2 Options for Paying Off Debt

This is Jamin Baxter and I serve as Business Development Director for Moody Radio. The only reason we're able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us too, like United Faith Mortgage.

Faith and family is at their core. It's why they choose to be such a close partner with our station. It's why they specifically advertise on Christian radio stations across the country.

It's why father and son John and Ryan still lead the company to this day. Check out United Faith Mortgage and their direct lender advantage at unitedfaithmortgage.com. Thanks to you and to United Faith Mortgage for supporting Moody Radio. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed 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. This is Jamin Baxter and I serve as Business Development Director for Moody Radio. The only reason we're able to spread the gospel of Jesus Christ on the radio is because of financial support from listeners like you. We also have businesses support us too, like United Faith Mortgage.

Faith and family is at their core. It's why they choose to be such a close partner with our station. It's why they specifically advertise on Christian radio stations across the country.

It's why father and son John and Ryan still lead the company to this day. Check out United Faith Mortgage and their direct lender advantage at unitedfaithmortgage.com. Thanks to you and to United Faith Mortgage for supporting Moody Radio. United Faith Mortgage is a DBA of United Mortgage Corp. 25 Melville Park Road, Melville, New York. Licensed 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 the day you've decided to take the bull by the horns and begin earnestly to pay off your credit cards and other debt. Good for you. Hi, I'm Rob West. Now that you're committed to getting out of hock, you've got two great options for doing it. I'll talk about that first today and which might be better for you. Then it's on to your calls at 800-525-7000.

Call that number 24 7 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. You regular listeners have probably figured out that we're talking about the snowball method of paying down debt and its big brother, the avalanche method. Now don't get me wrong, both of these approaches are great and whichever one you choose will help you get out of debt in a hurry. But which one is best for you and which one saves you the most money?

It's not necessarily the same answer. We usually recommend the snowball method for reasons I'll explain in a minute, but first let's define these terms in case you're new to this. The snowball method of debt reduction is probably the better known of the two.

Our friend Dave Ramsey has been singing its praises for years on his program. Here's how it works. First, you pay the minimum monthly payment on all of your debts.

You're probably doing that already because you have to. But then you apply any leftover money to the debt with the smallest balance. To be clear, that's in addition to the minimum payment you're already making on that debt. This would be extra money put on your smallest debt so it gets paid off first. Then once that debt is paid off, you take its monthly minimum payment and the extra you were sending and apply that to your next smallest debt. When that's paid off, you put all of that money on the next smallest and so on till all the debt is gone. You get the idea of a snowball rolling down the hill getting bigger and faster as it grows. With the snowball method, you get quick wins up front and that's really encouraging.

You start to see progress right away. Another advantage is that you have more and more money to use as you move on to larger and larger debts. So the snowball method really is great for paying off debt. But the question is, is it the best? Let's compare that to the avalanche method.

It's similar but with an important distinction. Just as you would do with the snowball approach, you make the mandatory minimum payments on all your debts. But instead of taking your leftover money and applying it to your smallest balance, you put it on the debt with the highest interest rate. When that's paid off, you apply its payment in the leftover to the next highest interest rate and so on. Now the difference is more than just lowest balance versus highest interest rate. With the avalanche method, you get a slower start on seeing progress. It'll probably take you longer to pay off the highest interest debt than the one with the lowest balance. So it'll be a while before you get a psychological boost. That said, the momentum does build with the avalanche method as you get to the end of your debts. You again have a lot of cash available and you're taking big bites out of what you still owe. So back to the question, which is better?

Well that depends on you. Do you need to see the progress you're making? If so, you want the snowball method because the results are more immediate and tangible. Like we said, you start getting wins early and that's encouraging. But some people think more in the abstract and they're content with watching the numbers and seeing the balances go down each month.

They don't mind if it takes longer to get a win. They want to make sure they pay the least amount of interest overall and the avalanche approach gives you that. Let's say you've got a half dozen debts ranging from one to ten thousand dollars and they have interest rates from six and a half percent to eighteen percent. Both the snowball and avalanche methods will pay off all of the debt in a little over four years with around eight thousand dollars in total interest. But the avalanche approach paying off the highest interest first will save you a couple of hundred dollars in interest. So now you're thinking why recommend the snowball approach when it means paying more interest? Well because studies have shown that the best approach is the one you're most likely to complete and that turns out to be the snowball approach. Paying off your smallest debt first. You see it doesn't matter if you might save two hundred dollars by paying off your highest interest at first if you get discouraged and quit which you're more likely to do with the avalanche.

And that's why we say go with the snowball. Get the quick wins. Pay off your smallest debt first and then go on to the next and don't worry about the interest rates because you're more likely to stay motivated that way and the key is to get out of debt once and for all. But whichever method you choose let us know how it's going. We'd love to hear from you and by the way once you get that debt paid off make sure you get on that spending plan using the MoneyWise app so you don't ever go back into debt again. All right your calls are next 800-525-7000.

That's 800-525-7000. I'm Rob West and we'll be right back. Thanks for joining us on MoneyWise Live.

We're so glad to have you along with us today. I'm Rob West your host. In just a moment we'll be heading to the phones to take your calls and questions on anything financial. Perhaps you want to talk about where we began today and that is how do you effectively pay off debt? Well we'd love to tackle that with you.

Today we teed up two different approaches the avalanche method which may be new to some of you and the snowball method which has been talked about for quite some time. We'd love to unpack that or perhaps you want to talk about saving for the future, developing a spending plan, whatever it is we'll take a biblical approach to helping you move forward with confidence. Here's the number 800-525-7000. We've got some lines open 800-525-7000. Before we go to the phones let me just say a huge thank you to the MoneyWise Live community for your participation in our fall share last week here on Moody Radio. What an incredible blessing to see God's people respond, to keep the gospel loud and clear through Moody Radio literally to the ends of the earth. We are so grateful for your involvement. So many new supporters of this ministry, many of you who have been regular supporters right there standing with us at all levels.

It was God's people coming together to do this great work and we are so very grateful and certainly appreciate the many kind comments we saw regarding MoneyWise as well. All right let's take your phone calls today. We're going to head to the lines. Again we've got a few lines open here at 800-525-7000.

We'll begin today in Baltimore, Maryland. Hi Marie, how can I help you? Oh hello, thank you for taking my call. My question is, I heard that it was possible for someone to steal the title to someone else's house. I was wondering if that's true and if it is, how can we prevent it from happening to us? Yeah you know unfortunately Marie there are so many ways that fraud is happening these days, especially with more and more transactions being conducted online and more and more ways that thieves are coming in and stealing from so many, especially preying on elderly folks. This has gotten a lot of attention lately because of some products that are out there claiming that they can protect you from this. I'm not so sure and I'm not a fan of these.

Let me just tell you kind of how this works. Essentially someone could stroll into the county deeds office and essentially fake your signature thereby transferring your deed to someone else and then taking out a loan against the property. Could that happen?

Not likely but conceivable. The protection though that these companies offer really just doesn't live up to the hype. Now this isn't what's typically known Marie as title insurance. You should always get title insurance when you purchase a property. That will protect you against any claim involving the validity of your ownership of the property.

It's a one-time purchase usually several hundred dollars. What though is called title theft insurance is a completely different product and it really isn't insurance at all. It doesn't like lock your title either as the name would imply. Essentially what happens is they monitor whether your deed has been transferred out of your name at the county records office.

There is actually no way to lock your title in any state, at least not yet. Now why I don't believe you need to take this on is because you can monitor whether a fraudulent transfer has occurred yourself. Most counties now allow you to view the status of your deed online. Some will even allow you to sign up for automated alerts involving deed changes which would be most like what's being offered here.

But keep in mind even if this were to happen Marie, this is fraud. If someone forges your signature, transfers your deed and then takes out a loan against it, it's still fraud. So the con artist at that point didn't legally own your property and therefore the new lender doesn't have a legal claim to it. If they tried to foreclose on you it would be wrongful foreclosure and wouldn't hold up in court. So from my standpoint I don't think you need to pay for a product that's essentially going to do what you can do yourself. You likely already have title insurance, it's just kind of an automatic when you buy a home or take out a new mortgage and when that's in place at that transaction that's really all the protection you need.

And you know if you want to stay on top of this I would check with your county deed office and just see if you can get an automated alert and therefore if somebody attempted to fraudulently change the deed then you would be notified at that point. Does that make sense? Oh yes, makes me feel a lot better too. Okay, very good. Well we appreciate you checking in with us today. Thanks for listening to the program, may the Lord bless you. You have a great day. Let's head south, Fort Lauderdale, Florida. Hi Winston, how can I assist you?

Oh, good afternoon. I loaned some money to a family friend and now he's telling me that he's broke so I says well why don't you take it from your retirement account? He says no you cannot until he gets to retirement age and from what I understand you can always take money from a retirement account and they give you a time frame to put it back. If you don't put it back then you pay a penalty. So the question is is there a retirement account that you cannot take money from period?

No, I mean with a few exceptions. You know if you had a pension there may not be a way to get access to that money but any self-directed retirement account like a 401k, a 403b, a SEP IRA, traditional or Roth, you can in fact take it out. I don't recommend it though. I would use that as an absolute last resort you know in terms of looking for funds to cover a short-term issue. Most notably the reason is because often you would be treating the symptom of a problem as opposed to the problem. You know usually money issues are symptomatic of other deeper issues like living within your means or they may even be heart related.

So you know I wanted you to tackle those first and make sure that you've reined in the spending and done what needs to be done to correct the problem. Otherwise that temporary fix by pulling money out of a retirement account is going to result in less funds available for retirement growing for the future, a pretty hefty tax bill potentially, and you know the issue will probably resurface six months or a year later because you haven't solved the main issue. In terms of what's available I mean basically yeah if you take money out of those self-directed accounts before 59 and a half you would have a 10% penalty on top of the funds likely being taxable. So you know you could be talking 35% or more right off the top. The only funds you would have access to without any kind of penalty would be a Roth IRA where you're taking out your original contributions. Not the gain but the original contributions you can access those funds without any penalty or tax consequence. But again I would rather you not do that because the whole point of that is to put something away that can grow for the future.

So hopefully that answers your question but I would encourage him not to take that approach and see if he can't solve the problem by you know really dialing back his lifestyle focusing on his spending plan and trying to perhaps come up with the funds another way. Does that all make sense though Winston? One more question if I may. Yes sir. Are you familiar with this retirement that's TCDRS? Well no it's probably a local retirement. Is that based in Texas? Correct. Yeah so it's just the retirement system of a particular county. What's your question specifically related to that? No I was talking to my son and he says you know this particular retirement account TCDRS retirement account you're not able to touch it period.

Yeah and that very well that could be the case yeah it's going to depend on the retirement account whether it's self-directed or whether the funds were going in on your behalf automatically whether it's a pension or what type of account it is so that's entirely possible Winston that those funds are not accessible whatsoever. All right I won't be all up anymore thank you very much for answering my questions God bless you. All right sir we appreciate your call today may the Lord bless you. Well folks so glad to have your calls today and we've got room for many more so we'd love to hear from you whatever's on your mind today we'll take a biblical perspective and try to help you move forward answer the questions that you have no matter what your financial issue is today. Here's the number 800-525-7000 that's 800-525-7000 this is MoneyWise Live biblical wisdom for your financial decisions. Stay with us much more to come just around the corner we'll be right back. Thanks for tuning in to MoneyWise Live I'm Rob Last your host all the lines are full so sit back and enjoy we've got some great questions lined up coming your way in just a moment Schomburg Illinois but first Austin Texas.

Hello Becky how can I assist you? Oh hi I've always been committed to debt-free living and I recently got married and my husband um plan for retirement is flipping homes so we took out a loan on our house to get started and I wanted to pay it off and he said we need to keep it open for like a line of credit and to be able to keep borrowing money to buy investment homes and rent them out and I just wondered how do you know when is too much to extend yourself in that arena? It's a great question and obviously I'd love for you all to be able to do this without encumbering your primary residence for investment purposes especially if you're not both on the same page because when we run through kind of the rules for borrowing if you will we want to make sure that the the money is being used for productive purposes economically that the economic cost is less than the economic gain that there's not any disagreement between husband and wife and you know there's a series of things we want to move through and so for you all to take on debt I really do want you to be on the same page and to the extent either of you is uncomfortable with it you know that would be a warning sign for me that we need to perhaps hit the pause button and you know I realize you all may be able to do this effectively perhaps he has some experience in this and I realize you're trying to generate retirement income but you know I don't want you to get over extended by any means especially in a red hot real estate market that could turn over you know here in a year or two so I just want you to proceed carefully.

Tell me how the first one has worked out how much did you borrow and what's happening from a cash flow standpoint? Well it went really well we bought it and sold it and made a good profit which we have used to start our own business so we weren't able to use any money to pay off the debt but it did it was like a good first you know sign to I proposed the next one we do we use to put towards our pay off our debt and but he kind of said well let's just keep getting more houses and then so I just didn't know when do you know when that's too much like kind of what's a marker for real estate investment. Yeah well I'd love for you to go into a real estate investment with at least 50 percent of your own cash just because you know as we look at investment properties we're going to have higher interest rates associated with them in a market like this you're likely paying a premium for the purchase in the first place and given the fact that you're you know encumbering your primary residence then it's no longer kind of purely a business situation because now your personal finances are involved whereas if you were to get loans on the properties themselves and you're able to demonstrate that you could go in with enough cash which means you've got savings and reserves to put toward that and they begin to cash flow then you can kind of separate if you will the business side of your real estate investing from your personal finances and as long as the debt service is covered plus taxes and insurance and you know routine maintenance and you've got a fund there to kind of cover all of that then you know you could always liquidate those properties and take care of that but the moment you begin to get your personal finances involved without a good cushion under you that's where I start to get concerned. So given the fact that you took the proceeds and the profit from this property didn't pay off the mortgage you put it into a business now what's going on with that business and are you all having to come out of pocket to service the debt at this point? The business is just in the beginning stages but it's I think it's growing and going well but I yeah I just kind of am trying to gauge at what point do you need to so you are are you saying you agree that it would be wise to pay off the equity from our personal home before we proceed in more investment properties? I am yeah I would rather you do that especially with you know taking this and plowing it into a new business and you know new businesses always take longer than we expect to cash flow they always take more money than expected and you know it doesn't sound like you have a real significant reserve underneath you that you know if things take you know more investment to get them going in things like marketing or equipment or you know whatever it is and or we see a you know softening in the economy that's where things you know can begin to get out of hand quickly and so you all continuing to pile on more and more debt to your primary residence without taking care of the debt you know along the way you know gives me a real concern so I think you know it's fine if you want to take the proceeds and plow it into a new business but if that means also then adding more debt to your primary residence so you can buy another property I'd caution against that just based on what I'm hearing about your own personal finances and your ability to fund that I would prefer you you know take care of that existing debt before you add another penny for another property okay all right well thank you so much I appreciate your help you're very welcome Becky thanks for calling and listening god bless you on to Schomburg Illinois hi Tori how can I assist you hi um I was calling in because I am at retirement age and I don't think I'm able to retire at this point so I have about five thousand dollars I was wondering what would be my advantage to invest in the five thousand toward my retirement yeah that's a great question let's do this we're headed toward a break but I've got the lay of the land here so just on the other side of this break I'll give you my thoughts on how to think about investments as you're just getting started thinking about retirement and you've got a little bit of money to put to work for you so you hold the line we'll be back with you in just a moment we've got a few lines open eight hundred five two five seven thousand perhaps ones for you we'll be back with much more just around the corner stay with us thanks for tuning in to MoneyWise Live I'm Rob West your host this is biblical wisdom for your financial decisions let's head back to the phones uh Tori is in Schomburg Illinois just before the break Tori was explaining that she has reached retirement age but not planning on retiring anytime soon and Tori it sounds like you've put aside about five thousand dollars and you're looking to invest that for you know the benefit of being able to access that down the road do you have a certain amount that you could put aside in addition to that each month yes probably so yeah what do you got a little bit of background noise there what do you think your margin is each month yeah I'm driving so sorry oh it's okay I want you to be safe so I'll let you just listen and focus on the road here's my thought you know first of all the very best place to invest for retirement would be a company-sponsored plan so if you have access to a company-sponsored retirement plan especially if there's matching but even if not I'd see if you could set that up and try to put as much as you can away a goal would be 10 to 15 percent of your pay automatically into that account if you can't do that then you'd back down from there if you don't have access Tori to a company-sponsored plan then another great option would be a Roth or excuse me heading into retirement I'd probably use a traditional IRA that's going to give you a current year tax deduction based on the amount that you contribute so it's going to reduce your taxable income as you make a contribution and if you're over the age of 50 you could put in seven thousand dollars for this year and then you could do another seven thousand next year and beyond so that would give you the ability to put that money away and get it working for you and get a little bit of a tax benefit in the meantime you know as you think about investing those funds I'd probably check with our friends at soundmindinvesting.org they have a wonderful resource that would give you mutual fund suggestions that are low cost very high quality you'd be very well diversified even with that five thousand dollars and then that money could begin to grow so you'd have something down the road and if you don't plan to retire anytime soon as long as you have a 10-year time horizon then I would say go ahead and get that invested and then be systematic perhaps every month of putting in you know if you could do 500 a month great but I'd look for that company sponsored plan first and then use the traditional IRA as your second option and I hope that helps you all the best to you in the days ahead.

On to Birmingham Alabama. Hi Judy how can I help? Hey there we have about maybe 30 or 35 $50 savings bonds that probably five of them are matured and I guess my question is with the government the way it is and and the economy I'm just afraid that that for some reason they're not really going to get backed when they do mature and should we go ahead and cash them in or or just keep holding on to them? Well I appreciate the question Judy you know I would probably cash them in if I were you not because I would be concerned that the government won't back them but just because of the interest that you're accruing you know if they're double e bonds they're likely paying you about 0.1 percent and you know you can do better than that in a high yield savings account you could get at least you know 0.5 percent so a half of one percent a year with a completely liquid savings account that's backed by the full faith and credit of the United States. Now you mentioned the economy and whether or not the U.S. you know will be able to back any of this down the road whether that's the Federal Deposit Insurance Corporation which is part of the U.S. government or you know backing their bonds government issued bonds and I would say you know if you look at it you know trusting in the United States government obviously our trust and faith is in the Lord but as far as economies go around the world we are still the biggest and the strongest. The dollar is still despite our challenges and the debt that we have in this country and inflation and some of the other headwinds still the strongest currency which is why even in the financial crisis of 2008-2009 you saw the dollar rally because there really is no viable alternative when you look around the world doesn't mean we don't have to be wise and as a nation in terms of how we handle our monetary policy but it does mean that we still have incredible strength as a nation economically monetarily and otherwise and I believe as we have to make some of the hard decisions Lord willing in the days ahead we will and so I would think in terms of where you put your money so you're not losing purchasing power because remember with inflation money that's not working for you is actually losing value every month I think there's a greater risk there than there is a risk that the U.S. government will default on its bonds or have some sort of collapse of the financial system or economic financial system or economically as we evaluate risk again with our trust squarely placed in the Lord as we evaluate risk I think there's a larger risk of you seeing that purchasing power eroded over time because of the inflation and because you're just not earning a whole lot so if it were me I would look at cashing these in and see where you could position it you know by still having U.S. government backing through FDIC but where you could get instead of 0.1 0.5 you have the ability to redeem a U.S. savings bond anytime you'd like provided at least a year's past since you purchased it it sounds like it has you perhaps will give up a little bit of interest when you do but the place to evaluate that is at treasurydirect.gov that's the government's website for savings bonds for the U.S. Treasury treasurydirect.gov and you could look at the individual CUSIPs and see exactly what the status of these bonds is and you can also find out if they're still earning interest there's a button that says are your treasury security still earning interest and it'll tell you very plainly so I'd check that out and consider perhaps redeeming these and seeing if you could find a bit more yield somewhere else I hope that helps you we appreciate you calling today let's head to looks like Brownsburg Indiana WGNR hi Mark how can I help you how you doing sir thank you for taking my call absolutely my question is this try to keep it short I've put earnest money down on the house and they're building it and as I'm looking at them building some of the the craftsmanship is substandard what what avenue do I have to you know rebut this yeah well I mean obviously you have a contract you have earnest money down and I would talk to an attorney about that a real estate attorney to evaluate both the contract to see what legal remedies you have for them to correct whatever issues are there and or the ability to pull out of the contract if you're just not happy I would start with the language of that contract and have a professional who represents you an attorney take a look at what your rights are and what's spelled out in the contract in terms of being able to remedy what it is that's going on here in terms of you not feeling like the the craftsmanship and work is being done to your standards and all of that will be described as a legal matter in that contract so you know what your rights are and then you'll need to proceed however you see fit obviously they want to get this job done and be paid in full beyond just the earnest money so there's an incentive for them to correct whatever is going on here your incentive is not to have to walk away and lose the earnest money and hopefully you'll be able to come to a resolution on that so I would start with the contract find a godly real estate or contract attorney to assist you and let us know how that turns out Mark we appreciate your call today and I'm so sorry to hear about the challenges you're facing folks we've got more to come on MoneyWise Live in fact I'm going to stay after for a little bit today got a few extra minutes so I'd love to hear from you 800-525-7000 we've got some lines open we'll be right back welcome back to MoneyWise Live biblical wisdom for your financial decisions in just a moment we'll head back to the phones but first it's Monday which means we're joined by our good friend Bob Dahl chief investment officer of Crossmark Global Investments where investments and values intersect you can learn more about Crossmark Global and the funds that Bob manages at crossmarkglobal.com Bob market's been interesting as of late what's catching your attention as you look out over the economic and market landscape the yo-yo nature of the market since we last talked we had three up days and two down days that's the pattern we've been experiencing the straight up that lasted 18 months has given way to sideways chop and the reason is it's no longer just Katie bar the door the economy and the earnings are indescribably good and we're going up not that that's gone it's just slowed somewhat and this quote transitory inflation doesn't seem to want to be very transitory we have the fiscal chaos in Washington DC we have uncertainty about not just what the fed's going to do but who the fed chair is going to be so things have turned a bit mixed and so the market has as well Rob yeah I noticed in your dolls deliberations this week Bob you made reference to the fact that 45 percent of earnings calls for Q2 mentioned inflation which means these corporations are taking note of higher costs absolutely that's in the context of about a quarter that mentioned it typically over time so almost double the amount inflation is an issue you know all you have to do is live life and go to the supermarket or the gas station to figure that out it's not that hard and wages are moving up and I've said on this program before wage rate inflation is the most insidious hardest to root out of the system so look I'm not talking about runaway inflation I'm just talking about unlike the last decade where it's been zero to two percent I think we're in the two to four zone let's just pick a number of three and that's very different from where we've been not just for consumers who live life but also for markets yeah Bob last time you were here we talked about supply problems let's talk about perhaps some good news COVID case is declining may be an end to the supply problems or at least the beginning of the end and you've talked about consumer confidence being a sign that you know we may be starting to turn when it bottoms out and perhaps we're seeing some of that what are the good things that you're seeing out there you just mentioned three very important ones but I'd add to that list that while earnings growth is not going to be 89% like it was in the second quarter it's still going to be way above normal let's suppose to use a round number it's up 20% in the third quarter I need to remind all of us that the long-term average is slightly less than 10 so profit growth still going to be double we have a good economy and we have good earnings um to feed that as well and while interest rates are up some out the curve they're still low which is an incentive for people to borrow money and do business so we can't get too negative about things but then the bear will come back and say Bob but the market knows that that's why it's selling at 20 plus PE ratio and they're right and I come back to the ying and the yang the up and the down the choppy sideways action yeah Bob last question as a Christ follower you know a lot of believers right now are discouraged just what's going on in the political climate economically they see the decisions we're making the debt skyrocketing the loose money they're getting concerned and I think perhaps in some cases fearful about where the U.S. is headed how do you evaluate the U.S. our strength as a nation economically vis-a-vis the rest of the world and you know we know the end of the story as believers and so how does that factor into it yeah uh how many hours do I have to answer this great question there are are so many cross currents and troublesome items on the agenda look you and I both have heard from Christians for I think it's decades now what about the debt what about the deficits and that's proved to be something not worth paying attention to as investors but there will be a day of reckoning we all borrowing from the future and interest rates won't go down forever we don't need high interest rates for interest expense as a percentage of our federal budget to be an issue so I agree with the concerned people to say there's some trends out there that bother me a bunch economically and can I say morally and we've got to keep our pulse on that we need to be salt and light we need to be be get the church to be to be united around some of these key biblical issues that God cares about big time yeah is it fair to say Bob that there's a greater risk and pulling out completely in terms of the purchasing power eroding with inflation versus the actual risk of our economic coming our economy coming tumbling down yeah thank you for bringing it to the markets no question look because markets have done so well I see if you've enjoyed doubling your money and the last 18 months in the stock market taking a little off the table is fine but don't push the panic button and sell everything because you think the U.S. is going to hell in a handbasket if it is the good news is we do know the end of the story but in the meantime we've got an economy that's doing reasonably well you need some equity investments in your portfolio yeah Bob thanks for stopping by we'll talk to you next week my friend all the best bye-bye all right Bob Dahl chief investment officer of Crossmark Global Investments Bob joins us each Monday afternoon and we're grateful for his insights let's head back to the phones Therese is if I'm saying that right Chicago, Illinois. Therese, how can I help you? I'm inheriting a house for my sister and brother-in-law who passed away 14 months ago and we're going to sell it and I'm just curious what I should do with it's probably going to be about $80,000 of inheritance money and I didn't know since it's 14 years since 14 months since they passed if it's still considered considered an inheritance to me for my taxes and that or and if I should put it down on my mortgage or what I should do with it yeah that's a great question so this was given to you as a part of the will and that's just taken this long for the probate process to occur is that right well yeah sort of it's I'm part of my brothers and sisters are part of it with me and we're just now deciding to sell the house so I see so the the cost basis is going to be as of the date of death and so any increase since that time would obviously be considered capital gains and you're going to have to look at that but beyond that in terms of how you should handle these funds I think you've just got to go back to looking at the priority use based on your current financial situation tell me this do you have an emergency fund and what about consumer debt that you have the only debt I have is we have one car loan and our mortgage and we have an emergency fund we have our our IRAs and we have our retirement fund we're looking like three years we're going to be retiring so the biggest that we have is the mortgage is 142,000 and my car has probably 30,000 okay and how many months worth of expenses do you say roughly you have in savings six months okay great and so you've obviously are living within your means you're continuing to put money toward retirement and you believe you're on track at this point in terms of having the funds you need to maintain your lifestyle once you fully retire yes okay great so I like the idea of apart from any giving you'd like to do out of this money I love the idea of you accelerating that mortgage payoff because if you've got debt under control and you're on track to get that continued to be paid down obviously we can get that car paid off you've got six months of reserves you feel like you're on track for your retirement savings if we could go ahead and accelerate that home payoff so that when you retire you're completely debt free including the house and the car that just means your monthly lifestyle expense is even lower which gives you even more freedom and flexibility because you don't need as much money in retirement which is a great thing and not to mention the peace of mind that comes from being completely unencumbered so just based on the information I have I'd proceed with paying that home mortgage down okay perfect thank you all right you're welcome we appreciate your call today quickly to Franklin Tennessee a beautiful part of the country hi Sherry how can I help you hey Rob yes I am being forced to have to leave the job that I'm in right now and I have a Roth IRA from a previous job that I transferred I rolled over but since I'm getting close to retirement age my question is do I need to continue to put money into the Roth IRA that I rolled out I mean the Roth IRA that we started out a year ago or put into the traditional IRA that I rolled over or do I need to put into both yeah and what are you concerned about Sherry in particular is it something related to social security or where you're going to get the most tax benefit what are you thinking about all of the above I just want to know my options yeah so you're continuing to work you just have have a new employer is that right well I'm trying to find another job because because of health issues I've had to leave the job I'm home I see okay very good well you know I think the key is as far as social security is concerned they don't care how many jobs you have and you know that really all that matters is that you contribute into the system and they're going to base your social security benefits based on your highest 35 years of earnings on your record so any year that you earn higher than a previous year among those highest 35 it's going to benefit you over time in terms of you know continuing to fund retirement I would just be systematic in funding that account and given that you're fairly close to retirement I'd probably opt for the traditional IRA which gives you the current tax benefit as opposed to the Roth which will you know typically is most advantaged when you have a long time to let that compound stay on the line we'll talk just a bit more off the air and make sure we get all your questions answered because we are out of time but I appreciate your call MoneyWise Live is a partnership between Moody Radio and MoneyWise Media thank you for stopping by today thank you for listening and being a part of the program want to say thank you to my team Amy, Dan and Jim Henry thank you for being here come back and join us tomorrow will you I'll be here we'll look for you then God bless you