Going Steady with Your Investment Plan

One listener that stands out that I worked with recently was this older couple that was interested in refinancing. They reached out to a few different lenders and their credit wasn't the best. I know some of these other bigger banks, you just won't hear back from them, which I cannot stand. Not everybody has the 780 credit scores and never had any hardships in their life.

I'll walk you through what you have to do. How can you end up being able to do this refinance, whether it's two, three, six months from now? Back to that older couple, we worked with them for months and months to improve their credit and we were able to get the loan done. We were saving them hundreds each month, thousands of dollars a year, finally got themselves into a situation financially that they can handle and they could start saving money each month, saving for retirement.

At the end of the day, they just could not be happier, which just put a huge smile on my face. We are United Faith Mortgage. One listener that stands out that I've worked with recently was this older couple that was interested in refinancing. Their credit wasn't the best. Not everybody has the 780 credit scores and never had any hardships in their life.

I'll walk you through what you have to do. How can you end up being able to do this refinance, whether it's two, three, six months from now? We worked with them for months and months to improve their credit and we were able to get the loan done.

We were saving them hundreds each month, thousands of dollars a year, and they could start saving money each month, saving for retirement, which just put a huge smile on my face. We are United Faith Mortgage. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. License mortgage banker. For all licensing information, go to NMLSconsumeraccess.org, corporate NMLS number 1330, equal housing lender.

Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. We used to call an exclusive dating relationship going steady. That's not an option these days when designating one's relationship status.

Still, it's helpful in another way. Hi, I'm Rob West. Going steady is still a good way to describe another serious and sustained commitment, making regular investments. I'll talk about that first today with investing expert Mark Biller, and we have some great calls lined up, but we won't be taking your live calls today because we're prerecorded. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, our friend and fellow Christ follower, Mark Biller, is executive editor at Soundmind Investing. And Mark, as always, great to have you back on the program.

Hey, Rob, thanks for having me back. Well, Mark, we've recently talked about investing as a day at the beach. Another time recently, we said it was like a tennis lesson.

Now it's like going steady. How in the world do we make this analogy? And do we need a chaperone? No, we probably do. Maybe we should call Steve Moore back out of retirement to oversee this. I'm sure he'd have some fun with this topic.

He would absolutely have fun with it. Yeah. So obviously, Rob, we're trying to create some good memory hooks to hang some of this material on. And this going steady approach that we're talking about today really refers to automating your investing by having a predetermined amount of money regularly transferred from your bank account into an investment account. When you invest the same amount of money at these regular intervals, we often refer to that as dollar cost averaging.

A lot of people have probably heard that term. And that is one of the main virtues of workplace retirement plans like your 401k or 403b. But it's also important to note that you can set up your own automated investing plan, even if you don't have a workplace retirement plan to participate in.

Yeah, that's great information. And as we say often, dollar cost averaging is one of our favorite investment topics, because it just works. You contribute the same amount each paycheck to your retirement account. When the market's up, you buy fewer shares. When it's down, you buy more shares, and it always pays off in the long run.

But Mark, I'd love for you to break that down a bit. What are the distinct advantages of automating your investing in this way? Yeah, well, in the article that we're discussing today, Rob, we point out six specific advantages, and we can run through those real quickly.

The first of those is self discipline. You know, when you're automating a dollar cost averaging plan, it causes you to factor in your long term investing into your budget right up front. Too often people leave their investing as kind of an afterthought, kind of whatever's left over, which for most people, of course, is nothing when they're done with their budgeting process, they use it all up. But this way, you're setting aside these regular installment payments towards your future financial security right up front and building that right into your budget. Yeah, and if you set it up for automatic contributions to, let's say, your retirement account, you never have to think about it again, which is really just one of the beautiful aspects of this approach.

All right, what's next? Yeah, and you're really hitting the nail right on the head giving me a perfect lead in because the next advantage that we talk about is that automated investing eliminates the need to ask the question, you know, is this a good time to buy stocks? Or should I hold off?

You know, that question, which we should point out, you never know the answer to that until much later. Only in hindsight, do you know is now a good time to buy stocks? That's a huge barrier for people making new investments. So this going steady idea by automating your investing assures that you're going to keep making these new investments consistently, even when the market is falling. Yeah, and we might say, especially when the market is falling, right?

Yeah, that's exactly it. That's the next advantage of dollar cost averaging, which is you get more for your money. When fund prices are low, your monthly investment stretches further, you get more shares for your money.

Strategy also works the other way. When prices are high, you buy fewer shares. So while this doesn't protect you from losses, dollar cost averaging will push down the average cost of your shares over time.

Three of the six distinct benefits of dollar cost averaging, it comes from an article called Going Steady, the advantages of systematic investment plan from soundmindinvesting.org. More to come with Mark Biller just around the corner. Today's program is prerecorded, so keep that in mind when you hear phone numbers. We're going to pause for a brief break now, but Rob West will be back in a moment with more MoneyWise Live. Delighted to have you with us today.

I'm Rob West, your host. Joining us today is investing expert Mark Biller of Soundmind Investing. You can learn more at soundmindinvesting.org. Well, today we're talking about going steady. Yes, that exclusive dating term that we used decades ago doesn't seem to be used much anymore. But we're not talking about relationships. We're talking about investing. Mark, you've been unpacking for us the distinct advantages of dollar cost averaging. When we invest systematically, we've covered the first three. Let's dive into the next advantage for regular consistent retirement contributions.

Yeah, the next one, Rob, is simply efficiency. You know, assuming that you're using mutual funds, which allow you to purchase fractional fund shares, that means that every cent of your systematic investments gets put to work right away. That's because traditional funds are sold in fractional shares.

So to give you an example, if you have a $200 monthly investment that might buy 7.4928 shares of your desired mutual fund. The point simply being that the full amount gets put to work right away. The contrast there is with exchange traded funds or stocks. And the advantage that traditional funds have is that with stocks and ETFs or exchange traded funds, those have to be purchased in full share amounts, at least for now.

Now that's changing a little bit. And it could be that within a few years, all of these types will be able to buy fractional shares. But for now, traditional mutual funds are a little bit better for this type of automated investing. And as a side note, that's also why 401k plans have always focused on traditional funds and have traditionally excluded ETFs.

Interesting. All right, well, those are some of the real tangible advantages to dollar cost averaging. What about some of the less tangible advantages?

Yeah, you know, here you got to start with peace of mind, because that's just a huge piece of this. You know, when you're making small monthly investments, it's just way easier for people emotionally than putting a lot of money to work and at risk all at once. You know, if the market falls after you've made a particular monthly purchase, most people can just take that in stride knowing that if the market continues to turn down, they'll be able to buy even more shares the following month. And on the flip side, if the market rises right after you've made a monthly purchase, you feel really good about your immediate profit. So the emotional swings with this approach are just way less severe than when you're trying to pick particular moments and add big batches of money all at once. Yeah, and you can obviously only do that if you're systematic with your investment plan or as we're saying, going steady.

All right, Mark, what's the last advantage? You know, it's really the ease of getting started. You know, with most brokerage firms and fund companies, you can open an investment account with a relatively small amount of money or even no upfront money at all. And beyond that, most mutual funds allow for very small monthly transfers. So this is really an easy way to get started investing, even if you don't have a lot of money already saved up. Yeah, we get calls all the time, Mark, from folks wanting to know where to begin, how to get started.

Break that down for us. What are the nuts and bolts of setting up a plan like you're describing? Absolutely, we get a lot of those questions, too. And the easiest way to do this, Rob, is if your employer has a retirement plan like a 401k or 403b for you to participate through. In addition, you also might get some matching contributions if you go that route.

So I'd definitely check with your employer first. But if your employer doesn't offer you an automated plan, then the next best choice for most people is going to be to set up an IRA with a broker or mutual fund company. We list a handful of good ones that we like in the article that we've been discussing if listeners need some ideas about where to go for that for setting up an account. And then it's just a matter of setting up these automatic transfers from your bank. And you can usually do that on a particular form from whatever broker or mutual fund company you set up your new account with. Now, if you already have an account with somebody, just ask that company for their automatic investing form, or a lot of times you can just poke around their website and find that form on your own. And I would just add one final note regarding the timing of all this, you know, whatever options you choose for implementing the systematic investing plan, you really want to get started as soon as you can so that you get the power of compounding working for you as long as possible. You know, someday you're going to look back on these humble beginnings, and we all start with humble beginnings.

And remember when you started going steady, and you'll just be amazed at how that account size has grown over time. Yeah, very good. Mark, is this something SMI could help with as well? Oh, absolutely. Yeah. And I'd encourage you to take a look at this article.

Again, we've got a list, there's a table in the article that lists several different options for setting this up. And, you know, our different strategies that we follow and sound mind investing can be applied in this way. But even if you're not using our strategies, just getting that money flow going into a good mutual fund of some type. You know, the the thing that really surprises people is, once you put this on autopilot, you're not thinking about it every month. So it tends to sneak up on people when they look six months, 12 months, a few years down the road, and go, wow, that that really has built up quite a bit while I haven't even really been paying attention. And that's really the whole idea of this is to make it the type of thing where you don't have to pay regular consistent attention. It's just happening automatically in the background of your life.

Mark, as you know, there's been a huge boom in the fintech space, financial technology with apps like Acorns and others that are really geared toward millennials to help them do just what you're describing, whether that's in the saving area, for short term needs or longer term with systematic retirement plan contributions. Do you like those? Or do they tend to be a bit more expensive than what we might find in your article? Yeah, you know, I think there's a lot of variation.

So it's hard to paint with a broad brush. I think that the point you just brought up is an important one. Whatever you're looking at, whatever plan or app or system, you want to look and see what are the expenses? What am I paying for this? The way that we're doing it through the article that we're talking about, those transaction fees are very, very small, if not zero, frankly, because a lot of these are no transaction fee funds. So it's a very cheap way to do it. That's not to say these others are bad. You just want to be careful. The other thing I'd be a little bit careful of is a lot of times these apps are geared towards getting you into individual stocks as opposed to diversified mutual funds. And so you can run into a lot more volatility when you're just picking one stock or a handful of stocks versus a diversified fund that's going to be a little bit smoother ride.

Yeah. Well, this has been really helpful, Mark. I love the power of compounding that comes in when we invest systematically over the long haul. Thanks for stopping by. Always my pleasure, Rob. Mark Biller has been our guest today. You can read more about this in their monthly newsletter at soundmindinvesting.org. The article is titled, Going Steady, the Advantages of a Systematic Investment Plan. Today's broadcast is a reprise edition, but we think the upcoming information will help you and make you a wise steward of what God's given you.

So please stay tuned. You're listening to a best of broadcast of MoneyWise Live. This program is prerecorded, so we're not available to take your calls today. But you can email us at questions at moneywise.org. Welcome back to MoneyWise Live.

I'm Rob West. This is where God's Word intersects with today's financial decisions. Have you ever thought about the fact that your money, the way you allocate God's money, tells a story about what's most important to you?

Here's the question we all need to ask ourselves, myself included. What story is how we're using God's money saying or telling about us and what's most important to us? And does it accurately reflect what's really on our hearts? Well, if not, maybe we need to make some changes. Maybe we need to think about how we're allocating God's money. So it's a proper reflection of where God is taking us, the vision he's given us for our lives and our service to him.

Well, that's one of the things we explore in this program. And we're so grateful for your calls each day as you ask questions because we know your heart's desires to be found faithful in serving the Lord with his resources. Hey, let's go right back to the phones.

Next up, Chattanooga, Tennessee. Monica, you're on MoneyWise Live. Go ahead. Hi, thank you for taking my call. Yes, ma'am. My question is centered around retirement, saving for retirement.

I was wondering what your thoughts were on an Index Universal Life Program or policy versus a 403b as far as saving. Okay, yeah. So you are still working, is that right?

That's correct. And how long do you plan to continue to work? Till retirement, at least 65, 67. Okay, between 15 and 17 years.

And you have a 403b available at work. Are you contributing to it currently? Yes, I am. Okay, what percent of your pay is going in there, Monica?

Do you know? Five percent, I believe. Okay, and are they doing any matching on that?

They are. They're matching like 50 cents to a dollar. Okay, and how has that been doing in terms of the performance over the years? It's been doing okay. Basically, I'm kind of starting over because I lost a job some years ago and I had to cash in my 401k. So I feel like I'm behind as far as my retirement goes. I see. Is this your only retirement account given that you had to pull out from the previous one? It is. Okay. And what have you built up in there so far? Close to $10,000 because it's a fairly new job.

So I've only been there a little less than three years. Okay, very good. And do you have some margin, Monica, such that you could increase that?

I know you're asking about universal life insurance policies, and we'll get to that. But regardless of which you chose, do you have the ability to put some more away? I do. Since the pandemic, I've paid off three credit cards. So I'm looking at taking that money and putting it toward my 403b.

Okay, great. Yeah, I like you continuing to add money to the 403b. I might get some help in looking at the various investment options inside the plan just to see if you're properly positioned. You have a good diversified approach to the portfolio that is appropriate given your age and risk tolerance.

And you could get some one time counsel from a financial professional, perhaps a certified kingdom advisor there in Chattanooga, who could look over the various investment options and just weigh in on whether you should make some changes to the investments that you've selected at this point. I like the idea of you pushing that up even as much as 15% or to the limit each year to the ability you can, just because you are a little behind. In terms of an indexed universal life insurance policy, I'm not a huge fan.

I'll say they have their place. But basically, it allows you to allocate cash value amounts to either a fixed account with a guaranteed kind of return, or what's called an equity index account, which is something that's going to mirror one of the stock indexes typically like the NASDAQ 100 or the S&P 500. The reason I'm not a huge fan is it mixes insurance with investing, which I just don't think is the best way to go for most people, and it can be very expensive compared to just a term policy with the proper coverage you need for a set period of time and using other investment vehicles like your 403b. So if it were up to me, I'd just try to get you to put as much as you can into that 403b up to the limit.

Make sure you're still covering your other priorities, namely giving and make sure you have a healthy emergency fund and you're systematically reducing debt. But yeah, putting as much as you can away through that 403b I think is the way to go and we appreciate you listening and calling today. Let's go out to Dallas, Texas. Linda, you're next.

Go right ahead. Yes, I was curious about the 401k. I listen to your program every day and I hear you talk about 401k and my husband and I cashed ours out a while back and we bought property and started a business. So we don't have a 401k.

It seems like it's a real important thing hearing you guys talk. I mean, we do the other things you do, like we're reducing debt. We don't have a car payment.

We don't keep a credit card balance. And the other thing, so I just wondered if we should put money back in a 401k and also is it secure against, you know, cause like how the things are going right now in the world. I mean, I'm just, I'm just kind of afraid. So I just just wanted to ask you that. Sure.

Is your biggest concern regarding the 401k, the stability of the stock market or something else? I don't know. I just, I just, I don't know if I should, I don't trust it. I don't know a lot about it. I haven't invested that much, but I mean, yeah, but I just hear you guys talking about all the time and I'm just kind of wondering, well, should we have one?

Sure. Well, the reason we talk about it a lot is I think we should be saving something for the long term and the stock and bond market with a properly diversified portfolio has proven to be the most effective place over the long haul. If we look back over the last hundred years, yeah, investments in real property, there's nothing wrong with that.

It's done well. And you know, you could invest in precious metals, but you know, in terms of the stability and the longterm performance, a properly diversified stock and bond portfolio has performed the best and it's passive, which means you can just let it go and let it grow. You know, whether or not you have professional management looking over your shoulder, it's just the most effective way for people to build wealth over a long period of time. And a 401k is just really accessible because it's part of a salary deferral and there's often matching. So I like the option of the 401k.

In terms of the risk of the stock market, you know, we go through cycles and you know, they're all different, but the market does always recover. Let's do this. I'll tackle a few more of your specific concerns right after the break. We're going to pause for a brief break. This is 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. We'll be back with much more.

Stay with us. Welcome back to MoneyWise Live. I'm Rob West. Hey, do you have a story about how God's been working in your life in this area of your finances? Perhaps you've been listening to MoneyWise Live.

Maybe you just found us or you've been listening for years and God's been at work and you've been able to pay off some debt or you've started giving and you're seeing God honor that or you've really started to process the implications of God owns it all and that's changed everything about how you've conducted your financial life. If so, we want to hear about it. We've set up a special email address for you to tell us your stories and in the coming weeks, we're going to have a new feature on the program where we actually allow you to hear from some of our faithful listeners who have been on this journey who have a story to tell. So here it is. The email address is mystory.moneywise.org.

Mystory.moneywise.org. If you have a story to tell, send us an email and we'll be in touch with you to see if we can capture that. Hey, let's go right back to the phones.

We do have a couple of lines open. 800-525-7000 off to Cleveland, Ohio. Maureen, what's on your mind today?

Hi, Rob. Thanks for taking my call. I am in the process of getting guardianship of my mom and she is receiving the pension of my dad before he passed and that's all the income that she has right now. Right now, she's incompetent. Well, she was, you know, the doctors ruled her incompetent and I was just wondering, do I need to file taxes on that pension? Yeah. Because we haven't filed taxes in three years.

I see, yeah. You know, it's never a bad idea, Maureen, to check with a tax preparer just to, you know, look at your specific situation or in this case hers to have a professional way in and you could find a certified kingdom advisor in the tax and accounting area there in Cleveland by going to our website moneywiselive.org. But I'll just tell you, generally speaking, single filers typically don't need to file a tax return if their gross income doesn't exceed the standard deduction, which is $12,400. The threshold happens to increase over age 65 to $14,050. So if, you know, in addition to the pension, she receives Social Security and, you know, that together then puts her income above those amounts, you know, that higher threshold of $14,050, then, you know, she would need to file a return and a tax professional could easily go back, file all three years worth of returns for her just to get her current on her compliance, you know, with the IRS.

So I don't think it would hurt to check on that, but hopefully that at least gives you some guidelines to know, based on what income she has, whether or not she would fall above or below that. And we appreciate your call today very much. Up to the Chicagoland area, Margie, you're up next. Go ahead.

Hi, Margie. Are you with us? All right. Thank you very much. Yeah, you're welcome. Take your time. We're right here and you go right ahead.

All right. I am looking at a property tonight that is for $114,900. I am prepared to pay $134,000 for it. I don't like, I mean, we're in a housing bubble, so I've read that housing prices can be up by 10% than the actual cost. Is it better to pay more for a property than what it's worth or better to wait for the bubble to break? I'm currently renting and rent is just over $1,000 a month and a really good place, but I'd rather not continue to rent. So basically, I can put down $60,000 for a down payment. And then there's also a property I'm looking at this weekend, an actual house where there's no HOA.

It'd be a longer commute, but in a lot more space, but just want to get your thoughts. Yeah, very good, Margie. And it's a great question to ask. And, you know, this is somewhat of a no brainer when you're selling one property and moving into another, because when the market's high, you're getting top dollar on the sale. At the same time, you're paying top dollar on the purchase.

It's a little more challenging. And I can understand why you might have a bit of pause as a first time home buyer, because you're not making the money on the sale. And so you're entering this market, arguably at very high levels. And clearly the housing market has been on an upswing really for the last 12 or 13 years since the 2008 housing crisis. With that said, I think there's something to be said about if you're buying the right house, meaning it fits your budget, you've clearly been a diligent saver, you're not trying to rush this, you've got 60,000 built up for the down payment.

And I think another thing that's working in your favor is we've got incredibly low interest rates right now. And so even if you were to wait, and you know, we don't know what's going to happen with the housing market or the economy, I mean, at some point, you know, economies roll over, and I would expect this to be in a recession at some point in the next few years, you know, typically, they'd last anywhere between 18 months and, you know, three years. But if you're planning to buy and keep this house for a while, and I would say a while would be, let's say 10 years or more, then, you know, you'd be able to wait that cycle out. Number one, number two, you're not buying it purely as an investment, you're buying it as a place to live. Number three, you're going to enjoy these historically low interest rates, which probably would not be the case, you know, if we were to, you know, see interest rates start to head back up as we start to see a little bit of inflation creep up. And, you know, we know that rates will move higher over the next couple of years. So are you planning to buy and stay in this property for quite a while?

I don't know when I will say I never know whether or not I will have a job for long. So that's always a big issue for me that I worry about. But also, the one other big thing is retirement. I don't have, I think, 50,000 a week in retirement. So it's a good investment for me, or should I buy something? I don't want to say, you know, buy something even cheaper.

Yeah, no, I certainly understand. Let me ask you a question, though, Margie related to your overall budget. So given you said you're paying about 1000 right now, and obviously, certain things are included in that. Have you looked at, you know, if you were to put the 60,000 down, have you looked at what the principal interest taxes and insurance payment would be to the best of your knowledge? Plus any additional expenses? Have you gotten a good understanding of what the utilities would be plus the HOA? Do you think you're going to be saving money every month?

And that's okay, if you don't know, I think that's one other consideration that I would look at. So here's my thoughts. Number one, we've got to keep your lifestyle modest. Number two, we recognize God owns it all. He is your provider, no one else. And you are doing what you need to do. And that is to say, how can I be a careful and wise steward of what God has entrusted to me making the very best decisions I can.

None of us have a guarantee of future income. We trust the Lord for that. And we do the best of our in our power to find where God is leading. And, you know, He's given you a profession, that's great. We've got a good housing market right now. Sounds like you're in real estate.

So I think the idea here is that you need to keep your lifestyle modest. If you're self employed, I'd encourage you to open a SEF IRA and just start putting some systematic money away to build over time, get that invested. And if you plan to buy this house, you know, rental prices are high right now. Even though housing prices are high, interest rates are low, you've got a good bit saved up.

If you feel like this is the right home for you, then I wouldn't have any problem with you proceeding, even given where we're at in the housing market cycle right now. We appreciate your call. If you'd like to post a question in our MoneyWise app, we'd love to have you do that. Our coaches stop by. I'm in there periodically as well. Just download our app in your app store today.

Search for MoneyWise Biblical Finance, and then you can post your question. Hey, we're going to pause for a brief break. We'll be back with much more. Stay with us. This is MoneyWise Live, where biblical wisdom meets today's financial decisions and choices. We're so glad you're along with us today.

I'm Rob West. Hey, let me remind you, MoneyWise is listener supported. We do what we do every day to serve you based on your generous support. If you've been listening for a while, perhaps you've benefited from the program or you'd like to help us to serve others as we continue to build out our suite of offerings, including our new app and our new MoneyWise community and all the things that we're doing, including a new helping hand segment. I'm really excited about where listeners can help other listeners in a desperate financial situation. If you want to invest toward that work, we'd certainly be grateful. Here's how you give quickly and safely. Just head over to our website, MoneyWiseLive.org. Click the donate button. You can give one time or monthly, and we would certainly be grateful. Let's head right back to the phones.

Jim is next up in Carmel, Indiana. Go right ahead, sir. Thanks so much for taking my call, and I am interested in how to proceed with our will. Okay. My wife and I have income from IRAs and along with Social Security, and we also have rental properties that we own, and we want to distribute funds from our will to charity as well as to family members. I just wonder if we should just let our will be probated, or should we set up some sort of a trust, and how would that work?

Yeah. Well, it just really comes down, Jim, to whether you would benefit enough by a trust to justify the cost and added complexity. It's not a terrible difference in cost. You know, a will typically would be maybe $500 to set up for the average person, whereas a trust might run from $1200 to a couple of thousand dollars. Why would you set up a trust?

Well, there's a few key reasons. Number one would be to manage and control spending and investments if beneficiaries are prone to poor money management, let's say. So if you wanted to be able to have certain mile markers or milestones for them to reach or certain conditions under which money would be distributed to beneficiaries, that would be one reason. To avoid, you mentioned it, probate of the trust assets and keep your affairs private because probate is a part of the public record.

This would not. Trust is a way to, you know, protect assets from beneficiaries' creditors. So, you know, if you're giving consideration to that, you know, with a privately held business, your trust can manage business assets for planned business succession.

Doesn't sound like that's something here. And then you can also provide structured income to a surviving spouse that protects the trust assets for descendants if, you know, the spouse remarries or something like that. It can also facilitate charitable giving after your death. Now, it's not to say that you can't do that through your will. You certainly can.

But it's another way to do it. And it can go into effect prior to death, whereas a will starts at death, a trust could be, you know, put into place if you're incapacitated for any reason, and the trustee would then begin managing according to the trust agreement. So I think you just need to think and pray through those things. And perhaps, Jim, sitting down with a godly estate planning attorney just to talk through this to see if there's any reason why this would be necessary. If you listen to that list and you say, you know what, we're fine going through probate. We feel like we've got everything handled appropriately. We've got beneficiaries designated on our IRAs and life insurance policies.

And, you know, we don't think it's necessary in our situation. I would certainly be comfortable with that. But if you felt, you know, a little more peace of mind knowing that these other provisions were in play, and it would be worth it to you to set up a trust, then I think you certainly could go that way. Where I would proceed next, if you don't know an estate attorney, I'd connect with a certified kingdom advisor there in Indiana. You can do that at our website, MoneyWiseLive.org, and then just ask for a referral. All CKAs will have a godly estate planning attorney that they can refer you to in the area. Does that make sense, though, Jim?

Yes, it does. And I just want to forgo any delay that probate might bring into the picture. Yeah, and that would be one reason to use a trust, Jim, because you will bypass the probate process.

So it sounds like, you know, given that that's important to you, a trust may be exactly what you're looking for to transfer the assets of the estate in an efficient manner, and it would also be done privately. So very well could be that that's the option for you. We appreciate your call today. Let's head south to Lakeland, Florida. Frederick, you're up next on MoneyWiseLive. Go ahead.

Thank you for taking my call. I would like to save for college fund for my kids. They are four years old.

I would like to know what's the best way to do that. Yes. Frederick, tell me a little bit about your financial situation. Would you be contributing a lump sum, or are you going to allocate a certain amount each month to automatically monthly?

Is that right? Yeah, monthly. That is a couple hundred dollars every month.

Okay, very good. Yeah, I like the 529 plan. So think about it like a bit like a Roth IRA in the sense that you wouldn't get a federal tax deduction for the money going in, but you would be able to invest it inside the plan, and then as it accrues, you'd use the various investments inside the 529 to be able to invest those funds. It would grow on a tax-free basis inside the plan, and then when your child that the plan is set up for reaches age where he or she's going to head off to college, or even up to a certain amount for private k-12 education, as long as the money's used for qualified educational expenses, and that determination is pretty liberal, then you would take that money out tax-free.

If you happen to qualify for financial aid, it would be considered a parental asset, which is factored into the expected family contribution at about five percent, which is much better than if it were to be an asset of the child in like a custodial account or something like that. So it's a very effective way to save for college, Frederick, and if your child gets a scholarship, you can take the money out on a pro rata basis equal to the scholarship or the grant, and if they don't use it all, it could be transferred to another child. So you could set up multiple 529s and then contribute systematically to each of them. There are 529s in every state, and your state of Florida may or may not be the best option for you given that you don't have a state income tax in Florida. You may want to choose a 529 in another state that has better long-term historical performance of its investments, and the best way to determine that would be to go to a website that I really like for this reason. It's called savingforcollege.com. Savingforcollege.com. You'll be able to go through a tutorial.

It'll ask you a series of questions, and based on the information you provide, they'll actually make a recommendation on the best 529 plan for your children. Does that all make sense, though? Yes, it does. I don't know if you have time for another question put into the same subject.

Sure, go right ahead. Yeah, I see in this school there is a program that's called Florida Prepaid. Yes.

It's that it belongs to the government, and they say that even if the economy is down, so we will not lose the money. Is that a good option as well? You know, I like, I'm familiar with the Florida Prepaid College Plan, and it's a good one, but in terms of comparing it to the 529 plan, I actually prefer the 529 plan just because I believe you have the ability to accrue more money over time. You know, as you think about investing this money over the life of your children versus just it increasing at the college tuition inflation rate, you know, I think you're going to do better over time and have more to put toward all of the college expenses, not just tuition room and board through the 529. So I'd look at both.

I wouldn't have a problem with you going either way, but I would, for me, I would go toward the 529 as the better option. We appreciate your call today. Let's head to Ohio. Gus, you're up next on MoneyWise Live, sir. Go right ahead. Thank you for taking my call.

I was just listening to your program and I really enjoy all the information you give to people, but I have one for you here. I'm going to be 85 years old in May. Okay. And I live with my daughter and son-in-law. My wife passed away two years ago. I was left with a considerable amount of money in the bank. I have insurance policies and I also have an irrevocable trust for my children. I have four children. Okay. And I'm just wondering at this age, is it feasible for me to invest some?

This money is just sitting in the bank doing nothing and I'm getting nothing out of it. Yes. What amount, if you're comfortable saying, Gus, what do you have roughly in the bank? It's about 50,000.

50,000? Yes. Okay. And your income is covered through Social Security alone or other sources? Social Security. Okay. And the income I get from Social Security is about 21,000. Okay.

And that's enough to cover all of your expenses each month? So far. Okay.

And do you have a little bit left over? Yes. Okay.

Great. Well, so let's say your expenses are running roughly about 1,800 a month. Is that about right? Less than that. Okay. Maybe 1,500? About 12.

Okay. So at 1,200 a month, I'd love for you to have somewhere between six and 12 months expenses in the bank liquid. Six months would be 7,200. 12 months would be about 15,000. So I would start by saying, of this 50,000 you have available, I'd love for you to keep 15,000 of that liquid. And then if you want to invest the rest, I think you could absolutely do that.

I'd visit with our friends at soundmineinvesting.org for a largely bond portfolio, but with some stocks to give you some growth as well. We appreciate your call, sir, today very, very much. Folks, thanks for joining us. That's going to do it for us. Thank you to Amy, Clara, Dan, and Jim for their wonderful assistance today. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Join us again tomorrow, would you? We'll see you then. God bless you.