The Discipline-Freedom Paradox

Solomon had enough wealth to do pretty much whatever he wanted, yet he writes in Proverbs 25, 28, a man without self-control is like a city broken into and left without walls.

Not a very pretty picture. It implies that left to our own whims and desires we self-destruct. Today, Kingdom Advisors President Rob West has a lesson to help us avoid that fate, and we'll take your calls and questions on any financial topic at 800-525-7000. Jot that down. Give us a call.

800-525-7000. I'm Steve Moore. Discipline and freedom, a paradox.

Next, on MoneyWise Live. Well, Rob, let's be clear here. We're talking about a paradox, so what exactly is that? Yeah, so a paradox is something that seems to contradict itself, but is actually true, or seems to be one way, but it's actually the opposite. And today we're talking about the paradox of discipline and freedom. Both of them can be that way, so essentially they're a pair of paradoxes.

A pair? Is this math? No, no, no, no, no.

Promise. All right, what's first then? What do you have when it comes to paradoxes? Well, let's start with the paradox of discipline, if you will. The word has developed a negative connotation over time. Think disciplinary action as a means of punishment for wrongdoing.

But that's not how the word started out. The word disciple as a verb means to teach. A disciple is a student. Think Jesus' disciples.

They certainly weren't being punished as our Lord taught them how to spread the gospel. But let's go back to the negative use of the word discipline. In that context, we think of it as restrictive, or limiting our ability to do what we want. And that's what makes self-discipline so difficult. Given a choice, we'd rather not limit ourselves.

That's right, I'm thinking of the bakery down the street, but most likely you're not, so. All right, well, where does the paradox come in in what you've just said? Well, right about now. You know, we think that discipline limits our freedom, but actually it does the opposite, especially in the case of self-discipline. And let's use money as an example. We have to train or discipline ourselves to live on a budget, to save and be generous, as laid out in God's financial principles. We don't want to do those things naturally.

We'd rather spend our money on anything we want whenever we want it. We don't want to limit our options. But discipline doesn't really limit those options.

It merely delays and focuses them. And over time, practicing self-discipline actually adds to our choices, to our freedom. Saving and investing both require discipline. Proverbs 10 4 says, a slack hand causes poverty, but the hand of the diligent makes rich. You see, as we acquire wealth, we also acquire more freedom, not to spend foolishly, but to live an appropriate, comfortable lifestyle and to serve God more fully. That's true freedom, Steve, and it only comes from discipline.

Okay. Well, speaking of freedom, what's the paradox there? Well, just like discipline, it has taken on a negative connotation. Freedom has somewhat undeservedly, I should say, a positive meaning. You know, we get to have anything we want.

That could be a better car, a bigger house or an expensive vacation with all the frills. But unless you're paying cash, all of those things just lead to debt, which of course is the opposite of freedom. Proverbs 22 7 says the rich rules over the poor and the borrower is the slave of the lender. True freedom requires discipline or it will lead to disaster. Freedom without virtue becomes license from which we get the word licentious, which means having a complete disregard for rules or morality. It's interesting to note that our founding fathers knew this. They gave us more freedom than any people had enjoyed in history, but they knew that our nation could only survive if the people remain virtuous. To paraphrase many of them, without virtue or discipline, there is no liberty. There's actually a story, Steve, about a woman stopping Benjamin Franklin as he was leaving the Constitutional Convention and she asked, what kind of government have you given us? And Franklin replied, a republic, madam, if you can keep it.

Yeah, I've heard that before. And that's a great response. A good job, Ben. So sum this up for us, Rob. What do we need to remember?

And obviously all of this goes back not just to the founding fathers, but to our Lord and Savior Jesus Christ. Well, you're exactly right. And we need to remember that discipline is a good thing and that freedom can be dangerous. There's an immutable law of discipline and this is the essence of the paradox. Discipline only appears to constrain us, while freedom only appears to allow us to have anything we want without earning it. In fact, the opposite is true. Without discipline, there can be no real freedom. The paradox of discipline and freedom. Thanks, Rob.

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So if you get a busy signal, hang up, try again. We have a lot planned for the next 55 minutes or so. 800-525-7000 on any financial topic that's of interest to you.

Albuquerque, New Mexico. Hello, Drew. How can we help you, Drew? Hey, thanks for having me on the show. Yes, sir. Honored.

Thank you. Let me just briefly tell you a little bit about my situation here. I'll throw some numbers at you.

Sure. So I'm 40 years old. We have a single income family with a great salary, a relatively stable career. I currently have $300,000 in my 401k. My wife has $200,000 in hers and together we have $60,000 in a Roth IRA. I'm contributing 9% into my 401k and my employer is matching it six.

We've never owned a home and we want to buy one this summer and we currently have $40,000 down payment saved up. So my question is, well, unfortunately there's a lot of conflicting information going on right now. There's some rumors that the new administration that our 401ks could be in big trouble to say the least. If that's a real possibility, I'd like to use some of that money while I have it. So I'm interested in this drawing up to $50,000 from my 401k to add it to my down payment so I can get up to 20% and avoid mortgage insurance. And I know that typically the advice is never withdraw from your retirement, but I'm just curious, isn't this just moving money from one investment to another, which would allow me to avoid throwing away several hundred dollars a month in mortgage insurance payments?

Yeah, yeah. Well, I appreciate that overview, Drew. It sounds like you all are doing a lot of things right. I love the fact that you're debt free except for this mortgage that you potentially would be taking on here in the near future. You guys have obviously been diligent savers, which means you've kept your lifestyle in check because the only way you can have that kind of retirement savings at age 40 is to have some margin, which clearly you've been putting toward long term investments in a tax deferred vehicle. You're continuing to contribute 15% toward retirement, 6% of which is coming from your employer, but 15 is the goal based on the income that you're living on.

As you said, you're the only one working. So you all are going to be in a really good spot long term, in fact, and we should all do this, but clearly when you're off, I think, doing as well as you are in terms of what you've already accumulated and what you're adding to it, I would really be thinking and praying about what your financial finish line is, because I believe as believers, we don't just accumulate for accumulation's sake. We realize we're blessed to be a blessing, that we should be not a bucket where God's provision stops with us, but a pipeline into God's activity that includes providing for our families, which means we save so that we can provide for ourselves at whatever lifestyle we feel like God has led us to in retirement at such a time when we perhaps can no longer work for pay, even though we may redirect our time and energy to something else in God's service. But I don't think that's an open ended accumulation goal. We need to set a finish line both for lifestyle, and that typically has to do with income, and for our balance sheet, which has to do with how much we will save for the long haul. And when we reach those, it gives us the freedom to give more away. So we need to be thinking and praying about that.

As to the 401k, are you thinking about that in terms of it being at risk because of a change in government policy related to the tax benefits or because of an economic or market crash? Yeah, probably an economic crash. Yeah. Okay.

All right. You know, if we were to step back and look at that, I mean, that would not be my base case. You know, the Yes, we've got some challenges that will come to roost down the road, we are going to exceed US GDP in terms of the amount of US national debt that we have.

That's not a good thing. That number continues to climb. And based on what we know about the new administration's policies, it will climb rapidly because there'll be a lot of spending going on both in stimulus as well as infrastructure and other programs. But I don't think we're in a dangerous spot now that the economists that I trust that are believers that really are skilled in this area would say that we're still a good ways away from that being a real problem for us. You know, we are going to have to deal with that in policy changes down the road.

And, you know, that may come in the form of reduced entitlements, it may come in the form of higher taxes, any number of things, but it will have to be dealt with. But I still think the underlying stability of the economy is very strong, the consumer is very strong, corporate earnings are very strong. You know, so I have no reason to believe that we won't see a continuation in the future of what we have seen historically. And that is that the U.S. stock market is the very best place to be with your long term investments so long as you have the right time horizon and a mix of investments that's appropriate for your age objectives and risk tolerance. Because we've been through some pretty precarious situations every decade, if you go back the last hundred years, has had its event that was unforeseen from oil embargoes to you name it. You know, it's been their tech bubbles and, you know, the Great Depression.

And you can factor all of these things in there, a financial crisis that was systemic in nature. And yet, if you have the long view, meaning 10 years plus, the market always rebounds and moves to higher territory. And if you get more and more conservative as you get closer and closer to retirement, then, you know, you are investing in a way that's appropriate for the risk that you're taking on. So to move out of that and invest necessarily in real estate, although real estate can be a great investment, it's still not going to perform at least historically speaking as well as a properly diversified investment portfolio, not to mention the fact that it tends to not generate income if it's not a rental property and it's somewhat illiquid. So if it were me, I would just stay right on track with where you are. Now, if you wanted to temporarily decrease your retirement savings so that you could accelerate the money going toward the down payment to be able to get into that house with 20 percent down to avoid that PMI, which I agree does nothing for you, and then resume those higher payments getting back up to the 15 percent, I'd certainly be on board with that.

But moving out of your 401k because, you know, this new administration or any number of other factors would cause us to believe that there's some sort of economic crisis, you know, on the horizon. I just don't see that and don't feel like that would necessarily be the way to go. But tell me your thoughts. That sounds great to me. That's what I was looking to hear. So I appreciate the information. All right. I appreciate your call. We appreciate you listening. If you have other questions down the road, don't hesitate to reach back out to us. God bless to you and your wife Drew as you work through all this and put it in God's hands and look for his direction.

Thanks very much. But Rob, I know you didn't just give the advice you did to Drew because you knew that's what he was looking forward to hearing. And I know you are an optimist, but at the same time, you're an honest optimist and a truthful optimist. And you and many of the economists we've spoken with in the last month or so have pretty much said the same thing. They don't see any terrible curtain dropping on the economy or the country as far as investing and that kind of thing, right? Yeah, there's just, you know, most people that really study this that also have a biblical worldview, I think, would say of something similar and that is there's nothing in the immediate horizon that can be anticipated that would result in a major collapse or even, you know, a bear market. Now, the market tends to be cyclical and we're 12 plus years in. So it's due for a recession, a bear market.

Even though we had one last year, it was very brief. But just look at the resiliency of this economy going through what we went through in 2020. And you have to agree, I think, if you look at that, that it's pretty impressive what the economy was able to weather. But we don't know what the finish line is as far as the pandemic is concerned.

Should that keep us awake at night? Well, you know, what we know is that in terms of real productive activity, the sectors of the economy that really have been impacted the most are still fairly narrow. That doesn't mean there's not a lot of people out there that haven't been hurt economically as a result of this. Personally, there absolutely has. Many in our listening audience have had hours reduced. They've been laid off. I mean, that's real. But in terms of the overall effect of our U.S. economy, the collateral damage has been limited to a few sectors that are not going to result based on what we know today in a real problem this year.

In fact, most economists think U.S. GDP will grow at its fastest pace this year than it ever has. If we can help you today with anything financial, give us a call. We're Rob West, taking your calls at 800-525-7000.

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That's christiancreditcounselors.org, or call 800-557-1985. 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. 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.

Jehovah Mecodeshken conveys holiness both in position and practice. I've told you before, we may go back and forth on whether or not we're saved. God knows who belongs to him.

That's all there is to it. So does the enemy. The enemy, we bear a mark. The enemy knows whether we are in Christ or we are not in Christ. We bear it.

It is obvious out there in the heavenlies. What would happen if we became convinced of that? What would happen if we almost thought of it in visible terms? What would happen? How differently would we live if we could take a black permanent marker and we just wrote on our foreheads, holy to the Lord.

Can you imagine? It doesn't mean we wouldn't have fun. We still laugh our heads off, have full, fruitful lives that we've been called to fulfill, but it means we'd make some decisions a different way. Begin with the end in mind. What is it you want to be when you grow up? Some of us are way into grown up. What is it we're still wanting to be today?

Today. Begin with the end in mind. Not thinking somehow that's all just going to pop up at the very end. Begin with the end in mind. You've been listening to A Quick Word with Beth Moore.

Maybe you're like me, always on the go. The free living proof app is a perfect tool to help you stay connected, encouraged, and in his word with Beth. Download the free app today. Just search for Beth Moore in the shop store. Thanks for listening to A Quick Word with Beth Moore. Hey, feel free to give us a call today if you have a question for Rob West, 800-525-7000. A question of any financial consequences is just fine. If you'd like to send Rob an email, keep it brief, just a couple of lines if you'd like to hear it read on the program. That address is questions at moneywise.org, questions at moneywise.org, and we may get to one of those a bit later in today's program.

But first, it's Hanover, Pennsylvania. Ron, thanks for holding my friend. What's on your mind today? Hi. Thanks for taking me in and listening to me. I appreciate it.

You bet. I sold my home a couple of years ago, and I got remarried. My wife and I are retired. We live in a retirement place where we pay for the home, and then you pay so much to live there.

You're familiar with that. We have quite a bit of cash that's in savings in the bank, and I was wondering what you would suggest that would be a safe place to put it, that it wouldn't actually have to draw a whole lot of money but be better than what's in savings. What would you suggest we do with $400,000 that we have in now? Yeah. Are you having to draw an income off of this $400,000, Ron? No.

We both are living very comfortably off of both of our Social Security's. Okay. So this really is a surplus, and you would expect that this would just continue to grow in the future until you need it if you had a major expense, maybe medical, maybe something else, and if not, then you could pass it on as an inheritance, give it away, something like that? Yes. Obviously, as we get older, if we have to go into a care unit or whatever, it's very expensive, so I'd like for it to make a little more than what it is now to help take care of both of us if we get to that point.

Yeah. And do you have concern about putting a portion of this at the risk of the stock market? You know, a lot of times what would happen with a portfolio like this, especially when you don't need it, is that it would be deployed in a stock and bond portfolio where maybe 30% or so, maybe 40% at the most, would be at the risk of a high-quality stock portfolio probably that have some dividends that would be paid on them. The bulk of it, 60%, 70%, it could be in fixed income bonds, corporate and government bonds, you know, generating a return, perhaps, you know, certainly better than you'd get in a savings account, and that the mix of the two might yield four or 5% a year. But recognizing that if we got into a bear market the last couple of years, that stock portion, you know, could be down 20% or more, which would bring the overall portfolio down. But the idea would be that during that period of time, you certainly wouldn't sell anything and with the market rebounds as it has historically, then that part would recover. But that would provide kind of the growth engine over any, you know, 5 to 10 year period that would supplement, you know, the fixed income, which would get your return up to that, you know, 4 or 5 plus percent return. But there is obviously some risk associated with that, as opposed to transferring that risk to, let's say, an insurance company where you'd buy an annuity product, which can be somewhat complex, also somewhat expensive, but yet can provide a floor where the money is guaranteed not to lose value. And then you get a portion of the upside, you know, if it's a variable annuity, or a fixed return, you know, better than a, you know, a short term CD, but a fixed return that would be paid to you from the insurance company.

Which of those sounds more akin to what you all are looking for? The fixed. One of the financial advisors at the bank where I'm at, had talked to me about one of the insurance programs, and they had one that if you gave them $300,000, they would lock it in for five years. It went, I think, from like $175,000 all the way to $275,000 at the end of five years.

And $300,000 would make a little more than $33,000 guaranteed money. Yeah, yeah. And you're allowed to take 10% out without the penalty. Yeah, okay. Yeah. And so there are products out there like that. I think the key is you just want to make sure you understand, you know, all of the ins and outs of those because they can be complex. But if, if you really don't want to have any risk associated with this, you want to transfer that risk to somebody else, then it sounds like an annuity contract and insurance product could be the way to go.

I think the thing to understand is they're not all created equal. So what I would do is compare what you're hearing from your local bank to perhaps what might be recommended to you from one or two other investment professionals. There's such things as no load annuities, meaning where there's no commission paid out of them, which gives them more to pay in the form of a, of a return. But, you know, looking at the various types of insurance contracts, you know, for this purpose, where you could, you know, get a little bit better return and not have to worry about it losing any value over time, you know, could be a great thing based on what it is you're looking for. So I would say go to our website, moneywiselive.org, click on find a CKA.

And I'd interview a couple of additional investment professionals, tell them what you're looking for, ask them for a quote on something that might be comparable or preferable to what you're being, you know, recommended from the bank, and then see which seems like it's the best fit for you. Ron, I hope that information helps you. Thank you very much for your phone call today. We do appreciate it.

Coming up, we're going to say hi to Lynn and Cheryl and Jan's in Cleveland, Tennessee, and also Shane in Michigan. That and perhaps your call as well. You'll have to place the call to make that happen.

800-525-7000. This is MoneyWise Live, where we always remember that God owns it all. And we'll be right back after this. 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. More information is available at investeventide.com. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes be like a roller coaster.

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Hmm. It sounds like you need the MoneyWise app. It's a free app that will help you plan your budget and track your spending, like the three dollars you spend every morning on coffee.

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Learn more at app.money. With SRN News, I'm John Scott. President Biden is putting into play his national COVID-19 strategy to wrap up vaccinations and testing, reopen schools and businesses, and increase the use of masks. It will also include a requirement that Americans mask up for travel. He signed a 10-virus related executive order today. He faces steep obstacles, including uncertainty over whether congressional Republicans will help pass his $1.9 trillion coronavirus package. The Biden administration has suspended new oil and gas leasing and drilling permits on public lands and waters for 60 days.

It's part of a review of programs at the U.S. Department of the Interior. Stocks drifted to a mixed close on Wall Street today that out dropped a dozen points. The Nasdaq gained 73.

The S&P 500 was up one point. This is SRN News. You're listening to MoneyWise Live. Rob West here taking your calls and questions today about anything financial. Is it saving? Is it investing?

Maybe it's buying a house, buying a car, saving for your kids' college, all those things and probably a lot more. We're happy to tackle them when you call 800-525-7000. We have several people holding, so I should probably be quiet and say, hi, Lynn in Tampa, Florida. Good to have you with us today. What's your question for Rob? Hi, how are you guys?

Great, thanks. This is my first time talking to you and forgive my breathing, but I'm actually kind of riding my bike. Whoa, whoa, whoa, wait a minute, Lynn.

Wait a minute, Lynn. You're riding your bike? Well, no, I stopped. I'm walking it now, but that's why I'm kind of breathing heavy. Oh, good for you. Good for you. And you're in Tampa, so it's nice and warm today and hopefully beautiful. Yeah, that's great. Okay, well, make sure you keep a lookout for anything that would be dangerous and go right ahead.

Okay, thank you. So my question is, my husband actually was at the post office. He recently took an early retirement for several reasons, but the good thing was he was able to buy back his military time. He had 10 years in service, so he's able to do that. He has a good 401k, but he is not working now, so it's just my paycheck.

I actually work for the government as well. I'm a nurse, so I do make a good living. I would say probably, I don't know, like 85 a year. And he was, we have no bills except for our mortgage, thank the Lord. So I was, we were wanting to actually take his money, which I think is around, I think he has like 82,000 in his 401k.

So we thought with all the penalties and everything about pulling it early, he probably will be looking at, he told me like over, like somewhat over 50,000 or 55,000. So we were going to take that along with maybe like 50,000 of my 401k, which is about 105 right now, and then pay off our house, which we only owe about a hundred on. And then be completely debt free. We don't know what we're going to be doing in a year if we're going to be selling it, staying in it.

I really would love to serve in missions and love to help out my church. So I'm hoping that I could just have money to do freely what I wish, you know, with God's kingdom. So I'm just kind of wondering if that's the best way to go, especially since we don't know what the economy, you know, we're both in our mid 40s. And I got about 15 years of work left. Yeah.

Okay. So talk to me about your income sources, Lynn. You're obviously continuing to work based on your current budget, which includes your mortgage. What is that shortfall every month now that he's taken early retirement? I think, I think our income is going to be like, I think we pretty much made it like even and that's, and I don't know if that's including like savings or not, but we just did our bills and expenses and everything. That's with like us taking date nights and everything. So I make around, I want to say like $4,400 a month myself. So that's with everything, you know, with tithing, with paying all the bills, with doing all that.

And again, I'm not 100% sure that's with saving anything. Okay. And is he planning to earn a paycheck in this season? Yes, he actually is going to be starting a woodworking business. So he's doing all of our home improvements right now for this particular season because we need so many home improvements, but then he's going to actually start to, you know, make projects for people. Yes.

Okay. And has he done this before and does he have some reason to believe that he, you know, really could make some money doing this or is this kind of a new venture and he's still kind of testing this out, if you will? Yes, it is new to him. He has been making stuff for me already. He made my twin bed recently. So he has been actually, yeah, he's really interested.

He loves to learn. So I have no doubt that he'll be successful. It's just a new venture.

Yeah, yeah. Well, the good news is it shouldn't take a lot of startup costs. I mean, he's going to do this from home and, you know, other than materials and he could perhaps, you know, make things and then sell them before he starts the next job to get paid.

You know, the startup costs should be minimal. Is that right? Right. Exactly. Yeah.

Okay. Well, you know, there is an opportunity. I mean, if the it's a result of COVID that you are taking money out of a 401k and you'd have to be able to answer that, honestly. And I don't know how that played into his change in employment. You know, there is the ability to take up to $100,000 out of a 401k under the CARES Act, which would be a hardship withdrawal without the 10 percent penalty.

Now, it would still be taxable, but you get three years to pay the income tax rather than it being due in the same year. Would that apply here? Do you feel like this situation is a direct result of the pandemic? I'm not really 100 percent sure.

I could let him know that. So it's $100,000 for the CARES Act, you said? Under the CARES Act, you can take up to $100,000 of your 401k without the 10 percent penalty. But it does say that it has to be as a result of financial hardship that was brought on by COVID.

So we'd want to obviously make sure that you can answer that with complete integrity. And if not, then you have to consider, OK, is it worth taking this out, paying the tax and the penalty to pay off the mortgage? And I just don't think it is. That's expensive money because you add the taxes to the penalty and now we're taking 30 plus percent right off the top, sending it to Uncle Sam. Yes, we could potentially pay off the mortgage and that takes that expense off, which is good because we want to keep your lifestyle at a minimum during this season. But that tax bill plus the penalty on top of that money not growing tax deferred for the rest of your working life and being available in retirement is not something I'm excited about. So what I would probably do is just really buckle down, look at even further cuts into the budget while he's getting this business up and running. Good thing is he's not having to buy into something. He's not signing a lease. He's not having to purchase a lot of equipment, probably. And he can start small and see some immediate income. And if he can prove that out and you bring in enough to just continue on your current track of paying your mortgage payment, leave that 401k alone, that would be my preference just because that money is there.

We're not playing that big bill to Uncle Sam. And when you get to retirement, I think to be glad that it was there compounding for you for all of those years. Then we wish you the best.

I just want to drop this on you and you can do with it as you wish. You mentioned your husband being so handy with wood and everything. There are wooden bicycles. I don't know what you're riding right now. It's probably not wood, but there are wooden bicycles. I've seen them.

I've touched them and they're either made of exotic woods or bamboo and they're very expensive. And if you fall and hurt yourself, you're already a nurse. So you kind of got that part of it covered. As long as you stay conscious, you're good to go. You want to eventually retire though. Oh, retirement is, you know, it's not all it's cracked up to be.

So speaking of cracked up, don't forget to wear your helmet, that too. And we're going to have to let you go, but we wish you guys the best. Thanks very much. Thanks for calling today. 800-525-7000. I'll tell you what, we don't have time to speak with Cheryl, but we'll come back and we'll say hi to Cheryl and Jan and Shane. And we've got some other lines open as well.

800-525-7000. I'm not handy with wood. You know what we need, Rob?

Speaking of wood, the last thing I tried to do with wood in my own talent is putting together Ikea furniture that comes with directions. It's not the easiest thing. No.

Yeah. So start a business that'll do that for other people. And I'll leave my phone number after the program today. You're listening to Money Wise Live. Buying a home is the largest, most nerve wracking purchase most of us ever make.

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This is Barry Maguire. I'm a car guy here to help you understand God's purpose for your life through the eyes of a layman. I've discovered that when I hear some really good news, I want to be the first one to tell everybody I know about it. And if it's really good, to run and tell them. Why would you be hesitant to tell people good news? And we have the best good news in the history of mankind. I'm talking, of course, about the gospel, which means good news. Most people are filled with guilt with no comprehension that God loves them. And yet, you not only know that God loves them, but wants them to spend eternity with Him in heaven as His gift to them. I mean, wow. Now that's good news. And the only thing that will matter 100 years from now. But first, they have to hear the good news.

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It's not a pep talk or a try-harder speech. Parents Rising offers real help for real problems that every parent faces. Parents Rising, check it out at moodypublishers.com. Americans seem wealthier but not happier. Loneliness and depression are on the rise, and wealth is doing nothing to make us feel whole. In their newest book, Becoming Whole, authors Brian Fickert and Kelly M. Capik argue that we've Christianized the American dream, and it's tearing us apart. This captivating book, Becoming Whole, demonstrates what it means to be whole, revealing how we project our own brokenness onto the people we're trying to help.

Get your copy of Becoming Whole at moodypublishers.com. Nice to have you with us today. Thanks so much. 800-525-7000. Rob West taking your calls, answering your questions today.

Topeka, Kansas. Hello, Cheryl. How can we help you?

Hi. Yes, thanks for taking our call. In 1992, we bought $30,000 worth of Series EE bonds. They're coming due in 2022, and we've accrued quite a bit of interest. Recently, I found out that we could pay the taxes on the interest each year, and so we're wondering if it would be wise to pay those taxes this year instead of waiting until 2022. Yes, you do have a choice, Cheryl, as to whether you report the interest every year or put off or defer reporting the interest until you file the income tax return for the year in which you redeem the bond and receive what the bond is worth, including the interest.

I think the question is when you have to report that. I know once you do start to report the interest every year, you have to continue to do so every year after that for all of your savings bonds and any you acquire. So, in terms of how you would do that, I would go to treasurydirect.gov to learn more about that. That's a really helpful resource, but it would spread it out, Cheryl, which I kind of like so you don't have this big tax bill due in the end. But the key is you have to keep up with that and make sure you're doing it every year versus at the end.

So it really doesn't matter. It comes down ultimately toward kind of how you want to handle it. And given that you've had these for a while and you're just now electing it, I think you'd need to look into that just to make sure that you understand the implications of how to do that. Keep in mind the bond interest is only taxable at the federal level. The only way, though, to get by that would be to redeem the money and use it toward qualified educational costs.

But there are some qualifying rules for that. So I don't have a real preference. If you use a tax preparer, I would consult with that individual just to see if there's any reason why you'd want to do it along the way versus waiting.

But as far as I'm concerned, whichever makes the most sense based on your tax situation each year is probably the way to go. Cheryl, thank you very much. We appreciate your calling in today and for your patience, and we hope that answer helps you very much there.

Cleveland, Tennessee. Jan, a little bit of time. How can we help you?

Hi. My husband passed away a couple of months ago, and he had some, I think, sir, not a lot, but some. I want to know, is that taxable? And also, the money that the government's been shelling out, is that taxable? Yeah. Well, Jan, I'm so sorry to hear about your husband's passing.

We're grateful you called in today, and we're pleased to be able to offer some assistance. You know, money you receive as a part of an insurance claim or settlement is typically not taxable. The IRS only levies taxes on income, so that would not be taxable in terms of death benefit. As for the stimulus payments, as to whether they're taxable, the answer is no there as well.

The IRS says the payment is not income, and taxpayers will not owe tax on it, and it will not reduce a taxpayer's refund or increase the amount they owe when they file their 2020 or 2021 return. So I think in both cases, the answer is no. And so I think moving forward, my counsel to you would just be, you know, see if there's someone that can come alongside you, perhaps an investment or financial professional, friend or family member, you know, as you move forward and make decisions for this next season of your life with regard to how to steward God's money, someone to lean on with questions, you know, as you move forward.

But certainly from a tax standpoint, the answer would be no to both of these. And we appreciate very much your call today. God bless you, Jen. Thank you very much for calling. And Rob, as we we've had a couple of calls, you're asking about dates and interest rates and things like that. And offline, we've had a couple of callers ask about the CARES Act when that actually expired. Is it too late to do anything in that regard?

What about paying interest or taxes on that? Anything you can clear up for us here? Yeah, our team did a little bit of additional research on that in that particular CARES Act 401k hardship withdrawal benefit did end on December 30th of this year, actually. And so that or last year. So that is no longer available.

So I think going back to that previous question about whether to take it that further underscores the need to leave those 401k funds alone if at all possible. Okay, good. 800-525-7000 Holland, Michigan. And Shane, welcome to MoneyWise Live. What's on your mind? Hey, guys, thank you for taking my call. And I love your ministry.

Thank you. So right now, my student loans are on COVID related forbearance. And I'm trying to build up the three month emergency fund. And I'm just wondering what your thoughts are as far as using my student loan payments to build up the emergency fund, even though I am able to pay them? Yeah, yeah. So you don't have anything really set aside for emergencies?

Is that right? I'm nearing like $4,000. Okay. All right. Sure. And Shane, what are your expenses every month, roughly?

About $4,000. Okay. Yeah. How long would it take you to put another $8,000 away, let's say?

I'm not positive. Okay. Just based on what you know today, what you have available because your student loans are not being paid, they're in deferment. What is that amount on a monthly basis? About $400. Okay.

All right. So, you know, if every two months you've got $800, we'd be talking about 10 months. You know, I like the idea of you at least having a couple of months worth of expenses. So I'd probably say let's set a goal for you over the next six months to save another $4,000 and then not redirect that into additional spending once you get there. But immediately, regardless of what the government says about whether or not you have to, immediately begin repaying those student loans as agreed.

And let's try to get those knocked out just as quick as you can. But that way it'll keep you from, you know, an unexpected expense requiring you to tap a credit card or something else. I like the idea of you having a couple of months there in reserve.

But I certainly don't want you to wait to pay those student loans any longer than you have to once you have that money because we want to get those paid off in full. Shane, thank you very much. We appreciate that. Hope that helps you.

One more, I believe, Ringgold, Georgia, up north of us a little bit. Hey, Kathy, you have a couple of IRAs, too? Yes.

And I'll be quick. I just I have two IRAs from previous jobs and I just wanted to know if it's wise or if it's possible to put them together into one. Yeah, it is both wise and possible. So, you know, you can combine IRAs as long as they're yours, meaning you can only have an IRA in one taxpayer's name. There's no joint IRA or anything like that. But if they're from your old jobs, old 401Ks or 403Bs, I would roll them into a single IRA.

That's just going to create a little simplicity with regard to oversight, investments and just upkeep in terms of monitoring those monthly statements. I think you'll be glad you did. Thank you very much, Kath. John, you are our final caller today calling from Naperville, Illinois. And what can we help you with? Hi, thanks for taking my call.

Sure. My my business recently received a large payment of of over six figures, and it's money we're not used to. And we know that the Bible tells us the first fruits go to the Lord and taxes haven't been paid on it. And it's money that we'll be able to use for a wedding, my fiancé and I. But I wanted to know what amount we should give. And we weren't sure whether that's 10 percent or a different amount, but we were hoping to get your wisdom on this.

Yeah, well, I appreciate that question, John. Clearly, you want to honor the Lord with what he's entrusted to you, which is a significant sum of money. And I would agree with you, giving proportionately and systematically as God has prospered you, which is what we read in the New Testament, is the way to go.

I like the idea of applying the principle of the tithe, and that would be a tenth. But, you know, we're not under the law. We're under the law of Christ, not the law of Moses. And so this is not about being legalistic.

I think this is something you should consider on your knees. But yes, I think clearly in the Old and New Testament, we give based off of the increase. And this is clearly your increase. And we give proportionately. And we can apply the principle of the tithe as certainly a rule of thumb, a starting place. But, you know, ultimately between you and the Lord where you land as to how much you would give and at what point, I think you need to consider that prayerfully.

There's not a right or wrong decision there. So I think you're already on the right track by just acknowledging this is something you need to be thinking about. And ask the Lord to really make it clear in your heart what amount he'd like for you to give and where that aligns with your passions and his heart in terms of the activity that he's doing that is obviously reaching people. So appreciate your call today.

I'm confident the Lord will honor your faithfulness and wanting to give based on this money that he's entrusted to you. And John, congratulations and all the best as far as your upcoming wedding is concerned. Thank you very much for calling today. Rob, just about out of time here, but one very important aspect of this radio program which enables us to be here every day is the help and the financial generosity of our listeners, right?

Well, it sure is, Steve. Yeah, we are listener supported here at Money Wise Media. So thankful for our partnership with Moody Radio, but we couldn't do what we do without you. And that is through your prayer and financial support. So if you listen to this program regularly, you're a part of what we call our Money Wise family. We'd love to invite you to invest in what God is doing here. Just go to our website, moneywiselive.org and click the donate button.

It's quick, easy and safe. Money Wise Live is a partnership between Moody Radio and Money Wise Media. Thanks for listening. And join us again tomorrow.