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. Learn to do good, seek justice, correct oppression, bring justice to the fatherless, lead the widow's cause. Isaiah 117. I am Rob West.
Those are often unprepared to face a range of difficulties, including grief, social isolation, and of course, financial challenges. Valerie Hogan joins us today with some ways we can help. 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 pleasure to have Valerie Hogan on the program. She's an attorney, a Certified Financial Planner, and a member of Kingdom Advisors. She's also co-author with her mom, Miriam Neff, of Wise Women Managing Money. Valerie, great to have you back with us.
Great to be on with you, Rob. Thank you. Valerie, you saw firsthand some of the difficulties widows face when your father died 17 years ago. Your mom, of course, founded Widow Connection, a ministry that helps women overcome and thrive after losing their spouses. With 60% or more of married women outliving their spouses, this is a real need, isn't it?
It is. It's a tremendous need. And this stat is maybe a little bit older now, a year or two, but there are over 1 million new widows in the U.S. every year. And so, and Scripture says we're to care for widows, right? James 1.27 is really clear.
Religion that God our Father accepts is pure as falsely as this. To look after orphans and widows in their distress and to keep oneself from being polluted by the world. So he talks about acceptable religion and keeping yourself from being polluted means to care for, and he specifically names here, orphans and widows. And so, several times widows do get overlooked in that or maybe brush past. Not a lot of, you know, late night television advertisements saying sponsor a widow coming on and orphans are a wonderful cause to support, but we just don't want to kind of push past this. So I do believe we have a responsibility because it's so specifically called out that this is on God's heart. It should be on ours too. I think you're exactly right. So what we want to talk about today is some ways that we can help a widow gain financial confidence. Let's dive into a few of those.
What's first? I really think is respecting time to grieve and it's not formulaic, so that makes it kind of difficult because everybody grieves differently, right? So respecting that it might be different for everybody. Some might just kind of soldier on and grieve privately.
Some may grieve kind of openly and it doesn't really mean that they love their spouse any less or that they're not grieving, but respect that they're going to need time to grieve. Some of those immediate decisions and big decisions, the clear thinking might not be there because of the effect that grief has. So respecting time to grieve, needing time before big financial decisions. I mean, if it's critical, the decision must be made, then it must be made. But if there are things you can hit the pause button on, I think just allowing that space is one way we can really serve widows.
Yeah. I think that's really well said. It's so important that a widow doesn't make a big financial move in those early months following the death of the spouse.
What's next Valerie? There can be a public element to what happens with a widow's finance. If you think about a military spouse, it's public information as to what the life insurance is there and in some cases, some settlements and that kind of thing. So whenever a widow has money and really with anybody who quickly collects money or suddenly, but when a widow has money that has come and is public like that, somebody is going to be out there that wants it. And so I see a special vulnerability there.
And because there's a special targeting at that widow, here's someone vulnerable who may be in shock and have a lot of resources, I think that's a prime target for fraudsters or people that are going to want to do wrong. So just understanding that that phenomenon is there and what can we do to help? Yeah.
How specifically can we help someone given that possibility that they could be victimized? Right. I think by providing a safe place and when I'm counseling with widows and talking with people that are vulnerable, I think my number one thought is, you know, the right person is someone who can hear the word no and be okay with that.
Hmm. That's exactly right. I think that's well said. Well, when we come back, Valerie Hogan will be with us. We're talking about widows and helping them to be prepared for a range of issues following the death of a spouse. Valerie is the CFP. She's a member of Kingdom Advisors. She's an attorney, also the coauthor of Wise Women Managing Money. How you can help take care of widows today here on Faith and Finance.
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For licensing information, please visit nmlsconsumeraccess.org. Great to have you back today on Faith and Finance. With me today, Valerie Hogan. Valerie is an attorney, a certified financial planner, a member of Kingdom Advisors.
She's also the co-author with her mom, Miriam Neff, of an incredible book, a resource we give out regularly here on this program. It's called Wise Women Managing Money, and we're talking about ways we can help take care of widows today. Valerie, as we said, more than 60% of married women will outlive their spouses, so this is a real need. We of course hear from so many of them on this program, and I love that we're providing some really practical and tangible insights to those who can come alongside and care for widows during this season of life. Clearly, this is on the heart of God. We see this in Scripture, and so this is an area we need to lean into.
You shared some ways we can do that before the break. I want to talk about a few more, and one of those is understanding that the widow feels financially vulnerable, you know, after the passing of the spouse, right? Yeah, I mean, I sure don't want to generalize, but I can say every widow that I've talked with or talked with with my mom in the ministry has felt vulnerable in some way, and they're not wrong.
They are being targeted, as we just said, by folks that know maybe there is a vulnerability or assume there is. Regardless of wealth, I've seen women suddenly finding out they're in debt. They feel very vulnerable, and I've also seen women that have a lot of resources now that are solely stewarding. And they may have even been in a profession that handles finances, but there's a vulnerability because you don't have that second person to kind of check in with, bounce back.
That spouse that may have been going on the journey with you, suddenly they're not there. Given that before the break, Valerie, we said we need to give proper space, respecting time to grieve, needing time before making large financial decisions. What about where there's a widow in our life, perhaps I'm a child of a widow, and knowing that there is that void and vulnerability financially, is it okay to try to step in right away and say, how can I help you get things organized, deal with the paying of bills?
How do we balance that? I think there is a strong, and I think it can be a good response that that person who's vulnerable needs protection. At the same time, she is autonomous.
She is now called to steward that, pretty much have the sole responsibility. She will get help, but I'd say offer that help when she's ready. You can come around somebody and everybody, I don't know if you've experienced this, Robert, or even seen this, but everybody's got an opinion on, you should do this, you should sell your house, you should keep your house. So really sensing, is that person ready and what kind of help would they need? And it's going to be all across the spectrum. So it's really looking for feedback from that person.
What would they like and what are they ready to receive? What about the role of the financial professional in the equation here, Valerie, staying with the existing advisor, perhaps finding a new advisor? How would you counsel folks to come alongside a widow in this area? For a financial advisor or someone who's helping her assess, is this still the right financial advisor is, is that person listening and paying attention to her? Do they know her goals? When she was married and they were in the office together in front of that advisor, was the advisor listening to the hopes, dreams and goals and working with both spouses?
Because that's going to keep that strong connection when it's just her now. So I think the number one thing is, do they listen? Do they know her? Do they see her?
Do they hear her? And if they are making a change, I know you value having faith aligned advice, and that would mean a certified kingdom advisor, right? Absolutely.
That's a great place to check and to vet. And it may take a couple times to interview a couple. This is someone who's going to walk aside you in life now. This is a close confidant.
So it's okay. I mean, it's a lot of work and maybe even a lot of work in a difficult time, but take the time it takes to find that good match. Faithfi.com, of course, is where you can find a certified kingdom advisor. And to Valerie's point, even several CKs that could be interviewed to find that right fit. All right, Valerie, what is another way we can help a widow in our life become financially confident?
Well, so and not to generalize that everybody lacks confidence, but I've just seen it so many times, hundreds of times where it's that confidence to go forward, especially when something traumatic has come along and shaken it. So I'd say encourage and empower. What is she capable of? What decisions can she step in and make?
And how much does she want to bounce off? So it and I think that encouragement, you can do this, you've got this. Just being that kind of support. She may feel the finances are now really daunting. So what help what resources can you offer? And also just explaining if you're in a position as an advisor, or if there's things that are confusing about finances, don't use, you know, tech terms, don't use industry terms, really lay this out. And again, not to oversimplify, she may be very sophisticated in finances, but grief takes a toll. So not a time to be technical, not a time to hand, you know, 40 page report with all the graphs and charts and start explaining, you know, basis points at this point, we're gonna, we need to talk about things that are relative to her and relevant to her. Yeah, no doubt about that.
Valerie, I know you say that one of the ways you can help is to help her say no or not now. What would be some examples of where you see that? I see that over again with especially with, you know, something happens, people come around from church, maybe advisors, family members, and everybody's got an opinion.
So for example, one lady, half her friends and family were telling her, you've got to sell that big house right away. The other half is saying you don't. And so who can you trust? It's the people that still are with you and still have your back when you are telling them no, I don't want to do that now. No, I would not like to buy your product. No, I'm not going to invest in your specific investment right now. If they're okay with no, I think that's a pretty good indicator that they're in it for you, not just to sell that thing, do that thing, get that result. It's a good indicator in a lot of life, but here especially, friends and family, you can offer help, but then I would say let go of that. She may or may not do your suggestion.
That's well said. Valerie, of course, you're an attorney and so you have experience in the area of wealth transfer and estate planning. What does the widow need to know there and how can you help? The widow needs to, there's so much talk about wealth transfer to the next gen. So I think for advisors and for others that are coming around, don't skip over her. As you said, at least 60% of the time, she's going to be carrying the baton to the end. So when we talk about wealth transfer, the first stop is usually going to be her. It's going to be the widow and so you can put all these plans in place, but if she doesn't know how to execute the plan or how to rely on the right people, all of that planning may not be any good. So make sure she's equipped for that great wealth transfer and that she feels comfortable. She may have changes come over her life where that original plan is going to change a little bit. Hmm. That's right. And this is a great time to remind husbands who are listening today to include their wives in financial discussions and planning.
And that includes wealth transfer, right? That's right. Many times I've heard sometimes, oh, she's not really interested or from a lady that says, oh, I'm not interested. And I think, I think you probably are interested in your wellbeing, your family, but something along the line turned you off.
Let's get a way that you can get re-engaged because I know you care. That is well said. Always solid advice. Thanks for stopping by today, Valerie. Pleasure to be on with you, Rob. Thank you. That's Valerie Hogan.
The website for a wealth of information about helping widows is widowconnection.com and the book, it's a must read, Wise Women Managing Money. Your calls are next. That number, 800-525-7000.
We'll be right back. Have you downloaded the Faith Buy app yet? You need to do that today because this is going to make your life easier. Yes, you can manage your money through the in-app envelope feature, but also plan out future goals. I want to buy a house in five years and I'm on track to do that.
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Looks like two lines remaining open, 800-525-7000, you can call right now. Let's go to South Carolina. Hi, Susan.
Go right ahead. Hi. My question is this. We've taken financial classes before and they encourage you to pay off your home and any debt like that. Well my son, he's a Christian, but he took another financial class. A person tells them to borrow against your rentals and things like that and buy more rentals. He's very successful at it, so I'm just wondering, is that biblically correct or not?
Yeah. It's a great question and there are clear warnings in Scripture around debt, and so you just need to heed those warnings, and that's all they are. It's not that borrowing is a sin by any means, but you just have to be careful because anytime you borrow money, it's a master-slave relationship. Are you in surety or in debt if you have an asset that exceeds the value of the loan against it? I mean, technically, no, because at any point, theoretically, you could sell the asset and pay off the debt. So as long as you use the leverage or the debt responsibly, then it can be an effective tool for a business, any business, whether it's a laundromat or a rental property business or buying and flipping homes, debt can be a tool to grow your business because it allows you to expand, in this case, his portfolio of real estate faster than if he were to have to buy everything with cash. But he has to be careful because that debt service, meaning the monthly payment to cover the principal and interest, is on top of his business operations, and so he needs to make sure he's got good cash flow and that if we went into a recession, I mean, things are good right now, the economy is strong, unemployment is low, stock market's doing well. Let's say 18 months from now, we're in a deeper than expected recession and he has trouble getting tenants and he's got multiple properties all leveraged, meaning they have debt on them.
He's got all the carrying costs. Could he put himself in a situation where he loses his business? He could, loses some of those properties, and that's why it's important not to mix your personal finances just so it doesn't spill over. For instance, if he barred against his primary residence to buy a rental property and now the business goes sideways and he's got difficulty keeping the renters in there and he struggles to make the payment, well now all of a sudden he's putting his personal residence at risk. So I would say just as a rule of thumb, ideally you'd buy your personal residence with at least 20% down, meaning you have 20% equity, 80% is leveraged. With a rental property, I'd love for that number to go up. I mean, it'd be great if he could have at least 50% equity in each of these properties, meaning no more than 50% borrowed. That just keeps the debt service reasonable so that as long as he can keep these rented fairly consistently, even if there's some gaps, he shouldn't have any trouble through the rental income covering the expenses, the principal interest, the taxes, the insurance, the maintenance, all the expenses that go along with holding rental properties and still hopefully have something left over as income to himself.
But there's a lot of information I've just thrown at you there. Give me your thoughts. No, that sounds good. He's really good about doing this right. He probably, half of them he owns outright and then the other half he has a little bit borrowed on them. He is just using this as a way to buy other things. So yeah, he's done a very good job.
I just love it. Sure. Because of the class we took that you pay off all your debt, you don't have any debt.
So it was a little bit confusing for me. Yeah. You know, I think the key here is, I mean, again, borrowing is not a sin. Is it wise to get out of debt as soon as you can?
Absolutely. Because then you're unencumbered. It gives you more flexibility. You can follow the leading of the Lord. You know, it just keeps your overall life, lifestyle expenses lower.
I mean, those are all good things. Is it possible to be completely debt free? It is. It's challenging, especially now if you want to buy a house, especially if you're just starting out, it's difficult to do with the average home being 420,000 without taking on some debt. And with a business, it's a little different just because so often, you know, most businesses use some measure of debt, you know, for normal operations. And that's just, you know, very common.
And it's not any different with a real estate business where you're buying and selling rental property. So hopefully that helps you. Thanks for being on the program, Susan. May the Lord bless you. Let's quickly go to Ohio. Alyssa, I have just a moment left about a minute. Go ahead.
Hi. So my husband and I live with my father in law and we need some repairs done on the house. And he offered to loan us the money like because we're going to start paying for all the costs of the house. And he offered to loan us the money from his own retirement account.
He's 70 years old. But the concern was if we have to pay back taxes because he makes about 14,000 a year from retirement and for Social Security from his wife who passed away. And he said if he takes out like 30 grand for us, then we would have to help him with the taxes on that, if that makes sense.
It does because there is no loans from IRAs. And so he would have to take a distribution, which means every bit that he takes out would be added to his taxable income. And so what he's saying is because I'm going to have a bigger tax bill because I pulled this money out and gave it to you, I need you to help me pay the taxes. Yeah. So is that going to be a better rate?
I feel silly. But then like getting like a loan to pay for the repairs that we need? It just depends on how long the payback period is. The problem is, I mean, let's say it's 20 percent in taxes. So let's say we spread that 20 percent out over a five year payback. How long are you planning to pay it back over what period? I definitely would not want to do longer than five years, hopefully less than that. All right. And is he going to charge any interest?
I don't believe so. OK, so you'd have a big bill on the front end, but it would be better over time because if you spread that 20 percent worth of taxes out over five years, it's going to be likely below the prevailing interest rate you would pay on the amount that you borrowed. So you'll pay probably, let's say, seven percent a year, five years. So you're going to end up paying seven percent every year for five years.
So thirty five percent and then, you know, versus let's say 20 percent or less for him. So I think it's going to end up coming out better on paper. I think the other side of this is just it's going to change the relationship because now he's your, you know, he's your the lender. You're the borrower.
The Bible describes that as a master slave relationship. So what if something goes sideways and you're not able to pay it back despite your best efforts? Is that going to damage the relationship? So I think it's going to be better for you on paper, even with that upfront bill, as long as you can cover it.
But you've got to think about the implications on the relationship if something unexpected happens. Does that make sense? Yes. Thank you for mentioning that.
Yeah. OK. All right. God bless you, Alyssa. Thanks for calling today.
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