the balance between reducing debt and saving for the long term? You know, when it comes to allocating God's money, it's about the priority use of that money.

Well, Scripture has some things to say about that. So if you're struggling with what to do first, perhaps we can weigh in on that. Again, 800-525-7000. Stay with us. Thanks for tuning in to MoneyWise Live. I'm Rob West. This is biblical wisdom for your financial decisions.

All the lines are full. We have some great questions coming up in just a moment. We'll be in Coconut Creek, Florida. I'll tell you a little story about Coconut Creek when we get there.

But first, we're going to go to St. Louis, Missouri. Hi, Gabby. How can I help you?

Hi. I am interested in finding out how to attack my student loan debt. It is almost $100,000. I have been retired for 11 years. I'm 66 years old. And I'm wondering at this point, should I just continue to pay the $545 a month?

Or if there is anything extra that I have, should I try to direct it toward paying off my student loan debt earlier? Yeah. Well, are you still working, Gabby, or are you retired at this point? I'm retired. I've been retired for 11 years. I waited until I was almost retired before I went back to school. Oh, I see.

Okay. So this is education that you received recently, or are these student loans older? They're older.

They are practically 11 years old because I got my bachelor's and my master's, and then I retired a few months later. It was just personal fulfillment. I see. Okay.

Very good. Well, tell me about the rest of your financial life. Do you have any other debt to speak of other than a mortgage? Do you have an emergency fund? Talk to me about your income and expenses.

Give me a quick overview. Okay. So I'm married, so my husband takes care of most of our finances.

So basically for me, I have just my student loan debt, and I've got a car payment that I'm making for the next year. Okay. And are you drawing Social Security? Yes, I am.

Okay. And so that's your only source of income then at this point? No, I do have my pension. Ah, okay. So my pension was one such that it's in the market.

We had the option of taking a lump sum or taking a monthly, and I took the lump sum. Okay. And what's roughly the value on that right now? Little over $500,000. Okay. And how much are you drawing off of that each month? After taxes, $2,600. Okay.

All right. So you're taking a little bit more than, I mean, typically I would say let's draw 4% a year, you know, which would be about $20,000 on that, about $1,600 a month before taxes. You're taking a bit more than that.

So, you know, I suspect you're seeing this principle decline slightly, although with the market doing what it's done the last couple of years, perhaps not. But I think, you know, generally speaking, you're taking a little higher percentage than I'd like to see you take in terms of maintaining this for the rest of your lives. The roughly $2,400 or so that you're taking a month plus Social Security, you said you're basically only putting that toward the car and the student loans. Are you adding to your savings with the rest?

No. I travel a lot. And so I and I buy things for my grandchildren.

So that's kind of... That can add up quickly. Yes, ma'am. All right. Well, you know, I mean, I think the key is, you know, at the end of the day, we want to make good decisions. And part of being a wise steward is to honor our obligations. Clearly, you're doing that based on the payment schedule that was established. Is there any requirement that you pay that off any quicker?

No, not based on the commitment that you made. I suspect, though, that you'd be encouraged to see it coming down slightly quicker than it has. But I realize it's a significant sum of money that you've probably just accepted is going to be around for the foreseeable future. So I think I would, you know, perhaps ask the Lord for some wisdom here on what to allocate. I probably would put more than just the scheduled minimum payment against it. And, you know, you can determine the amount.

I don't think there's an exact amount that's appropriate or not appropriate for this. The goal is ultimately to pay it back in full. It's, you know, again, a lot of money. But you have the resources coming in. And by God's grace, He's provided for you. You've saved diligently. Clearly, you've applied biblical principles along the way, which has put you in this position.

But, you know, as to whether you should accelerate that payoff, I would probably do that. I think the question is really asking the Lord, what lifestyle have you called me to? And with these resources you've entrusted to me, how should I allocate them? And part of that is to enjoy it. And clearly you're doing that.

You're traveling and to provide for your family and you're blessing your grandkids with it and you're meeting your obligations. But you probably have some excess. And I would say a portion of that should go to, you know, probably accelerate this debt payment. But the appropriate mix of that, I think, is ultimately up to you. And it's a question I would be asking the Lord. What would you have me to do? So maybe you take the next week and in your quiet time, just say, Lord, how much would you like me to allocate toward reducing this debt? And see what you come back with. And, you know, perhaps you give us a call back if you'd like. We could talk about it a bit more. But I think at the end of the day, the goal should be let's get this paid off as soon as you can.

But in the context of the rest of your financial life in a way that makes sense based on where the Lord is leading you. So, Gabby, we appreciate you checking in with us today and all the best to you in this exciting season of life. We appreciate your call. Well, folks, we're going to hit another quick break here. But when we come back, we'll talk about a whole host of issues. Jehira's in Coconut Creek.

She's a single parent and wants to know how she should manage limited resources, child support and alimony for expenses, savings. We'll talk to some folks who want to know about selling property, others who want to invest. Perhaps your question as well. We've got two lines open. Here's the number, 800-525-7000.

That's 800-525-7000. This is Money Wise, biblical wisdom for your financial decisions. We're so glad you're along with us today.

A lot more to come just around the corner. Stay with us. We'll be right back. Thanks for tuning in to Money Wise Live, biblical wisdom for your financial decisions. Got some great questions lined up here.

Let's go right back to the phones. Coconut Creek, Florida. Jehira, how are you today? I'm fine. How are you?

I'm doing great. So I grew up in Fort Lauderdale, not too far from Coconut Creek. But my grandfather, who was a developer, real estate developer, actually developed Coconut Creek and he was actually the one who named it.

Isn't that interesting? So I know right where you're at, but that's not why you called today to talk about my family tree. So I'll let you get to your question. How can I help you?

Okay. My question is I'm a single parent for five years and I get alimony, child support, and I'm starting my new job. My question is how many savings account am I supposed to have in my mortgage? Do I pay that with my job income or with the alimony and child support? And plus, I have additional income that comes in. So I have about four different streams of income that comes in. I'm just trying to figure out how to manage it well. Yes. Well, we can help with that.

I'm glad you called. So I think the key, Jihira, first is to develop a spending plan based on exactly what your monthly expenses are. And I'll call part of them discretionary. These are the expenses that you don't get a bill for.

So they change month to month, but you have to control them. In fact, they can tend to be the budget busters. That's your food category and things that you might be spending money when you're out buying clothing, things like that for yourself or the kids. And then there's those fixed expenses, like the utilities and the rent or mortgage.

And if you have a car payment to those are fixed expenses. We got to get all those into the spending plan and figure out exactly what your monthly expenses are. And the key is, and this is the key to every financial success, we've got to live within our means. So we've got to make sure that all of that spending, including those expenses that don't come up every month, like money we're putting aside for Christmas or a semi-annual insurance payment or something like that, that gets included in there on a monthly basis, ideally where you're saving for it every month. So when the bill comes, the money's there.

And we need to do that in such a way where there's margin. And that means there's a little bit left over so that you can put that towards your savings goals or other things that you would like to do in terms of your priorities. Now, once you've identified all of those expenses, then the key is to make sure that you know how much is coming in, but also when it's coming in so that you can actually go back and assign each one of these expenses to one of your paychecks. And we can actually help you do that with the MoneyWise app.

When we're done here today, you stay on the line and we'll get you your information and get you set up with a pro account so you can download your transactions, you can capture your spending plan. And what I'm going to want you to do is set up what I call an envelope system, which basically just means, and we're going to do this digitally, although you can do it physically with actual envelopes, but every budget category gets an envelope. We put the money in it when we get a paycheck, either digitally or physically. And then when we spend it, it comes out of the envelope, but at any given time, we know how much is left. The key is when you're on a tight budget, meaning we're living paycheck to paycheck, we want to make sure we know that the timing is going to work out so that we have a plan for when you're going to receive each of those income sources, your paycheck, your alimony, your child support, and then you're going to assign specific expenses to each one of those throughout the month so that you have enough to go around for everything that you need. And if you're living within your means, meaning your total expenses are less than your income, we're going to have some margin and we're going to want to use that to build up what I call an emergency fund in your savings. The goal on that is going to be at least three months worth of expenses. So if you're spending $2,500 a month, we're going to want to get to a place where you have $7,500 in savings. Now, you probably don't need more than one savings account, although with online banks these days, they're free. So you could have more than one. An example might be for your tax savings.

So for instance, depending upon when the settlement occurred, your alimony is going to be taxable if it was finalized before January 1st, 2019. Well, that might be a great way for you to have a separate savings account so that you can put a portion of that in there every month. So when it's time to write the check for your taxes, the money's there. That would be an example of why you'd want more than one. But apart from that, I think just having one savings account as your emergency reserve to fall back on when an unexpected expense comes, you know, makes the most sense.

So give me your thoughts on that, though. Do you have any follow-up questions? Yes.

Okay. So I was thinking like an emergency savings. Do I need a regular savings or just one emergency savings, like just one?

Yeah. I would just have one emergency savings account. And as long as you're comfortable doing business online, I'd open an online bank savings account. So you could use Ally Bank or Marcus, something like that, and you'd link it to your checking account electronically. So that way, if you ever needed money for something unexpected, you could transfer it and the money would be there within two days without any charge. But it's not in your checking account.

We're going to reserve that money for the monthly expenses that come in. Okay. Okay. Okay. That makes sense? Yes. Yes, sir. It makes sense. Okay. Good.

Well, let me just tell you two things, though, to wrap up. Number one is we have coaches that would love to help you, somebody that can walk alongside you, Jahira, as you get all of this set up, that would answer your questions, help you set up your spending plan, get set up on the MoneyWise app, get all of this working properly, even help you get your savings account opened up and connected. And there's no cost for that. So if you just go to our website, MoneyWiseLive.org, and click the Community button, you'll see Connect with a Coach. And you just fill out that information. We'll get in touch with you. And our coaches will help you. The second thing I want to do is you hold the line. We'll get your information. And I'll make sure we get you a free subscription to the MoneyWise app as a pro subscriber.

And that will allow you to download all your transactions if you want to do that, and get your digital envelope system set up so you can track that every month. And listen, I appreciate your call. I know it can seem overwhelming. But we're going to walk with you and make sure we help you get this set up properly. And listen, you keep at it.

I know it's not easy being a single parent. I've counseled hundreds of them. It's hard work, but it's worth it. And God will honor your diligence. And we appreciate your call today.

To Minerva, Ohio. Hope I'm saying that correctly. Hi, Neil. How can I help you? Hello. Thank you for taking my call. Can you hear me okay?

Yes, sir. Go right ahead. I'm, I turned 66 on Monday, and I've already informed my employer that I am going to be retiring effective January 14. I'm a widower, my wife passed away eight years ago. I can draw my wife's social security at age 66, which I'm going to do effective Monday. And I can continue to do that until I draw mine.

My question is, am I better off to delay drawing my retirement and allow it to build the full amount at age 70? Or to draw mine? Yeah, makes sense. I lost you right there at the tail end. Well, first of all, happy birthday in advance, Neil. And this is a great question. We're going to take a quick break, but just on the other side of it, I'm going to weigh in and give you my thoughts.

And really, it comes down to take your wife's benefit as a survivor benefit or your own. And we'll answer that just around the corner. Stay with us. Thanks for tuning in to Money Wise Live, biblical wisdom for your financial decisions. I'm Rob West, your host, taking your calls and questions today. Just before the break, we were talking to Neil in Minerva, Ohio. Neil has a birthday coming up next week. He's already informed his employer that he's going to be retiring after the first of the year.

He's a widower, and he's looking to take his wife's survivor's benefits and let his social security continue to grow until perhaps age 70, but just wanting to check in and make sure that's the wise thing to do. Did I get that right, Neil? That is correct.

OK, yeah. And I'm in favor of this. You know, you are entitled, of course, to taking either one in terms of survivor's benefits or your own. And the Social Security Administration will give you the higher of the two. The benefit of you waiting is that you can take hers as long as you can live on that. That's going to be enough to cover your expenses. Then it will allow you to delay yours, which is going to grow by 8 percent a year. And ultimately, when you begin taking that as then the higher amount, you'll enjoy that higher payout for the rest of your life. And so I like that strategy a lot. Was there anything else you wanted to ask as a follow up on that?

No, that was it. I had my financial advisor advise that, and then I had someone else advise me otherwise, and I was in a dilemma. OK. All right. Well, the key is you're waiting until full retirement age to take this, so you're going to maximize that survivor benefit, and then you're going to fully maximize your own benefit because you're going to get this 8 percent growth locked in. And when you start taking it at age 70, you'll have that for the rest of your life. So I think this is a great strategy. The key will just be to really order your finances in such a way that you can live within your means on your new income based on that survivor's benefit, and then ask the Lord what he has for you in this next season of life. And I'm sure it'll be exciting and we wish you all the best. And by the way, again, happy birthday.

To Moline, Illinois. Hi, Vicki. How can I help you? Hi. Thanks for taking my call.

I appreciate your show. We are selling some property and going to probably have about $225,000 to invest. We're in our early 70s. I work part-time. My husband is retired. We are self-employed, so we have maybe about $100,000 in IRAs, but we're living basically on Social Security and what I make part-time work, and we're doing fine.

We're debt-free. But I'm just not sure about where to invest this money. I feel like maybe it should be something secure in case the market crashes or something.

But yeah, it's not going to do anything, as you know, in the CD. Well, I think it does come down to are you willing to assume any risk with it? Now, keep in mind, when you invest in a stock and bond portfolio, there's varying degrees of risk you will take based on the strategy, the investment strategy that's deployed. And that can be dialed up or down based on your age, objectives, and risk tolerance. But there is always a measure of risk, and you need to go into it understanding that. And so typically in this season of life, we would look at a portfolio where maybe 70% of it would be in more stable investments, like fixed income type bonds and CDs, perhaps as a part of that, although they're not very attractive today.

And then perhaps maybe 30% of the portfolio, and this could be tweaked, but this was just kind of a guideline, maybe 30% is invested in high quality stocks. And that would be the growth component to the portfolio. And then let's say a year or two from now, we hit a speed bump. I mean, this market has been raging since 2008, 2009. And certainly, we've seen a double in the last 12 months.

And so folks have been enjoying that run. And I'm sure that's benefited your portfolios. But the market does work in cycles. And let's say we hit a recession and the stock portion was down 30%. Well, that would only be 30% of your portfolio, and you would have to go into it knowing that you're not going to sell anything, you're not going to touch that, and it will recover, it always has. And the more stable portion of the portfolio would provide that income, that kind of is the base. And the goal would be that you'd still have access to your funds, because any of those investments could be sold at any time, although you'd want to take a long term approach. But even though you have access to the funds, the overall return might be instead of, well, today, a half a percent on a savings account or a one year CD, you might be trying to get 4%. But you're not trying to get 8% or 10% or 12%, because there would be too much risk associated with that in this season of life.

So I think it's all about first, am I willing to take any risk? And if not, then you're right, you're back to banking products with FDIC Insurance or an annuity product, which is an insurance contract where you're transferring that risk to the insurance company in exchange for a guaranteed return. But you're going to lose some access to your capital without penalties and surrender charges. And it tends to be complicated. And you're going to give up some of the upside in exchange for that. But if you're willing to take a measure of risk, then it's a matter of finding, I believe, in your case, that professional who can make those buying and selling decisions, but based on a strategy that's consistent with your goals and objectives and what you're trying to accomplish and how much risk you're willing to take in this season of life. Give me your thoughts on all that, though.

No, it makes sense. And I do have a new financial advisor who's a Christian and seems to really think the way I do about a lot of things financially and other. So and that's basically kind of what he's advised. But since I told him, I really don't think I'm going to need the money within the next few years, he's got me like moderate aggressive or moderate growth. I'm sorry, moderate growth with the IRAs that I have. But this new money from the land, that's what I was concerned about, putting that in something maybe a little more secure. And I think that's just a conversation you need to have, because if you're really worried, American, I shouldn't say worried, if you are concerned in a healthy way about taking too much risk, then it's not about achieving the very best return you can, because in order to do that, you're going to have to take more risk than you're comfortable with. And I think what it comes down to is, if you got a statement in a given quarter, three months of the year, and that portfolio was down 15%, you know, that 200,000, you know, all of a sudden, you know, you get your statement, and you know, it's 170, would you be okay, letting that ride and waiting for it to come back? And if so, then that's a probably an appropriate level of risk. I mean, if it was fully invested, you know, you might open your statement in that 200, 140. And then all of a sudden, you might get really concerned and say, let's get out of this.

Well, that'd be the absolute wrong thing to do. And what that would tell me is that you went into it taking too much risk. So I think you need to be really clear how much downside you're willing to take, even though you're not going to sell it, you're going to wait for it to come back. And then the strategy needs to be dictated based on your comfort level with that level of risk and no more. And it's not a matter of what your advisor wants to achieve in terms of rate of return.

It's how much your risk you're willing to take in exchange for a reasonable rate of return. And that can be managed according to your wishes, as long as you're really clear about what you're looking for. Okay. Yeah, well, it makes me feel good because he said he sounds like he thinks a lot like you do.

Good. Well, that makes me feel good because I really like your program. Well, thank you. Well, listen, thank you very much. You are very welcome. And it sounds like you're on the right track.

So I would just say stay at it. And by the way, congratulations on being completely debt free. We appreciate your call today, Vicki.

On to Pembroke Pines, Florida, not far from Coconut Creek, actually. Sabu, how can I help you? Hello, it's good to be on the show. Thank you for taking my call.

So, welcome. You know what, I'm losing you just a little bit, Sabu. So I'm going to ask you to take a step to your right or your left. Let's see if we can find a little bit stronger cell signal and we'll give you one more shot at it. Go right ahead. All right. Can you hear me now? Yes, sir.

Okay. So I was saying that I filed bankruptcy in 2010 and then, you know, rebuilding my credit and things like that since then. Now, I'm out of the, the bankruptcy fell off my credit report, so I'm good there. But I find myself very focused on money. Like, I spend hours each day pining over each penny and each dollar. And I want to know what the balance is between keeping track of where you're at, being wise with your money and being too concerned. Is there a balance?

How do you determine what the right attitude is? Well, it's a great question and it's one we should be thinking about because God doesn't want us to be fearful or concerned. He wants us to trust him as our provider. But he's also wired us all differently. You know, some of us are more detailed and hands on. Others are more hands off. Some of us are more in relation to our finances. We just kind of want to know directionally where things are headed and others want to be in all the details. And that's just a part of how God has wired us.

And that's not a bad thing. There's positives and negatives to each of those attributes that we have. You know, if we're a saver oriented, the pro is we're going to be disciplined, we're going to be future oriented. The con may be we're going to hold money a bit tightly and maybe we'll place too much faith in financial security over trusting in the Lord as our provider and for ultimately our outcome. So we need to celebrate how God has wired you, but not allow it to trip into a mentality that causes you to hold on too tightly and begin to put your faith and trust in your money and not in the Lord. And I'll tell you, one of the most powerful anecdotes for you holding your money too tightly is generosity. If you can open your hand enough to say, Lord, I want to demonstrate as an act of obedience and ultimate trust in you and not building my own mini kingdom, but investing in your kingdom, I want to give and be connected to your activity. You'll watch the grip of money, Sabu, begin to release in your life. And then you'll be able to just enjoy the positive aspects that come with you being somebody who's disciplined and future oriented.

But if you find yourself up at night worrying or concerned, I think that's a good sign that perhaps your trust is misplaced and needs to be focused on the Lord. Hang on the line. We'll talk a bit more off the air because that's going to do it for us today on MoneyWise Live. Folks, thanks for being along with us today. I want to say thank you to my team, Amy Rios, Dan Anderson. Thank you to Hans who was answering our phones today, doing a great job. And Mr. Jim Henry alongside me as well. We'll look forward to seeing you tomorrow. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media.