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When to File an Insurance Claim

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
June 8, 2021 8:03 am

When to File an Insurance Claim

MoneyWise / Rob West and Steve Moore

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June 8, 2021 8:03 am

Insurance is a great way to protect yourself from unexpected losses.  But knowing when to file a claim and when not to can protect you from unintended consequences. On the next MoneyWise Live, host Rob West will share a secret strategy for keeping the cost of your various insurance premiums low. Then he’ll answer your calls and questions on various financial topics. That’s the next MoneyWise Live—where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio.


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Go over at NMLS number 1330, equal housing lender. Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Insurance is a great way to protect yourself from unexpected losses, but knowing when to file a claim and when not to, well, that can protect you from unintended consequences.

Hi, I'm Rob West. It's prudent to have life, health, auto, and home insurance. It's also wise to keep the cost of your premiums low. I'll tell you the secret for doing that today. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Money Wise Live, where God's financial principles guide our every step. Insurance isn't specifically mentioned in the Bible, but God's Word does tell us that we should be prudent and wise. Proverbs 8-12 says, I, wisdom, dwell with prudence, and I find knowledge and discretion. And Ecclesiastes 7-12 tells us, for the protection of wisdom is like the protection of money. And the advantage of knowledge is that wisdom preserves the life of him who has it. Having insurance is wise, but knowing when to file a claim and when not to requires wisdom as well.

Sometimes the payout just isn't worth the cost down the road to you personally and to consumers as a whole. Let's look at roof damage from hail storms as an example. Have you noticed roofing companies showing up in your neighborhood after a storm? Now, for the most part, roofers are honest people, but a few bad apples can spoil the reputation of the bunch.

Sometimes those bad apples will try to convince you that a hail storm has damaged your roof when it hasn't. They'll tell you that your insurance company will pay for a brand new roof and it won't cost you anything except maybe your deductible. But the truth is, an insurance claim will always cost somebody something, and it won't be the insurance company.

Those costs are always passed on to the consumer, raising premium rates for everyone. You may also find that your premiums go up the next time you have to renew just because you made a claim. So when should you file a claim? Well, there's a good rule of thumb for home and auto insurance. Only file a claim if the damage comes to $500 or more on top of your deductible. So if you have a $1,000 deductible, file a claim only if the repair bill comes to more than $1,500. Try to think of home and auto more like catastrophic health insurance. Use it only for the big things, not to nickel and dime the insurance company whenever you dent a fender or lose a shingle in a windstorm.

You're better off paying for those things out of pocket. Filing multiple claims with an insurance company is a sure way to get your premiums raised or worse. You could find that when your policy is up, the company declines your renewal. And if you think that you'll just go to another insurance company, you're probably in for an unpleasant surprise.

They talk to each other in a manner of speaking, no pun intended. You've probably never heard of it, but the insurance company has a secret weapon that it uses to weed out frequent filers. It's a shared database called the Comprehensive Loss Underwriting Exchange or CLU, if ever there was an appropriate acronym.

So here's how it works. When you file a claim, it's noted on an industry ledger of sorts called your CLU report on how many times and how frequently you file claims. Too many claims in your CLU report and insurers may refuse to give you coverage and that period could last up to three years. And even if another company does decide to insure you, you'll probably find yourself paying higher premiums. So you don't want to file a claim unless you're facing significant out-of-pocket losses.

But there's a way you can avoid even the temptation of filing. The next time your policy is up for renewal, raise your deductible to the highest amount the insurance company allows. Let's say that amount is $2,000. Next, you want to make sure you have that 2,000 in your emergency fund plus another 500 or 1,000. With that accomplished, you're now insuring yourself against minor losses. This will not only avoid the temptation to file, the high deductible will also help lower your premiums, which will save you a lot of money over time. So to recap, file an insurance claim only when your loss is at least $500 more than your deductible. When it's time to renew, up your deductible to the highest amount the insurance company allows. And finally, keep that amount, your deductible, plus at least $500 in your emergency savings. Do all that and you'll save yourself a lot of money and grief down the road.

Now, when we say make sure you're self-insured, therefore you have your deductible, $2,000 plus at least 500 more, that's on top of your three to six months expenses. We need that there as your reserve for any unexpected expense. But if you do this, you'll have the margin and the foundation under you to be a great steward of God's resources. Hey, your calls are next, 800-525-7000. This is MoneyWise Live, where God's financial principles guide our every step. So glad to have you with us on MoneyWise Live.

I'm Rob West. Thanks for being here today as we apply God's truth to your financial decisions. What's on your mind today? Do you want to talk about savings or investing?

Perhaps it's giving or dealing with that debt you've been struggling to pay off. Whatever it is, we'd love to hear from you. We have some lines open. Here's the number, 800-525-7000.

That's 800-525-7000. You know, we began today by talking about when to file an insurance claim. And often when we talk about insurance, the question comes up, is insurance really biblical? Shouldn't we trust the Lord? And absolutely we should. I think the idea behind having insurance is to be sure that we recognize we want to do our part.

Yes, our trust should be in the Lord. But what is our role in terms of providing and offsetting risk? And I think, you know, as we think about our stewardship responsibility to care for our families, to manage the resources that God has entrusted to us, and to look out for our neighbor. You know, if we were in an accident and we caused, you know, something medically or a damaged piece of property or an automobile, we want the ability to make that person whole. And I believe that's where insurance really comes into play.

It's not a lack of trust. I believe it's just a stewardship responsibility. So when it comes to having the proper amount of insurance, whether it's for property and casualty or even to provide for our families through life insurance, it's important that we have sufficient coverage.

It has to fit well within the budget, but we need to make sure we're properly insured. You know, so often when it comes to this area of life insurance in particular, the people that I've counseled over the years are underinsured. They simply just don't have enough in the way of resources to adequately provide for their families if they were to be called home.

If the Lord were to take them home, they were to pass away, their income goes away, especially during those working years, they wouldn't necessarily have the ability to continue to provide for their families after death. Well, that's where I believe having a proper amount of term insurance, which is pure insurance, which means it's the least expensive approach that you can have, allows you to have that proper amount of coverage. So I would encourage you to really take a look at that.

Perhaps get an independent agent that can come alongside you to make sure you have the proper coverage, be it for property and casualty or life insurance, or in a later season of life, even considering long-term care insurance, if that fits into the budget. So think about that, pray about it, and then find somebody who can walk alongside you to give competent counsel. All right, we'll be taking your calls here in just a second. Let me give out the number. We do have some lines open today. 800-525-7000. That's 800-525-7000.

We're going to begin today in Port St. Lucie, Florida. Hilda, thank you for calling today. How can I help you? Hi, yes, nice to talk to you.

I have a question. We bought a lot about like four years ago, and we paid about $26,000 for it. And now, you know, we have a potential buyer, and we would probably be selling it for $80,000. Do we have to pay capital gains tax on that, and like how much would that be? Yes, you will, because it's not your primary residence.

So you have an exclusion if it's a primary residence, and the definition of that is you've lived in it two out of the last five years. Not going to be the case with a lot that you bought as an investment. So with a property like this that was bought for an investment, it's gone up in value, you're going to be looking to pay capital gains on the gain, which is simply the amount of profits you have.

The proceeds from the sale minus the original purchase price, and then you'll subtract any transaction costs or any improvements that you've made to the lot itself. And then the difference is really your gain. Now, for most folks, they're going to pay a long-term capital gain of 15% if you make, you know, under around $450,000 a year in income. That has nothing to do with the amount of gain. That's purely your income. So typically, you're going to be looking at 15%. You're going to want to plan for that, Hilda, because you don't want to get caught off guard with that and not pay that in on a timely basis and then, you know, have a tax bill that you're not ready to pay.

Good news is you're going to keep the lion's share of that that you can use to reinvest elsewhere, whether that's another piece of property or paying down debt, or maybe you want to invest it for the long term in the stock market. Does that help though? It does. But I have another question. When you say like to pay the taxes, do I have to pay the taxes before it's time to file my income tax next year or? Yeah, you know, I typically would. I mean, I think as you realize that gain, it's a good idea. It could be that the amount is just not enough to trigger any kind of additional liability if you don't pay it sooner than your tax filing. So you could check with your tax preparer on that, but it's not a bad idea once you know what that tax liability is, just to go ahead and make that estimated payment in advance. That way the money's already there based on a calculation that your tax preparer would provide. And then you could recognize that payment that's been made when you file your tax return. So there's not anything additional owed. And if you overpaid, you'd get something back at that point. But always a good idea to go ahead and get that in and not wait.

And that way you wouldn't have any kind of interest accrue. Does that make sense? Yes, it does. Can I ask you another question? All right, one more. Okay.

All right. We also have another lot that we are that we would like to build a home. Now we do have our home here, that we'll probably have it finished paid off on like within the next year because we're sending extra money every month. So I think it was a 15-year mortgage and this is probably like going on the eighth year. We'll probably have it done by next year.

And my husband and I, I'm 65 and he's 67. So it's just to build a house like for our, like my son. Use the proceeds from that one lot. I don't know if that's a kind of wise thing to do because we will be, you know, because we will be kind of like you could say, debt free by the time we, you know, we pay off the house that we have now. But I was thinking of, you know, giving that to him and using the proceeds as a down payment. Okay. Yeah, so I'm just trying to make sure I follow. So it's another piece of property and you're looking to gift the property to him prior to the sale?

Is that right? Well, I don't know what would be the better thing, you know, because we have to kind of like build the home. So it's probably going to be under our name, you know, for the mortgage. Okay. All right. Yeah.

And so what is the question you're trying to answer related to this property? Well, you know, I'm just thinking it's like, hold on, if it's the right thing to do. I'm in my, like my sixties and my husband too, you know, kind of like, you know, I'm deciding I want to do this.

Should I do this? Kind of like, like I say, once we finish paying our home here, you know, it's an extra like $2,000 that I have every month, every month, you know, that I was paying towards the mortgage that I won't have to be paying anymore. You know, even if I had to use a thousand dollars to help out pay that mortgage.

Yes. Well, I like the idea once you pay off your mortgage, if you have surplus income, you have some extra cash flow, as long as you're giving at the level you feel good about and all of your debt is paid off, you're on track and saving for the future, continuing to reduce debt on this other property makes a lot of sense to me. If you can be debt free and unencumbered, you're going to get a lot of peace of mind as a result of that.

And then as you get into that retirement season, Hilda, it'll keep your lifestyle and expenses as low as possible. So appreciate your call today. Thank you for the questions you've had, and we'll look forward to talking to you again real soon. Well, we've got some phone lines open today, taking your calls and questions on anything financial, applying the truth of God's word to whatever's going on in your life. We've talked about insurance today and taxes due on an investment property. What's your question? Is it saving or giving, perhaps retirement?

How do you approach that from a biblical perspective? Whatever's on your mind today, we'd love to tackle it. Again, here's the number 800-525-7000.

That's 800-525-7000. This is MoneyWise Live. We'll be right back.

Stay with us. Thanks for joining us today on MoneyWise Live, applying God's word to your financial questions. In just a moment, we'll talk to Scott in Pennsylvania, Robert in Tampa. We've got two lines open, 800-525-7000. We'd love to hear from you. Hey, let's take an email question.

We haven't done one in a few days. If you have a question, by the way, and you'd rather send it in, you can send that to questions at Questions at We try to read as many of them on the air as we can. This comes from Lee and Heather in Albuquerque, New Mexico. Lee and Heather want to know, should we pay down credit card debt or build our emergency savings first?

Lee and Heather, this is a great question. I'm going to say do both, but here's my approach. You know, if you don't have anything in your emergency savings and you've got some credit card debt, let's start with the emergency savings. Let's pay at least the minimum on those credit cards, keep them paid in full every month or at least the minimum so you're an on-time payer.

Let's establish, though, with any margin that you have. And by the way, to get that margin or surplus up as high as you can, let's be sure you're using a spending plan. Dial into that spending plan. While you have credit card debt, we need to be looking for every opportunity to cut because everything you eliminate from that budget, and by the way, you need to be tracking it, that's more money you can apply to debt reduction. But let's pay the minimums on the credit cards. Let's take every bit of surplus you have and let's sock that away in an online savings account until you get to $1,500.

That's going to be my target for you. Once you reach $1,500 in emergency savings, then let's pivot back to the credit cards and use the snowball method. Pay the minimums on all of them, but let's attack with every available dollar over and above your expenses that smallest balance until it's paid off and then move right down the line. Once those credit cards are paid off, then we're going to go back to the emergency fund and try to get that to three to six months expenses. Why $1,500? Well, I want you to have something so we can break the cycle of using the credit cards to fund your lifestyle. The unexpected will come, and if we don't have anything, you're going to rely on those credit cards. So that $1,500 is going to give you a bit of a buffer until we can get the credit card debt paid off and get that emergency fund to its proper level. I hope that helps.

Again, questions at If you want to send a question to us, we'd love to hear from you. All right, back to the phones. Tampa, Florida. Robert, thank you for your patience, sir.

How can I help you? Question. Last week I heard, I thought I heard you say that if you were married and your wife doesn't remarry, we divorced her 15 years ago, but she has not remarried. I thought I heard you say that she could collect Social Security on me or from me. Yes, that's true, but that has no bearing on your Social Security, Robert. So that does not decrease your benefit whatsoever.

Any payments by Social Security to a family member, including an ex-spouse, doesn't affect your retirement benefit, but they are eligible to collect spousal benefits as long as the marriage lasted 10 years, they haven't remarried, they're at least 62, and you are entitled to collect Social Security, then they can collect as a spouse, but that's not going to affect your benefit whatsoever. Does that make sense? That's the answer to my question, sir. God bless you guys for you and your ministry. Thank you very much, Robert. Yes, sir. Thank you for calling today. To Pennsylvania.

Scott, thanks for your call today. How can I help you, sir? Hi, I'm trying to decide on where to buy a house. I want to live in the country, but I've got enough money. I couldn't afford a 15-year loan in the country. I could in town. I'm just wondering if it's better to postpone moving to the country.

I mean, it does cost money to sell a house and relocate, or if it would be a good idea to just try to be conservative in my purchase, but, you know, to do the 30-year loan now. Yes. So what is your age, Scott? 47.

47. All right, and so you're looking to move from in town to more out into a rural area. Are you looking to accumulate a little bit more land? Is that why it's more expensive? Yes, and actually I'm moving from Iowa to Pennsylvania, so I'm starting from scratch, and yeah, I would like to have a little land and a little more privacy.

Okay, yeah, very good. And tell me about the rest of your financial life. Do you have an emergency fund?

Do you have any credit card debt? And have you been saving for the longer term beyond a down payment for this property? We've got a little bit of an emergency fund because we just sold our house, so I want to set aside like $10,000 for that. I have no debt. Yeah, so free and clear other than a mortgage. Okay, very good. And what would you have left over after the $10,000 is carved out for emergencies that you could use for this additional purchase?

Around $75,000 or $80,000. Okay, and where are you living now that you've sold the house? Have you closed on the sale?

Tomorrow. Okay, and what is your plan at that point? Are you all going to rent there in your current location? Yeah, we have a short-term solution that can last, you know, pretty much as long as we want.

It's not ideal, but it'll work until we can, you know, find something that works for us. Okay, so let's say you're to make the move. How much would you be expecting to spend for the property you're looking for in Pennsylvania? Oh, probably around $300,000. Okay, so if you put $80,000 down on that, you'd have about a $220,000 mortgage. I think the question is, you know, where does that payment fit into your overall budget in terms of the income that you're relying on? As a rule of thumb, I'd like to see that payment, Scott, be no more than 25% of your take-home pay, including principal interest, taxes, and insurance, which would leave 75% for the rest of your lifestyle and expenses, beginning with your giving and then all of your fixed and discretionary expenses. It could be that you're going to need to go with a $30,000 mortgage in order to get that down low enough, which I would certainly be comfortable with given that you're putting down, you know, well over 20% on this property. So I think you just need to look at, you know, you've already committed to this sale.

It's happening tomorrow. You're going to have the proceeds. You know, you want to make this move.

And so where are you going from here? And I think the idea that you would go ahead and make that move once as opposed to, you know, buying something else locally and then making a move down the road, you're going to have to make that move and making a move down the road is going to save you money, but you don't want to get overextended. And that's where using that 25% rule of thumb and then actually fleshing out your budget to make sure it works, I think is the right way to go.

If that needs to be a 25 or 30-year mortgage, then I would do that. It sounds like a good plan, and I think you're right on track. Let us know how it goes. We're going to pause for a brief break. Much more to come on MoneyWise Live just around here. Stay with us. We'll be right back. Thanks for tuning in today to MoneyWise Live, where we apply God's word to your financial life, your questions, the decisions you're making as you seek to be found faithful as a steward of God's resources. Hey, coming up in just a little while, Dolls Deliberations.

That's right. Our good friend, Bob Doll, 40-year Wall Street veteran and Christ follower who joins us weekly on this program will be along to give us his weekly investment commentary, which I always look forward to. What's going on in the markets? How do we interpret the news of the day? And Bob will always bring an insightful and informed perspective.

That's coming up a little later in the broadcast. Hey, have you checked out the new MoneyWise app? If not, it's available and ready for download. You can use our digital envelope system. You can ask questions in the MoneyWise community and get answers from our MoneyWise coaches and others, as well as our Discover tab, where you can get the best content in Christian finance from all the leading voices. It's all in one place, and you'll find it in the MoneyWise app.

Just search for MoneyWise Biblical Finance when you visit your app store today. All right, back to the phones. We have, let's see, three lines open, 800-525-7000 to Naples, Florida. Edison, thank you for your call today, sir.

How can I help you? Thank you, Rob. Our question is about our kids. We want to be able to set them up for the future. And we went from zero kids to four in a year and a half. And so, you know, yes, from going from the oldest being seven years old to the youngest being, you know, we're doing two weeks.

So, you know, we are trying to see what will be the best way that we can set up our kids. Yeah, so you are a blessed man, Edison. How exciting. I thought, you know, we went, we had four in four years. And we did that because our boys, the first two, were 18 months apart. And then a couple of years later, we had twins.

And so we had four in four years, four in a year and a half. And I realize that involves adopting as well as natural birth, but that's exciting. You're going to have a busy household. So when you say set up accounts for your kids, tell me what you're thinking. Are you wanting to begin to fund retirement?

I mean, excuse me, college accounts? Or did you have something else in mind? That's probably what I'm thinking. But I mean, I don't know what the best option will be. I mean, I don't know, like, you know, if saving is the best thing or setting some kind of account for them that, you know, whichever, you know, whatever you think that it will become, I guess, the most beneficial to them and, you know, for us to be able to be something that we can actually do.

Yeah, yeah, makes sense. Well, I think the key here, Edison is, you know, your expenses are going to go up as you have these four precious children in your home. So you're really focusing on that first to make sure you're doing what you need to do to take care of your family before you even set aside something for them for the longer term, be it, you know, a fund you can give them to, you know, make a first car purchase or, you know, get into an apartment or pay for college. I want to be sure you guys are, you know, doing the giving you want to do and that you don't have any consumer debt and that you have an emergency fund that's funded at three to six months expenses and that you're taking advantage of the power of compounding to save for retirement. So putting in, you know, upwards of 10 to 15 percent of your pay and some sort of tax deferred, you know, retirement plan, preferably a company sponsored plan with some matching, you know, those are kind of the key building blocks, if you will, of your financial life that's going to give you a solid foundation to kind of navigate and journey whatever the Lord has for you in the days ahead. Once those pieces are in place, again, you're giving emergency fund living on a, you know, less than you earn in your spending plan and your saving for retirement. Then I think, you know, the next step is to start think about thinking about some medium term savings goals, which could be, you know, a down payment or, you know, money toward a bigger home because you obviously have more people in your home now.

And so, you know, if that's something you're looking to do, you might want to be saving to put some money toward that additional or larger home. Another goal would be to begin to systematically fund an account for the kids. I like the idea of you putting money aside in a college fund, and my preferred choice would be a 529 college savings plan. There in Florida, you have both the prepaid plan as well as the 529 education savings. I like the 529 education savings plan better. You can make systematic contributions of whatever amount you want, so you'd want to build it into the budget.

And again, make sure you've taken care of those other things first. But then you'd have four accounts, let's say, one in each of the kids' names. That money would grow on a tax-deferred basis, and all the gains you would have when you're ready to use it for college would be tax-free as long as it's used for qualified educational expenses. If those children, any one of them got scholarships or grants, you could pull the money out on a pro rata basis with no tax impact. And if one didn't need it, you could transfer any portion of one account to another child. And it could also be used up to a certain limitation, $10,000 for K to 12 education as well. So I think that would be perhaps the best approach. And if you started it early, you could really have a meaningful amount when they're ready to go off to college. So again, it's the 529 education savings plan, and I think that would be what you're looking for. Does that help? Yes, thank you.

I mean, I guess they're kind of referring to that. So we do have the savings. We do have the emergency plan. I do have a 401k and a pension. I have two jobs, so I get them from both, and I do match.

I do the max-match that I can do, so they can match me the highest. So we do have all that set up. So is there a specific kind of company that we should go with, or is that to the Florida state? Yeah, the way I would look at that would be to go to a website, Now, because you're in the state of Florida and there's no state income tax, you're not going to receive any kind of benefit for using the Florida plan when it comes to the education savings. So you can pretty much choose from any state's plan. And the reason you may want to go outside of Florida is they rate these plans every year. They all use different fun families, you know, inside the plans, which means different investments and some have better historical performance than others. So I'd go to

I'd run some calculators based on the number of kids you have, the ages that they are, what your savings goals are, and it will actually recommend the best 529 plan for you. And then you can perhaps take their recommendation and open the account online. So hopefully that helps. God bless you, Edison, you and your wife in these exciting days as you bring four kids into your home in a year and a half.

That's phenomenal. We appreciate your call. Let's see, to Illinois, and we welcome Miriam. Go right ahead.

Oh, Jacob, come on. Hello. Hi, how can I help you? Hi. Hi.

I love your program. And I've definitely learned a lot. Um, so I do have three, four property rentals. I technically don't have a mortgage anymore.

And that's when I decided to buy these rental properties. Now my question is that I've been trying to pay this off with my own money. I just don't know as far as tax purposes, if it's good for me to pay it off or advice to just, uh, you know, the, the interest rates are pretty low. They're only like, uh, two to two to 3% on each property.

Yeah. Well, you know, you certainly could talk to your CPA about that Miriam to determine exactly what benefit you're receiving by being able to deduct certain expenses, because this is a business enterprise. I think this is a permissible use of debt because these are for appreciating properties that are income generating. I think the only aside to that would be if you have a conviction about being out of debt, or you just want to be completely unencumbered, I actually think that outweighs the tax benefits you'll receive just to have these properties free and clear. Uh, but I have no problem with you continuing with a low interest mortgage on these.

If you're realizing benefits financially through being able to deduct, I check with your CPA, then pray about it and make a good decision. Thanks for your call. We'll be right back with much more on MoneyWise Live. Stay with us. Welcome back to MoneyWise Live.

So glad to have you along with us today. We'll get back to your calls and questions in just a moment, but first, uh, a chance to check in with our good friend, Bob doll. Bob is a 40 year wall street veteran portfolio manager and chief investment officer. He joins us each week to give us his deliberations on the market so we can interpret the news of the day and grow in our understanding of how we manage God's money as it relates to investing. And Bob, there's some exciting news with regard to where you call home from a work standpoint, just in the last few days.

Tell our listeners about it. Certainly. I'm thrilled to have accepted the position of chief investment officer at Crossmart global headquartered in Houston, Texas. And, uh, Rob, as you know, a faith-based firm, um, that, uh, uh, manages values based products. And, uh, over the last few years, I've had the opportunity to do that, uh, as part of my job and was just excited about it and, uh, uh, thrilled to be able to, uh, integrate in a more complete way, uh, the investment platform and, uh, hopefully knowledge God's given me over these years, um, with, uh, what's important to God as we look at our investments. So, uh, it's, it's very exciting for me and, uh, loving the people so far. Well, that's great, Bob. This is so exciting for me as well, because I think this just further underscores, uh, really the opportunity and growth in this space of faith-based investing, you know, somebody of your experience and stature on wall street, joining to lead an overtly and explicitly faith-based investment management firm and really bring your expertise to bear, but to be able to express your values on behalf of your clients through these funds is really exciting and can't wait to see what God is going to do with that.

All right. Uh, it's been an interesting, uh, week in the markets already. Uh, I know you said in your deliberations this week that the bull market in global equities is entering a more difficult period.

Talk to us about that. Yeah, it's not meant to be bearish. I don't see a big decline because of the excellent news in our economy and earnings to back that up. I just see a choppier period ahead. Today's a perfect example. The S and P 500 day closed within one point of where it closed yesterday.

It went nowhere. You've got the bulls loving the strong economy and the earnings and the bears saying, well, not so fast. Does this mean we're going to have a little more inflation, a little higher interest rates and that tug of war I've used that phrase with you in the last few weeks from time to time, that tug of war I think is going to continue and we'll just take time to resolve. So there'll be days we feel good when the market's green and not so good the next day when the market's red. So we gotta be in the right stocks. Yeah, that's exactly right.

Choppy, as you said, is the operative word. President Biden is clearly grasping for an infrastructure deal. How important is that to where the market's going to head in the near term?

Well, you bring up a great point. Remember, not that many weeks ago it was we're going to get these next two multi trillion dollar plans kind of one at a time. And now there's nothing that looks like it for sure is going to pass. President Biden wants to get infrastructure done in the good news. Both sides of the aisle do as well. The question is, what's infrastructure and how many dollars do we want to throw at it?

And there you get many different opinions. So it's not real smooth in D.C. right now. And the president's agenda is more in question than it's been since the day he was inaugurated.

Yeah. Bob, wrap it up for us today. Obviously, there's a lot of good news because of the strength of this economy and other economies around the world. There's a lot of good news priced in. But where do you see us headed from here?

You know, I'm going to be boring, flat and indecisive, oscillating up and down. Look, the path of least resistance put a gun to my head, Rob, is still to the upside because of the massive amount of money and liquidity we have out there. But it's not going to be a straight line. Well, and maybe valuations will actually matter on the stocks we pick for a change. True enough.

In the old days, a little more inflation and a little more interest rates meant a little lower P.E. We'll see how that works out. We will. And we'll look forward to having you back next week. Congrats on joining Crossmark Global Investments as the new chief investment officer. Bob, grateful for you, my friend.

And vice versa. Thanks, Rob. All right. Bye bye.

That was Bob Doll, 40 year industry veteran and good friend of ours. He checks in weekly with his doll deliberations here on Money Wise Live. All right. Let's get back to the phones. We'll take as many questions as we can over the next several minutes to Indiana. Rob, thank you for your patience.

How can I help you, sir? Yeah, I have recently retired end of May and having finished up a life of building up our savings and obviously our charitable giving tithing and so forth. Now we're on the withdrawal side and just looking for some guidance and some thoughts on how do we handle our charitable giving and things in a period of time now where we're going to have less income and we're just really taking from our reserves and savings now.

Yes, yes. Well, Rob, I appreciate you thinking about this. And, you know, as stewards of God's resources, clearly we should be thinking about holding what we have loosely, however much or however little. I realize cash flow is down in this season of life and yet you want to still be found faithful in your giving.

And I believe God will honor that. You know, if we take the approach of starting with the tide, the principle of the tide that we see throughout Scripture, giving a tenth based on our increase and beginning with God's plan, the local church, and then moving beyond that and giving sacrificially, if we focus in on the tide, I think, you know, it's interesting in this season of life because if you've been a tither and you've been giving based on your gross income and you've taken and put a portion of that aside and that's been growing, you know, obviously there's a good bit of this money that you're now living on as you take withdrawals from, let's say, a 401k that's been rolled over to an IRA. There's a good bit of that that you've already tithed on. So I think you've got a couple of approaches here. Number one is you just say, listen, as I take income out, I recognize a portion of this is gain, a portion is my original investment. I'm just going to see it as my increase and I'm going to just tithe on what I receive as if it's just income because it's all provision from the Lord. The other approach is to say, no, I actually want to calculate the gain each year, the increase, the realized increase in the portfolio, and then I want to give based on that amount. However you approach that, I think, is certainly something that you need to take into account, pray through, and get comfortable with. You know, in terms of other income sources, namely Social Security, again, I think you could look at the same thing.

Clearly a portion of that, although it'd be very difficult to calculate how much, is a return of what you've paid into the Social Security system. But, you know, again, it's all God's provision. And so I would say just build your budget based on the increase, the income that you have, you know, whether or not you do it on the full amount or, you know, on a portion of it, just recognizing the increase versus the original contribution. And then give.

Give with great joy and open-handedly. And then I think look at your balance sheet for additional giving opportunities down the road because you may find that, you know, you've accumulated more than you need. And so you might say, you know what, Lord, we want to give a portion of this to you, you know, out of appreciated stock or, you know, just straight out of other assets.

I think the other opportunity for you, Rob, in this season is when you get to the place where you need to do a take out required minimum distributions is to look at the qualified charitable distribution where you'd give directly from one of these accounts like an IRA to a church or ministry and satisfy that RMD, but where no tax is paid and therefore you get a bigger bigger deduction and the charity or ministry gets a larger amount to put into God's service. So that would be something to consider and perhaps you could use that to offset money you would have been giving just out of regular cash flow. Does that help though or does that bring up any other questions in your mind?

Yeah, I think that's that's helpful. I'm also thinking obviously we don't know how long we're going to live. God does, but neither my wife or I know what our days will hold.

We're currently healthy and expect to live a long and healthy life. And so I'm looking towards that, you know, we've made arrangements for the end of our time whenever that may come and we have two children. So our thoughts are to, you know, obviously provide some whatever's left at whatever point in time that is to them, but we'd also then I guess kind of we're looking at a three-way, you know, one for one child, one-third for another child, and then one-third for God's work. Yeah. So how do we, yeah, I guess I'm just asking the question how do we know how much we should plan to give at the end, you know? Yes.

Is it just whatever's left? Yeah, well it's a great question and I think it's one that you need to approach with obviously a lot of prayer in terms of thinking through where is each child at in their own spiritual walk. Would this money be a hindrance to them based on the lifestyle they have and the decisions they're making or would it be something that'd be a blessing because they're managing money well, making good decisions. Secondly, you know, what do you want to do as your last stewardship decision with regard to putting money into circulation in God's economy?

I think there's something real to that. And do you want to do some giving now and perhaps get the kids involved? Perhaps you put some money that you would give away at death in a donor advice fund and get them involved in giving it away now and, you know, use that as a way to model some incredible generosity. I want to send you a book that I'd like for you to read, Rob, that I think will help to unpack this. It's a book by our friend Ron Blue and it's called Splitting Heirs, not hairs, but Splitting Heirs. It's the best book on a biblical approach to inheritance and wealth transfer. It'll unpack all the principles, including the one that a lot of people struggle with, that if you love your kids equally, you'll treat them uniquely, which just simply says we don't necessarily have to treat them all the same. And, you know, he unpacks that as well as a number of other principles.

So you stay on the line. We'll get that book right out to you. It's called Splitting Heirs from Ron Blue. And then once you read it, call us back and we'll talk about what you've learned. Well, that's going to do it for us today. I want to say thank you to my team today, Dan and Deb. I want to say thank you to Rich Rozell as well. And thank you for listening.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Come back and join us tomorrow as we apply God's word to your financial decisions. I'll be here. I hope you will be too. May the Lord bless you. Bye-bye.
Whisper: medium.en / 2023-11-07 07:28:44 / 2023-11-07 07:47:04 / 18

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