Leverage Your Expertise

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Learn more at eventideinvestments.com Hi, I'm Rob West. While it's important for Christians to be faithful stewards of their finances, the same applies to other resources God gives us. Our time, expertise, and experience. How do we leverage those for His Kingdom? I'll talk about that, then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Truth Network. This is Faith and Finance, biblical wisdom for your financial journey. faithfi.com if we're to be truly faithful stewards. You've been given skills and talents that the Lord wants to use for His Kingdom. Paul makes this clear in 1 Corinthians 12, 4-7.

It reads, Now there are varieties of gifts, but the same Spirit. And there are varieties of service, but the same Lord. And there are varieties of activities, but it is the same God who empowers them all in everyone. To each is given the manifestation of the Spirit for the common good. And again in Romans 12, 6-8, Paul writes, So let me ask you, are you giving back a portion of your talents to God's Kingdom? You might not think you have any talents to contribute, but that's never the case. We all have skills and abilities that God can use. For example, if you're in the business world, you have a unique opportunity to share the Gospel with those who don't yet know Christ.

You come into contact with many different people like associates, customers, and vendors. And while doing that, you can make a strong witness for Christ by treating people with honesty and respect. It's probably not a coincidence that when Jesus called the 12 disciples, many of them owned and operated businesses as tradesmen and commercial fishermen.

It would only be reasonable to assume the disciples used their contacts and past relationships to witness for Christ. So we all have God-given talents. Are you good with children? Those skills can be put to use in the church nursery, or babysitting for a single mom or dad in your neighborhood who needs a break. Maybe you're good at repairing cars, or a great cook, or you like to paint, and yes, some people actually do.

Or maybe you have time you can spend with an elderly shut-in down the street. Putting time and talents to work for others not only fulfills your calling for stewardship, it provides a great witnessing opportunity by reflecting the love of Christ, and a chance to invite someone to your church. So don't think you have nothing to give. God can use just about anything to advance His kingdom. For example, the staff of Moses in Exodus 4, 3, and 4. It reads, If God can use an ordinary object like a stick to perform miracles, imagine what He can do with you, a real, live person made in His image. God wants you to give of your expertise because He loves you, and He wants you to experience the full spiritual blessings of giving. Luke 6 38 reads, Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap.

For with the measure you use it, it will be measured back to you. Now, how much time and talent you give back to God is between you and Him, and here 2 Corinthians 9 6 can be helpful. It reads, The point is this, whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. If you're generous with your time and talents as well as your treasure, you'll no doubt one day hear these words, Well done, good and faithful steward, enter into the joy of your Master.

Stay tuned, we'll be back with much more just around the corner. If you believe in and have benefited from FaithFi, would you consider becoming a monthly FaithFi patron? Learn more about the FaithFi patron's membership at faithfi.com and click Give. Are you investing in the future of God's kingdom or wonder how your money can make the most impact for His purposes? Kenneth Boa and Russ Crossan wrote the book Leverage, using temporal wealth for eternal gain to guide these discussions and build a financial legacy where moth nor rust destroy.

Request your copy with your gift of any amount at faithfi.com. Your donation helps us share God's financial principles with others. Leverage your resources for greater impact today. You're listening to Faith and Finance, where we talk about how to handle God's resources. So let me ask, how are you using God's resources?

The book Leverage, using temporal wealth for eternal gain will help you think through giving to God's kingdom now and later. And you can request your copy of Leverage with your gift of any amount at faithfi.com. Now, on to the calls. Remember, the number to call is 800-525-7000 to Spokane, Washington. Hi Fran, go right ahead. Well, hi Rob. Thanks for taking my call.

Yes ma'am. My question is, my husband and I purchased a home with cash for our kids because the home would not pass home inspection for them to qualify for a home loan. So now we are wondering, do we resell the home to them because then they would have to pay closing costs again and sales tax? Or do we add them to the title, sign off our portion, have them get a home equity loan, and then repay us that way? But we are concerned about tax consequences either for us or them, capital gains, or something we may not foresee.

Yeah, yeah, very good. Okay, so he purchased this home when? We are doing it right now. We are going to, my husband and I are closing on this house in about 10 days. Okay, and then is he going to put a good bit of work into it, or are you both going to put in a good bit of work?

Yes, my husband, he's a really talented guy. He'll be doing the repairs. We will then, the home will be able to pass home inspection once we complete our repairs. Okay, and then at that point, what is the plan related to the kids? You ultimately want them to have this when you all pass away, you want them, you know, are they planning to keep this property?

What do you think will play out here? Yes, we are just helping them get into the home. They were already pre-qualified for a home loan, but the catch was the home wouldn't pass the inspection. So our desire is to have them own their home, that home on their own, and they would pay us back or get the home loan.

I see. Okay, so they're going to need to go out and secure a mortgage, but they won't be able to do that until you all get it up to a place where it can pass inspection, which is why you're purchasing it, then doing the renovations, and then your hope is to sell it to them. I think that's really going to be the key, is to sell the property to them, and then that way, upon the sale, they can go out and qualify on their own for that mortgage, which is a good thing, because now you're not, you know, asking them to get into a mortgage that they can't actually afford. Let's try to make sure that that mortgage, hopefully, is no more than 25% of their take-home pay. I'd love for them to go into this with some equity. Do you all anticipate selling this to them below market, or would you anticipate them buying it at market value? We believe it will be below market, or excuse me, it would be, they will have equity in the home, because we were able to purchase it at a lower price due to the cash offer, and so we believe there will be built-in equity once the repairs are complete.

Okay, yeah, very good. And do they have any cash to put into this deal when they make the purchase? Yes, they are already pre-approved for a home loan. Yes, so they had already done their portion ahead of time, found the house, then the house wasn't able to pass inspection, and then that's when we entered the picture.

Got it. But are they, is it all of the proceeds coming from the mortgage that they will secure, or are they actually going to put a down payment down as well? They will put a small down payment as well, yes.

Okay, alright. And so hopefully the combination of that down payment, maybe less than we would have encouraged 20%, that plus the fact that you bought it under market value, maybe that gets them up to 10% plus on the home equity in terms of loan to value. So yeah, I think that is the next step, is that you all buy it, you close on it, you make these renovations, you get it to the place where it will pass inspection, and then they go out on their own to secure a mortgage to buy it from you.

I would get a real estate attorney to help you with the contract for the purchase and sale so that everything is done properly and filed, you know, that new deed filed with the county. So now they're the owner, they're buying it from you, you're taken out with a combination of their cash plus the proceeds of the loan that they'll secure and all that will happen at closing, and then that will establish their new cost basis moving forward. And then if they live in it two out of the next five years and turn around and sell it because they're moving or they need something bigger, well then they'll be able to enjoy, assuming this is still in place, up to a half a million dollars in gains and not have any capital gains tax at that point.

Right, well we were wondering, so our issue is if they go ahead, we resell it to them. So we're going to purchase it, we'll close, we are paying closing costs for my husband and I to purchase it. Then when we sell it to the kids, they're going to have to go ahead and pay the sales tax again, the closing cost for title search and all of that again. But if we put them on the title of the home and then just basically gift it, our portion to them, so they would already be owners of the home, then they could get a home equity loan to repay us back. But we're wondering, that would save us money on the closing costs, but are we going to incur unforeseen tax consequences if we were to go that route? Not really, because they would inherit through the quitclaim deed, which is what you would do, and again I'd use a real estate attorney to make sure all this is done properly. They would inherit your cost basis, which is what you're paying for right now, and then your improvements would be factored into that in terms of establishing the new cost basis that's higher than your actual purchase price because you're improving the property. So it's not like you bought this 20 years ago and now you're quitclaim deeding it to them and they're inheriting your original purchase price from 20 years ago.

So given the fact that this is all happening in a relatively short period of time, I would agree with you. That probably does make some sense where you'd essentially just gift them the property and you'd have to file a gift tax return to let the IRS know that you're making a gift beyond $34,000, which is the limit between the two of you, you and your husband, that you can gift to someone in one year. There's not taxes due on that, it just eats away at your lifetime gift exemption of over $12 million. So unless you plan to give away $12 million in the aggregate, you're fine. The only thing I would just look into in advance is making sure that that's not going to create any challenges with this mortgage that they're getting, but it shouldn't because they'll be the rightful owner of it through a gift and then they will essentially have to get the cash out to pay you all.

And you're just going to have to let the mortgage company know that, that there's an expectation of repayment on that gift because that does often play into whether or not they'll qualify for the loan. Does that make sense? Yes, it does. And thanks very much. I appreciate your help today.

Absolutely. No problem. So yeah, I think the next steps are talk to a real estate attorney and then do your due diligence on the mortgage to make sure that the mortgage company understands exactly what's going down and that that's not going to create any problems with them qualifying. If you need help with that, our friends at Movement Mortgage could be a great resource, at least maybe one of the three that you look into.

We recommend getting at least three bids. You can go to movement.com forward slash faith and you can learn more there. I'm Rob West. You're listening to Faith and Finance and we'll have more of your calls and questions on the other side of this break. The number to call is 800-525-7000.

We'll be right back. Hope for Zambia, empowered by Family Legacy, is a ministry providing hope to vulnerable and orphaned children in Zambia by investing into their spiritual, intellectual, physical and emotional growth and well-being. Whether distributing five million meals each year to students or empowering them to graduate from high school and go on to pursue post-secondary education, we believe that when you educate a child, you change their world.

Go to hopeforsambia.com slash faith to transform a life. We're grateful for support from Eventide Investments on the Faith and Finance program. Eventide's approach to values-based investing is grounded in the belief that humankind was created in the image of God with intrinsic dignity, value and worth. Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com. That's eventideinvestments.com. Welcome back.

This is Faith and Finance. I'm Rob West. We're taking your calls today. 800-525-7000. That's 800-525-7000.

By the way, you don't have to call, just send an email. AskRobatFaithFi.com. That's AskRobatFaith, the letters F-I dot com.

Chattanooga is where Brian's located. Go ahead, sir. Hi. Just very quickly, I'm about to receive an inheritance of about a quarter million dollars. I'm going to spend about 40 of it to get out of debt.

And I want to know what's a good strategy. I'm 60 years old and I need to decide what to do with the remaining 200. Yeah.

All right. Talk to me about how you're doing just kind of in your financial life. You said, will you be completely debt free when you pay off that amount you just mentioned? Well, I'll have probably about 10,000 left on a car, but that's about it. I mean, I could go ahead and pay that off too. I'm not really set up for a really comfortable retirement. The 0809 just devastated my retirement fund.

And I had to actually, in order to try to save my house, I had to cash it and what was left of it and still lost the house in any event. So I'm kind of down to just a small pension through public education that'll be there. And otherwise, it's Social Security and that's about it.

Okay. Pension plus Social Security. And how far off is retirement for you? I'm about, like I say, I'm 60. So, you know, seven, eight years, nine.

Yeah. So what I might look at doing, Brian, is trying to systematically transfer as much as you can from that 200,000 that's left after you pay off the debt into your retirement plan. Even if that means by maxing out your annual contribution this year and every year for the next seven days while you're working, even if that means you need to live on portion of this 200,000.

So let's say by maxing it out, your check gets down low enough where you're short at the end of the month and you need to pull 500 bucks. You know, I'd be comfortable with you pulling it from the 200,000 because what you're essentially doing is you're replacing that money that you're living off of out of the 200 with additional money going into your retirement plan, which gets it into that tax deferred environment so that over the next seven years it can grow on a tax deferred basis. So that would be one option and then you could fund some Roth IRAs. The other option is just to keep it in a taxable environment and just hire an advisor and have somebody manage that for you. And so now you're going to have your pension and you're going to have your social security.

And again, I delay that as long as you can. You know, if you'd wait till age 70, you could get an extra 24% of that check added to it for the rest of your life. And if you didn't need that money because you worked until age 70, then, you know, that'd be great.

And that way you get that checkup. And then that gives you, you know, perhaps another 10 years for this 200,000 to grow. And I'd probably reach out to a certified kingdom advisor on our website at faithfi.com.

And then that person could take over management of this. Does that make sense? Okay. Yes, absolutely. Yeah.

Okay. So I would interview two or three certified kingdom advisors there in Chattanooga. You can do that on our website at faithfi.com. That's faithfi.com.

Just click find a CKA and that'd be a great start for you. You could also do some some planning as a part of that as well. But thanks for checking in with us today. We appreciate it.

If we can help you further along the way, give us a shout to Cleveland. Hi, Debbie. Go ahead.

Hi, thanks. I'm 71 years old. I have $22,000 worth of debt. My credit score went from 680 to 580.

Some company reached out to me and and offered me a consolidation plan that they say will the creditor will allow that they say will allow them to use past interest pay towards paying off my credit debt to those people. And, you know, they will be charging a fee. So I was wondering what you thought about that, because I know I've heard you. I listen to you almost every day. And you said, you know, reach out and try to settle with the people yourself, because all of my credit is very, very old. And I just want to know what you thought about that. That's helpful, Debbie.

I appreciate that background. What has all this debt been written off? Is it charged off, do you know?

Nothing has been done. Today is my last day to finalize it, whether I'm going to go with him and see what they can do. Right. And that's why I called you. And you say, God bless me. I was able to speak with you.

Oh, I'm delighted to. What kind of debt is this? Was this a personal loan? Was it credit cards?

What was it? Credit cards, credit cards, all credit cards. All right. And have you been paying the minimums on these or are these in default? They're not in default, but I just started paying like interest, the interest, including the interest. My son paid off a house that cost me $70,000. He paid it off for $32,000 because when I bought it, my sister told me to pay interest, but I never did because I was raising, you know, somebody. And I just, you know, you have no I get it. I understand there's a lot of competing priorities and there's only so much to go around. Are you able to cover the minimum payments every month right now? Oh, yes, because I've shared that credit with my son and so we're in it together. I don't use it as much. And they, you know. OK. Yeah. Well, I don't like the sound of this. I'm not sure what they're offering to do, but it sounds like either debt settlement where it gets delinquent and then they try to come in and negotiate a payoff or it's a consolidation loan where they're going to give you a new loan and pay it off with that.

And then you're going to end up extending the term. What I would rather you do before you do anything, Debbie, is contact my friends at Christian credit counselors dot org. Christian credit counselors dot org. Do you use the Internet?

My son does. OK, very good. So I would have him go to Christian credit counselors. What they're going to do is they're going to start by looking at your budget. They're going to start by seeing who are your creditors, who are those credit card companies that the debt is with, and then they're going to put you on a plan or at least tell you about what it would look like to be on a plan where they would try to get the interest rates reduced. Because through credit counseling, those interest rates would come down and you would have one level monthly payment every month where, you know, that payment is going much larger percent is going to principal instead of interest.

So have your son reach out to Christian credit counselors dot org, schedule a phone call, tell them we told you to call. They'll get on the phone with you. They'll explain everything. They'll work on a budget with you. They'll make sure it fits in your budget. And then at that point, you know, hopefully that'll work out and that'll get you on a plan to pay this off 80 percent faster.

But I like the sound of that much more than what you're describing on this company that contacted you. If we can help you further, Debbie, give us a call back. But again, that Web site, Christian credit counselors dot org. God bless you. I hope you'll make plans to join us again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you. You're welcome.