Unequally Yoked in Business 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. Do not be unequally yoked with unbelievers. For what partnership has righteousness with lawlessness, or what fellowship has light with darkness? 2 Corinthians 6.14.

Hi, I'm Rob West. That warning from the apostle Paul is usually interpreted to mean that you shouldn't marry outside the faith. But does it apply to other relationships just as much? Ron Blue joins us today with his practical and spiritual insights about partnerships. 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 decisions. While we can always say class is in session when Ron Blue joins us, Ron's the co-founder of Kingdom Advisors, a much in-demand author and speaker and a personal mentor of mine. Ron, great to have you back. It's always a pleasure, Rob.

Good to be with you. Ron, let's dive into this passage. Paul wasn't just talking about marriage in that particular passage, was he? No, talking about partnerships. And there are so many kinds of partnerships. You see it most likely in the professions that are typically organized as partnerships. But you can have businesses also that have multiple partners and owners. So partnerships can last a long time. I spoke to the CPA firm that I founded not long ago, and they've been a partnership for 50 years and still operating as a partnership. So it applies to business partnerships and other types of partnerships also.

Yeah, that's helpful. Ron, what I've appreciated so much about your teaching, among other things, is that you've taught us principles that are transferable. What principles guided you and your experience with partnerships? Well, I got this question a lot, Rob, over the years, and probably the most significant illustration is, let's say you have two OB-GYNs who want to go into partnership, one a believer and one not, one who believes in abortion and one not. And I was asked many times about that type of relationship.

And I always, I said, there's a couple of things to think about from a principle standpoint. And the first thing is, what will it do to your testimony to be in partnership with somebody that you're unequally yoked with? And only you and God can answer that, but that's a really big question, because you could lose your testimony by the partnership that you're in. And the second thing is that partnerships a lot of times go sour. It's like marriages, 50% of them end up in divorce. Well, I don't know what the percentage is, but a lot of partnerships end up dissipating. And so I always advise, have your exit strategy in place before you form a partnership, so that either one can get out of the relationship in an equitable basis and maintain their testimony if they're the believer that's leaving that partnership. The other thing that it does, if you have an exit strategy, you avoid a lot of the conflict that can come from the separation of any partnership. It's like marriage, but it's the same thing in a business. And I always also said, thirdly, that remember that the business is really the most critical thing that you want to preserve, assuming that you've got a business that has a testimony already, you want the testimony to live beyond the relationship.

And you know, this financial planning firm that I had started, that was a partnership, and I left after 23 years, but nobody left with me because they were committed to the mission. And that's what you really want to see happen, and you also want to see that the exit strategy makes sense economically to everybody, so that you don't find yourself in conflict over the terms of the exit strategy. So those are just three principles that I used to talk about with people when I've been asked those questions. Ron, that is so helpful. Don't let it interfere with your testimony. Have an exit strategy all parties agree to, which is what makes it different from a marriage.

And the business itself is more critical than the founders and the owners. Ron, great to have you with us today. Oh, good to be with you, Rob. Thanks for having me.

That's Ron Blue, author and teacher, talking about partnerships. All right, your calls are next. The number 800-525-7000. That's 800-525-7000. I'm Rob West, and this is Faith in Finance.

We'll be right back. Are you looking for a financial professional who aligns with your biblical values? Certified Kingdom advisors are trusted financial, legal, or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice.

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Visit giveshosetoday.org and find out how you can provide shoes for a child right now. Great to have you with us today on Faith in Finance. I'm Rob West. We're taking your calls and questions today on anything financial. The number to call is 800-525-7000. We've got some lines open today and we'd love to dive into whatever you're considering in your financial life today. Give us a call. Let's begin today in Tennessee. Jane, you'll be our first caller. Go right ahead. Hi.

Thank you for taking my call. My husband lived in Georgia for 19 years at a residence down there. We recently married in September of 2022. He has lived in Tennessee since. His plan is to sell the property in Georgia and pay off the remainder of the house here, which is about $58,000, to put a substantial amount more into some improvements here as well.

And the remainder, he was looking at possibly putting into retirement. We're looking to see how we can avoid paying as much capital gains as possible, whether there's a time limit from when he moved here that he needs to get that property sold and in Georgia. And then is there a time limit to invest the money that he would make off of that sale here? No. And so are you wondering about capital gains on the property? Yes. Okay.

Yeah. So the rule on that is if you take the date of the sale and go back five years from the date of the sale, as long as he lived in that, if he's the one on the deed, two out of the last five years. So five years back from the date of the sale, any two years of that period, then he would qualify for that capital gains exclusion of, as a married filing as a single person up to $250,000, married filing joint up to $500,000 in gain that would not be subject to capital gains tax. And then anything beyond that would be, and that's based on his taxable income as to which bracket he would fall in if the gain, not the selling price, but the gain is less than that 500 or 200, depending on whether he's joint or single filer, then there is no capital gain. And it doesn't matter what he does with the money after the sale that has nothing to do with it. Oh, okay.

Okay. So he, and there's no time limit if he did fall into having a capital gain, is there a time limit that he has on any of that to invest it somewhere? And could he possibly, if there's a capital gain, invest the money into a retirement account or does that still come back against? No.

Yeah. So the capital gains, what he does with it, the only time that it matters what happens after the sale is if he's doing a 1031 exchange where he's taking it out of an investment property and putting it into another investment property. And so you can essentially push the gain down to a future sale by keeping it invested in a similar type property. And you've got a window of time, you've got 45 days to identify the property and 180 days to close on it.

But that's not what's happening here. So there's nothing that relates to how he uses the money after the sale that affects capital gains in this case. So the only consideration is whether or not he's going to have a capital gain and that's going to come down to number one, how much gain does he have? And then number two, does he qualify for the exemption related to this being his primary residence for any of the two years prior to the date of the sale and you that window of time goes back five years. And if that's the case, then he can set aside up to either 250 or 500,000 of the gain and then pay gain on anything that goes above that. But if he qualifies for that because he lived in it two out of the last five years prior to the sale and he's under that threshold that's excluded, then he doesn't pay any capital gains and it has no bearing on what he does moving forward. Now his ability to get that into a retirement plan moving forward just has to do with what retirement plan you're talking about. So you know, if it's an IRA, he can make a contribution.

If it's a 401k or a company sponsored plan, well, he could only put it in through salary deferral. But again, that has nothing to do with the sale of the property and whether or not he has capital gains on that sale. Does that make sense though, Jane? Yes, that does make sense. Now he's lived here for the last 18 months. Is that a problem? No. So long as you know, he, if we take the date of the sale, go back five years, as long as he lived in that home that he's selling for two out of the last five, now it could be that for three years he's lived somewhere else, but if you go back five years, the first two years, you know, he lived in that as his primary residence, he still qualifies.

So you know, he's got a five year window from the date of the sale looking back and he's just has to be able to say, I lived in that home for two out of these five years, regardless of what he's done the last 12, 18 or 24 months, if that makes sense. Okay, that's good. Thank you very much. I appreciate that. Okay. You're very welcome. Hey, all the best to you. And we appreciate your call today.

Uh, to St. Charles. Hi Debbie. Go ahead. Hi. Real fast.

Thank you so much. People are talking about having cash at home now and I wonder like about how much would you advise and then also how much would you advise if any in your safe deposit box is cash? Yeah, it's a good question. I mean, typically the rule of thumb, Debbie, that you'll hear from most advisors is thinking in terms of a couple of weeks worth of expenses. And so if there was a disruption in the banking system or, you know, you had a major, um, you know, natural disaster and, uh, you, you typically want to think in terms of how do I have a couple of weeks worth at most four weeks worth of cash at home. And I'd put that in a, in a safe, a fireproof safe. In terms of a safe deposit box, I don't think there's really any need to have anything there.

You may want to have important documents there if you don't want to keep it at home in a fireproof safe, but in terms of cash, I wouldn't keep cash in a safe deposit box. I'd have your at home cash and then I'd have your three to six months emergency fund in the bank that you could access online, you know, through an ATM or something like that. But the at home cash of two at the most four weeks would be to, you know, deal with the natural disaster or that temporary hiccup in the banking system.

Yeah. That doesn't sound like very much. You're not thinking like four or 5,000 then like a lot of people are stowing away.

Well, I mean, yeah, no, not really. I mean, it's a month's at the most a month's worth of expenses. So however much you normally would spend in over a month's time would be, you know, I mean, I just can't think of a scenario in the last 50 years where somebody, you know, needed more than a month at home and you know, you normally you'd be able to restore electricity or the banking hiccup would be resolved and you'd be able to get to an ATM and get the cash out. I just don't like the idea of having thousands and thousands of dollars at home unnecessarily. But at the end of the day, you know, think and pray through it.

But I think that two to four week worth of expenses, Mark, is really my probably where I would go. OK. So, yeah. All right. So that's not quite as bad as I don't have an ATM or a debit card. I just don't.

So I would have to go to my bank and get cash. I see. Yeah. Yeah. I understand. Well, you could certainly factor that in or maybe are you uncomfortable having a debit card? No. OK. So you might want to ask your bank for a debit card on your existing account. But, you know, maybe you make an appointment with them and talk through the different options and that might give you a little bit more peace of mind that as long as you could get to an ATM, you could add to what you already have.

But hopefully that gives you some other things to think about, Debbie. Lord bless you. Thanks for calling today.

We appreciate it. Before we head into our break, let me remind you, if you'd like to find a financial professional who shares your values and priorities, who's met high standards and character and competence, who's been trained to bring a biblical worldview of financial decision making. Well, we'd encourage you to look for a certified kingdom advisor in your area. There's more than fifteen hundred men and women who have earned CKA all across the U.S. You can find one at faithfi.com.

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Let's go to Oklahoma. Keisha, thank you for calling. How can I help you?

Thank you for taking my call. My question is, my husband and I have a couple of savings accounts that aren't really drawing any interest or anything. I just wanted to see what your recommendations would be on that. Okay.

Yeah. So you've got two savings accounts. What are these earmarked for, Keisha? Just emergency funds. We've had a Bank of America account for about 20 years. We just recently moved to Oklahoma in the last three years, opened up a local account at a credit union. Okay.

So we opened up a savings account there too. Okay. And what do you have between those two accounts? How much money do you have in there roughly? Probably $18,000. Okay.

Yeah. I mean, so the benefit you have now of rethinking where that money is housed is that you could earn almost $1,000 over the next year on that $18,000 because you can get 5% in a high yield FDIC insured savings account. Now it's going to be an online bank likely. You may find a local credit union that's trying to compete for some business and willing to match it. But typically to get the higher yield savings, you're going to use an online bank and you'd go to bankrate.com, it'd be one place.

You can also go to NerdWallet and just see based on any given day what banks that are close to five star rated, they all have a rating system, offering FDIC insurance with no fees or paying the most attractive rates. And you'll see that today you can get every bit of 5%. Now those are of course variable and move with interest rates.

And so as the Fed lowers rates, which has probably been pushed out to the fourth quarter of this year, I would guess could be the third quarter, those rates will start to come down. But there's no reason why you wouldn't want, unless you all have talked about one, to open one of those accounts, move that money over, get that 5% right now and link it to your checking account electronically. And then you'd, even though there's not a physical branch, you could move money back and forth fee free, you know, with two or three days through the ACH system. So that would be the alternative.

But what are your thoughts on that? I mean, I just feel like if it's growing some, we could give more and help more people. So, well, I love the idea if you're growing a dollar a month, right?

Yeah. So if you can get 5% on the money, I mean, I think at the end of the day, it's kind of a stewardship issue, right? And we've got this 18,000, we're being good stewards of the fact that we have an emergency fund, that's great.

But why not get a little better return on it? And it's fairly easy to do. So what I do is head to bankrate.com or NerdWallet, find the one that you want to go with.

You can open the account in five minutes online. And then you would just transfer that money electronically in and then just let it sit there till you need it. Now, all of a sudden, you're earning some, you know, real interest, as I mentioned, I mean, you could get $900 over the next 12 months, assuming the interest rate stayed the same. And it won't. But let's say it did.

I mean, that's $750 a month that you could be giving away or doing something else with. Right. Right. Great.

Thank you so much. All right, Keisha. Thanks for your call today. We appreciate it.

Let's see. Let's head to Montana. Hi, Billy.

How can we help? Hello. So quick question. My siblings and I have some farmland that we inherited when our dad passed away eight years ago. Just getting close to the sale being final. And what I'm wondering as far as the capital gains goes, is right now I'm single, just kind of not a very great income.

If I am going to be married this year, I'm wondering if that added income and filing jointly next year is going to affect whether I have to pay capital gains or not. Yeah, interesting. So this is not a property you live on currently, correct? Yeah, there's a farmstead that we had that surveyed off of the land and I plan on living on that. But I guess, so I guess actually, yeah, so it will not be part of the sale. Okay. To answer your question, it'll just be farmland only sale. Okay.

Yeah. So yeah, in order to get the capital gains exclusion, you'd have to have this as your primary residence for two out of the last five years and it doesn't sound like you'd be able to do that. So essentially the way this works is it depends on your tax filing status for the year in which the capital gains occurred. So if the gain, if the sale happens this year and in 2025 when you file next year, when you file your 2024 return and you had the sale in this year and you're filing as tax filing status single, then the capital gains rate would be, you know, up to $47,026, $25, it'd be 0% capital gains. And then from $47,000 to $518,000, it'd be a 15% capital gain rate.

If you're married filing jointly for 2024, if this is the year you sell it, it's the 0% up to $94,000 and then 15% from $94.51 to $583,000. So I mean, you certainly could factor that in, I guess, I mean, I'd probably be more inclined if the Lord is leading you all to marry and you've gone through premarital counseling and you're ready to do it. I'm not sure I'd let this be the decision maker, but that is a reality that, you know, to your question, yes, your tax filing status will drive your taxable income, which drives which rate you fall into.

Okay. So obviously half of this year will have gone by before we would be married. Even if we do marry this year, is that still an option to file separately next year? Like married, but file separately?

Yeah. So, you know, after marriage, basically, you consider changing your withholding and then you would typically file the next year. What I would probably do is talk to a CPA about this just to figure out based on the timing when your actual filing status will change. I'm not a CPA. I'd love for you to get some professional counsel on this, especially if you're making decisions about the sale of property and capital gains. Do you all normally do your own return or do you normally do your own return? I do mine.

He does have a CPA do his, I would just check in with his CPA and just get an understanding of when will that filing status change for the purposes of capital gain and then you'll have the information. I think that's your next step. Billy, we appreciate your call today. May the Lord bless you.

Well, that's going to do it for us today. Thanks so much for your calls. By the way, if you ever have a testimony you'd like to share about God's faithfulness in your financial life or how you've applied one of the principles that we talk about here on faith and finance, be sure to call us with those as well.

We always love to hear your stories. Hey, before I let you go today, let me remind you about our great study, Rich Toward God. That's right. It's a four week study on the parable of the rich fool found in Luke 12. It explores the themes of greed and treasure, pride and abundance. It ultimately helps you discover what it means to be rich toward God. Now if you'd like to study it just personally or use it in a small group, perhaps in your neighborhood or a church, you can check it out at faithfi.com. Just click store. That's faithfi.com and click store and if you're like me, you're in a small group, you're always looking for rich biblical content that's practical.

This study, Rich Toward God is just that. Again faithfi.com and click store. All right, that's going to do it for us today. Let me say a big thanks to my team. Certainly couldn't do this without them, Amy Rios, Devin Patrick, and Taylor Stanrich. For those folks and everybody here at Faith Buy, we'll see you next time. Bye bye. Faith in Finance is provided by Faith Buy and listeners like you.