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Now, let's jump into the podcast. And the angel said to them, fear not, for behold, I bring you good news of great joy that will be for all the people. Hi, I'm Rob West, wishing you and yours a blessed Christmas Eve. As Christians living in a materialistic society, we must remember to celebrate for the right reason, the birth of our Savior. Howard Dayton joins us to talk about that, that 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, our good friend Howard Dayton is the former host of this program and founder of Compass Financial Ministry. Howard raised two incredible children who are now parents, and along the way, he learned some things about keeping Christ in Christmas. Howard, welcome back. Oh, great to be with you, Rob, on Christmas Eve.
And to you as well, Howard. Our opening verse is, of course, from Luke 2, 11 through 14. It goes on to say, For unto you is born this day in the city of David a Savior, who is Christ the Lord.
And this will be a sign for you. You will find a baby wrapped in swaddling cloths and lying in a manger. And suddenly there was with the angel a multitude of heavenly hosts, praising God and saying, Glory to God in the highest, and on earth peace among those with whom he is pleased. Wow, Howard, is there anything more beautiful than reading the story of the birth of our Savior?
I totally agree. I was fortunate, Rob, to grow up in a family that celebrated that passage of Scripture, and it just brings a flood of great memories of my childhood with my mom and dad and sisters. And it's something we wanted to pass on to our children as well. Speaking of Matthew and Danielle, did you read that passage to them as they were growing up?
We did. We'd read it together as a family on Christmas morning, just before opening the presents. And we wanted the kids to realize that the real reason we were celebrating Christmas was the miracle of Jesus, the Creator of the world coming to earth. I'd read a few verses that Bev would read, and when the kids got old enough, they'd read.
And, you know, sometimes it's a little hard to keep them from being distracted with the presents, you know, just screaming openly over there in the corner and under the tree. But it was a tradition that they loved. I know it was. Howard, how big a role did giving and instilling generosity play at this time of year with your family? It was big, Rob.
I'll tell you the most memorable experience. I was in the office development business, and we hired a wonderful African American man named Raymond. He'd been introduced to Christ while he was in prison, where he became, I mean, deeply committed to Jesus.
He was the best employee I ever had, but he was struggling financially. So we encouraged our daughter, Danielle, to give his daughter a particular doll that she had. And Danielle didn't want to, but we took the doll with us and visited their home. It was a fixer-upper that our family had actually given Raymond, practically no furniture. And when Danielle met his sweet daughter, she realized that she wasn't going to have any presents. She totally changed her mind, and Danielle was delighted to give her that doll. And it was life-changing for Danielle and really encouraging to our whole family.
Well, I know that was an experience she never forgot. What advice, Howard, would you give parents today about teaching the real reason for the season? Rob, I think it's more important today than any time during my lifetime, because so many in our culture have rejected Christ. So we need to be intentional in teaching our kids and grandkids. The real reason that we celebrate Christmas is that we're honoring the Lord Jesus for leaving heaven, coming down to earth to die for us so that we can have eternal life and spend all eternity with him if we know the Lord. Well, you're exactly right, Howard, and we've got to do that with intentionality.
If not, we'll get swept up in the culture and focus on the wrong things, right? Absolutely, Rob. It's really a priceless opportunity that we have as parents and grandparents.
Yeah, that's exactly right. And generosity is right at the center of all of it, because we're experiencing God's ultimate generosity and the ultimate gift that he's given us, Jesus Christ, his son, our Savior, born on Christmas Day. Well, Howard, Merry Christmas to you and yours. Thank you for stopping by. Loved it, Rob, and Merry Christmas to you as well.
Thank you. Howard Dayton's been our guest on this Christmas Eve. You can find out more about him and his great ministry at compassfinancialministry.org. That's compassfinancialministry.org. I'm Rob West, and your calls are next at 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions.
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Helping you see God as your ultimate treasure. This is Faith and Finance. We're going to help you apply God's wisdom to your financial decisions today. And if you have those financial questions, now is the time to call. Lines are open. That number, 800-525-7000.
You can call right now. We'd love to wade into whatever's on your mind financially here in this giving season. Maybe you're thinking about giving wisely. Perhaps you want to give not just out of cash in this season, but out of appreciated assets. Maybe it's some appreciated stock that you have that you'd like to be able to give away.
How does that work? Let's talk about it. Maybe it's staying on budget in this season. As we look toward the new year, a lot of folks will be starting up their budget, pressing reset in their financial lives, and saying, all right, this is the time.
Last year didn't work. This year, I'm going to be on a budget. I'm going to have a system to control the flow of money. By the way, that's where the FaithFi app can really help, using the beautiful digital envelope system that's built into the app for you to manage all of God's money there in a really seamless way. And if you're married, you and your spouse staying on the same page, that's a wonderful tool for you. You'll find more at our website, faithfi.com.
Just click app. But any of those topics and more are in play today. Credit scores, paying down debt, staying on budget, even transferring your wealth. As we think about this last stewardship decision we'll make, which is transferring what we have to the next steward, we need to think first and foremost, are they chosen first?
But secondly, are they prepared? We realize, and this is really clear in the book of Ecclesiastes, that wisdom and wealth are both good, but only one preserves, and that's wisdom. We need to transfer wisdom before wealth, and there's actually a risk, there's a danger, if wealth grows faster than wisdom. There's a challenge there, there's a problem area that we create.
And here's the other reality. If it's sudden wealth, think inheritance, where a large sum is dropped in the lap of an inheriting heir, and the wisdom is not there, that can create a major problem. And so we need to be thinking about that. How do we transfer wisdom first? What does it look like to pass on spiritual and social capital before financial capital? What does it look like to train our children, not only in the admonition of Christ so they surrender their lives to Jesus as Savior, but also as stewards of God's resources, handling God's money through the lens of Scripture, a biblical worldview, so that they can bring God's heart to bear in the financial decisions and choices they're making. That's so critical, and it's a key part of transferring God's money in a God-honoring way. We'd love to talk to you about that, if that's on your mind today as well.
A lot we can cover. Lines are open, you can call right now. 800-525-7000.
That's 800-525-7000. We're going to head to Ohio here to kick off here in just a moment, but first, in the news today, it turns out that a low credit score is not the number one reason folks are denied a mortgage these days. While a low credit score certainly doesn't help, a new report from the National Association of Realtors shows that the most common reason for your mortgage application being rejected is your debt-to-income ratio, what they call in the industry DTI.
That number accounts for 40% of application denials. Your debt-to-income ratio is determined by dividing your monthly debt payments by your gross monthly income. For example, if your total debt payments, so think your house and your car, whatever you have in terms of monthly obligations, if your monthly payments are $2,500 and your gross income is $6,000, your debt-to-income ratio is 42%. Well, typically, lenders want to see a DTI under 43% because this metric is a pretty strong indicator of your ability to make monthly mortgage payments. A debt-to-income ratio of 35% or less is considered good by lenders.
So while paying bills on time is always important because that's the most important factor driving your credit score, I would encourage you, as a hopeful home buyer, pay off as much debt as possible before applying for that mortgage so we can get that debt-to-income ratio down. That's going to make you a better quality buyer. Alright, let's dive into your phone calls today. Lines are open. 800-525-7000. Again, that's 800-525-7000 you can call right now. Let's head out to Ohio. Diana, you'll be our first caller.
Go right ahead. Okay, my question is, what is the difference between a will and a trust? Hmm, yeah. Well, a will and a trust, Diana, and this is a great question. I appreciate you asking because a lot of people have this question. They're both tools for managing your assets and ensuring they go to the right people after you pass away.
So that's where they have a lot of common ground, but they do work differently, and let me explain the difference. So, a will is a legal document that states how you want your assets distributed and, and this is key, names a guardian for your minor children if you have them. Okay, and that's where a will is absolutely essential.
It really is in every case, but for sure if you have minor children because it names the guardian. Now, a will only goes into effect after you die and requires that typically your estate go through probate, which is a court process that can take time and does involve fees. So that's a will. Now, let's talk about what a trust is. Remember, both of these are tools for managing your assets and ensuring they go to the right people. But a trust, where it's different is, it's a legal entity that you create to hold and manage assets during your lifetime and after your death. So one of the key ideas where a trust is different from a will, remember I said a will requires that everything goes through the probate court. A trust bypasses probate, so it allows your beneficiaries to receive your assets more quickly and privately. A trust can also offer more control over how and when your assets are distributed because remember, I said that a trust goes into effect during your lifetime and after your death, whereas a will only goes into effect after you die. So one of the benefits of the trust, in addition to the fact that it's bypassing probate, and that handle assets can be handled privately, not a part of the public record. One of the other big distinctions with a trust is, is that a trust can go into effect prior to your death. So let's say you're incapacitated and your trustee can then make decisions with the assets inside the trust prior to your death. It also can remain in existence after your death.
And so let's say you had certain errors that you only wanted to receive certain assets at certain times, upon graduation of college, when they reach a certain age. Well, a trust can handle that because all that can be spelled out in the trust, whereas a will would have to be processed and everything has to be distributed in a relatively short period of time. So in short, a will is simpler, but it involves court oversight. A trust can be more flexible and private, but it requires more effort to set up. Does that make sense? It does, but the trust is more expensive.
Am I right? On the front end, it would be two to three thousand dollars, where a typical will would be five hundred dollars to a thousand. But you don't have the court costs on the back end, which you do with a will through probate, with a trust you do not.
So yes, more upfront cost, but a little less on the back end. Thanks for your call, Diana. By the way, if you're looking for advice from a financial professional and you'd like someone who shares your values and who has met high standards and character and competence and ethics, well, we trust the Certified Kingdom Advisor designation, the only financial services industry designation out there that is around biblically wise financial advice, pastor and client references, annual continuing education, experience, character and ethics requirements all having been met.
You can find a CK in your area and I'd interview at least two or three. Just go to faithfi.com, click find a professional. That's faithfi.com. Hey, back with more in our final segment right around the corner.
Stick around. Request a copy of the Look at the Sparrows devotional today with your gift of twenty five dollars or more by going to faithfi.com slash gift. Faith and Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered financial wisdom for living well.
SMI provides step by step guidance for do it yourself investors from those just getting started to those getting ready for retirement. More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. Applying God's wisdom to your financial decisions and choices, this is faith and finance. You know, as you manage God's resources, that's a high calling. We recognize that we manage money for the King of Kings. He owns everything, the cattle on a thousand hills, the earth is the Lord's and everything in it.
And the fullness thereof is what God's word tells us. And so we have stewardship responsibilities, not ownership rights. It's like if you were a household manager, which, by the way, is how you would interpret the word for a steward in the New Testament.
It would translate household manager. As you walk into that household that you're managing, you would know immediately upon entering that, wait a minute, I don't own anything here. I've just been tasked with managing responsibly and faithfully the Master's resources. And so I'm going to take that seriously, and I'm going to do it according to the Master's wishes, and I'm going to realize none of this belongs to me. Well, it's the same thing when we think about managing God's money.
We need to approach it exactly the same way. Nothing we have is ours, not even our bodies. It all belongs to God, and so we want to be stewards of what God has entrusted to us, our time and our talents and our stewardship of God's word and relationships, and yes, God's money as well. Well, the whole focus of this program is to help you manage that money wisely and do it in according with biblical truth. Whatever's on your mind today in your financial life, let's talk about it. Call us right now at 800-525-7000. I've got some lines open today, and we'd love to wade into whatever you're thinking about in your financial life. 800-525-7000. Sandy's standing by to take your calls right now, and we'll get you on the air quickly. Let's go out to Texas. Hi, Robert.
Go ahead, sir. I was wondering with the last caller who just mentioned the trust fund, and you were talking about the differences, and I heard you say that a trust fund is a sure way that those involved that are to receive the money when everything comes to pass is the best way to go. Now, my father put a trust fund for the four of us who are four siblings. He put the oldest sibling and the youngest sibling in charge of the trust fund, and I have other siblings calling me wanting me to try to get information. Unfortunately, one of those siblings keeps telling me that it's the other sibling that's in charge of all that, and the other sibling just has cut off all communication with everybody else in the family. So to put other family members at ease, I was wondering if even though the two siblings that can access that fund when my mother wants to access that money, they won't be able to go through the whole fund without my mother's access, correct? Well, it's going to come down to who the trustee is. So is that one of your siblings?
Yes, it's the oldest sibling and the youngest sibling in the family that are in charge of that. And even my mother will get emotional with me not knowing if the fund is still there, and she has mentioned to me, try to find out if it is still there. And if it's true that a trust fund won't allow anybody to access that until the time comes, well, that would put everybody in my family's mind at ease. Unfortunately for us, the person in charge of it has cut off all ties.
Sure. Is your mom the grand tour, the creator of the trust? No, that was my father and the two siblings before my father passed. And one sibling didn't want really anything to do with it. And when I asked him, he tells me, no, you have to ask her. You have to ask the other sibling because she had nothing to do with it. And so is your mom currently the only beneficiary of it until she passes? Correct. And as far as I know, she says she's never ever gone and asked her for any of the money. And unfortunately, her mind isn't what it used to be.
So even if she has, she would forget right away. Yeah. And then will you and your other siblings that are not the trustees, will you eventually be the beneficiaries? Are you named in the trust as far as you know? I believe so, but we can't even get that information because all ties have been cut off. Yeah. All right.
Well, here's the thing. I mean, if you're a beneficiary of a trust and not the trustee, the way you get the information is, number one, you review the trust document. So if you have access to the trust agreement, you'd read it carefully and it would outline your rights as a beneficiary and specify the trustees duties to share information. Now, what you may say is, well, that'd be great, Rob, but I don't have access to it.
Okay. So then step two would be to contact the trustee because they're responsible legally for managing the trust and providing the beneficiaries with relevant information. So I would have your mom write a formal request for first a copy of the trust document in its entirety and second information about the trust assets, income and distributions.
And then thirdly, you'd want to request regular updates. So beneficiaries are entitled to updates on the trust status. So I would ask for or have your mom asked for periodic accountings or financial statements. And then finally, I would have your mom, if she's having trouble getting all these pieces that I just mentioned in place, have her reach out to an attorney, an estate planning lawyer who can really explain the trust law and help you if necessary. And hopefully it doesn't come to this because there's obviously relational collateral that can happen, especially within families. But, you know, an attorney could help her demand an accounting and even petition the court for the trustee's removal if the trustee is not providing the necessary oversight and information. Does that make sense?
Yes, it does. And who do we submit this paperwork to? You'd petition the court, yes. The institution that's taking care of the fund. No, the court would be the one to remove the trustee if necessary. And they're also the ones to go to to request the information that you just mentioned? No, that would come, you would request that from the trustee first. You would only get an attorney and a court involved if the trustee did not comply with the demand for the trust documents and the accounting and financial records. So I think that's your next step. If you need an estate planning attorney, you can find one on our website, faithfi.com.
Thanks for your call. Well, as we round out the broadcast today, let me remind you of the five wise money management principles that we find in God's Word. You see, folks, once we recognize God owns it all and that we're stewards or managers of the King of Kings resources, then the next question is, well, how do I manage God's money wisely and faithfully?
And that's where these five wise principles from God's Word come into play. Number one, spend less than you earn. I know it sounds simple and it's not, but it's the key to every financial success. Number two, avoid the use of debt because debt mortgages the future. Number three, set long term goals because the longer term your perspective, the better the decision you'll make today. Number four, have some margin or liquidity, meaning you don't spend everything that you bring in because that margin is key to you being able to fund your long term goals, like giving more, paying down your debt or saving for the future. And then finally, number five, give generously because giving breaks the grip of money over our lives and allows us to bless those in need and even take the gospel to the ends of the earth. Well, I hope those are an encouragement to you today as you apply those wise five principles in your financial life. A big thanks to my team today, Taylor Standridge, Chad Clark and Amy Rios. And for everybody here at Faith Buy, I'm Rob West. Come back and join us next time. We'll see you then. Bye bye.
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