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2 Timothy 1:7. Hi, I'm Rob West. When it comes to investing, wisdom means keeping emotions in check. Fear, greed, overconfidence, and regret can all derail sound decisions. Dr.
R. Rayner joins us today to share four ways emotions ruin smart investing and how you can avoid those traps. Then it's on your calls at 800-525-7000. That's 800-525-7,000. This is Faith in Finance, biblical wisdom for your financial decisions.
Well, it's always a pleasure to have my friend Dr. Art Rayner on the program. Artist, the author of several books on biblical finance, and the director of the Institute for Christian Financial Health. Which certifies Christian financial counselors. Art, welcome back.
Rob, it is always an honor to join you. Art, we're talking about the ways emotions can derail wise investing. And it's really critical that people are aware of these. Wouldn't you agree? Oh, absolutely.
Over and over, I've heard comments like: the market is on fire. I'm putting more money in, or the market is tanking, so I'm going to take all the money out. People make reactionary decisions as a response to momentary gains or losses in the stock market, and they are rarely smart decisions. When it comes to investing, Emotions are your enemy. Allowing emotions to guide your investment decisions will most likely lead you to buy high and sell low, never creating the gains necessary to build a solid retirement fund.
Yeah, and no doubt you want to buy low and sell high.
So that would be the opposite of what you want to do.
So let's look at four ways you've identified that emotions ruin smart investing so folks don't fall into the emotional trap. What's first? Yeah, first emotions are often focused on the present. Not the future.
Now the present matters, but usually we are so consumed with the day-to-day market volatility that we miss the big picture. We're not investing for today, we're investing for the future. When you keep your eyes on the future, bumps in the market seem less dramatic.
So limit emotional decision making by focusing on the future. Yeah, that's great advice. And perhaps turning down the noise of the world through the twenty-four-hour news cycle might help. What's the second way that emotions ruin smart investing? Yeah, that would be allowing fear to take over, usually during a down market.
When the market heads south, we are sometimes suddenly filled with fear, but making fear-motivated investment decisions rarely results in a sound, thoughtful decision. We saw this in 2008. As the market plummeted, individuals pulled out of the market, swearing that they would never invest again. Of course, most of those people probably would now agree that their decision was not the best. During a down market, fear is often your worst enemy.
That's right. And as you well know, your steady contributions actually buy more shares when the market's down.
So who wants to buy at the top all the time? All right, what's next?
Next, we can be overconfident during an up market. Whereas fear can hurt you during down markets, overconfidence does the same during up markets. We saw this right before the dot-com bubble burst in 2000. We could look back. On 2020, and point out something similar.
Markets moving upwards can lead people to view the market as free money. Individual investors who have no idea what they are doing start purchasing riskier investments. Those who were never in the market before suddenly jump in, not wanting to miss out on making an extra buck. Overconfidence fills the market and creates the opposite effect. of fear.
However, the result can be just as devastating. Yeah, that makes sense. All right, we have time for one more way emotions can ruin smart investing. Yes, feeling regret when you look back on past investment decisions. While regret can help us make better investment decisions moving forward, we must be careful not to overcorrect, but regret can lead us to do just that.
Yeah, no doubt about it. The Bible says that saving is wise, so we need to be wise and invest for the future, but not let emotions determine our investment decisions. All right, R, we've got just a few seconds left. Tell us about the Certified Christian Financial Counselor.
So the certified Christian financial counselor helps individuals and couples get out of debt. Create a budget, start saving for the future, and they can be found by going to Christianfinancialhealth.com. And then, right up at the top, you'll see a tab that says search, cert CFC. If you click on that, you'll be able to find one in your area or find one that you can meet via video. Folks, I can't encourage you enough to reach out to a certified Christian financial counselor.
Again, you can do that at ChristianfinancialHealth.com. Art, great to have you with us. Thanks for having me. That's Dr. Art Raynor, Director of the Institute for Christian Financial Health.
Again, check them out at ChristianFinancialHealth.com. Back with your questions after this. Stick around. What if managing your money could actually draw you closer to God? What would happen if we began to see God as our ultimate treasure?
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I'd love to tackle what's on your mind in your financial life. Any topic in play today, we can certainly cover debt repayment. We can talk about investing. Perhaps you're thinking about how to give wisely or stay on budget or whatever it is. Give us a call.
We'd love to tackle it. 800-525-7,000 is the number to call. Again, that number is 800-525-7,000. Go ahead and get in the queue, and we'll get your call in the mix here very, very soon. But first, in the news today, experts are now expecting two more interest rate cuts before the end of 2025 following the Fed's recent quarter-point reduction last week.
Now, analysts say the central bank is trying to balance slowing inflation with signs of economic cooling, which means borrowing costs could continue to ease into 2026.
Now, while the timing isn't certain, markets are already pricing in further moves. How does this affect various aspects of your financial life?
Well, let's start with mortgages and loans. If cuts continue, mortgage rates and auto loans could gradually become more affordable. That would certainly be welcome relief for buyers who've been on the sidelines. Savings accounts and CDs. On the flip side, savers may see yield shrink as banks adjust downwards.
So, if you're considering a certificate of deposit, now might be a good time to lock in that CD rate before those head south. Investments, lower rates generally support stock prices, especially in rate-sensitive sectors.
So, I would say, as an investor, be mindful of valuations, don't get swept up into short-term rallies, don't overweight in a particular category that's been hot. But here's the reality: when these rate cuts come amidst recession, we don't normally see the market respond positively. When these rate cuts come in the midst of what would otherwise be considered a bull market and a strong economy, even though there is some elements of weakening, then it tends to push stock prices even higher. That would certainly be the case in terms of the environment we're talking about. That would be the case of what we have going on right now.
We're hitting all time highs here every few days. Nevertheless, we've had some real strength in the market. We've got a pretty robust economy that has weathered the tariffs and the inflation. Inflation is coming down, even though it's been a little sticky here around 3%. On top of that, despite some weakness or signs of weakness in the job market, for all intents and purposes, corporate earnings have been strong.
And we really have quite a robust economy right now. And so that would beg prices moving higher if, in fact, we get into an easing cycle. We'll certainly have to keep that in mind. What does this mean for your wallet?
Well, debt payoff. Becomes even more attractive since interest costs decline. But planning for lower savings returns is also essential.
So don't rely too heavily on cash for long-term growth. Proverbs 21:5, the plans of the diligent lead surely to abundance.
So wise planning, not guessing the next Fed move is what truly secures financial health, but we'll certainly keep you posted as all of this progresses. All right, let's begin to tackle your phone calls today. Again, we've got lines open, so you can call right now at 800-525-7000. Again, that number, 800-525-7,000. Let's begin in Alabama today.
Sharon, go right ahead. I'm trying to help someone that who has three credit card debts. all of which have gone to collections. And my question is, what qualifies this documentation that that debt collector is the one entitled to collect the debt. if you've sequentially been getting Letters from different debt collectors.
Yeah, and generally, why this happens, Sharon, it's a great question, is debts are often sold or transferred between collection agencies.
So sometimes two agencies trying to collect is a result of poor record keeping. It could be a scam, but not always.
So, you're right. You do need to verify the collector. And under the federal, or I guess it's called the Fair Debt Collection Practices Act, that's the one I'm looking for. You should have the right to request written verification, and that's what I would do.
So within five days of the first contact, They're required, according to the Fair Debt Collection Practices Act, to send you a debt validation notice showing the amount owed, the creditor's name, your rights to dispute. You can also request something written asking them to prove they own the debt.
So I would say, as a general practice, I would not pay, especially given the discrepancy here, until you have that written proof. I'd compare the notices from both collectors with your own records, like the original creditor statement. You can also call the original creditor. and ask who currently has assignment or ownership of the debt. And then I would say, just as always, as a good practice, watch for red flags.
So, anytime somebody's telling you, I know this sounds silly, but it affects a lot of people. If they're asking for payment by gift cards, if they're refusing to send documentation, those are scams. And so, I would say, bottom line, request written confirmation and then contact the original creditor and see if they can help provide clarity.
Okay, well I'll start off. letter was sent to the Most recent collector, or one claiming to be the collector, and what he sent back were. Copies of the The debtors statements, monthly statements and a copy of the contract he signed with the creditor. And I did not know if that sufficed as adequate documentation. But I didn't know.
Go ahead.
Well, I was just going to say, sorry to interrupt you. What did the other one provide? Any documentation? Uh I didn't write to the first one because, yeah, he provided one of those letters that shows the amount of the debt, the letter that you described. and who he was collecting for.
But then. A couple of months later, he got that same kind of a letter from somebody else. who then also sent a settlement offer. And A debtor has never been able to. Raise the money for the settlement offer in time for the deadline.
They always come with the deadline and it's pretty short. Yeah, yeah, got it. What I would do is ask for an updated verification. From the collection agency that is not the one he's received most recently. Because what that could mean is the one that he's gotten most recently could be the new owner where it's been bought or it's been transferred.
And so I would go back to the one that he had received previously and just ask for a new verification. And then what you will probably find is they'll come back and say, it's no longer ours. And then that would clear it up. The other thing you could do would be to call the original creditor and just check there. He could also pull a copy of his credit report to see if one of those lines up.
But I think, given the documentation that's been furnished, it's probably not a scam. And so, at the end of the day, it's probably the one that he's received most recently is the current owner of the debt. But just to be sure, he could go to that previous owner, the previous collection agency, and just. Asked for confirmation that they do, you know, in fact, no longer own this debt. Does that make sense?
That is a great idea. I had not even thought of it and did not know if I could call the original creditor or if the debtor could. And would you just call the number on the credit card? I would, yep. And just ask them to pull up the file.
They'll say it's in collection, but just say I want to verify the collection agency. Sharon, I hope that helps. God bless you.
Well, folks, we're going to head into our first break here in just a moment, but we do have some lines open today.
So if you have a financial question, you'd love to wrestle with it, we'd love to talk to you about it. You can call 800-525-7000. We want to help you see God as your ultimate treasure and money a tool to accomplish God's purposes. Let's do that together as we talk about a biblical worldview of money right after this break. We'll be right back.
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Let's head back to the phones. We're going to head to Mississippi. Rose, how can I help? Yes, sir. I've purchased, I'm retired, I purchased a property.
about thirty five thousand about six, seven years ago. not quite paid for yet but i had to borrow some money because when i purchased it it wasn't a phrase And there's mold in the crawl space. There was such a thing as a crawl space. I'm from Nebraska. I'm a city girl.
However, Do you think it'd be wise for me to borrow money to fix that? And what would you do if I were you in this case? Because it's affecting my breathing, the air that's coming from this crawl space. That's got mold in it. Yeah.
Yeah. Well, your health comes first here, Rose.
So mold can be dangerous, especially at your age. This is an optional in my mind. It needs to be addressed.
So I would say, first of all, we need to get the cost of repairs nailed down.
So I'd get multiple estimates to confirm the true cost of the remediation.
Sometimes it's less than expected. And then, you know, in terms of the financing risk, Borrowing at $77 on a fixed income can be risky if the monthly payments strain your budget. But again, this is not optional.
So you could look at local housing or community development programs perhaps in your area that could help. You know, offer help to seniors with home repairs, any nonprofit grants or low-interest loans. You could certainly check with your local church to see if this is something perhaps the benevolence department or that just the church would be willing to help with here. Perhaps even making a recommendation to a remediation company owned by or with a church member that's involved that might be willing even to offer a below market rate here cost for you on this remediation.
So I would explore all those options. Ask the Lord to give you wisdom here as you explore these. But I think at the end of the day, taking out a loan would be the way to go if you have to. You said you bought this place. Do you have an existing mortgage on it?
Yes, I did when I when I got it. Few years ago. No, that that was the mortgage w that I when I first did a few years ago.
Okay, and you still have that mortgage in place today? Yes, it is.
Okay. All right. And are you able to cover all of your expenses, including that mortgage? And do you have anything left over typically? Oh yes, I'm I'm I can I'm doing all right with the covering covering the mortgage now.
But I wonder will it be wise? I'm just wanting your input on the fact that I didn't I didn't really want to wait this late in the date to be doing anything like that, but the money that I already put into the place is I don't want to lose that either. Yeah. Well, I think the key here is, first of all, again, your health is paramount. And so I think for that reason alone, I would do this.
But second, just to preserve the asset that you have there, nobody's going to buy it with mold. And so, you know, I mean, it also is preserving the integrity of the home, which allows it to be resold at some point in the future.
So I think there's every reason in the world to do this. Have you gotten any bids on it? Do you know what the approximate cost would be? To uh fix the mold? Yes, um, I have.
Okay, what what are you what are you hearing roughly? Oh. One says five, one says 10. These are reputable businesses out of Memphis and the surrounding areas of people that do this for a living. There's some local people that say they can do it.
encapsulated for less than that.
Okay. I wanted to have your input on doing so. Yeah. No, I think that's right. You'd probably want to look at a line of credit.
You could go down to your local bank and talk to them about it. You could talk to a local credit union, but you're probably, I mean, if it's $10,000 and you get a home equity line of credit, you're probably talking about $100 a month or something like that at these interest rates, and the rate will come down as rates come down. But I think you need to move forward with this for your own sake and for the integrity of the home.
Well, thank you so much. I consider everything I hear on this station. Awesome. And I believe I believe God. The wise, I believe the wise.
Thank you for being on the program today. Let's head to Arkansas. Marsha, how can I help? My husband will be 73 soon, and we have an annuity. We put all our RA money in annuity when we retired.
And so far we have taken no distributions. But I know when he turns seventy three, we'll be required to take a minimum distribution. And I don't know how much that will be or how I can find out or whether that will change every year. Yeah. I'd like to take the minimum possible in case we need it for You know, home health later on or something.
Yes. If it's a tax-deferred annuity, then yes, you would.
Okay. Then you would have a required minimum once he reaches 73, and it's going to be based on the account balance of Dece as of December 31st. of the previous year and the IRS what they call life expectancy table. Or the uniform lifetime table, and you can find that at irs.gov. And so you have to understand what that factor is.
A lot of times the annuity company may provide that for you. But basically, once you find that factor, then you divide the balance as of December thirty first. By that factor, and that tells you how much you need to take for the year.
So, for instance, what is the balance roughly today? Do you know? I'll say around 170.
Okay. So at 73, I believe the factor is 26 and a half. And you'd want to verify all this, but that would be about $6,600. Uh for year one.
So that would give you just a rough ballpark. And you're probably going to want to get a CPA involved or a tax preparer just to calculate it for you.
Well, I was going to ask who do I get to check with that me and who do I check with for this. And that's going to be taxed as ordinary income.
So this will probably, yeah, yeah, it's ordinary income.
Well, you know, it's an annuity that we built up. We had RA money and then we we dumped all of that into the annuity because we did not I know it doesn't go up much, but we didn't want to lose anything. And with our age, you're not, you know. It's up and down.
So I just w now every year it'll that factor's going to change, isn't it, as he ages. Yeah, that that's exactly right.
So um each year your divisor, which is that lifetime factor, actually gets smaller, which means the percentage you have to withdraw gets larger.
So yes, the RMD would go up each year as he ages. Mm-hmm.
Well, I just wish that when we were younger they had had the Roth Ira. Yeah, that's a beautiful thing. There's no question about it.
Well, listen, all the best to you, Marsha.
Well, folks, that's going to do it for us. We covered a lot of ground today. I'm so thankful for the opportunity to come alongside you to talk about our role as stewards, to look to God's word, to encourage one another and realize that as we see God as our ultimate and true treasure, well, money changes its entire focus. It becomes a means to an end to accomplish God's purposes. And that's what we want to encourage you in as we gather together on this program each day.
Hey, check out the Faith Buy app. You can download it today and set up your spending plan. FaithBuy.com. Just click app on behalf of my team, Jim Henry, Devin Patrick, Robert Youngblood. I'm Rob West.
This has been Faith and Finance. Come back and join us tomorrow. We'll see you then. Bye-bye. Faith in Finance is provided by Faith Buy and listeners like you.
