3 Financial Questions To Answer With Ron Blue

What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice.

To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Have you ever noticed that it's a lot easier to find answers when you know what the questions are? Hi, I'm Rob West. Sometimes the hardest part of solving a problem is coming up with the right questions to ask. And that's certainly true for managing money. Today, financial teacher and author Ron Blue drops in with three financial questions you need to answer. 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 decisions. Well, our guest Ron Blue is co-founder of Kingdom Advisors and the author of several books on personal finance from a biblical perspective, including Never Enough. Ron, always great to have you with us. Well, Rob, I enjoy it all the time, so thanks for having me.

Absolutely. I'm excited about this because a hallmark of your teaching for a long time has been these critical questions. There's three of them that you say the Bible asks and we all must answer at some point. The first one being, who owns it?

Why is that so foundational? Well, until you answer that question, you don't know who the steward is or trustee is of the money. And when you say that I own it, then I can do with it what I want. But if I say God owns it, now my actions change because now I'm managing somebody else's money or finances, and it's the most fundamental financial question that anybody can ask.

And answering it will change your money behavior, but it will also change your life. And it's, to me, really the first step of the lordship issue. Is he really lord of my life? And if so, he owns all that he's entrusted me with. So it's a biggie, Rob.

Yeah, it sure is. And you said it'll change your financial behaviors because you've also taught us that your behaviors follow your belief system. So really that idea of who owns it, God owning it all, if that's at the core of your belief system, it changes everything about how you actually manage money. Now this second question is equally as important, Ron, and that is, how much is enough? Talk to us about that question. Well, we live in a culture that we're surrounded by unbelievable amounts of wealth, if you will, at least reports of wealth.

You know, I watched a golf tournament a couple days ago, and in the winter I got $3.6 million, which is fine. I'm not questioning that. But here's what I do question, and that is, do I have a finish line? Is there an amount that when I get there, I'm done? Or do I keep looking around and saying, I'll never quit because there's always somebody ahead of me? And answering that question gives a sense of a goal that can be accomplished, and it gives a sense of peace and contentment that you'll never get unless you answer that question.

In other words, unless you have a finish line, you'll never have contentment either. Wow. Yeah, that's powerful. And I know you've taught us that that applies both to your lifestyle, your spending on a monthly basis, as well as your balance sheet, your long-term accumulation. All right, Ron, let's finish with this third question. We have just about a minute left, and that is, is the next steward chosen and prepared?

What do we need to know? Well, again, we live in a culture that has a lot of wealth associated with it. Just take the average person, if you will, who owns a home, and if they die at an old age and they've had a retirement plan, perhaps, and they own a home and they're debt-free, then somebody's going to be managing that money or that wealth after your debt. And it's a really good idea to know who that is and make sure that they're prepared. And the reason that's so important is because you're really transferring God's possessions or God's money. So I want to make sure that I'm transferring it to someone who considers themselves to be a steward and accepts that responsibility, and men are prepared to handle it also. So it's a biggie too. It really is. And I know you've taught us there, part of that is asking the question, what's the worst thing that can happen?

Because there are not only financial but spiritual implications to passing wealth to the next steward if they're not properly prepared. Well, this has been quick, Ron, but really vital questions we all need to answer. Thanks for stopping by. Yeah, as always, Rob, I enjoyed it and appreciate the opportunity.

Absolutely. That's Ron Blue, author of Never Enough and frequent contributor here at Faith and Finance. Your calls are next. 800-525-7000.

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They're distributed by Foresight Funds Distributors, LLC, which is not an advisory affiliate, a registered investment advisor, nor do they provide investment advice. What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values? How about someone who will take the time to explain your options? Certified kingdom advisors are professionals who meet high standards in competence and integrity, and have been trained to offer biblical financial advice.

To find a certified kingdom advisor in your area, visit faithfi.com and click Find a CKA. We're back. I'm Rob West, and this is Faith and Finance. Thanks for listening today. Thanks for taking the time. As we head into our calls and questions, I want to take a moment to ask you if you've downloaded the FaithFi app.

You can use it on your desktop or your mobile device. All right, let's head to the phones. By the way, if you have a question, just call 800-525-7000.

That's 800-525-7000. To Ohio we go. Hi, Katie. Go right ahead. Hello. Thank you, Rob, for taking my call. I'm a former student, and I have about $50,000 in student debt.

Then, of course, the Supreme Court struck down the provision for having some student loan forgiveness. That's right. I just wanted to see. I do have IRAs. I've got an emergency fund of six months or more.

We have savings in that. I just wanted to see if you... Because I get contacted a lot by different organizations kind of trying to offer me lower interest rates and stuff. Some of them I think are a scam, and I'm just not quite sure, but I can really discern that.

If you had any advice for how to start... Because it'll start back up in October. Yeah. Yeah, very good. Well, first of all, there are a lot of scams out there right now. In fact, the Federal Trade Commission is just out with some warnings to student loan borrowers to be on the lookout for scam artists following especially the Supreme Court decision. We don't want to... You don't want to trust anyone who promises debt relief or loan forgiveness. You don't ever want to give away your federal student aid ID, log in information, and never pay for help with your student loans. Are these federal loans, Katie, or private? Yeah. No, they're federal. They're the federal.

Okay. When COVID first began, at that time, it was President Trump just held everything in forbearance. I called and talked to customer service at student loan at that time. They had said that during this time that it would be as if we were making the 120 payments we have to make with like 0% interest. And then when that forbearance period was over, then we'd pick it up from there. But I don't even think that that's on the table now and that's actually going to happen. Yeah. So are you trying to get the loan forgiveness from the public sector?

I was trying to get it. As I said, the Supreme Court struck that down and I did get an email because I had applied for it. And they struck that down and I got an email that said that they are trying to do some things to make it easier for people to start coming back and paying their student loans. So I don't have any direction from them, at least at this point, whether or not any of mine will be forgiven or anything.

Okay. Well, the public service loan forgiveness is still available. So if you work in public service, federal, state, local, for a government or nonprofit organization for 10 years or more, even if not consecutive, you may be eligible to have all of that canceled. So that public service loan forgiveness program wasn't affected here by the decision to not allow the Biden forgiveness to go into effect.

It's a completely separate program that continues. And so I would still look into that, again, if you qualify and you need to make sure that you do. Beyond that, I think that I wouldn't be looking to refinance this outside of the federal loan program. I mean, you probably are going to have a higher interest rate. You'd also most certainly lose all of the benefits that come through the federal loan program with regard to income-based repayment. I'm not saying you need those now, but if you did, that's a nice option to have where you could step down that payment based on your income if you all had a disruption in income or went through a difficult season.

So I'd leave it right where it is. And apart from just confirming whether or not you qualify for the PSLF, I would just focus on getting back on that scheduled monthly payment, trying to pay extra. I realize it's a big number, but let's just try to get that paid off. And that comes by living on less than you make, freeing up margin, and trying to prepay that loan. Right. Right. Well, and I am in public student loan forgiveness, but my understanding is if you make those 120 consistent payments and you're not late, they will forgive the rest. So it wouldn't necessarily behoove me to put extra on the loan at this time. That's right. That's exactly right. If you're in the public service loan forgiveness and you're certain you qualify, yeah, you would want to just make those 10 years of on-time scheduled payments, 120 of them, and the rest will be forgiven. And so you're right.

If you do qualify and you are in that type of work, then absolutely, I would say don't prepay it. Yeah. I was just hoping for like, you know, some other option for me, but I kind of figured that out. So thank you for taking the call. You're welcome, Katie. Absolutely. Thanks for your call today.

God bless you. Eight hundred five two five seven thousand to Indiana. Hey, Charles. Go ahead, sir.

Yes. I got a letter from my mortgage company and they're saying that my mortgage is over to an extra account and they're going to I either had to pay around thirteen hundred or my mortgage will go up to two hundred dollars more a month. And I'm just wondering what would be the best to let it go up or to pay the thirteen hundred?

Well, it's really going to accomplish the same thing. If you have the thirteen hundred dollars and you want to try to keep your mortgage payment where it is because you've got a certain budgeted amount that you'd like to, you know, stick within, then, you know, I would just go and send the thirteen hundred dollars unless that's going to deplete your emergency savings. And if that's the case, then I might just go with the two hundred dollar option. Essentially, what's happened here is either your property taxes or your homeowners insurance or both have increased and they're just trying to account for that because they probably have forecasted that you're going to be at a deficit. You're not going to have enough in the escrow account to pay one or both.

And so they need you to make that up. They're willing to let you do it over time or they'll let you do it as one a one time payment. This is all your money anyway. And so, you know, if you were to sell the house, you'd get it back. So I wouldn't worry about whether or not, you know, one is a better deal than the other. It's really just a matter of do you want to try to keep your mortgage payment where it is because, you know, it just works in your spending plan. And if you have the cash, then I'd go and just write the check. Otherwise, you can do it out of your mortgage payment.

But this is not a cost to you. Essentially, they're just trying to make sure the escrow is fully funded. So these these bills can be paid when they come due. Okay, it'll still go up to around $80 once I do my pay that's $1,300 and the other part is my spouse was saying that maybe we should sell the house and move where we can get a lower tax rate. Yeah, you know, you certainly could look at that, although I would count the cost on that because remember, buying and selling real estate is very expensive, you know, so you've got probably 6% to a realtor on the way out. And then when you buy the property, now you've got, you know, the additional cost to purchase the real estate taxes. And, you know, you've got the not only the fees, but also you've got the mortgage insurance. I mean, there there are expenses associated with buying and selling a property so you'd have to be able to realize a pretty substantial reduction in property taxes for you to make that worthwhile.

Now, for instance, some counties where I live, if you're over a certain age, like over 65, you don't have to pay the school taxes any longer. And so moving to that county could save you a lot of money. That kind of move may make some sense, because that's a lot of money that you would save over let's say a 10 or 20 year period.

But apart from something like that, you know, I would just make sure you know what you're actually going to save and compare that to the transaction cost before you were to go ahead with something like that. Okay, thank you for your help. All right, Charles, God bless you, my friend. Thanks for your call today. Well, we need to take a break. This is Faith in Finance.

We'll be back after this. As the leading advocate for the Christian financial industry, Kingdom Advisors serves the public by promoting the integration of a biblical worldview across every aspect of the financial services industry. And we serve a growing network of 1000s of Christian financial professionals equipping and empowering them to carry biblical financial wisdom to their clients, peers and community. For more information, visit kingdomadvisors.com.

That's kingdomadvisors.com. We are grateful for support from sound mind investing in the faith and finance program. For more than 30 years, they've been helping Christians reach their financial goals with step-by-step guidance for investors at every stage, from those just getting started to those getting ready for retirement. Through scriptural principles and practical suggestions, SMI offers financial wisdom for living well. More information, including the short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. We're listening to Faith and Finance, where we talk about how we handle God's resources.

How are you using God's resources? We're talking about it, and the lines are open to take your calls and questions. 800-525-7000 is the number to call. Let's head to Michigan. Hi, Gail. Go right ahead.

Yes. Thank you, Rob. I listen to you quite a bit, and I hear you say that annuities are not a good idea. And that is what we have for our IRAs.

And I think we've had them about seven years. And so I am wondering what you recommend for people like us. We are a retirement age. We are not yet retired, but do we make a change at this point?

Yeah, I wouldn't say automatically, Gail. I'm not one who says there's never a place for annuities. They're just not my favorite tool to save over time, because you give up access to your money. You have certain limitations on what you can get to, at least during the early day.

The early years of that, they tend to be complicated. They limit your upside potential. And so I'd rather you have insurance where you need insurance, and then you save outside of that and get the full upside, even though you're taking some risks. Now, the benefit of the annuity is you've got that ability to convert that to a guaranteed income stream where you give up, you transfer the risk to the insurance company. So are you looking to annuitize this at some point and turn it into an income stream that would be a part of your retirement plan? Is that what you all were thinking? Well, we are at the age where my husband is already taking out money.

And no, I just wanted to know. It just makes me nervous to hear you say that annuities are not a good investment, and that is what we have. Right. And before we went to invest, then we were also in not a very good program. So I'm just hoping... Yeah, I mean, there's no reason to be anxious about it.

It's not a terrible thing at all. It's just that for those who are trying to build wealth over time, I prefer you build wealth outside of an insurance product and just straight investments. But now that you're here, you've built up a nest egg inside an annuity, I think it would behoove you to sit with an advisor who can look at, from an objective perspective, look at the insurance product you have, and then in light of your overall financial plan and your plan for retirement income, whether that's Social Security and drawing down this annuity or convert or what's called annuitizing it, where you convert it to an income stream that gets paid out in the form of a monthly check for the rest of your life or the rest of you and your spouse's life. It may make sense for you all, now that you've got it and you're approaching retirement, to stay right where you are and convert that to an annuitized payment.

And the key is, how are you going to solve for the income that you need for the rest of your life? And this annuity could be a great piece of that equation. Now, you may sit with an advisor that says, listen, we can roll this out, if it's qualified money when in pre-tax, we can roll this out to an IRA and invest it and maybe do better, at least just based on what we would know about how this annuity is going to perform for you versus what you might be able to do outside of it. But I wouldn't say that's automatically the best case. I would just want an advisor to look at that and help you make that decision in light of your overall retirement plan. But I'm not saying, Gail, you automatically need to get out of this annuity.

Now that you're there, it may be the best option for you moving forward, but it would be worth a look. Okay. Very good.

All right. Thank you so much. You are so welcome. We appreciate your call today. Joyce, thanks for calling. Go ahead. Thanks for receiving my call.

I have two questions for you, if you're able to answer. I am 74 years old. I have a whole life insurance. Am I able to change it to term life? Probably not, but you would have the option to get a new term policy and cash this one out. You typically wouldn't want to do that in retirement, though.

At age 74, a term life policy is going to be very expensive. What's the purpose of the insurance, Joyce? Do you still need it, or is it really just to provide an inheritance of some sort?

No, it's just that I'm no longer here, and my daughter could use that to bear with me. Sure. Are there other assets that would be available for that? The reason I ask is the mortality expense associated with this policy as you age continues to grow. And so this is probably a fairly expensive policy right now.

You may have some cash value that has built up in this that you could pull out and earmark for burial expenses and then drop the policy. So you just want to make sure that this makes sense for you to continue to pay for this. Yeah, it's like $25,000, and I pay like $179 every month. Yeah, that's a lot of money. You're spending $179 a month.

That's over $2,100 a year for a $35,000 death benefit, which is not a whole lot of death benefit, especially when you're spending $2,000 a year. Is there cash value in it? Would you be able to pull cash out if you collapsed the policy? There's cash value, yes. Yeah.

Do you know how much? No, not right off hand. I think I should have kept what I had, but my friends helped me to change it, and I could have made a bad decision. Have you already done something with this?

No, it's just there. Let me talk to you, a man of experience, and I'll give you the advice. Sure. Well, I would consider probably dropping the policy. Again, if you could take that $2,000 and redirect that to a savings account, it wouldn't take too many years before you'd have everything you need. You may have some cash value in this that could really be earmarked for burial expenses, and you could add $2,100 a year back to your budget to do some more giving. You could save that and build up your emergency fund.

I think continuing to pay for this very expensive policy that you don't really need because nobody's counting on it, especially with a very minimal death benefit of $35,000 with you spending $2,100 a year, I would rather see you check into pulling the cash out, collapsing the policy, letting it go, and then just regaining that $179 a month. Yes. One more question about the bonds. Is it a good time to buy bonds? I know it used to be 6.8%.

I don't know what it is now. Yeah, you're talking about inflation bonds? No, they're really not as attractive. They were at 9.6 a little over a year ago, then they were down to 6.4. Now they're at 4.3, and they're going to continue to fall. If you're looking for a higher yield with safety, I'd rather you go into a one-year CD at maybe 5.5%. It's going to be better than the I bonds. With the I bonds, if you pull the money out in less than five years, you're going to have a three-month penalty worth three months of interest.

Although the I bonds were attractive previously, I don't think they are as much any longer, so I would probably pass and look at high-yield savings or certificates of deposit. Thanks very much for your call, Joyce. We appreciate it.

Well, that does it for us today. I'm Rob West. Thanks to our amazing production team and to you for listening. I hope you'll join us again next time right here on Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you. We'll see you next time.