What’s Really Important

A famous Hollywood celebrity once scoffed at the idea that money can't buy happiness, saying, Look at the smile on my face. Hi, I'm Rob West.

Although still wealthy, a few years later, that actor was divorced and battling substance abuse and probably not smiling anymore. So what does bring happiness? Howard Dayton joins us to talk about that today. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial journey. Well, our guest Howard Dayton is founder of Compass Finances God's Way and author of several books on biblical financial principles. And as many of you know, the former host of this very radio program.

He's also a great friend and mentor to me personally. Howard, welcome back. Great to be with you, Rob.

Just a delight. Howard, we're going to take a look at a chapter in your book, Your Money Counts Today, specifically a chapter you've titled, What's Really Important? And I'll go out on a limb and say, I'm thinking that's probably not money, is it?

I think you're right about that, Rob. You know, money will never bring to happiness. I mean, just think about King Solomon. The guy was the author of much of Proverbs, Ecclesiastes. He had an annual income that's more than yours, Rob, about 25 million.

Just a little bit more than yours. You know, he lived in a palace that took 13 years to build. He owned 40,000 stalls of horses.

He sat on an ivory throne overlaid with gold. You know, obviously Solomon was in a position to know whether money could really bring happiness, and he just doesn't hesitate to say that riches do not bring true happiness. In Ecclesiastes 5, he writes, he who loves money shall never have enough. The foolishness of thinking that wealth brings happiness.

The more you have, the more you spend, right up to the limits of your income. Darrell Bock Boy, isn't that true? And we know that's true, because it comes right out of God's Word, and yet, Howard, that's certainly not what the world believes, is it?

Howard Jones No, it really isn't. Most people believe that you can buy happiness, Rob. According to surveys, this is mind-blowing. No matter what the income level, Americans say they need about 40 percent more than they make to be truly satisfied. And I find myself battling sometimes, falling into the if only trap. You know, if only I had that new car, I'd really be satisfied.

If only I had that house, I'd be content. Well, the list is endless, and the Bible offers a sharp contrast to this attitude. As somebody said, money will buy a bed but not sleep, books but not brains, food but not an appetite, a house but not a home, medicine but not wealth, a crucifix but not a Savior.

Darrell Bock Boy, that's powerful. Howard, you made a statement a moment ago, the more you have, the more you spend, right up to the limits of your income. And, boy, have I seen this play out. You know, the tendency is, as our income grows, our spending grows with it.

And that's always going to be the case unless we protest to the contrary. Talk about that phenomenon that happens to so many families. Yeah, I think it's really important, Rob, to establish, as early as possible, the limits of your lifestyle. I was in a small group study last night, and one of the couples who were just doing great when it comes to their business, she's an ER doctor, he's making a lot of money, but they decided early in their marriage that this was going to be the limit, and they set an amount that we will spend for our lifestyle. And so they're giving 40 percent of their income away because they set that lifestyle cap. And I think it's really important for those who are having a lot, in particular, to set a lifestyle cap and to do it really as early in the game as possible. Yeah.

Well, it's so key. And that lifestyle cap relates to your expenses. What are you going to spend on a monthly basis, Howard? There's also an opportunity to set a financial finish line for your balance sheet as well on accumulation, right? This couple did that. And they actually have been living on 20 percent of their income, giving 40, saving 40, and they're just about done on the saving side.

So I think you're absolutely right, Rob. Well, and that just creates an opportunity to give lavishly. We'll continue to talk about this just around the corner. What's really important? How should we view money? And does God always bless his people financially?

That and much more with our guest, Howard Dayton. This is MoneyWise Live, biblical wisdom for your financial journey. Welcome back to MoneyWise Live.

What's really important? We're looking at a chapter of the great book, Your Money Counts from Howard Dayton. He joins us today to talk about money and its role in our lives. And Howard, we were talking just before the break about how money can't buy happiness.

And that comes from an authority, King Solomon, who is arguably the wealthiest man who's ever lived. And he made that point. It just doesn't happen. Yet we can take it to the opposite extreme. And if we understand this idea, we can say, well, perhaps money itself then is evil in some way. Talk about that.

I understand that. But money is not evil, according to the Lord. It's morally neutral. Money can be used for good, such as supporting missionaries or building hospitals. It can also be used for evil, such as financing illegal drugs and pornography.

Rob, just listen to 1 Timothy 6, verse 10. The love of money is a root of all sorts of evil. The Bible doesn't condemn money itself, only the misuse of it, or the wrong attitude toward it. Keep in mind that in the Old Testament, many of the godliest people were among the wealthiest of the day. Job, Abraham, David were all wealthy, and yet they didn't allow wealth to interfere with their relationship with the Lord. Still, that having been said, Scripture warns that riches are dangerous.

They can destroy a spiritually fruitful life. Jesus says in Matthew 13, verse 22, And the one on whom the seed was sown among the thorns, this is the man who hears the word, and the worry of the world and the deceitfulness of riches choke the word, and it becomes unfruitful. Also, it's really easy for wealth to turn us away from the Lord.

Deuteronomy 31, verse 20 tells us, And they have eaten and are satisfied and become prosperous, then they will turn to other gods and serve them, and spurn me and break my covenant. And so, Rob, it just must be human nature to cling to the Lord when it's obvious that only he can provide our needs. But once they have a lot, people often take the Lord for granted because they no longer think they have as much need for him. Well, that's so true. And in my experience, and I know it has been yours as well, that when we have excess, when we have a surplus, that generosity really is the only way to break that grip of money over our lives if we allow it to do so. Isn't that right? Absolutely. There's nothing else. I mean, having God's perspective of money and then practically just to be radical in generosity is the best anecdote for taking the Lord for granted.

Yeah. Howard, another misconception among believers is that godly people will always prosper financially. How do you address that? Yeah, Rob, I think Christians often embrace one of two extremes. Some say if you're really spiritual, you must be poor because wealth and a close relationship with Christ can't coexist. The opposite extreme is the belief that if a Christian has enough faith, he or she will always prosper.

Now, it's interesting. In the Old Testament, the Lord did extend the reward of abundance to the children of Israel when they were obedient. And He threatened them with poverty as a consequence of disobedience. Deuteronomy 30 tells us, I have set before you life and prosperity and death and adversity, in that I command you to love the Lord your God, to walk in His ways and to keep His commandments, that the Lord your God may bless you. The Bible doesn't say that a godly person must live in poverty. A godly person may have material resources.

Well, that's exactly right. So at that point, it really comes down to being found faithful with what God entrusts to each of us, right? We recognize He may give more to some and less to others. And it's really about ultimately being held to account and being found faithful. You're exactly right, Rob.

And I think that's exactly right, Rob. Well said. What about the other extreme, Howard, the so-called prosperity gospel? Yeah, some believers feel that all Christians who really have faith will always prosper.

And frankly, this is also in error. I mean, just think about Joseph. He's the classic example of a faithful person who experienced both prosperity and poverty. He was born into a prosperous family then sold into slavery by his jealous brothers. He became a household slave for Potiphar. Potiphar promoted Joseph to head the household. And later Joseph made really the righteous decision not to commit adultery with Potiphar's wife.

And what happened? He was thrown into prison for years. But in God's timing, Joseph was elevated to the position of Prime Minister of Egypt. So a godly person living a righteous life can experience both prosperity or poverty working in their lives. Yeah, some believers, though, may ask the question, why then does the Lord allow me not to be blessed financially? If somebody were to ask you that, Howard, how might you respond?

Yeah, Rob, I think there are three reasons. First, the person may be violating a scriptural principle. For example, they may be giving generously but acting dishonestly. They may be honest but not working hard.

They may be completely out of debt but not giving. Second, there's the building of godly character. I think Joseph's character was being built during his trials. An example of the Lord developing character in a people before prospering them is found in Deuteronomy 8. In the wilderness He fed you manna which your fathers did not know, that He might humble you, that He might test you to do good for you in the end. Otherwise you may say in your heart, my power and the strength of my hand made me this wealth. And the third reason why godly people aren't blessed financially, we just have to look at the mystery of God's sovereignty.

Hebrews 11 lists people who triumph miraculously by exercising their faith in the living God. But if you look in verse 36, the writer directs our attention to godly people who live by faith, gain God's approval, yet experience poverty. And when you think about it, Rob, it's the Lord who ultimately chooses how much to entrust to each person. And sometimes we simply can't understand or even explain his decisions. That's exactly right. And Howard, to sum this up, the good news is that God's word has some instructions for those of us who are materially rich.

And by the way, most of us in America would fall into that category. So let's finish today with how we should manage money according to God's word. Yes, the Lord knew that the folks who had a lot would really face serious spiritual danger.

So he offers three instructions. First, be humble. 1 Timothy 6 tells us, instruct those who are rich in this present world not to be conceited.

Then put no confidence in your assets. In the same passage, do not fix your hope on the uncertainty of riches but on God. And third, give generously. Instruct them to do good, to be rich in good works, to be generous and ready to share. So I think those are the three primary things that when a person has a lot, they need to focus on. Well, God's word teaches that true joy is based in our relationship with Christ.

Here's what we want to do each day on this broadcast. We want to understand God's heart as it relates to our money, because we know there's 2300 verses in God's word that deal with money and possessions. And the reason for that is because there's so much to say about our money and our hearts and ultimately our walk with the Lord.

Folks, we already have an abundance before the first dollar and we can look to God's word for instruction. Howard, thank you for these important reminders today, my friend. Great being with you, Rob.

Bless you. Howard Dayton has been our guest today. You can find out more at compass1.org.

That's compass1.org. We'll be right back. Welcome back to MoneyWise Live. Delighted to have you along with us today. I'm Rob West, your host, taking your calls and questions here in just a moment. We've actually got some lines open. We'd love to hear from you. Here's the number 800-525-7000.

That's 800-525-7000. What's on your mind today? Financially speaking, of course, we'll apply biblical principles to your question and see if we can help you get some answers to move forward with confidence. Just a moment, we'll head there. First, let me just invite you to consider giving to MoneyWise Media here at year end. Now, more than ever, we could use your financial support as we close out this year and plan for next year.

Here's what you may not know. This ministry is entirely listener-supported, so what we do here on the airwaves, in the MoneyWise app with our coaches and online, it's all as a result of your gifts, tax-deductible, of course. If you'll head to MoneyWiseLive.org and click the donate button, you can give quickly and securely online. You'll find an address to mail a year-end gift, or you can find our phone number there, and there'd be somebody who would be delighted to help you over the telephone. Again, before 12-31 will be counted for this year, and it will go a long way to continuing our work. Thanks in advance for any support you can give. Again, MoneyWiseLive.org, just click the donate button. All right, phone lines are open.

800-525-7000 will begin today in Sandusky, Ohio. Hi, Jeff. How can I help you, sir? How you doing? Great. Quick question. Is it wise to purchase cancer insurance?

Yeah, it's a good question, Jeff. You know, many more employers are now offering this type of critical illness insurance at group rates, and that can be attractive if it's offered that way. But apart from that, it's not necessarily the best thing for everyone, and here's why. These plans tend to be pretty specific in terms of what they'll cover, so you have to really look at the fine print for any exclusions. Critical illness premiums tend to increase more than traditional insurance as you age, so you need to understand kind of what the premium is to start with, but then how it's going to increase over time. They don't offer the same protections that traditional health plans do under the Affordable Care Act.

People often overestimate their chances of developing cancer, you know, which this would specifically be for. So, you know, you'll typically save money by getting a traditional health insurance plan with adequate coverage for critical illnesses rather than a specific kind of add-on plan. And I would also look, if you're trying to, you know, save cost as it relates to covering your health care, you can always explore a medical cost sharing ministry as an alternative. You know, Christian Health Care Ministries would be a great example. It's a ministry we're very familiar with here because some of our team members at MoneyWise Media actually have used CHM for many, many years and have found it just to be a wonderful solution for that.

You'll find them online at chministries.org. But I think at the end of the day, Jeff, it's not my favorite policy from a cost-benefit standpoint unless it's made available, you know, really inexpensively through a group plan. Okay, yeah, that's what this one is. It's through insurance through work, $45 a month for a family. So I didn't know if it was wise to get it or not. Yeah, so I think you just got to look at your budget and just determine, you know, whether that makes sense. I mean, you know, we're talking $600 a year, you know, and what specifically would that cover and, you know, how much of a risk is that to you? And then also look at your traditional health insurance just to see, you know, what gaps might exist that this would need to cover because it could be that you've, you know, got adequate coverage already. So I think you've got to start with your budget, then understand the policy, and then compare that to what added benefit you'd get over and above which you already have.

In many cases, it just doesn't make sense. But I appreciate your call today. I hope that was helpful to you. And thanks for listening. 800-525-7000 is the number to call.

Lorraine, Ohio. Hi, Christina. How can I help you? Thank you for taking my call so much. Thank you. Yeah. Yeah, I've been married.

Yes, sir. I've been married now for about 11 years. My husband's a Christian.

I'm a Christian. He handles all finances. He's the main breadwinner in our home. But when it comes to the financial issues, he just refuses to talk about them in any sense of the word. I've asked, you know, I know I have a basic idea of how much he makes.

He goes, I don't know why you're worried about it. The bills are paid. But he's also not the best. We have no savings. He has a decent job. We have a median income. He just refuses to talk to me about finances, and I'm just completely lost and confused about it all.

Yeah. Well, Christina, obviously, you know, money issues are typically symptomatic of other issues. You know, they reveal what's going on in our hearts, where we placed our trust, and it's really generally when there's money challenges, it's not about the money. There's something else there and underneath it that I think you need to begin to explore, because clearly God's design for marriage is oneness in every sense of the word, and that includes our finances, which means even though we may have one bookkeeper, one person who's more prone to financial matters, one person who's, you know, more prone to the details and taking care of making sure that bills are paid on time and keeping the budget organized, which, by the way, doesn't have to be the person if there is only one income.

It doesn't have to be the one earning that income. That has to do with more, you know, how has God wired you? What is your personality? Are you more hands-on or hands-off? You know, some people are more directional in wanting to understand where things are going, where others are more detailed.

Well, the person who's going to be the bookkeeper is the more detailed, hands-on person, and that may, in fact, be you. But, you know, the fact that he's resistant to talk about it at your request, you know, perhaps there's something else going on there. Either he's embarrassed about how it's been handled in the past, and even if there's not kind of financial infidelity going on, which would be where there's things that are being hidden, decisions that are being made, debt being incurred without your knowledge, expenses taking place, perhaps depleting any savings, you know, those issues would be real.

Those are serious. I mean, that's marital financial infidelity. It could be that it's not that.

It could be that it's just embarrassed that you're not further along, or, you know, that, you know, it's tough to make ends meet every month. But the bottom line is, until this is out in the open where you all can communicate together about it, you're not going to be able to make any progress. So I'd pray first, and then I'd have an honest sit down with him just to say, listen, we have got to be able to do this together. And if we can't, then we've got to talk about why that is, because at that point, it's not about the finances.

And then maybe a third party could help, like one of our MoneyWise coaches. Now we've got to take a break. Stay on the line. We'll talk a bit more off the air. This is MoneyWise Live. We'll be right back.

Welcome back to MoneyWise Live. Phone lines are open, perhaps one for you. We'd love to hear you, from you, related to your calls and questions on anything financial. The number is 800-525-7000.

That's 800-525-7000. Just before the break, we were talking to Christina about a breakdown in communication related to money in her marriage. You know, my friend Dr. Shanti Feldhahn conducted a study with her husband, Jeff. She's Harvard trained, and she's a researcher and looked into this area of money and marriage.

And you won't be surprised that she concluded in her study that 72% of married couples have conflict in this area of communicating about money. And that, you know, really the primary drivers of overcoming that were twofold. Number one, that there be a cushion, a financial cushion. And what that means is that it's not about necessarily what your income is. It's about the fact that you're living below your income. So there's margin or a cushion there. And that cushion was an essential ingredient in overcoming marital financial conflict.

The second one, well, you won't be surprised to know it was communication. Even if there's not a cushion and even if the communication is difficult, communicating about money regularly as husband and wife was absolutely essential in terms of being able to move forward together and experiencing all that God has for you. So I would challenge you, perhaps this is the month to begin a monthly or even a weekly money date where you look at what's working, what's not working, what changes are coming up, what course corrections do we need to make, and how are we doing in light of pursuing our goals that hopefully align with our values?

Where is God taking us and how can money be used as a tool to accomplish that? Here's the bottom line. We all have different personalities as it relates to money. As I said to Christina, some of us want to handle money more directionally versus on a detailed basis.

We just want to know where are we heading at a high level. Others want to be pretty detailed. We want to know down to the dollars and cents and pennies of each account. Well, you need to construct your conversations around how each of you want to see that and handle money. Some want to be hands off in there every day or every couple of days in your accounts looking at things.

Others know you're more hands off. You want to see it monthly or quarterly. Well, I think once we understand our money personalities, it gives us the ability to then communicate in a way that's consistent with that.

So nobody's overwhelmed and nobody's frustrated. Perhaps one of our MoneyWise coaches could help with that. By the way, you can connect with a coach when you become a pro subscriber to MoneyWise. That will get you access to the pro subscription of the MoneyWise app and you can connect with our coaches for help anytime you need it. You can do that quickly and easily right now with a discounted offer available at moneywise.org slash pro. We'd love for you to check that out this month. A discounted offer to become a MoneyWise pro subscriber again moneywise.org slash pro. All right, we've got some phone lines open 800-525-7000 as a number to call 800-525-7000. Before we head back to the phones, let me get an email or two in. These are from folks that have sent an email into questions at moneywise.org.

We try to take a couple of these each day on the air. This first one comes from Esther and Esther is simply saying, I have a lot of credit cards with high interest rates. And even though I faithfully pay the minimum each month, I feel overwhelmed.

I need guidance on the effective way, the most effective way to eliminate these as quickly as I can. And Esther, we'd be delighted to help with that. You know, when you have high interest credit cards, that needs to become the focus in terms of your priorities in paying them off. The first thing I would do is make sure you have an emergency fund. But with high interest credit card debt, I wouldn't try to solve for one month or three months expenses, certainly not six months, I'd set a goal of $1500 in savings, emergency savings, that's going to give you some cushion, not as much as you'll ultimately need, but something. So when the unexpected comes, you're not adding to those credit cards. But as soon as you get that 1500 saved, let's put every extra dollar of margin or surplus toward paying down those credit cards beyond the minimum payments. Now, one of the things Esther, I would suggest is that you look into credit counseling debt management that's going to allow you to get the interest rates down through a nonprofit credit counseling agency, the accounts will be closed, you'll pay them one fixed monthly payment. But here's the benefit. Through debt management, on average, you'll pay off these credit cards 80% faster.

So I would check with our friends at christiancreditcounselors.org as a first step and perhaps that'll get you well on the road to paying these off once and for all. And Esther, we appreciate your email. All right, let's head back to the phones. 800-525-7000. Lynetta is in Colville, Washington.

Go right ahead. Hi, thank you for taking my call. So this is concerning an inheritance from my mother, and the inheritance is coming from two different sources. The first portion is coming from an annuity that she had and our tax preparer told us that we do have to, my husband and I, we have to pay income tax on that money. But now I will be receiving another check soon that will come from her checking and savings account and our tax preparer says that we do not have to pay income tax on that.

So I'm wondering if that income has to be included as part of our income for, well, we're trying to get on to the Affordable Care Act for our health insurance, and that's going to be- Yeah, well, I would take the advice, Lynetta, of your tax preparer, your professional. And the only thing that's causing me some question, which might prompt you to go back and ask for clarification is, you know, if this is truly an inheritance, you know, generally heirs do not pay inheritance taxes. The estate does that if they're due before dispersing the funds. Now, if it's an asset that is passed, you know, normally there's a step up in basis, which just means the cost basis is what determines whether or not capital gains are paid on the sale of the asset. And so typically there's a step up in basis to the date of death, establishing a new cost basis. And then if it's sold after that, if it's sold for a profit over and above that stepped up cost basis, then you would pay capital gains on the difference, but generally not as income for tax purposes.

And, you know, that's true for Washington State inheritance taxes as well. So I would just ask for clarification. Again, I don't see all the details. I don't know kind of the legal structure here and what transpired. I just have a very little bit of information. So I would get professional counsel, but that's a bit perplexing to me as to kind of what you're being told there. So I would just ask for further clarification.

And then I think once you know that, then you can proceed from there in terms of understanding how that may or may not affect you in terms of the Affordable Care Act. We appreciate your call today. Thanks very much. We're going to head to a break here when we come back. Eddie is in Oak Lawn, Illinois, and he wants to know about paying off his house or setting aside an emergency fund. Jonathan's in Miami. He's been waiting to purchase.

He's wondering if now's a good time to go ahead and buy or if he should continue to rent. Plus, we have some lines open for you. Here's the number 800-525-7000. Hey, by the way, if you haven't created your free MoneyWise account to receive our MoneyWise Weekly Wisdom email and to be able to post in our MoneyWise community and get answers from our MoneyWise coaches, you can do that quickly and easily on our website.

Just head to moneywiselive.org and sign up for a free account today. We're going to pause for a brief break and come back. More of your questions and calls.

800-525-7000. Stay with us. We'll be right back. We're delighted to have you along with us today on MoneyWise Live, where we recognize God owns it all.

We're stewards or managers of his resources, and money is a tool to accomplish his purposes. Well, in community together, we can help you navigate your financial decisions, applying biblical wisdom to the issues of the day. We've got some lines open today. We'll head right back to the phones. Miami, Florida. Hi, Jonathan.

How can I help you, sir? Hey, how's it going? It's been a little crazy down here in Florida with the housing market and everything, and me and my wife have been trying to just rent it out and see hopefully if there's a dip or something that comes our way so we can take that opportunity to buy. But right now, the rental market's even crazier now, and our landlord's trying to raise our rent through the roof.

We have a one bed, one bath, and he wants to raise it to $2,000 a month, but we are trying to get it changed to at least $1,850 a month. So yeah, it's just a little crazy, and we're just wondering if we should just get into the process of just buying since it's just so crazy right now. Yeah, well, you know, as you think about buying, I think the key is, are you ready to buy? I'm not as concerned about the housing market in terms of your your timing, because even if we were to see a cooling of the housing market, I think that's going to result in a slowing of the increase as opposed to a decline.

I mean, if there was any kind of dip, it would be very slight. And so I think the primary thing here is, you know, if you're not looking to buy a property as a rental, that would be another story. If this is going to be your primary residence, it's not just a financial consideration, because your primary home is not an investment.

Now, here's what I mean by that. Yes, it should increase in value over the long haul, you know, if you're planning to stay five to seven years or more, and that's a good thing. But the definition of an investment is that we sell it when it accomplishes purposes. And that's not how we approach our homes.

That's where we live. And so for me, it's not as much of a concern as to, you know, whether or not this is the right time to enter the housing market as it is, are you ready financially to enter and the way I would define that is to say, can you find a home that you would be happy with location size and so forth, where you have 20% to put down, and where the resulting mortgage payment that you would take on would be no more than 25% of your take home pay? Would you be able to accomplish those, do you think? With how it is, I mean, we'd have to probably downgrade on what our wants are to maybe accomplish that. But sure, we could maybe I mean, we have the savings. We definitely have the savings for a down payment and more to keep us, to keep us, you know, financially stable in case anything, another COVID craze happens or something.

Sure. Just mostly the monthly income, that's more of the problem. I think we make total like 70,000 before taxes. So affording something, you know, 25% of our take home pay is a little hard down here right now.

Well, I totally get it. But I also realized that, you know, you're likely going to be paying more than what you would be paying for a mortgage for rent, just because of what's going on in the rental market right now. So, you know, let's say your net take home pay is 4500 a month, you know, we'd be talking about, you know, $1125 for principal and interest taxes and insurance. And I realized that's going to be difficult to do. But even if you had because you're living in a hot real estate market right now, even if you had to move up to 30 or 35%, I'd be okay with that. The key is that you need to be able to balance the budget. So you'd have to dial back other areas, which is increasingly challenging due to inflation, especially in certain sectors of the budget, like food in particular.

So I think that the key for you is just to begin to explore that. Could you buy something that perhaps isn't the home you'd ultimately like to be in, but maybe a starter home to get into the market that does fit your budget, that's not going to be a strain, perhaps it's even less than you would be paying for, you know, your rent, and then factor in those other costs that are going to be associated and see whether, you know, now is the time you can swing that. If not, I think perhaps you may just need to delay this, just find as, you know, reasonably priced rental as you can and continue to save and then hopefully your income continues to increase. But I think, Jonathan, that's the main focus right now is when you're financially ready, for me, more so than, you know, when to enter the market, because if we try to play that game, you know, we just have no idea where the market's going from here. And I don't see any signs, you know, that we're in kind of a bubble situation or anything like that with the housing market. The increases, even though we're slightly overvalued, have been as a result of real supply and demand issues and lack of inventory, as opposed to any kind of bubble in the housing market.

So I think you need to do the hard work to figure out what you can afford and then see if you can find a house that matches up with that. And we'll ask the Lord to give you some wisdom on that. We appreciate your call today.

Oak Lawn, Illinois. Hi, Eddie. How can I help you, sir?

Hi, Ron. My name is Eddie and we're trying to figure out what's the best route to paying off the house and do we have enough money in reserves to do so. Real simple. We have no car loans. We have two cars, no student loans, and we have no credit card debt. And with that involved, we're making some pretty good income. And we fully fund our tithing and we fully fund our 401k and IRA retirement accounts.

So we just want to figure out what's the best way to do so. If we have 30,000 in cash in the bank and we're wondering, is that enough to put away for reserves and just focus on paying the house off? Your thoughts? Yeah.

Yeah. What are your total expenses on a monthly basis? Total expenses is about, with kids being in private school, Christian school, about eight grand a month. And we have reserves and we have, we bring in about 10,000 a month. Okay. So about 8,000 in expenses.

So you have nearly four months expenses already set aside. What is your age? 50. Okay. So you all are planning to continue to work for the foreseeable future, correct? Yes.

Any other major changes on the horizon that you know about? No, sir. Okay. Well, you know, if you have good, steady income, you've got, as you said, you're making good money. You're doing all the right things. You're prioritizing your giving, you're fully maxing out your retirement accounts, you're completely debt-free except your home, and you've got four months expenses in emergency reserves. I'd say absolutely. Let's go after the house and take your surplus and begin attacking that debt.

Because once you're completely debt free, not only is that going to free up even more margin for increased giving or, you know, whatever else the Lord might lead you to do, but you're going to get a whole lot of peace of mind that comes from that knowing you're completely unencumbered. So given everything you've told me today, Eddie, I would absolutely encourage you to go all out toward paying down that mortgage. That's it. Thank you so much. All right. God bless you, buddy. We appreciate you listening and calling and congratulations on all the progress you've made financially.

We're going to finish today in Tampa Bay, Florida. WKES. Hi, Bill. How can I help you, sir?

Hello. I have two rental properties and the interest rate is so low right now. And is it wise for me to refinance? And between the two properties, I can have like equity of more than $200,000. And I'm trying to buy a new rental property. Okay.

Yeah. So you have a couple of rental properties right now. What about your primary residence? Do you have a mortgage on that?

Yes, yes, yes. Okay. That's the one, you know, the mortgage.

I'm paying like maybe $600 extra. Okay. And what is your interest rate on that one? It's 2.8%. Okay.

Phenomenal. So you want to leave that alone and you're already paying extra on that. And then you've got these other two rental properties. How much equity do you have in those? One is a little bit more than that. One is a little bit more than $100,000.

The other one is about maybe $90,000. Okay. And are you looking to get cash out or are you just trying to improve the terms? Cash out to buy another property.

Okay. And how much would you be looking to pull out? And how much would you be spending on that? So according to the mortgage company, it's going to be a little bit less than $200,000 because it's 75% of the cost of the property. So for both, it will be less than $200,000. Okay.

All right. And you'll have how much equity? What percent? The interest rate that I have before is 4.75.

It's going to go down to 3.875 because it's a business. Okay. And you'd get that on all of them? Yes. Yes. For the two. Okay. Yeah.

For the two. But then what about this new property? You'd take a new mortgage out on that as well, right?

The two mortgage. Yeah. Yeah. It will be because it's a business also.

It's going to be similar to that. Sure. Sure.

Yeah. I guess the question is just are you comfortable with this amount of leverage? I'd rather you get these properties down to 50% loan to value before you take on a third just because we've been talking about this because we've got a lot of debt out there. And if we were to hit a recession and you all of a sudden have these rented but they're no longer rented, now you've got yourself in a challenge where you're trying to cash flow these things. Does that give you any pause? I have a little bit of a reserve in the bank.

How much? And the renters, I have like more than $100,000 and then the renters are paying mostly. I have extra income after they pay, you know? After the new mortgage, you know? Okay.

Yeah. And that's good. So you're cash flowing the debt service, you're covering the expenses and you have a little bit extra left over.

I think the key would just be careful in getting too overly levered. You know, my preference again would be that you'd have no more than 50% loan to value on these before you buy yet another property. So I think you just need to be careful because everything's going along great right now. We've got a housing market that's high, you've got good rental income. But if we hit a recession a year from now and all of a sudden you're not renting these properties, I think the question would be how quickly would you run through your reserves? How many months do you have to cover all these before you could get them sold?

So I'd probably go slow and wait until you have 50% equity in order to get the third home. But we appreciate your call today. All the best to you in the days ahead. Well, that's going to do it for us today.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to Jim and Eric and Amy and Dan. Thank you for being here as well. Come back and join us tomorrow. We'll see you then. Bye-bye.