Paying for Convenience

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage.

Let's call it the couch cushion dash. This is the moment when you need a tip for the pizza man, a few bucks for your kid's lunch, or you can't say no to the sweet eight-year-old and her Thin Mints. But you've got no cash and no other options but to tear apart the house searching for hidden money. It's Ryan from United Faith Mortgage, and it's funny how we can usually find a way to scrounge together a few bucks hidden around our house. Shame on you if it's from your kid's piggy banks. For many listeners though, there's enough money sitting inside your home to buy a swimming pool full of Thin Mints. Home values have gone up across the country the last few years, leaving many of us with a good chunk of equity tucked inside our homes that we could cash out to use for life. If you'd like us to help, we are United Faith Mortgage. These days, people focus on two things when buying goods and services. How fast can I get it, and how much does it cost?

Hi, I'm Rob West. What folks don't often consider is that the first one has a big impact on the second. Put more simply is how much they'll have to pay for convenience because it certainly isn't free. We'll talk about that today, then I'll take your calls at 800-525-7000. That's 800-525-7000.

This is MoneyWise Live, where God's word is the last word on our finances. Okay, so the word convenience has even worked its way into our lexicon for buying stuff. Think convenience foods and convenience stores. Convenience foods are easy to fix.

Usually you just have to heat them up or get them from a fast food restaurant. Convenience stores sell all kinds of things that we usually want in a hurry without having to go into a bigger grocery store. Everything from soft drinks to diapers.

But all of these have one thing in common. They cost a bit more for the convenience and often at the expense of taste and nutrition as well. Now, obviously we want to be good stewards of the resources God entrusts to us. But if you have the money in your budget for a convenience purchase, is it wrong to buy it?

Well, not necessarily. We have to budget our time as well as our money. There are only 24 hours in a day and sometimes getting fast food for the family makes sense, as long as it fits within your spending plan. But here are some ways that you can get caught paying for convenience you can't afford. Now, you may be in a hurry while you're out doing errands, so you grab a burger on the way. You know it's not in the budget, you can't afford the convenience of eating out, but you do it anyway. Maybe you don't have time to cook at home, so you opt for pizza delivery.

Again, not in the budget. Or instead of waiting for an item to go on sale at a local store, you simply go online and buy it. Now you're paying for shipping, too, and if you really need it in a hurry, you're paying extra for expedited shipping. You ignore the fact that convenience costs money and your budget is blown again. By the way, don't get caught up in the myth that Amazon Prime shipping is free. You pay an annual fee for that service and the true cost is probably still factored into the price. If it were really free, they wouldn't do it. The only way to make your Amazon Prime membership pay for itself is to be a frequent shopper and only buy things that you know are cheaper there than somewhere else. There's no question that Amazon and other online vendors are in fact a great convenience, but not at the expense of your budget.

Now, where are some other ways we might sacrifice stewardship for convenience? Well, maybe the worst example of all is the dreaded payday loan. These are the crack cocaine of financial services. Payday loan outlets offer you some or all of the money in your next paycheck, but at extremely high interest rates. In many cases, the interest rate is so high that after you pay off the loan, you don't have enough money left to get to the next payday, and so you have to take out another loan, and of course, the vicious cycle continues. It becomes impossible to break the habit, so never take out a payday loan.

Alright, here's another example. An unlimited data plan on your cell phone may be a convenience, and salespeople will always try to sell you one, but do you really need it? Maybe not, if you're mainly on Wi-Fi at home and don't use that much phone company data. On the other hand, if your job keeps you on the road a lot, it may make sense to pay more for unlimited data.

Here's another one that's becoming more common. Valet parking is a convenience offered at high-end restaurants and hotels and even some malls. Now, let me ask you, does it make sense to pay for a gym membership and valet parking?

Paying to walk on a treadmill and not to walk from the far end of the parking lot? Of course not, but some people do it without thinking. We should always be thinking, what else could God's money be used for?

So, here's the bottom line. The less discretionary money you have, the fewer conveniences you can actually afford. You see, God wants us to enjoy His abundance.

There's nothing wrong with that, within reason. Even if you have the money to pay for a convenience, it doesn't mean you always should, especially if it results in you saving or giving less. Keep in mind, we want to be clear about the goals that God has given us. And the way we accomplish our God-given goals in the long term is to make sacrifices in the short term.

Your spending plan is going to be the driver, the key to you being able to have the margin to accomplish everything God wants you to accomplish, including increasing your giving over time. All right, your calls are next on any financial topic. Here's the number 800-525-7000.

That's 800-525-7000. I'm Rob West, and this is MoneyWise Live, where God's word is the last word on our finances. Stay with us. We'll be back just around the corner. Welcome back to MoneyWise Live.

I'm Rob West. So glad you're along with us today. We started out today talking about convenience, the cost of convenience and how we control expenses as we manage God's money. Because recognize that's the starting point, that God owns it all and we're a steward. So when it comes to managing God's money, we should take great care being found faithful in how we manage God's money. And that means we should have a careful watch over what's coming in and going out. How do we do that? Well, you know, it starts with that spending plan, having that budget.

And here's the thing. When we have the long view in mind, remember we can make better decisions today, the longer term our perspective. So when we know where we're headed and when where we're headed is informed by not just goals, but our values, what's most important to us?

What is God doing in our lives and in our families? And how can money as a tool be used to accomplish those purposes? When we have clarity around that, it makes sacrificing in the short run much, much easier. We can say no to things knowing that it's a no to a bigger yes, a bigger yes, keeping us right in line with what God has for us and using money as a tool to accomplish that. That's, I think, the big idea when we think about why we would want to have a spending plan.

Why is that important? You know, to help you manage your money on a daily basis, we've developed an app that can help you set up your spending plan, use that in a digital envelope system, download your transactions, categorize them. And as husband and wife, if you're married, stay on top of that throughout the month.

It's simple to download. You can go to our website, MoneyWise.org or just head over to your app store and search for Money Wise Biblical Finance. You can download our our app today and in there you can get your spending plan set up.

I think that once you track and get your spending plan in place and then develop a system to control the flow of money, you'll have a lot more peace of mind as you steward God's resources. And please let us know how it goes along the way. Hey, we're going to take your calls and questions just ahead. Here's the number, 800-525-7000. 800-525-7000. In just a moment, we're going to talk to Jeff in Canton, Ohio. But first, Timothy's in Nashville, Tennessee.

And Timothy, what's on your mind today? Thank you for the call. I'm looking to get life insurance. I'm a recently married husband, just got married in January. My wife and I do not have any debt whatsoever. We are currently living with her parents and are in part caregivers for them. So we don't have any rent or a mortgage right now, but we don't have a home.

And I'm in an entry level position and currently taking school. I have about two more years of school before I graduate, just looking to determine how much life insurance I need, as well as what term I should be looking for. Yeah, very good, Timothy. Well, you know, I'm glad that you're thinking about this now. So often, folks, especially who are young, newly married, you know, kind of this is often one of those things that gets overlooked along with having a will in place, which once you start having kids, it's always important to have a will. It's critical when you have kids, because that's where you're going to name a guardian should the Lord take both of you home at the same time. So I think it's really important that we begin thinking about your life insurance coverage. And the good thing is that if you use term insurance, which is where you're just buying pure insurance and you're paying as little cost as possible just for the mortality expense, not the, you know, adding that to a savings plan, then I think you can get it very inexpensively and make sure you have the proper coverage, which your need for that will change over time. But at a minimum, you know, you want to start with 10 to 12 times your income.

It's just a good rule of thumb. And keep in mind, what we're trying to do here is replace a hardship that would create be created for your wife if the Lord were to take you. And so she's got to be able to replace your income to maintain lifestyle. And I realize you are just starting out.

But this is a good starting point. Once you have kids, you'll want to bump that up. In most cases, folks recommend in addition to that 10 to 12 times your income, you'll want to add roughly 100,000 per child for college expenses. And then, you know, oftentimes you'll add to that any other debts that you have, including your mortgage to be able to pay that off.

Because here's the idea. If we had 10 to 12 times your income in a lump sum, and then enough to pay off the house, enough to cover, you know, major planned expenses, namely college and anything else and pay off the debt, any other consumer debt so that you're completely debt free, then your wife, in this case, would be able to convert that lump sum to an income stream that's pretty modest, again, with all of those things already taken care of, to maintain her lifestyle while she's still saving. Until retirement age, at which point the insurance would no longer be needed. And then, you know, on your life, meaning a death benefit payable to her as the beneficiary on, excuse me, something on her life payable to you, if she's working would follow kind of the same rules of thumb, primarily to replace income because the other things would be covered, you know, perhaps in your policy.

And then, you know, for her, if she's a non working spouse, you would typically look at, okay, what would be additional expenses that you would take on if the Lord were to call her home, and that usually comes about when you start to have kids because now you would need to have full time daycare if you're going to continue to work and, you know, that's not in the budget, probably at that point. So, you know, those are kind of the starting points in terms of the length of that term policy. I'd look at either a 20 or a 30 year level term. Keep in mind, you'll typically replace it, you know, prior to that term expiring with a new 20 or 30 year policy, assuming you're healthy, you would be able to kind of re up on that and extend the length of that term. Does all that make sense, though, Timothy?

It does make perfect sense. Currently, entry level, I'm looking at about 30,000 annually. Once I graduate, I could potentially be somewhere between 50 and $70,000. So I am looking at 40 in the next couple of years.

And then my wife has a college age daughter of her own. So I'm just trying to get a big picture if I should be looking at $400,000 to $500,000 or if I should be looking at more or less. Well, I would probably maybe split the difference. Keep in mind, you can layer these policies on top of each other. And so, you know, you could go and get a half million dollars worth of coverage now and then come back and add another quarter of a million on top of it, you'd have to disclose it because the insurance company is going to want to know there's multiple policies in force, but doesn't mean you have to stick with it. Or you could replace it, you know, keep in mind, once you get qualified for a new policy of a larger amount to replace the whole thing, starting that timeline over again. And you, you know, you've been approved for it and the policies in force and your signatures on it, then you could let that other policy lapse, and just carry on with the new one. So you don't have to decide on something that's going to last for the next 20 or 30 years. Again, you know, it can grow with you and with your lifestyle and needs.

So I think probably a half a million dollar policy, which is gonna be very inexpensive, very manageable at your age, would get you started and then you'll want to reevaluate over time. We appreciate your call today, Timothy, and thanks for checking in with us. Let's head quickly to Canton, Ohio. Jeff, you're next on the program. How can we help you, sir?

Hi, Rob. First, I want to thank you so much for your daily program. That's really interesting. And we're impressed with all the range of questions that you can answer.

It's amazing sometimes. The question I had was related to our daughter, who actually had two questions. The one was, though, first, we've been taking money out of our IRA and giving it to our daughter as gifting it to her to put in a lot. Well, this year, she put in the money early because she wants she thought there'd be more opportunity early in the year. And she's a teacher and she has a 401 C, I think it is. And but she's also just after and she's expecting a child.

So I was wondering if you had any ideas or how, what house we should go about gifting it to her this year? Yeah, so she has earned income, but you're giving that to her as a gift, because she's living on her income. And therefore, this is what she's using to fund that Roth IRA. Is that right?

Yes. And this year, she had some savings, and she just put it in on her own. And so we don't have that option, we're taking out of a 401k. And she does have a, a, as I mentioned, through the teachers or through the state of Hawaii, she has an opportunity to put it in as a 401 C. But I'm not quite sure if that's the right thing to do at this moment.

Okay, yeah, probably. Well, first of all, for the Roth IRA, you know, I think what you're doing here is you're paying the tax on it for her, then you're doing the gift, which you can do 15,000 a year, you and your wife could each do 15,000 as the annual gift exclusion. And then she's just taking that money up to the cap, which happens to be, you know, $6,000 prior to the age of 15,000. And putting that into her Roth IRA, which is going to grow for her. She probably has in addition to that, a 401 A plan, which is basically an employer sponsored money purchase retirement plan that allows you to put in the contributions into the plan. And both the employer and the employee can contribute that's usually government and nonprofit organizations. And the employer has a larger share of control over how the plan is invested. And then she can withdraw it through a rollover to a different qualified plan. So I would just encourage her as you all get that money. And that's very generous of you to if there's no matching to start with that Roth and fully fund it, and then switch over to the 401 A through salary deferment.

And the goal there is to get to 10 to 15% of her income. We'll be right back. Welcome back to MoneyWise Live.

So glad to have you along with us today. Just before the break, we were talking with Jeff in Canton, Ohio. He and his wife are pulling money out of a 401k systematically and gifting it to their daughter. She's turning around and putting it into a Roth IRA. And in addition to that, Jeff, I'm speculating that she has a 401 A plan if you said it's not a 401k. But in either case, it's a basically a defined benefit retirement plan, where excuse me, defined contribution retirement savings plan, where she has the ability to put money in.

I think the goal is over time. And this will certainly be aided by the fact you all are assisting is to get 10 to 15% of her pay into the plan over the long haul. And if she does that, year after year with the compounding effect, you know, she'll be doing quite well. And obviously, you all are are giving her a great boost to get there.

As you do this annual gifting, I just want to make sure that you all have the ability to do that. And you've kind of thought through your long term plan in terms of what you're going to need to be able to maintain your lifestyle in retirement, she's got a lot of time ahead, you all don't have as much in terms of the ability to continue to save. So just make sure that you've really worked through that. You mentioned you have a second question.

I understand it relates to real estate. Is that right? Right.

Yes. Related to your intro for yesterday on bubbles, and the for us, the real estate market in San Francisco is just out of hand that they have a lot of people with IPO money, and they just crazily outbidding each other. Unreal at about eight, eight times our house with same square footage, eight to 10 plus a lot less land. And we're helping our daughter and advising her and she's showing us the listings and everything that she goes, tries to purchase.

They did outrageously over it. You know, 25% easily over the list price. So I was wondering if you had any advice? Yeah, you know, it's a really challenging market nationwide, but especially in certain pockets of the country and California and Florida would certainly be among those. Florida, I think is has a longer term upside potential from this point, even just because of the number of people moving into the state of Florida, trying to escape the higher taxes.

California has all the location and the sun and the great weather, but the taxes are sky high. And so you've still got a lot of people leaving the area, which means, you know, if she's just trying to enter the housing market now, it's not that she's selling something that she's going to benefit from on the sale, selling it sky high to turn around and then buy something. This is probably a good time, especially with somebody who's just starting out that, you know, she'd be thinking about being a renter, you know, while we give this some time for the housing market, likely to cool off. It's clearly overvalued 40 percent higher than where it was in 2016, excuse me, 2006, just prior to the 2008 collapse. And, you know, we're also seeing nationally today based on the demand and the real value, it's probably nationally about five and a half percent overvalued.

But it would be more than that in places like what you're describing. So I think, you know, the key whenever you're buying is save, save, save. So you want to buy with at least 20 percent down. I realize that's difficult to do, especially when people are praying over market values. Make sure you don't overpay. So, you know, don't get into those bidding wars and react emotionally. Make sure that you're not spending more than 25 percent of your pay for principal interest, taxes and insurance.

And if you can't check those boxes, plus with an understanding you're going to try to stay in this home for at least five to 10 years, then I think it's time just to wait and let's let this housing market cool off, perhaps even dip and let her continue to save and relook at this, you know, a year or two down the road. So I think that's going to be my best advice for you. We appreciate you listening and calling today. I'm back with your questions and comments just around the corner.

Here's the number 800-525-7000. This is Money Wise Live where God's word intersects with your financial life. Stay with us. Welcome back to Money Wise Live. I'm Rob Lass. This is where your financial life intersects with the 2350 verses found in God's word dealing with money and possessions. You want to know God's heart related to your money? Let's explore that together based on what's going on in your financial life.

We'll go back to the phones in just a moment. This is a great opportunity, though, for me to remind you that Money Wise is listener supported entirely. It's your support that allows us to share God's financial wisdom every day through our Money Wise coaches, through our certified kingdom advisors, through our website and the Money Wise app. Of course, this radio broadcast and everything we do to come alongside you and provide this community of stewards really wanting to journey together and understand biblical financial principles.

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Chattanooga, Tennessee. Gary, I understand you had a CD mature recently. Is that right?

Yes, that's correct. Following your advice for diversity, this is kind of the secure end of our savings. And you know, the interest rates are terrible. And I'm wondering if you could recommend another option with similar security, maybe FDIC to put that money from that CD. Yeah, I wish I had a good answer for you, Gary.

Unfortunately, I don't. I wouldn't lock it up into another CD. Rates are just too low. You're not going to get rewarded enough for the illiquidity of the CD in today's environment. You know, you can get a half a percent with a liquid FDIC insured high yield savings account from an online bank, and you might get, you know, 0.65 or 0.70, another 15 to 20 basis points, and you're going to tie up the money for a full year. So I just put it back into a high yield savings account and wait, recognizing that the goal for at least that portion of your net worth is to be stable and secure. You don't want to take risk with it.

I'm understanding. And unfortunately, in this environment, there are some benefits to having low interest rates. But one of the downsides is exactly what we're talking about here. I mean, any other option, you know, would require a bit of risk dividend paying stocks, you've got the risk of the underlying security moving up and down, even though there's the income from the dividends. Certainly, peer to peer lending is getting more popular, but there obviously is risk there. Even bond mutual funds, even short term bond funds, that's certainly an alternative to CDs, but as rates head higher, the bond prices are going to fall. You're going to get a good yield, but you're going to see some decline in the value of the underlying investments of those funds or ETFs. You know, the only kind of foolproof way, if you will, to get a great return on your money that's guaranteed is paying down high cost debt, because obviously that's going to be guaranteed returns equivalent to the interest rate that's going away as you pay that off. But otherwise, Gary, I think in this environment, we're just going to have to be happy with the high yield savings account. You could go to bankrate.com and compare. But, you know, that 0.5, 0.55 is about the best you're going to do.

Does that make sense, though? What about treasuries? Yeah, you know, you're still not going to do a whole lot better there. I mean, you can look at treasuries in buying direct or through funds, you know, basket of treasuries through ETFs or mutual funds. You may do a little better there, but again, you know, you're going to have the price of the treasury moving around with interest rates and the direction as rates head up is that the treasuries will fall in value.

So, you know, I think you've got to just have these baskets of money and for that, that's, you know, your liquid reserves of six months or more, depending on what season of life you're in. I'd probably just stick with the high yield savings and wait out this interest rate, these interest rates moving higher once they normalize probably in the next year. I think there'll be some other options there, but unfortunately there's not a whole lot you can do right now.

But we appreciate your call today, sir. By the way, check out soundmindinvesting.org. They've got some great articles that they've done recently on some investment options, specifically as inflation begins to tip, tick up not only tips, treasury inflation protected securities, but a few other ideas. And that may be an option for some of this.

As we see inflation begin to creep up, you can be rewarded with some of these investments that are pegged to rising inflation soundmindinvesting.org. Just do a search on their website. You'll see some great articles. We appreciate your call today. Let's head to Wisconsin. Catherine, what's on your mind? Hey, so we have well, I have some. Catherine, did we lose you? Okay. I think we had just maybe lost her.

Are you back? There we go. I'm sorry.

Apparently I hit the mute button on accident. No problem. No problem. How can we assist you?

Okay. So I have some student loans. Part of it is government and part of it is private. And my husband and I have been pouring pretty much everything we have except for three months saving emergency fund. We've been pouring just about everything we can into the private loans. Now the government loans are currently on hold because of the pandemic. And so we are we're figuring that once we get the student or the private loans paid off, which were only a couple thousand away from doing. We're figuring if as long as the government loans are still on hold, there's no point in putting any money toward them yet, just so we can keep building our savings, especially with the with the rumors floating around about the possibility of the government forgiving some of that, which maybe they will, maybe they won't.

But we're figuring it would be better to put that money into savings, rather than to put it toward the loan. But I just wanted to just check and make sure if you thought that was the best idea or if you had any other ideas. Yes. Well, I would agree with you. I mean, given the deferments that are in place here and what's going on with COVID.

Absolutely. The place to be looking is it toward the private loans first. That's going to be where I would be focused on what you want to pay down. Not to mention, you know, in addition to the the fact that they're in deferment, they're going to give you the most flexibility even once you start repaying with income based repayment options and the like. Obviously, if if loans are forgiven across the board, there's going to be caps on what is going to be able to be forgiven.

Likely. And so, again, I think if you focus on paying on those private loans first. Now, if you feel like you haven't shored up your emergency fund fully, then I'd probably go there next just to make sure that, you know, even before putting extra money toward the student loans, make sure you've got that three to six months expenses. But after that, I would continue paying toward those private loans. I realize there's uncertainty about the legislation, but you can never go wrong reducing debt to the best of your ability. And I think you're doing it in the right order. So I'd say keep it up.

I'm glad to hear your lifestyles in check because you have plenty of margin, which means you're able to shore up your financial foundation. That is a great thing. Thank you, Catherine. We appreciate you checking in with us. Thanks for listening and calling today. Folks, thanks for being along with us.

This is MoneyWise Live. I'm Rob West. We're going to pause for a brief break. We come back. More of your questions. Lines open.

800-525-7000. Stay with us. Welcome back to MoneyWise Live where God's word intersects with your financial life. Just ahead, we're going to talk about getting a large settlement for workers comp, what to do with the money and also an inherited IRA that's been invested for 10 years. Terry wants to know where to go with that. But Rose is in Antioch, Illinois. Rose, how can we assist you today?

I have a question for you. My husband needs some quite expensive dental work between $35,000 and $55,000. And I'm 59 and a half and I was thinking about taking it out of my 401k but needed to understand a little bit more about what the rules are there, if that's a smart thing to do, if you have other suggestions on how to finance this. Yeah. You know, unfortunately, there's, you know, pulling money out of your 401k is an option. It's not the best option because it's taxable money and obviously, we'd prefer to let that money continue to grow so it's there for you down the road and you're going to obviously have to take whatever you pull out and set a portion aside to cover the tax on it. But I'd rather you do that than you know, taking on some debt. So as long as he's 59 and a half, if he's the if it's his IRA, there'll be no penalty in pulling the money out, you'll just pay income tax on the amount you withdraw in the year that you take it out.

So it'll be added to whatever income you have during that calendar year. And then obviously, you'd take care of it out of that. You know, other options would be could borrow against a 401k assuming he hasn't separated from the company.

I'm not a big fan of that. I think the you know, other options would be, you know, to look at pulling from an emergency fund as long as you have margin and you can replenish that looking at other assets that could be liquidated. And then I think, you know, the the last option would be, you know, how could you finance it in such in some way, you know, perhaps working with the provider on a payment plan of some kind, you know, to see if they can stretch it out over time. So, you know, those are going to be, you know, the best options if you were to pull this out, Rose of the 401k. How are you all doing in terms of what you've been able to set aside to be able to cover your expenses in retirement? We have about 150 in 401k and about 100 grand in pension.

Now we plan on working God help us another 10 years. Okay. All right. And how much do you think you'll need to take out?

Depending on I said the dental expenses between 35 and 55 and we're still praying and and taking a look at at options there, but we could probably we have about eight months of expenses saved in our in our savings account. So we'll probably pull about 10 grand out of there and then finance the rest. Okay.

Yeah. So I think that's I mean, obviously it sounds like this is major dental work that has to be done. And so, you know, that's what the emergency fund is there for.

We don't want to deplete it entirely. But I wouldn't hesitate to, you know, especially if you're a cash payer to go in there and try to negotiate with them around the cost of this thing. Let them know that you are paying cash. It's not coming from insurance that you, you know, you can show them your finances and let them know that, you know, this is a bit of a hardship, although you plan to pay it in full. And if they can work with you both in the total cost and the timing of how it's paid and when that would be a real blessing to you. But apart from that, it sounds like you're on the right track here in terms of how you go about it. I just think, you know, what's key is you try to keep debt as low as possible in this season and really keep lifestyle in check, which means you've got to control the flow of money going in and out. Your spending plan is going to be the real key driver there. But I think you certainly you're getting creative, you're asking the right questions, and I think you're on the right track. So all the best in that dental work that he has to have done. Rose, we appreciate your call today. Let's head to Ohio.

Terry, how can we assist you? Well, I received a IRA with my divorce, and it's been sitting there for 10 years and then only it goes from 20 it's for 20,000. It was for 30 and I use the other part to buy a new car.

So it was like 20 it's 20 and it only goes from 20,000 to 21 or 22. It just keeps you know, it hasn't earned any anything for 10 years. So I don't know what should I do invest somewhere? I don't know. I guess I'm afraid to take the chance.

Sure. What is that invested in? Do you have a sense of that?

I don't really I don't it was way back and it was I was all emotionally upset. So I just wait to see well banks. It's invested in banks.

I know that. Okay, well with the sum of money you're talking about Terry, you're going to be better served to get broader diversification through either exchange traded funds or mutual funds where you can own a basket of investments that's not tied to a small group of individual stocks companies, whether they're banks or some other industry, because you're really relying on one sector to do well as opposed to getting a broad cross section of the market, which has done quite well over the last decade. So I think you need to reevaluate this given the sum of money. It's not enough for a financial advisor to come in and manage it for you. So I think you should be looking at one of the fun families like Vanguard. You could use their robo advisor solution where you'd go through a question and answer process and they build a very low cost diversified portfolio for you. You could use the Schwab intelligent portfolios.

You could also check with our friends at soundmindinvesting.org and these are believers that could give you an investment strategy there as well. So I think it's time to perhaps redeploy these funds, but I'd be careful in terms of, you know, understanding what's the purpose of this money, how quickly might you need it and make sure that your investment strategy reflects that because if this is money you think you might need within 10 years, you don't want to put all this in a stock investment strategy, even if it's diversified through mutual funds, because we got into a recession a couple of years down the road, you know, wouldn't be out of the question for this to be down 35%. And so if all of a sudden, you know, you got a statement in the mail, and you're 20,000, you know, was, you know, 13,000, you'd probably be pretty frustrated and upset about that. Now, keep in mind, if you've got a long time horizon, you would go into it knowing, well, even if that happened, I'm going to wait for it to come back.

And it's going to move to higher ground like it always does. But you may not be in a position to be able to take that level of risk. And so if that's the case, you're going to have to have a more conservative posture, which, you know, with lower risk means lower return. So I think that's where, you know, working through one of these robo advisors, again, like Schwab Intelligent Portfolios or Vanguard or Fidelity, they'll uncover that through the questions and answers and then come back to you with a really well diversified low cost portfolio. So I would check those out. And if you have any other questions along the way, don't hesitate to give us a call. We appreciate you checking with us.

Let's head to Chesterton, Indiana. Danny, what's on your mind today? Well, I've been for a lot of years, I've been on a basically a structured settlement, except for the permanent disability. It's been almost 21 years now and they have changed how they want to deal with me. And they're trying to not necessarily entice me, but they're wanting me to put it into a place to where I'll take an annuity in place of my regular payments that I get. I mean, I'm supposed to get them regardless, but if I die tomorrow, they would all stop. And the money that they're, they're also offering me the option of taking the money instead of buying the annuity.

And that money is north of $900,000. So I'm trying to, I'm trying to get some decent advice on how to even look at this because I'm, I never even considered it until, you know, 55 years old now. And I have a 14 year old daughter and, and you know, I don't want to leave them with nothing if something happens to me.

Yes. So are you looking, Danny, specifically for just how you want to take it or whether you should take it in the first place? Whether I should take it in the first place, because I mean, it's a, it's a complete, it would basically cut my income in half, but it would, if I got the lump sum, it would give me a rather large amount of money and I'm not very good at investing or anything like that. So it's not, it's not my bag. I'm not, money's not my thing.

So yeah, no, I understand. Well, listen, we all have giftings and that's why the Bible encourages us to seek wise counsel, which is part of the reason you're calling today. But I'm going to ask you to perhaps add to that circle of counsel because this is really a critical decision. I mean, this is a significant sum of money and there needs to be some analysis done on what's best for you in terms of what's the, the lump sum, which you said your understanding is around 900,000 versus, you know, what's the present value of a future income stream based on the annuity payout they're going to give you. And how does that compare to the lump sum they're offering? A financial professional could help you calculate that. And then, you know, beyond that, what is the, what happens beyond your life to that annuity? Is there some survivors benefits where that continues or does it stop?

That's going to be a key part of the factor here. And then beyond that, if you decide to take the lump sum, who's going to manage it and what's the investment strategy and what needs do you have as you head in to this season of life based on whether or not you have the ability to work or this is going to be your primary source of income. And what could that look like to preserve these funds for the rest of your life, which is going to be critical for you to be able to do that. So I'm going to recommend that you connect with a certified kingdom advisor there in Indiana. I'd probably sit with at least two or three, find one that's a real good fit for you, you know, that you feel comfortable with that has the track record look you're looking for where, you know, you all can begin to work together and he or she will work with you again on some planning first to help you make the decision as to how you should take that. And then perhaps that person or certainly another professional could then come alongside you to do the management of the money once you receive it, assuming you decide to take the lump sum. So head to our website MoneyWiseLive.org.

Just click find a CKA. And again, I'd interview two or three. Pick the one that's the best fit. And we'll be praying a lot.

God gives you and the advisor some real wisdom in making this decision. We appreciate your call today. Hey, I want to say thank you to my team today. Producing is Amy Rios, engineering Dan Anderson, Rich Rossell, providing research and Eric Tidwell is our call screener today. MoneyWiseLive is a partnership between Moody Radio and MoneyWise Media. I hope you come back and join us tomorrow as we continue to dive into God's word and apply his truth to your finances. We'll see you then. May God bless you.