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April 14, 2021 8:03 am
This is Doug Hastings, VP of Moody radio and were thankful for support from our listeners, and businesses like United faith mortgage.
My best friend is blessed with three kids in a big house all the kids have their own rooms, but recently life in a bagel house is been different. In an effort to solve kid boredom. My friend, but when those massive blue tarps and created a full room tent in the spare bedroom. They put each of the kids mattresses under the tent in the shape of a T and every night for now, five weeks the kids have slept with their heads, feet apart and set of rooms apart, it's Ryan from United faith mortgage and when I see a home. I can help with the interest rates, escrows, and trying to help listeners pay the least amount possible. But for me that story was a needed reminder that it doesn't matter whether our homes are big or small it only matters whether willing to enjoy the little things that God gave us today like a tarp tent.
If you happen to be looking for a new place to put up a tarp of your own. We are United faith mortgage United faith mortgage is a DBA of United mortgage Corp. 25 Millville Park Rd., Melville, NY. Licensed mortgage banker for licensing information, go to an MLS consumer access.org corporate and MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah and Wall Street legend Peter Lynch once said you recessions you have start market because if you don't understand that's going to happen. You don't do well in the markets.
Lynch once managed the most successful mutual fund and history. Weathering the market's ups and downs by Rob West today. I talked with Robert immensely of inspiring vesting to get a biblical perspective on market volatility that it's on to your calls at 800-525-7000 800-525-7000. This is moneywise live section of the faith and find Robert immensely as CEO Vince Meyer investing in underwriter of moneywise swear they're playing a critical role in the fast-growing faith-based investing movement Robert to a real privilege to have you back on the program is my pleasure.
Thinking about absolutely, you have some fascinating stories to share about certain companies both good and bad from the faith perspective will get into that in just a moment I want to first talk about applying biblical principles to investing when things are less than steady. You might say on Wall Street.
So how should a Christian investor react during turbulent times in the stock market will basic mantra is that every investor should follow right you have a long-term plan, you stick to avoid making short-term emotional decisions you get good advice. You invest in a diverse portfolio. There's these these principles every investor should follow and I think really interesting question is, is there anything different about the way a Christian investor should react during market turbulence compared to non-Christian investor and I think the answer is yes. And the reason is because our hope is in our Lord right and we put our trust in God we have these promises from God and I've seen the reaction of investors across the spectrum, working in a secular bank like Wells Fargo previously and I working with primarily Christian investors and tell you back in 2008 when I was at Wells Fargo that the reactions of some of these these clients we had were there like was coming to an end me that they were panic and terror was not too strong a word or what some of these people were feeling and I can't blame them because really there hope was in their wealth and they start evaporating before their eyes, but in the Bible. First Timothy tells us to not to set our hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. And so, really, that the number one response of the Christian should be to trust God and the ups and downs and we put your trust in God we have a peace that passes all understanding such a good word here we have an abundance before the first dollar right. We were entrusted our Lord sending his son to pay the penalty for our sins we could be reconciled to the father but you start there and you have an abundance more than you could ever imagine. And then you go to God's promises. I will never leave you or forsake you. And again here before you get to your financial provision.
We have so much and obviously as you said so well Robert. That's where our hope should be, you know, it's often said that fear and greed are the two most dangerous emotions for investors what you think that's the case and talk to us about a biblical perspective of those well I mean just ask yourself do you intend to make better decisions or worse decisions when you're stressed out, fearful, anxious, I know I don't make good decisions and the situations you know we've all been driving on the highway looking to remarry see the Highway Patrol likes nonart on them in the not following you there just driving behind you but your heart rate goes up right and get jittery and I get the ticket right I'm not doing the wrong existing on I get fearful, anxious, missing things with investing right when we have we have emotions gripping our heart that is not a time to make decisions important decisions that I think we've all been there, where we've made some sort of decision when we were in caught up in in his anxiety or depression or fear or anger or whatever that emotion may be that later. We regret we look back and think what was I thinking you know and ironically when we make those fear-based decisions and were trying to take matters into her own hands and avoid pain or loss but it's sort of self-fulfilling prophecy.
Often times where reactions we take in those times, are the very things that are putting us in the long run great counsel and words that we should really heed when it comes to our investing one of the other things it can really help is having a financial advisor somebody who can keep you grounded and make those decisions for you, so they're not emotional. We'll talk about that much more just around the corner were joined today by Robert immensely, CEO of inspire investing time for your questions a bit later in the program as well. 800-525-7000. This is moneywise live be right back. Back to moneywise live on Rob West today are just nestling CEO of inspire investing talking about how we approach turbulent markets as believers.
What can we draw from Scripture that informs how we should approach for handling God's money when it comes to seeking a return a little later in the broadcast will be taking your questions. Robert just before the break you were talking about fear and greed, which can grip us as it relates to turbulent markets. It can lead us to making decisions emotionally, which is never a good thing that we find ourselves at an interesting point right now.
You were 12 years plus into a raging bull market. Yes, we had some lips along the way including last year through the pandemic.
Although that was pretty short-lived. So perhaps some are experiencing greed right now and we've seen that play out recently in the markets with some highflying tech stocks and some shorts on some other companies, but we could have a fear situation here before too long. I think folks are quick to point out the mounting debt were taking on in this nation. The fact that cyclically speaking, we should be rolling over into some sort of a recession before too long.
Even though it may not be anytime soon. So which do you think is more prevalent right now.
Well, I think there is an aspect of lead our personalities. Some people are prone towards fear all the time.
Some people are more prone towards greed more risktakers. I think in general. As he mentioned, we we seen stocks come so far off the bond in 2008 such a long time ago. Yet this market is continues to go higher, and I think you mentioned in a recent examples like game stop in the Robin Hood saga that kind is ongoing and bitcoin and so many other examples of exuberance in the marketplace where I think the real dangers people of gotten complacent and that they tend to tend to get greedy and those times where maybe they have made some risky bets in their investment account. I called that and they turned out well right they made money and what you do you make another one little bigger this time and you think well what I'm really doing a great job on this market.
I must mark out and you keep doing that and it kind of lures into this false sense of security that either one you just you know your infallible investor or to know it always goes up all the time. But the reality is, the market is just going up everything's going up and eventually they're going to go down and you don't get caught in a situation where you've taken on excessive risk because you're chasing this market higher. And when that turns around very quickly find out is one Buffett says who's you know when the tide goes out to find out who's been skinny dipping, and you don't want to be in that kind of caught off guard situation that's that's for sure.
Let's talk about using an advisor about what you think, Robert. It's especially valuable to work with a Christian financial advisor will say someone with the certified kingdom advisor designation when the stock market is turbulent in particular work with the kingdom advisor something skilled in not providing biblically wise financial vices. I think Paramount because it's, you know, when we manage our own money when were listening to our own thoughts only.
We kind of just getting tunnel vision right we don't know we don't know can't see what we can't see and is true in all areas of our life right with its relationships or whatever it is and I had a doctor come into our office things 2013 2014 very smart man, very high income and you want to become a client. He wanted you saw that we are a Christian financial firm was seeking some biblical advice, and he told me a story.
It was just kind of jaw-dropping in a 2008. He'd been managing his own money 2008. He saw his account value drop in half and complete panicked and sold out and went to cash as many people dead and that's I'm writing me the world was in a in a very precarious situation and he made this decision and then the market a course rally back started very sharp rebound, but he was still scared to get back in because he was convinced that the moment he got back into the market. The market was gonna fall out from under him again, and so on and so forth. A hearing were several years later he was still in cash and so if he had just left his account alone and do nothing with it, he would've had about twice as much money as he started with and beginning of 2008, but because of that fear-based decision.
He had no new counsel to help, talk about the legend and give him some wise advice he had half as much as what he started with in his case. That was a difference of millions of dollars. And so took some some real humble soul-searching on his behalf to come in and seek that wise counsel, but is a is a wise decision and I think that's that. Example always sticks with me is the reason why we need biblically wise counselors in our tickling our financial life very well said Robert. We want to guard against fear and greed. We want some accountability and some professional counsel biblical counsel when it comes to investing.
We also want to think about our convictions and how we want our faith to be reflected in our investments and I know that's what you're all about, inspire, and you have tons of stories about companies that you're investing in that our listeners can invest in the really align with their values and priorities as Christians which give us an example, perhaps of a company doing some really good things right now. Sure will and talking about the GM Smucker company with a name like Smuckers, it has to be good. So it's it's a personal connection with this company. My grandfather, my dad's side was a VP with them and worked his whole career Smuckers group on a farm in Ohio and works with your college started as a lab chemist kind of bottom of the run with Smuckers and worked his way up and there's this story that he used to tell one day Paul Smucker called him into his office on Friday afternoon and said this point in time. He was just a kind of a low level again kind of lab chemist Vern were fixing to set up our first shop west of the Mississippi out in California and we think you're the man for the job and he said will know what I am not in management.
What we see is somebody who has that the same values that we can trust take that out California and keep those of really family-friendly Midwestern faith-based values alive in this new facility and I said no pressure, but we want an answer by Monday and so if you hear company and my grandma and and he prayed about it and made the move out California so many years ago, but all through his career there and through our experience that that company we see integrity. We see caring for their workers.
My grandfather open that plants in Salinas California employing hundreds of people ran it for 40 years retired and that Smuckers close the plant. But before they close the plant they found a job for every single person who was working that plan before they closed it. Help them find a job elsewhere with the company they really care about people. They really do, and the founders and owners Smucker families, a faith-based family and you know this is that kind of integrity that permeates an organization that we think not just isn't just a warm and fuzzy story that actually has results in the bottom line right is the company that is doing things right there not violating human rights and their supply chains that go all over the world. There not cooking the books to great story, love. It is just an example of the kind of investments that are out there that can align with your values. There's also some companies to avoid as well. You can do all of that screening of inspire insight.com or you can learn more about inspiring vesting of inspire investing.com Robert, thanks for being with us today.
That was Robert Leslie, CEO of inspire investing.
This is moneywise live right back in your calls. 800-525-7000 back to moneywise live good to have Robert next along today appreciate his comments as we think biblically about managing your money. And yes, that includes the stock market assessments in good times and difficult ones always placed in our trust in our hope in Jesus, not our stock portfolios. It's time to turn our attention to your calls today would love to hear from you on any financial topic. Whatever's on your mind and your heart today. Whether it's giving dad's. Perhaps it's your saving for the future or just wondering how to handle your kids in terms of passing on these biblical financial principles to the next generation. Whatever you have for us today. We'd love to hear from you.
We have just a few lines open.
Here's the number 800-525-7000.
That's 800-525-7000 before I go to the phones. This is a great time wrote to remind you as we here are mid month that moneywise is listener supported.
We can't do what we do without your financial partnership and support were certainly grateful that you allow us through your support to share God's financial wisdom every day through our moneywise coaches and are answering thousands of questions each year through our certified kingdom advisors, and are of course radio listeners you out there listening each day. The ability to bring you the website aggregating all the content that we do and just being able to serve you in so many ways through our online communities and of course the moneywise app. We do all of that only because of your support and if you would prayerfully consider investing in this ministry would certainly be grateful it's a tax-deductible gift and you can give safely and email@example.com just click the donate button. We would certainly be grateful but said to our phones. Joanne your first up today on moneywise live go ahead and $30,000) and I don't know exactly what okay couple of questions to him did mean to interrupt the go-ahead.
No, I knew it and trace it back when there time, date, just get out of that regular stock market until I see in Colorado and Washington. Okay, I would not necessarily. I think the key is that you find someone that you feel really comfortable with where you have open communication that meets your expectations. I think it's important that this individual is understanding what your goals and objectives are to help you meet those who understands a biblical perspective of money and really understands the counsel of Scripture, but certainly that person does not need to be right there in your city. Unless that's important to you to be able to sit down face-to-face.
But in this environment were finding more than ever, the people are more and more comfortable using technology to have meetings and connect with one another and so I think the physical location of your advisor is less and less important all the time. Let me ask you a couple questions you just about your situation.
Are you retired okay and are you living off of the income from this annuity okay I have night.
I don't have to draw okay so does this is this annuity been what's called annuitized in the sense that you're receiving the monthly check every month now. Okay, so it's still accumulating it's in the accumulation phase and is it a fixed annuity giving you a guaranteed return every year or is it variable, meaning it has investments inside okay and how is it been doing. If you been happy with the results except I think that Margaret someone my age on very good. Well, I think the key for you is to have a real good sense of first of all, what are your needs so you mentioned that you have Social Security but that doesn't quite cover all your living expenses and so you have a need to supplement that you've been handling that by pulling out some of the cash value out of this policy. Some the accumulation that you been withdrawing periodically. This account is still continuing to grow. Annuities can be somewhat complicated so I think perhaps it's time for you to either go back to this advisor and have this individual explain to you exactly what you're invested in and as it relates to the variable portion assume you're getting a portion of the upside, the returns on the investments inside the annuity, but there's probably some sort of floor in there that doesn't allow it to go down beyond a certain point in the event that we were in a down market.
You need to understand that just so you know what your risk is, and then determine whether this is the very best place for you to be so that you can have this money growing for you in a way that's conservative reflects where you're at in your age and stage of life. Your income needs now and in the future, and the ability for this money to last throughout the rest of your life, or until the Lord returns, and I think you're getting not only your current advisor to weigh in on that and perhaps provide some explanation as to why this investment was recommended is important. And then if you wanted to seek out a second or third opinion from somebody who might offer an objective scenario that's different. This, perhaps, outside of an insurance product. I think that would be a good idea as well because it sounds like you at least have some uneasiness with what you're currently in as to whether it makes sense for you to stay right where you are. Pull your money out do something else that would be a little bit beyond what I would be able to give you an answer on right now just because annuities tend to be complex and I certainly wouldn't be able to get into all of those details in a way that would allow me to give you a good decision with regard to the 30,000 and I think the key is to make sure that you have. First of all years worth of living expenses in a safe and liquid account. If you do, then that's great. You could redeploy this into some other investments again that a conservative and I could be there for you growing up, but also available down the road if you need them. If you don't have that one years worth of expenses and liquid savings account. I would move this right there so you got it.
If you needed for the unexpected, but it safe and secure losing value to find another advisor to check with the school website moneywise live.org click find us to take a break right back to back to moneywise live at the intersection of faith and finance taking your calls and questions today. Few lines open 800-525-7000 one to Frisco, Texas.
Susie, your next up on moneywise live. I love your program.
I'm calling because I am sold my house money. 245,000 in the bank for the last six months I have about another six months. We had a total of 2400 for the year.
To me, but well worth it because I'm getting familiar with Texas so until fourth. However, there's a big bubble that's about to burst. I don't know when you'll burst. I'm wondering if I should try to buy something.
Things fell here in three days. We are way overpriced for what can I do with that money that would be fairly think is right now that that 245,000, and earning any interest right right yeah you know this is a challenge all over the country. Susie, it's that I know what you're facing there in Texas were certainly singing here in Georgia just read an article yesterday about the home that was listed and had 88 offers within 24 hours. You know it's just a really hot stock market right now and this gives me real estate market for a number of reasons. So certainly meal because the economy is reopening people have disposable income right now you were seeing historically low interest rates mean all of that is really fueling this housing market that's been on an upward trend for quite some time. The challenges you, you mentioned a bubble bursting and you know I think we will see a rollover in the housing market cyclically speaking because it does tend to move in cycles just like the economy and the stock market does. I don't see any reason that we would see a bubble bursting in 08 we had a real systemic problem in our system that that had to be worked through.
I don't think we have something like that going on right now, but clearly we could see housing prices begin to cool move from a sellers market to a buyers market in concert with, moving beyond the reopening of our economy getting beyond some of what's fueling this due to the stimulus that's out there in the easy money and all of that. Once that works its way through the system. I could see us beginning to temper economically and that would carry over to the housing market. The question is are these prices going to continue to rise for the next couple years and if so, you know, could you be in us a situation where you're paying rent go beyond what you might want to, you continue to see housing prices move up and then when the housing prices begin to go taper off or we see a dip, you know you don't get back to where we even are today and so the challenge of buying a house is it's not a pure investment because it's also where we live right, so if it was a pure investment we would buy based on only the price of that were entering out and would have accomplished its purpose from an investment standpoint would sell it. Let's just not the way we operate with our homes. We buy them direct to raise our families and to live in your we buy them based on the location and what we can afford.
Of course, but it's a lot more than an investment. Although we certainly moved in with the expectation that were to be there long enough to see some appreciation so I guess what I would say to you as number one. If you're buying deal with in something you can afford. Meaning if your budget will support it and so typical rule of thumb on that would be the principal, interest, taxes and insurance payment should be no more than 25% of your take-home pay.
If that's the case, and you have at least 20% down.
It sounds like you have probably a lot more than that and you're playing just planning to stay in this home for seven years plus, then even though you're buying in a sellers market and you are saying things are overpriced and I would tend to concur in most parts of the country as long as you're in it for the long haul.
You should still do quite well and you don't get yourself into this position where your paying rent prices that are already higher than normal and trying to time the market as to you when you enter the housing market, which is just a kind of a losing proposition, and may require that you wait longer than you're willing to wait, and ultimately by higher than you would be able to buy today, so I think for all of those reasons I would tend to say as long as you've got a checked all the boxes in terms of not buying more house than you can actually afford. I would tend to encourage you to go ahead and proceed and make that purchase. Before we get to where you would put the money if you decided not to do that. Tell me what questions you thought you have probably had another six-month leave on for another year, 50,000 to rent for two years until you sell.
I don't how to do the math like to figure out at like a bad move because Angel love. Why not right at AAA I get from this man.
Tell me okay and I had a hard time finding something like accidents. Let's difficult need effective but, that money into something that was semi-safe but it seems like it's a CD that you still not paying you now or you're going into the risk of market which I guess it's pretty risky scale like all the money that the government spending and cleanest will not eat well the year time horizon, and if you expect to use this money in less than five years. I don't think it should be at the risk of the stock market. The challenges even the bond market has the potential for loss because as interest rates move up bond prices are going to go down so you have, you can have a principal loss there even while you're earning some income. There are some other options you could go with the tips treasury inflation protected securities, things like that but I think you know for money that you're going to need in 2 to 5 years. I'm saying even though interest rates are low just going to need to. I think for my perspective. Take the .6%'s and it's moving higher. That would come with a high yield savings account. I think you just need to continue to think and pray through about where your God is leading it sounds like you really like where you're out I wouldn't be concerned about continuing to rent if you enjoy the place you are don't see it necessarily is money you're throwing away because you know it's your home and the others. The nonfinancial side to this as well. That always needs to be considered. So I would say either stay were your output that in the high-yield savings and just wait for the interest rates to recover and and improve over time. Or see if Ford might lead you to something where you get just as much joy you can buy it at price point that fits with your budget and then stay there long long time and we appreciate your call today. Quickly, the late Carol Illinois Suzanne, you're next on the program. Go ahead where I don't feel that I was acting out of here, but the word of our investment back in September when a portfolio of just under about 800,000 were already retired. We have no doubt we have emergency cash but I pulled out of our portfolio which is mostly IRA accounts allowed and sold all that stocks The bond sold out of stock so I had about $600,000 in cash sitting there six months, earning nothing, doing nothing and I don't want to just dump it all back and I was considering like dollar cost averaging back to the market and I'm just looking for advice appreciate your calls. Do you need an income stream from this money, or is it just money that can continue to grow. Second printing that were already retired, but between my husband's pension and social security were doing just fine so we don't really even need to pull out money. So in that case why have 600 of 800,000.
At the risk of the stock market well and probably much anyway. I was at a 64 any kind of situation and the outback went up so much that when I got all that ended up sure okay so that makes sense to take a quick break, just pause for a moment we come back will give you my thoughts on where you go from here. We appreciate your call today. You're listening to moneywise live for to take a brief break will be right back. Stay with us back to moneywise live on Rob Weston survey along with us today would you like somebody to walk alongside you as you set up your spending plan. Perhaps think about getting your finances in order. Developing debt repayment plan or giving plan or moneywise coaches would be delighted to walk alongside you. These are trained volunteers that do this as a part of their ministry, they do it virtually by meeting with you weekly using technology to get you all set up in the moneywise app and answer your questions also teach you some biblical principles along the way over what is typically 6 to 8 weeks.
We've got coaches available. Typically we have a month or two. Wait to get connected with a coach, but we've trained a whole new team of coaches in the last month and so we've got some coaches that are ready to go. So if you'd like to connect with a coach at no cost other than the digital workbook of $29.
If you have the ability to pay for it. We'd love to connect with the dissent or website moneywise live.work moneywise live.org and click connect with the coach, Suzanne, thank you for your patience. Just before the break, Suzanne called from late Carol Illinois describing her situation. An account of roughly a portfolio roughly $800,000. She saw some nice growth leading up to the beginning of the pandemic. Last year at that time she pulled out the stock portion which had grown to about 600,000 of the 800,000 in the portfolio about 200,000 in bonds, which is still there and she's wondering what to do with this money, and Suzanne, I think the first thing is just to recognize what you have. What a blessing that is. Secondly, that sounds like you did quite well leading up to that so I wouldn't you have any regrets about Chino pulling out even though the market is done quite well since then you're still sitting on a large portfolio of God's money and you're asking the right question and that is how can I be the most effective and faithful steward of what God has entrusted to me I think. Thirdly, I would concur with this line of thinking that we were talking about just before the break, and that is that, given your situation that your husband's pension plus Social Security really covers your lifestyle in this is surplus that is there if you need it. Down the road you had a major medical event one of you or both of you needed long-term care you want to do additional giving the Lord lead you to. It's there for those reasons, or to pass on as an inheritance and so it's not necessary to take risk ill in a way that is not appropriate for your situation, so you and your husband have the opportunity to pray and say Lord, what would you have us to do with this and you can be as conservative as you want to be. I would say perhaps as a starting point. Think about maybe 30% stocks and 70% in fixed into income type investments that are more stable that you know can throw off some income but are not as much at the risk of the stock market.
The benefit of that is, even if you began with that 30% of the 800,000 or about 1/4 million dollars to dollar cost average into the market.
Over time, even if by the time you got it fully deployed. We had a recession, you know, a year or two down the road.
Once you all the stimulus is work through the system and once the euro.
We've gotten past the reopening of the economy. That's creating all this economic growth right now in the economy starts to cool and it rolls over you even if it blasted two or three years, you would need to touch that money any of those investments could just remain there while you wait for them to come back. The key would be that you don't react emotionally at that point out that you did before, but you would want to make sure that you would be prepared to leave it there and let it recover. Knowing that the bulk of that money may be as much a 70% or more you know is in a more stable type investment portfolio. The last thing I would say is I would really encourage you to consider having an investment professional come alongside you to help you deploy the strategy that you will both agree to. That's consistent with your goals and objectives. Does that make sense though yes thank you I will probably be investing less briskly at this point contact. Great idea… So the dollar cost thing that would work it would and I would be thinking in terms of maybe 30%. Again that's your the steward so you and your husband need to think and pray through how much risk you want to take, but I think dollar cost averaging whatever portion of this you decide you want to put the risk of the stock market. Specifically, if you wanted to connect with a certified kingdom advisor there in late. Carol you could find wanted to moneywise live.org just click find a CK. We appreciate your call south to Chattanooga, Tennessee Roger next on the program go answer all my sister Montana and in the mid-70s.
My parents and I bought a building lot in West Palm Beach there close to the line.
Sorry and early 80s we start we did one withhold my sister her husband that, but maybe they can build on them when he retired. Unfortunately, usually pathway did not get you that she is concerned about capital gains tax paid in Montana or Florida and will hit her very hard.
Yes, well, because it's not anyone's domicile. There will be capital gains on the property, assets held longer than a year are either to be zero 15 or 20% depending upon your tax bracket is a long-term capital gain. You know the capital gains for individuals are reported on your federal income tax return, but also the state can having capital gains taxes.
Well, since Florida has no income taxes no capital gains for individuals only Corporation, so you won't have any state capital gains are in Florida, Montana piggybacks on the federal government's income and capital gains taxes so Montana will likely assess capital gains taxes on her state income tax return even if the gains are required acquired out-of-state, but they do offer.
I believe a 2% capital gains tax credit.
My team is telling me that effectively lowers its top rate down to about 4.9%. Bottom line is if there's gain their this is an investment property. There's going to be capital gains owed at the federal level, for sure. And then some amount of for the state of Montana if that's where she files so I think this is a year. Certainly if she doesn't normally use a tax preparer to have a professional helping her out file that return anytime you have anything unusual. I think it's even more important to have a competent professional walking alongside you. I would actually advocate for a tax professional every year for most people, but I think certainly this year and she should expect to pay that you want to get that determined in advance, so it's not a surprise, and she can get that paid on a timely basis.
We appreciate your call. Let's go to Nebraska. Becky, your next on the program. Go ahead, switched out 23. He's got a 401(k) that at about 13,000, and it and she had a chance to roll it into a new job, but he had recently came across rolling gold or silver. Yeah that would not be my favorite option for him. Becky, I think either rolling it into that new 401(k) just to keep things simple so you can just continue to build that account, making sure he either does his research on the investment options in the plan to pick the very best mix of investments for him at his age and stage of life, or getting somebody to advise him and that that's good to be the simplest disease can have one account he could roll into an IRA, which would allow him to you. Have a little more control over it in and open up a lot more investment options because at that point he could invest in any stock, bond or mutual fund but gold is you know it's getting a lot of attention lately just because of the fear of inflation and you know anytime we have uncertainty like what we've been through the last year for sure with the pandemic causes folks to take another look at the precious metals what I'd tend to look at is the longer-term performance and volatility of the precious metals and the data just isn't there again over a long period of time on talking you know the last hundred years. Even if we look at the last 25 years. He's got a lot of my time ahead of him if the Lord tarries in his good health that for this money to grow in the very best performance is going to be properly diversified stock portfolio just in terms of the annualized return.
He can expect based on historical norms and the volatility so I'm thinking at his age that's gonna be the best option for him and then at that point he would just need to decide as he rolled into the 401(k) or an IRA. If he chooses the IRA he's going to have to have an investment strategy to go along with it and our friends that sound mind investing.org can help with that. So hopefully that's helpful to you but we appreciate your call today. D. In Miami, Florida. You can be our last color today. Go ahead now.
I wanted to start a work grandkid to NPR belles lettres look to suggest other than the college fund. Yes you'd like to keep this outside of the college fund. Is that right yet okay yeah D what I would recommend is that you open an investment account to be a brokerage account in your name or if you're married, you and your husband's name, perhaps jointly making the kids.
Or, you know, their parents, the beneficiary, but the idea would be that you begin to segregate this money, you begin to invest it systematically and I would use either the Schwab intelligent portfolios or betterments or even Vanguard has a new Robo advisor solution, but the idea would be that you be systematic in your contributions to this taxable portfolio. It would be in your name so you could decide when you ultimately give them these funds as a gift, but you, you'd have control over it. So if it at that point down the road they were not making wise decisions with their money. You could do decide to hang onto it for a little bit longer so you're not supporting an unhealthy lifestyle, let's say, but that's can give you a good broad diversified approach and at very low costs, so a betterment Vanguard Schwab intelligent portfolios. Any of those would be a great place for you to call today hey thanks for tuning into the broadcast.
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