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More People Are Budgeting

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
October 21, 2021 9:19 am

More People Are Budgeting

MoneyWise / Rob West and Steve Moore

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October 21, 2021 9:19 am

As work hours shrank during the COVID crisis and resulting shutdowns, many turned to budgeting to help stretch their precious dollars. But why are some people still not budgeting? On today's MoneyWise Live, host Rob West will talk about the likely reasons why some people still are not using a spending plan. Then he’ll answer your calls on various financial questions from a biblical perspective. 

See omnystudio.com/listener for privacy information.

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MoneyWise
Rob West and Steve Moore
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Rob West and Steve Moore

This is Damon Baxter and I serve as business development director for MIDI radio. The only reason were 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 to like United States mortgage faith and family is at their core, it's why they choose to be such a close partner with our station is why they specifically advertise on Christian radio stations across the country. It's wife, father and son, John and Ryan still lead the company to this day. Check out United faith mortgage and their direct lender advantage@unitedstatesmortgage.com thanks to you and to United faith mortgage for supporting Rudy radio United faith mortgage is a DBA of United mortgage Corp. 25 Millville Park Rd., Millville, NY license mortgage backer for licensing information, go to an MLS consumer access.org corporate MLS number 1330. Equal housing lender not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota and Utah. What's the difference between a golf ball in your tired old car that needs a few thousand dollars in repairs.

Well, you can drive a golf 200 yards west. Seriously though, you know when it's time to pay for repairs or get another car what's happening with used car prices these days. Talk about that first today it's on to your calls at 800-525-7000 525-7000.

This is moneywise live as is the term sticker shock when talking about used cars but if you tried to buy one. Recently, you probably had the same experience prices that take your breath away. Why are used-car selling for so much these days. Well, it's economics 101 when demand increases and supply doesn't prices go up. In this case way and why has demand for used cars, especially late-model used cars risen so sharply well because the supply of new cars is actually fallen folks would normally buy a new car finding they can. So they're turning to dependable used cars instead increasing demand there enforcing used-car prices to rise, but now you're probably thinking well what happened to all the new cars you might call it a perfect storm. First, there was a fire at a computer chip factory in Japan causing a worldwide shortage of chips used to regulate modern vehicle engines and transmissions, no chips, no new cars. Second, auto manufacturing plants have had a difficult time keeping enough people on the job to run their assembly lines due to COBIT further decreasing production, and finally secondary manufacturers have run into the same coded snags creating a shortage of the thousands of parts needed to assemble cars. It's gotten so bad that some automakers have actually ceased production temporarily and for those reasons. Over the summer vehicle wholesaler Manheim which monitors in the scores used-car values said there are the highest they've ever been, but there is some good news. The upward trend in used-car values has started to level just a bit since then.

Even though prices are still way above last year's numbers, cars.com, said used-car prices are still going up but the rate of climbing prices has started to taper off in recent months there used-car median listing price in August was $24,000 up almost 35% from last year. The rate of increase was 2.2% from June to July, but from July to August. Used-car prices rose only 1.3%, indicating the prices were beginning to moderate well, I didn't say it was great news, but at least they had something in the news could be even better. Depending on the make and model used-car you're looking for. Here are a few examples that the median price for a used Toyota RAV4 jumped over 7% from May to June, but only rose about 4% from June to August price leveling for several popular trucks is been even more dramatic. The median price of used Ford F1 50s. The best-selling vehicle of any type in history rose a staggering 14% between May and June, but dropped sharply to just under 3% from June to August. So does all of this mean you can afford to wait until used vehicle prices get back to what we remember is quote unquote normal, that depends on how much life is left in the vehicle you're trying to replace experts who been monitoring the chip shortage and other supply chain problems say it will take time for new car inventories to increase. That means used-car prices won't drop anytime soon. Now what does that mean if you're stuck with a beater that needs expensive repairs well. Naturally you'd like to trade it in on a quality used-car or at least have it towed away. But you don't want to have to take out a mortgage to do it.

So how do you know if it's worth it to repair your current vehicle while consumer expert Clark Howard recently tackled that question about a 2008 Toyota Camry with 185,000 miles that needed $3000 worth of repairs. Just about the blue book value of the car. Normally he would say no, dump the Camry in the formula he uses is this different pairs cost less than half of the cars value the work done if the repairs cost between half and the full value of the car have the work done, but only if it means you'll get another year of life out of the vehicle, but these are not normal times. Even though the repairs to the Camry equal the cars value. Clark advised going ahead and having the work done. That's how bad the used-car market as buyers these days.

Bottom line, if you can afford to wait until used-car prices decline. You'll probably come out and this is moneywise live wisdom for your financial decisions is moneywise live a thousand questions in just a moment. We got some lines open. We love to hear from you. Here's the number 800-525-7000 800-525-7000.

Now let's begin today in Parma, Ohio, WC, RFI had a can help user talk to you a quick question. I've got conflicting years. I just want you can clarify it better if one has credit cards that you really don't use much say for example you got like 10 cards and hundred and $50,000 of available credit for you using two or three at look-alike 5K.

Is it better to leave them open to to establish a better credit rating could you not using that much of your available credit, or to close them close to him because your credit rating to go down. I do absolutely. It's a great question. You know it will result in your credit score declining but likely would just be temporaries only ask yet are you carrying balances on the two or three cards you are using are you discharging and then paying it off well basically I just started you know whatever the balance is whether it's 800,100. What I do is write primarily use one American Express when I travel one man it's was issued by my Sentry Federal credit Union, federal employee amenities that I will use the other ones I just got over the years because you know you got a good deal. What I'm saying that sure I like closing them just because it's not only can remove the temptation to use it although it doesn't sound like that's a real problem for you, but more importantly it removes the potential for it to be compromised. So if one of those accounts is hacked and the others charges on their and because you're not actively using these accounts. Perhaps you're not monitoring them as closely because in most months. The balance is zero, no activity, then you might miss it. Whereas if you close these it's going to remove them in take away the possibility that somebody could compromise these accounts and use them fraudulently. Now why would the score drop. Well, depending upon how old these accounts are part of the fight go scoring formula is the length of credit the history that you have and if you these are some older accounts.

Obviously it's gonna take that away. But if you got a pretty long history of credit in general. That's probably not going to be an issue. The other issue would be that it would push your credit utilization percentage because with less available credit you know any balances that you're carrying would be a higher percentage of the total. And you know that if it pushed over 30% could hurt you. The fact that you're charging and paying these off. Even though the statement balance is being reported to the Bureau prior to you paying it off, it's probably much less than 30% of the total available credit. I would imagine so that's likely not going to be an issue. The only thing you may want to think about is if you were about to go out and look for a new loan of some kind. You're in the market shopping for car you plan to borrow a portion of it.

Are you looking to refinance your house or something like that. You'd probably not want to close it right then because a temporary decline, even of 60 or 90 days could potentially drop you into a lower tier that would result in higher interest expense and not as so favorable terms.

But if you're not out seeking new credit.

I would say let's start closing perhaps two accounts every six months until you get down to the number that is more manageable. Any temporary decline would be just that I think you'd see it come right back up and I will remove the possibility that these accounts could be compromised.

Does that make sense that I would keep my oldest accounts are met. Going back my 20 years I have been granted a bed that you have a great you're welcome.

God bless you Sir, we appreciate you calling 800-525-7000.

We got some lines open as a creditor savings. Perhaps it's investing or giving would love to hear from you. 800-525-7000 to Tampa Florida. Barbara understand you have a question about an annuity. How can I help about 10 years ago and so now it and it's mature. I guess it's the right term. I have time for me to decide whether I want to take an income stream from it or surrender it and reinvest it.

My financial advisor says that if I do that she would suggest putting that into the moderate aggressive portfolio so I don't need that income stream and to me it seems like such a small amount each year would be the minimum would be 8000 something this year. It would be 9600. It kind of depends on the how the markets doing.

I think you have been all confused about ever since I purchased it and I'm leaning toward surrendering it, but I just wanted to get some some your thoughts about that Sarah be happy to win Barbara what is the amount that is surrender value on hundred and 57,000 okay very good in your income sources other than Social Security or what my husband has military retirement pension and PA pension rights and that's enough between the pension, then the Social Security it's enough to cover your expenses and I have quite a bit around 500,000 in my IRA.

I see okay and have you been happy with how that's been invested in performing yes I have been it's been staying pretty stable card is in moderate see moderate conservative part of it sent in moderate fund and as I said my my advisor is saying if we take this and surrender the annuity she would suggest putting it in a moderate aggressive because that would be the farthest out would have more time to grow probably for my heirs, you now have many months worth of expenses.

Do you have in liquid savings. Well let's see quite a few. I don't know you have probably around 75,000 joking you nonemergency science perfect okay that sounds great. Well I like this idea, you know, I don't think given the assets that you been able to accumulate your modest lifestyle.

The cash that you have in reserves. I don't see a need to continue with another insurance product unless you were just looking for those guarantees, but sounds like you have a great relationship with an investment professional who understands what you're trying to accomplish. I think the key would just be making sure that you're not taking more risk than you're comfortable with because you don't have to know your expenses are covered.

You got quite a nest egg there yeah you want to be a good steward of it and see it grow for your heirs. But we don't want to take unnecessary risk, and you know, given what the markets done the last couple years in the 10 years before that we had quite a run. If we were to hit some speed bumps along the way. Let's say we were to get into a recession. A year or two from now, we'd come through it and move out of it and move higher in the good news is you could let that money stay right there and recover. But I want to make sure that you're comfortable you know if in 1/4. Your portfolio was down 15 or 20%.

Would that give you any real concern with that cause you to lose some sleep or would you be comfortable saying nope I'm a stay with the long-term plan.

It'll come back and I'll be just fine.

I want you to have those conversations with your advisor to make sure you're ready for that, so that you don't have risk that you're taking unnecessarily. But apart from that, I like the idea of you, perhaps rolling this out if it's qualified money into an IRA or into a taxable account so that it could be managed in the way you described and I think that's probably the best way to go. Okay thank you all right, Barbara, thank you for calling. We appreciate you listening to the folks I will want to be good stewards of God's money. The good news is the Bible is chock full of wisdom that's timeless always right and always relevant. It's never going to change and to make sure that when we apply those principles will put ourselves in a position to experience God's best for your calls just around the corner 800-5257 things are turning into moneywise. My decision as opposed to taking your calls and questions today on anything financial lines open. Perhaps one of those is for you. 525-7000 800-525-7000 and look for you to check out our website@moneywiselive.org. Not only can you take this program on the go with you. All of our broadcast archives of their you can also create a free moneywise account which will allow you to post to the moneywise community where you can get answers to your financial questions from a biblical perspective from our trained moneywise coaches. You can also take advantage of all of our great content.

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Content providers the leading voices in Christian finance all aggregating their content on our site just for you articles podcast videos that will help you really understand God's heart as it relates to managing your money.

Check out all that and more, and moneywise live.org and head back to the phones today were to stay in Illinois hi Amy, how can I help you in all that sounds good to be stock options, freedom from your employer are quite popular to give you the right to buy a specific number of shares of your company stock during the period of time and as you said at a price that your employee sets.

The reason they do. This is they want to attract and keep good workers they want you to feel like an owner of the company and this is obviously a benefit they set the price for the stock at its usually discounted yelp. In some cases below the market price at that time and you once you exercise it. In this case it sounds like they're providing a guarantee which is not typical and it would provide that floor underneath what you're doing. So I like that a lot. The only potential concern is just getting to highly concentrated in your company stock. You know I would prefer that you keep your total investable assets to 20% or less. But given the benefits that you're describing the immediate profit that you're going to realize by buying it at a discount.

Plus, this guarantee that it will lose value for a period of time makes this pretty attractive so I would say you take full advantage of it, especially since you said this is doing well and then as you're able to over time.

Perhaps you diversify away and held by other holdings that would give you the diversification you need to be prudent in your investing strategy. But bottom line is I think this is a great option. Amy, that you also take full advantage of.

Okay.

All right. We appreciate your call today along the coast of Illinois were to stay there. Matt is up next. Matt, how can I assist you today. Good.

So my wife has been granted Social Security disability and she is actually going to be getting a check from when she was diagnosed. I'm going to just do row numbers approximately 40 maybe $50,000 our home. We owe approximately 62,000 and we have about $37,000 in auto loans between two vehicles.

Would it be smarter to put a lump sum down on the house and try to get that payoff as soon as possible or the auto loans. My wife's other idea is that she wants to do a room addition on the house which would not help us with paying off the three main things that we have. We do not have any credit cards okay great I do you have an emergency fund that now okay you know I'd probably start there are in you figure out what your monthly suspect is what are your the total expenses that you have over a month's time, and I'd like to set aside 3 to 6 months. Three. At a minimum in a liquid savings account. The key there is if the unexpected comes, you have a major expense on the how somebody loses a job if something truly unforeseen, not the tires and the Cardinal where we should be planning for that but you know something that comes out of left field. We would want you to have to rely on credit cards because you don't have liquid assets. And that's where the emergency fund, although it's not very attractive from a return standpoint because you'd be thinking about earning probably half a percent on that in a high-yield savings account. It's going to be really critical there to shore up your financial foundation for the unexpected, so I'd start there.

The other thing is you know I like the idea of your paying cash for the addition rather than having to borrow more money down the road so you could hang on to this money for that purpose. But I'd probably consider waiting. This is not the ideal time to put an addition on your home just because of material costs right now to me in her purse through the roof you seen the price of lumber come down but it still has a way to go and I think perhaps six months or a year from now we are going to see even lower prices as we work through some of these supply chain issues and you know so much of the home renovation and construction market will perhaps cool off a bit. So, unless this is something you guys are really looking to do in the very short term. You got a family member moving in and or something that is requiring you to get a jump on this. You just may want to consider waiting perhaps up to a year and see if you can do a little better just in terms of the overall expense but I think priority number one. Assuming you can cover the debt service on the use the mortgage and the cars shoring up that emergency fund. If you do have money left over to put toward that I prioritize the car loan first over the house. Let's focus on getting the house paid off at a minimum.

By the time you tired. If you can do it sooner. Hope that helps you Matt. We appreciate your call was openly love to hear from you today, after this break will get right back to the phones. Here's the number 800-525-7000. This is moneywise live. Thanks for joining us and moneywise live Rob West you host all the lines are full, so sit back and enjoy great questions coming up. Kevin wants to know about how he should use his investments. Given his cutting back on his work and Pharaoh wants to know how she should take care of a mortgage note. She's working part time work ahead, though, next to Chicago. Martha is asking the question, I believe about your 401(k). How can I help you Martha 401(k) and Martha did we lose you there certain yes no I can't 401(k) for several years now and I did contribute it. However, my husband and I were very concerned about the market and but we ended up doing likely pulled out of the market. An early age, probably in early 2020 and still we've just been on hold on money market and my question would be a significant time to get back can I know quite a bit, but even then I'm just wondering if this is a good time to maybe come in with a little bit of a mine of money to get back into the market yeah yeah well fortunately I can't tell you whether it's a good time in enforcing no one because we have to know where the market was at it from here and this is not possible to know that you only invest in the market, we would invest for the long haul and we do it in a properly diversified portfolio that aligns with our goals and objectives.

We recognize there's going to be ups and downs along the way. But when we look historically, it's been the very best place to build wealth if we have the right strategy and were willing to be patients and were not trying to speculate jump in and out of the market. We can do quite well now I realized there was it was a crazy time last year and you know perhaps you all were you somewhat concerned about what you are seeing around you and you decided to get out of the market. If you'd call me at that point I would've discourage you from doing that for precisely the reason that we've seen.

You know the market had the quickest declined to a bear market we've ever seen, followed by the quickest rise to a bull market we've ever seen. And then we had incredible growth since then.

But that's behind us. Where do we go from here and I think the key is because we don't know Martha where the market is headed in the short term, it's just not possible to know. I think you should move back in. I just wouldn't do it all at once and so I think perhaps a way to think about.

This would be to say okay if were to take the next six months and move back into the market so that your fully invested. What if you take and divide that into six equal parts and then move back into the strategy that you were in that was appropriate for your age and risk tolerance you move that back in each month. You know in six equal parts so that by the time you get to to the six month your fully invested. Why would you do that well. Again, we don't know where the markets headed the market could be significantly lower than it is know today that we could see correction.

It could be higher, but were not counting on one euro market value on a given day and time were beginning to kinda move it into the market. Over time, which should smooth smooth out some of the ups and downs and some months you buy at higher levels in other months you might buy at lower levels and I think it's just perhaps a more prudent way for you to return to being fully invested.

I would though evaluate your allocation just to make sure that if we were to get into you know some difficult times down the road. Let's say we were to hit a recession and of the key is that you all see this is long-term money and that you're not too highly concentrated toward your assets that are perhaps a bit more risky than you should be based on where you're at and if you correct that and make sure the allocation is appropriate. Then, you know you can have the peace of mind to say no matter what comes, we're going to ride it out because we know over the long haul.

This is the very best place to see our wealth grow the challenge right now is in the money market you're actually losing purchasing power every month because especially with the uptick in consumer prices with inflation. You were not even keeping up with inflation so that money is losing value, which is why we wanted to be invested. It's just that now that you're on the sideline. I think it would be prudent to move back in over six months and there's nothing magical about that. I'm just picking that number to say we want it to be somewhat near term, but I'd like for you to smooth out the ups and downs by not dropping it in to the market on a single day just all that make sense though I do appreciate your advice. Happy to give it Martha.

We appreciate you listening calling today.

God bless you. Let's head to Tulsa, Oklahoma hi there, how can I help you I yelled and all actually cause and I got through October 4 and I don't have any debt other than my mortgage.

I am thinking that I should check out our top IRA after the first of the year and he is back toward paying off my mortgage which is about 25,000 left on and I had gotten it by not that take lady that the amount of my mortgage each month at keeping an asset continue to grow with the part-time work that you're going to be doing there. Are you able to cover the mortgage payment plus your other expenses or do you have a shortfall and that's what you'd be looking to do this.

I don't know that I'm going to be how on time God is going to laugh and it would not probably cover the mortgage okay well I think that's the next step for you to really get a maybe very done so this but perhaps you need to do a bit more work is to get a real good handle on what are your monthly expenses not only the things you get a bill for but your discretionary spending. Let's put that into a budget.

Let's think about, even those things that don't come every month, maybe a six month insurance premium or something like that, get that all baked in there so you know what it's gonna take for you to fund your lifestyle on a monthly basis and then match that up with what you have coming in as your income sources and then determine whether you can get the work needed to match that and if not, what is that shortfall because what I would love is for you to find enough work for you to at a minimum, just cover the basic expenses and then we could just keep paying on that mortgage.

Over time you got a manageable balance. I don't think we need to rush to pay it off as long as you can cover it each month because you certainly don't want to lose the home or anything like that so now suggesting we stop pay but if you can come up with enough income to pay it.

Let's not try to hurry up and pay it off and to your point. Let's keep those retirement assets growing so that you can rely on them at some point down the road. Now, if you find a you're not able to work and be that there is a shortfall every month. Right now, then obviously got a look at what assets are available for you to cover your expenses and what changes perhaps do you need to make, including selling a home or you're making some changes to bring your spending in line with the resources that you have but as a last resort, and that's what it would be to pulling from your retirement accounts.

The one benefit from a Roth is for at least your contributions, not any of the gains that your contributions you can get those facts back tax free without any Penalties anything like that stand though. I will talk a bit more off the air because I got hit a break here, but much more to come moneywise.

Why don't go anywhere.

Here's a number 800-525-7000 grateful your tuning into moneywise live today with wisdom for your financial decisions on Rob Webster hosting tomorrow's Thursday which means are moneywise weekly wisdom email goes out that's right it's the best in biblical's financial stewardship. We have our recommended reads the articles tomorrow. You won't want to miss for money adults in marriage why you need to steer clear of long-term car loans from our trainer and then an article from a faith driven investor as well call deeply rooted for the future and it's a great story are trending podcasts as well.

Are there in our verse of the week it's all and are moneywise weekly wisdom. I also share three principles of stewardship in my opening a message to you if you'd like to receive are moneywise weekly wisdom just create a free moneywise account you can do that moneywise live.org or by downloading the moneywise app it moneywise biblical finance wherever you download apps. Once you create a free account, you'll automatically receive each Thursday are moneywise weekly wisdom, and I know it will be an encouragement to. Let's head back to the phones were going south to Ocala hi Kevin, how can I help you sir, thanks for taking my call to find out. Maybe you know if I'm a little behind on what I should be doing. I'm getting ready to cut my schedule down so that where if I only, like if I want to. I will be working maybe a couple days a month so because I just don't see myself retiring actually like what I do, but I'm just trying to figure out what I need to do the direction I need to go and it would be the best in making sure that you know that bit. I know I'm not wasting or misusing that what we saved up my wife and I say that you got about five more years before she can retire, but but we have a good amount put away in mutual funds and ending stocks and that I'm just trying to figure out what would be the best direction to go from here. She works so give me a sense of what you needing to draw from these investments. Once you begin working less.

What will be your shortfall each month. You know it's like to think actually what that would be you know each month. I'm most probably about between the till that's around $3500 a month.

I mean, we don't have any car payments. We don't have a mortgage were doing very well on that and want to be wise and prudent.

What I do. I've been doing my thing but yeah that's with money coming in so you know what I don't have any more money coming in at which I'm doing right thing. So 3500 Allin is what you need to cover your expenses now does your wife's income then offset that or is that 3500 a month in addition to what she's bringing my life right now. I she makes a very good salary and what she does in management within the medical community. And you know but it and so I mean we don't have any shortfall guy get the better the better way to put it at this time. Right now okay so her income is enough to cover hundred percent of your expenses will absolutely okay great and so obviously anything you do because you said you'd be working some as you want to would be supplemental in common that at some point down the road you be collecting Social Security so all that you've accumulated could continue to grow for the foreseeable future and you all don't anticipate tapping into any of that correct right now. Barring that, you know something else you know may go on in our lives or something like that and I don't see any worries, but I just want to be prudent in dealing with making sure that we have you know you mean that were doing right on our offerings and you and to be able to do enjoy. We don't usually travel a lot, but I'd like to do that.

More so know that's great but I think there's a couple of things here are number one you could benefit from a financial planner and an investment advisor and you haven't done the professional that you work with. No, I don't like it that I've been doing mostly investment on my own for about so that it that's what you know what money continually got me and so it did make an error that we could still make up that difference that you know over time, but yet like yeah I think I need to look like Janet change that angle. Yeah, no problem, and what you have total in the investable assets roughly between my wife and I both.

We have about 720,000 in IRA and 401(k) about hundred and 60 about it in stock right very good so you got quite a bit that you've accumulated. The good news is that you're still drawing income. She's got plenty of income. Your expenses are covered. I think the key would be for you all to begin to establish you know the spending plan around you.

What additional you want to spend on your lifestyle as you said you been fairly modest you'd like to do a bit more traveling will great. Let's assign a number to that annually and work that into the plan. If you can cover that out of your two income sources.

That's even better. If not, you know you've got money that you can pull from. I think beyond that, you need to be looking at you know, do you want to take on some long-term care insurance. You know what about your giving are you giving strategically and have you set a financial finish line in terms of assets as well as you know, capping your lifestyle for your monthly spending and then you know one of the best ways to give you. Should you be giving out of appreciated assets in a rather than just cash and what ministries are you giving to and do they align with your passion, so I think a couple of things could serve you well as one you and your wife sitting down and doing some planning around what you want your life to look like over this next season as you're working less. She still got five more years of work, but perhaps you all could do a little bit more traveling. What would that cost.

Let's build that into the plan. What is God have for you with your extra time and how can you align your resources to support those activities so that you can now invest in God's kingdom I think would be good for you to visit with the perhaps somebody the National Christian foundation who can help you think about your giving but I would seriously consider Kevin connecting with a certified kingdom advisor who could not only do a plan and really be that sounding board for you and your wife is you all envision what God has for you in this next season and how your money can be used as a tool to support that. But also somebody who can really take responsibility for and managing this portfolio yelled, making sure you're not taking unnecessary risk, but also taking the responsibility responsibility of making the buy and sell decisions so that that's not all falling on you and you can help give oversight to that. Certainly it's gotta be with your objectives in mind, but you're not bearing the brunt of making those buy and sell decisions and I think that'll give you a bit more peace of mind. So for your next step I again take some time for you and your wife to pray and plan for the future and then not connect with a certified kingdom advisor. You can go to our website moneywise live.org and click find the CK but I think you guys are in a great spot. You've obviously handled God's money really wisely and it's now time to enjoy the fruit of that and be used by the Lord in this next season.

We appreciate you checking in with us, but stay in Florida, Colleen, you're next on the program. How can I help my how and I are like fairly clean a little bit larger lump money and get Angle by investment like really haven't been enough to cover both marketing Lab. The total cost would be icy. Give me a sense of what you have in mind.

Colleen is thinking of buying a single-family home and renting it out or what you looking okay. All right.

Have you done this before, or spend much time researching this right now. I've never lied. Okay. All right. You know, yeah sure yeah and you know it's can be a very effective way. I think the key is are you ready for it financially because there's a couple of things that you gotta consider number one is you're in Florida and Florida real estate is sky high right now. So although you know the corresponding prices that folks are paying for your B&Bs is up. The purchase price is quite elevated and so I don't see us in a bubble warehouse and housing markets can come crashing down, but we certainly could see leveling off, or even a dip in housing prices and so you're buying at what could be. We don't know for sure, except in hindsight, what could be a peak at least in the near term. That's number one. Number two is the fact that you're putting your primary residence at risk.

Even though you've got the cash flow to cover it right now and I'm not a huge fan of what I'd rather you do is save take that marginally you have on a monthly basis and just save save save until the point where you could buy something where you collateralize the loan to that other property and where you're putting down because it's an investment property 50% in your own cash and I realize that may take some time that would perhaps delay this quite a bit, but it would put you in a position where you're able to not affect your current residence and truly separate. This is a business activity, and not collateralize your you know primary home your domicile to this investment and if you do that it's gonna put you in a much stronger position because the cash flow if you got 50% down should absolutely be able to cover the debt service plus the maintenance in the marketing and anything else that you need to do and again you're not putting your own home at risk if something were to change, you lose a job or you just not able to make that mortgage payment now suddenly you're not losing your home over it. I also don't like the idea of the home equity line of credit because that's a variable rate and you were going to see rates head up over time, so I'd go real slow on this, I'd make sure you're funding your 401(k) first. Specially there's matching and then if you really want to do this once you've researched it, you've spent some time with people who are doing it. You understand what you're getting into and you got the time, I would save by it with the 50% down and then not get a mortgage on that property. Specifically, as opposed to pulling it from home.

I hope that helps you it's probably not what you are looking for because I realize it may take a bit longer but I think you put you much stronger position. Appreciate your call today is live as a partnership between Moody radio and moneywise media Jim Henry providing research today. Deb Solomon my producer Amy Rios, the engineer today. Thank you for being here. We appreciate all your calls and questions help you come back and join us tomorrow all over again.

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