The Nuts and Bolts of Savings

Go to the ant, O Sluggard. Consider her ways and be wise.

Without having any chief officer or ruler, she prepares her bread in summer and gathers her food in the harvest. Proverbs 6 tells us it doesn't take a genius to save, yet so many people have trouble even getting started and they end up living paycheck to paycheck. So today, Kingdom Advisors President Rob West tells us how to break that cycle. And it's your calls and anything financial at 800-525-7000.

800-525-7000. I'm Steve Moore. The nuts and bolts of saving. That's next right here on MoneyWise Live. Well Rob, we talk about saving all the time, so why devote an entire opening segment to this topic? Well, I think it's good to have something of a primer on saving once in a while. We always have new listeners tuning in and some folks might benefit from a refresher course. Yeah, and probably we lose listeners on a daily basis, don't you think?

One of us says something untoward and that's it, they're gone. Yeah, you probably do cause that to happen sometimes. Okay, just kidding around. Alright, now everyone knows that saving is essentially not spending, but you want to break that down into some nuts and bolts, right?

Right. You know, first off, you have to understand that another way to define saving is living on less than you earn. Having money left over at the end of the month that you can then put to work for you either in a savings account or an investment account like a retirement account. And that's absolutely vital to your financial well-being. Once you do it consistently, it prevents you from going into debt and opens up all kinds of possibilities.

Okay. Alright, so where would you like to start? Well, by gathering some data, you can't tell your money where to go if you don't know where it's going already. So you have to track all of your spending for at least a month, write down every penny you spend in a notebook or better yet, download the new MoneyWise app in your app store. Just search for MoneyWise Biblical Finance. You can log your purchases there.

They'll even download automatically. You'll probably be amazed to find out where your money is actually going. Discovering how much you actually spend on groceries and eating out is often a shock.

That's for sure. Okay, so once you know where your money is going, then what? Well, then you decide where you want it to go. And that means drawing up a spending plan that covers all of your monthly obligations and assigns a set amount to each category or envelope where you have some control like groceries and entertainment. Again, the MoneyWise app can easily help you do that based on the tried and true envelope system. The idea is to set up a spending plan that leaves money left over at the end of the month so you can build up, yep, you guessed it, an emergency fund for unplanned expenses like replacing an appliance or car repairs or worse, a job loss, which has been a reality in the past year for many Americans. Eventually, Steve, you want to have that three to six months living expenses saved and there are a few tricks to help you get started.

Alright, such as? Well, now that you have that budget in place and you know how much you should have left over at the end of the month, go ahead and put that amount into savings. This is sometimes called paying yourself first. This will help you psychologically to stick to the budget. If you think the money's already gone, it'll help you resist the temptation to spend it. Set it up with your bank to automatically move the money from checking to savings at the beginning of every month. I got it out of sight, out of mind. Good.

Alright, what's next? Well, one trick that a lot of savvy savers have picked up on is to pay as they go. They use only cash checks or debit cards to pay for their regular expenses, no credit cards. This would be for things like food, clothing, utilities. Again, the MoneyWise app uses the envelope system to help you do that.

Yeah, this is all great, but I know that some folks might be thinking, this isn't for me. I never have money left over for saving. Well, there are things you can do, whether you have money left over or not, and they'll help you either way by maximizing the margin you're looking for. Make a list before going grocery shopping and stick to it. Never shop as entertainment.

That leads to impulse buying, i.e. stay away from the malls. Look for other ways to save. Lower that thermostat in winter.

Raise it in the summer. Pack a lunch instead of eating out, especially if you're still going into the office every day. Bundle your trips to save on gas. Those are just a few ideas.

You can, of course, Google a lot more. You can also contact one of our MoneyWise coaches. As you know, Steve, they're well-trained, godly folks who will help you set up a realistic spending plan with money left over every month, and they'll encourage you along the way. You can find them by going to our website, MoneyWiseLive.org. Just click on Connect with a Coach.

I think right now there's about a two-week wait to get with a coach, but once you do, they'll walk with you weekly through a virtual means, probably video chat, and help you get everything set up. Amen. Great information, Rob.

Thanks. Your call is next on Anything Financial. Open lines at 800-525-7000. Jot it down. Give us a call.

800-525-7000. We'll be right back. 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. Investing is more than just returns.

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You'll find it all in Master Your Money by Ron Blue, available when you click the store button at moneywiselive.org. Hey, it's a great day. I hope it's a great day, and the sun is shining wherever you are. Of course, the S-O-N is always shining, and we're blessed and honored to have you with us today as we talk about his biblical principles of managing your money.

Our phone number again is 800-525-7000. Rob, as of a couple of hours ago, we have a brand new president. What does that mean to the country? And frankly, some people are probably wondering right now, what will that do to the stock market today or the remainder of the week?

Any thoughts? Well, no one knows where the market's going in the short term, of course, you know, whether that's a day, a couple of days, a week, or even six months. But the bottom line is, I think most economists I'm talking to, Steve, think that we're going to see a pretty healthy rise in GDP this year, as we hopefully continue the rebound out of the pandemic, that will post positive gains for the broad stock market. You know, the US federal debt is going to continue to rise, it's going to move beyond 100% of GDP, we're going to continue on essentially a Cold War with China.

There's obviously still a lot of polarization in this country. But, you know, I think most folks believe just based on the sound state of the economy, despite some longer term trends that we're going to need to address, namely the debt, and others that we're going to see. Well, I talked to Bob Dole recently, who manages billions, he's a good friend, loves the Lord and one of the most trusted voices on Wall Street, he feels like US real gross domestic product will increase at its fastest pace in 20 years. Now, despite that, and despite low inflation, he's still only expecting modest gains in the market. So the, you know, although we'll have a new high, probably for the 12th consecutive year, which would be a big deal, we will probably not have the types of gains we saw last year, given the even the strong earnings growth that we'll see. So obviously, these are, you know, interesting times. And clearly, we do have a new administration. And we'll see what that brings. But I think all for all intents and purposes, should be a pretty good year on the stock market. The key though, Steve is not trying to predict where the market's going in the short term, we always want to look at the long view when it comes to investing, well diversified, invested for the right reasons, with the right time horizon, not trying to pick the winners and losers, tops and bottoms. So you know, that's the biblical approach.

And I think that's the approach that wins. Okay, thank you very much, Rob. All right, Leslie. Well, for the last time for the next couple of minutes, anyway, here's our phone number 800-525-7000. Give us a call right now out to Colorado. Corey, thank you for your patience, sir. What's on your mind?

Thanks for having me on the show. I have a question about investments in the near future and for long term investments as well. Everybody's been talking about silver. And I'd like to start buying silver.

I started buying small amounts, but I was thinking about buying somewhere around 40% of my savings in silver, because it's a hard asset. Yeah. Let me ask you, Corey, when you said 40% of your savings, what percentage of that of your total investable assets?

That'd be about 75%. Wow. Okay. Yeah.

You know, I'm just not a big fan of that approach. I realize there's a lot of folks out there that say, given kind of where we are in the economic cycle, given the incredible rise over the last decade, in particular, and perhaps even a bit more than that in the US national debt, given some of the other factors going on that, you know, were due for a major correction or worse. And therefore, the hard assets, the precious metals will perform very well, you know, give you some stability in the midst of uncertainty.

You know, obviously, they're a hedge against a falling dollar and a hedge against inflation. Despite all of that, you know, if you just look at silver, you know, it's $25.50 an ounce today. A couple of weeks ago, it was $27.50.

Back in the summer, it was near $30. So it's certainly going down. Now, you could argue you're buying it at a discount. I just don't think given the volatility of the precious metals, the fact that they don't have the long term growth trends, as well as a well diversified portfolio does, that they're okay to own. And I'd prefer to do it in in a stock form and ETF rather than taking physical possession. But I'm just a fan of not putting more than 5% of my money there. Just because when I look at everything historically, at least, it just says that it's not as good of an investment in terms of performance, and you're going to have more volatility. You also have with the physical possession, the markup on the buying and selling using a dealer, you've got to store it and secure it and insure it and all of those things. Now, you may say, Rob, I hear you.

And this is just the direction I feel like I need to go or I have other reasons. And, you know, certainly as the steward of God's money, you've got to make those decisions. It's just for me, based on everything I've seen in my career and the studies I've done, I just don't like this in terms of overweighting at this level in the precious metals for performance. Rob, would you feel the same way about putting 75% of what you have to invest in any one thing? I mean, even if you invest it in one great stock, there's not much diversification going on. Well, right. And you're violating Ecclesiastes when you do that, you know, which is this principle of diversification. You know, everything that good that Wall Street has to offer has its roots in biblical truth, including the principle of diversification.

And so, yeah, overweighting in your own company's stock or precious metals or the latest high flying tech stock, I think is not going to pay off in the long run. All righty. Lake Worth, Texas. Cory, thank you for that call.

Lake Worth, Florida, rather. Abe, what's on your mind? Welcome to MoneyWise Live. Good afternoon. Nice talking to you. Thank you, sir.

You too. My question is that I'm reaching 80 and I'm more in stocks and I have whatever, you know, all my whatever I have is all in stocks with the stockbroker. Question is, should I stay with the stocks or should I go into a fixed 50? I had a fixed news. I had an annuity. I hit the wrong one. So I hit bottom on that one. So I'm kind of skeptical if I should do that or not. Yeah.

Well, Abe, I appreciate that question. You know, I'm not a big fan of annuities with a few exceptions. They tend to be expensive, complicated. And, you know, you can often accomplish something similar without locking up your money and without the fees and commissions that go along with it. You know, obviously, if you want to transfer the risk that you're taking by investing yourself or hiring somebody to do that for you and you want to transfer that risk to an insurance company, well, an annuity will certainly accomplish that. But, you know, if you're comfortable having a properly diversified investment portfolio that's consistent with your goals and objectives, I like the fact that you can see the long-term performance, you're not paying the same costs, and you still have access to your money. In terms of what the right investment allocation is for you, it's going to be largely dependent upon your age.

As you said, you're nearly 80. And the income you're trying to generate or are needing to generate from this portfolio. And then really the ultimate purpose. Is it money that you just kind of parked on the side in case you need it because you have major medical expenses? Is it money you're planning to give away or pass on to the next generation as an inheritance?

Let's talk about what it is. So, first of all, if you don't mind me asking, how much do you have invested? And then tell me whether you're living on any portion of it. I'm invested with my staff is about $325 now.

And that's mostly our savings, the major part. I do have a little bit for emergency, maybe around $40,000 for emergency. We're working, so I have a part-time, so I don't take too much from the IRAs and all that. I only take what the minimum is required.

Okay, very good. And so you said you're still working. You've got about $40,000 in emergency savings in addition to the roughly $325,000 in stocks. What are you spending on a monthly basis? If you total all of your expenses each month, give me a rough number. Oh, that's a tough one. I think we spend more than we should.

I don't know, probably around $3,500 around there. Okay. Well, I'd love for you to take the time, Abe, to actually begin to track that. Whether or not you get into a system where you're using the envelope system and tracking the flow of money every month from here on out, you at least need to settle into a budget that begins with what you're actually spending so you know what that monthly need is. And it gives you a way to evaluate whether you want to make any changes. You actually volunteered that maybe we're spending too much. So you may identify some areas where you didn't realize you were spending what you are and you'd want to cut back. But let's say it's $4,000.

Let's say you're missing a few things. Six months of that would be $24,000. So you almost have a year's worth of savings there in your emergency reserves, which is great because that way you wouldn't have to rely on any of the stocks if you needed to supplement. Now, typically what we would say is you'd use the rule of 100 because people are living longer.

That rule has moved to 110. But you take 110, you subtract your age, and that's the percent of your portfolio you would typically have in stocks. So 110 minus 80 means you'd have 30% of your portfolio in stocks, and then you'd have the balance 70% in some sort of fixed income. Now, because you're continuing to work and you don't need the money right now, you know, you could get a little bit more aggressive, but I probably wouldn't have more than 40%.

Because if you stopped working for any reason, you don't want to have to sell stocks at a loss if you're now going to have to start taking more than that required minimum distribution. So I'd probably talk to your investment professional about what it would look like to move to a more conservative portfolio. We're 12 years into a bull market, and so this is probably a good time for you to get a little bit more conservative. So in the bear market that will come eventually, you don't see a significant fall. This is MoneyWise Live.

We'll be right back after this. You probably have a strategy for your finances, your career, even your retirement. But do you have a strategy for your giving? At the National Christian Foundation, we can help you create a giving strategy to inspire your family, maximize your resources and leave a lasting legacy of faith.

To learn how visit MoneyWise.org slash ncf. 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. Splitting heirs will foster a real appreciation for the precious resources that God has entrusted to you.

And it's available when you click the store button at MoneyWiseLive.org. 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. What is it that makes us different? Now I'm not talking about weird. We can be very weird and we cannot blame it on God. Most of my weirdness has nothing to do with God. Now the fact that I put scriptures in Amanda's pinata at her rehearsal dinner, okay, that may have something to do with God.

But the fact that I make chili without any meat in it has nothing to do whatsoever with God. It's just plain weird. Being raised in Arkansas and of course, everyone in Arkansas. It's the one thing about having just one team in the state.

It causes a lot of unity. Everybody there is a Razorback fan. It just, it just is what it is.

I don't know any other way to tell you. It just rocks like it can rock a stadium like nothing else because everybody from the entire state is for one team really is an incredible thing. But we would wear plastic hogs on our head and we would be proud of it. That's the, as I think back to that, that's the part that bothers me that we all you could go to and there I can still just feel exactly how they would feel because of course we had them at home and we would even be known to play in them and there's, there's something wrong with that and that's not God's fault. It's not God's fault that Arkansans wear plastic red hog heads on their head. That is not God's fault.

That's just plain weird. You've been listening to Beth Moore with a quick word. Beth would love for you to tune in each Tuesday night for Bible study. Classes begin at 930 PM Eastern, 830 Central on TVN.

Maybe you had to miss a Tuesday. No problem. Go to Bethmoor.org. That's Bethmoor.org. You can watch the latest episode of our television program and more. Hey, if you have a moment, you might want to check us out online. It's MoneyWiseLive.org. That's our primary home website. You'll find lots of great information, things you can download for free, past radio programs, audio, the audio, and also actual listings of radio archives, how to find a certified kingdom advisor or a CKA in your area, and also how to connect with a budget coach.

All of that and much more when you visit us online at MoneyWiseLive.org. West Michigan, Lori, we appreciate you being there today and how can we help you? Thank you for taking my call. Certainly. And thank you for all the biblical advice that you share with you on your program.

I have a couple of questions. One is very brief, but first of all, regarding some investment property and the best way to pay for renovations. My husband and I own both this property, which was inherited, and our private residence, Frain Clear. We don't have any other debt. We do have an emergency fund. And so this rental property is part of our long-term retirement plan, and so we'll be setting up an LLC on it. The rental needs a lot of renovation, and we're wondering the best way to go about financing that.

If we should take a home equity loan from our home or from the value of that property, or if there is another way that's recommended. Yeah, it's a great question. So you said both homes you own free and clear, is that right? Correct.

Yeah. And in terms of the renovations you're planning to do to the rental property specifically, what do you expect that will cost? I do not have an exact figure, but we're talking, we've basically gutted it. So it's going to be new kitchen, walls, drywall. My husband does a lot of the work, so that's going to help instead of having it all contracted out. Could it be $100,000 or more or no?

I wouldn't say that, maybe 60, I don't know. The thing to consider is obviously taking out either a mortgage on your current property or a home equity loan, which I would rather see you do than a line of credit because we can lock in the low interest rate, is on your primary residence you're going to get a better interest rate, better terms. There's obviously a lot more requirements on a rental property in terms of what you need to qualify, although given that you own it free and clear you shouldn't have much trouble. But you're generally going to see higher interest rates than for a primary home if you were to take it against the rental property. However, if you're looking at this as a business and I think that's what it is and you've formed an LLC and you want to separate your personal financial affairs from the business and you're going to cash flow the debt service out of the business, meaning you're planning to rent it out eventually and you want to rent it out for enough to cover the repayment of the debt and put a little aside for maintenance and cover the taxes and the utilities and all of that, the marketing, when you need to replace a tenant and you want to keep all of that separate from your financial life, I mean I kind of like that because it keeps everything separate and then as you have over time profits or you have income being thrown off over and above all the expenses including the debt service, then you can pay yourself out of that and recognize some of that income. But if you're just looking for the most cost effective way to do it, depending on your reserves that you have and depending upon what your margin is over and above your expenses to cover the debt service and whether or not you feel like it's going to put you, your personal financial affairs in any kind of jeopardy, clearly the most inexpensive way to do it would be to do it against your primary residence.

But I would probably compare the two rates and if you're not seeing a big difference just because of the assets that you have, I'd go ahead and keep everything separate, put it against the rental property and just really focus in on that being a business and running your personal financial affairs completely separate. Stay on the line, let's talk a bit more off the air. Thank you, Laurie. Ryan, we're heading in your direction.

Stay with us. This is MoneyWise Live. When it comes to investing guidance, you want advice grounded in God's word. That's the approach offered by SoundMind Investing. SMI has helped tens of thousands of Christians acquire investing wisdom and confidence.

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What's up? I have questions about planning for retirement, long-term care insurance. I don't know where to start. It sounds like you need the MoneyWise app. It's a free app that will help you find those answers and more.

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Learn more at app.moneywise.org. With SRN News, I'm John Scott. Joe Biden has taken the helm as the 46th President of the United States. He used his inaugural address to urge people to come together.

Biden declared that democracy has prevailed as he took the oath at the U.S. Capitol that had been battered by an insurrectionist siege just two weeks earlier. They wish to inoculate Americans against the coronavirus hitting a roadblock. A number of states reporting they are running out of vaccine.

People who managed to get appointments for the first dose are seeing them canceled. From Consumer News, U.S. safety regulators investigating complaints that a Ford pickup truck tailgate recall did not fix the problem. Ford recalled the F-250, F-350 and F-450 trucks in 2019 because of those power tailgates opening while being driven. Stocks finished sharply higher. The Dow picked up 257 points today.

The NASDAQ was up 260. This is SRN News. Hey who are those guys and why do they allow them on the radio? Well he's Rob West. I'm Steve Moore and we're here to help you work through your money, your finances as the Bible gives us principles to do so and you'd be fascinated if you're new to this. Rob over what 2,300 verses in the Bible that pertain to money and finance and how to manage it and use it and give it and deposit it and invest it and all the rest right?

All the rest. Yeah the back story on that is the former host of this program Howard Dayton actually in a men's Bible study took that project on over several months. They literally went through the Bible. They cut out with scissor every passage that dealt with money, possessions, net worth, assets. They stacked them up by category all over the conference room table and 2,300 plus verses later they had their number. I never cut up the Bible with scissors.

I understand where they were going with that but I'm always afraid lightning might strike or something like that but thankfully it did not and yeah they found over 2,300 verses and it's still very very applicable today. Again our phone number 800-525-7000. Ed is in Crete, Illinois. Is it Crete? Am I pronouncing that correctly Ed? Yes sir, it's Crete, Illinois. Thank you very much for taking my call. You bet sir. What's on your mind?

Okay. My wife and I have had a chance to we like to move to Indiana but marketing in Indiana is it goes homes that go very fast. So how bad of an idea is we're able to qualify to purchase this home on a 30-year note with giving it more than 20% down and if we purchase this home and then we sell our home, our current home, can we put that money towards a principal or is that going to be a tax-wise is that going to be a problem? No, it shouldn't be a problem at all as long as you've lived in your current home two out of the last five years if you're married you'll have half a million dollars worth of gains not just the selling price, the actual profit that you take out of the home. You can have half a million dollars and pay no capital gains on that and then you could absolutely take that and pay off in full if you can that mortgage on the second property. You just have to recognize that potentially and I don't know the rest of your financial story but depending on how much you have in the way of reserves and how much pressure that new mortgage with 80% of the home's value as a new mortgage, the pressure that that payment is going to put on the family budget and what if your primary current home doesn't sell as quickly as you planned and I just don't want you to get into trouble but if you say, no, we've got it covered, no problem, we've thought through that and even if it took six months or a year, Lord willing it won't, we have no issue then yeah, you could certainly proceed with that and then like I say, you take the profit, the proceeds out of this current home that you're selling and just wipe out that mortgage and you know, you would then be free and clear at that point. Could I ask you one more question?

Sure. Okay, if you sell up now, this is a rental property, if you sell a rental property to pay off another rental property, so you're free and clear of having a mortgage, how is that tax-wise too? Well, you would pay capital gains on the profits. You know, most folks that's going to be 15% but it could be as high as 20% if it's a long-term capital gain depending on your filing status and your taxable income but you would have a capital gain that you would pay on the profit which again, you would have to calculate exactly what that is, the selling price minus the original purchase price minus the cost of selling it minus any fixed improvements that stay with the property, you'll come up with your gain and then you'd pay the capital gains against that and then whatever is left over after the taxes are paid at that point, you would just take that money and use it to pay off the other rental property.

Matt, does that work for you? Well, but that means that that money that you had in one property, you cannot just move it to the other property by paying it off. No, you can roll it into another rental property that you would purchase a similar property and defer the gain but I don't believe and that's a good question, you probably want to check with your tax preparer on that with a 1031 exchange because you already own the property, you're not acquiring a new rental property, is that right? Right.

That's the only question I have. So I would talk to a tax preparer to ask that question whether you could still roll that into the other rental property as opposed to going out and acquiring a new property. There could be a way that you could essentially kick the can down the road on that paying that capital gain by rolling it in but given that you already own it, I just want to make sure that's the case.

I'm not entirely sure right now so I would check with a tax professional on that specifically. Thank you very much. Tina, we're heading in your direction. Please stay with us and Ryan, I think we lost you friend. If you're still out there and want to ask Rob a question about automobiles, feel free to give us a call back or anyone else 800-525-7000. One more before the break, Lakeland Florida and Joel, what's your housing situation there?

How can we help you? Hi, so me and my wife just bought a new house just before Christmas and interest rates right now are really low and everything that everybody's been telling us is your first year put as much money as you can down on the principal because that'll cut down on your mortgage. But I was just wondering, would it be smart to take that money you would put down on the principal and put it into another retirement with an interest rate that is collecting an interest rate higher than what would be on our house? So in theory, you would be making money instead of just paying down the principal. Exactly. Yeah, so give me a few numbers here, Joel.

I love this question and I think I understand where you're going with it. But what did you pay for the house? $1.848.

Okay. And what is your mortgage down? It would be $1,008 a month. How much do you owe on the mortgage?

Oh, $1.79, like $9,000, I think. Okay. All right. So you essentially put 10% down. Is that right?

Or no, less than that. Yeah. We put 3% down.

3% down. Yeah. Okay.

So yeah, $1.79. And how much do you currently have going into retirement accounts? What percent of your income do you know? Well, I'm a firefighter. Okay.

Well, I'm a firefighter. So 10% of all my paychecks go into our retirement with the department. But I was wondering if it would be smart to open up another retirement. Well, it's not bad to open up for another retirement, but put that money towards the people into retirement that could collect more. Yeah.

No, it makes a lot of sense. What do you have left over? What's your margin every month after the bills are paid, including the 10% that's currently going into your retirement account?

How much do you have left over that you could either put toward additional long-term savings or against the principal? Man, I wish I knew that answer. Yeah. Okay.

Well, here's the thing. I love the fact that you've already got 10% going into retirement. I would love for you to have a spending plan so you know exactly what you have coming in and going out and you can make real decisions about areas you need to cut back to free up more margin. Your first priority is three to six months emergency funds. You may already have that.

You can ask about it. If you don't, I'd take every bit of that margin on a monthly basis and put it toward that. If you have credit cards, go after that next. Then I do like you going after the house just until it gets below 20% loan to value to get rid of the PMI, but at that point I'd put it into additional long-term savings.

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How to Grow, a new book by Daryl Dash, available at moodypublishers.org. Here's a somewhat startling verse about generosity of all things, and if I give all my possessions to feed the poor, and if I deliver my body to be burned but do not have love, it profits me nothing. 1 Corinthians 13.3. Maybe someday we can come back and camp out on that verse a little bit, Rob, and pick it apart and see what it really says to us.

Let's go to Florida or stay in Florida. Hi, Tina. What's your question for Rob West? Hi, thank you for taking my call. Yes, ma'am.

I have a question. I'm still working on 55, and I participate in my employer's TSP, and max that out, so it's like 13% is going towards that. But I also have two mutual fund accounts from previous jobs, back when I was a contractor. So I'm wondering, do I combine those two, or do I keep everything separate? That's like three different retirement accounts.

I don't know what to do. Yeah, I do like combining those 401Ks, Tina, that you've separated from, and you do that in a new IRA, an Individual Retirement Account. The benefit of that is, a lot of times when you separate from the company, the expenses are slightly higher. Obviously inside the 401K, you have limited investment options, but given that there's two of them, you've got to understand what those investment options are, and you've got to do the research or pay somebody to do it to figure out what should your money be invested in in the one, and then you'd have to do it for the other, not to mention picking the funds that you're in inside the TSP. When you get it in one place, there's some economies of scale, just in terms of the amount of oversight, less paperwork, less monitoring of the accounts, not to mention if you hire somebody to manage it for you, you're often going to get some break points there, and you can make sure it's a little easier to make sure you don't have unnecessary investment duplication or that you're not managing it properly from a diversification standpoint when it's all in one place. So I think that's a good option for you. So I'd open an IRA at Charles Schwab or Vanguard, or if you want to do something that's more in the fintech space with a great smartphone app, you can use a Betterment. But that IRA, once it's open, you'd then get the rollover paperwork from each of the plan administrators with those 401ks, you'd fill it out, they'd send a check to your new custodian where that IRA is, all the money would be consolidated in one place, and then you'd either have to deploy an investment strategy yourself or hire an investment professional to do that for you.

But it will make things a bit simpler, and I think that's a great approach. Tina, thank you very much. We appreciate that call today. Buffalo Grove, Illinois, and Bridget, we appreciate you holding on the line. We know you've been patient today. Thanks. And what's on your mind?

How can we help you? Thank you for taking the call. I received an unexpected inheritance, and I just want to make sure it was such a gift that I want to make sure that I'm using it properly.

And I was wondering, I think what I'd like to do with it is to go from a 30-year fixed mortgage and refinance to a 15-year, and I didn't know if that was the right thing to do. Yeah. Bridget, do you mind me asking how much you got? $40,000.

Okay. And do you have emergency savings? Yeah, we have six months in emergency savings because I listen to your show every day, and that's what you told us to do. And that's unadjusted, so I think we could probably go 12 months if we were more frugal. And we have about $180,000 left on our home. We do have our retirement property paid off of. Awesome. We already had that paid off, so I just didn't know how best to utilize that money.

Absolutely. And what's the home worth? $300,000. Okay. And tell me about your budget right now. After the mortgage is paid and all the bills are covered, do you have anything left over? Yes.

We usually have enough to put in our money for our IREs every year. Okay. Excellent.

So basically what I'm hearing is you'd take the $40,000, you'd put it against the house, and you'd get a new 15-year mortgage for $140,000. Is that right? Yeah. Or I was just thinking just to make sure that we can—I was just thinking about refinancing, using that for the financing costs, and just to get used to the payment, which would probably—what I was quoted at would probably be about $300,000 more a month. Yeah.

Okay. So I didn't— Well, yeah, the costs of refinancing shouldn't be more than probably 2 percent. So you're probably talking, you know, $3,500, maybe something like that. So yeah, you could make sure that you're not increasing the value for sure, but you should have $35,000 or more that you could put against it to bring the total mortgage down, which as you move to the 15 years should still go down a bit. I suspect you'll even be able to drop that interest rate a bit. So between the reduction in the interest rate, a mortgage at least $35,000 less, even though you're going from a 30-year to a 15-year, you're probably going to either be breakeven or a little bit less.

I like that plan, given that you're fully funding your retirement, you've got this rental property that's debt-free, you've got at least six months in emergency savings, you're doing a lot right, and this is going to get you even quicker moving toward having that primary residence free and clear. So I think this is absolutely a blessing, as you've already acknowledged, and using it in this way will really, I think, honor the Lord. Yeah. Thank you.

And is there anything else I should be doing with it or any other options? Yeah, I don't think so. I mean, we could run through the list, do you have any college-bound children or anything like that? Yeah, soon. Soon. And I, yeah. Is that funded? No.

Okay. So that would be another option, is to go ahead and hang on to that money, recognizing that as soon as you put it against the house, it's going to become very illiquid. And so if you, you know, I think you and your husband need to begin praying through how much do you want to be able to cover of your children's college, go ahead and communicate that to them early, whatever that number is, so they know, you know, what they have to work with. They can start looking at the cost of attendance of each of the schools they're interested in. And, you know, I think you could drop that into a 529 plan, given, you know, some of these other things are on the right track, or maybe split it.

So maybe you'd put just enough in it to make the budget balance on the new 15-year mortgage, and then take the rest of it and go ahead and sock that away to really seed that that college fund. I think that potentially could be one other option. Bridget, we're glad you called today. Thank you very much.

Columbus, Mississippi. Marcus, just a little bit of time. How can we help you? Yes, sir. Thank you for taking my call.

Sure. I got, I got over $400,000, I got $200,000 in a CD that will be freed up in August. And also I got $200,000 just in the bank. And so, I know I need to invest it, but what would be your suggestion, especially for that CD money when they get freed up? What is your age, Marcus?

42, I'd be 42 in March. All right. And do you have retirement savings that you're contributing to outside of this roughly $400,000? No, sir, I only, I got an old Schwab, Charles Schwab account for my job I was working and they just sent me a letter.

I think it's only like $55,000 and I haven't been contributing to it. And so, that's the only thing I got. Are you self-employed?

No, sir, right now I'm retired military, enjoying my VA pay 100%. Okay. All right. Very good.

And does that cover all of your expenses? Yes, sir. Okay. Very good.

So, this is really over and above. So, I think the thing to do is to, you know, I'd recommend, there's a lot of money that you've worked hard and probably for a long time to save up. And just to kind of keep this earning, you know, a half a percent or, you know, one to two percent and a CD is not the best use of this money.

I would get an investment professional to really sit down with you, make a plan, look at what you're trying to accomplish now and in the future, what the Lord has for you in this next season of life, and deploy an investment strategy that's consistent, not with anybody else's objectives or not trying to beat the market or beat your brother-in-law's returns, but trying to only invest in a way that meets your objectives, your God-given objectives. And that can be as conservative or as aggressive as you want. I suspect given where you're currently and you've got the money, it's probably on the fairly conservative end. But the goal would be maybe four or five percent a year instead of one to two. So by taking a little bit more risk, you can get, you know, a good bit more in the way of return and do it in such a way that if you needed to tap the money for unexpected expenses or a major medical event, you wouldn't even need to touch the stock portion of it, which would probably be a smaller percentage. You could do it based on the more stable portion of the portfolio so you wouldn't have to worry about whether the stock market was up or down at any given time. So where I'd go with that, I'd head to our website, MoneyWiseLive.org, click find a CKA. I'd interview two or three certified kingdom advisors in your area and talk about the best investment strategy for you, the person you feel most comfortable with.

I would deploy them to begin investing it. Marcus, God bless you, sir. Thank you very much for calling today.

Algonquin, Illinois. Frank, you're our final caller. Just a tiny bit of time, even less than that.

How can we help? Okay, I'll be real quick. So I have some double E bonds that I've been saving for my boys' education quite some time ago. And I'd like to roll that into a 529. Is that something I can do?

You wouldn't be able to roll it in. You'd have to redeem those bonds. And then you could make a contribution to a 529, which I think would be a great option.

Double E bonds right now are paying 0.1%, so you're not getting a whole lot there. But I'd go ahead and redeem those and then make a contribution to that 529. And then the growth on the investments you choose moving forward between now and when you'd start taking it out for qualified educational expenses would be tax-free. So you could enjoy all of those gains moving forward and you'll do a lot better over a long period of time, not in any month or two, but you'll do a lot better over time in the stock market through a 529. A couple of websites I'm going to give you as we wrap up here on time. Number one, the best way to evaluate the right 529 for you is a website called savingforcollege.com.

You'll answer a number of questions and they'll make a recommendation for you. And then the place you can redeem those electronic savings bonds is at treasurydirect.gov. That's the government's website for savings bonds.

Or you can, if they're paper bonds, you could redeem them at most banks or financial institutions. Frank, God bless you, brother. We appreciate that and hope that information helps you. Thanks very, very much. Rob West, always a pleasure, sir. Let's come back tomorrow and do it again, all right? I'll look forward to it, Steve. Thanks.

All right, me too. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. My thanks to our technical crew today, Amy, Deb, Aaron, and of course, none other than Mr. Jim Henry. For Rob West, I'm Steve Moore, a real pleasure being with you today. Tell a friend if you enjoy the program and then join us again next time for a brand new edition of MoneyWise Live.