Financial Unfaithfulness

This is Doug Hastings, Vice President of Moody Radio, and we're thankful for support from our listeners and businesses like United Faith Mortgage. Heading into spring, I've been spending a lot of time pondering, analyzing, and debating something extremely important to men, and even many women. And that's whether a new driver would improve my golf game.

I would say I'm somewhere between embarrassing and appalling at golf. But man, do I love it. And all my buddies show up with these epic flash, big maverick birther drivers, and I can't help but feel like they've got this massive advantage on me and my persimmons. It's Ryan, and our faith and family mortgage team, we're proud to have a pretty special advantage ourselves and one that can be a big deal for you. Our team is an arm of a bigger company who is a direct lender, which means our company uses its own money and makes its own decisions within its own walls. There's no middleman, and this advantage often allows us to get you a better rate, saving monthly and lifelong money on a refinance or new home purchase. We're much better at mortgages than I am at golf. We are United Faith Mortgage. Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. After healing a crippled man in Acts 3, Peter tells the astonished crowd, Repent then, and turn to God, so that your sins may be wiped away, that times of refreshing may come from the Lord.

Hi, I'm Rob West. We're blessed to have a God who hears our cries of repentance and welcomes us back into the fold. I'll talk about how that affects our money. Then we have some great calls lined up, but please don't call in today because we're prerecorded. It's the Memorial Day edition of MoneyWise Live, where biblical wisdom meets today's financial decisions.

So, yes, it's Memorial Day and we're enjoying the day off like most of you, probably. But we hope you'll take some time today to reflect on and appreciate the sacrifices made by the fallen heroes of our armed forces who gave the last full measure of devotion to ensure the freedoms that we all enjoy today. One of those freedoms is to earn money, accumulate wealth, and spend it as we wish. But with that freedom comes responsibility. We're to be faithful stewards of God's resources. All too often we fail in that mission and we might be tempted to think that God doesn't concern himself with mundane things like money or how we manage it, but nothing could be further from the truth. As I've said before, more than 2300 verses in God's Word dealing with money and possession show that he is keenly interested. And as with any other act of unfaithfulness, we must repent those involving our finances.

When we do, God is eager to refresh us with his blessing. That means we must also never think that our financial sins are too great for God to forgive. Christ's sacrifice on the cross paid for all of them.

You can be assured that when you repent of financial unfaithfulness, God will absolutely hear your prayer. You know, the life of King David is a great example of the power of repentance. David was not only a great warrior having killed the giant Goliath and a truly able monarch who brought great prosperity to ancient Israel, he was also a terrible sinner who committed adultery and even murder by sending Uriah to the front lines in what was essentially a suicide mission.

All that is in 2 Samuel 11. So why then is David the only figure in the Bible called a man after God's own heart? It's because of David's willingness to repent, to acknowledge his sin before God and turn from it after being rebuked by the prophet Nathan. We see David's earnest desire to repent his sins in Psalm 51 where he writes, Have mercy on me, O God, according to your unfailing love, according to your great compassion, blot out my transgressions, wash away all my iniquity, and cleanse me from my sin. And of course, David was forgiven.

He's listed in the so-called Hall of Faith in Hebrews 11. Like David, we must also repent. But what should we repent concerning money?

Well, here's just a partial list. First, we must never forget that God owns everything. We're not the source of our wealth.

We're not even the source of our ability to earn money. All of that comes from God and failing to acknowledge it is the first step toward financial unfaithfulness. Next, we must always act with honesty and integrity in our financial dealings with others because we're a witness for Christ.

2 Corinthians 8 reads, For we aim at what is honorable, not only in the Lord's sight, but also in the sight of man. We must also be generous, sharing God's bounty with our local church and with those in need. Malachi 3.8 says, Will man rob God? Yet you are robbing me.

But you say, How have we robbed you? In your tithes and contributions. Next, we must live on less than we earn. Failing to do that results in debt, which the Bible doesn't say is a sin, but also never condones. Proverbs 22.7 says it plainly, The borrower is slave to the lender. Another act of financial unfaithfulness is not saving. Proverbs 21.20, Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.

You see, we must set aside something for immediate, unplanned expenses, and I believe we should invest long-term for the day we can no longer work. Now, laziness can be another financial sin if it prevents us from working hard. Work is not punishment.

It was ordained by God before the fall. Proverbs 14.23 tells us, All hard work brings a profit, but mere talk leads only to poverty. Finally, we must never let ourselves be overcome by envy or covetousness. In Exodus 20, we find the tenth commandment, You shall not covet your neighbor's house, you shall not covet your neighbor's wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbor's. We're to be content with what God has provided, never wishing we had what others possessed. So if you've committed any of these financial sins, don't despair.

God waits patiently for you to repent. All right, we have some great calls all lined up next. This is the Memorial Day edition of MoneyWise Live. Welcome back to MoneyWise Live, where we apply God's truth to your financial life. Hey, today's broadcast is pre-recorded. Our team is taking some time off, so don't call in. But we have some wonderful callers all lined up that I'm sure you'll be interested in.

We'll be talking about renting versus buying. We'll be talking about investing in gold and silver in our political climate today. But first, let's head to Indianapolis and talk about Social Security and managing cash flow with Christie. How can we assist you? Hi, thank you for taking my call.

Sure. My husband can retire with full benefits in September, but plans to work until he's 70. And our question is, if he goes ahead and works until 70, but starts drawing his Social Security benefits in September, it will allow us to have our house paid off in three and a half years.

Is that a wise decision? We want it paid off before he retires, and that would allow us to do that if we put his $2,500 a month in Social Security directly on our house payment. Yeah, I mean, I like that because, you know, eventually this comes down to recognizing that this is God's money, you're his manager or steward, and you need to prayerfully consider what your priorities are, what are your values, and how can that inform the way you make financial decisions, which means it's not just always a math equation. It's really about how can we best honor what we believe the Lord is leading us to do with the money he's given us. And if you all have said, which I totally affirm, that we'd like to be completely debt-free as soon as possible, and certainly by the time he retires, and you taking his Social Security at his full retirement age, despite the fact that he's going to continue to work, allows you to do that, then I would say that's wonderful.

Now, what are you giving up? Well, potentially, if you don't need the money, you're giving up an increase in that check. So, you know, it would grow 8% a year until age 70, at which point he could begin then collecting a higher check for the rest of his life. But that sounds like would prevent you from accomplishing this other goal, which is to be completely debt free. So if it were me, and based on what I'm hearing you say, I would set that potential or actual increase of that Social Security aside and go after this amazing goal that you have to be debt-free as you all head into retirement, enjoy being unencumbered and having a bit more flexibility, which is also going to reduce the monthly income need that you have.

So that as you transition to him no longer working and you all no longer taking a paycheck, obviously, being debt-free will help with that loss of income. So I'm affirming that. But given what I'm saying here, Christy, any additional thoughts or questions? No, that's pretty much what my husband had had figured out.

But we just wanted to make sure there weren't any things that we had overlooked or, you know, potential downfalls that we didn't see. Yeah, no, I don't think so. I mean, the only again downside is because you don't need the money, technically, you have the ability to let it continue to grow and then earn that higher benefit check for life. But even though you're giving that up, the fact that he's continuing to work, if he's earning more now and will between now and age 70 than he was in the early part of his working years, those higher earning years are going to replace the lower years, probably when he was younger and just starting out.

And that in and of itself will result in some increases in the check that you're already receiving as that's factored into the formula. So I would say press on. I'm excited for you all. Just be real prayerful about what the Lord would have for you as you head into that season, you know, even three or four years down the road. And we appreciate your call today very much. Let's head to Kenosha, Wisconsin. Jeannie, I understand you want to talk about gold and silver.

How can we help you? Yeah, with the economy not knowing what's going to be happening. We have our 401k pretty secure. And my husband was thinking of taking some of the 401k out and investing in either gold or silver.

Is that a good move or is that not? You know, I wouldn't do that apart from just a normal allocation, which I would say for most folks is only around 5% in precious metals. Just not historically not been the performer that stock investing has. You know, it's selling for around $1,800 an ounce today, which is close to where it was 40 years ago when you adjusted for inflation. Meanwhile, the S&P 500 has seen an average increase of 11 and a half percent a year over that time. So obviously, the stock market inflation adjusted is going to do much better.

It's also got lower volatility. The reason folks are talking about gold buying gold right now is just because it's a store of value. And obviously, with the volatility that was brought on by the pandemic, and then with all the monetary policy and the stimulus and the debt, I realized that a lot of folks say, well, at least we'll have the backing of the precious metal. You know, if we were to see a debasing of our currency, or we lose the reserve status, I just think even though I think we've got some tough choices to make in this country, and we are going to see more inflation down the road, probably not as much in the way of stock returns, you know, for the next decade or so, just given how far we've come the last 10 years.

I think all those things are real. But I still think for the average investor, a properly diversified stock and bond portfolio that's allocated based on your age, goals and objectives is a better long term play than gold, even given some of the headwinds that we're going to face politically and economically in the coming years. I just don't think the data supports overweighting in the precious metals, even where we find ourselves, because it's really a hedge. I realize it's a store of value, but it's a hedge against a falling dollar and, you know, economic decline. And I think long term, you know, we're going to be better off, you're going to be better off staying with a stock and bond portfolio. That's just my perspective on it. Doesn't mean it's necessarily the absolute truth, but it's it's at least kind of the approach I would take based on history.

And, you know, the difficult things we've had to address as a nation going back every decade for the last 100 years. Does that make sense, though? Yes. OK. Yes, thank you. You're welcome. We appreciate your call. If your husband disagrees, tell him to call back in and we'll talk some more about it. I appreciate you checking in with us.

Jessica in Louisiana. You're next on Money Wise Live. Go ahead.

Yes, sir. Thank you for accepting my call. I was calling to ask a question about renting or buying a home right now. I'm currently renting. I'm paying out like a thousand fifty dollars per month for an apartment.

And I'm 46 years old. I'm a teacher and I've never owned my own home. I've had so many rock bottoms. It's it's been a long time since I've been renting. I've had so many rock bottoms.

It's ridiculous. But within God's timing, I know that a house will be in my future. But I called to ask you a question. I'm going back to school, even though I'm a teacher and I'm full time, I'm going back to school to be a chaplain. And I don't have it well enough where I can pay that money on my own to go to school. But I am taking out student loans. And for this semester, I will have something left out of that student loan money. And it will be enough to pay off my car note. And right now, my car note is being financed through the credit union where it comes directly out of my out of my paycheck. And I was calling to see, is it a wise idea to go ahead and pay off my car note and just use that money that's already been taken out of my account, out of my paycheck for my car, use that to start saving money for a home? Or should I just leave that money there and start saving from that money to buy a home from that money?

Yeah, I see. What about additional expenses related to the education you're seeking? Are you going to need to borrow additional money for future years?

I think so, sir. The way it's looking, I will have to. Now, I could apply for scholarships because right now I'm at a 4.0. I could do that. And that's something I need to think about, seriously.

Okay, very good. Well, I would try to get to the bottom of that before I spend this money on the car. I'd really buckle down on your budget each month and see if you can't pay off that car out of cashflow as opposed to using the student loan debt. Let's use this to continue to fund your education so you can borrow as little as possible.

And then let's just continue to save up for that home purchase. We're going to have to pause here. Stay on the line. We'll talk a bit more off the air. This is MoneyWise Live. Thanks for joining us. We'll be right back. Welcome back to MoneyWise Live. I'm Rob West.

This is where God's Word intersects with your financial life. So glad to have you along with us today. Hey, our team is taking some time off today. This program is prerecorded, so don't call in today. Wait till we're live in the studio. But we do have some great calls all lined up ready for you today.

I'm sure you'll enjoy them. All right, let's head back to the phones. We go next to Ken in Pumpernickel Valley, Nevada. And Ken, I understand Pumpernickel Valley, according to my producer here, is named after a mountain shaped like a loaf of bread. Is that right? Yes, sir. I love it.

I bet it's beautiful out in that part of the country. Hey, how can we help you today? Well, my scenario is I used to work for the government. I have a state retirement. And when I left the government, I can't do nothing with my retirement. I can't add to it.

I can't take from it. If I take the whole thing out, they're going to penalize me $10,000. Yeah. So I'd like to know what I should take and do with this money because it's sitting there doing nothing.

Yeah. And what options will you have when you reach retirement age? You'll have the option to either take it as a lump sum or turn it into a monthly payout.

Is that right? It'd be just a payout. There's no lump sum. If I take the lump sum, then they penalize me $10,000. Okay. And what is that lump sum?

Do you know what that would be today? Right now, if I was to take it out, I'd get $26,000 and I have $36,000 in there. Okay. And have they told you what that monthly payout is going to be at retirement?

It's like $400 and some a month. Okay. All right. You know, I mean, I would probably... How far are you from retirement? I'm 52 years old. Okay.

52. So you got a while. And is that $400 and something a month going to grow by some percentage each month? Do they add some sort of adjustment to it every month? Or do you think that's locked in?

No, that's locked in because I can't. It's not growing. It stays at $36,000. Okay. But I'm wondering if the monthly payout would grow though, but you know, by the time you start taking it out, if they're going to adjust that for inflation or something else? No, no, no.

$400 is what I would get when I start retiring. Okay. And so, you know, so that's down the road.

Yeah. I mean, the only thing that I'm looking at is, you know, we'd have to factor in whether you think you could grow that $26,000 to a number that would, you know, allow you to do much better than that. But let's say, let's say you, you know, you doubled it.

Okay. So let's say it's, you know, it becomes $52,000 in the next 10 years. You know, even then at 4% a year, that's $2,000 a year that you would pull out in the form of income without touching the principal. And even then that's only $173 a month. Now I realize, you know, that's, you could take more than that, but you'd be eating into the principal.

We typically use that 4% number as kind of a rule of thumb. So given that you're going to be getting $400 a month for the rest of your life when you retire, versus you having to take this $20,000, double it in 10 years. And even then, if you want this money to last, you know, indefinitely, you'd only turn that into $173. It tells me that that $400 a month, even though, you know, perhaps it's a little bit frustrating to you to think that's not going to be growing over time, that's still a meaningful amount of money in terms of what, you know, you would have to do with this $26,000 to generate the same $400 a month.

Do you follow? Right. So I kind of like the idea of you saying, even though I'm not crazy about it, I'm just going to leave it alone. I certainly don't want to take a $10,000 hit on the $36,000 balance. I'm just going to, you know, know that that's there. And when I need it, I'm going to have an extra $400 a month to add to my Social Security and whatever else I can, you know, amass in retirement savings. And I think that's a good thing.

And you know, that money will last throughout your retirement, as long as the Lord Terry's and you know, you're still with us, you know, that's going to be a nice sum of money to supplement your expenses on a monthly basis. So I'd probably leave it be if it were me. Okay. Sounds good. All right. All right.

Very good. Ken, thanks for your call today, sir. Hey, before we take our next break, let's turn our attention to an email. We often hear from listeners who send questions in. And by the way, we invite you to do that. Here's the email address questions at moneywise.org.

Christy, thanks for your email. You asked, what's the best college savings plan? I know you like 529 plans. How do I know which one is the best for me? And that's a great question.

You're exactly right. I do like the 529 college savings plan as a vehicle to save for college related expenses. Here's why you put the money in similar to a Roth IRA, you don't get the deduction when it goes in, but you do get tax free growth. They also have great investment options built in that are easy to choose from, although they do vary by state. So when it comes to selecting the plan, that's right for you, you have to choose which state's plan to go into.

And by the way, a little secret, it doesn't have to be your state necessarily. So there's a website that can help you make this decision. It's saving for college.com saving for college.com. You'll go through a quick question and answer process and based on your state and whether there's a tax advantage to you saving in a 529 in-state, they'll compare that to the investment results of other state's plans and give you a recommendation on the plan that's best for you. So head over there to check it out.

It'll give you a goal on how much you need to save based on your kid's ages and how much you want to save for college plus the recommended plan based on the state that makes sense for you. Again, savingforcollege.com and we appreciate your email today. All right, we're going to head to a break when we come back more of your questions. This is MoneyWise Live. Stay with us. Welcome back to MoneyWise Live. I'm Rob West. Hey, we have the day off today, so don't call in, but here's the good news. We've got some great calls all lined up and I know you'll enjoy hearing from these folks like Christine down in Florida. And Christine, you're next up on MoneyWise Live. Go right ahead.

Thank you for taking my call. We have a pretty comfortable emergency fund set aside. We have it in a just a regular savings account with no interest. We also have a HELOC home equity line that is a four percent interest and we do have a balance on that because in the past we had used it as an emergency fund. We are wondering whether or not because we have other stocks and money that would be available to us in the case of an emergency that we could pull out pretty quickly, should we take that cash that's just sitting there as our emergency fund and pay down the HELOC to save that four percent interest or should we keep cash?

Yeah, yeah. Tell me about your monthly income and expenses and potentially what kind of margin you have on a monthly basis, meaning money left over at the end of the month after all the expenses are paid. Well, yeah, we're okay.

We're doing all right. We're probably saving at least a thousand to two thousand a month after. I am going to be retiring in about four months. We have already started just putting my current paycheck just into savings because we're getting ourselves used to living off of my husband's income and then in about two to three years he'll be retiring and we'll be selling our house then and if there's any more on that HELOC we'll just pay it back from the income from the house. We have a retirement home already and ready ready to go to move to.

Very good. And how will things look budget-wise once you retire? Will it be pretty tight or will you still have a little bit of margin each month? No, I believe we'll be okay. We have four separate annuities also that will kick in and so we should be fine.

We both have, we have IRAs, we have a Roth and I have my retirement account from my work. Excellent. And is the line still open, the home equity line, or is it closed at this point? No, it's open.

It's flexible. We pay it down and then we can take money out of it. Yeah. And did I understand you to say you have about 47,000 in emergency savings and the balance is about 40, is that right?

We have 47,000 in the savings and the balance and the home equity is about 60 right now. Oh, about 60. Okay. So you'd still have a bit left even if you took a hundred percent of those funds out.

Yes, that's right. Okay. All right. Well, here's what I might do. You know, normally I wouldn't advise pulling this significant an amount out of your emergency savings, but based on everything I'm hearing, you all are well established in your disciplines. You've demonstrated you can live well within your means.

You've demonstrated you can save. You, you're putting away a couple of thousand a month right now, ready to live on a single income. And even then you've figured out how you can continue to cover all of your bills. You've got retirement well thought through and you've got an open line of credit. So that's the only reason I'm going to give the advice I'm about to give, but I would say I'd be comfortable with you going ahead and taking, let's say 42 of the 47, paying down that line and then really attacking it every month. You know, with just 5,000 in emergency savings, because the bottom line is, you know, you could obviously pull that money back out at any point if you had to.

Even though I'd rather you not, but if you really had to, something just comes out of left field, that's a major expense. You could pull back from the home equity line of credit at any time and by not having that money sitting there earning a half a percent, you could not be paying four percent, right? And so given all of the things that are going on and all the pieces you have in place, I think keeping a little bit of margin so you're not running back to the home equity line because the water heater breaks. So that's why I'd keep that 5,000 or so, but I think going ahead and paying down the bulk of that and then taking that, you know, a couple of thousand a month and continuing to attack at that and then as soon as it's paid off, let's replenish that emergency fund with the excesses that you have and if you needed it, it's there.

You could take another withdrawal. Does that make sense? That makes a lot of sense. I appreciate it. Thank you very much. Okay, Christine, God bless you and thanks for your call today. Let's head to the Quad Cities, Illinois and welcome Michelle to the broadcast. You're next up on MoneyWise Live.

Hi, thank you for taking my call. I just had a question. So I get some money each month for my son and I wanted to put that away from him, away for him. He's 16 now and what my thought was is instead of just sitting in a savings account, is there a better way? I was thinking like, you know, in a couple of years, he's going to be going off to college and stuff and he could probably use that money. So I don't know if it's going to invest it. I don't know if it has enough time for investing but then for it to just sit in a savings account seems like it's hardly doing anything. So I don't really know what to do with the money.

It's about $600 a month so it builds quickly. Sure, sure. Yeah, you know, I think the only issue here, Michelle, is just the time horizon because what I'm hearing you say is you might want him to be able to tap these funds and access them within two years, correct? Correct. Yeah and so from that standpoint, that's really not a time horizon that's consistent with any type of investment in marketable securities because here's the thing, you could invest, you know, this $600 a month and whatever you've already saved up but so I realize you'd be what's called dollar cost averaging, buying in as the market moves up and down but let's say, you know, 18 months from now and I have no idea whether this is going to be the case, hopefully not, but let's say we're heading into a recession, you know, keep in mind we're 12 years into a bull market and apart from a blip on the radar through the pandemic, which it's amazing that's all it was economically speaking for this country as a whole, we're, you know, at the tail end, in many cases, of what's probably a bull market cycle and so if the economy were to turn over as we see inflation creep up and interest rates start to head up and the market heads down, you know, we could have a couple a year period where we're in a recession.

I mean, it happens usually every decade or so and we're well beyond that. So I think from that standpoint, I'd hate to see you have it invested even though you'd have the ability to make some more money but then when he's right at the time where he's wanting to use it, you're selling it and taking a loss on the investments that you purchased. So from that standpoint, I think, you know, I'd probably just leave it be, you know, and just try to continue to maximize the highest yield savings accounts you can find with FDIC insurance and just have comfort in the fact that that money is going to be there when it's time for it to be there and you'll be able to use it for that purpose but I think anything else is just too risky given the time horizon. Does that make sense? It does. Thank you and that's kind of what I was thinking but I just wanted affirmation, I guess, on that. Okay, very good. Well, we appreciate your call today and thank you for listening very, very much. Hey, let me mention the opportunity you have to partner with us on MoneyWise Live. You know, this is a listener-supported broadcast which just simply means we can't do what we do without your partnership.

What is your role? Well, your role is calling and listening but it's also investing, supporting this broadcast on a daily basis because we are, in fact, listener-supported. So if you want to be among the MoneyWise partners, our patrons out there that are supporting and underwriting this work that we have the opportunity to do each day on the air and on the web and on social media and in the app, well, you can do it quickly, easily, and safely when you head over to MoneyWiseLive.org and just click the donate button.

MoneyWiseLive.org and click the donate button. Hey, we're going to pause for a brief break but when we come back we have more calls lined up for you to listen to. This is MoneyWise Live where God's Word intersects with today's financial decisions. We'll be right back. Welcome back to MoneyWise Live.

So glad you're along with us today. We've got some great calls coming up. We're going to talk about how to maximize your online savings, whether or not you should move money that's invested in the stock market to the real estate market. We'll even talk about how to minimize capital gains on the sale of a rental property but we are pre-recorded today even though we have these great calls lined up. We're taking some time off today so don't call in but enjoy these calls like this one coming from Tampa, Florida. Alicia, you're next on the program. Go ahead.

Hi, thank you. I am about to sell, I'm planning to sell a rental property. I've had it rented for 16 years when I got married and of course I have my main, where we live now. So I just discovered that at a rental property the capital gains are pretty huge.

It's not the same as when you live, when it's your primary home. I am told, well, that I have to pay 25% on the depreciation that I've taken over the years which I've depreciated 36,000. So that would be a $9,000 hit on that part of it and then on the remainder of the gain I would pay the 15%. I want to know how to avoid paying so much capital gain. Is there something I can deduct with it being a rental property?

And then I have another question after that. Yeah, you know, talking to a tax professional would be your best bet here, Alicia. I'm not a CPA.

I mean we can talk generally about this but it's going to get pretty specific pretty quickly in terms of what you might do to increase the basis just based on the improvements you've made over the years and any allowable expenses that could be put against establishing that original cost basis that you're going to determine the gain by. But as you said, there is going to be some tax due on the depreciation. There is going to be a long-term capital gain and as you said for you that's going to be at 15%.

So, you know, there is going to be a tax hit there. Let me ask you, I mean one of the more common opportunities to kind of kick the can down the road on this capital gains tax would be what's called a 1031 exchange but that would mean that you'd want to find a rental property. That would mean that you'd want to find a replacement property to put this money into. Are you going to stay in real estate investing or are you wanting to redeploy these assets elsewhere? That was my next question about the 1031 exchange. I was wondering if I can exchange the rental property and buy the property my husband and I live in now, which is our permanent residence. Yeah, no, it would need to be a like property. So that replacement property would also have to be an investment property, not your domicile. Okay, okay. I'm glad you answered that because I've been kicking that around all day. I'm very nervous because this sale is all I have so I want to do the right thing. Sure, sure.

No, I can certainly understand that. Well, if you are not wanting to redeploy this into another, you know, similar investment property and you know, there's some, you can be fairly liberal in that but it does have to be another investment property. It can't be your personal residence. What you would want to do is identify that replacement property within 45 days and then conclude the exchange within 180 days in order to qualify and then essentially that gain would be rolled over into this new property and at some point you'd have to pay it when you finally sell it and pull it out and no longer redeploy it and rental property. But I would talk to your tax preparer just to see what you can do there. I mean, there's not a lot of options if you're not looking to do a 1031 exchange and you're not wanting to do any kind of giving out of this where you might give all or a portion of this property to charity and take a deduction out of it prior to the sale. That could be done but if that's not something you're looking to do out of this, you're just wanting to get as much out as you can so that it can be invested in let's say, you know, a conservative stock and bond portfolio that could be there to generate an income for retirement, something like that, then you know, this is going to be taxable. Good news is it's a fairly low tax rate at 15% at least for the long-term capital gains portion.

So that's good even though I realize, you know, it adds up on a sale of a property you've had for a long, long time. So I would check with your tax preparer and we appreciate you checking with us today and listening to the program. Let's head to Crossville, Tennessee.

Judy, you're next. How can we help? Hi, I am concerned about the market volatility and the economy and so we were considering, my husband and I were considering purchasing a home and renting it out and we have a, we are in our early 70s and he's still working part-time, okay, but we have a company in our neighborhood who actually will manage that type of situation so that we're not getting into some areas that we're not familiar with or spending more time doing that than we want to. Yes. So they say that we can probably buy a home, the market's high now and we were just looking for a small but $150,000 to $175,000 home could probably get us anywhere from $1,000 to $1,500 or so a month. So we're looking at that coming in monthly versus sitting in our stock portfolio right now. Yes. And a few years ago we asked our CPA about it and he said, oh, it's a lot of trouble to have a rental, but now he said he has a lot of customers who are actually doing that very thing and getting a monthly income and getting their money out of the stock market.

Sure, sure. Well, you know, I mean, real estate as an asset class is a great investment. It is obviously a bit more labor intensive than, you know, a passive type stock and bond portfolio, especially if you hire somebody to manage it for you. But you're offsetting some of that by having a management company, although there's added expense to that. And I would do a lot of due diligence on that 1,000 to 1,500 a month that they're talking about on a 150 to $175,000 property. That sounds a bit high to me, you know, in terms of what you'd be able to throw off from that.

And of course, there's no guarantees. I mean, depending on what happens in the stock market and the housing market in the next several years, obviously, as you said, you know, the housing market is up significantly. And it's not like 2008-2009 during the Great Recession where we had kind of a global economic meltdown that was triggered by a housing crisis that resulted from, you know, subprime loans and inappropriate lending standards.

All of that, for the most part, has been resolved. In fact, the lenders these days are much more conservative. This is being driven by a number of factors, low interest rates, low inventory nationally. There's not enough houses for the demand, not to mention the fact that the millennials, the largest generation, are now reaching age 30. They're married and having kids and thinking about buying a home. This is when they typically do that or when people do that. And you add to that the pandemic, which caused a lot of people to move to a work remote situation.

So they're moving out of, you know, the big cities into the suburbs and, you know, from small apartments to a house and a little bit of land where, you know, the kids can run and play. So all of that has kind of fueled this housing market. I think it's it's certainly high right now. It's, you know, overvalued. But I don't think we're going to see a crash.

I think what we'll see is a cooling off of the growth. But with that said, it doesn't mean that it's going to be necessarily as simple, Judy, as what might be presented to you by the the rental company, just in terms of their ability to keep it rented, the maintenance fees, the, you know, any kind of damage that happens, any kind of repairs that you'd be responsible for, and then kind of the net result of the return on the money. You know, if you would tell me, OK, Rob, if I had one hundred and seventy five thousand in this season of life in a stock and bond portfolio that's very conservatively invested, what should we expect? I would tell you, you should expect to pull about four percent a year, but that only be about seven thousand dollars, which is not anywhere near fifteen hundred a month.

I mean, that's about six hundred a month. But that would be where you have maybe 30 percent in stocks, the rest in fixed income, bonds, government, corporate bonds, things like that managed by a professional. And the idea would be that you'd hold on to the principle and you'd be able to pull some income off of it. And if we got into a recession a couple of years down the road, you wouldn't touch the stock portion. You'd wait for it to come back.

And it always does, at least historically speaking. And I wouldn't expect anything different. So I guess the bottom line is I'd say I'd be a little hesitant for you to jump into this because I don't think it's going to be as simple and as lucrative, perhaps as it's being described. And I would want to talk to a lot of people who are with this management company doing exactly the same thing that they're asking you to do to make sure that those returns are, in fact, what they're seeing and to know kind of the other side of it. So I do a little bit more due diligence, Judy, before you jump at this.

Does that make sense? Judy, are you still with us? All right, well hopefully that helps you. We appreciate you listening and calling today. May the Lord bless you. Let's go to Orlando, Florida. Colleen, you're next on the program. How can we help you? Hi, I actually have heard you speak several times on putting your money in online banking because it gives you a better interest rate.

And I wish I could say that I wrote it down when you said it before, but I didn't. And so I can't remember the names of the banks that you suggested. Yeah, so I typically give out three and I look at them periodically. By the way, if you want to do your own due diligence, I would say that again, due diligence, Colleen, I would go to bankrate.com. They're constantly updating the best online banks.

You could also go to nerdwallet.com. My three favorites right now, all paying around 0.5%, about a half of 1% in interest with no fees, and that's the beautiful part. They're not any maintenance fees or there's not all these gotcha fees they're constantly hitting you with. The three that I like are Marcus, Marcus.com, Capital One 360, and I also like Ally Bank. Marcus, Capital One 360, and Ally Bank. They all have great customer service.

Like I say, no fees, great interest rates on high yield savings, and they all have great websites and apps as well. So hopefully that helps you. We appreciate you calling today and good luck as you go out and connect with an online bank. Well, folks, that's going to do it for us today. I want to say thank you for listening. I want to say thank you to my team, Amy, Deb, and Jim Henry. I want to tell you that MoneyWise is a partnership between MoneyWise Media and Moody Radio, and we hope you'll come back and join us again next time. We'll be here applying God's word to your financial decisions. May the Lord bless you. Bye-bye.