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This institution is not federally insured. For what does it profit a man to gain the whole world and forfeit his soul? Mark 8, 1936. Hi, I'm Rob West. Christian parents should teach their children God's time-tested and true financial principles, but they shouldn't ignore the spiritual principles that accompany wise money management. I'll talk about that first today, and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, we've talked many times about the importance of teaching your kids biblical financial principles starting as early as possible. Today, we'll go over those age-appropriate lessons along with some spiritual principles that go hand in hand. We think that grasping the spiritual principles will make your child more likely to follow the financial.
So let's get started. Maybe as early as age three, and certainly by age five, you can introduce the idea that buying things requires money. That's a simple concept, and it's followed by the idea that you have to earn money, and that means work. The first spiritual lesson that you must teach then is that God created everything. Genesis 1-1 reads, in the beginning God created the heavens and the earth. Next, that God owns everything. Psalm 24-1 says the earth is the Lord's and everything in it, the world and all who live in it. And that work is a good thing, a gift from God given to us before the fall of man.
Genesis 2-15 tells us the Lord God took the man and put him in the Garden of Eden to work it and keep it. Also at this early age, you can begin to teach your children the importance of gratitude, and that we should always thank God for his blessings. 1 Thessalonians 5-18 teaches, in everything give thanks, for this is the will of God in Christ Jesus concerning you. Now once a child reaches age five or so, you can begin to introduce the basic concept of budgeting.
The three-jar method works great for this. Money received from an allowance or birthday or Christmas gifts can be divided equally between jars for saving, spending, and giving. The spiritual principles here are that it's wise to save because we don't know what the future will bring, and that we should be generous. Proverbs 6-8 teaches, Go to the ant, consider her ways and be wise.
Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest. And of course Hebrews 13-16 tells us, Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God. Okay, when your kids reach nine or ten, they're ready to learn more about the necessity of earning money, and that work itself is a gift from God.
Deuteronomy 8-18 says, Remember the Lord your God, for it is he who gives you the ability to produce wealth. You can give them opportunities to do that around the house. If a chore isn't done, the allowance is withheld until it is. 2 Thessalonians 3-10 teaches, If anyone is not willing to work, let him not eat. Now, from ages 10 to 15, you can expand on the idea of working to earn by giving your kids the chance to earn greater amounts for doing more difficult chores, such as babysitting or mowing the lawn. You can also help them set savings goals. You can even set up a custodial account for them at the bank or set them up on the FaithFi app. The spiritual principle here is fairness.
First Timothy 5-18 reads, You shall not muzzle an ox when it treads out the grain, and the laborer deserves his wages. In this 10 to 15 range, you can also have children decide on a ministry they'd like to give to. Teach them to tithe to your local church, but let them choose where they'd like to give beyond that. Raising faithful tithers and generous givers, what more could you want as a parent?
Deuteronomy 15-10 tells us, You shall give to him freely, and your heart shall not be grudging when you give to him, because for this the Lord your God will bless you in all your work and in all that you undertake. Now we come to ages 16 to 18. At this stage, children are able to work outside the home and earn more money than they can around the house. So emphasize the importance of sticking to a budget so they can save and meet their goals, which by this time should be for things like a car or saving a certain amount for college. And that brings us to investing. Again, with a custodial account or an app, let teenagers decide which stock or stocks they'd like to buy, probably in fractional shares. Proverbs 21-5 teaches, The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty. You want to teach these financial and spiritual principles to your kids at the appropriate times so they're ready to take on the responsibility of managing money on their own and doing it wisely. We'll be right back with your call.
Stick around. simply go to faithfi.com and click app to get started. account is insured up to $250,000. This institution is not federally insured. Welcome back to faith and finance. I'm Rob West. All right, we're taking your calls and questions today on anything financial. Number to call is 800-525-7000. We've got some lines open here.
We'd love for you to get in on the conversation. Again, 800-525-7000. You can call right now.
All right, let's begin today in Centerville, Tennessee. Hi Debbie, you go right ahead. Hey, thank you. I have a question about, I have about an inheritance amount that is just money that I can have fun with. And a bank has just offered a debit card grade account where if you do 15 transactions a month, you can earn up to 5% on your money. And I was thinking of starting with 10,000 there because my money is sitting at my home bank, which doesn't offer this and making no money basically. And so I was just wondering what are the risks of a debit card?
Yeah, sure. Well, I'm comfortable with online banks as long as it has FDIC insurance. So if it's a member of the FDIC, then your deposit is backed by the full faith and credit of the United States government.
Even if the institution were to fail, they'll ensure that you have ready access to your money and it's protected. You know, I would probably before you make that change, go to bankrate.com. That's bankrate.com.
Click on the button that says high yield CDs. What you'll find is that there are plenty of banks out there, online banks, that are offering anywhere between 4.5% and 5% on high yield savings. And many of them offer no monthly fees or any kind of requirements for automatic deposit or even a certain number of withdrawals. They may have a minimum deposit balance, but you're going to be able to meet that pretty easily. And so I don't know that you need to go through the hassle of 15 transactions a month in order to get that 4.5% to 5% if you're willing to use an online bank. And again, I'm comfortable with that.
So that would be my recommendation there. With regard to the money, am I seeing in my notes here that it was an inheritance? Is that right? Yes. Yeah. It's my mad money.
I've purchased washer dryer and put some money down on a car. And I'm also thinking of my church as well. Oh, great.
Yeah. So if you've got things already picked out you're going to do with it, then obviously keeping it at a high yield savings makes a lot of sense. I love the idea of you giving. I love the idea of you taking care of some major purchases that you have. If you want to prioritize some of it for longer term savings, I would look at getting that potentially in a retirement account like a Roth IRA, or you could accelerate your salary deferral into your 401k and use a portion of it to backfill what you wouldn't be getting in the monthly check from your work from your employer. But if you've got all the money kind of earmarked for certain things, then yeah, keep that right there in the high yield savings.
Bankrate.com will help you find the best one, but you don't have to settle for one that requires that kind of transaction activity. Okay. Appreciate the information. Thank you. God bless. All right.
Yeah. And you too, Debbie. Thank you for calling today. We appreciate it.
800-525-7000 is the number to call. Earlier, by the way, we tackled this subject. The title of the episode was, Are Online Banks Safe? We'd love for you to listen to that and maybe that'll give you some of the information you're looking for. Also, we have an article on that same topic. If it's easier, just go to faithfi.com.
That's faithfi.com and just go to the content tab and you can do a search for, Are Online Banks Safe? I hope that helps you. Again, 800-525-7000. Still a few lines open today. We'd love to hear from you.
To Boynton Beach, Florida, Orlando. How can I help you, sir? Hey, Rob. God bless you. Thank you. I got a prospect buyer for my house. The price is going to be like $920,000 and he's proposing $500,000 up front and the rest to be financed at 10 years. And he wants to pay interest only for the 10 years.
I don't know if that's good or if I can ask him for five years or... So he wants you to finance it for him? Yes.
Yeah. Why is that? Why isn't he using traditional financing? I don't know. Probably because of the interest.
I'm giving him like six percent. Yeah, yeah. You know, I don't like this option. I mean, typically when somebody's looking for owner financing, they're doing it because they can't qualify for traditional financing and so they're looking, you know, for you to do it and hold the note. I would much rather you just sell him the property and he buys you out in full and then you don't have to worry about a buyer default where he could stop making payments at any time. And if this happens, they don't just, you know, walk away. Then you could end up going through the foreclosure process.
So, you know, I think, you know, this could be challenging. Also repair costs. If you take back the property for whatever reason, you might end up having to pay for repairs and maintenance depending on how well the buyer took care of the property. So I would really caution you against owner financing here and just try to find a buyer, especially because this real estate market is still very strong despite the higher interest rates.
Find a buyer who's going to buy you out in full and if they need financing to do it, let them get their own conventional financing through a third-party lender. Because the only thing I like, you know, is that he's giving me 500 upfront and, you know, I can pay my loan which I owe about 200,000 and the rest, you know, to buy something, you know, for us. But what's the house worth? About that price, it was 950 but we couldn't sell it at 950. Yeah, so I would rather you get 950,000, pay off your $200,000 mortgage and you've got 750.
In this case, you're getting 500, you'd be left with 300 but what's the likelihood you're going to get back the rest of it and what if he doesn't perform on it because he has bad credit or doesn't have the, you know, the documented income or something happens in his financial life and he just stops paying and now all of a sudden you're having to initiate foreclosure proceedings against this person and what condition is the property going to be in. So why not just sell it to somebody who can pay you the full 950,000? Okay, okay. I guess I just needed your advice, you know, I mean. Yeah, yeah.
No and I'm not trying to give you a hard time but I think the key is that we just have to go back to why is this the case. If you were excited about getting the 6% a year, well what is the risk on that and I think the risk is a lot higher just given that you really don't know what's going to happen in his financial life. Banks can offset that risk by, you know, the underwriting process, making sure this person is credit worthy and doing a lot of due diligence on it and then they have a process for foreclosing if they need to but, you know, they're not going to lend the money without a lot of underwriting going into it and oftentimes when you owner finance you just don't have that level of scrutiny, you know, to be able to evaluate this bar and you're highly concentrated. You've got one borrower, they've got hundreds of borrowers, so if one of these deals went go south, you know, they're making up for it with many, many, many others.
So I would stay clear of this if it were me, Orlando, look for a buyer who will pay you the true market value and give you a hundred percent of that money and let you go pay off your loan and then go find that next property. Hey, God bless you, my friend. We appreciate you calling today. I hope that was helpful. We're going to take a quick break back with more on faith and finance 800-525-7000.
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For licensing information, please visit nmlsconsumeraccess.org. We are grateful for support from sound mind investing in the faith and finance program. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes seem like a roller coaster, but it is possible to enjoy both profit and peace of mind in investing no matter what's happening in the market. You can see a short video webinar on that topic at sound mind investing dot org. Since 1990, sound mind investing has sought to offer financial wisdom for living well. soundmindinvesting.org. Welcome back to faith and finance.
I'm Rob West. The purpose of money is not to have more of it. The purpose of money is to accomplish a set of goals that are ultimately informed or should be informed by our values, our values and priorities as believers, as Christ followers, understanding that we should operate with a biblical worldview in every area of our lives. And that certainly includes in our management of God's money, using as a tool, holding it loosely, saving appropriately, giving generously.
Well, we want to apply the themes and principles from scripture to the daily financial decisions you're making every day on this program. And we do that together. We've got a few lines open the number to call today, 800-525-7000. All right, let's head to Kansas. Marie, you'll be next on the program.
Go right ahead. My husband and I are both on our 60s. We both are living on a fixed income.
Social Security is our income now. And so I want to kind of go over we have a what I think is a very nice nest egg. We don't have any children. So and we don't owe any money on anything except for $29,000 left on our property.
So I kind of wanted to go over our assets and where we have them at. So we have we owe $29,000 on our home. Our assets are roughly $300,000 in a secular managed investment portfolio, about $400,000 in annuities.
And then our home, which sits on 10 acres is valued at $800,000, $10 million. And you're living purely on your Social Security, you're not drawing an income from any of these investable assets. We had to draw an income, some income from it for the past two years, because my husband just turned 65. But he ended up with cancer. So because he was on the marketplace, insurance plan, it maxed it out. Is there going to be ongoing expenses related to his medical care? Well, Medicare will cover it now. Okay. Oh, right now that he's 65. Okay, yeah, very good.
Well, I would agree. I mean, you are in pretty good shape here in that you're living modestly. So your Social Security is covering your income needs. You've got no debt except for this home.
And that'll be paid off probably in a relatively short amount of time you if you wanted to, you could go and pay it off right now. And then you've got this 300,000 in investments and then the $400,000 annuity. Is that a fixed annuity growing at a fixed rate? I have I haven't spread into three different annuities.
And I believe want a part of one of the annuities is fixed. Okay, there's a variable. Correct. Okay, yeah. So that's great. And then you can annuitize it that at some point if you wanted to.
And then what were you thinking? You mentioned a gold IRA, which for the benefit of our listeners, basically, that's just an IRA that allows you to hold gold in it, and still keep it inside that IRA bucket, if you will. But what were you thinking of putting into gold out of this roughly 700,000 in investments?
Well, I was thinking a third, but I'm not sure where to go with that. And then about paying off the home, doing some math, I think it would push us up into a higher tax bracket if we didn't if we paid it off right now. Because we have to take out probably double what we still owe because of the hit of taxes from the government. Okay, we paid it off just monthly. I don't think it pushes us up into a higher tax bracket. But the gold backed IRA, I was thinking about a third of what our assets are.
Yeah. Well, that would be a little higher than I would recommend. I heard you mentioned digital currencies. And I can understand your concern there.
I'm not a fan of that either. I think that would give the government too much insight and potential control over our transactions. But for that reason, there's that's going to be very hotly debated in Congress, because this is not something the executive branch can do.
It's not something you know, the Treasury or the Fed could do acting on their own, it would require an act of Congress, which is responsible for coinage. So, you know, there's a lot of congressional leaders that have significant concerns about this, which is why I think if it were ever to come to pass, it's going to it's going to be a while. Because we haven't even started, you know, China started back in I think it was 2019.
And they're still in the beta phase, right now may have even been 2016. So, you know, we're still the strongest economy in the world. Yes, we have our challenges, but there's really nobody close to us. I mean, China's having real problems economically, in terms of a replacement for the US dollar, there's not a really viable alternative there either in 60% of the girl, the world's reserves are held in US dollars, 90% of the trades are happening in US dollars.
So I don't think there's a real threat there anytime soon, I think any potential threat, you know, economically, a debt crisis or a replacement for the world's reserve currency, something like that, a major economic calamity, it's much further down the road. And so I wouldn't be making if it were me, and you're the steward, you've got to make those decisions. And I certainly respect that. And it would say that you need to make those prayerfully. But for me, I think the best approach is still a properly diversified stock and bond portfolio.
You know, it's your age with you all in your 60s. You know, I'd probably be thinking about maybe 10% in gold and precious metals, maybe 35% in stocks, and then about 55% in bonds and bonds will do well as the interest rates fall, which they will probably starting next year. So that's just me, I think a third in gold is just too overweighted gold doesn't have the performance from the as well as the stock properly diversified stock and bond portfolio, it doesn't pay any income.
And if you're taking physical possession, you've got the kind of dealer markups on the buy and the sell. So I like gold, but I'd probably limit your allocation to 10%. I'd probably do it through an exchange traded fund, which just tracks the price of gold. And then you don't even need the gold IRA, you could do that in a, in a traditional brokerage account, or your advisor could do that, who's managing the 300,000?
Does that make sense? Well, you know, with the recent bank failures, and because the federal government is exponentially raising the debt so high, it makes me wonder if the FDIC will default on their promised insurer up to 250,000 per person per institution. Yeah, I just don't see that happening. I mean, what you saw with those bank failures were isolated events brought on by mismanagement. There's not any widespread problems or systemic problems. I mean, we're in much better shape now than we were in 2008 and 2009, where there were some real systemic issues with regard to lending practices, the bank reserves are much higher today. You know, I realized there are some real challenges that we need to deal with longer term, but none of those are imminent, in my view. And again, I think that's why if there was real problems, you would have seen a cascading effect in the banks.
And what happened was it was isolated, and we moved beyond it. And all the stress tests are coming out exactly where they need to as they run those on all the banks. So I just don't see that happening. Again, I don't know the future. So I think at the end of the day, you need to be comfortable with the direction you're going. But I'd much prefer for you to protect and grow your money for you not to be in gold.
More than you know, at the level you're talking, I think stocks and bonds would be and banking products are a better option. Thank you. All right, take care. I hope you'll make plans to join us again next time for another edition of Faith and Finance. Announcer Faith and Finance is provided by FaithFi and listeners like you.
