The Risk of Playing it Too Safe

Economist and investment expert, Peter Bernstein, once said, the biggest risk is not knowing what you're doing.

Hi, I'm Rob West. All investments carry some degree of risk. Companies fail and governments fall, so it's important to make sure the return is worth the risk. Mark Biller joins us today to talk about managing investment risk, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, our guest is Mark Biller, executive editor at Sound Mind Investing, where they always know what they're doing.

SMI is also an underwriter of this program. And Mark, it's great to have you back. Thanks, Rob.

Good to be back with you. So Mark, the new issue of the SMI newsletter has a focus on risk management. And one of the articles, as you know, that we'll discuss today is the risk of playing it too safe. Now that sounds like a contradiction in term. So maybe you can start by explaining it for us.

Yeah, absolutely. It does seem like a little bit of a riddle. But I think the best way to make sense of it, Rob, is by digging into a behavioral phenomenon that the experts call loss aversion. So researchers have found that most people feel the pain of losing money, roughly twice as strongly as they feel the joy of gaining money.

Let me say that again, a little bit differently, just so everybody gets it really clearly. Losses feel roughly twice as bad as gains feel good. And so that naturally causes a lot of people to become loss averse, and they try really hard to avoid losses.

Sometimes people take that to such a strong degree that it actually undermines their long term goals. So one of the trickiest parts of investing is we need to take enough risk so that we meet our long term goals without taking more risk than you need to. And there's some really tangible steps that we can take to reduce or mitigate risk.

A lot of those are the things that we talk about frequently on faith five. These are things like maintaining an emergency savings fund to minimize the risk of a financial emergency. When it comes to investing, diversifying your holdings rather than putting all your eggs in one basket is another good example of how we can take tangible steps to reduce our risk. Yeah, that's helpful. But as you point out in the article, it's also possible for a person to be too risk averse, right?

Yeah, that's absolutely right. And sometimes we actually increase our long term risk by playing it too safe with our investing decisions. So one example of that is young people not investing aggressively enough.

And by doing that, they let the opportunity for long term compounding to slip away. Now, this one's kind of ironic because young people, we often stereotype them as inherently bold risk takers. You know, we read these stories in the newspaper or whatever about them buying meme stocks and Bitcoin and doing other really risky investing things and certainly some of them do. But the broad research on Generation Z that's adults age 27 or younger really does not back up that perception. So the article we're talking about today discusses a recent national study that found these Gen Z'ers are the least financially confident generation. 57% of them think that savings accounts are the best way to invest their money.

And as you know, Rob, most financial pros would agree that savings accounts are just a really extremely conservative choice for people with several decades of investing time ahead of them. And even when we go up the next step of the age demographic ladder to the millennials, that's people aged 28 to 43. They're also surprisingly risk averse. So a different Schwab study last year found that millennials were especially interested in bonds.

Well, again, bonds have historically been the favorite of retirees, not 28 to 43 year olds. So what these surveys indicate is that younger investors are arguably too loss averse today, and they're making investing choices that are likely to significantly impair their ability to build long term wealth as a result. Really interesting, Mark, and really fascinating that we're talking about being perhaps too risk averse even in the younger generations. Well, when we come back, we'll talk about how this affects you, how you can prevent being too risk averse and investing in a way that will allow you to accomplish your long term goals. Mark Biller with us today, back with much more just around the corner.

Stick around. So grateful to have you with us today on faith and finance live with me today. My good friend Mark Biller, he's executive editor at sound mind investing. You can learn more at soundmindinvesting.org. You'll also find the article we're discussing today from the recent SMI newsletter. It's called the risk of playing it too safe. And it's available for your reading pleasure again soundmindinvesting.org. Mark, before the break, you were sharing some fascinating data, some research on even the younger generations that were perhaps too risk averse that could actually create more long term risk because they're not on track to meet their long term financial goals.

That's surprising. And maybe it comes down to younger folks just having less experience with how investments work over time. They're not seeing what can happen down the road. Would you think that's it? Yeah, I do think that's right, Rob. I would also point out though that previous generations didn't have that same conservative inclination when they were younger and when they were less experienced investors.

So I do think there's something else going on here. But you're exactly right that there's a disconnect between making you know, a safe 5% return in a savings account or a bond today, and not recognizing the impact that inflation is likely to have on that relatively low rate of return over time. And you know, the reason young people should be targeting that higher return of stocks over these many decades that they're saving for retirement is so that they can grow the purchasing power of their savings at a faster rate than inflation over the course of their careers.

Yeah, interesting. And unfortunately, that disconnect, if you will, isn't limited to young people, is it? Tell us about the new retiree that you talk about in the article. Yeah, that's exactly right, Rob, retirees often fall into the same trap.

So the article talks about a particular 65 year old new retiree who recently contacted us, they have all their retirement savings in cash. And this retiree told us that she could live just fine on Social Security, plus the $450 that she was taking out of her retirement savings each month. So of course, we asked her, well, how long will your savings last, if you keep taking out $450 a month? And to her credit, she knew that answer immediately, she could do that for a little over 25 years. So she felt pretty good.

She had run the numbers, she thought she was in good shape. But the reality is, she really isn't in great shape, because she was failing to factor in this rising cost of living. And because of inflation's corrosive power, I mean, we've seen this in the last three or four years, firsthand, how $450 today is going to buy far less in the future than it does right now.

And that means that this retirees standard of living is unfortunately just going to decline steadily as the years pass. So this is a case where an investor doesn't want to take any risk. But ironically, by playing it so safe, she's not just risking the possibility of financial trouble down the road. She's basically guaranteeing it if she stays on that ultra conservative path. Yeah, that's a really helpful example.

All right. So for our listeners today, Mark, how do they prevent this from happening? Yeah, well, to prepare for the future, you know, investors normally need to accept some degree of risk. And that typically means maintaining at least some exposure to stocks, even after they reach retirement age. And that's simply because these days, you know, a person needs to plan as if their retirement could last 20 or 30 years. Now, admittedly, it is tricky to dial in that not too much risk, but just enough balance.

It is kind of a fine tuning process. And this is where a good financial advisor or a service like SMI can often really help someone figure out what is that appropriate level of risk, and then translate that into a portfolio of stock and bond investments. You know, Rob, as you know, I'm not a big fan of annuities in most cases. But let's take this case of this new retiree we were just talking about a moment ago, you know, even an extremely conservative step like buying an annuity with an inflation rider would likely provide that person with a higher monthly income, while also locking in at least a little bit of inflation protection. So the point of bringing up that example is there usually are things that can be done. But first, the person has to recognize this risk of playing it too safe.

Yeah, that's really helpful. Mark. annuities, of course, tend to be costly among other issues. And I know they're not my first choice either. Although for somebody that wants to transfer that risk to an insurance company, it is an option. But what would you suggest is perhaps a better approach? Yeah, well, we typically would suggest for SMI investors, that really closer to like a 5050 blend of stocks and bonds is still pretty appropriate for most people as they're hitting early retirement age. If the numbers work for a person, a conservative investor like this one that we've been talking about, they might be able to drop that down to 20 to 30% in stock mutual funds or ETFs and putting the rest of that and fixed income securities. But even there just keeping that little bit of stock growth exposure is one way to really improve the odds of having enough money in your later years. Now, again, I want to reiterate, we don't take on extra risk just to try to grow our pile as much as possible.

We need those returns to be higher than inflation in order to protect our purchasing power. For most people, that means taking on some risk. You want to reduce that risk over time.

That's why you scale back your stock exposure. And we constantly remind our readers and members, don't take on more risk than you need. But ironically, recognizing that taking too little risk over the long haul can be as damaging as taking on too much risk.

So we've got away the risk of action against the risk of inaction. Great stuff, Mark. Of course, folks can check out these articles about risk management and specifically the one we've been discussing today, the risk of playing it too safe at soundmindinvesting.org. We're nearly out of time.

Mark, tie a bow on this for us. Yeah. So you know, I guess the takeaway, Rob, is investment risk certainly needs to be managed. We're not trying to tell people to ignore the risks involved with investing. To whatever degree possible, you want to minimize your risk.

Nobody gets bonus points for taking on more risk than they need to. But against those truths, we need to balance that by understanding sometimes the riskiest thing to do is to play it too safe. You can't go into the bunker too early and expect your purchasing power to keep up, much less grow ahead of inflation over time. Yeah. And given inflation and the fact that people are living longer with the advances of modern medicine, that just makes this all the more important, right? Absolutely.

Yeah. You've got a plan. Like I was saying earlier, even once you hit retirement, that's not the end of the investing game because most people have 20 to 30 years that they've got to make that money continue to last. Mark, we always appreciate your insights, my friend. Thanks for stopping by today. Always my pleasure, Rob. That's Mark Biller, executive editor at Soundmind Investing and underwriter of this program. Again, check out this article, soundmindinvesting.org. Your calls are next, 800-525-7000.

That's 800-525-7000. I'm Rob West and this is Faith and Finance Live. We'll be right back. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. So thankful to have you with us today on Faith and Finance Live. I'm Rob West. It's time to turn the corner and take your calls on anything financial. The number to call, 800-525-7000. We've got some lines open. You can call right now. Our team is standing by, 800-525-7000. All right, let's dive in today.

We'll begin in Cleveland, Ohio. Hi, Jennifer. Go right ahead.

Hi, how are you? Thank you so much for taking my call. You're very welcome. My daughter, oh, thank you. My daughter, who is 19, is looking to purchase a car this week. She has found a car that she likes. It has very low mileage.

We've had a mechanic take a look at it and he says it's good to go. She has the finances to purchase a car outright. But because she's 19, she doesn't have much credit.

So my husband and I were thinking that maybe she should only put half down instead of paying for the whole thing and then establish credit. What are your thoughts? Yeah, I have a lot of thoughts on this one. You know what? I love the idea of her paying it in cash.

And for two big reasons. Number one, it just starts her off at this very early age of understanding the importance of delayed gratification, saving and eventually buying what we can afford with cash and not using debt to fund purchases. Obviously, I would imagine she's worked very hard unless she got this money as a gift to put this money away. It sounds like she's done a lot of legwork to find a great car. As you said, low miles.

I love the fact that you all got it checked out by an independent mechanic. And so I'd love for her to make this first major purchase completely debt-free as the fruit of her labors. Secondly, I don't think there's any reason for the sake of building credit to pay a dime of interest, especially when you don't have to. There are other ways, Jennifer, for her to build credit.

We can talk about some of those. But taking out a loan specifically for the purpose of building credit, even though I understand at age 19, she has a lack of credit at this point and that will come to bear in certain situations. This is not the way to do it. So how then do you build credit? Well, one option would be she could get what's called a secured credit card where she would put a certain amount on deposit, let's say $500.

They would then issue a $500 credit line against it. She could set up to spend for one purchase a month, let's say a budgeted item that she's already planning on spending. It hits the card, she pays it off, and then it's reported to the bureau each month as being an on-time payer. That's going to help her build credit. If you wanted to take it another step, you could add her as an authorized user to one of your accounts. You don't have to give her the card to use, but she would inherit all of your credit from that point forward.

Now, that runs both ways. If you all had a missed payment, that would hurt her. But if you're timely in your payments and you don't carry balances that are certainly above 30% of your limit, if you do, I wouldn't do this. But if you're paying it in full every month, that would be one way you all could help her establish credit. There are other vehicles, something called a credit builder loan, where she's paying interest but she's paying it to herself. That would be another way that she could go about this. There are ways it will happen over time as she is out there just following good money management practices like she already is, but paying any interest, especially with these high interest rates right now, is not the way that I do it.

Does that make sense? It does. And she does have a secure credit card right now. She's had that for about six months and she has been on our credit card probably for about two years now. Okay. All right. What is her credit score at this point? That I don't know.

Okay. It might be higher than you think. I mean, is she out looking for a loan? Obviously, she's going to have a newer, at least new to her, automobile. I would imagine she's not buying a home anytime soon, so does she even really need a good credit score at this point?

Probably not. We just always just thought that having that monthly payment other than ... Because she couldn't get a credit card, like you said, because she had no credit, so we had to do the secure credit card. So we just thought this was just another vehicle for establishing credit. But if you're saying that it's best not to do that, that's why we're making a phone call. Yeah.

No, I appreciate that and it's a great question. I can understand why you might want to consider it, but I think in this case, it's not worth it to go about that. That's where, again, if you wanted, you pulled the credit score and that might be the next step. Maybe you go to Credit Karma or you go to AnnualCreditReport.com and just actually take a look at what her credit score is. In this season of life for her, the only place this could possibly work against her is if she goes to get a job and they check her credit.

But again, they're typically looking for something that's awry. A lack of credit would typically not be a way or a reason they would stand in the way of giving her the job, at least at this age. And then perhaps if she wanted to go get an apartment, they pulled credit. They were looking at her credit score and that was a reason. But ultimately, I don't think it's really going to harm her in any way at this point.

She's doing all the right things. And again, this credit builder loan could be another way that you could go about this where you actually pay monthly installments. It's reported to the Bureau. And then what you'd be looking for is where the lender returns that interest to you at the end. But again, I would probably just say, let's just stay on the track you're on with the authorized user for years.

And with her using that secured credit card, you might find that once she's ready for it, she could actually go ahead and get approved at this point for a card that's unsecured, specifically that caters to students and younger borrowers. But I think you guys are doing all the right things here, Jennifer. But I wouldn't go to the level of paying any interest to build that credit score.

Go ahead and check that though. You might be surprised it's higher than you think. Thanks for your call today. We're going to take a break folks. Much more on the way, plus your phone calls, 800-525-7000. You can call right now.

We'll be right back. Great to have you with us today on Faith and Finance Live, where we want God to be your ultimate treasure and money, a good gift from God to provide and joy and also yes, to give according to the heart of God that we see in Scripture. We want to help you manage God's money each day, practically in light of biblical wisdom. We do that when you call 800-525-7000. Again, that's 800-525-7000. Hey, before we go back to the phones, as a listener supported ministry, I know many of you out there listen to this program regularly.

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That's faithfi.com slash give and thanks in advance. Let's head back to the phones. We do have some lines open today. Whatever your financial question, we'd love to tackle it. The number to call today, 800-525-7000. Again, that's 800-525-7000. We've got some lines open.

Let's go to Indiana. Hi, Jill. Go right ahead. Hi, how are you? Doing great. Thanks for your call. Good. I was just calling because my husband is retired. I work part time.

We have about 125,000 in an IRA and I'm wondering if I should pull some of that out for an emergency fund to put in our savings because we don't have a lot of in savings. Hmm. Yeah. What did, did you say your ages and if not, would you mind asking? My husband is 67 and I'm, will be 65 this year.

64. Okay. And are either of you still working? I work part time. You work part time.

Okay. And so what are you all living on other than your part time income? Just his income. He's retired and then our house is paid for, our cars are paid for. We just basically pay for heat and utility and electric.

Okay, great. And is he living on social security? And is his income in retirement social security alone or something else?

Social security alone. Okay. Got it.

And with his social security plus your part time income, are you also collecting social security or are you waiting on that? I'm waiting. Okay. And what is your plan there? When would you think you might take that? I haven't decided for sure. I'm thinking maybe when I'm 65. Okay.

But possibly 67. I'm not real sure on that yet. Okay. And with his social security and your part time income, do you guys typically have anything left over at the end of the month? Yes, we do. What would you say on average you have at the end of the month?

I'm gonna guess probably 600. Okay. Yeah. And so where has that been going?

Given that you've only got, you know, 1000 in savings, is that just kind of been finding its way into extra things? Or is that a new thing at the house? Yeah. Okay. Yeah. Sure.

No, I get it. It adds up quickly. And how long are you planning to continue to work part time for kind of the foreseeable future? Or are you looking at when you take social security for you to fully retire? What are you thinking?

Well, I'm thinking either I'm hoping to last until 67 is what I'm hoping. Okay. To continue to work part time. Yeah.

And will your social security be the same more or less than your part time income? Do you have a feel for that? It'll be more. Okay, great. Yeah.

You know, here's the thing. I mean, I love that you all are living modestly, you're debt free. I love that you're letting that social security continue to grow. I'll tell you, if you could wait even until age 70, or every year beyond, you know, full retirement age, that benefit you're expecting at full retirement age is going to grow by 8% a year.

So if you waited an extra three years, and I realized that's all I'm asking a lot. So you need to prayerfully consider that as you and your husband talk through this, but you could end up with a check 25% higher than even you're expecting. But the idea would be that if you can get that checkup as high as you can, that the combination of those two would allow you all to live kind of well within your means. I would keep this 125,000 invested. Is it in stocks and bonds right now? Or what is it invested in? It's in stocks and bonds. Okay. So I was also going to ask if you thought about diversifying into gold like a gold IRA, any of it?

Yeah, I like gold. I mean, obviously, it's it's up here near record highs just because of all the uncertainty and so many other things swirling right now economically. It's more of a fear trade. It doesn't have any income. And it tends to be more volatile, even though the long term performance has been fairly good.

But I wouldn't overweight there. So I would say on $125,000 portfolio, you'd want somewhere, you know, around 5%, you know, which would be about 6200 up to 12,000, maybe 13,000 in gold, probably no more than that. And you could buy that inside the IRA without taking anything out through one of the gold tracker ETF. So there's exchange traded funds that have gold in a vault behind them, but you're buying them like a stock. And it just follows the price of the ounce of an ounce of gold.

So as gold rises, the price of that ETF rises, that's a way for you to have some exposure to gold inside a properly diversified portfolio, but I wouldn't go more than 10%. For sure. I like the idea of you leaving that money there, I would rather you not take it out just to set it in savings. Because here's the reality, if you all had an emergency and unexpected expense, you can get to that money pretty quickly by immediately placing a trade liquidating a position and, you know, having them send you a check.

And so you can get access to it. But I would rather you prioritize, okay, let's see if we can get this 600 a month up to 750. Because we're going to really dial into our spending plan, we're going to really watch how much we're eating out and, you know, whatever it is that tends to be your budget buster. And let's see if out of your surplus each month, you could get that up to three months expenses as a first goal. Well, that's probably just based on your modest lifestyle, maybe 6000. So, you know, maybe that's, you know, if you do 6000, you've already got 1000 right now. So we're trying to save 5000. And let's say you're putting 750 a month, I mean, six months from now, you're pretty much there. And you haven't touched the IRA, you leave it invested, and now you're funding your emergency savings out of surplus cash flow. Six months after that, maybe you're at a full, you know, six months worth of expenses in the bank, that would be my better approach, then we're leaving that money in tax deferred environment for the future.

If you all need it down the road for long term care or a major expense, you're not creating additional taxable income through that withdrawal, and you're funding the emergency fund out of out of surplus, that would be the ideal situation. Does that make sense? That that makes perfect sense. And you don't think they're going to take Social Security away by the age of 70? No, I don't.

I mean, yeah, I get it. So 2035. It's going to if nothing changes run out at that point, they'd be able to pay 70% of benefits.

Is that going to happen? There's just I can't imagine because it's just too much of a political issue for any elected official not to allow Social Security to continue. What's probably going to happen is we're going to see higher FICA taxes, which are the taxes that fund Social Security. And we're probably going to see that full retirement age continue to move out.

But I think they'll find those levers to pull that allow us to shore up Social Security just because nobody wants to pull that rug out from under voters. We appreciate your call, Jill. All the best to you. We'll be right back on faith and finance live. If you'd like to find a financial professional in your area, we recommend the Certified Kingdom Advisor designation. This is the only industry accepted designation in the financial services world around biblically wise financial advice. There's more than 1500 of these men and women across the United States, and they've met high standards and character and competence and training to bring you a biblical perspective of financial decision making at a professional level.

Plus, they've had a pastor client reference and annual continuing education. You'll find a CKA in your city when you head to our website, faithfi.com. That's faithfi.com. Just click find a CKA and or excuse me, find a professional is what it says right there at the top of the page. And you can find a list right there in your city. Check it out today. Faithfi.com.

Click find a professional. All right, back to the phones. This is our final segment here. We might have room for one more question at 800-525-7000.

Let's go to Missouri. Hi, Terry. Thanks for your patience. Go right ahead. Yes, thank you so much for taking my call. Yes, ma'am. And my question is, yeah, how do you know how much you need at retirement?

My husband and I, so he's 55, and I'm 57. And he's planning on working, probably for the next 10 to 15 years. Okay. Yeah. Yeah. So there's, there's some rules of thumb. And we could start with those. And that's all they are. They're just kind of a basic flyover of where you might want to be.

But I wouldn't put too much stock in that. And then there's retirement planning where you actually go through and say, okay, what is my lifestyle today? How much am I spending to fund my lifestyle? And when I get to retirement, how might that change? So for instance, if you all are on track to be debt free, either now or between now and retirement, that would take, you know, a major expense or expenses off the table because maybe you're not paying a mortgage any longer. You know, often we live on 70 to 80% of our pre-retirement income in retirement.

And so normally the way we would do it is say, okay, Social Security was never intended to cover more than 40% of your pre-retirement income at best. And so typically what you would do is you'd say, okay, if I have 10 to 12 times my pre-retirement income in my savings in my retirement account, so if you're making $75,000 a year, you know, you'd want somewhere between $750,000 and $900,000 in your retirement account. And then at 4% a year, you know, that would give you $36,000 a year that you could pull out of it. That's generally kind of the rule of thumb on what you can take out in retirement and maintain the balance.

So you'd never deplete it. And then eventually you could give it away as an inheritance or to a charity or ministry. But that $36,000 is, you know, when added to Social Security should get you back up to, you know, somewhere between 80%, maybe even a little bit more of your pre-retirement income, which in my example was $75,000. So that kind of makes that goal alongside Social Security 10 to 12 times your income. Now, where should you be at along the way?

Well, if we kind of back that down at age 55, you'd typically be somewhere between 5 and 8 times your salary saved as a benchmark toward your ultimate goal of 10 to 12 times your income saved. Now, a lot of people look at that, Terry, and say, wait a minute, I'm not anywhere close to that. Okay, that's all right. Let's start where you are. Let's limit your lifestyle. Let's prioritize saving. Let's do it in a way that where we're seeking the Lord, realizing that our trust is in Him and, you know, He may lead you to save an entirely different amount, you know, because He may have different plans for you. I mean, maybe you're, you know, going to sell everything and go overseas to serve the Lord in, you know, in your next season of life. You know, that's between you and the Lord.

But at least as a starting point, that's one way to try to get to what's an appropriate goal that has some rationale to it that assumes we're going to, you know, be living on less in that season of life for the reasons I mentioned, and we want to maintain our standard of living in at that point. And obviously, if you want to change it one way or the other, that's going to affect that. But does that all make sense? It does. Yes. Okay.

So again, it's not intended to scare you, because if you're not anywhere close to that, that's okay. Let's start where you are. Let's make a plan. And at the end of the day, it's really about first of all, Lord, what would you have for us? What lifestyle have you called us to? What does that season of life look like? Our service to the Lord never ends. So we need to be asking, Lord, what do you have for us in that season of life? And then, you know, ultimately, it's going to lead you to what is, you know, what do we need to fund our expenses? You know, recognizing that it's probably going to be somewhat less than what we're spending now, although there's different expenses in that season of life.

And probably the biggest additional cost could be the prospect of long-term care, you know, which can obviously run anywhere from $5,000 a month to $10,000 a month, depending on, you know, what your needs are. So there's just a lot to think about, and that's not, you know, something we should be anxious about. I think we need to ultimately give that to the Lord. But it does say that we should, you know, be prioritizing having margin, exercising self-discipline, so we have surplus every month, so that we can, you know, save appropriately with the Lord's leading. So hopefully that helps you, Terry. We really appreciate your call today. May the Lord bless you. Let's go to Florida. Hi, Jay. Go ahead.

Hi. So I just inherited about $102,000. I am currently unemployed because my husband was ill. I had to take care of him, and we have a minor daughter, and it's just basically sitting there in the bank for about a month, and I just don't know how to invest it.

And I would like to know how I could get an income from that. Okay. Yeah, so let's talk about just kind of the current status of things. You said your husband was ill. Yeah, he passed away.

Oh, I'm so sorry, Jay. Okay. And so what are you all living on right now?

I was basically living from his paycheck that he received, and I just started receiving Social Security a few days ago. Okay. So that's basically it. Yes.

So right now your income sources are the Social Security survivors' benefits and potentially whatever you might draw out of this $100,000. Is that right? Yes.

Is the Social Security for you and your child enough to cover your expenses or are you running short each month? Yes, it is. However, I have to, like, do strict budgeting. Yes. No, I certainly understand that. All right. And then are you working or do you have the ability to work at this point? I have the ability to work. I'm still of working age.

I'm, like, just in my mid-40s. Okay. Yeah. So, you know, I think the key here is if you can continue to work, you know, do you all have any other investment accounts or savings, anything beyond the $100,000 you received? No. Okay.

Yeah. And so I think the goal at this point is, number one, to get, you know, to set aside a portion that we'll call your emergency fund. So I think you'd probably want to take whatever is equivalent to six months' worth of expenses, leave it right there in savings. The rest of it you probably want to start investing it. And unless there's something major coming up that you can see on the horizon, like, you know, I have a car, it's on the last legs and I know I'm going to need to replace it or, you know, we've got a major repair, we just can't put off any longer, then obviously we'd want to add that there because we don't want to invest anything that we don't have at least a 10-year time horizon on. But apart from the emergency savings and your known kind of more immediate expenses, like, let's say, in the next three years, I think the next step is to take the rest of that $100,000 and get it working for you. In fact, I'd be trying to systematically move it over into a retirement account so it's growing on a tax-deferred basis, either by, you know, over-funding as much as you can a 401k if you were to go get a job and have one available to you, even if that meant you had to pull some out of that excess savings so that you're shifting it into a tax-deferred environment and then get it invested in a stock and bond mutual fund. And then if you could go back to work and make that, you know, work with the care of your minor child, then the goal would be, let's not touch that $100,000. Let's cover your bills out of Social Security and your working income.

And then let's, you know, start continuing to fund retirement accounts and, you know, so that you can have something more substantial down the road maybe 20 years from now that, you know, can supplement your Social Security for you to live on as you need. So that would be the ideal situation. Does all that make sense? Yes, it does. Thank you.

Okay. You're welcome. So what I would do now is reach out to a Certified Kingdom Advisor in your area there in Florida.

You can go to our website, faithfi.com. Click find a professional at the top of the page. And I think, you know, that would get you pointed in the right direction.

They could also help you manage that money. Thank you for your call. Quickly to Tennessee. Marjorie, I just have less than two minutes.

How can I help? Okay. I'm going to be 65 in June. I don't really want to work to my full retirement.

My job is very rewarding, but very stressful. I have no credit card bills or anything additional to mortgage and a car payment as far as the other just utility things. My car payment is about $400 a month, and I still owe about $18,000 on it.

And I was wondering if it would be to my best interest instead of taking my additional commission checks every month that I typically put in savings and put that toward paying the car off. Yeah. What is the interest rate on it? About $50,000. I don't remember, honestly. I honestly don't know.

It's not very high. But these would be commission checks above your regular income. Is that right? Yes. Yeah. So I and how quickly do you think you could pay that all the car off if you did that? I can. I could probably pay that off by the end of the year. Okay.

And then all you'd have left would be the mortgage at that point. That is correct. Yeah.

You know, I like $175,000 in a simple IRA. Good. Okay, great.

Yeah, I like that plan, Marge. I mean, obviously, I don't know a whole lot here other than what you just described, which was very helpful. But I think that's great because it gives you a goal. It's surplus income. Obviously, you're paying some interest on that year. So you're going to get a guaranteed return on that money equal to that interest. And it sets you up so that your living expenses are $400 lower every month when you hit retirement, which you say is, you know, not too far to down the road, Lord willing. So I think that's a great plan.

I'd work as long as you can grow that Social Security and build up your savings. But I do like this plan of paying off the car. Hey, thanks for calling today. Faith and Finance Live is a partnership between Moody Radio and Faith by thinking to Amy, Gabby T, Jim and Dan. See you tomorrow.