National Debt Crisis

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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 version of MoneyWise Live is prerecorded, so our phone lines are not open. During his presidency, Ronald Reagan said, we don't have a trillion dollar debt because we haven't taxed enough. We have a trillion dollar debt because we spend too much.

Hi, I'm Rob West. The days of a trillion dollar national debt would look pretty good today. It now stands at nearly 28 trillion. Here to discuss what that means for the economy and your future is economist Jerry Boyer. 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, MoneyWise contributor, Jerry Boyer is the financial editor at townhall.com and the author of the maker versus the takers, what Jesus really said about social justice and economics. And as always, Jerry, great to have you with us again. And as always, it's great to be with you, Rob. Jerry, as you well know, we crossed the trillion dollar threshold some 35 years ago.

Now it's 28 or 29 times that, depending on which debt clock you look at. I want to begin today by just talking about how in the world we got here. Well, we got here because we're a people who don't want to defer our gratification. We want what we want now.

And that's a moral problem and a spiritual problem. It's funny, just over the weekend, I was watching Willy Wonka with my grandson. And there's that scene where I think it's Baruch that says, now, now, now, I want it now. Well, she's bratty, so are we. We want everything. We don't want to save and then buy. We want to buy and then go into debt. And that reflects itself in our own patterns as individuals and reflects itself in public budgeting.

One of the virtues of the spirit, one of the fruit of the spirit is self-control and patience. We don't have those and nations that don't have those get debt that's out of control. Well, let's talk about God's word and what it has to say about debt. Of course, none of it's good, but it's mostly about personal debt. Is there a biblical principle, passages, Jerry, that come to mind that apply to nations in this area of debt?

Well, yeah. And I do wonder sometimes if, because evangelicals like me, our movement started with having a personal relationship with Jesus, that's in the 70s, that's what people told me, you need to have a personal relationship with Jesus. Maybe we go too quickly to think that everything in the Bible is about individuals and not about nations. When you read the Bible, it seems like it's about individuals and nations. So I think a lot of these passages in Deuteronomy where you lend to many nations and not borrow from them, those are probably about nations, not individuals. So I think a lot of the biblical material about debt is about nations, but it also applies to individuals. We tend to think it's about individuals, but it also applies to nations. Whichever one it is, there's a presumptuousness to debt. Debt is, I want it now, we already talked about that, and God will give me the earning capacity in the future to pay back the debt, presuming upon the sovereignty and the providence of God.

Yeah, very good. Jerry, $28 trillion certainly sounds scary, but another figure is worrisome as well. 130% of GDP, or gross domestic product, where we're at right now.

Is that the real problem? Yeah, the numbers like trillion are scary, but we also have an economy that's about $28 trillion, right? So I mean, you deal with advice, you deal with advisors a lot. If someone comes and says, I have $280,000 in debt, am I in trouble? Well, you might say, well, what's your income? Oh, I make $30,000 a year. Yeah, you're in trouble. Oh, I make $2 million a year.

No, you're probably not in trouble. You should deal with the debt, but your earning can handle that level of debt. So you have to compare the borrowing to the earning. And that's what the debt to GDP ratio does. It's essentially our ability our ability to pay off that debt if we need to with our economic output. And something bad happens around 90% to 100%. There was a book this time, it's different, several years ago, that looked at a whole bunch of countries around 90 or 100% debt to GDP ratio, economies start to slow down.

And here's the problem. If the earning, the production slows down, but the borrowing doesn't, then the debt rises even more as a ratio to your economic outcome. So you kind of get caught up in a death spiral. And that's what happened with some of these European economies in 2010, 2011. They got caught up in a debt death spiral. Well, we're at 130%. So just after this break, we'll talk about whether that's something that should concern us as a death spiral in our future. Also, Larry Burkett years ago said we were headed for an economic collapse. We were only at 30% national debt to GDP then.

Why didn't it happen? And what do we need to know about the days ahead? All that and more just around the corner with Jerry Boyer. Hey, this is a reminder that we're not live today, but we do have lots of great information coming up in the rest of the program. So please stick around. Welcome back to MoneyWise Live.

I'm Rob West, your host. Joining me, our good friend and economist, Jerry Boyer is with us this segment talking about the national debt, which by the way, stands at nearly $28 trillion. Is that a cause for concern? And where might we be headed? Jerry, just before the break, you said something bad happens, I think, to quote you. When we get around 90% of gross domestic product to national debt, we're at 130%. So is that bad thing happening here in the United States?

And what might we expect in the days ahead? Yeah, I think that bad thing is happening. Now, there's some accounting stuff here, like what are you counting as debt? Because some of it we owe to ourselves, like the Social Security system. So if you consolidate that, it's a little lower, it's closer to 100%, but it's still bad. And yeah, we seem to be in this cycle now.

Now, we're coming out of this terrible COVID crisis. So the economy is always going to grow fast when you shrink 30%. But in terms of our long-term growth rates, really since 2008, 2009, 2010, they've been substandard. And so the debt rises, the debt-to-GDP ratio rises when the debt is growing faster than the economy.

And the debt has been growing faster than the economy. So we are stuck in that. Now, it's not destiny. We're Christians. We believe in free will and human accountability. It's not fate.

You can get out of it. After the Napoleonic Wars, Britain had a worse situation. But they got their act together. To some degree, they had a religious revival. They kept their spending low.

They cut spending dramatically. They went back on the gold standard. And they actually grew their way out of that debt. Ronald Reagan, because of his policies, strong dollar policies and growth policies, was able to kind of grow our way out of the problem that Larry Burkett talked about. So it's not impossible.

It's just like any other bad behavior, any other vice, the more times you do it, the harder it is to stop it. Yeah, there's no question about it. You mentioned Larry Burkett.

I did as well. Many of our listening audience is familiar with the book he wrote called The Coming Economic Earthquake. As I said, at that point, national debt to GDP was at 30 percent. Now we're at somewhere between 100 to 130 percent, depending on how you calculate it.

Why didn't that happen, Jerry, what Larry was talking about? Well, I think it didn't happen because the national debt to GDP ratio of a third is actually fairly sustainable. If you're a country that has its act together for the most part, and you have good growth policies, and you're not kind of a third world autocracy where you nationalize property, then you can do that.

You're a pretty good credit risk. So debt was a problem, but that level of debt was not necessarily a problem. Another thing is that the U.S. was doing a lot better than the rest of the world. The communist world was no competition for us economically, and Europe was mainly socialist, so people might not have liked the dollar. They might have thought we were printing too many of them or we were borrowing too much, but it was better than the alternative, so investors kind of stuck with the dollar.

Yeah. From a historical standpoint, Jerry, debt was also high in 1946 after World War II, and we grew our way out of that. What can we learn from history? Well, after World War II, we certainly had a lot of debt, but we did something productive with the debt. We didn't pay people not to work. We paid people to destroy Nazism, which is a pretty good investment. It also meant the United States was kind of the last economy standing. So again, you could look at the United States and say, well, the debt to GDP ratio is 106%, but England's worse, the whole world was worse, so we're still going to keep buying American bonds. The other thing is we made a conscious decision to go back on the gold standard, which means that if we were going to spend, we had to borrow the money, we couldn't print the money. So we basically shut down the printing press to some degree because we guaranteed to the world that if you don't like the dollars, we'll give you the equivalent amount in gold. Now, we don't have a gold standard policy now. We are not the fastest growing economy in the world now, far from it, probably about middle of the pack, and the trend is not towards – and the other thing is they did a lot of tax cutting after World War II.

People don't know about this, but Truman actually cut a lot of taxes in significant ways. And we're not doing that. We seem to be moving in the opposite direction. So that's why the post-World War II boom without inflation would not be my base case. So are we headed for a debt crisis or a default, Jerry?

Where does this go from here? I think we are. The question is when. Certainly, some people were very early, and I don't need to pick on Larry Burkett because he's wonderful.

He's one of the founders of all of this movement that we're part of. In fact, some of the best people are early. They see the problem and then they see out ahead where it's going. So I think we are headed towards a debt crisis, but there are things that kind of hold back on it from happening now, like some of the things I've mentioned. The United States has a high debt-to-GDP ratio, but we're eighth from the top. We're not at the top. So there are countries that are much worse than we are. We've got problems, but in many ways, our tax code, unless we get tax hikes, is still more competitive than a lot of the rest of the world. We have a lot of knowledge in our economy.

So those kinds of things, that kind of spiritual heritage, that capital that's there still a little bit, we're not the nation we once were, kind of delays when that might happen. So I don't know what a trigger event would be, but let's say that in the fight over the debt ceilings, at some point, someone with authority, you know what, we can just default. That could be the thing that kicks off an avalanche. And what would a debt crisis or a default look like, Jerry, in your best estimation? The world would sell United States treasuries.

They wouldn't want them anymore, and a lot of them are held overseas. And they wouldn't want dollars anymore, because the dollars are there to buy the treasuries. So what that means is the dollar would rapidly decline in value, which means export prices would go up very much, which would be inflationary. The dollars that they're holding overseas would come flooding back domestically, and those would start circulating, again, driving up prices.

And we've seen a little mini-me version of this over the past year. Interest rates would spike, because if the world isn't lending us money, then we're just lending to ourselves, and we don't have a high enough savings rate. And then the Fed would have a really tough decision. Are we going to go through the crucible? We're going to keep monetary discipline and go through the pain and come out the other side better, like what happened in 1979, 1980, 1981, 1982. Or are we just going to keep the printing presses going to avoid the pain? And at that point, what you have is kind of a slow death of higher inflation over maybe a decade and no growth. So, Jerry, what do we do with this?

We've got about 90 seconds left. Do we get out of the stock market, like some are saying? Do we get out of the banking system?

What do we do with what you've just shared? Yeah, I wouldn't get out of the stock market, because the stock markets actually correlate with inflation much better than bond markets. And nothing correlates more poorly with inflation than cash. When people are scared they go to cash, well, cash is the one thing that's guaranteed to lose value during inflation. That's what inflation is, by definition.

It's a loss of value in cash. So, what do you do? I think you diversify, historically diversifying inside the United States, but also outside. If we have U.S. inflation, then emerging markets at times like that tend to outperform. So, diversifying internationally, diversifying not just in paper, into commodities, this is the stuff you do.

It's just basic biblical wisdom. We don't know the future for certain, so that's why we diversify. So, what I'm hearing you say is, yes, we're getting to some scary levels of debt. Yes, we need to make the hard decisions as policymakers and legislatures to rein in spending. And as God's people managing God's money, we need to continue to follow biblical principles, investing for the long term with proper diversification and trust the Lord at the end of the day.

Is that it? Yes, and have enough margin so that when something bad happens, you can be a source of comfort to your neighbors and actually help them financially and be a supporting structure, because they're going to be scared. And you can explain why it is that the Bible told us that things like this were a risk.

And we certainly shouldn't live in fear. Jerry, we're going to have to leave it there today, but there's plenty more to talk about, so we'll have you back real soon. Thanks, my friend. Economist Jerry Boyer has been our guest today.

You'll find his many insightful articles at townhall.com. It's great to have you with us on MoneyWise Live today, but unfortunately, today we're not live. We're prerecorded and therefore won't be taking your calls. However, we've lined up some calls in advance that we think you'll find helpful. So stay tuned and enjoy the rest of the program.

Thanks for joining us on MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, your host. Hey, our team is taking the day off today, so don't call in.

However, we lined up some great questions in advance. We'll be able to get to a couple of emails today as well, but first to Akron, Ohio. Renee, thank you for calling. How can I help you? Hey Rob, thanks for taking my call. I listen to you every day as I'm driving in the car and I appreciate your guidance and wisdom. Thank you.

I have my, thank you. My son has an IRA pension plan that he received a couple years after he had left his employer. They sent him a 1099, or 1099-R. Very small amount, $886, but every quarter he's earning, you know, a couple dollars, but the fees and expenses are, you know, $20, $25. So it's down to $680 now and I wasn't sure how to advise him to close this out. I would imagine there's going to be some fees or should he roll it over into something else? He has no other investments. He's young and just starting out. Yeah, so it's essentially in an IRA now, is that right? Yes, it says auto rollover IRA.

Okay, very good. You know, I'd love for him to keep it open. Yeah, he doesn't need to be paying those fees with that balance because that's going to just eventually dwindle that down to nothing, but I like the idea that he would have an IRA because, you know, starting young and starting to put away, you know, even $50 or $100 a month, building that up over time, you know, that's really going to pay some huge dividends for him down the road because of the power of compounding. Is, you know, do you think he would have the ability if he were to get serious about it to begin systematically contributing or is this a situation where he's working on, you know, some other shorter term goals in the meantime? No, I think that's probably a good idea to encourage him to do that. Yeah, and just let him know, listen, you know, this is a long term play, but, you know, he's going to be thrilled he had it down the road. If more, you know, high school students who are working part time and college students and newly married couples would get serious about beginning to systematically put money away, even small amounts, you know, they would be just blown away by what that could grow to over time if they'll keep it invested and keep their hands off.

So what I would probably do, Renee, is encourage him to roll it. Well, he'll open a new account, new IRA at one of the robo advisors, so probably either Vanguard advisor or Betterment. And they have a solution where basically, once the accounts open, and then once the $800 or whatever's left is transferred in, then he'll answer a series of questions through their web interface or app, which are great. And it'll build basically an indexed ETF portfolio. So using indexes, which are very low cost, he'll capture the broad moves of the market, you know, in international and domestic and small cap and large cap, but it'll be very stock heavy because of his age.

And that's what you want. And then he won't, you know, try to pick the winners and losers. He'll just get the movements of the market, which, you know, will do well over the long haul. And I think as you, you know, encourage him to do that, then when he starts hopefully a systematic contribution into this account from, you know, his savings account or checking account, just builds it into his budget. Every time it hits the account, so the account, it'll automatically be deployed and reinvested in the same strategy.

And there's not any transaction costs. So, you know, it'll be very inexpensive, which allows him to keep the profits inside the account, which is the goal. So the two that I mentioned are the Vanguard Advisor or Betterment. And either one of those would be great. And I think it'll give him what he needs. Does all that make sense, though? Yeah, that does. I like that option a lot better. OK, good. Yeah. And they're very I'm not sure if he's a millennial, but if he's in somewhere near there, you know, they're very millennial friendly because they just have slick websites, great smartphone apps.

He'll feel very at home navigating them. And, you know, they just make it really easy to systematically put money away, kind of forget about it. And you can because, again, it's not invested in a particular company or a particular sector. It's not like you're wondering, well, I'm all in health care. So how's that doing? Or I'm all in technology.

Well, technology might be out of favor. And, you know, any given year, he doesn't have to worry about that because he's invested across the whole market. And so it can just grow over time. And that'll give him a great place, low cost to do some investing. And I think he'll get excited about it, too, as he begins to see it grow. And perhaps that'll give him some incentive to put even more away.

So check those out. If he has any questions or you do along the way, give us a call back. And Renee, we appreciate your listening and calling today. Well, folks love hearing about young investors, people wanting to take God's money and put it aside, which means if we're going to do that, we've got to live modestly. We've got to dial in our spending and live on less than we earn, which is really the key to every financial success.

Hey, a quick email before we hit the next break. This email comes to us from Dan. And Dan just simply says, how do I strike the right balance between giving and providing for my family? And Dan, I appreciate this email and question so much because I think it really is something we have to wrestle through. You know, it'd be great if the Bible said, well, you need to live on sixty eight point two percent of your income and give the rest away.

But it doesn't. It really leaves it up to us. So the first thing we have to do is recognize God's ownership. The second thing we need to do is be on our knees saying, Lord, what lifestyle have you called me to? No one else can define that for you.

And you certainly don't want social media or advertising defining that for you. You need to define that before the Lord. And I would just say err on the side of living simply. But once you build your plan and you say, OK, God, we feel like you've called us of this lifestyle, you know, you really need to to start with the giving side and build that in first and then figure out how to live on the rest.

And that's going to be a wrestling match throughout your life, especially as you get raises. And the tendency is to increase your lifestyle. We've got to guard against that and make sure that as God raises our standard of giving, not necessarily our standard of living along the way. So you pray about it.

Begin to study the scriptures. There's so much about money and possessions that will renew your mind and I think lead you to God's heart in this area. And I'm confident he'll give you the answer to the balance between providing and giving.

But I'd start with the giving. Hey, much more to come on Money Wise Live. This is the program giving you biblical wisdom for your financial decisions. I hope you'll stay with us. We'll be back right after this break.

Welcome back to Money Wise Live. I'm Rob West, your host. So glad to have you along with us today. Hey, we're not here because we're taking some time off, so don't call in. But we've got some great questions that we lined up in advance that I know you'll enjoy, beginning with Renee in Canton, Georgia. Renee, thank you for calling today. How can I help you?

Hey, Rob. First of all, thank you so much for joining us on Money Wise Live. We're so glad to have you with us today. Thank you so much for taking my call. I had called back in December about another situation, and you stopped and immediately prayed for the situation.

And I just want to say thanks for that. My question today is, I have the option of staying in the dental field. But I think it's important to have the option of staying in the dental field. With benefits that are just okay, but health insurance and retirement and stuff, or I have an opportunity for a job offer. I have a job offer that I'd be making about $20,000 or $25,000 more a year with no benefits. I'm thinking to go that direction, but I have other people telling me that I don't want to do that.

And I don't know what to do. Yeah. Well, I think the key, Renee, is to calculate the value of those benefits that you would be leaving behind. So you've got to get in there and look at, okay, as we compare these two jobs, and are you comparing it to the one that you have right now, just keeping it? Is that really the other option? Well, I actually don't have a job right now because of COVID.

But there's one sitting there waiting for me. So I have two options. So you have the one that would be offering the $20,000 more without benefits.

And then what's the second option? Working in a dental office, and I would have health insurance. They match 3% or 4% and dental vision, and just the regular. Okay.

Yeah. And they would be able to tell you what the value of those benefits are. So you could look at, to give you a breakdown of that, first of all, you could also look at what you would need to pay to replace that on your own. So for health insurance, for instance, the most cost-effective way, which is not insurance, but an affordable health insurance, insurance, but an affordable option to cover medical expenses would be Christian Healthcare Ministries, where you'd look at a medical cost sharing. Or if you wanted true health insurance, you'd have to go out on the market and find out what that would cost you. And then you can quickly calculate the benefit of the 4% match, and you could get the value of those other policies, which is going to be insignificant. Total all that up and do an apples-to-apples comparison from those two. Obviously, it's not just about the financial side, but you're going to want to know what it's actually going to take to provide the benefits that you need when you're having to go out and pay for them yourself, because you can't be without health insurance, and you're going to need disability insurance, and you're going to need to save for retirement. So you've got to have the two comparisons to be able to look at that. And then look at the non-financial side and compare, you know, the two jobs and just see which one is going to be a better quality of life, the location, the distance, the hours, you know, all of that.

So why don't you start by, you know, doing those the comparison and see kind of how that 20,000 stacks up against the value, the true value of those benefits, both as they lay it out to you, what they're having to pay, and then also the replacement cost, which may be a little bit higher when you have to go out and get it on your own. Does that all make sense? It does. Okay. So start there. And if you have any questions, when you get to the end of that, give us a call back.

And I'm confident the Lord will give you some wisdom as you navigate that. We appreciate your call today. To New Hampshire, Mark, thank you for calling today. How can I help you? Hey, Rob, thanks so much for taking my call.

Yeah, happy to. So question, question, whether or not it makes sense to take out a HELOC loan to pay off our current mortgage loan. The mortgage loan is about 145,000 left to pay on it. We're sitting at about 4.2%. We got 21 ish years left on that, but we're trying to pay it off in about seven years. But just wondering numbers wise, so that we can avoid closing costs to do it. I guess the conventional way, if that would make sense to do the bank we talked to over the weekend seems to think it did.

But just kind of wanted to get your thoughts. You know, I'm not a big fan of that approach, Mark, just because HELOC is going to be a variable rate and we know rates are headed higher. The thing I'd probably be more interested in you doing is looking at a new 20 year mortgage, where you can drop that rate by over a point, not increase the term. In fact, you decrease it by a year. Yeah, you've got to look at the expenses, but I would try to do it for no more than 2% of the loan value. So, you know, we'd be talking somewhere around $3,000, maybe four at the most. The key would be that you'd, you know, want to have enough in savings on the interest rate to be able to offset that in a couple of years. You'd need to plan to stay in that home for a while, which it sounds like you are. And when you have surpluses that you could add to the principal balance, you could get, you know, that going in the right direction so you could pay it off in the timeline you're looking for. In fact, they could run an amortization schedule to tell you how much exactly you need to send extra every month or every year to get it paid off in the time frame you're looking for. So I'd much rather you go that approach. I don't like the HELOC option. You know, even though the expenses may be less on the front end, that variable rate could come back to bite you, okay?

Sure. Maybe we're thinking a 15-year loan then, maybe. Yeah, and that could be a great option as well. The key is make sure those expenses are in check too.

No more than 3% of the loan value. Save at least a point. I'd rather a point and a quarter and then get the amortization schedule to find out what it's going to take to pay it off, you know, as quickly as you'd like to do it.

Make sure it fits into the budget and then I think that's going to be the better option. We appreciate your call today, Mark. To Tammy in Davie, Florida.

Hi, Tammy. How can I help you? I have a question about my age being 62. I can collect retirement and I want to do it, but yeah, I'm going to work part-time and then turn it off, just invest that amount and then turn it back in when I'm 65 so I can collect that amount instead of what I get at 62. Is that possible?

You know, it is technically. So if you claim Social Security retirement benefits within the previous 12 months at 62 or later, you can apply for a withdrawal of benefits. You have to repay what you've received so far, as you said, and then they'll treat your application for early benefits as if it never happened. That would then increase your benefits later, but you can only do this for 12 months.

So in my estimation, Tammy, especially given what I'm expecting for the stock market over the next 12 months with 12 months with more tempered moderate returns, just given how far we've come in this stock market and some of the headwinds we have like inflation. I just don't think it's worth the hassle and the risk of something going wrong that would permanently increase your benefits. Just given, you know, I don't think you'll have a whole lot to show for it on the upside. So if it were me, I'd probably pass on that.

And if you have the ability, let those benefits continue to grow without trying to take them early and then pay them back. Does that make sense? It makes a lot of sense. Thank you so much. All right. We appreciate your call today, Tammy.

God bless you. Well, folks, you know, that's what it's all about. We want to go into God's word. We want to pull out the principles and we want to lay that biblical worldview on top of the financial decisions we have to make every day, whether it comes to saving, giving, paying down debt or managing our lifestyle or setting our goals for the future.

We want to run it all through biblical, a biblical lens, because then we know we're basing it on the truth and it's time tested that transcends tax codes and interest rates, all of it, because God's word is always right and relevant. And that's what we do here on MoneyWise Live. We're going to pause for a brief break, but more to come just around the corner. Stay with us. We're glad you've joined us today for MoneyWise Live. Hey, our team is taking some time off today, so don't call in. But we have some great questions that we've lined up in advance, and I know you'll benefit from what we'll discuss today as we apply God's wisdom to today's financial decisions. We're going to go back to the phones.

Arlington Heights, Illinois. Mary, thank you for your patience. How can I help you? Thank you so much for taking my call. Yes, ma'am. I have a question about I'm retired, and I'm like 74 years old, and I lost my job during the pandemic, and it was part time because of my age and things like this.

So it's been kind of hard to get someone to hire me again for what I need to work, the hours I need to work. But anyway, I have some investments in a Roth IRA, and I'm not able to add to that because I have no income, right? That's right. And so I have about $20,000 sitting just in cash, and it's been there for a while in my checking account, and I've been wanting to invest it. But what I don't want to do is invest it in something that taxes or whatnot is going to go into the principal, and I might lose money. So that's kind of what I'm trying to get advice for.

Okay. Well, taxes aren't going to be an issue because this is a Roth IRA. So this is in a tax-free environment, so any gains would be not taxable inside the Roth. And then as you take any money out, if at some point you need to make withdrawals, it comes out tax-free.

You are correct. You can't make additional contributions without earned income. So the question is where to invest it. I want to go back to something you said just a moment ago, and that was, if I heard you correctly, you don't want to take any risk.

You don't want to have the risk of any principal loss. Is that correct? Well, for the $20,000 that I still have that I want to invest, you know, because like I say, it's sitting in the checking account, and I'm thinking, you know, it could be making something somewhere. And that portion is not in a Roth. Oh, I see. Okay.

So that portion that's in the checking account, you want to make something on it, but you want to keep it in a stable account where it doesn't have the ability to lose any money, but you're willing to take some risk with the Roth. Is that right? Right.

Okay. So with the checking account, for that portion that's beyond your living expenses, you know, just what you would keep in there to operate in a given month, and then you'd be replenished with additional income the following month. Leave that in your checking. Anything beyond that, you may want to look at opening a high-yield savings account. You'd only get about a half of one percent, but at least you'd be earning something, and you could keep that linked. If you do business online or you're comfortable with that, you can open an online savings account. There's no fees. Again, you'd get a better interest rate than you would with a brick-and-mortar bank, and you'd be able to keep that in your checking account. With a brick-and-mortar bank, you could link the accounts electronically, and if you ever needed some of that savings or surplus, you could move it over to your checking, but it'd be FDIC insured backed by the full faith and credit of the United States government, and then, you know, that wouldn't have the ability to lose value, and it would be there if you needed it. With the Roth, how much is in that account?

About $60,000. Okay, and that you're willing to put it to work, but you'd probably want to be on the more conservative end. Would you want somebody to handle this for you and essentially build the portfolio for you, or would you like to do a little bit of reading and with some guidance make these decisions yourself? What are you most comfortable with how you want to approach the management of that Roth? Right, well, I've done both. I had one of the kingdom advisors in the neighborhood and everything, but it just wasn't working out because I don't know if it was because of the time that it was, but anyway, any money that I was ahead, the fees were like, you know, putting me down to ground, you know, to the basic of what I had invested, so it was not growing, basically.

I see, yeah. Well, yeah, it would obviously depend on the time period that you were invested, but anything in the last few years should have done far better than, you know, maybe the one percent or one and a half percent you were paying if that's the way the fee structure was set up. You know, another approach would be to visit with our friends at soundmindinvesting.org. The Sound Mind Investing newsletter and the advisory group there could make some recommendations on some good mutual funds for you that would be, you know, you wouldn't have an ongoing management fee for that, so that would be one approach. Another approach would be to look at a robo advisor, so you could go to the Schwab Intelligent Portfolios or a Vanguard advisor, robo advisor solution, and then you'd use ETFs, exchange-traded funds, based on the answers you provide to the questions they would ask. They would automatically build a very low-cost indexed portfolio that would just mirror the market indexes in a way that's consistent with your goals and objectives. That would be probably the Schwab Intelligent Portfolios, the Vanguard advisor, or Betterment.

So I'd probably look to one of those two, soundmindinvesting.org, or one of those robo advisors for the investments of the Roth, just given that you have $60,000, you don't want to hire a money manager, but you want something that's going to put this money to work for you, a fee in a way that makes sense from a fee structure standpoint is what I'm trying to say. So I hope that helps. If you have other questions along the way, Mary, don't hesitate to give us a call. And we appreciate you checking in with us.

On to Chicago, Illinois. Rob, thank you for your call. How can I help you? God bless you, brother. Listen, I'm calling on my behalf of my brother.

Okay. He's a vet. He's in the, he's getting 100% support from the VA in terms of housing, should he be, you know, should he decide that he wants to do that? Okay, but he has Parkinson's disease. And he's really not, he's kind of on his last, last limb, so to speak. He is reluctant. He's not always thinking clearly. He's in the process of trying to get his well established and that kind of thing. He hasn't been a good fiduciary, doing any good fiduciary work.

He has his home, which is a bungalow in Las Cruces, New Mexico. Okay. And I'm, I'm his older brother. I helped raise him.

Okay. And my thinking is, he can't get, he hasn't got enough money to get 24-7 care in his home. But he's hemming and hawing about going into the VA Residence Center. And he has some charitable interests that he likes to take care of, helping do research in New Mexico, for people who have mental problems, mental problems and that type of thing. My thinking is, my thinking was, though, that if he in fact had the support of selling his home, okay, and earning the interest off that he might be able to support his charitable issues, which are very important to him. But I'm not just exactly sure if that's a wise decision or where he would go to find the best income generation for his his home.

It's about $80,000, I think, value of it. Okay. And would he be willing to relocate into the VA housing at that point? I think there's one VA person who is helping take care of him now, who's a vet himself, and they have a good relationship. My thinking is that since the VA would continue paying him, that they could continue paying him to come and visit him, spend time with him at the VA hospital. Yeah, yeah.

Okay. Well, I think that's what it comes down to, Rob, is quality of life for him, for whatever time the Lord gives him. And, you know, addressing some addressing some of those issues first, because I love the fact that you want to help him honor his desire to be charitable. And certainly you could take 80,000. And he could find a, an investment advisor, I think, you know, right there in New Mexico, that could help him turn that into an income stream. And he could have a lot of fun giving that away.

But obviously, there are other implications to liquidating that asset. And I think you just need to think and pray through that recognizing he, you know, is going to have challenges perhaps in making these decisions himself. And so you've just got to perfectly consider whether you think that would be the best option for him in terms of whether he's going to want to stay there in his current residence, even if that means he's doesn't have his ability to be charitable, or would he be just as happy in this home? And would this give him an even greater quality of life as he enjoys what time God gives him here, despite his health challenges and giving some of this money away.

So in terms of where to go, I would be looking to an investment advisor to help at this point, turning that asset that 80,000 into an income stream using a very conservative mix of stocks and bonds that would generate an income, you'd probably want to be thinking in terms of, you know, about 4% a year, which would be about $3200. So I think you've got to give some real careful thought to whether this makes sense from a housing standpoint before you do anything. And that would be my best advice to you. But let us know how it goes. And we appreciate you walking alongside him. We'll certainly be praying for you God to give you some wisdom here. On to Tennessee, Mike, just have about a minute left. How can I help you?

No, I'm all right. Thanks for taking my call. I owe 35 on my truck and 55 on my house. And the truck is at 4.1%.

And the house is at three and a quarter. And I said I sent extra $100 a month towards the principal, towards the house and an extra $350 a month towards the truck. And also I also dropped $400 a month in my savings account and 15% into my 401k. I just curious, do I need to keep rolling with what I'm doing or just cut a few things off and concentrate on one debt at a time? Yeah, I'd probably go after the truck first put all of that that you're sending toward the mortgage toward the truck.

Then when you get that payment out of the way, I'd save for the next car purchase and then take 100% of that and put it on the house. That would just be my priority order. Stay on the line. We'll talk a bit more off the air. We're going to have to wrap for today. We appreciate your call. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media.

This is the program where God's word intersects with your financial life. Come back and join us next time. We'll do it all over again. We'll see you then. God bless you.