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Side Business Boom

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
August 12, 2021 5:35 pm

Side Business Boom

MoneyWise / Rob West and Steve Moore

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August 12, 2021 5:35 pm

Whether they call it a side gig, hustle or business—a surprising number of Americans have found ways to bring in extra cash. And now a lot more are thinking about doing just that. On the next MoneyWise Live, host Rob West will talk about how the COVID pandemic and related shutdowns have increased our desire to make money on the side. 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.

See omnystudio.com/listener for privacy information.

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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 you know 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. Call it a side gig, hustle or business. A surprising number of Americans have found ways to bring in extra cash and a lot more are thinking about it.

Hi, I'm Rob West. It's a trend that was well underway before the COVID shutdowns and the pandemic seems to only have increased our desire to make money on the side. I'll talk about that trend first today and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Okay, so the numbers flowing out of a recent survey by the tech company Xavier really are amazing. They polled 2000 Americans and found that one in three have already started some type of side venture and another 25% plan to start one in the next year. About half of the folks setting up something on the side are using a business model they hope will someday generate passive income, probably to a great extent through online products or service sales.

Another third of those surveyed were simply looking to create another income stream. So, if you're looking for a new kind, here are some of the best practices you could say that can save you some trouble down the road. Since rules and attitudes towards side ventures vary from company to company, you should crack open your employee handbook to find out what is and perhaps more importantly, what isn't allowed. You especially want to look for references to conflict of interest. These would prohibit you from engaging in any activity that would affect your employer's bottom line.

It may also require a lot of attention to the report of interest. Another item to look for in the employee handbook is a non-compete or what's called a restraint of trade statement. Obviously, this would prohibit you from doing work similar to that of your employer. Also, dig back through any paperwork you signed at the time you were hired if you haven't. You may have actually signed something with a conflict of interest or non-compete clause or maybe just a general statement that you agree to follow the provisions of the employee handbook.

So, start there. Now, after you've done all that and determined that your side gig is allowed, it's a good idea to tell your employer about it anyway, even if you're not required to. This just demonstrates good faith and transparency and is far preferable to your boss finding out from someone else and bringing it up when you're not expecting it, perhaps even seeing it online. During that discussion, make it clear that you won't be using company time or resources for your side gig and that you understand the importance of keeping it that way.

But talk is cheap, as they say. It's not enough to just tell your employer you're keeping your job and side business separate. You need to demonstrate that commitment by continuing to perform well for your employer, of course.

Colossians 3 23 tells us, whatever you do, work heartily as for the Lord, not for men. So, you must give not only your time but your full attention to your day job during your normal work hours. This may become more of a challenge as your side business starts to make money. It's new and exciting and just the natural tendency is to put more of your effort and interest there, therefore leading to less time available for your day job.

But it's not only dishonest to shortchange your current employer, it's foolish. Your full-time job is paying the bills and funding, in most cases, your startup side gig, so don't do anything to jeopardize your primary income stream. To make this work, you'll need to set some boundaries, first between your job and your side business, but then also between work and your family or home life. You can't work all the time and you should carve out time for your loved ones and for rest and relaxation. I would also encourage you to set one more very important boundary, and that is to keep the Sabbath to the best of your ability. Now, I recognize sometimes working on Sunday is unavoidable because your employer requires it, but you don't have to require it of yourself when starting a side business. I would just encourage you to keep the Sabbath holy and worship the Lord. It's interesting that Wilbur and Orville Wright, you know those names, in a desperate race with other inventors to be the first to fly, never worked on Sunday.

We know the Lord blessed that decision. By the way, their building and testing of airplanes, listen to this, was one of the greatest research and development programs in history. It was a side venture for the Wright brothers.

Their real job, if you will, was making and selling bicycles. Maybe that'll inspire you a bit. Well, there are some best practices to help you get your side gig off the ground, and I hope you find them helpful. Hey, your calls are next, 800-525-7000. Call that number 24-7, 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial journey.

So glad to have you along with us today for MoneyWise Live. I'm Rob West, your host, as we mind the Scriptures and pull out the principles from God's Word. By the way, there's 2350 verses that deal with money and possessions.

Howard Dayton, my good friend, actually went through and, with a small group of men, found them all. They literally spent weeks and weeks pouring through the Bible, each taking a section, cutting them out with scissors, stacking them up by categories, and 2350 verses later, we had our number. So let's just say there's a lot in God's Word about this topic, and I believe, I believe the reason there's so much is because money is often the primary competitor to lordship in our lives. If something is going to compete for first position in our lives other than the Lord, it's going to be money and the things that money can buy. Remember, we read it right in the Bible. You cannot serve God and mammon or money. Why are those two things put alongside each other?

I believe it's for that reason. But we can break the power of money in our lives by being generous, holding what we have loosely, recognizing God owns it all and we're stewards. You know, that one understanding will change everything about how we handle what is truly God's money. And we want to find His wisdom today for the decisions and the choices you're making in your financial life, and we want to do it together. We've got some lines open today for whatever is on your mind. Give us a call. 800-525-7000. Again, the number 800-525-7000. Leslie in South Carolina, we're coming your way in just a moment, but we'll begin today in Sorrento, Florida. Michael, thank you for calling. If you don't mind me asking, where is Sorrento?

Yes. Hi, Rob. Thanks for taking my call.

I'm just north west of Orlando, near a town called Stanford, which has been in the news in the past. I have a friend who is a financial advisor. He's independent and he's a fiduciary. I'm 63 and I'm considering, you know, maybe four or five more years of retirement in our discussion, because I have the majority of my money in a 401k and I'm still employed. He was discussing about using an in-service withdrawal to put the money into an IRA tax qualified IRA.

And, you know, that way he can control it. You know, he can't do anything when it's in the 401k. I just want to see what your take was on the wisdom of doing an in-service withdrawal. I'm 63, as I said, and so I'm over 59 and a half, so I don't know. Well, there wouldn't be tax consequences, I guess, anyway, if it's qualified, correct?

Well, that's right. I mean, you know, with an in-service withdrawal, which as you correctly pointed out, I mean, this is when you take a distribution from an employee-sponsored qualified retirement plan, such as a 401k, without leaving the company, which is typically when you would roll that out. If you're not 59 and a half, it may incur that tax penalty. You're, of course, 63, so that doesn't apply.

And there are special considerations that would allow you to miss that penalty even at a younger age, $10,000 for the purchase of your first home, if you have a hardship, an extreme financial need. So, you know, the first thing, though, is that not every retirement plan allows these in-service withdrawals, but most of them do. And then the question, you know, the main question I would ask is, why are you doing it? Is it just so we can open up the investment options? Are you not happy with the limited options in the 401k?

And what's the main driver behind it, Michael? Well, just having listened to your program so often, I mostly have been handling my own retirement. And, you know, I was starting to really consider the wisdom of using a financial advisor, especially with taxes and, you know, planning for the future once I do retire.

And so I have someone that I've known for quite a while, and that's something that I think he's recommending. And I just I feel a little hesitant to do that, to move that money out, or at least most of it out. It does have very limited core funds. It does have a self-directed brokerage account, which I'm taking advantage of, where I can move it over to. Well, that's through TD Ameritrade and I can just trade open stocks, but I just don't understand the benefit or if it would really be a detriment to move that money out into a tax IRA. Does that make sense?

It does, yeah. I mean, the main benefit, assuming, number one, the plan allows it, and number two, there are no tax consequences because it's a qualified account to qualified account, and you need to check on that to be sure because, like I say, only, you know, there's about 30% of employer-sponsored plans in the U.S. that don't offer this option, so you'd want to check. But the main benefit would just be you kind of take the blinders off, if you will. Right now, you only have access to those limited options in terms of mutual funds. You said you have a trading option. I'd be a little leery of that if you don't have the time and the expertise to make those buy and sell decisions on individual stocks. But then, if you get it out and get it over to the investment advisor, and he or she then has the unlimited investment universe to choose from, every stock, bond, mutual fund, exchange-traded fund through an individual retirement account, then clearly, you know, there's more opportunity to tailor a portfolio to your needs.

Now, the typical 401K should have, you know, plenty of high-quality options that really cover the bases and give you what you need, and if it's been performing well, you know, you may not want to disrupt that. You may just want to have the conversation with him about, you know, when you retire, you want to know who you're going to use so that when you roll it out to an IRA, then, you know, he can take over. But whether it makes sense to go ahead and do that now, I think is up to you. As long as there's no tax consequences and your plan allows it, I certainly don't have a problem with it. As long as you feel like this is, you know, somebody that you're ready to do business with and you've done your due diligence and discovery and, you know, I would probably start with a portion of it just over the next several years as you're still working to kind of see how it goes and get to know him and his process and see what the returns look like so that that perhaps could give you the peace of mind then when you retire to go ahead and roll the balance of it over or make another decision if it's not been working well for you. So as long as you check it out and the tax consequences and the plan allows it, I think it's not a bad idea as long as you're ready to make the decision that he's the one to manage at least a portion of the account. Does that make sense?

Yes, it does, and I appreciate that. So it's not necessarily a bad idea but it may not be the best idea. Well, I think it's just, yeah, at the end of the day, it's up to you whether you're ready to delegate and if it's been performing well where it's at, you may not want to disrupt that. But if you say, I think I'm ready to delegate and this might be step one of ultimately this individual having your whole retirement, you know, access or portfolio, you know, I think this would be a logical first step in entrusting a portion of it to this individual so that over the next several years you could kind of test the waters if you will. So I appreciate your call today.

I don't have a problem with this. I think it's really about are you ready to delegate and is this the person for you? And Michael, we appreciate you listening and calling today very, very much. You know, folks, this is a tough decision.

You know, when you've spent your whole working life amassing your retirement assets, you've worked hard, limited your lifestyle, you've been saving diligently, you've built it up to a sizable nest egg and now you're looking to just hand it over to somebody, I realize that can be, you know, a difficult decision and yet I think having wise counsel, a professional, an expert that can help is really key. Hey, we've got some lines open today. 800-525-7000, more of your questions just around the corner.

Stay with us. Thanks for joining us on MoneyWiseLive, biblical wisdom for your financial decisions. Hi, I'm Rob West, your host. We've got some lines open today. What's on your mind?

What do you want to talk about related to God's money and the decisions and choices you're making? We'd love to hear from you. This is a call-in program, which means we've got to have callers in order to do the program.

Good news is we have some great calls lined up, but I've got some lines for you. So here's the number, 800-525-7000. Before we talk to Scott in Grand Rapids and Leslie in South Carolina about identity protection, let me just mention, I talked to the last caller before the break about hiring a professional advisor, in his case a money manager. We often talk about the Certified Kingdom Advisor designation on this program, and these are not men and women who work for MoneyWise. They simply have earned what I believe are the gold standard industry designation for professionals who are specially trained to bring biblically wise financial advice.

How do we know that? Well, they've met high standards to earn the CKA designation in addition to at least 10 years in the business and having another professional designation like CPA or CFP or CFA. They also have to go through a university-based course to learn how to apply God's word to professional financial decision-making. It's a 50-hour course at one of two leading Christian universities. It involves a proctored exam nationally, but in addition to that, they have to sign a statement of faith, a code of ethics, a pastor reference, two client references.

There are a whole host of things, not to mention the regulatory review that's done before they earn it, and then all that happens again every year in addition to 10 hours of continuing education. So these men and women, 1,500 of them around the country, really have done some hard work to be able to call themselves Certified Kingdom Advisor, which gives us peace of mind that you're going to have someone who can really give you advice at a professional level that aligns with your values and priorities as a Christian. How do you find one of these folks?

Well, just head over to our website, MoneyWiseLive.org, and click Find a CKA. Let's head back to the phones. By the way, again, some lines open, 800-525-7000.

Leslie is in South Carolina. Leslie, thank you for your patience. You're next up on the program. Go ahead. Yes, thank you so much for your ministry, first of all. I really appreciate it.

Thank you. My question involves identity protection. I thought I had heard you talking to another caller related to another subject. You just happened to mention that you weren't a fan necessarily of identity protection. And I've been paying for that for every month for many, many years.

And when I heard you say that, I did a lot of research on it. And I found out I think they say basically they don't do a whole lot more than you could do yourself by monitoring your credit report and put a credit freeze, which I've done all that. But I don't really have time to do a lot of monitoring, and it is a valuable service. But I want to cancel it if it's not really worthwhile.

But I guess my big question is just your thoughts on the whole thing. And then if I did cancel my service and then I did get identity theft, could I then hire one of them? And would they help me after the fact?

Yes. Well, it's a great question, and you're correct. I typically don't advise the average person to get and pay for identity theft protection until they've or if they find themselves in a position where their identity has been stolen. And when that happens, oftentimes it will be paid for you.

In some cases, if your accounts were compromised, it would often be offered to you by one of the financial institutions you do business with. And you might say, well, why is that? Why would you wait until it happens in order to pay for it? Wouldn't you rather be preemptive? And I would come back to it happens to a small percentage of people, even though we hear about it more and more. And you're right, Leslie, you know, the majority of what you need to do to protect yourself, you need to do anyway.

And so I would just mention a few of those. Number one, you need to freeze your credit. You've already done that. That's free with all the credit bureaus, Experian Trends Union and Equifax. So nobody can open an account fraudulently in your name because the lending institution they're seeking credit from can't access the credit report.

Without a credit report, no credit is extended. Safeguard your social security numbers. So just be careful who you give that to.

Don't carry that card with you. Be alert to what's called phishing and spoofing. This is most commonly known as people who send you emails that are impersonating a legitimate business with a link that you click on that's going to try to collect and steal your information.

And it can be done by phone as well. Use strong passwords and change them regularly. Don't do business with any financial institutions on public Wi-Fi at a coffee shop or something like that. Shred documents that have sensitive information.

Those are the kinds of things. And by the way, check all of your accounts regularly and check your credit report regularly. If you do those things and turn on alerts because just about every financial institution you're going to do business with now is going to alert you when there's withdrawals, when there's deposits over a certain amount, when they see activity that's suspicious.

And if all of that is happening and really, frankly, Leslie, should be happening anyway, then you've put yourself in a position where I think you've done just about everything you can do. Now, where will the identity theft protection help you beyond that? They could be out there monitoring on the dark web for your email address or phone number. A lot of your institutions are doing that now for free. They would be monitoring your credit report for changes.

You can do that yourself and set that up. So I think it's just one of those added expenses that unless you have reason to believe your accounts have been compromised or you've been notified of such, just by using these best practices, you can eliminate that expense for your budget. But with all of that said, Leslie, if it gives you peace of mind to know that you've got one extra layer of protection and you can afford to do it, you've built it into your budget, then I would say, you know, just stick with it and I don't have a problem with it.

I've got just about 30 seconds left. Give me your thoughts, though. Yes, then can you hire them after the fact, then?

Could you hire one of those identity theft companies after you? Absolutely. Okay, great.

You sure could. Thank you so much. Okay, Leslie, we appreciate your call today. I hope that was helpful.

By the way, the FTC's website, ftc.gov, has some great resources about identity theft that you'll want to check out, again, ftc.gov, and hopefully we're all using those best practices I just described. We're going to pause for a brief break. More of your calls just around the corner, 800-525-7000. We'd love to hear from you. Thanks for being along with us today. This is MoneyWise Live, I'm Rob West, and we'll be right back. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host, taking your calls and questions. What's the number to call? Well, I'm glad you asked.

Here it is, 800-525-7000. By the way, MoneyWise Media is a listener-supported, not-for-profit ministry. We only do what we do through your generous support. If you would prayerfully consider a gift one time or perhaps becoming a monthly partner, we'd certainly be grateful. Just head over to our website, MoneyWiseLive.org, and click the donate button, and I'll say thanks in advance. Again, the lines are open today for your calls and questions on anything financial. Do you want to talk about savings or giving?

Perhaps it's retirement, that pesky credit score, paying down some debt, whatever you've got. 800-525-7000. Next up is Scott in Grand Rapids, Michigan. Scott, how can I assist you?

Hello. I turned 67 this last May, and I'm probably going to work another 10 years so I can pay off my mortgage. And I'm wondering, is there any reason I should wait any longer to sign up for Social Security? Yeah, there's a good reason, and it's because between now and age 70, your Social Security check is going to increase by 8% a year. And that's a nice increase that would then result in, obviously, a higher check every month for the rest of your life when you take it.

And because it sounds like you don't need it, given that you're going to be working and this is just money you'd probably be sticking away in savings or investing, and you're certainly not going to get a guaranteed 8% return, I think there's a good case for it. Now, the flip side of that is, well, I've got to live long enough to realize that because I'm giving up three years' worth of checks. And even though I'm going to get a higher payout, there's some period of time that I need to live in order to pay me back for what I didn't get so that I can then enjoy that higher check from that point forward. And that's true, but what I would say is that if you're healthy and the Lord tarries, there's a good chance that's going to be the case.

The data says that when you reach age 65, your life expectancy increases to 83 and 84 for men and women respectively. And so by waiting, especially since you don't need the money, I think there's a good reason for you to do that. But tell me how you're thinking about it, Scott.

What are your specific questions? Well, my wife was suggesting that we could put all the money that came in from Social Security on the mortgage. We still owe just over $100,000 on the house.

Okay. Yeah, and that's a great point. I mean, I love the idea of you all really aggressively going after that. And perhaps at this kind of extra money, you could certainly do that. And that would get you to a place, hopefully, that by the time you retire, that mortgage is gone.

You all are completely debt-free and you have left less lifestyle to cover, which means you need less income. So, yeah, I mean, that would be a great scenario given that you still have a mortgage over the next several years. So I like that plan, actually. Okay. Well, good.

Thanks for your input. Okay, Scott. We appreciate it. Well, thank you very much, and I appreciate you listening and calling.

Let's head to Chicago. Mary, thank you for your patience. How can I help you? Hi, there. You had said earlier that one of the biggest competitors to Worshiping God can be money, something to that effect. Yes. So I'm currently spending a lot of time learning how to invest online, and a lot of time. And I'm putting a lot of money into my brokerage account, even though I haven't really started doing anything with it. So I guess I just wanted to know if you had any suggestions on how to make sure that I don't get carried away with the money part of it and stay focused on Christ.

Yeah. Well, Mary, I love this question, because you're exactly right. You know, what I was saying earlier is I believe that money is often the chief competitor to lordship. If something's going to compete for first position in our lives with the Lord, which is His rightful place, I believe it's most often going to be money and the things that money can buy.

And so we have got to make a concerted effort to make sure that's not the case. And I think it starts with this recognition that God owns it all, and that we're stewards, which means we have a high calling, because we're managing the money that belongs to the Creator of the universe. That's a big deal, and it makes every spending decision a spiritual decision. Beyond that realization, what can you do practically to make sure that that continues to happen, and that as you research this investing, and you are investing and handling money every day in that effort, you don't get derailed from that. And by the way, investing is very biblical. I mean, the parable of the talents, and we see all of these principles around putting God's money to work, I think, and seeking a return on His money that's affirmed in the Bible.

So there's nothing wrong with that, but it really comes down to a heart attitude and heart condition for us to make sure that we keep it in its proper place. So what can you do to make sure that's true? Well, number one, and I think this is probably the biggest thing, is to renew your mind with the Scriptures around money. As I said at the top of the program, there's 2350 verses that deal with money and possessions in God's Word, so just meditating on those is going to renew your mind and orient your heart and your thinking toward money being seen through God's eyes, not the world's eyes. So what I want to do as step one, when we're done today, you stay on the line.

Deb will get your information. I want to send you a copy of the Stewardship Bible. This was a project that American Bible Society and Compass Finances God's Way did years ago, where they created a Bible, and every money passage is highlighted in green, and it's a beautiful Bible, but I think just you spending some time at the start of every day reading through and meditating on those passages will go a long way to make sure that your heart stays in the right place. I think the second thing you can do is make sure you're being generous. Make sure you're giving systematically, and you're giving sacrificially when the Holy Spirit leads you to do so. You know, the author Ron Blue and one of my mentors says that giving breaks the power of money over our lives. And I believe that's true, because it forces us to hold it loosely with an open hand, because when we're giving and we're generous, it's flowing through us into God's causes, which just naturally, I believe, calibrates our hearts to God's heart, and I think preemptively keeps us from getting to a place where money gets out of whack with where our priorities should be. So that's, I think, another thing that we can do as we move forward. Does that make sense to you, though?

It does, it does. Just one clarification, though. Giving systematically versus sacrificially. I understand this systematically part. What do you mean by sacrificially?

Yeah, that's a good question. So I think we should all be systematic givers, and this would be along the lines of the principle of the tithe, where we recognize that everything we have belongs to the Lord, and we should systematically be giving a portion of what he entrusts to us back into circulation into God's economy at our local church and other places that he directs, and I would do that proportionately. We see proportionate giving in Scripture based on your increase, so whatever income sources you have, and between you and the Lord, decide what percent you want to give, and I would hope that would increase over time. But then I think, you know, beyond that, we need to be sensitive to what the Holy Spirit is leading us to do and be willing to give sacrificially, even to the point of saying, you know what, I've been saving for this goal for a vacation, but I really feel like the Lord's leading me to give it to this person.

They, you know, they're in a desperate situation, and they just, their car just, you know, is gone, and I want to replace that. I'm going to just take this out, and even though I was planning on using it for something else, I'm going to give it away. And I think that just means we've got to be in tune with the Holy Spirit, and there will be those times where we sacrifice, and we don't do something we want to do, and we give to someone or something else that the Lord leads, but that means we've got to be in prayer, asking the Lord what he would have us to do. Mary, I think you're on the right track. Stay on the line. We'll get you the Stewardship Bible, and thanks for your call today. Much more ahead on MoneyWise Live. Biblical wisdom for your financial decisions. Stay with us. Thanks for joining us for MoneyWise Live. I'm Rob West.

We're so glad you're along with us today. Hey, have you downloaded the MoneyWise app? If you haven't, you can take this program with you on the go and listen on the treadmill or walking through the grocery store or plugging it into the Bluetooth in your car, plus all the other podcasts we have and our MoneyWise community and our digital envelope system. It's all available in the MoneyWise app.

Just go to your app store and search for MoneyWise Biblical Finance. Let's go back to the phones. Holding patiently in Elgin, Illinois, is Rose. Thank you for calling today. How can I help you, Rose?

Okay. I've been working full-time, and I will be 72 in October. I've been contributing to my 401K.

I left my job a couple of weeks ago due to health reasons, but I had met with my advisor in May, and we decided to start my required minimum distribution, so they took half of it. My question is, since if I would have continued working, I could have delayed that to April, correct? Of next year? That's correct, yes.

Okay. But since I've already started it and took half of it, can I delay the other portion into April? I don't plan to go back to work this year.

I see. Yeah, so your required minimum distribution, you have to start taking when you reach age 72, and so it really has nothing to do with whether you started or not. It is more about when you actually need to take it out and when it's due based on your age. So have you looked at that in terms of when you turn 72 and when it would actually be required from you to send?

Well, I turned 72 in October. Okay, so it would be April 1st of the year after you turn 72, and so that would be next April 1st is when your first RMD must be taken. So the fact that you took one early doesn't have anything to do with whether or not you take more right now.

It's really that it's just the full amount based on that IRS table with your age and your account balance and what is required to be taken out, that that full amount be taken by April 1st of next year. Does that make sense? Yes.

Okay, so I took half and I can let the other half wait until April of next year. That's right. Great.

Okay, that was my question. Thank you so much. Okay, Rose. Thank you for calling today. God bless you.

On to Colorado Springs, Colorado. Samuel, thank you for your call today. How can I help you? Yes, well, thank you for taking my call. The reason I call is I'm enrolling into a health plan. I just got into this company and I wanted to know whether, because in the past I heard you talking about, you know, like market insurance or any other insurance where you will want to take the insurance with high deductible and then lower premium so that when anything happens you will be able to, and then once you save enough on your emergency fund you are able to, you know, pay out whatsoever. So I wanted to know whether that's the same idea with, I can apply that same idea to health insurance because we have a high deductible plan with lower premium and we have the other one with a high premium, I mean very high premium and lower deductible and out of poverty and hospital visits and all that stuff. Sure.

Is the high deductible plan coupled with an HSA, a health savings account, or not? Yes. Okay. You know, what is your age, Samuel?

I'm 57. Okay. Are you in good health? Yes. Okay. So you don't have any ongoing medical conditions that require regular care at this point? No.

Okay. And would you have the ability with your disposable income and so forth to kind of really fully max out that HSA contribution this year? You know, this year an individual can put in up to $3,600, a family can put in $7,200.

Would you be able to put in those types of amounts over the year? Yeah. I can do that, yeah. Okay.

Yeah. So the benefit of that is if you're, you know, typically I would say if you're younger, you're a little bit older than I would like to see for the full benefit of the HSA, but the second piece is that you're healthy and you can fully fund, you know, that HSA, so therefore you're going to have some left over at the end of the year, and then that HSA in retirement, you know, becomes a real powerful tool as a part of your retirement plan because it gives you a tax-advantaged account, you know, dedicated toward medical expenses and even non-medical expenses in retirement, and so it can really be a great tool beyond even the retirement accounts that you have down the road. So I think, you know, this is a good idea if, again, you're healthy and you can fully fund it, but if you'd rather have the peace of mind to know, you know, that you're going to pay a little bit more and you've got less out of pocket, whether that's for an office visit or a hospital stay, I mean, certainly having that option available to you is a good one. My preference, and what I do personally, is I use the HSA just because, you know, we don't use it a lot, even though we have kids, although they're getting older now, and, you know, we have an account that's building up with an accumulated balance that will be available for the future.

Does that make sense? Oh, yes, I think that makes sense, and I think the HSA is pre-tax money, yeah. That's exactly right, and, you know, after you turn 65, you can use, you know, the HSA funds for non-qualified expenses.

You'll pay ordinary income tax on that, but you won't have any penalties. So, you know, it's a powerful tool as a part of your retirement arsenal, if you will. So I hope that helps, Samuel. Thank you for calling and for listening, and all the best in this new job. On to Portage, Indiana. Kimberly, thank you for holding.

How can I help? Hi. I just had a question related to trust and will. So is there an asset amount or minimum, I guess, that you suggest for people who want to do trust? You know, not necessarily.

Yeah, not necessarily. I mean, you really need a will. I would say everybody needs a will, especially, absolutely, if you have minor children, because that's going to name the guardian. But you need to have a will. But the trust is really about, I mean, the rule of thumb would say if you have a net worth of at least $100,000, but beyond that, and you have either a substantial amount of assets in real estate, or you have very specific instructions on how and when you want your estate to be distributed to your heirs after you die.

So you have a lifelong dependent child who you need to be able to distribute money to over time, or you want certain triggering events to determine when money is distributed, or things like that. So it's really not about a dollar amount of net worth, as long as it's over $100,000. It's really about how much do you have in real estate, because there's a real benefit to a trust there, and do you have those specific instructions on the timing and to whom you want your assets distributed. If you don't have any of those going on, then, you know, for most folks, a simple will is all you need, and it's going to be about a third of the cost of a living trust.

Does that make sense? Right, because I have like $300,000 probably in real estate. And so, and then I did want a specific clause in about my property going to my children, if once I pass and if my husband was to remarry, then I would really prefer for the children to have it and not the new spouse. I know that may sound weird, but, and once he passes, do you know what I mean? So it would be his and then. So I'm wondering if that's a reason to get a trust to have.

I think I'm hearing enough to say it's at least worth talking about. So I would encourage you to go visit with a Godly estate planner and find out, you know, what makes the most sense for you. Talk it through your specific situation and get some good counsel. So I would call your church and ask for a Godly estate planning attorney, or you could connect with a certified kingdom advisor in your area and ask for a recommendation.

But based on what I'm hearing, I think there's enough reason to at least explore it. Let's head to Brandon, Florida. Paul, thank you for your patience. Unfortunately, I've just got about a minute and a half. How can I help you? Hey, thank you so much for taking my call.

I'll try to be real quick. So I was very fortunate to be able to go back to school and my wife and I would be OK under just her income. And I've just graduated this summer and been able to get a job into my field.

So it will be another forty five thousand or so that we'll be bringing in with an expected additional thirty thousand on top of that the next three years. I've never had that kind of money. Oh, I lost you. I think I have the gist of it, though.

You cut out on us, Paul. But yeah, I mean, this is a great thing. You know, if you can build your lifestyle around one income and take the other income and just sock it away, especially since you guys are young, I would say that's the way to go because you could really build up some assets. I think the first question is, you know, what are what is your goal? What are you saving for? Is it, you know, buying a house or, you know, do you have kids?

You want to start funding that college plan? Are you saving for retirement? You know, make sure you're you're putting a good bit of it there through a company sponsored plan or an IRA or both with a goal of 15 percent of your income, 10 to 15 percent of your income. And I'd be looking at both incomes as to what you're trying to get working for you. Obviously, your second income, yours that you're not using for your budget, your monthly spending is prime for those short term, medium term and that long term goal of retirement savings. So I would absolutely do that.

And I'd start with a retirement plan at work or an IRA or again, use both of them together. Brandon, stay on the line. I'm going to send you a copy of Sound Mind Investing, the handbook from Austin Prior. Folks, that's going to do it for us today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. My name is Rob West. So glad you were here today. I want to say thank you on behalf of my team.

Gabby T on phones, Robert Sutherland doing research today, Deb Solomon producing and Amy Rios, the fabulous engineer making it all happen. Hopefully you'll come back and join us tomorrow. I'll be here, Lord willing, and we'll see you then. Bye bye.
Whisper: medium.en / 2023-09-02 23:21:44 / 2023-09-02 23:39:19 / 18

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