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 certain words just sound so positive and uplifting? A good example is prosperity. Hi, I'm Rob West. Prosperity sounds good because just about everyone wants to be prosperous or thriving financially and there's nothing wrong with that, to a point. Ron Blue is here to talk about that 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, it's always a special day when financial teacher and author Ron Blue stops by.
He's written several books on biblical finance, including Never Enough, Three Keys to Financial Contentment. Ron, great to have you back. It's always good to be here, Rob.
Looking forward to it. Ron, one of the things you've talked a lot about is what you call the paradox of prosperity, which just seems counterintuitive that prosperity may not always be a good thing, or at least there's more to the story. So explain that for us. Well, the paradox of prosperity is a concept that I discovered and thought about in my think time, and I put it in almost every video series that I've done, or any speaking that I've done, and I can share it, and people, when I share it, get it, and they've known it, but they haven't thought about it.
And I use an illustration personally. When Judy and I got married, we lived in a trailer that was 28 feet long, 8 feet wide and 6 feet tall, and you could do the ironing and do the dishes and make the bed all at the same time, because the trailer was so small. And we didn't have to make many choices when we lived in that trailer, because we were happy if we just had enough to eat.
But over time, things changed, and we had 5 children, 13 grandchildren, and now 4 great-grandchildren. We've moved multiple times around the country, we've lived in multiple homes, and I found that as life went on, we began to have a lot more decisions to make, such as cars and college education, retirement, and all of those things. So the more you have, the more choices you have, and perhaps the less freedom you have in some respect. So what are then the implications of that paradox of prosperity?
Well, the first implication and the really important one to me is that we live in a culture that rewards success, if you will, and honors success and honors celebrity. And it seems like that if you had more, you would be more content. You could have your own jet, you could have multiple homes, you could take multiple vacations and so forth. But the reality is that you can lose your peace of heart and mind when you have all of those choices that are confronting you. I'm not saying it's wrong to have more, but I'm saying that more will not necessarily give you peace of heart and mind or contentment. So that's a spiritual perspective, it's not a financial perspective.
Yeah, that's really helpful. I know what we're saying here is that prosperity in and of itself is not necessarily bad. But there are some implications to this, and you've taught, Ron, that we all have to answer two questions. One is who owns it, and the answer, of course, is that God owns it all. But speaking to that idea of contentment, that second question is, how much is enough? And that's a big part of this, isn't it?
Well, it really is. And you know, for years, I tended to treat that as a financial number, and enough can be expressed as a financial number. But I was reading one time in Hebrews 13.5, and it says, make sure that your character is free from the love of money, being content with what you have.
For he himself has said, I will never desert you, nor will I ever forsake you. And all of a sudden, I realized that how much is enough is what I have right now. And that's what gives me contentment. If I'm content with what I have right now, more will not give me more contentment. And more is not necessarily the answer to contentment.
The answer to contentment is being satisfied with what God has provided right now. And that's what I already have. Yeah, that's a game changer. It is a game changer. It hinges everything about the way I think.
I love it. So if you're able to find contentment with what you already have, you're far less likely to be taken in by the paradox of prosperity. That's a profound idea. You think about that today. Ron, thanks for stopping by. We appreciate you. Thank you, Rob.
Appreciate it very much. That's Ron Blue, author of Never Enough, Three Keys to Financial Contentment. Your calls are next. The number, 800-525-7000, 800-525-7000.
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Let's head to Higginsville, Missouri. You can, yes, so they have to have earned income. They can be employed by you, even though you are their father, but that needs to be legitimate work. They need to have some do's and don'ts with regard to hiring your child. They have to do real work. They have to follow child labor laws. You have to give them real wages.
Those wages have to be reasonable. You've got to withhold and remit taxes and keep payroll records and help your child file a tax return if necessary. All of that has to be above board and in compliance, but if you can meet those criteria and you may want to check with your CPA or tax preparer just as you're getting this set up to make sure you've checked all the boxes, then absolutely, this is a great opportunity for you to allow them to be able to start early in funding what I think is one of the most ingenious savings and investing tools that's ever been created. That is what Senator Roth helped us to come to know as the Roth IRA, where you put in after-tax dollars, it grows tax-free. If your 10-year-old is able to do reasonable and meaningful work and comply with all of those things that I mentioned, imagine he or she doing that and that money compounding for the next 55 or 60 years. That's amazing and could be a real benefit to them down the road. Does that make sense though? Yeah, that's what I was hoping to hear. I wasn't sure how it all worked.
Just make sure they're a real employee and that you do that in a way that is appropriate from the IRS's standpoint, but given that you've got plenty of things that they could be doing around the farm and you could pay them for that, I think that would set them up for a real opportunity. Dwayne, all the best to you my friend. Thanks for calling today. God bless you. By the way, before I move on, head to our website, faithfi.com. You do a search, we actually have an article on this hiring your kids from Art Rainer that I think might be helpful to you, but you're certainly on the right track, my friend.
It's in Memphis, Tennessee. Hi, Mary. Go right ahead. Hi, Rob.
Thank you for taking my call. We refinanced our home two years ago and we currently pay $500 extra to the principal amount. We've been doing that for two years, but now I'm thinking maybe that money should be put in towards our 401k. We only put in, my husband's at 12% in, and I'm wondering if that $500 would be better suited bumping it to the 401k, that'd give us to 15%, or is it better toward the principal? Yeah, I love this question, Mary, because there's this tension that we have between trying to pursue being debt-free and saving to take advantage of our working years to grow our long-term savings on a compounded basis. And we've got to wrestle with how much do we apply to debt reduction versus how much do we save and kind of find the balance between the two.
Tell me just a bit of information and then we'll see if we can talk through this together. What would be your age for you and your husband? My husband's 59 and I'm 60. All right, and what do you all have saved total in all of these retirement accounts that you have?
We have $710, $600 in an IRA, and then $110 in his current 401k, and then we have $30,000 in his savings. Great. That sounds really good.
And do you all, I'm sorry, go ahead. But our mortgage is $201,000. Okay, very good. But you are sending $500 a month and you're doing that out of current cashflow, right? Correct. Okay. And you said the percentage that you're putting in of his pay is around 10%? 12%. 12%. Okay.
That's great. You know, we usually recommend 10 to 15% and so I love that you're doing 12 and you're accelerating that mortgage payoff. I think one of the goals might be for you all to try to sync up the payoff of that mortgage with you entering retirement, which would give you an opportunity as you're entering retirement and perhaps now beginning to live on social security plus an income stream from these retirement accounts, it would take that largest expense off the table.
Do you know based on the current track that you're on with the 500 extra per month, have you had your mortgage servicer run an amortization schedule or have you done it yourself to determine if you continued this, how quickly you'd have it paid off? Yes, it would be, well, we have 10 more years. So it'd be 10 years, but that's including the 500 a month extra? Yes. Okay. Yes, it is. Okay.
Very good. And yeah, no, it is, but obviously you've got still a significant balance. When do you all think you might retire? Do you have a certain age you're targeting at this point? No.
My husband loves his job and he doesn't plan on retiring, but you know, initially he'll have to, but he loves it for now. Okay. So a 10 year time horizon on that could be realistic from what you know today. Yes. Okay.
Very good. So here's what I might do. I think trying to continue on this track, recognizing that, you know what, we were created to be workers.
I love the idea of your husband saying, I find a lot of enjoyment out of using the way God has wired me and gifted me in service to him and as a worker, and I want to continue to do that, you know, until God redirects me to something else. I think you all saving 12% a year, already having 700,000 in savings, which would, you know, could throw off as much as 30,000 a year plus social security. If you were to stay on this track of continuing to fund that at 12%, that makes some sense to me, especially if by continuing with the $500 a month and prepaying the mortgage, it would allow you to enter retirement debt free and you all could use that payoff date as perhaps a target that you'd like to use down the road. Now, at some point you could decide to change that date.
You could extend it, make it longer, or maybe you try to accelerate that even a little quicker. But I don't think there's necessarily any definite idea here that you need to automatically get that to 15%. I think if you could continue at 12% and solve for having this mortgage paid off as you transition into retirement, that's kind of the best of both worlds for me. I mean, the only other opportunity you have, Mary, to kind of dig into this a little deeper would be to actually do some retirement planning with an advisor if you haven't already just to say, what is our lifestyle going to look like in retirement? Most folks live on about 70 to 80% of their pre-retirement income. So if you were to look at that and run some projections as to what this 710,000 will be in 10 years based on a reasonable growth rate plus the additional contributions you're putting in, I mean, I could easily see you all be over a million dollars in this portfolio. And if you could do that and that would cover your retirement expenses plus allow you to have this mortgage paid off, I think that's an ideal situation. So I would say apart from some planning, I like the idea of you continuing right on the track that you're on.
If you'd like to do a little bit deeper dive here into this, then I'd connect with a certified kingdom advisor or your existing advisor to do some retirement planning. Does that all make sense? It does. Thank you so much for the confirmation. Thank you.
All right, Mary. You're welcome. You guys keep up the great work and thanks for being on the program today.
Hey, we've got four lines open, 800-525-7000, a quick break and then back with much more. Stay with us. 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 HopeForZambia.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. Hey, great to have you with us today on faith and finance. I'm Rob West. We're taking your calls and questions, 800-525-7000. Back to the phones we go.
Ohio. Hi, Ray. Go ahead, sir. So, listen to all your previous callers. I'm not anywhere near where, you know, they're at, but, you know, I have been very irresponsible in my young years with finances and whatnot, and, you know, the prodigal son came back five years ago and, you know, I went from coming out of prison to, you know, almost being homeless to, you know, just last year I got my credit up as far as I could get it to, I purchased a home, you know, purchased a vehicle for my wife, got married last year, and I'm moving along. I'm not in any trouble. I don't, I'm not delinquent on anything.
I'm up to date on everything. I've got like, you know, three years where no missed payments. But I do not have any type of safety net. There's no savings.
There's no emergency fund. And I just, the last couple of weeks, been talking with someone in a Depth for Life program, and they just texted me last night and said that I got approved and we're going to have like a final meeting tomorrow over Zoom. And basically, we're using, we're purchasing a whole life policy, which they are going to manage with me, and I have about $13,000 to $15,000 in credit card debt, and $18,000, my wife's vehicle is still owed, and my home is still at, I bought it for $420 something and I'm down to $402. Like I said, it's only been a year and a half with the home, but you know, so they are going to be paying off on a schedule, the credit card debts first, then the vehicle, then my, I also got solar installed in the home. That's going to go next, and then the house lasts, so the mortgage will be paid about 13 years faster than I would just paying it regularly how I've been doing. And at the end of that, when once the home is paid off, I will also have a cash value of $94,000 change in the policy, so you know, that all sounds great to me, and the way we're setting up is I'll be putting $400 to $500 a month into the policy, so you know, I'm just, everything sounds great, and like I said, I'm not in any trouble, but I just wanted to hear your thoughts on this.
Yeah. Yeah, you know, I'm not a big fan of this approach, I mean, it's a very complicated approach to paying down debt using a whole life insurance policy, which is a very expensive type of insurance policy, and it's not being used for the death benefit, it's simply being able to, it's being used to kind of create a complex way, as you said, to bank on yourself and use the borrowings from that to pay down debt and so forth. It's not a revolutionary idea, and it tends to be somewhat expensive. It's got to be structured correctly, because if it's not structured properly, you know, you could actually collapse the policy if you don't handle it the right way, and again, there are plenty of fees involved in it with the folks that are selling these products to be able to run their businesses, but I would just rather you keep this much more simple and just say, you know, how do we limit my lifestyle in such a way that I can free up margin, do my savings, my long term savings in more traditional type investment vehicles, whether that's a company sponsored retirement plan or an IRA, investing on a disciplined systematic basis to be able to grow that money over time, and then paying down debt out of surplus cash flow where you first of all build up an emergency fund to eliminate additional borrowing and then we snowball the debt. If you have credit card debt, I would much prefer a debt management program where you're getting the interest rates reduced through credit counseling and paying those off with a level monthly payment using the snowball method, smallest to largest balance, and you know, knocking that out over time without directing so much into this expensive insurance policy, kind of using these strategies that I understand, you know, they can show you a lot of fancy illustrations that might make some sense on paper.
It's not a scam, but it, you know, is a fairly expensive way to go about something you can do on your own without involving life insurance. Does that make sense? Yes, it does. Yeah.
Okay. So if it were me, I would kind of go back to that spending plan, say, how do I reduce my expenses to the best of my ability to cut back so I can free up margin? I'd look at, you know, first getting your life, your emergency savings to three to six months worth of expenses. At that point, I'd look at what you're putting toward the credit cards because that's really the most important, especially given where interest rates are right now, I suspect those rates are pretty high.
I'd focus on that first after you have the emergency fund, I'd contact our friends at christiancreditcounselors.org, have them run an illustration to show you how quickly you can get it paid off with the reduced interest rates that they make available. Once that's gone, I'd look at starting your contributions to a long term investment plan. If you have a company sponsored plan at work, great. If not, you can set up one on your own to be able to save for retirement. And then let's continue to use any excess margin to pay down other debts until you're debt free. And then I think you're in a really great spot at that point and you haven't spent any money on keeping up these whole life policies. So that would be the direction I'd go, Ray.
If you want to contact Christian Credit Counselors, again, the web address is christiancreditcounselors.org. If you have other questions along these lines, at some point, don't hesitate to reach out to us. We appreciate your call today.
Quickly to Omaha. Theis, thank you for calling. I have just a minute left. Yeah, Rob, I'll be very brief. Rob, I was trying to see if you, I know in the past you've mentioned sound mind investing and also Fidelity and Charles Schwab, would you have any other companies outside of other companies for Roth IRAs for individuals? Yeah. So sound mind investing is a great option. You mentioned them. And the reason I would mention that again is they'll essentially give you some good mutual fund recommendations, but you can use any brokerage firm you want. You don't have to use Schwab or Fidelity. Those are just two of the largest discount brokerages out there, which keep the expenses low. But they'll essentially give you the mutual fund suggestions that fit with the strategy you're looking to deploy based on your age and risk tolerance. And then you can choose the brokerage firm of your choice at that point. So I'd probably start with soundmindinvesting.org and then go from there. Theis, thanks for your call today. 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 Faithfi and listeners like you.
