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CARES Act: What’s Taxable and What’s Not

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
July 15, 2020 8:03 am

CARES Act: What’s Taxable and What’s Not

MoneyWise / Rob West and Steve Moore

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July 15, 2020 8:03 am

The federal government spent trillions of dollars to help individuals and businesses suffering from coronavirus shutdowns. But we’re now left with the question, what parts of those stimulus packages are taxable? On the next Moneywise Live, hosts Rob West and Steve Moore have answers about taxes and the CARES Act. Learn what’s taxable and what’s not on the next MoneyWise Live at 4pm Eastern/3pm Central on Moody Radio.

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Association federal government spends trillions of dollars to help individuals and businesses suffering from coronavirus and shut down the government gave the defendant all in some cases, the government will take away many who receive those benefits. Now wonder if they'll have to pay taxes on financial planner and teacher Rob West has some answers for us today. It's good news and bad calls and questions on anything financially, 525-7000 Give us a call 800-525-7000 times more care is at what's taxable.

What's not right here on moneywise line Rob so we want. First the good news or the bad news.

Let's start with some good news. Millions of Americans received the stimulus payments of $1200 for eligible adults and $500 for dependent children. We've answered this one several times, but we still get questions about it. So let's put this out to rest. First, those $1200 and $500 stimulus payments are definitely not taxable on the return your file for 2020. They were actually classified as tax credits so they not only aren't counted toward your AGI adjusted gross income are not counted as income for federal programs like Medicaid, either that that's important Steve because some elderly in nursing homes and assisted living facilities have been mistakenly told they have to sign those checks over the facility where they're living well they do not. That's right. That is good news. Okay anything else while we been talking about stimulus payments to individuals under the charismatic. There's also the economic impact payments or EIP. The other major form of benefits is the paycheck protection program or the PPP love those government acronyms exactly right there going good for an acronym under the PPP payments have gone out to small businesses and self-employed individuals in the form of loans, some portion or all of those loans will be forgiven. That is if the money is used for payroll rent or mortgage group health benefits and specifically utilities okay so PPP loans may be forgiven but doesn't that present tax liability. Normally, it would under federal law hello loan forgiveness is usually counted as taxable income, but the care Zach specifically excludes the forgiveness of small business PPP loans so that's more good news. Okay, so this act really is quite a bit different from lots of things we've seen in the past, that's for sure. And good news as far as federal taxes concerning what about state taxes on loan forgiveness. That's where it gets a little iffy in most cases states follow the federal government's guidelines on taxing loan forgiveness, but not always.

It's unclear now which states, if any, will in fact tax the PPP loan forgiveness so businesses that have their loans forgiven. Need to set some money aside in case their state doesn't follow the lead of the IRS okay and I said I believe that some portion of PPP loans might be forgiving can you be a little more specific.

I sure under the latest PPP guidelines. Here's how the forgiveness works.

First, your business must retain or hire or that is rehire full-time employees during the reporting period, which ends December 31 of this year.

Second, it must not reduce compensation paid to any employee by more than 25% in the last 60% or more of the money must be used for employee compensation and benefits okay so what if a business doesn't meet those criteria. Well then we'll have to pay back some portion of the money but it's not all bad news, even if that happens, those businesses will have two years to repay at only 1% interest and there's an option to delay the first payment for up to six months. So those are fairly generous terms. Remember, the whole idea of the paycheck protection program loans is to keep businesses afloat and keep you employed okay but what about people who didn't stay employed millions of people have received unemployment benefits often boosted by an additional $600 a week from the federal government will that money be taxed.

Unfortunately for most people receiving unemployment benefits.

The answer is yes.

Depending on your income level you could owe federal taxes on that money. The iris abuse state unemployment benefits as taxable and that's what this is this year that will include the $600 weekly supplement provided by the federal government okay what about state taxes. Well, good news and bad there.

The majority of states also tax, unemployment benefits, but not all. Specifically, California, Montana, New Jersey, Oregon, Pennsylvania, and Virginia do not live in one of those states. Well, that's good news to hear some more good news 800-525-7000. Thomas would like to hear from you money and life run on the same track. Unfortunately, sometimes it seems like your money is heading in a different direction from your goal, and never enough three keys to financial contentment. Author Ron blue helps you to break down all your financial options to a basic floor and then shows you how to keep it all chugging along in the right direction on the same track never enough three keys to financial contentment available when you click the store button at moneywise live out of work. Our friends and sound mind investing have been helping Christians reach their financial goals since 1990 with step-by-step guidance for investors. Just getting started making choices in a 401(k) or getting ready for retirement all grounded in God's word, the SMI slogan is financial wisdom for living well. More information is available online. Sound mind investing the SMI website also includes a common money and investing sound mind investing.org. One of the common areas in our office has some beautiful flowers in a vase every day, they change color and type.

Throughout the year. But one day last winter I finally slowed down long enough to smell those beauties. There was no smell and it turned out think you know flowers can look so real, but have no life, just like so many folks who look like they really belong to Jesus Christ like their Jesus describe people who would come before him on judgment day with lots of Christian credentials. No real. He says that he will tell them they never knew that. That's why the Bible says we examine yourself to see whether you are in the faith. The time to realize that you don't really know him is now you can avoid being turned away by acknowledging what Jesus did on the cross for you real honest about your sin and wanting Jesus to take over your life as your Savior in your heart. We love to help you get started. Call us at 8884. Check with us and chat about Jesus.com that is robbing you of freedom and peace of mind. Christian credit counselors can help where nationwide nonprofit counseling organization has helped over 3000 individuals in the last 27 years out of credit card debt percent faster while honoring that info to learn how Christian credit counselors can help you visit Christian credit counselors.org Christian credit counselors not call 800-557-1985 five minutes about the about the cares act of the stimulus payments and in some cases, if states will be taxing those.

I think you give us a list of most states who will not be taxing those payments, but there are some states where they will write it right. Yeah.

So if you live in a state without an income tax. Obviously, you will be taxed on unemployment benefits there. Those states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming and then there are those other states I mentioned just before the break, that will not tax, unemployment benefits, California, Montana, New Jersey, Oregon, Pennsylvania, and Virginia, all the rest. Though your unemployment benefits could be subject to federal and state tax. This can want to take a look at that. You probably know what state you're in, and how they treat that, but if not, ask your tax preparer you know whenever we discussed this and go a little bit in depth am always so impressed as to how much money has been put into this program so far it's me off the top of my head I can't remember but were talking about trillions of dollars. Well, that's exactly are yeah a lot of my billions and billions of dollars that were so put in here not trillions into the PPP specifically about if you put all get together yeah you do go past a trillion incredible amounts of money stimulus if you will being injected not only into the economy by way of small businesses, but also these direct payments to consumers.

We know money market balances are at all-time highs right now so there's a lot of money on the sideline, which means there's some pent-up demand for this market. In my view, to continue to run to higher levels. Once we have a little more clarity around the back end of this virus vis--vis therapeutic sent a real candidate for a vaccine. And so I think we could be in for a strong market heading in the year simply because of all the money that's been pumped into the system through the Federal Reserve and okay well inland and another good reminder. It's always good to have some savings, even when money is coming your way. Check.

She hadn't planned on. If you're not setting aside some of that money if you don't have you ideally 3 to 6 months of savings, but at least a months worth of savings things can sneak up on you that you're not prepared for and the last thing you want to have to do in a situation like the one were in the middle of is using your credit card to pay bills or respond to emergency situations. Anyway, if we can help you today with anything financial we have liens and here's the number 800-5800 525-7000. Indianapolis is where we begin should lease what's in your mind?? What went Iran free help program should be child that will have a feature to do deduction, not do deduction to make it easier for your main information in the comic she may aiming at Google, if you work and after I get I get to work in our clerk at the home have a no mindnumbing chat with my other gas was traveling that ballot out my mildly get reimbursed for mileage networking and looking at the picture and I didn't get benefit from the other other other three companies operate. I was working on cultivating 30 hours for the company, where they need to conquer anything kinky to personal private home. If cat was working for Lynn and I will bring a car to work for work for my ankle. I see yesterday so you're right, there are a lot of free options out there, you know, for instance, simply looking to file an extension today can do that@irs.gov. Keep in mind that for those that I know this is specifically what you're asking about her chemise, but those looking to file an extension today. That's an extension on filing not paying.

So make sure you include an estimated payment there. There are other options in terms of the free filing solutions. TurboTax has a free addition but they are for simple tax situations you need. So this is going to be ideal for W-2 income yell and in real simple returns. You can still get credit for dependents, but if you're looking as a self-employed individual to be able to maximize and take advantage of all the deductions available to you that does move beyond just a simple returning you typically are going to have to pay for that. Whether you use an online solution or certainly if user tax preparer so I don't have a quick free option for you given the situation there because you have a little bit more complexity in your situation I think you need to pay for it, but I can tell you this, it will be money well spent to make sure you get that filed correctly and make sure that you take full advantage of every deduction. Coming your way so you can still use a TurboTax solution or one of the other online options, but Juergen have to pay for chimney sweep appreciate hearing from you. Thank you so much for your call today, Orland Park, Illinois Kathy, I understand you going to correct this PPP no. I just want to make sure that the right you're exactly right in the I believe we had said two years which was the original length you are exactly right. It was extended. They did make a few changes in the second round to the PPP program specifically and one of those changes was extending that payback to five years on paying that back still has a 1% interest rate. No change there. Lots of moving pieces, but that good catch, Kathy, and you're exactly right Kathy, thanks very much. Anything else.

Well, you had given her. I'm hearing the employee without PPP wrote on that part cannot be forgiven. Is that correct you know it's a good course again the I'm not sure about that. We can certainly look into it. I'm not familiar with that portion of it. What I know is that for those who applied for the PPP using the standard PPP terms and as long as you use them for the money for the purpose in the percentages required by the PPP specifically for payroll and a few other expenses then you can have 100% reimbursed but if there's some caveats to that which are pointing out, I'm not aware of those would be worth doing a bit more due diligence. It does get quite complex quickly so thanks for your question on that and I would dig a bit further on that we don't have an answer right away.

Thanks Kathy. We do appreciate your call today very much less squeeze in one more Tinley Park, Illinois hi Diane what's what's on your mind today.

Now I should deal with not knowing anything about how when I go about yeah well these are called numismatic coins and these are coins that are collectibles.

I think the key is you need to start by finding out what is the real value of what you have. If you by chance Diane taken these two coin dealer or somebody who has some professional insight that could die give you evaluation on them and that okay very like that you yeah I would look for a coring coin dealer in your area.

I would start online to begin researching that the great thing about the Internet as you can. You can get a lot of ratings for individuals and businesses that I be looking for a coin dealer that has a good reputation online.

Lots of of ratings that are positive and somebody that you can go and sit with face-to-face that really has some expertise is had some longevity in the space and where you can confirm either through the Better Business Bureau or through online ratings that they've got some have really have a good reputation in this area what you want to start with is getting an evaluation of the value of what you have and I probably do at least two different individuals you have to pay them probably for their time, but that way you get an objective opinion as to what you have there in that coin collection and then at that point is some of those individuals may help you as a broker to sell them but at least you'll know what your you should be aiming for as you sell them because there's a lot of folks online that you know will take advantage of you if you're not careful. And that's what you certainly always want to make sure you're dealing with somebody who is reputable.

Another place to to go just for additional information. Diane would be a website called money.org that's the American numismatic Association money.org and I think as you read up there you'll be able to find some additional information that will point you in the right direction, but I'd start with evaluation and then asked for a recommendation on a dealer to sell and Diane. We hope that helps you check that out.

They have a splendid website and they also rate and rank and approval of dealers nationally and so that should give you a good place another place. Interestingly, you might check out which is local, but also national in this yelp yelp.com because more than likely there is some other people who have the you know, done some checking around, as you are trying to do when they have opinions and resources for a little local dealers who done well by them, so you might want to look into that as well. Thank you very much for calling in today and without pause here for a brief break you listening to moneywise live from West as your host. I'm Steve Moore, is a pleasure to have you out there today in listing 800-525-7000 back with more writer on do you know if you have enough money house. Do you know how much is enough. If not, one blue can help with this book. Master your money a step-by-step plan for experiencing financial contentment. Learn how to save and invest and give wisely create a long-term financial plan and how to get out of debt. Find it all in master your money by Ron blue available when you click the start button moneywise live.org to this practice is not thinking we got to know what you want to be were named not to think that we won't know the will of God pleasing. Thank God for you.please give me your thinking. This program, the financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst in splitting hairs, giving your money and things to your children without ruining their lives. Ron blue explains why it's important to make these decisions now, instead of forcing your heirs to do it later. Splitting heirs will foster a real appreciation for the precious resources that God has entrusted to you, and it's available. Click the start button moneywise live.org to moneywise live, where are our bottom-line goal is to help you find jobs planning. God's wisdom from your finances and that's kind of the cornerstone on which we built this radio program if we can help you with that. We love to do it. So let's continue on. Oh, 800-525-7000, Calhoun, Georgia Diane, what's on your mind today little bit of background about working but my health is not going to allow me taking out a mortgage on how it came here to get paid much quicker than really close to time by now I have 38,000 that I owe on how and I don't know what to try and refinance the refinance money or just go ahead and paired up my 401(k) and I don't have that hanging over my yeah Diane appreciate the question I'm sorry to hear about your health situation many years you have left on that 15 year mortgage file for over $1000 okay and what is sure what is the interest rate on 3.75 okay. All right. And when you rework your budget in retirement.

Talk to me about how that works out in terms of how do you have to eliminate this payment completely in order to make everything work or could you just reduce it in and fund your lifestyle to me about your spending plan. I don't everything it paid off. I don't have credit card get anything like that. However, I know I can't do it thousand dollars so and when I look into refinancing the closing, there you know three to $4000 yeah now on that size mortgage, it shouldn't be you know you should not spend more than 1%. It is a smaller loan so you could pay a little bit more. Yeah, you got a couple of options here. How much do you have in your 401(k) and 75,000 all right and are you planning on generating an income off of that to supplement other income sources in retirement. Will that just continue to grow. I plan on using it on my retirement. He will be time and travel a little bit if I want here and I don't have any money on my income will be called to 28 month okay very good and so you've got the 401(k) yeah and then with the house you plan on staying there for the foreseeable future. If you can. You don't have any plans to move.

I think okay alright well you certainly could refinancing. Obviously, this balance is fairly low, you should be able to go get that payment way down and make that work in your budget.

The other option is to go and pull that out of the 401(k). I probably do that but I would the challenges you if you spread it out over a couple years even if you spread it out over two tax years you take half now and half right after the first of the year in 2021 that would spread it out over two tax years. Would you be able to continue to work until that time, or have you Artie stopped at this point in here. I'm figuring that okay then I'm probably going that direction. Diane, I take half of it out this year and half next year. Go and pay it off completely and save the refinance expense and get your budget right sized and then just continue to invest the balance of the 175, after the mortgage is paid off. That will keep your tax burden down by spreading it out and we appreciate your call today. God bless you.

Investing is more than just return it's an expression of who you are and what you value is the way you invest your money reflect your identity as a Christian and eventide design investments for performance and a better world so you can invest with the confidence to reach your financial goals while remaining true to your Christian values and commitments.

We call this investing makes the world rejoice more is available@investeventide.com invest eventide.com. Thank you from the bottom of my heart I could've had the procedure I needed without CHF's help sharing the bills that letter from a member displace Christian healthcare ministries purpose to glorify God and serve his people. CHF is the original noninsurance voluntary health cost-sharing ministry, enabling its members to share the cost of each other's medical bills, call 800-791-6225 or visit CH ministries more moody radio verse of the week is found in Revelation 5 and they sang a new song, saying where are you take the scroll and open it for you were slain or blind you ransomed people for God from every tribe and language radio verse of the issues that affect our lives. We need we gain perspective by reading the Bible every day where it is a daily devotional from the battling proclaims the truth of God's word reflections on life article about the Bible and living your life in Christ find out how you can have today and were.org today and were.org this month somebody like legacy giving your family to send closer together closer to true financial freedom, practical advice to shrink the financial mutation in your marriage, budget friendly family activities and a lot more free moneywise. The magazine subscription is waiting for you work/site personal taxes and border are together reporting about 25,000 new coronavirus cases as new restrictions and combating the spread of the pandemic take over the US and around the world. Alabama will begin requiring facemasks after the state reported a pandemic tire 40 deaths in a single day. Delta Air Lines says it expects to take a charge about 3.3 billion to cover the cost of early retirements and biomes for employees as it shrinks in response to a sharp decline in air travel airlines that this week. 17,000 employees have agreed to depart the company stocks rose today on Wall Street following some encouraging, though very early results in developing a coronavirus flexing the Dell pushed forward 227 points, but I stuck up 61. The S&P gained 29 this is SRN use listening to moneywise livelier host.

However, last time for minutes now and we'd love to hear from you today.

Here's her phone number 800-525-7000 must be a Rob Webb out there somewhere. Sure, there is currently listening to the program are a wealth if that's you call in and we have something free for you today a gift 800-525-7000 just in Chattanooga, Tennessee, and what's on your mind Jeff yet how oh my daughter is expecting a child and she has the money back if you'd like to invest in something long-term that would benefit her more than just owning and savings account. I just want to get out about what you sure Jeff, what is the purpose of the money. Who is it for and what is the purpose and time horizon based on what she knows today. So it is hard now that you expect in about six weeks going to vapor for college in the future will whatever life throws at her, rather yeah well I think one of the keys that you just said there is is really her ideas to use it for college.

And if that's the case, what I would encourage her to do is open up what's called the 529 college savings plan. She can look at the plan offered there in the state of Tennessee which are not limited to the plan in your state. You can compare that to other plans from other states because most of them allow you to open an account even if you're not a resident in the way you would want to encourage her to do that to evaluate those plans is to go to saving for college.com and then she can run a quick little question-and-answer calculator that will compare the Tennessee plan or wherever she lives to the other plans and give a recommendation. The nice thing is that very low cost in terms of opening that and she can just put money in either a lump sum fashion or lump sum plus some sort of systematic contribution and then that money can be invested in the mutual funds inside the plan, and if it's specifically used for qualified education expenses, which includes paying off student loans after college includes up to 10,004 Arcata 12 private school as well as the normal college related expenses you might expect then that monies can grow tax-free and not be taxed when it's cold out and it gets fairly simple to select the investment options inside the plan. So that's the direction I go tell her it's a 529 college savings plan. She's gonna want to evaluate the various plans that saving for college.com. Thank you Jeff moving along to Valparaiso, Indiana hi Diane, what your question today for Ron down.

They moved to he heart health insurance 24 years old. He turned 20 in November working at hundred and $50 and a lot me specially for a young couple 1 cal right, starting out what option one parent for her even though you I see the 650 Diane that you're talking about. That's the plan offered through his company health insurance.

It was at a family plan and that would cover the three of them as the two, but that was for both he and his wife yeah okay you know I tell you with the rising cost of healthcare these days. That really is not. Unfortunately I'm not a bad amount, you know, it's not uncommon for a family once they have a few kids to be spending well over $2000 a month for health insurance. If you want traditional health insurance with, you know, low deductible and a reasonable co-pay. It is just very expensive and so 650 a month I know is a lot as a just starting out, but it's not out of line. I think the key is that they both have some type of coverage. So where do you go from here. Well, they could look at a couple of other options. Another option would be to look at an HSA and perhaps even ask his company if they be willing if he if they provide any sort of a benefit in the form of perhaps covering a portion of his cost of health insurance, whether they'd redirect that into an HSA. They may not. But basically they would get a high deductible health insurance plan which is a lot lower cost and then you pair with a health savings account where you make contributions. It would grow on a tax-deferred basis and ultimately be tax-free for Jews for medical expenses, but essentially their funding the cost of the healthcare out of the HSA and it can be cost advantage. Another option that they really should look at that may be a great fit for them is something called Christian healthcare ministries.

It's a health cost sharing among Christians across the country. Tens of thousands of them.

They've literally paid out billions with a B in the big idea here is, it's not insurance but it's Christians coming together to share each other's medical bills, and you would probably be looking on their top plan at about 500 a month so that be obviously less than the 650. The only difference is that they would an ineffective mistress husband wife would need to be that much probably be somewhere between three and 400 a month but basically they would be self-pay up to $500 per incident. Now if their young and healthy. That may not be a big deal but essentially they want to take a for a period of time.

The difference between what they're paying to see HM and what they would be paying for traditional health insurance and put that in the savings account so they can self-pay the cost of a doctor's visit or they had to go to a hospital stay.

Again, because they have responsibility for the first $500 but then everything after that is shared among the Christians in the plan through Christian healthcare ministries so I would refer them to to those two options. Option one is that the plan offered by his employer.

Option two is an HSA health savings account paired with a high deductible health plan and you could look@hsabank.com to get more information on that and then the third option is Christian healthcare ministries. You'll find them@chministries.org Diane would hope that helps you and hear your son and his wife as they go forward some great options there. Thank you very very much Rob a quick email. I think of this is from Jane.

Hey Rob, is this a good time to refinance with rates so low you know it really is, in fact, they just tick down again today sitting right around 3% I think you can pretty much, you have a good credit score, you get 2.99% today on the refi so I think the key here is to make sure a that you're not extending the term so often you know five years and with 30 year mortgage starting over 30 years. We don't factor in fact that were really paying interest for another five years. So even though you're reducing the rate you could really go backwards. Number two is make sure you're not overpaying in terms of cost on that refi a 1% would be my target in terms which are paying for expense and number three have love for you to save at least a point on the interest rate and then lastly stand at home for at least five years. But if all those things, why this is a great time to be looking at refinancing Steve with rates at his silver close okay and if you have a brief email from Rob. Keep it brief, just a couple of lines. If you want to hear and read on the year and then the address is questions@moneywise.org questions@moneywise.org moneywise live.org you can find lots of free materials their resources that will help you with your personal finances in your budgeting. That's also where you can send a gift if you like. Just click the donate tab at the top of the page. Moneywise a large stick around. More to come. After this many people are experiencing financial challenges such as credit card downsizing that in jobs, savings, more than half of all divorces are the result of financial pressures at home, but there's hope your money counts biblical financial expert Howard shows that the Bible is a veritable managing your finances will discover the profound relationship with God, your money counts is available when you click the start button moneywise live.org where I'm a car guy here to help you understand the urgency and how fun it is to share your faith in every opportunity. It probably won't but the rapture could happen today and if it did, your friends would be left behind. More importantly, how many would be left behind without warning, keep in mind, it is equal 317 got appointed as watchman over our friends and holds us accountable for warning the enemy is coming with all that's going on. There's no question that Satan is coming we should be warning all of our friends and loved ones. While there's still time.

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There's nothing more exciting than knowing God just use you to lead somebody to join us@igniteamerica.com is there someone that are struggling to forgive. If you are not alone.

Bitterness seems to be erupting in anger on the streets of our nation behind the closed doors of our homes. Political spectrum in our capital. There is a solution. 2000 years ago Jesus died on the cross for the sins of the world including your sins, and my sin. He dug a well of forgiveness that supplies another race think you are when his love flows into our hearts, we have the ability to forgive those who had wounded us and we Bible erupts homes are united relationship restored in the nation's why don't you your heart and by faith, pull out God's grace and forgive those who have hurt you. I'm Sammy to author an international evangelist one cry.com many people adopt an attitude toward marriage and finances that it'll all work out somehow. But sadly, it often doesn't financial woes can devastate a marriage but there is a better way. God's way, money, and marriage counseling by Howard date will help you discover God's approach to growing your finances strengthening your relationship with your mate and cultivating godly joy, money, and marriage God's way is, and moneywise live.org from Matthew 25 verse 40 and the king will answer them. Truly I say to you, give it to one of the least of these my brothers did it to me nice to have you with us today.

It's moneywise live Chicago, Illinois hello Frank, thanks for holding, thanks for your patience and what your question great. Thank you for mom. I know I have like about 40 40,000 employed right now working and I'm trying to figure out who try to get you. Hear what you got money as well know. Yes, yes, do you have the ability to continue to work in the future.

Okay, yeah, you know, I think the key to being able to save. Despite perhaps, of the challenges you have in the past is a fairly simple on the I wish I had a silver bullet here for you but think of the end of the day. To the extent God gives you the ability to work healthwise. Keeping your lifestyle and check keep your expenses at a minimum, and then being systematic in your savings and I realize it may seem like you just either don't have enough time or you not away not able to put away enough money on a monthly basis for it to amount to anything meaningful, and yet I think the key is just continuing as a study plotter which we read about in God's word putting money aside but continuing to trust God because ultimately he is your provider.

No one else but starting with this idea that God owns it all that you are a steward that your trust is in him, not in the things of this world and in your possessions and that he will provide for your needs and then following his principles spending less than you are avoiding the use of debt. Having some margin, which is some excess beyond what you're spending on a monthly basis that you can put into savings, and even invest for the longer term. You're just investing the Lord allows your healthwise over the next 10 years. As you continue to work that can amass into some additional funds, and as you do that. That plus Social Security and what you're able to accumulate. Not to mention the fact that you be pursuing becoming debt free. If you're not already there will allow you to keep your lifestyle at a minimum, and Lord willing, have the resources you need to be able to provide for yourself. But I realize it can be challenging and that to the extent you need assistance along the way.

That's where the body of Christ should come in.

So this would be an encouragement to those out there who have more than they need to be looking around them. For those who are in need to be able to share in be the hands and feet of Jesus and his leaving, but Frank, I would certainly appreciate your call today will ask the Lord to provide for you and the situation in the in the days ahead, and I hope you don't get discouraged and just continue to stay the course or amen thank you Frank God bless your brother Rock Island, Illinois Mike, I understand you have a question about the national debt and I believe company 23 and 50 a month later reach a million for the chair and another that I'm wondering how government that will lay end up choosing money that causes hyperinflation often wondering that you might know about that you think they might do that me and other listeners need to prepare for yeah Mike I appreciate that you know the same principles we read about in God's word related to debt apply to nations in the same they way they do individuals and their clear warnings around the use of debt and I think you we certainly need to heed that at a national level. At the same way we do with her personal finances as we manage God's money we needed to do in my view, everything were doing right now to be able to weather this coronavirus pandemic coming.

We had an event driven recession that was brought on by nothing more than we had to turn the economy off on a given day in March and essentially everything kind of locked up and we knew what was going to be the fallout of that huge unemployment numbers, the quickest move in the stock market to bear market territory and history will obviously a drop significant drop in the gross domestic product and gross output. All of those things brought on and yet very necessary and so the US government did what it had to do. The Federal Reserve stepped in and began to provide stimulus and liquidity to businesses and individuals to keep the economy functioning to keep people employed and we certainly seen the fruit of that now that would've been great if during the previous 11 years of expansion as we went through the greatest bull market we've ever seen and greatest expansion of wealth this nation is ever experienced that we were paying down our debt. That would've been the ideal situation, which is the same thing we should be doing in the times of plenty personally and yet that wasn't the case. So that's where I think we need to learn her lesson because in those good times we should be actively trying to run budget surpluses not deficits and get our act together with regard to paying down the national debt.

Unfortunately, we haven't been doing that we've been kicking the can down the road and we will have to deal with that at some point. Now what about hyperinflation.

Yeah, I don't see hyperinflation coming to me this is when we have a rapid rise in the value of the currency of the country tumbles, and you know we would typically define that her economists would when prices rise by at least 50% a month and it would typically happen at a time with her civil unrest or war in an underlying collapse of the economy you when I can have anything like that. We still have a strong consumer. We have a strong economy. Yes, we've passed the current level of gross domestic product with our national debt in order around 20 to 23 trillion GDP and we have about the same now taking on more in the way of national debt that one-to-one ratio is a big deal and we need to make sure that we keep that in mind moving forward but I don't think were to see anything like hyperinflation coming because the Federal open market committee really does have quite a bit of help power in the situation they have tools at their disposal. They will use interest rates to be able to help keep inflation at that ideal mark of about 2%, which is what they typically shoot for, and they can raise rates.

Once we start to see inflation coming in there and can manage that appropriately. So I think the key is just recognizing a we need to elect officials in the future who are willing to make those hard decisions and tackle this and be recognize that we are only in control of what God has entrusted to us and we need to follow his principles in terms of how we manage that.

I would concur with you that this is something we need to take note of and that we need to get serious about as a nation in the future.

Amen to that might great question. We appreciate your phone call today. Thanks so much, Pompano Beach, Florida Bonita pleasure to have you there and what's on your mind that your child to put questions regarding the home that I purchased a 30 year loan back in 2005 that change and I don't know decided to sell it to another entity of some sort. I can't see, and I felt all the killer change.

The other part was the key in the GMAC and I had no say in the matter. Though a few different entity on changed over the years and I keep getting people to have to start making that payment hereinafter corrected and I get covered in our meeting look on that before hand but I'm like you know what I got to talk to somebody that knows more about kind of staying on and noted that short night out another 10 years so wearing it with a 30 year loan.

Now they're extending it another 10 years in the specific killer 2035. Now they had thousand 40 okay yeah I would deftly get somebody to take a look at this for you.

There's a couple of things that don't really make sense to me as I'm hearing you describe your situation. Number one is it's very common for lender to sell your loan. Basically what they're doing is they're selling the servicing rights to someone else and are getting off their books, which frees up their credit lines and allows them to lend money to more individuals because for many of them that's their primary business, not necessarily the servicing side and so it's very common and you give them permission to do this. Typically when you take out the mortgage though sell the servicing and therefore you'll start writing your check to somebody else. What's confusing me. As you said, you have portion at one and a portion of the other. I've never seen that or heard of it, so I want to get more information about that.

The other thing is they can't change the terms of the loan without your permission. And so it doesn't sound like you are in any kind of situation where they had to put a portion on the backend where you have a loan forbearance or deferment. Nothing like that is a right correct only 800% financing and so I didn't realize and they said all well 8020 and so I can't ask questions as to why we have two different loan companies now so they said hello. Well, you have 8020. So technically we can sell a portion of the get out now.

Well I would look at refinancing and while you do that get a trusted individual to evaluate your current loan I go to movement mortgage.com see if they can help you. Thanks for your call today. Unfortunately at a time when he was not is a partnership between radio and moneywise join us tomorrow


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