How to Use Your Emergency Fund

Jumper cables are a blessing when your car won't start, but you have to know how to use them or you might be in for a shock. The same can be said for your emergency fund. As for it, you have to think of your savings as a piggy bank, not a cash cow, or you're just going to be setting yourself up for trouble. Today, Kingdom Advisors President Rob West tells you how to use it and how not to. Then it's your calls at 800-525-7000.

I'm Steve Moore. How to use your emergency fund. That's next here on MoneyWise Live. Okay, Rob, we all know that we need ideally three to six months living expenses in our emergency fund.

That's a given. So I guess the other question might be what actually constitutes an emergency? Well you're exactly right, Steve, and it's critical to know that because if you don't, well, your emergency fund won't be there when you really need it. And all we know, it's not easy to save up a proper emergency fund. You need to protect it.

So it's there to protect you. That's why we have it. So we want to define a true emergency and maybe the best way to start is by defining what isn't a wise use of that money. Okay, I'm guessing that we're not talking about a dinner out at Chick-fil-A after the radio broadcast. It's probably something more like taking a vacation, remodeling the kitchen, having to replace all the tires on your car at the same time, that kind of stuff maybe. That's on the no-no list. But in a broader sense, let's say anything that you know is coming or have some control over. You see, you shouldn't use your emergency fund for things that are expected but might be infrequent. Those would be birthday and Christmas gifts, auto registration and insurance premiums, taxes, back to school shopping. Add to that list auto maintenance, minor home repairs, even medical co-pays or clothing. You know those bills will eventually come due so you need to plan for them in your budget. Okay, so anything you can plan for, you should. Does that pretty much cover all the no-nos then?

Not by a long shot. There's another whole class of things where you shouldn't use your emergency fund. Let's call them wants or anything that isn't required for living. At times, you might want something so badly that you're tempted to tap into your emergency savings.

These might seem obvious but let's go over them anyway. The latest smartphone upgrade or you have a wedding to attend so you need new clothes, the family needs a vacation. Even if it seems like an emergency, it isn't. Those things should all be a part of your regular spending plan. And add to that some big ticket items, Steve, like a new car, a down payment on a house or even retirement. If your emergency fund has three to six months living expenses, that's a large amount of money and an even larger temptation.

If you blow all or part of it on a want, well, again, it won't be there when you have a need. You know, I have to say this, Rob, you do take the fun out of emergency fund. So what should you use your emergency savings for?

I see what you did there, by the way. There are three main categories, Steve, and I suppose it's no coincidence that all of them are found in our Mayday budget, which you can download in the resources section at MoneyWiseLive.org. Those categories are housing, food and transportation, as long as the need is unexpected, absolutely necessary and urgent. So that would be things like living expenses if you lose your job or have a severe pay cut, emergency home repairs, unplanned medical expenses and travel for something like an out of town funeral, things like that.

All right. That list of no no's is a lot longer than the list of things that you should spend your emergency money on. So let's say you suffer a suffer maybe a job loss or have a major medical expense and you have to tap into your emergency fund for that.

Any cautions there? Well, I'm glad you asked because there are three things you need to do when that situation arises. First, you want to make sure you spend as little of it as possible.

That goes without saying. An example might be you have an auto accident and need major repairs that aren't covered by insurance. Well, if you've been saving for a new car, you can use some or all of that money for repairs, minimizing the hit on your emergency fund. Second, whenever you have to use emergency savings, that should always include a serious look at your budget to find any areas you can trim. You have to reduce regular spending to make your emergency money go farther. And that will also help with the third thing, and that's to rebuild your emergency fund as quickly as possible back up to three to six months living expenses because, Steve, you never know when the next emergency will come along.

That's right. Okay. Well, we'll come back and chat some more about this, and then of course we'll take your phone calls today on anything financial that you're wondering about. 800-525-7000. Open lines available. Give us a call right now to speak with Rob West.

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What are they? How best to use them and not use them? Rob, you want to put a bow on this? Anything we should or shouldn't be doing when it comes to managing our emergency fund money? Let me just say, Steve, it's possible to go too far in the other direction and think that you should never use your emergency fund, which borders on hoarding. It's there to use when you truly need it, and you should. And if you do have to use it, don't beat yourself up.

Take comfort in knowing that you're following the advice right from God's Word. Proverbs 21-20 comes to mind, Precious oil and treasure are in the wise man's dwelling, but the foolish man devours it. So it's not foolish to use that money when you have a real emergency, and that's really what it's there for.

That's right. In fact, that's our question of the day, our Facebook question of the day. You might want to visit us there sometime, which is, how do you avoid the temptation to tap into your emergency fund? And Cindy says, don't make it so easy to access and give yourself time to evaluate if this is really an emergency. We have a separate account that we add to twice a month, automatically transferred from checking to savings. That is more of the non-emergency fund that is used for taxes, insurance, vacations, etc. Every time we get some sort of rebate or refund, we put it in this account, so rarely do we have access to the emergency fund, kind of in that realm of out of sight, out of mind. You know it's there, but you don't want it enticing you on a regular basis, right? Well, that's exactly right. And I love the idea that it's a separate account.

It really needs to be. You don't want to keep your emergency fund in your funding account, typically your checking account that you pay your bills out of every month. You want to get it out into a separate, I recommend, online savings account. That's going to ensure that, well, it's there. Just the click of a button, you could transfer it into checking, but it's not too readily accessible.

To Cindy's point, that ACH free transfer electronically typically is going to take two or three days. Well, that's not a bad thing because that's going to make sure that you're not using it on the spur of the moment. I think the other thing is, with the online savings, you can have multiple savings accounts, even for specific purposes. So in addition to your emergency fund, you might have a separate savings account for a vacation fund. You might have yet another one for that car replacement you're saving for down the road. And with those online savings accounts, you shouldn't have any fees. So there shouldn't be any monthly maintenance fees, anything like that.

And you'll earn, well today, probably about a half a percentage point a year, not much, but something on the money as it accrues interest. So that's really the approach I like to take. And I think, you know, Cindy and others we're hearing from, like Laureen, are saying the same thing.

That's right, Laureen and Sharon. And if you haven't ever visited our Facebook page on a daily basis, we post a question up there that we often talk about sometime during the radio program. If you'd like to respond there, we can't promise we'll read all your comments, but we do our best to do that. And thanks in advance. Now, one more time, if you have a question for Rob about anything financial, whether it's your vacation or buying a new car or investing or retiring or maybe giving to your local church, let's talk about those things and more when you dial 800-525-7000.

Let's begin by going to Wichita, Kansas. Hey, Sally, what's on your mind today? This is Sally. Yes, ma'am. I have a question about something that came to me in the mail about a new miracle device that comes with free monthly service for life and unlimited nationwide help with just the push of a button.

And it sounded too good to be true. And so I thought I would check and see what you're thinking on was. Yes. Well, I'm so glad you asked, Sally. I'm sorry, I didn't mean to cut you off. Were you going to add something? No, I was just going to say I didn't know whether to even call about it because I can be pretty susceptible to signing up or something. OK.

Yes, ma'am. Well, I'm glad you're pausing, because especially when you get things in the mail or worse than that, if you get an unsolicited phone call, I'd be very leery, especially these days with so many scams out there targeting seniors. You can get swept up into something that does sound really good.

And it's anything but that. I will say, though, in this case, medical alert systems are a great idea, especially if you live alone. And there are actually many of them, Sally, that don't charge a monthly fee. They typically range in price from, you know, 100 to 300 dollars. And many of them do, though, charge a monthly monitoring fee. So you have to understand what you're getting and whether or not there is going to be a monthly fee. Do you use a computer by chance?

No. OK. My son got me one and he has it most of the time because every time I use it, it seems to go wacky. Yes, I understand how that can go. We have some of those computers here in our studio ourselves. What I would recommend is that you get your son to help you do a little bit of research. Tell him you've got a project for him. And I want him to check out the one that you've received. But I want you to give him a Web site that I'd like for him to look at, because there's a Web site that the address is assistedliving.org.

Assistedliving.org. If you give him that, they actually have a Web page devoted to the best no monthly fee alert systems in varying price ranges. And if he goes on there, he could evaluate the one you've received.

But perhaps there's a better one. And I'd love for him to check that out. There's any number of other Web sites, including Consumer Reports, that he could check as well.

But the idea that you're describing is a good one. And the fact that it's saying there is no monthly fee, that's entirely possible. I think I'd like for him to do just a bit more research before you invest one hundred and fifty dollars in anything. So give him that Web site, ask him to check it out for you, because I think you will have some more peace of mind knowing that you could alert somebody if you ever had a medical problem. That's right, Sally. Great suggestion on your part and a great phone call.

I'm sure that a number of other people are probably going to check that out today just to make sure they're getting the best option available. And that Web site again, Rob, was assistedliving.org. Is that correct?

That's correct. All right. Sally, God bless you.

Thank you very much. George, Independence, Missouri. What's on your heart today, George? Hello, sir. Can you hear me? You sure can.

Loud and clear. All right, sir. My question is, I'm getting the economic impact payment for a decent sum. My question is, and I do believe, I do believe with all my heart, I am led to give some of this. I need to give a decent portion of this to a ministry. OK. My question is, too, should I give that money to a ministry?

I do believe I am. Again, I do believe the Lord is leading me to give some of that money to a ministry. And, too, I'm looking for an appropriate ministry to give to, say, like a missionary group like Lottie Moon or a natural full-on, like pro-life ministry, something like that, to give back that money in portion to the Lord's work. Is this appropriate?

Absolutely, George. I love the idea that the Lord has made it clear to you that he wants you to do some giving with these funds. And, you know, we can never outgive God, so I don't think it's ever a bad thing to respond to the leading of the Holy Spirit that we're to give away some of God's money. You know, I really believe, frankly, that, you know, one of the reasons God entrusts what he does to us is so that we can be a pipeline into God's activity. And it's not that God needs our money, it's all his, the cattle on a thousand hills, but it joins our hearts to his and allows us to experience the blessing of being involved in the various places he's at work, both in your local community and your church and to the uttermost parts of the world. How do you go about selecting that ministry?

That's a great question. We've actually got a giving plan tool on our website that you can download at no cost. If you go to MoneyWiseLive.org, click the resources section and look for the tool called Giving Plan. What it will do is help you uncover a couple of things. Number one is, what are your passions? You know, what are some of the gifts that you've given where you experience the most joy as a result of it? Where is work being done to encourage people, equip them or empower them in the name of Jesus? And really, what are the things that are on your heart?

I think as you wrestle with some of those questions, and perhaps you already have uncovered that, you mentioned pro-life and you mentioned a few other things. I think identifying those passions is a starting point. Then you want some wisdom as to where to give it and then ultimately how much.

In terms of where, there's a number of places you can go. First of all, if you know of a ministry doing great work in any one of those areas that align with your passions and God's heart, then obviously you could just make that gift. If though you're still uncertain as to what that might be, a simple call to your local church could be a great option. You mentioned mission work. Well, perhaps there's a missionary that the church actually sponsors that they know is in a need right now.

You mentioned pro-life. Maybe either at your church or in another church in your city, there's foster care ministry or other pro-life activities, even for the unborn, that they could recommend and you could contribute to. So I think connecting with your local church might be a great next step. And then if you want to do a little bit of due diligence on the ministries you're talking to, you could go to Charity Watch and they would be able to give you some more information on that. So I think those are perhaps some next steps that you could pursue as you consider where to go with this.

But I think at the end of the day, I love this idea of what you're describing. George, we appreciate your phone call today. It's nice to hear from someone who wants to be ultra generous and it sounds like you're that guy today. We wish you the very best. Thanks. Hey, we have to pause for a brief break.

You're listening to MoneyWise Live with Rob West. I'm Steve Moore. When we come back, we'll chat with Evan, Rosie, and Judy, and perhaps chat with you, 800-525-7000. Stick around.

We'll be right back. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian credit counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80% faster while honoring that debt in full. To learn how Christian credit counselors can help you, visit christiancreditcounselors.org.

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To learn how, visit moneywise.org slash ncf. Hebrews 4-12 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. God's practice never veers from his position. God never acts differently than who he is. You and I have done it a million times, but God never does that.

He always acts consistently with his character. I'm going to read you an excerpt that blessed me so much by Ken Hemphill and his book, The Names of God. Listen to this. And he's actually quoting the old Scottish theologian, Nathan Stone. But listen to this as he writes on holiness. He calls holiness the balance of all the attributes of deity. In other words, and I want you to hear this carefully, holiness is not just one of God's attributes.

This is something else I'd never really thought about. Holiness is in every attribute he's got. He has holy love. He is the holy justice. He is holy in everything he does. So it is not one attribute. It's in every attribute he's got.

So listen to this. He further argues that power without holiness would degenerate into cruelty. Omniscience without holiness would become craft. Justice without holiness would degenerate into revenge. Goodness without holiness would be passionate and intemperate fondness, doing mischief rather than accomplishing good. It is the holiness of God that constitutes the perfection of all his attributes. So his holiness, his distinctiveness is in every single attribute he has.

Does that make sense to everybody? You've been listening to A Quick Word with Beth Moore. The online experience is now available at BethMoore.org. Come join Beth for Now That Faith Has Come, a study of Galatians at BethMoore.org. See you next time for another Quick Word with Beth Moore. MoneyWiseLive, it's a place we like to think where God's timeless wisdom meets today's financial choices and decisions. And again, if we can walk you through some of those, give you some thoughts on our part, biblical thoughts and principles to our best of our ability.

Give us a call right now, 800-525-7000. Rob, we were chatting a little bit about researching ministries, determining what ministries to give to, ministries that review other ministries, who, what, how they function, and you gave us one. I believe what you gave us was ministry ... no, what did you... Well, there's a couple of good ones. Ministrywatch.com would be a great option, ECFA.org, the Evangelical Council for Financial Accountability, which both MoneyWise and Kingdom Advisors are ECFA-certified, and so it's a great way for you just to learn a little bit more about these ministries and specifically the financial accountability associated with them. But I would always look for not only ministries of great reputation with good financial strength, but also where the lion's share, the vast majority of what's coming in, is going right into their programming and ministry activities in the name of Jesus.

So, love the idea of giving generously, but we also want to be wise in our giving as well. All right, so it's ECFA, ECFA.org, or Ministrywatch.com. Those are just a couple. That's right. All righty.

Holland, Michigan. Eben, nice to have you with us today, sir. How can we help you? Hey, thanks for taking my call. I have a question about my wife has a 403b with her current employer, and then she has a 401k with the old employer, and we are wondering, should we roll it over to the 403b?

Yeah, it's a good question, Eben. The first thing you have to look at is whether or not the 403b with your wife's current employer will allow you to roll in a 401k from a previous employer. As far as the IRS is concerned, there's no problem, but not every planned administrator will accept a 401k or 403b from another administrator, and so you'll want to ask that question.

If they will, I like that idea, frankly, because then it's all in one place. You can make sure that it's being invested properly according to the options available to you, and you'd obviously want to select those investments inside the plan that really match well with your risk tolerance, which is really how much time do you have between now and retirement and how much risk are you willing to take for the reward that you're looking to receive during that period of time. As you get closer and closer to retirement, you'll want to get more and more conservative, but having everything in one place just simplifies things and makes sure that you're investing properly. If, though, they will not allow you to roll that in, then the other option, which I don't have any problem with, it's a great option, is to roll it out to a traditional IRA, an individual retirement account. You'll open the IRA, you'll then get the transfer or paperwork to do the rollover, and the check will be sent from the custodian of the 401k to the custodian of the IRA. You will never take possession of the funds, and therefore it's not a taxable event. At that point, you would need to then deploy those dollars in investments, again, that are consistent with your goals and objectives.

You could open that IRA at any institution you want, Charles Schwab or Vanguard or TD Ameritrade, anyone that made some sense to you, low cost, high quality type institutions. So hopefully that's helpful to you, but I would do one of those two options. Evan, we appreciate your phone call today. Thank you very much. Rosie, Judy, Chris, we're heading your way. Please stick around, stay with us. But we have an email here, Rob.

It's from Kathy. She says, you always talk about retirement accounts, but I was wondering if it would also be good to have some money invested in something other than a retirement account. What do you think, Rob? Well, I like stocks and bonds, that asset class for the bulk of your long-term investments, i.e. retirement savings. It's going to be the most stable, the most proven way to build wealth over a long period of time with the least amount of risk. But once you're fully funded there, you could look at other asset classes like real estate or other options as well. OK. Thank you very much, Rob.

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Here's a great reminder from the book of Hebrews, Hebrews 11, 6, and without faith it is impossible to please him, for he who comes to God must believe that he is and that he is a rewarder of those who seek him. 800-525-7000. Rosie Fort Myers, thanks for your patience today. How can we help you?

Thank you for taking my call. I am 55 years old, married, employed, me and my husband are, and I don't have in my actual employer a retirement account. I have a no 401k with $20,000. I have savings close to $200,000, and I wish to use that money.

Why? But also I would like to purchase a house here in Florida. So is there any way that I could use those savings and this 401k money towards retirement? What type of retirement plan would be good for my situation and how much money I could put in there? And the second question is can I, once I have that retirement plan, if any, can I contribute somehow from my income more money since I'm going to continue investing in it?

Yeah, yeah, very good. Rosie, are you self-employed or you work for someone and they just don't have a retirement plan, company-sponsored plan? I work for a company and they don't have a retirement plan. Okay. And does your husband work as well? Yes, he does. Okay. But he does not have access to a retirement plan either, correct? He has one, yes.

Oh, he does. Okay. And is he contributing to it? He is contributing.

Okay. What type of plan does he have access to? Is it a 401k? He has a 401k.

I don't know the amount of money, but I don't think it's much either. Okay. Do you know the percentage of his paycheck that's going into that each month? Oh, that information I don't have, I'm sorry.

Okay. Well, I would look at that because he's going to want to maximize as much as he can going into that account, even if it's more than you normally would because you could look at it as if he's contributing for you as well and you live on more of your income and put in more of his. The 401k contribution limit is $19,500 a year, but there's a catch-up provision for those age 50 and older of $6,500. So you'd be able to put in a good bit of money there, $26,000 per year that you could have available for you and your husband when you reach retirement. So you may want to look at boosting up the percentage of his income that's going in, even if it's more than you would have, just because that's a great option.

It's coming right out. You're getting a tax break for it and it's going to grow tax deferred. Now, let's look at the funds you have available and talk about the best options for you as you think about how to allocate those funds.

You mentioned you have about $20,000 in an old 401k and then you've got $100,000 in savings, is that right? Close to $200,000. Oh, close to $200,000. Okay. And how much of that $200,000 roughly do you plan to put into the home purchase? I would say $50,000 for the house and probably $100,000 for the retirement plan. Okay. So about $100,000, you'd want to put $100,000 into retirement and $100,000 into the house? That's what I'm thinking, but I want your advice. Yeah. Well, I mean, I think the next step is probably to do some retirement planning to figure out what you need. You said that you're starting late. Why is that? Did I see some notes here from my producer that you just came to the U.S. 10 years ago, is that right?

Yeah, about 11 years ago. And I had my retirement plan in my original country, but here I couldn't build up much money. Okay. So as long as you've been working and contributing to Social Security for at least 10 years, you'll be eligible for Social Security benefits. And obviously, as you continue to work, you know, those higher earnings years will replace the lower over time. So that will make up a portion of it once you reach that point. Beyond that, though, you need to have a goal for what you're trying to save to supplement the rest of the income you'll need in retirement whenever that point comes. And that's going to really help you understand what you're ultimately trying to save in any type of retirement account, be it a new account you have access to or the old 401K or your husband's 401K. So I think doing some retirement planning with someone there in Fort Myers, Rosie, would be a great next step for you. And you could connect with a certified kingdom advisor at our website, MoneyWiseLive.org.

It's always good to know what your target is so then you can make a plan to get there. Now, I would look at rolling that 401K over to an IRA, an individual retirement account that's a non-taxable event. And then you and your husband could start contributing $7,000 a year each to both that IRA, the one in your name, that's what you would contribute to, and then a separate traditional IRA that he would open perhaps to contribute as well. So $7,000 a year and you could still contribute for 2020 until you file your 2020 tax return. So you can actually put in $14,000 this year, $7,000 for 2020, $7,000 for 2021, and then you can each do that.

So a total of $28,000 would go in. Beyond that, what you may want to look at is maximizing the contribution to his 401K and maybe living on some of the savings that you have to the extent you're putting in more than you have the ability to and that's going to impact your ability to cover your expenses. So if you put in as much as you possibly can each year into his 401K and that pulls his take-home pay down such that you can't cover your budget, then you'd supplement that with the cash you already have that you already paid tax on. Does that make sense to you?

It does make sense, yes. So I think between his 401K and the two IRAs, those are going to be your best options with you not being a self-employed person. If you wanted to do something beyond that and get a tax advantage situation, I would talk to that financial planner I recommended about perhaps an insurance product because an annuity would probably be the only other way that you could get some money working for you on a tax advantage basis if you wanted to use a big chunk of this savings that you have. But I think between all of those, you can get a good bit of money working for you and you all still have 10 years or so if you're healthy and the Lord tarries where you can contribute to these plans and continue to save over time so you'll have quite a nest egg when you reach that point. Rosie, thank you very much for your phone call today. We wish you guys the best. Continuing on, Judy, you're our next caller today. What's on your mind? Yes, sir. Thank you. I have a question for you that's a little different.

I want to know how you feel about someone who is, I'm 76 years old. I'm living in an apartment and I would like to purchase a house. Yeah, well there's the nonfinancial and the financial side.

Let's start with the nonfinancial. Are you okay with the overhead, the upkeep, you know, whether it's the lawn or the maintenance that you would have to take on in a home versus an apartment. Have you thought through that? Yes, sir. I have mainly because the house, my husband passed away.

I sold our house because there were too many stairs and moved to an apartment that I've had to do that because he was 100% disabled. So I've had to arrange to have other people do things, you know, for us in that way. Yeah. So you have thought through that. All right. And then Judy, how much do you have available to put toward a down payment on this purchase? Sir, I was actually thinking about going VA, no down.

VA, 100% financing. Okay, let's do this. We're up against a heartbreak, which means we've got to pause for just a moment. But when we come back, I'll give you my thoughts on where we go from here.

Okay. We'll come back and chat some more with Judy about possibly moving from an apartment into a house and take your call as well. Perhaps 800-525-7000. Buying a home is the largest, most nerve wracking purchase most of us ever make. It doesn't help that you're entering a maze of unfamiliar words and confusing options that can leave you intimidated, frustrated and afraid you've been taken advantage of navigating the mortgage maze by Dale Vermilion helps you clear up the confusion, unrack your nerves and make the best mortgage decisions possible with confidence. Navigating the mortgage maze available when you click the store button at MoneyWiseLive.org. Siri, I need some help.

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On this, your favorite radio station. Just before the break, we were chatting with Judy, who's in Georgia. She's 76, and she's wondering if maybe she could move from her apartment into a home.

And Rob, what was our advice there? Yeah, Judy, so you're looking at potentially a VA loan, 100% financing. I guess the first question is just the approval process. Do you have documented income to show, or would you be showing retirement income? Yes, sir, I have his VA disability and my Social Security income.

Okay, all right. Yeah, and so that's certainly possible as they evaluate your readiness for a loan of this type. And, you know, there's not anything that prohibits you from taking out a mortgage at age 76. I think the question is just, you know, going into a purchase like that with 100% financing, recognizing the market has been doing quite well. The real estate market in most parts of the country has just been really moving higher considerably over the last decade or more.

And so, you know, arguably you're buying near the top. If we were to hit a recession, could we see a dip in home prices that would cause you to perhaps be upside down, meaning you owe more on the mortgage than the home is worth? Well, yeah, that's entirely possible, although if that's a home you plan to stay in for the, you know, rest of your life based on what you know today, then that may not be as much of a concern. But I never like going into a home without having some sort of a down payment, both to indicate that you have the financial ability to do it and to give you a bit of cushion so that if something were to happen in terms of home prices moving down, you don't find yourself stuck in something that can't be sold because you owe more than it's worth. I think beyond that, it's really a budget question. You know, if they will approve you for the loan and they likely will, you know, does it fit into your budget? And knowing where apartment prices are, rentals these days being very expensive and interest rates being so low, it could be that you'd in fact have the same or less in terms of the monthly outgo. But you'd obviously need to understand that and make sure that it fits well within your budget so you don't create some unnecessary strain.

So as long as you've considered the upkeep, you've considered your ability to qualify for the loan, you consider the fact that you're pushing it right up to the edge and therefore, you know, it could at some point depreciate if we hit a recession and therefore you'd be upside down for a period of time and it fits in the budget, then I'm not inherently against it if it's where you feel like the Lord is leading. Does all that make sense, though? Oh, it certainly does. Yes, sir. Okay. Yes, I appreciate that living here.

These apartments for a small one bedroom are $1,200 a month and certainly I can find something for that. Yes, ma'am, I suspect you can. So we appreciate you calling and listening. God bless you in the days ahead. Thanks, Judy. And if you get further down the road and you still have another question, feel free to give us a call back. Indianapolis.

Hello, Chris. You have a question about owning some gold, huh? Yes, sir. I really know nothing about it and thank you so much for taking my call. I appreciate it.

Happy to. I'm retired with just a modest IRA and, you know, it kind of feels like my money is in cyberspace, you know, and I don't actually physically possess it. But we see a lot of advertising for purchasing gold and there's different ways to purchase it and then actually physically owning it. Do you see any merit to that? You know, I'm not a big proponent of that, Chris.

It's not that I'm entirely against it. I just would rather you have money that's in a more liquid form. And, you know, there are some disadvantages to owning physical gold. Obviously, the risk of loss or theft, you have to secure it and make sure that you understand the risks associated with that. There's the insurance costs. If you keep physical gold in your home or business, you may want to insure it.

And that's obviously an added expense. There's obviously the premiums that you would pay both to buy and sell. So dealers typically charge a premium over the spot price of the commodity or precious metal to sell or buy most forms of gold. And so you have to factor that in when you're considering the transaction. So I think for that reason and because of the liquidity of it, you know, I prefer just historically speaking, based on the performance of a well-diversified stock and bond portfolio over the last hundred years, I prefer that approach where perhaps as a hedge against inflation and a falling dollar, you do have an allocation to gold.

But a typical allocation for the average investor is probably no more than 5 percent. But you could do that in a way that's actually tied to the underlying movement of the price of the gold without taking physical possession. There's plenty of exchange traded funds that move in sync with the price movements of gold. And so you benefit as gold rises or falls. But again, you don't have to pay the premiums and secure it and insure it and, you know, take possession of it in your home. So again, am I against it? No, but it's not my first choice.

I'd rather see you go a different direction. I will also say in these periods of unrest and uncertainty, especially going through the pandemic we've just experienced, you're always going to see a huge rise in the number of solicitations for buying and selling gold. Just because this is what people flee to in times in periods of uncertainty doesn't mean it's any better of an investment in terms of the overall performance and the volatility, you know, even though we're hearing more about it right now. Rob, if you wanted to purchase gold but didn't want to take possession of it, where would you go?

How would you find that? Well, the easiest way is to buy an exchange traded fund that tracks the price of gold. So an example would be the ETF GLD, which basically just moves in sync with the price of gold. There is gold behind it that the fund company owns, but you don't actually take any physical possession. You're essentially just benefiting from the rise and the fall of the precious metal as it moves around.

But it's trading like a stock so you can buy or sell it as long as the markets open any day of the week. OK. Chris, we appreciate your phone call today. We wish you the best as you mull through what you want to do in that regard. Thanks.

Cape Coral, Florida. Hello, Keith. You have a question for Rob. Yes, sir.

A one quick question. When a person retires and their only income is Social Security, are they supposed to tithe on that? Yeah, Keith, I appreciate that question. You know, we're you know, we believe that we should be givers, that the Lord modeled that as the ultimate giver when he gave us his son who paid the penalty for our sins on the cross. And so when we give, I like to say it calibrates our hearts to his heart.

So then we're asked the question, OK, how do we give? Well, we know that the tithe was under the law of Moses. We're now under the law of Christ. And so I think systematically and proportionately is what we see in the New Testament. And I would say that systematic giving should start with the local church and then we give beyond that sacrificially to other ministries and causes that are on God's heart that align with our passions. Now, what about Social Security? Well, the tithe, if you're following the principle of the tithe, was based on the increase. And so I would say as the Lord provides increase, then we give systematically and proportionately. You might say, well, a portion of that Social Security that I'm receiving was me paying into the system.

And I would say you're absolutely right. But you're going to have a difficult time figuring out what portion was yours and what portion was actually the gain in that money over a period of time that's resulted in these payments to you for the rest of your life. My approach is just to say the Bible doesn't make special provisions that exempt those on fixed incomes or government subsidies. It simply says, honor the Lord with your possessions and with the first produce of your entire harvest. That comes from King Solomon, Proverbs 3, 9. So for me, I would look at it as God's provision, your increase, and then I would give as the Lord leads. But at the end of the day, it's the Lord's money and he doesn't need it.

What he wants is your heart. And so I would ask you to go to your knees and just ask the Lord, what would you have me to do? And then follow his lead. What if you go to your knees, ask God what to do when he says, call Rob? Then what? Well, then I would refer you to the answer I just gave for the last two minutes. Hey, God bless you, Keith. Thanks very much. Great question. Nick in West Lafayette, Indiana, you're our final caller today. What's on your mind?

Hi, thanks for taking my call. Yeah, my question is around the change in the presidency. Typically, you have a change from one party to another party. And I've heard from sources that it doesn't really impact the stock market that much.

But I feel like the way in which each party, you know, basically puts policies in place, they're very different from one another. So I was wondering what your thought is on how the stock market is not changing that much and it continues to increase over time. Yeah, well, what we know, Nick, and you bring up a great point is that the market is cyclical, meaning that it always moves in cycles. And those cycles tend to run even though we're beyond that in this one in 10 year increments. And so every 10 year period has its periods of unrest. You know, we're obviously in the midst of an unusual run one right now, but it seems like that's they're always that way. And we have periods of boom bull markets, and we have periods of bust and bear markets and those bear markets can be short lived like the the pandemic we experienced that one was a very fast bear market, the fastest in history, or they can be when they're more systemic in nature, much longer two or three years.

But at least historically speaking, they always rebound and move to higher ground. And so trying to predict whether this time is different and should I try to time the market as opposed to just staying with a long term, well diversified investment strategy is just not a winning proposition. I would say as long as you're invested according to biblical principles, longtime horizon, steady plotter, you have the right risk tolerance, you have the right investment allocation that syncs with your goals and objectives, I would stay the course despite a change in the presidency despite the change in the Congress. And in fact, those that I look to think that we're going to see GDP increase considerably this year, and actually the stock market is going to do quite well. Who knows?

That's why we take the long view though. Great question, Nick. God bless you, buddy. Thanks very much for your phone call today. MoneyWise Live. This program is a partnership between Moody Radio and MoneyWise Media. Thanks to our technical crew, Dan, Rich, Deb, and the talented Gabby T. Have a great remainder of your day. Join us again tomorrow.