Growing Leaders in Generation Z

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. We've had millennials generation X and then generation Y, so you had to know they were coming. Now we have generation Z.

What makes this youngest group tick and how can we help them become tomorrow's leaders? Today host Rob West talks with Dr. Tim Elmore to find out, and later we're joined by some real live gen Z-ers. I'm Steve Moore, growing leaders in generation Z.

That's next, right here on MoneyWise Live. Well Rob, our guest Tim Elmore is founder and CEO of Growing Leaders, a group dedicated to raising up new generations to be tomorrow's spiritual and entrepreneurial leaders. He's also a best-selling author of more than 30 books, his latest being The Pandemic Population, Eight Strategies to Help Generation Z Rediscover Hope After Coronavirus. Well that's right, Steve, and Tim is a great friend. Tim, we're delighted you've stopped by today, and the title of your new book really sets the stage for what we're talking about today. Welcome to the program. Thanks, Rob.

Great to be with you. Hey, let's start by identifying just who we're talking about. What's the latest definition of generation Z?

Who are they? Well, they are essentially the young people that only remember the 21st century. They're the kids that were raising through K-12 education and early college. But it's funny, Rob, just when we all got used to the mindset of a millennial generation, coaches, employers, parents, here's this gen Z group that is really different, really different, actually. Well, let's talk about those differences, because when you get to a certain age in life, it's natural to see everyone younger than you as the same, but that's not the case, right? World events, the developments in technology, all of these factors really shape who they are and how they see the world. So how is this youngest group now reaching adulthood different from the others? Yeah, well, as I just mentioned, it is different, and I think the thing that gen Z high school students and college students hate the most is being lumped in with the millennials. So the millennials grew up with cell phones, gen Z grew up with smartphones, and that was a game changer. Social media, mental health issues, just being overwhelmed. But what I love about gen Z-ers is they feel much more empowered with that smartphone in their hands.

Think about it. Kids are asking Siri and Alexa questions they used to ask mom and dad, you know? So they're even wondering, do I even need you guys in my life? So I love the empowerment. We're just going to have to guide them into making great choices with what they have to give.

Yeah, well, that's so good. And I love that you've said they no longer need knowledge from their parents. They need wisdom. They need somebody to really guide them along the way. Now, they've had quite a different experience with the pandemic specifically compared to what millennials faced with, well, let's say 9-11. So how might that affect them?

Yeah, so we all remember September 11, 2001, but what we know about that was it was a specific day and it was a specific place or places New York City, you know, Washington, D.C. This pandemic is this elongated sinister killer, you know, and so many from gen Z, maybe all of them feel like, when will this be over and will I ever have that college education I thought I would have or that marriage or that job and career? So what I'm noticing is gen Z-ers do one of two things. They either drift toward just feeling overwhelmed by all of this, and you can understand that, or they dig their heels in and say, I'm going to do something about this with that sense of empowerment they feel. And the good news is, Rob, millions of these gen Z kids are going, I'm going to figure this out. I'm going to adapt and figure this out. And I love it. I do, too.

We've got just about a minute before our break. You talk about something you call post-traumatic growth, and that's really what you're hopeful about as these gen Z-ers emerge from the pandemic. What is that? Well, it's actually a term that most people have not heard of, even though it's a genuine psychological term. When we go through trauma, most people expect the person to come out on the other side with PTSD or something like that, post-traumatic stress disorder. But actually, the numbers show that's only one out of five people that might either come back from a war or go through a car accident and have PTSD. Four out of five actually experience what psychologists call post-traumatic growth. And how this happens, Rob, is they go through the traumatic experience, but they get far enough away, and perhaps with a caring adult processing it with them, they can see the silver linings to the dark cloud. And they emerge stronger, better perspectives, more grateful, and of course, isn't that what we want with this next generation? So my goal is to help gen Z come out of the COVID-19 thing stronger than ever. I love it. Well, we're actually going to talk to some gen Z-ers right around the corner and continue to unpack this.

That's right. A couple of gen Z-ers right around the corner with microphones. We'll chat with them in just one moment. Our guest is Tim Elmore.

I'm Steve Moore. More on MoneyWise Live after this. Great to have you with us today on MoneyWise Live, and what better way to find out just what's going on with the generation Z folks than to talk to a couple of them. Rob West, we're joined today by some people you know, I think, 16-year-olds Colby West, who may look familiar to you, and his classmate, Kate Newman.

Well, that's exactly right. And these gen Z-ers, Steve, are very special to me. I'll start with Kate. As you said, she's 16.

She's a junior at Johnson Ferry Christian Academy. Kate and her family are close family friends of ours, and Kate, delighted to have you here today. Hi, thank you so much for having me.

Absolutely. And Colby West, as you said, we share a last name because he's my oldest of four. It's actually, Steve, the first time I've had one of my kids on the broadcast.

So this is fun. Colbs, great to have you. Hi, it's great to be here. Colby's 16 as well, but not just any 16-year-old, and he might not be happy that I'm about to say this. He's 16 today, which means it's his birthday. And you know, we didn't plan that originally, but bud, happy birthday.

So thankful for you and really proud of you. Thank you. All right, let's dive in.

If I say any more, I'm going to get in trouble. Tim, you love a good focus group and we've actually got one right here in the studio. So I'd love for you to follow up on what you were just sharing before the break about the pandemic population and perhaps unpack that a bit with Kate and Colby.

Yeah, thanks, Rob. Colby and Kate, welcome to this conversation. Glad to have you with us. I would be interested in hearing from the two of you about how things have been going for you as you deal with a pandemic and even as you look at your peers.

I know you must see mental health issues. The CDC reported last fall that one in four young adults have contemplated suicide, and yet you guys are finding a way to make it through this. Talk about what's going on as you see it from a Gen Z point of view. Yeah, so like you said, we've missed out on a lot this year with sports seasons canceled, prom canceled, mission trips that we can't get back. We've been really isolated from our friends with church events and school events canceled. And honestly, we've kind of learned that relationships are a lot harder now.

You have to make efforts to see people. And it's been really a good exposure of who your true friends are. But through all this, I've seen a sense of optimism for life after the pandemic. I feel like we can come out with a greater appreciation of life, strong desire for community and deeper relationships, and then even new priorities.

I think we'll be a lot more flexible because with so much that's been canceled or changed, we almost are going to expect it and be willing to adapt to that change more easily in the future. Yeah. In fact, one thing that's always true about the emerging generation is they're much better than adults at adapting. And I'm glad that you're confirming that. Thanks. So let's go a step further.

I would love to hear from Colby. One thing I've seen in your generation is that you want to be, you're very much authentic people. You want to be authentic about serving others, giving, saving.

Gen Z, I don't know if you know this Colby, but is much better at saving money and giving than millennials were at their age. Talk about that for a minute. Yes, I've seen this a lot with my peers. Authenticity is something that's really important for them. I think with a lot of the social media stuff circulating around, there's a lot of fake things and things that are staged that kind of stand out to us.

But I think that also makes us drawn to things that are real and have a lasting impression on people. We want to make a difference in people's lives in a way that's tangible when it comes to our serving and giving. And I think the only way we can do this is to work together.

I think that even though we're young as students, if we work together, we can accomplish these things. An example of this would be the mission trips we take every year. Each summer, they become the highlight of what we do. And it's a lot of fun. And giving and serving with our time is something that brings a lot of joy into our lives.

Yeah, that's exactly right. And Tim, I think really underscores exactly what you're talking about, related to the desires on the part of this generation to make a difference and be a part of something that has meaning. And that's a perfect segue into the project that Colby and Kate are working on now, trying to raise money to fight a life threatening disease.

And Kate, I'd love to start with you. Tell us about this exciting project. Yeah, so especially nowadays, everyone I feel like has a cancer connection and most likely witnessed just the awful toll that it takes on them and their loved ones, whether it's physically, emotionally or financially, or most likely all three. But Colby and I have been given this super special opportunity to help the over 1.3 million Americans that are living with blood cancer today. And the opportunity that Kate's talking about is the Leukemia and Lymphoma Society's Students of the Year program as team members for Team Saints for the Cure. Students of the Year is a seven-week competition for high school leaders that are looking to make an impact in the fight against cancer.

One of the things that makes Students of the Year unique is we get the opportunity to serve others while also learning skills like leadership, business development, as well as project management. Our team's goal is to raise $100,000 by February 20th. Oh, that's awesome. And Kate, I know the funds that are raised are going toward a number of things related to this fight against blood cancer, right?

Yeah. All the funds raised will help LLS fund cancer research, patient services and efforts to make cancer treatments more accessible and affordable. This cause is really important to Colby and me because leukemia is the most commonly diagnosed form of cancer in children and young adults.

Well, I can imagine that it would be. And what I want to do is tell our MoneyWise Live listeners how they can participate in helping Team Saints for the Cure fight this deadly disease. So Colby, why don't you start out and tell us how they can get involved? Yeah, just go to MoneyWiseLive.org. There's a link at the top to donate to our team Saints for the Cure right there.

Or you can just text Team Saints to 797979. Every gift will make a difference no matter how big or small. And we want you to know that we are truly grateful for this opportunity to share about our campaign. And we appreciate any and all support we might receive.

That's incredible. Well, again, Gen Z'ers are passionate about their causes. And these two Gen Z'ers in particular want you to get involved in helping them and their classmates do something really meaningful so we can have more research and really make a dent in this deadly cancer. This is an opportunity to encourage some students to be involved in a great cause.

And by the way, that I mentioned, it's Colby's birthday, no pressure. Here's what you do. We're taking over the MoneyWiseLive.org website today right there at the top so you can get involved in LLS Students of the Year campaign. Just click the link. You can give any amount safely and securely or better yet, text Team Saints to 797979.

You'll get a link back that you can follow and you can give quickly and easily. Colby and Kate, really excited that you stopped by today. And Tim, this is just what you were talking about in terms of this generation really being passionate about their causes.

No doubt about it. In fact, I don't want to embarrass them that Colby and Kate, you guys are stellar examples of what we're going to need in the future. So many of your peers are scared right now and overwhelmed and just hunkered down trying to keep their academic scores up in this strange time. And I love the fact that you've reached outside of just getting A's on your report card and said, I'm going to do something that actually matters in life. So may your tribe increase.

Thank you so much. I appreciate you all being here. Well, Tim, we're going to have a chance just after the break to continue to unpack this pandemic generation and really help our listeners today change the narrative. That's a really big idea in our few seconds left before the break here.

Set that up. Why is that so important? Well, when you go through very difficult times, whether it was World War II or the Great Depression or today with this pandemic, it's very easy to get emotionally paralyzed. And so what I master is parents, teachers, coaches who work with the emerging generation help our kids come out of this strange time with an accurate memory, but a positive narrative. Active memory, meaning I remember it was hard for sure, but positive narrative.

But we overcame that and we came out stronger than when we went in. We'll come back to speak a bit more with Dr. Tim Elmore, author of The Pandemic Population right after this brief break. Then we'll come back and take some calls later in the program on any financial topic that's of interest to you.

800-525-7000. And we'll be right back. Good to have you with us today.

It's Money Wise Live. Your host is Rob West. I'm Steve Moore. Today we're talking about, I mean, just when you thought you understood the millennial generation, along comes Generation Z. And our guest today has written a book called The Pandemic Population Eight Strategies to Help Generation Z Rediscover Hope After Coronavirus. And Tim Elmore is the author of that book, also the CEO and founder of Growing Leaders, a group dedicated to raising up new generations to be tomorrow's leaders, whether we like it or not. And we do like it based on the folks we've already heard from on today's program.

Rob? Yeah, that's exactly right. And as our listeners know, this program is focused on how we can take God's Word and lay it on top of the financial decisions we make and really experience God's best. And as we talk about this next generation, one of the things I'm most excited about is that they are passionate about their causes. They are generous. As Tim said, they're savers. And Tim, in your book, you talked about some of the positives and negatives that can come out of this pandemic. And many of them relate to this next generation being forward looking.

Talk to us about those. Yeah. So Generation Z, because of what happened with the millennials, their older counterparts are much more forward looking. In fact, if you think about it, since the turn of the century, there's been three economic downturns. They've seen it all. I mean, if they were born in 2000, even though they were infants, they saw adults that were a little bit scared.

And then the 2008 and then the 2020. So I, in the pandemic population book, you do a chapter where I talk about the potential negative outcomes from this season we're in and the potential positives. I believe the difference between whether they receive a positive or negative paradigm or narrative will be how we lead them through this time. They're either going to come out feeling life is scarce.

I better save up and hold on to everything I've got, you know, grab the toilet paper quickly, you know, that sort of thing. Or they're going to say, this is our chance to give and to be generous and to meet needs that are around me. And I think Colby and Kate were good examples of that paradigm. Well, that's exactly right.

But that takes intentionality. It takes shepherding, the Gen Z-ers in our life to see the world that way and perhaps adopt that positive narrative you're talking about. Tim, I'd love for you to take a moment and just walk us through the steps that you offer so eloquently in the book. Yeah, well, it was based on some interviews I did with some Great Depression kids. So one of the chapters, believe it or not, I interviewed people that were between 85 and 95 years old, but they remembered the Great Depression. And I said, what enabled you to come through that with such grit and resilience? And every one of them talked about parents and teachers and coaches who really helped build a gritty, positive narrative.

And every one of them I talked to said, oh, yeah, we weren't victims. We knew we were going to make it, you know, that sort of thing. So here were some steps that might be helpful for your listeners. Number one, I think it would be wise to get a whiteboard or a pad of paper and list the pros and cons of this pandemic.

Now, the reason you want to do cons is because you want to show your student, I'm in touch with the fact that there were some hard things about this year. Absolutely. But the pros, the pros, Rob, remind them, oh, there is something positive.

There is a silver lining to that dark cloud. My mom did this so well with me and she'd grown up in the Great Depression. So that's number one. Number two, we need to tell stories of past generations that made it through a tough time.

And here's what they did. We think in pictures, we think in stories. We've got to tell stories. So that's going to be key. And then finally, I recommend that caring adults who have kids around them find a metaphor and a story that will begin to frame the narrative.

Let me give you one quick example. I recently sat down with a high school senior who was really, he's going into his senior year this year. He was really struggling. He was a bit depressed, a little anxious.

He knew that last year's senior year was robbed from the seniors. So we came up with a metaphor and we called it candles and brush fires. Real quick, here's the deal. Candles and brush fires are both flames, right? They're both fires. A candle can be blown out with a small breath.

You know, on Colby's birthday cake, it's not going to be hard to blow that candle out. On the brush fire, not only can they withstand strong winds, they get bigger. And I'm saying, well, here's what we said to each other, this high school senior and myself, let's be brush fires coming out of this. Let's be brush fires. Let's get stronger and not just survive, but thrive. He recently texted me, Rob, with a text that just said, Dr. Tim, I'm a brush fire this year as I go through my senior year.

And I got teary and I thought, this is a metaphor that's going to frame his story coming out of 2020, 2021. Oh, that's so powerful, Dr. Elmore. Well, imagine, folks, if we could come out of this pandemic, ready to send our Gen Z-ers into the world with a different story and more forward-looking, more positive, more generous, holding what they have loosely and wanting to make a difference in the world.

And Tim, that would be powerful. Now, I know at Growing Leaders, you all are very practical in terms of the tools you're creating for families and churches and other organizations to really facilitate a conversation and provide some practical help. You have a free resource that you'd like to tell us about today. We do.

Yeah. When the pandemic started almost a year ago, we created something called Home Chats. Home Chats are on our website, growingleaders.com, and it's six conversations that start with a picture because a picture is worth a thousand words. So we teach with an image, but we start a conversation on managing their time, managing their resources. But rather than just watching time fly by, we really think meaningful conversations are what we need with our kids.

So Home Chats would be one. The other, Rob, would be the Pandemic Population book. It's a short read, but I just decided to dig and look back at what did people do during the Hong Kong flu? What did people do during the Spanish flu? What did people do during the Great Depression? What did the adults do to help the emerging generation come through it well?

And so in this book is where I really put what I found, and I actually believe we have a greater chance than ever to really help these kids come out and maybe look back in 20 years and say, we're stronger because of the way mom and dad led us. I love it. Well, Tim, thanks for stopping by today, my friend. We're so thankful for you. My pleasure. Great to be with you, Rob. Thanks for having me.

And again, you'll find Dr. Elmore's resources at growingleaders.com. We'll also post all these links in today's show notes. This is MoneyWise Live, taking your calls when we come back at 800-525-7000. It is a great pleasure to have you with us today.

It's MoneyWise Live. Your host is Rob West. I'm Steve Moore, and we're really glad to have you with us today. Thoroughly enjoyed that interview about the Gen Z folks.

Thoroughly also enjoyed getting to meet Colby and Kate, Rob, and Colby's 16th birthday today. Really? I'll tell you what, yeah, I now have a 16-year-old in the house, Steve. I don't know what to do about that.

But no, he's a blessing, and he gets added to the carpool rotation as of Friday. So actually, I'm in good shape. That's great. Hey, now, how much money were they trying to raise? Yeah, so their team is trying to, their group at school is trying to raise $100,000 for the Leukemia and Lymphoma Society to really try to do more research and provide patient services all around various types of blood cancer. And it's an incredible initiative that's going on across the country.

And they're making great progress. In fact, you're helping. So we said right there at the top of the page today only, we're kind of taking over the header of the MoneyWiseLive.org website for you to encourage these students and give to a great cause, the Leukemia and Lymphoma Society. And already $1,100 has been given, Steve, by Money Wise listeners.

So that's great. But we'd love to get to $5,000 during this remainder of the program. So if you'd like to give to a great cause and be a part of helping Colby and Kate reach their goal, we'd love to have you partner with them. Again, MoneyWiseLive.org, just click the donate button.

Any amount would be great. And let's see what we can do between now and the end of the program. And again, our phone number for your calls and questions today on anything financial is 800-525-7000. We have multiple open lines right now. 800-525-7000. Give us a call.

We'd love to chat. Rob, I'll get off this here in just a second. You have four children. So Colby is 16. He's your oldest. Is that correct? Yes, that's right.

He is. And then Mason is 14. And then I've got twin girls, Abby and Emma, that are 12.

And so we have a house full, but it's always a lot of fun around our house. Oh man, I guess so. Okay, then quickly, because someone asked me about this earlier, what about the MoneyWise app?

How was that doing? And I understand that something new has been added just in the last week, right? Well, actually, yeah, the new components coming out next week, Steve, but we are super excited about the new MoneyWise app. In fact, thousands of you have already downloaded it and are using it. We're hearing from you. In fact, we do little mini workshops every week for folks that want to know how to use it better and how to develop a spending plan.

They're free and they're done over Zoom. But it's been a lot of fun to talk to so many of you who listen to this program regularly and are now a part of the MoneyWise app community. It's a digital envelope system, the best I've ever used. It's a community where you can share ideas and ask questions. And I pop in there from time to time and answer a good many of them. And then the third component that you're talking about, Steve, is in fact our new Discover tab. And it's where you can discover all of the best content related to biblical finance. So if you download the app today in your app store, just search for MoneyWise biblical finance. And what you'll find is all of the best content providers MoneyWise and Generous Giving and Gospel Patrons and National Christian Foundation and Compass and a dozen others all are feeding their content into our new MoneyWise app and that launches next week. So get the app now and you'll be ready.

Again, just go to your app store and search for MoneyWise biblical finance. Now you implied that you sort of float in and out. You might be there on the sidelines, watching, lurking. You know, I'm hearing that music from Jaws.

Is that how people should feel? No, answering questions, encouraging, helping anything other than Jaws. Okay, 800-525-7000. Let's go to some calls before I get flared. Chicago, hello Pam, how can we help you?

Hi, I had a question. I have stock and I was wondering if it would be wise to sell them while they're high, they're trendy, but my other question is the tax penalty. Should I sell them and accept the tax penalty or let them drop and what is the best course of action? And also my second question is could I roll them into an IRA or is that something an investment firm would have to do?

Yeah, great question. Okay, so the current account that you have that holds these stocks you're referencing, Pam, is a taxable account, meaning it's not in a retirement account currently like an IRA or a 401k, is that right? That's correct. It's with Robinhood actually. Okay, I see.

Yeah, so here's the thing. That style of investing, what you're describing, where you're kind of getting in, sounds like on a short term basis to try to capture some stocks that have some momentum, perhaps you've read about them and seen them on the news or whatever it might be and you're trying to make a quick return, is not really a style of investing that I advocate. In fact, it can be really dangerous because we get caught up in some of these types of investments. Really prudent investing is only for the long haul, where we're putting it in solid companies, we're properly diversified, we're taking the long view, we're not trying to ride a stock up and jump out.

Because frankly, although you may have a few winners along the way doing that, it's just a losing proposition. I mean, all the data says that if that's your strategy, unless you're a professional trader, you know, trained and working at this day after day, that's not the approach that you need to take. So I would in fact encourage you given, you know, with the proper tax considerations and everything else, which I don't know the details, I would encourage you to move away from that strategy as quickly as you can. There are going to be tax implications, though, Pam, I mean, obviously, if this is a short term capital gain, and you're, you know, you have income between 40 and 80,000 a year, you're going to pay 22% on it between 80 and 164,000, you'll pay 24%. So, you know, the tax bill is could be quite steep, but obviously, it sounds like you've got some profits.

And so you're going to keep the lion's share of that. But I would take the opportunity when you move out of these stocks, and hopefully you have more winners than losers, to not try to repeat this approach and really get into a longer term properly diversified strategy that is consistent with your goals and objectives. Now, once you liquidate and pay the tax, you can absolutely take that money and use it as a contribution for 2021 into an IRA. In fact, you can still contribute for 2020 until you file your 2020 tax return. So you could put in $6,000 for last year, 6000 for this year. And then you could redeploy those assets, I would say, and probably not highly concentrated stock positions, but properly diversified stock or excuse me, mutual funds, or exchange traded funds. And if you need some help with that, our friends at soundmineinvesting.org could help. So that's going to be the direction that I would head and I'd be really careful about doing this again in the future. Pam, thank you very much.

We appreciate that call today. You know, there's nothing wrong, Rob, with trendy stocks. In fact, that's what people hear about when they flip on the news networks on TV. But what we're saying is that you need to do your homework first. Just don't jump in because everyone else is. And don't try to hit these highs. Don't jump in and jump out. We're kind of long term, steady plotting folks around here, right? Well, and I think that's really the biblical approach, Steve, when we look at the opportunity to invest to take God's money, which is what we have, we're managers of God's resources.

And we want to look to God's wisdom on how we handle it. And clearly in the word, we should be seeking a return, the parable of the talents affirms that, but done in a way that's diversified with a long term perspective, without to take in an emotional toil and where we're on the same page as husband and wife. More Money Wise Live after this. You're listening to Money Wise Live. Your host is Rob West. I'm Steve Moore, taking your calls and questions today about anything you may be wondering about when it comes to your personal money management.

Rob, how's it going? We're trying to raise some money along with your son, Colby, and his friend, Kate, for the blood disorder and leukemia organization, which is not the actual name. It's a leukemia and lymphoma society.

Yeah, it's the Students of the Year campaign. And we said, yeah, we'll give one episode to trying to help this group of students raise some money for a really important cause and help them be the generation that beats cancer. And so they're trying to raise $100,000. We said maybe the Money Wise Live community can take $5,000 of that today.

Guess what? You're already in for $1,200, where you've said, yeah, we want to step up at $25 and $50 and $100. And we had somebody give a couple of $100.

That's great. If you want to encourage these students and give to a great cause, you can do that today. Just today only, we're taking over the Money Wise web page.

It's at MoneyWiseLive.org, right at the top of the page. Click Donate, and every $10, $20, $50, $100 counts. Let's see what we can do between now and the end of the program. Yeah, maybe you know someone who has struggled with leukemia or one of the other blood cancers. They tend to be something that just sort of pop up, and you wonder what hit me, what's going on.

And some of them are able to be addressed, and some of them still are a real mystery to medical science. So if you'd like to help with that, check us out today. It's easy to find this particular thing on our website, MoneyWiseLive.org, and you'll find all the information there right on the front, right on the home page. All right, let's continue on. Idaho, Jennifer, and how can we help you? Hi.

Hi, Jen. Thanks for having me on. Sure, sure. First, I wanted to say that your guests were just really awesome to listen to.

They seem like very accomplished young people. Oh, thank you. You're sweet. I will pass that on. They've already left the studio, but they are a blessing to me, and I will certainly share your sentiments. That was very sweet of you. Yeah, I actually teach Gen Z students, and so I just really appreciate when they are, you know, well-spoken and have the heads on right.

Yeah, well, thank you. It's encouraging to meet so many of them, but hey, how can we help you with your financial question today? Okay, so it's a bit complicated, but I have a condo that I paid $165 for, and I've paid it down over three and a half years down to $151. It seems to be valued at about $240, and I have some school debt and some debt to my parents that I would really like to start paying down significantly, and so I'm wondering if it's wise to take out, to do a refinance. I'm at $3.75 right now.

I've been shopping around. Someone did offer me something as low as $2.5. I'm in an FHA loan.

I was hoping to transition to a conventional, but that does, I can't get quite as good of a rate that way, but I'm wondering how wise is it to refinance with the ability to take a significant chunk out, maybe $10,000, $20,000, to pay down some of my debts? Yeah, tell me again what you think the home is worth and what is the mortgage balance? So, the mortgage balance is just over $151, and the home is probably worth close to $240.

That's not based on a formal assessment. That's based on what the houses around me have been selling at. Yeah, very good, and how many years do you have remaining on the current mortgage, Jennifer?

Twenty-six and a half. Okay, all right. You know, I'm not a big fan of this strategy as much as it might make some sense to you. The challenge is, you know, let's say you were to do, I'm sure you're looking at a new 30-year mortgage. I'd rather you do a new 25 or even 20, although that 20-year mortgage may create some challenges just in terms of the monthly payment being more than would fit into your budget, and my rule of thumb there is I'd like it to be less than 25% of your take-home pay for principal, interest, taxes, and insurance, so you've got enough left for your other fixed and discretionary expenses, not to mention savings toward the goals that you have. But let's say you go with a 25-year mortgage, and you can, in fact, save at least a point, which you should be able to at 375 as long as you have the right documented income and you've got a good credit score, then that's going to make some sense if you plan to stay in this home for at least five to seven years because you're going to save a bundle in interest over the life of the loan. The challenge is, even though the rate's attractive, when we take that student loan debt, which, by the way, has, you know, flexible payment options, assuming it's a federal, these are federal loans where if you got into a real hardship situation, you could, you know, use the income-based repayment or some of the deferment options if you got into a real financial bind, not to mention the fact that it's not secured to your home, which it would become as soon as you put it on the house.

But in addition to that, by stringing this out over the next 25 years, you know, even though the rate is better, you're going to end up paying more in interest over the long haul. So here's what I would do. I would really focus back on that budget to say, what can I do to dial back spending? Where can I trim? What can I cut or cancel?

How do I live well within my means and free up as much margin as possible so that after I paid off any credit card debt, and you haven't mentioned any, so maybe you don't have any, and after you've funded an emergency fund of at least, let's say, three months expenses, you take every available dollar and probably just because of the relational dynamic, you prioritize paying back your parents and then go to the student loans and just pay obviously the basic, you know, minimum monthly payment on the mortgage or the new mortgage if you refinance. I like that approach a lot better as opposed to taking all this debt and attaching it to the home for the reasons that I mentioned. So hopefully that's helpful to you. Perhaps not exactly what you were looking for, but I think it'll really pay off in the long run. Jennifer, thank you very much and we appreciate your kind remarks at the top of your call today as well.

Joe in Illinois, what's your question for Rob West, sir? Hi guys, how are you? Doing great, thanks. I really appreciate you taking my call.

This is kind of an unusual one. I have a sizable 401k, I get a pension, and I'm just trying to do some planning. I feel like I can live within the 4% rule on all my bills. My question is when do I start to cut into the principle of my 401k? Like, you know, like I said, I could live on the 4%, but when do I just start to take out more and more? Like, I'm just trying to get a good calculation of how much I should live on.

Yeah, it makes sense. Let's talk about what you have, Joe, and obviously our time is going to be short here, but what do you have in that 401k currently? I got about 650. Okay, and how much are you pulling out right now?

Oh, I'm not even retired yet, but I'm just doing some planning. All right, so how much do you expect you would need to pull out on a monthly basis to make up whatever gap you have in other income sources? Just 4%. I plan on 4%.

I think that's 26,000 a year. If you have the right investment strategy, you know, the guy who came up with the 4% rule actually recently revised that up, which is kind of interesting. And so he's saying 5% is probably just fine. So if you stay at 4% and you've got an investment professional who's managing that with a portion and a growth component and then a really solid fixed income strategy behind it with the majority of the funds, you know, you should be able to pull out that 4% a year, pay any taxes, you know, that you have to pay and never touch the principal. And that would be the goal unless you wanted to eat into it because you had a major expense, you wanted to take a big trip one year, you wanted to do some giving that was outside of what you're already doing systematically. But the idea is that the principal never gets touched because you should be able to generate a 4% return with the right income portfolio that has a growth component to it. Does that make sense?

Yes, it does. So the goal is just don't touch the lump some. Exactly. Yeah, because then it'll last the rest of your life. And again, you know, you may want to go ahead and start spending some of that down. You may define what your finish line is and say, I'm comfortable giving a good portion of this away or, you know, I want to use some of it. And that's fine.

But the idea behind the 4% rule is you never touch the principal. And if you can do that, then you know, it'll last, you know, as long as you live, you know, factoring in inflation and those kinds of things. Joe, thank you very much. Appreciate the question today, sir.

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I'm a widow, and very limited income, of course. And but I need some help. I'm not real tech savvy. And I need some help getting set up on it.

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