This Faith and Finance podcast is underwritten in part by one assent. God has created every single person and every square inch with immeasurable dignity, and every day businesses impact these people and places in powerful ways, either causing them harm or helping them flourish. Our trusted sponsor, One Ascent, exists to help investors consider who a business impacts and how they're impacted. More than likely, your values inspire why you invest, whether it's to provide for your family, put your kids through college, or prepare for the next stage of life. One Assent believes your values can also inspire how you invest by directing your investment capital into companies that positively impact the world.
Whether you invest on your own or work with an advisor, OneAssent's comprehensive values-aligned solutions seek to help you do well by doing good. To explore a new way of investing that aligns with your values, visit onascent.com/slash Faithbuy and tailor your portfolio to what truly matters to you. Puritan poet Ann Bradstreet once said, Wisdom without an inheritance is better than an inheritance without wisdom. Hi, I'm Rob West. Every parent hopes to leave an inheritance for their children, but doing so wisely takes careful thought and prayer.
Today, Ron Blue joins us to discuss the uniqueness principle and how it can guide parents in passing down wealth effectively. And then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial decisions.
Well, we always look forward to having Ron Blue on the program. He's co-founder of Kingdom Advisors, the author of many books on personal finance, and a dear friend of mine. Ron, great to have you back. Good to be a part of it, Rob. Thank you.
Ron, studies show that around two thirds of parents divide their estates equally among their children. And while this certainly isn't a bad thing, can you share with us how this can be problematic in some cases? Yes, I think Rob, if we think about it, the way God treats us. He loves us all equally, but he treats us uniquely. Yeah.
He doesn't just divide up everything equally.
Some have some things and others have others, but So when it comes to leaving an inheritance to our children, We have five children, and I can tell you this, they all sat at the same dinner table, but they sure didn't all turn out the same way. Amen. I mean, they've done fine. I don't mean to imply something negative there, but they marry differently. They parent differently.
They're in different economic situations due to jobs lost, jobs taken.
So what I have found over time is that when Judy and I started, our kids were None of them were married.
Well, I'm sorry, there were two of them that were married. And we asked three questions, Rob. We said if we left X amount of money to X child, What's the worst thing that could happen? And it took us about two years to really think that one through. The second question then was, well, how serious is it?
In some cases, it wasn't serious at all. Like we had one child, we said, well, if we left them whatever, they'd give it all away.
So that's not real serious. We had different situations with another child where it would have really harmed their marriage because the husband really had a passion to. provide for his family.
So we ask those questions, what's the worst thing that can happen? How serious is it? And then what's the likelihood of it occurring? And that's the process that we follow. It doesn't say how we'll end up, and I can tell you this now at my age, 83, with a daughter that will soon be 59.
as the oldest and the youngest being 47. circumstances changed over time.
So how we would answer the question today that we asked for the first time 25 years ago is totally different. But it's the process that's the thing to think about. And in America, the default is equal. And then it's not necessarily wrong to be equal. But it is, I think.
Unwise to not think through the consequences of leaving this wealth to a particular child.
Well, I so appreciate that about your teaching, Ron, because here, once again, you're not saying that it's better or worse to leave the same amount to each child. What you're saying is what's important is to follow a decision-making process, right? Absolutely. Because what you don't want to do is you know and you've heard me say this too, don't pass wealth unless you pass wisdom. Because wealth never creates wisdom, but wisdom can create wealth.
So what I want to do as a parent is the best thing for my children And I need to think that one through very, very thoughtfully and very, very prayerfully. It may end up I treat them equally, but it may not either. The most important thing is the process that I follow. And if you don't ask the right question, you don't ever get the right answer. And the right question is: what's the worst thing that could happen?
Because I don't want that to happen. Yeah, that's right on. Ron, I know you've said, well, transfer at the end of the day should reflect God's wisdom, not human emotions, because ultimately we're accountable to Him. This has once again been so valuable. Ron, thanks for stopping by.
Always a delight, Rob. Thanks for having me. That's teacher and author Ron Blue talking about the uniqueness principle. Your calls are next: 800-525-7000. That's 800-525-7000.
I'm Rob West, and this is Faith and Finance. We'll be right back after this break. FaithFi is grateful for support from One Ascent. One Ascent believes that your values inspire why you invest and how they can inspire how you invest. OneAcent's goal is to provide solutions designed for every need and invest in businesses that bless the people and places God has made.
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A short video webinar about that is available at soundmindinvesting.org. Financial Wisdom for Living Well, SoundMindInvesting.org Helping you live as a faithful steward. This is Faith and Finance. By the way, if you'd like to find a certified kingdom advisor in your area, a financial professional who shares your values, has been trained to bring a biblical worldview to their advice and counsel. They've also met high standards in character, competence, and integrity and experience.
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Let's begin in Chicago. Stephen, how can I help? Yeah, hi there. I uh appreciate you taking my phone call. I was just wondering, I've got like one point four million in Roth IRA part like three hundred fifty thousand and then the rest in financial assets.
I have a home I own out right in St. Louis that I Airbnb. I have a condo in Dustin, Florida that I own outright that I. I you know, I rented out also with a management company down there. Anyway, and I also have a an apartment that I rent for $2,100 a month in Chicago.
I'm heading there right now as we speak. Um so During summertime, this is high season in Florida.
So things are great. Money's pouring in from rentals. Um And then the list is doing good right now, but it probably will be dead for most of the rest of the year. Uh so what I'm getting at is How do I You know, like I haven't had to use my money, go into my savings, my $1.4 million. I haven't had to go into that.
And I'm sixty years old, I'm sixty one this year actually.
So I'm kind of waiting for Social Security to kick in. Should be a little bit of a breather, but I've built another year and a half for that.
So, I'm watching my food budget. I'm watching going out to eat budget. I'm trying to be really good about that. But I still it's feast or famine and And you know. I've got taxes coming up in November for St.
Louis. I've got taxes in Florida.
So And I paid $2,100 in my apartment in Chicago, which I probably don't need, but I really love Chicago. It's a luxury for me to do that. It's so I'm getting at am I doing things wrong by renting this apartment in Chicago? I've done it for 15 years. I'm still making it, but You know, I don't know.
It's 1.4 million enough to survive on if I live to, you know, I don't know how long I'm going to live. I'm 60 years old right now. Yeah. Yeah. Well, I appreciate your transparency on that, Stephen.
And, you know, I think it's important for you to take a step back where, you know, you look at these things. In one sense, you've got, you know, a great little nest egg that you've put together and you've got other assets beyond that Roth and the investments with the properties, but you also are spending a lot of money as well. And I think you've got to look at, you know, where you're ultimately headed and determine, you know, what is it going to take for you to fund your lifestyle in the future? And I think even before that, what is the right lifestyle? You know, what has God called you to?
And I can't tell you that. I mean, it'd be great if the Bible said, you know, you're supposed to live on 63.4% of your income. It doesn't. It's between you and the Lord to say, Lord, what have you called me to? You know, what does it look like for me to live faithfully, live with contentment, to enjoy what you've given me, but also to love my neighbor and bless others and invest for the future?
And how do I, you know, balance faithfulness? The midst of all of that. And, you know, I think ultimately that's a decision that starts with a lot of prayer and conversation with the Lord. But once you settle into what your values are, you know, is it about living simply and giving generously or is it about working hard and what does enjoyment look like? And, you know, how much is enough?
And, you know, we just spent about six months putting a new field guide together here at FaithFi called How Much Money is Enough that really kind of walks you through a biblical perspective and even some exercises on determining how much money is enough for your lifestyle and for what you call what we call your lifetime of accumulation, both lifestyle monthly and lifetime kind of net worth, to help people wrestle through that. And I'll be happy to send you a copy of it. And that might be a great tool for you. But I think at the end of the day, you've really got to start with a values conversation and say, Lord, what are you calling me to? And how do I steward wisely what you've entrusted to me?
And once you make some of those. Decisions about how much is enough for me in terms of my lifestyle spending, that really drives everything else. Because when you set the cap, not just I'm going to spend whatever comes in until it's gone, and then that therefore leaves you in this kind of endless cycle of as more comes in, you just spend more, and your level of spending always rises to your level of income. You need to protest to the contrary and say, No, I'm going to define enough for my lifestyle. And once I set that cap on how much I'm going to spend on a monthly basis, and the answer to that may dictate whether you keep Chicago or stop renting it or make other changes in your budget, that then drives your lifetime finish line as well.
Because now, once we know what you're going to cap your lifestyle spending at on a monthly and an annual basis, it's just a math equation to determine how much do you need saved in order to generate that amount of income for the rest of your life, given inflation and some of the unspeakable. Uncertainties and, you know, social security at full retirement age, and kind of all the factors, including your, you know, other assets that would play into a calculation like that. But it's just math at that point. And so I think perhaps that's the starting point, Stephen, you know, is for you to really define enough for your lifestyle spending, because then everything else kind of falls out of that. You need then a system to control the flow of money coming in and going out to make sure you stay on, you know, your cap and you don't exceed it.
And then you can also calculate what you need long term. And I think it will also drive some of your other decisions with regard to: am I spending too much beyond what I decide I want to spend? And how do I right-size that? What do I need to let go of? And again, I can't tell you.
Yes, the apartment, no, the apartment. You need to spend this, not that. That's not for me to tell you. That's between you and the Lord. But give me your thoughts on all that.
Well, I think you hit some nails on the head there about first of all, it's between me and the Lord. I I I kinda I hate to say that, but I've never thought about that like that. Um That, you know, I don't know when I'm going to die. None of us do, right? Right.
So I don't know how much money I'm going to need. I don't know my health situation coming. You know, I'm 60 now. I don't know what's going to happen at 70. God forbid I live that long, God, or God willing, I live that long, I guess.
It's between me and the Lord. I just want to live comfortably. I mean, I'll be honest with you, I really haven't given much back lately because I just am too nervous. Yeah, so it's not a good feeling. Yeah, well, here's what I would say to that: yes, there are unknowns, including when the Lord's going to call you home and your health status, but what you can decide is, again, prayerfully, how much is enough for my lifestyle spending?
And there's a couple of ways you can do that. You can do a maintenance finish line where you just say, What I'm spending right today is where I'm going to cap it. You could do a benchmark based on a certain industry or profession or locale. I mean, there's a number of approaches, but once you define enough, everything else falls out of that in terms of what you ultimately need to accumulate to let that last for the rest of your life at that level of spending. Stay on the line, we'll talk a bit more.
800-525-7000 is the number to call. We do have room for you. If you have some question today, something going on in your financial life, give us a call, 800-5277. 525-7,000. Lines are open.
Calls are coming in, but we've still got room for you at the moment. 800-525-7,000. A quick break and back with much more just around the corner here on Faith and Finance. Helping you see God's best for your financial life as you apply biblical wisdom. Stay with us.
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NMLS number 39179. For licensing information, visit NMLSconsumeraccess.org. Delighted to have you with us today on Faith and Finance. I'm Rob West. We're taking your calls and questions today at 800-525-7000.
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That would certainly be a huge blessing to us. Faithfi.com/slash give. Let's head back to the phones. Pennsylvania, Bob, how can I help you, sir? Yes, sir.
Thank you for taking my call. Quick question. My wife and I are looking to purchase a new house. house we're in is paid off. We have about sixty percent of the new home purchase price in cash.
And so we just need the other forty percent to finish that off, and we would have to sell our house So rather than putting a contingency on the offer, I was looking for the best way to borrow that for probably sixty or ninety days, that remaining forty percent, whether to go to a HELOC or a bridge or some other way of financing that. Yeah, great question. Yeah, the non-contingent offer is going to be much more attractive to sellers in a competitive market, and you can move into the home before selling the old one, which makes the transition less stressful. And then once your home sells, you can use the proceeds to pay down the new mortgage. Are you in a position to afford the housing payments on both?
And do you still have a mortgage on your current property? No, the current property is paid in full. And yeah, we can handle the the the the new Well, we won't have a mortgage. The only payment we don't have any debt. We only the only debt would be this loan that we need is a bridge loan.
Okay, got it. Yeah. And have you already shopped that around? Have you talked to any lenders? Just one brief conversation, trying to get some discernment on whether it was better to go with a bridge or HELOG or what the best route was to go with.
And no, I haven't stopped around.
Okay. Yeah. I mean, there's a couple of ways to do that. A bridge loan is specifically designed for that purpose to buy a new home before selling your current one. It's short term, and you pay it off once your existing home sells.
The HELOC, you know, since your current home is paid off, you could open that HELOC against it before you list it for sale, which you would need to do. And then you can use those funds toward the down payment and then pay off the HELOC when the house sells. And it's often less expensive than a bridge loan if you qualify, which you likely would. And then the traditional mortgage, you know, since you can already put 60% down, you could just simply obtain a conventional mortgage for the remaining 40% and then just pay that off as long as there are not any prepayment penalties and those are not very common anymore once your current home sells. And so, you know, if you expect it to sell fairly quickly, Then I would probably lean more toward the traditional mortgage on the new property or the HELOC, since those bridge loans often carry higher interest rates and fees.
All right. I'm surprised. I thought the HELOC would be as simple and easy, but. Um, yeah, if we can get a traditional mortgage, I was just afraid of some of the fees that a company. a traditional mortgage being higher than the HELOC.
Yeah, and that's going to be a part of it.
So it's ultimately going to come down to what are the fees and what is the interest rate. You know, if you've got really strong credit and you can find somebody who's offering a fee-free HELOC, and they do come up from time to time. I know recently, I think it was Bank of America that was offering to cover all of the fees. They paid for the appraisal, and they paid for, there was no origination. I don't know if it's still available now.
And I think you had to keep it open for a certain number of months, but as long as you did, it was fee-free. And then it's just a function of, okay, what is the rate? Is it prime plus a half? Is it prime plus one? And how does that compare to a traditional mortgage?
So it's really just going to come down to, you know, how competitive are these lenders going to be? And are you better off with the HELOC or the traditional mortgage? It's probably going to be the HELOC, especially if you can find a lender who has a special deal going on, but not always. And so I think it's worth looking at both. And maybe you get a couple of bids for each.
And then ultimately, it's just a math equation on when you factor in the total cost of the interest for whatever period of time it is plus the fees and expenses, which one comes out ahead. And it really doesn't matter. Whichever one wins on paper is probably the one I'd go with.
Okay, all right, I'll ge just have to uh get my pencil out and and add the numbers. Yeah, that's exactly right. Our friends at Movement Mortgage could be a great place to start. You could go to faithfie.com/slash movement. The leadership are all believers and they're just a great mortgage company.
But you may want to check with a local bank or credit union or do some shopping online. I'd get probably at least three bids total, if not, you know, maybe a couple from each of the HELOC versus the conventional loan on that new property. Hey, Bob, thanks for your call today. We appreciate it. All the best to you as you purchase this next house.
Let's head to Ohio. We've got just a few moments left. Estella, thanks for your patience. Go ahead. Yeah, I just have a question.
We have an adult daughter that lives with us. She's 22 and the only really financial responsibility that she has is her car insurance. She does have a car that she bought used, so that's paid. But her car insurance and her groceries and things like that.
So we were wondering if it's biblical to begin to charge her rent to live up in our home. Don't really seem motivated to go out there.
So, one, I wanted to know: is that a biblical thing to charge your adult child rent to live with you? And if so, how do you come up with the right dollar amount? Yeah, yeah, that's great. You know, I think it absolutely can be. I mean, you've got to take each of these situations separate.
In some cases, folks will say, Listen, we're going to cover the expenses, but there's a deadline here, and we're going to communicate clearly that this is a six-month thing or this is a 12-month thing, and then you need to be on your own. Others will say, No, we don't want to make it too cozy for you to be here and not develop your own responsibility and get on your own and save and work hard. And so, you know, we're going to charge you some rent.
Now, in terms of establishing the amount, I would probably look at the amount of space she's occupying, just like if you were going to rent out through Airbnb a room. You know, you can determine what percentage of the house that is and back into a number.
Now, the other option is you could take that money without even. Even telling her and put it in a savings account and then bless her with that as a gift on the way out the door doesn't mean you have to keep it, but I don't think there's anything wrong biblically at all with you deciding to charge rent and keeping it. I think the big thing is communication. You want to communicate clearly and even put it in writing so there's no hard feelings and misunderstandings. Stella, I think it's a great idea.
Thanks for your call today. Folks, that's going to do it for us. If you want to support our work here at Faith By, just go to faithby.com and click give. Big thanks to my team today: Sandy, Jim, Devin, and everybody here at Faith By. And we will see you next time.
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