Living Wisely in Either Prosperity or Adversity

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Learn more at Praxismutualfunds.com. In the first century BC, Roman historian Sollust said, Biblical wisdom for your financial journey. When things are going well financially, it's tempting to take credit for your success. This can lead to sins like pride and greed. Adversity has its own set of temptations.

Self-pity, bitterness, and envy are a few typical responses to hard times. And these aren't godly attitudes either. There is a better way, of course. Christians are called to live with integrity, no matter the circumstances we face.

But how do we do that consistently? Well, according to the Bible, the key to godly living in both good times and bad is wisdom. Proverbs 1.7 says, Scripture confirms that fearing the Lord in this way is the first step toward living wisely. Good parents know that children need boundaries both for safety and healthy development. God has set boundaries for His children as well. Boundaries that protect us spiritually and physically. When God says no to something like stealing or dishonesty, it's because those things hurt us by breaking relationships with other people and with the Lord. Because God loves us, He sets these boundaries for our lives. When we obey, we're safe and at peace. So, fearing the Lord isn't about being afraid. It's about learning to love and obey our Heavenly Father even more. Wisdom is something that begins with a healthy respect for God's authority. That means whether you're struggling financially or experiencing a time of prosperity, you can still live wisely. Pay attention to what God says and you'll begin to receive the benefits of wisdom.

Here are a few of those. Discernment. Proverbs 2.9 says the wise will understand what is right and just and fair.

Guidance. Proverbs 3.6 reminds us that in all your ways acknowledge Him and He will make your path straight. Blessing. In Proverbs 3.13, we read that blessed is the man who finds wisdom. Good reputation. In Proverbs 3.35, the wise inherit honor. Protection. Proverbs 16.6 says through the fear of the Lord, a man avoids evil.

Those are certainly desirable benefits and all available to you no matter what kind of financial state you're in. And what about those who choose not to honor God and live by His rules? Well, the Bible calls the people who do that fools. Fool is a strong term referring to someone who deliberately destroys themselves. Psalm 14.1 puts it plainly. The fool says in his heart, there is no God. They are corrupt. They do abominable deeds.

There is none who does good. God warns that fools will suffer shame, disaster, distress and troubles. You definitely don't want to be foolish in your finances or your life. So how can you follow a path of wisdom in your day-to-day financial decisions? Well, first, understand how God views money and possessions. The Bible tells us that God owns everything and we are to be wise caretakers of whatever we have.

He's not really concerned about your bank balance. What matters is where your heart is. Ask the Lord to change your heart so you can follow Him in this area. Second, being financially wise means living by biblical principles. For example, practice integrity in all your dealings and consider others more important than yourself.

You can find out more about this at faithfi.com. A third key to financial wisdom is contentment. When you invite God into your finances, trusting Him to lead you and provide what you need, you'll begin to understand 1 Timothy 6, Godliness with contentment is great gain. So what do your actions and attitudes about money reveal about you?

Are you wise or foolish? If you're committed to Jesus, following the Lord with all your heart, it will show in your financial choices. Whether God in His wisdom has provided you with adversity or prosperity, you can be confident in God's love and provision.

You can be prepared to deal with any financial circumstances when you're focused on what's really important and that's following Jesus. All right, your calls are next. The number 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith and Finance.

We'll be right back. We have three money management options to choose from, so find an option that fits your unique needs. It's available on desktop or mobile. Simply go to faithfi.com and click app to get started. We are grateful for support from Praxis Mutual Funds. Praxis Mutual Funds has seven impact strategies that are designed to create positive real world change. More information is available at praxismutualfunds.com. The fund's investment objectives, risks, charges, and expenses are contained in the prospectus and summary prospectus. This and other information is available at praxismutualfunds.com. Investments involve risk.

Principal loss is possible. Foresight Fund Services LLC. Great to have you with us today on Faith and Finance. We're taking your calls and questions now on anything financial. The number to call today, 800-525-7000.

That's 800-525-7000. We'd love to hear from you with whatever is on your mind today as we take you into God's word, help you think about the practical decisions and choices you're making today as a steward of God's resources. What a high calling you and I have in that regard. So we want to get it right.

And that means we go back to scripture and understand the heart of the master so we can manage the master's money wisely. So what are you thinking about today? Let us know.

800-525-7000. We'll be diving into your questions here in just a bit. In the news today, and this shouldn't come as a surprise at all, car owners are hanging onto their vehicles much longer these days. A new study by S&P Global Mobility shows the average age of U.S. cars and light trucks rose this year to a record 12.6 years. We all knew this as the pandemic supply chain interruptions, inflation, and high interest rates all seemed to hit one right after the other causing folks to keep their cars the last few years. The study indicated that vehicles between 6 and 14 years old will make up 70% of those still on the road over the next five years.

Our friend and former host of this program, Howard Dayton, is fond of saying the cheapest car to drive is often the one in your driveway. And so, although things are getting slightly better with regard to both the availability of cars, we're seeing inventories build, we're also hopeful that interest rates will come down. We're certainly seeing car prices coming down starting with the new cars as those inventories build and then that will spill over into the used car market. But nevertheless, folks are hanging onto those cars. They certainly, if you're having to borrow, don't want to get stuck with those high interest rates on top of those already high automobile costs.

So we'll continue to watch that, but some interesting data out today, no doubt. All right, let's take your phone calls today. 800-525-7000. Again, that number is 800-525-7000. You can call right now. Let's begin today in Texas. Hi, Linda. Thanks for your call.

How can we help? I'm concerned. I own a home and it's just in my name. I do have a will. But, you know, you see these advertisements on TV about people being scammed out of their house, somebody taking out mortgages on their home and everything. And I was wondering if I should put my house in an LLC or a trust.

Yeah. And so are you more concerned about a creditor perhaps after a lawsuit coming after you? Or is it really more about somebody falsifying the deed, putting their name on it, perhaps assuming your identity and then trying to get a mortgage on it and something like that? That's what I'm concerned about. Not not a creditor or anything. Okay.

Yeah. You know, I wouldn't be concerned about that. You'll see a lot of folks out there advertising what they call title lock insurance. And that's a misnomer because there is no insurance that can protect against fraud because at the end of the day, it is fraud. If someone were to file a false quitclaim deed in your name with a fraudulent signature, it would never hold up in court.

What I would do, Linda, to appease your concern here, and I'm certainly understand why you have it. I would check with your local county deeds office to see if they offer free monitoring. Many counties do offer this now. And basically, this is where you would be alerted or notified if somebody tried to file a change in deed with regard to your property. You can also check with your title insurance company to see if they offer protection against this. Some policies do. And this is not title lock or title lock insurance.

This is the standard title insurance. Now, do you have a mortgage on this property? No.

No, I own it outright. Okay. Yeah. And did you at one point, though? Yes.

Okay. So you probably got title insurance at the purchase. And so you could check with the title insurance company about that policy that was taken out when you originally bought the home because your mortgage company would have required it and just see if they offer any protection.

Some do. But generally, regular title insurance just covers what we'd call legitimate claims against the property in the past. Somebody has a lien on the property, something like that. That's what that takes care of. Not the same as somebody falsifying a deed and fraudulently transferring it. So I wouldn't be concerned about it. The cost associated with you putting an LLC in place, transferring the property, maintaining that filing on an annual basis would just, in my view, not be worth the expense and time you'd have to put into it.

I'd probably just start with your county deeds office and see if they can give you any kind of alert that could be placed on your particular property. All right. Thank you very much. That's very helpful.

I'm so glad. Thank you for your call. Call anytime.

Let's go to Maryland. Hi, Edgar. Go ahead, sir. Hello.

Thank you for taking my call. Yes, sir. I bought U.S. Treasury savings bonds back in the 1990s when I was working. I wanted to cash them in and get a CD because it's paying five percent. Is there any problems with that?

I don't think so. No, I like the idea that you would cash those in and get a better rate right now. I think the question when we're talking about investing, whether it's a bank product with FDIC insurance or a savings account or stocks and bonds, is we've always got to match the investment with the time horizon. So how do you this particular money that you have in the savings bonds? Give me a sense of how much we're talking about and how that fits into your total investable assets. It's about 10,000 and I'm 75. I live on my pension from federal government. Been doing that for over 25 years now and I don't need it. I just want to have it available and leave it to my state.

Easy to get to. Okay, great. That's helpful, Edgar. Let me ask, is this one I would typically call your emergency fund or do you have other liquid cash that you can rely on for an unexpected major expense? No, I've got about 20,000 in my emergency fund. Okay.

And where is that today, if you don't mind me asking? It's in my credit union savings. Okay. And what are you getting on that interest?

Half of them CD. Okay. And how much are you getting on that interest wise? Five percent on the CD. Okay. And on the savings?

Very little, about two percent or something like that. Yeah, okay. That's my fast emergency.

Got it. So two suggestions. One is to the savings bonds.

Yeah, I like that. And especially since you've got the savings, the emergency savings separate from this, I think CDs are a great option. You could get a little over five percent today for a one year. If you want to go and lock it up for two years, you could get four point eight percent on a two year CD. You're going to want to shop around.

You probably will want to use an online bank. Are you comfortable using the Internet, Edgar? I refuse to use it. Okay. So have you talked to your- I retired from NSA. Okay.

So you know too much. I got it. Right.

Have you talked to your credit union about what they're paying on a one or a two year CD? Yes. Okay.

And are you happy with that? Yes. Good. Okay.

Yeah. So I guess short answer is I like your plan. I think this is a good time for you to cash in those savings bonds that you've held for a long time, take advantage of the rates.

You've got a good relationship with a local credit union paying some attractive rates. You can walk in and see the whites of their eyes, which I know you're happy about. And so I think that's a great plan. Thank you for your help. All right. God bless you, sir. Thanks for calling today. Let me also mention as a listener supported ministry, it's so important that we hear from you. If you found some value in this program and you'd like to support our work, you can do that right now at faithfi.com. Just click Give. By the way, a gift of twenty five dollars or more is our thank you. We'll send you our brand new four week study, Rich Toward God, which I know you'll enjoy. Faithfi.com. Just click give back with your questions after this.

Stick around. Are you looking for a financial professional who aligns with your biblical values? Certified Kingdom advisors are trusted financial, legal or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice. You can find a local CCA professional in your area by going to faithfi.com and clicking Find a CCA. Join Christian community dot com. That's join Christian community dot com. The credit union is an underwriter of this ministry.

Membership eligibility required. So glad to have you with us today on faith and finance. I've got room for maybe one or two more questions before we round out the program today. The number to call eight hundred five to five seven thousand.

Let's head back to the phones to Texas. Hi, Jody. How can I help?

OK, I have a question. And this is something that it took me a while to understand. And I've been trying to teach my children when you apply for a loan. So you go to see this beautiful house and you want the house and they give you, say, a seven percent interest rate on the house. But when you get your first mortgage statement from the bank, they haven't taken seven percent in interest. They've taken off your payment, you know, eight hundred dollars. Probably a good five hundred and something of it has gone to interest.

May probably more. And they give you maybe one hundred or so dollars in toward the principal. And so that whole process is called front loading interest. So actually you're paying probably what, 60 percent in interest on that loan, not seven. And so this is why the house balances do not go down, because you're paying so little in principle every single month that at the end of the year, you've paid almost, you know, just a very special your first year.

You've paid such a small amount toward your actual principal and that you just continue to pay interest on this higher amount of balance. And I went to refinance my house. And when I refinance my house, I asked the gentleman, how long will it take me to recoup? Because I had been paying on my house for about 10, 15 years. So I was starting to pay less interest. And he said, well, I said, how long will it take me to recoup the money that I'm going to lose because you're going to start that cycle over and I'm going to pay the upfront interest?

And he said, even though your rate lowered, it'll take you five years to actually realize a profit from refinancing at the lower rate. Of course, you have the lower payment. Yes. But you're not going to save yourself money when it actually comes to how much you're paying off toward your house.

Yes. Yeah, that's true. Because typically, you're going to have somewhere between three and 5% in fees. And in order to get that back, you it's generally going to take you about five years.

In some cases, it could even be longer than that, which is why you need to save at least 2% before on the interest rate before you'd want to consider refinancing, I'd say at a minimum a point and a half. And you want to make sure you're going to stay in the home long enough to realize that. Let's go back to your original question, though. You're exactly right in the sense that, you know, that's just the way amortized interest works. And so, you know, it's not necessary.

I mean, nobody's hiding anything. The amortization schedule is available. And you can see from your mortgage company before you close on it exactly with a level monthly payment, which is what an amortized loan is. You have a fixed monthly payment. So they're divided equally, but the amortization causes the majority of the interest to go out of each payment on the front end toward interest and then it flips on the back end.

And so that changes over time. So clearly, in those early years, the larger portion of that monthly payment is going toward interest because the outstanding principal balance is higher. And as the loan ages and the principal is paid, more payments go toward principal on the back end. You know, it's not a ploy by the banks. It's a straightforward result of the mathematics involved when you apply a fixed monthly payment amortizing the full loan amount over the term.

And again, it's all fully disclosed, which is why I think it's important, if you can, to do maybe one of two things. Number one is add something on the front end each month over and above the monthly payment because anything you send beyond that scheduled monthly payment where it's applied based on that amortization schedule, which is all available on the front end. But anything above that is going directly to principal, which is going to really benefit you because now you're not paying on any interest on that amount that you reduce the principal by for the life of the loan.

So that's great. And I would just really try to do that maybe at least one payment, extra payment a year if you can. The second is, you know, I generally advise folks to, you know, get a 30-year mortgage but pay it like a 15-year mortgage.

So rather than getting the 15-year mortgage, go ahead and get the 30, pay it like a 15-year, and then if you ever got into a financial hardship, you lost your job, you had an unexpected kind of major event, you have the ability to pay the scheduled payment based on a 30-year amortization but you don't have to and if everything works according to plan, you pay it off much sooner and save all of that interest. But it's really just the difference, Jody, between a simple interest loan and an amortized interest loan and I think that's why it's important to understand the value of principal reduction along the way. Does that make sense though?

Well, it does. I guess, can you explain to me then what, okay, a simple interest loan would be basically they say they're charging you, excuse me, 7% and you're going to actually pay 7%. Is that correct? Yeah, what's happening is they're charging the interest based on the balance on that day and so, you know, whatever is remaining, they charge the interest on it with an amortized loan. It's all determined in advance so based on that level payment you have over the life of the loan, they determine in advance exactly what percent is going to interest and what's going to principal and then that shifts over time more on the front end, you know, much lower on the back end and so that's just the way the amortized interest works over the balance of a, you know, a 30-year loan. So basically it just seems like since most people don't live in their houses for their whole life then you would basically be in a situation to where you're paying most of your payment toward interest if you live in that home, say you get a 30-year loan but you live there 12 years. The bank has had the advantage of getting most of the interest out of you even if you move in 12 years and then you buy another home and you start to cycle again. Yeah, that's exactly right and that's why it's important for you to try to prepay as much as you can especially in those early years and roll that equity in to get as low of a mortgage as possible and so hopefully you've got some appreciation in that home that you're living in. You know, you get a 30-year loan but let's say you only live there 8 years and you're right, in those first 8 years the majority has gone to interest but hopefully you've had some appreciation, you've had some principal reduction and maybe you paid a little bit extra and I think that's why it's key that you take 100% of that equity and roll it into the next property because you're right, if you move every 5 to 7 years, you're not going to make a lot of progress through those mortgage payments just because of the way amortized interest works. So I think understanding that is really key and I'm glad you raised the point in the process but I think it's also important to understand that all of that is fully disclosed on the front end.

I mean that's not hidden to anyone. You should be able to see at any given moment exactly out of every payment you're going to make what's going to interest and what's going to principal and the effect of those extra principal payments along the way. Hey, thanks for calling today. It's great to have you on the program.

Well, that's going to do it for us today. I hope you found something helpful and encouraging today but above all else, I hope you were encouraged to go back to God's Word. You know, in our role in managing God's money, we always need to be reminded that God owns it all, we're stewards and money is a tool to accomplish God's purposes. So as stewards, we have to understand the heart of the master, we find that in Scripture. A big thanks to my team today, Taylor, Devin and Pat and we'll see you next time right here on Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.