Taking an Interest in Compound Interest

Compound interest is a double-edged sword. Albert Einstein reportedly called it the eighth wonder of the world, saying he who understands it earns it.

He who doesn't, pays it. Einstein knew that compound interest is a force to be reckoned with. Today financial planner and teacher Rob West explains how you can either make it work for you or let it work against you. And it's your calls on anything financial. 800-525-7000.

800-525-7000. I'm Steve Moore, taking an interest in compound interest. That's next right here on Money Wise Live. Well Rob, is this really a case where a little knowledge can save you or make you a lot of money? I mean, I'm thinking it is. Would you agree?

I certainly would, Steve. A recent financial literacy survey found that individuals who fail to grasp the concept of interest that compounds have higher transaction fees, run up more debt, and listen to this, pay higher interest rates on credit cards and other loans. Compound means that two things are added together. Well in this case, it's principal and interest. And it works the same for both savings and debt. In very simple terms, compound interest means that your savings or your debt will grow incredibly fast. Maybe it would help to explain the two different types of interest we're talking about here. So can we compare them?

Yeah, that's a good idea. So we're talking about simple interest versus compound interest. Simple interest is what you pay on the original amount you borrowed or what you have in the bank only.

This is called your principal. Simple interest applies to a fixed rate and it means that the dollar amount you pay in terms of interest remains the same for the life of the loan or the account. Now compound interest is very different. It's calculated on your principal amount plus your accumulated interest. So the amount you pay or receive in interest will change. It will grow over time. Compound interest pays interest on top of interest and that's how it grows so fast.

That's Steve Wyatt's double-edged sword. Compound interest works for you if you're saving money but it works very much against you if you're borrowing. Okay, can you give us some examples of that? Sure, let's first look at how compound interest works against you with a credit card. So let's say you have a $6,000 balance, pretty typical for most Americans. And we'll use a compound interest rate of 17% which unfortunately is about average according to the Federal Reserve. Now assuming you're paying only the minimum amount owed each month, after five years your $6,000 balance, well it's now $9,000 because you've accumulated almost $3,000 in interest. After 10 years, your balance is now $15,500 because you've added an additional $6,500 in interest.

At that point, you actually owe more in interest alone than you did with your original principal. And by the way, good luck on remembering what you actually bought all those years ago. Oh, it was something I needed I'm sure.

Yeah, I'm sure it was. It gets even scarier though, Steve. After 15 years, your balance is a whopping $26,000. Unfortunately, that's the way compound interest works against you. Okay, got it. All right, that is scary. All right, but let's look at the bright side. How does compound interest work in a, let's say a savings account?

Yeah, sure. You often hear the line, you work hard for your money, make your money work hard for you. Well, that's exactly what compounding interest does in a savings account. Interest rates are very low these days, but the concept still applies. Let's use the same amount we started with in our credit card example, $6,000. You put that in your savings account earning about 1.2% interest, which is fairly typical these days, although it's come down in the last few weeks, probably 0.8%.

But we'll stay with that 1.2. And you make no additional deposits or withdrawals. Now after five years, even at that very small rate, you earned almost $400 because of compound interest. Each month your principal grows and you're paid interest on that higher amount. That's how it's different. And it grows so much faster than simple interest.

After 10 years, you've accumulated nearly $1,000 in interest after 15 years, nearly $1,500. Okay, good. Got it. All right, so how do we take advantage of that, of compound interest?

Yeah, it's fairly simple, a pun intended. Do not carry a balance on your credit card. Pay off any consumer loans as quickly as possible, making additional payments on the principal if you can. And get your emergency fund into a high interest online savings account.

I realize that's a relative term these days. There's nothing terribly high out there, but some are better than others. And they'll give you a better rate with the online than the brick and mortar banks.

We say this often. The ones that I really like right now are Ally, Marcus, and Capital One 360. They're safe. They carry FDIC insurance up to a quarter of a million dollars. You can link them to your checking account as well. Okay, we're discussing interest and anything you want to talk about today, anything at all.

Open lines available right now at 800-525-7000. He's Rob West. I'm Steve Moore, and we'll be right back. The financial wealth you leave behind could be the best thing that ever happened to your loved ones, or the worst. In Splitting Heirs, 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.

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SoundMindInvesting.org. In the days of Noah, the people rejected God. So God decided to end the life that He had created by bringing a flood upon the earth. But God remembered Noah because his family had remained faithful. So God instructed Noah to build a boat to protect him from the flood.

The people saw Noah building a boat, but Noah didn't live near water. So the people thought he was crazy. They laughed and made fun of this foolish man. Then it started to rain. It kept raining and raining and the laughter stopped. The waters began to rise and suddenly the people realized that God's word was no laughing matter.

They fought and tried to get into the boat, but it was too late. God had sealed the door shut. If you haven't accepted the forgiveness of God and believed in the saving work of His Son Jesus Christ, then you've rejected God. God's gift of salvation is given to all who choose to receive it. So accept the free gift today.

Don't be left outside when the door to heaven is sealed shut. Do you feel like your hands are tied with debt, preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80% faster while honoring your debt in full. For more information on how Christian credit counselors can help, visit christiancreditcounselors.org. That's christiancreditcounselors.org or call 800-557-1985.

800-557-1985. Hey, thank you for tuning in and joining us today. If we can help you with anything financial, that's what we're all about. We love to chat. We have open lines that will allow you to do that. Just give us a call right now, toll free 800-525-7000.

800-525-7000. You know, Rob, we started off the program today talking about a simple interest compound interest with a quote from Einstein of all people, Albert Einstein. And who would have thunk it that when he wasn't working on E equals MC squared and the speed of light and all that, that he'd be talking, he'd be looking at interest, simple and compound interest. Crazy. It really is very interesting. I guess he was just a math guy.

You know, it didn't make any difference what kind of math. Why don't we get him on the program? Is Jim Henry still booking our guests? He is.

Yes. And if anybody can do it, Jim can. I hope he does. I hope he's listening. Okay. Let's go right to our phones.

Boy, if Albert calls, I'm going to be knocked out. Okay. 800-525-7000.

Florence, South Carolina. Hello, Debbie. How can we help you? Hi.

Thank you for checking my call. I was listening to you guys the other day and you brought up a major concern of mine. Here in Florence, we have the coinless currency signs all over all of the businesses. You recommended that we bring our coins and currency in that they needed it. But we are actually being met with signs that they do not want it.

My concern is this. I know that we're in the last of the days because it's been going on since the Old Testament. But I understand that when the beast comes, there will, he'll control the one currency and there will be like a world order. I know the Bible doesn't specifically claim that, but it's in Revelation and Daniel.

It speaks on those types of things. My question to you is this. Is the government trying to make us go totally currency free?

And if we turn in our coins, will it be taken out of circulation? Because this is just not something that I'm looking forward to. Yeah.

Well, I hear you, Debbie. Let me try to bring some context to this. You know, the coin shortage is really about the pandemic.

There's not any kind of other strategy going on behind the scenes. It's a function of really primarily two things. Number one is we are transacting business more and more online, especially now that a lot of people are home, you know, working and purchasing things over the Internet because they're just not out as much as they used to be.

Number one. Number two, there is obviously a rise in a lot of the fintech financial technology driven by smartphones that we're using to buy things and chips and things like that where we're not actually using physical currency as much any longer. And then the other factor here is just the covid-19 in terms of the mint and the production that they've had as folks have been working from home.

Obviously, they've been on reduced hours, and so therefore they're just not churning out as much. You put all that together and it's just resulted in a shortage, which is why the government has even said the Federal Reserve has said, if you have coins, go ahead and turn them in, get them back into circulation. Now, you raise a good point, and that is a lot of stores are not wanting the physical either paper money or currency. And that's, again, related to the virus just because people are handling them.

So whether it's, you know, scanning QR code and getting a menu on your phone so you don't have to hold the menu in your hand and they don't have to clean them or paying electronically, whether you're in a drive through or in a restaurant, hopefully socially distanced with a mask on, it's just a function of trying to keep everybody safe and sanitary. Now, how then do you get your coins back into circulation? Well, what I would say is the best way to do that is just deposit your coins in your bank account, because that effectively puts them back into circulation.

They're not trying to get them out. As soon as you put it back in the bank, then they can make them available to their vendors, which are the stores that in many cases are looking for them because there are so many that just can't get the access that they need. The other way is you could take them to your grocery store and most of them have a coin converting kiosk.

Unfortunately, many of them will take up to 10 percent as a fee for converting the coins to paper currency. So that's why I think the bank is a better option. But I hear what you're saying.

I know you want to be faithful in terms of understanding what's going on in the bigger context and honoring the Lord. I wouldn't be, if it were me, terribly concerned about that right now. I think the key is just recognize that, yes, we are moving more and more toward a global and digital economy. And the result of that is going to be less in the way of physical currency, more in the way of digital. And you add to that the COVID-19 pandemic. And that just has put us in this situation.

So I think if you take those to the local bank, you'll be doing your part and hopefully this will be a thing of the past here pretty soon. Yeah, great observation, Debbie. We're glad you called in with that.

Thank you very much. Chicago, Chicago, Illinois, WMBI and Sheldon, what's on your mind, sir? Hello. Good afternoon, gentlemen. I love you both. I love you guys both. I'm three o'clock hitched. I'm on the radio.

So as far as I'm concerned. Which one do you love the most, Sheldon? Oh, boy.

Here we go. Which, I mean, if you had that, if you had to have lunch with one of us, which would you prefer? I would do it like King Solomon. I would have to split you in half. Oh, boy. I always end up with half a sandwich.

That's what that's all about. You can have Steve. You can have Steve.

Hey, how can we help you? I mean, last week I heard you say that it felt like you were kind of against gold per se. I just wanted to know why you weren't so adamant about gold. I see all the commercials and things. I'm just wondering. Yes.

Well, it's a great question, Sheldon. And it's not that we're against gold. I'm just against over concentrating your position in gold. You know, you'll find periods of time when gold outperforms the stock market, but more often than not, the broad stock market outperforms precious metals. For instance, over the past 30 years, the price of gold has increased by about three hundred and fifty percent over the same period.

The Dow Jones Industrial Average, 30 of the biggest companies in the United States, has done about twelve thousand percent. And so I just think for a lot of folks, they need to see gold as a piece of a well-diversified strategy, but not a core holding just because of the volatility and overall performance. Think of it like an insurance policy, more than an investment. Gold usually increases in value when the market's down, and it's also a hedge against a falling dollar. So we would recommend for a well-diversified portfolio for most folks, think about it in terms of a five percent allocation. Yes, you'll see a lot of ads on the TV for gold.

These are gold dealers that are often advertising and they typically do that when we see a big run up in gold. But that doesn't mean that it's the best thing for you in terms of risk reward and volatility. I think for most folks, they try to get too highly concentrated. And especially if you're taking physical possession, which has a whole host of other issues in terms of security, receiving it, you know, making sure that when you sell it, you know, the dealer is not taking too much of the transaction. You know, there's just a number of issues there related to storage and safety.

So again, we're not against it, but I would just be cautious about overweighting in the precious metals. Sheldon, great question. Thank you very much. And the next time we're in Chicago, we'll see if we can touch base and we will buy your sandwich for it. You get an entire sandwich too.

No, nothing cutting in half and chips and chips as well. Wow. So generous. Oh yeah.

I'm going to go crazy. You can pick up the tab for the Coke. Okay. Thank you.

All right. This is MoneyWise Live. Rob West picking up the tab and the phone line today when you call them at 800-525-7000. Give us a call.

We'd love to hear from you. More MoneyWise Live after this. Money and life run on the same track, but unfortunately, sometimes it seems like your money is heading in a different direction from your goals. In Never Enough, Three Keys to Financial Contentment, author Ron Blue helps you to break down all your financial options to a basic four 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 MoneyWiseLive.org. He plays four twelves says, for the word of God is quick and powerful and sharper than any two-edged sword. Here's Beth Moore with a quick word. Really the biggest question we've got before us is what kind of God do we have? I've got to figure out, can I trust my God? Turn him back with me to Romans chapter nine. I want you to hear Douglas Moo's quote out of the new international commentary, the New Testament. I'm quoting Paul is not clearly asserting that Jacob and Isaac were saved while Esau and Ishmael were not, but he is arguing that God in his own day is bringing into being a covenant people in the same way that he did in the days of the patriarchs by choosing some and rejecting others.

That's the only connection we can really make back to these two sets of brothers. The point being made there is not that one is saved and one is lost. We don't even understand how all that works with covenant. That's why I hope to confuse you on the Ishmael issue about the fact that he was circumcised and it says God was with him.

And some scholars will say, but it was just temporal. Okay, well then it scares me that God's with me. You understand what I'm saying? I just, it's just scary. I'm just saying, let's muddy this thing up a little bit because it's not that clear. The parallel that's being drawn here is just as God did in the old covenant, just as he chose and rejected under the new covenant.

There is choosing and there is rejecting and it's all going to go back to the heart of God and do we trust it. Do you know if you have enough? Enough money? Enough house?

Do you know how much is enough? If not, Ron Blue can help with his book Master Your Money, a step-by-step plan for experiencing financial contentment. Learn how to save, invest, and give wisely, how to create a long-term financial plan, and how to get out of debt. You'll find it all in Master Your Money by Ron Blue, available when you click the store button at MoneyWiseLive.org. And welcome back to MoneyWise Live, a place where we do best to remember that God owns it all. We're just managers of his stuff while we're here.

Round Rock, Texas. Hey, Nancy, what's your question for Rob? Okay. First of all, thank you for letting me ask my question today.

I have two parts to my question. I'm a homeowner and my current mortgage or the amount I owe is $38,000. I'm in a zero interest homeowner home mortgage because my home is a Habitat home.

I know, right? But the only thing is I'm 68, I'm retired, and I'm running into some needs, some repairs, some upgrades, and I don't have the ready cash to do those. I don't want to go into my emergency fund. Someone suggested that I get a loan, what they call an equity loan.

And as I was in the process and praying about it, I really felt like I shouldn't go through with it. So I pulled back on the equity loan because I didn't have enough counsel to do it confidently. So I want to ask that question, like if that was a good way to think about paying for any upgrades or repairs for the home where it is now, that's number one question. And part two, I'm in a small home, but the maintenance of the landscape is probably too much for me to do on my own anymore.

So I need to have help with that. And so I was thinking what if I sold the home where I live, I have four children, and the home sellers are doing really well in the area where I am. So my home, I've been told that it can sell for $210,000.

The question related to the second part, what is it you're trying to solve for there? So what I was thinking was I would sell my home rather than wait and do a will and at that time try to figure out how I would divide my assets. I have four children, sell the home for the $200,000. $100,000 would be my gifting money divided into that for four children. Out of the $100,000 for myself, pay the $38,000 due on the home and then possibly live intermittently with my children. I see. OK, let me try to weigh in on these.

I appreciate all the explanation. First of all, going back to the repairs, if you're planning on selling the home, Nancy, I would be just real cautious about what repairs and improvements you do. The first thing I would do is visit with a realtor, a professional who hopefully specializes in your part of town, maybe even your neighborhood. If you don't know someone, you could check at your church or you could just drive around and see whose sign you see most often in your neighborhood. And oftentimes that particular individual will specialize in that part of town.

Maybe you interviewed a couple of them. But I think one of the questions you want to ask is which repairs and improvements make sense, given that you're planning to sell the home because certain things you'll get the money out of and may even help you sell it quicker. Other things you won't.

So you just want to be careful with that. If you decide to do some improvements and you don't have the money to do it and you and the realtor decide this is really essential for you to maximize the the asset that you have there, the home, then a home equity loan, I think, is a way to do that, probably the best way to do it. Now, I like the fact that you step back because anytime you're taking on debt, we want to go into that with our eyes wide open, make sure we're doing that the right way. And that's got to start with can you afford that in your budget?

And secondly, is there any other way? Well, if you don't have the cash and I wouldn't want you to deplete entirely your emergency savings, then doesn't sound like there's another way. And so then if you're married, you'd want to make sure you and your spouse are on the same page about it. Beyond that, you'd want to make sure you have a guaranteed way to repay and is by selling the home you would because the loan would be collateralized to the home. And then you'd need to make sure that it fits into your budget, your cash flow.

So you'd want to, if you don't have a budget, do a detailed budget, make sure you could afford the payment. But a home equity loan is probably going to be the way to go, not a line of credit, but a loan with a fixed low interest rate, where you can get the money you need for the improvements, not anything else. You do the improvements, and then that's going to position you to sell the home.

But again, only those improvements that you and a professional real estate agent agree on. In terms of how to approach your kids, you need a will, and so I'm glad to hear you have that. You don't necessarily need a trust.

I know you told our producer you were curious about a trust. That perhaps is something you need, but in most cases, probably not. That's going to keep your estate out of probate.

It's going to make it private. That also can go into effect prior to death. But I think the key here is to make sure that you have what you need, and if you're planning to give some money to the kids, you have that $15,000 per person annual gift exclusion. But I would make sure that's the right thing. I don't want you to deplete all of your assets too early.

You can always give money to the kids at death, if that's what you want to do, and you could start giving some money to them now, but I just wouldn't deplete so much of your assets that it becomes a hardship. Nancy, we hope that helps you. Thank you very, very much for your phone call today. We'll be taking more calls this afternoon, obviously, 800-525-7000. 800-525-7000. When we come back, let's see, Kaylee has a question about, she's graduating with debt, wants to know how to approach that. Marie is in West Palm, wants to know about her son's checking account. Her name is on that account. What does that mean? What does that involve? And then Kelly in Nashville, getting a dual income in September, wants to know how to pay off the house or should she pour money into retirement.

They're in their 50s. Well, we'll address all of those things, and of course, we'd love to hear from you. 800-525-7000. If you haven't visited our website yet, you might want to do that. It's MoneyWiseLive.org. There you'll find links to free resources, personal finance tools, budget templates, archives of our past radio programs, and much, much more.

Stick around. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

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Interested? Learn more by calling 800-791-6225 or online at chministries.org. Hi, my name is Lyle and I'm a worship and media arts major at the Moody Bible Institute. The Moody Radio Verse of the Week is found in Psalm 127 verses one through two. Unless the Lord builds the house, those who build it labor in vain.

Unless the Lord watches over the city, the watchman stays awake in vain. It is in vain that you rise up early and go late to rest, for He gives to His beloved sleep. And that is Psalm 127 verses one through two, the Moody Radio Verse of the Week. We all long for something good, true and secure. There's a hunger for a hope that goes beyond politics and entertainment and reaches deep into our souls. That hunger can only be satisfied by Jesus. For more than 90 years, Moody Radio has faithfully delivered that message of hope to millions so they can take the next step in their walk with Christ.

Call 1-800-D-L-MOODY or visit moodyradio.org. God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both heaven and hell. In Managing God's Money, author Randy Alcorn breaks it all down in a simple, easy to follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions and eternity.

Managing God's Money is available when you click the store button at moneywiselive.org. With FRN News, I'm John Scott. Delta Airlines is following the example set by United and saying it will drop an unpopular $200 fee on customers who change a ticket for travel within the U.S. The move comes as airlines are desperately trying to lure people back to flying. Oregon State Police will patrol Portland's nightly protest with help from officers from neighboring communities. That's part of a plan announced late Sunday by Governor Kate Brown. The city is approaching 100 consecutive nights of Black Lives Matter demonstrations.

A federal appeals court in Washington has declined to order the dismissal of the Michael Flynn prosecution permitting a judge to scrutinize the Justice Department's request to dismiss its case against President Trump's former national security adviser. Stock's finishing mix, the Dow dropped 223 points. The NASDAQ gained 79. This is SRN News. Good to have you along today. Hey, if you enjoy the program, would you do us a favor? Tell at least one friend this week that you listen to us and why, and maybe they'll become a listener as well.

Cleveland, Ohio. Hello, Kaylee. Thanks for holding for us. And we understand you're about to graduate with that. So congrats on the graduation.

How can we help you with the debt part? Yeah, thank you so much for taking my question. I wanted to say I appreciate all you guys do on this program.

Yeah. And so my question is my husband and I have been trying to figure out what to do next year. We're both in graduate school. I'm going to be graduating first.

He kind of was smart and was able to get school paid for, and he gets very small stipend and stuff throughout because he's a GA and stuff. So he actually gets income, but fortunate enough, I'm going to be graduating in December and then I'll start working next year. And we're trying to figure out, we've gotten a couple of pieces of advice on whether or not to pay off our debt as well, or also plan for retirement. So we both have Roth IRAs and I also have a previous 403B plan from when I was a nurse before I went back to grad school. So the three different advices I've gotten is one, pay off all of your debt.

Our goal originally was within 18 months, but we may be able to kind of tweak it and do it within a year, which would be very stretching it, but I think we could do it. But we would not be able to pay anything towards retirement. The other one was to max out your retirement and then to take that extra six months to pay off all of our loans. The other third advice was pay 10 to 15% or at least match what my employer is going to pay for the 403B and then maybe minimally put in something for that year. So my question is, is it going to matter not paying into my retirement or our Roth IRAs in the first year in the long run versus getting out of debt quicker within six months or so? Yeah, well, it's a great question, Kaylee, and I would echo Steve's comment.

Congratulations, you're moving into a really exciting season of life. You know, I would align more with the third piece of advice that you got. I would take full advantage of any matching that they are going to make available to you or your husband, because that's free money. And if they're matching you 50 cents on the dollar, you're not going to get a 50% return anywhere. If they're matching you dollar for dollar, it's 100% return.

I just don't like you giving that up. So I would take full advantage of that. But then anything beyond that that you have in the way of margin, I would go right after that debt. And I'm thrilled to hear that you could do that in anywhere between one and two years.

That's phenomenal. Will it make a difference in 30 years that you started 18 months later? Maybe on paper, you know, we'll see a slight difference. But I think you having the peace of mind just to know you're going to get out of debt, you focus on that, I think, knowing that you're not contributing to your retirement plan will give you even perhaps some additional incentive to kind of keep your lifestyle at a minimum so you can send as much to debt reduction as possible. And I think since you're taking advantage of that matching, you haven't left any money on the table. So that would be the way I would approach it.

If you had a conviction together as husband and wife that you wanted to do it a different way, I certainly wouldn't argue with that. But if it were me, that's kind of the way I'd go. I'd take the match and then focus like a laser on getting that debt paid off as quick as you can. And then you can get right back to long term savings.

And I would set your goal at 10 to 15 percent of your take home pay as your retirement savings goal. Does that make sense? Yeah, that makes great sense. I appreciate it. Okay. Hey, all the best to you guys. Thanks for listening and calling. Bye bye. Thanks.

All right. Marie is in West Palm Beach, Florida. And what's your situation with your checking account, Marie?

Hi, thanks for taking my call. It's actually my son's checking account that he opened when he was a teenager. And I went to the bank with him and my name is also on that account. He is the primary owner of the checking account. Now he's in his 30s and I haven't done anything with that account at all for years. But the question is, if he were to say, bounce a check or be laid on a payment to his car payment, does that affect my credit rating at all because my name is on his checking account?

Yeah, it's a great question, Marie. You know, checking accounts are not a part of your credit history and they don't impact your credit score, at least for the big three credit bureaus that are generally used to generate your score, Equifax, Experian and TransUnion. They don't report overdrafts unless they go to a collection agency. Now, there are some smaller bureaus that do monitor your checking activity, Chex Systems, CHEX, Chex Systems and Certigy. Chex Services would be two of them. And so if he's constantly overdrawing his account, you know, if you went to open a bank account somewhere and they checked at Chex Systems or Certigy and saw that that was frequently going on, it could affect your ability as co-owner of that account to open a new checking account at another bank.

But again, it shouldn't affect your overall credit score unless it were to go into a default status and then be turned over to a collection agency. Does that make sense? That does make sense and I appreciate that information. You're very welcome. Thanks for calling. God bless you. And we move, yeah, thank you, Marie. We move now to, let's see, how about Nashville, Tennessee? And Kelly, what's your question for Rob? Yes, I really appreciate you taking my call and I'll echo the last caller.

So much appreciate y'all's ministry. My question is, my wife and I are going into, for the first time in our married life of 30 years, we're going to be dual income now, starting this coming month, September. And I'm just trying to prioritize that, you know, I've got about 10 years left before I retire, about 13 before she retires, and I don't want to blow it. So I'm like, okay, we don't want to change any of our spending habits.

We don't want to boat or anything like that. We're just going to keep going like we've been going on the budget we've been budgeting. So we've got this extra money, of course, want to tie the with it and do some really good things with it to bless people. But with the leftover money, is it best to really shoot to try to refinance the house? I mean, we've already refinanced it this summer, but to pay it off? Or is it best to really bulk up on retirement? Or what's the best way that you would suggest to use that extra income while we have it for approximately 10 years?

Yeah. Well, first of all, Kelly, congrats on where you're at in terms of having this additional income. And I love the fact that you're not going to change anything, which means you're going to have even more margin that you can put toward your goals. And that would really be my starting point as you and your wife sit down, talk about where God's taking you pray through this. Do you one or both of you have a real conviction about this one way or the other? Well, we had really thought about paying the house off, but I was listening to your show last week and I can't remember who what it was, but you had said don't spend a lot of time.

And it's only two point seven five percent when you could be getting retirement for six percent. You know, I'm saying I really caught my ear when you said that we had we had talked about focusing all on the house. But then I thought maybe that's not the wisest thing. So I thought I'd ask you about that.

So the house is the only real conviction. We are going to need one more vehicle. So I've got to be saving a little bit for that. OK. It may have been me.

I'm thinking maybe it wasn't because I don't I don't know. I don't typically say that. Here's the thing, especially since you said you have a conviction around paying off the house. I actually love you being debt free. And I'd like for you to sync up your pay off of the home to your retirement. So on the current track that you're on, apart from you really going after it, would the home be paid off by retirement on the current trajectory? Yeah, well, we refinanced that 15 years. And so for it to be paid off by the time I retire, we'd have to pay it off in 10 years.

So we'd have to put some extra down on it that way. So here's what I would say. If you can sync it up to retirement, that that'd be fine.

But if you all have a conviction of being debt free, I'd go for it. Don't think twice about what you're missing out on. You'll enjoy that peace of mind.

So I would say one of the two would be my preferred options. Kelly, we hope that helps you. God bless. Thanks for calling in today.

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Kettle Falls, Washington. Hey, Jack, what's on your mind? How can we help you, my friend? Guys, well, I appreciate you and I'm going to be, I don't want to sound negative and I'm sure I don't, I certainly don't want to be sound facetious. I appreciate you. I appreciate your show. I know you're a good, strong Christian, man. Thank you.

Just a short comment. I heard you a couple of segments ago talking about refi's and such as you mentioned in one of the institutions being Bank of America. And I asked this only to get a handle on what your mindset is, what your formula is for drawing the line. I know Bank of America, for instance, is very heavily pro Planned Parenthood, pro-abortion.

They were very heavy in the Black Lives Matter. I can think of zero pro-Christian things that they're promoting or backing. So my question is this, where do we as Christians draw the line between saving a quarter of a percent, a half a percent and taking the stand? Another way to put it, how abhorrent and anti-Christian does an institution need to be before we go, you know, guys, you're going to save a dollar here, but I'm going to tell you what they stand for is totally unscriptural, totally against what we believe in as Christians and Americans.

What's your formula? Yeah, it's a great question, Jack. Just in all fairness, I don't recall mentioning Bank of America. We did mention three banks that I usually look at for online savings, Ally, Capital One 360 and Marcus.

And when it comes to refinancing, I would encourage you to go to bankrate.com to find the most attractive rates. But here's the thing, I think for any believer, this becomes a conviction or a conscience issue. Romans 14, let each one be fully convinced in his own mind. And I think how we approach engaging in the world, how we approach doing business, whether it's buying a particular product or service from a company that uses their corporate profits for things that perhaps you would disagree with as a believer because of your deeply held values and convictions or buying a publicly traded stock of a company that either their primary activity is something that conflicts with your values or they use their corporate profits is a decision that each person needs to make. And I think you've got a couple of options on that. In fact, we talk about three options when it comes to your investments. You can avoid companies based on conviction or conscience.

You can engage other companies in terms of engaging them as a shareholder to vote proxies and show up at the annual meeting and send emails as an owner of that particular company to shareholder relations. And you can, in fact, influence their decisions as you engage with them. And you can embrace other companies, which would be intentionally selecting an investment in a company that's either making a positive impact on the world, human flourishing that has a social impact or even a kingdom impact. And so by avoiding and embracing and engaging, I think each person needs to pray through that or each couple needs to pray through their approach to that across a whole spectrum of decisions, whether it comes to the shampoo you buy, the coffee you drink or the investments you make.

And so that's really, I think, what each person needs to decide. Now, here's the great news, Jack, is that it's it's much easier than ever before, at least on the investment side, to really see what's going on with these companies. And one of this free services we talked about recently on the program was something called Inspire Insight.

And I'd encourage you to check it out. Inspire Insight dot com. You can literally put in a company name or a ticker symbol, and you'll get a score or ranking based on all the information out there that their servers are gathering based on what kinds of things they're doing, specifically looking at them related to faith based issues and values. They look at environmental, social and government scores.

They look at faith based issues and generate a score with all the detail behind it so that you have the information and then you can decide kind of how you want to approach that. So I would just say, number one, pray through it, develop your convictions and then take advantage of all of the information that's out there so you can decide how you and your family are going to approach this with regard to the services and products you buy or the investments that you hold as well. I appreciate that, guys. Well put. Very well put.

If I could add one final tidbit, when you look at the motivation and the coordination of the other side, for instance, Chick-fil-A, how well orchestrated it is and how Satan is so crafty. I'm 65 and how incrementalism has worked over the years. What we're looking at now and accepting is, well, you know what, I don't really want to go there, but you know what?

Everybody else is. 30, 40 years ago, they would have probably been run out of business because it's so important now. So again, I appreciate your explanation. Well put. I would just add not only individually, but as a body of Christ, especially when you've got a microphone. I think it's so important to say, folks, especially you might not know how do you know the intent of every organization, every institution?

You don't. But I think it's so blatant what's going on out there. They'll attack us on every front. We take a step back. They're aggressive. We're passive.

They're winning right now. Yeah. Well, we certainly appreciate you weighing in, Jack. I think your point is well taken. And the good news is we can get the information and then decide how we want to approach it. And each one needs to make a conscious effort to do that.

Yeah. Jack, thank you very much. We appreciate that. And we appreciate the spirit in which you placed your call. Thank you very much.

Let's see. How about Akron, Ohio, when we welcome Nancy? Nancy, we're so glad you called today. How can we help? Well, thank you for taking my call.

I really appreciate it. And my husband and I are in our mid and early 70s. And we have enough money in the bank to take care of us if something happens. Our concern is, is that if one of us gets sick, that money is going to be eaten up by medical medical care. And so we would like to take a third of that money and put on an addition that we absolutely don't need. But of course, it'd be wonderful to our home. And we we just really question this.

And yet the money is just sitting there. And I would like to make a note. Ten years ago, we went into full time ministry overseas. And because of my health, we had to stop and then we went into full time ministry in Florida with Wycliffe Associates.

And again, because of my health, we had to stop. So we're sitting here and the Lord is saying, Look, I'm giving you this money, your house is paid off. You know, and before we were going to use it on ministry and that is not happening. So how do we relieve our conscience by putting on this addition?

And yet, I hate to see that money sit there. And, yep, well, it makes sense. Nancy, first of all, I'm delighted to hear how you and your husband have served the Lord so faithfully over so many years. And obviously, he's entrusted you with these resources. And I think the first question is, you know, have you prayed about it? And I assume you have and ask the Lord for wisdom.

You know, you're right. If there is one thing that potentially could erode your assets in this season of life, it's probably long term care. It's going to be either skilled care or nursing home or in home care, something like that, which is very expensive. And you're past the age where it's going to make sense for you to get a long term care insurance policy.

So you've got a couple of choices. One, you could sit on those assets or you could put it to work in the form of an addition on the home. Are you going to get all of that back?

Maybe not. But, you know, if you needed the money down the road, you certainly could sell the home and recoup at least a portion of it, if not the majority of what you put into it. So I think there's not a right or wrong answer there. I think perhaps one exercise would be to sit with a financial advisor who could really help you estimate based on the average length of stay. You know, most people need that type of care for 18 months to three years. And depending upon whether you can do that in home or you're looking for assisted living or nursing home, they can give you an idea of what that's going to cost. So at least you have all the information that you could compare against the value of your stock and bond portfolio now. And if you were to take a third out of it, of course, again, even if you decide to put that addition on, you could always sell the home.

At the end of the day, we just need to trust the Lord, make the best decisions we can, and try to be a wise and faithful steward of what he's given us. It sounds like you've done just that. So I don't have any problem with you doing this, but perhaps you visit with an advisor there in Akron. If you go to our website MoneyWiseLive.org, just click on Find a CKA.

And I'd perhaps think about spending some time with one or more of those individuals. Nancy, nice to hear from you. And we hope that information helps you. God bless you. Thanks so much.

Mundelein, Illinois. Allie, we have a little sliver of time here. Quickly, can you give us your question?

Yes, and thank you. That's all I need. So my husband has a lot of money in the 401k. He's two years from retirement.

And we're wondering what is the best low risk fund to move the money into? Yeah, are you going to be living off of this money in a couple of years when he retires? Or will this money continue to grow because you've got other income sources to fund your monthly expenses?

Both. So you will start to draw an income from this as soon as he retires? I would say a little while after.

Maybe within a year. Well, if you look at the target date funds, a couple of years from retirement, the vast majority is going to be in the bond category, fixed income options with maybe a small allocation to stocks. I would probably keep a small allocation to stocks. You know, at 65 years old, we would typically look at somewhere between 35 and 45 percent in stocks, depending upon your risk level. Remember, this money has to last you if the Lord tarries and you have good health potentially for decades, even once you retire. And so that gives you kind of a growth component, even maybe just a third of the portfolio.

But the majority of the portfolio, somewhere between 50 and 60 percent, should be in bonds and fixed income, generating the income that's more steady, less volatile and will churn out the income that you need to supplement your retirement. So that's what I would be looking for. And don't hesitate to get some counsel on this from a certified kingdom advisor in your area. God bless you, Ali. Thank you very much.

And we hope that information helps you and your husband. God bless you. And with that, we're going to have to pull the plug on it because that's what that music means in the background. You've been listening to MoneyWise Live. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thanks to Amy, Aaron, Dan and Jim for their production help. Join us again tomorrow.