Today's version of Bunny Wives Live is prerecorded so our phone lines are not open. We all make mistakes and learning from them is a valuable skill, but learning from other people's mistakes, well, that's priceless. Hi, I'm Rob West. That's especially true with mistakes involving money. The world is full of ways you can lose it if you're not careful. We'll go over several of those mistakes today so you don't have to make them yourself. Then we have some great calls lined up, but please don't call in today because we're prerecorded. This is Money Wives Live, where biblical wisdom meets today's financial decisions. Okay, so our first way to lose money is a great example of biblical wisdom running smack dab into a financial decision, and that would be co-signing for someone else on a loan. Studies show that in the majority of cases, the co-signer ends up having to pay off the loan. Proverbs 22 is clear, be not one of those who gives pledges, who puts up security for debts.
If you have nothing with which to pay, why should your bed be taken from under you? You know, parents are often tempted to co-sign for their children or maybe another family member, but the Bible is clear that we shouldn't do it. Instead, look for other options like helping with the down payment or lending the money yourself, even providing it as a gift. Our next way, though, to lose money is something we're likely to hear more about in the coming days as interest rates rise, and that's taking out an adjustable rate mortgage or ARM. These seem to make sense when interest rates are low, but when they begin to rise, so do your monthly mortgage payments. You can get a great low introductory interest rate with most ARMs, but after that, you're just gambling that interest rates will stay low. It's always better to go with a fixed rate mortgage for the shortest term you can afford. That means you'll get a lower interest rate on a 15-year mortgage than, say, a 30-year loan. By the way, if for some reason you have to take equity out of your home, maybe for repairs, the same philosophy applies there as well.
You want to take out a fixed rate home equity loan, not a home equity line of credit or a HELOC, which almost always has a variable interest rate. All right, here's one more way to lose money, and it's taking on consumer debt. Borrowing for a home, business, or even education may make economic sense. The return promises to be greater than the cost, but that's definitely not the case with credit cards, auto loans, and other forms of consumer debt.
Now, granted, you may have to borrow money for a car, but since it's a depreciating asset, you always want to be saving for your next car purchase so that eventually you can pay cash and not borrow at all, whether you buy new or used. While there's some, maybe some return on other types of loans, there's no return at all on credit card debt. When you run up a balance, you pay interest on it at an average rate of, listen to this, 16% or more. It's just money down the drain. Ever wonder why credit card issuers are so quick to give you that one or 2% in the form of a reward for using their card?
Well, it's because they know they'll make it back 10 times over if you start carrying a balance. So if you want to stop losing money on credit card interest, you've got to get on a budget, living on less than you make, saving up that emergency fund we talk often about here so you don't need those cards. And by the way, you can connect with one of our volunteer coaches at MoneyWiseLive.org.
Just click connect with a coach. Okay. Our next way to lose money is by making risky investment decisions. Buying cryptocurrencies is all the rage these days, and no doubt some people have made a lot of money on them, but others have lost just as much. Often by the time you hear about a fantastic investment in some cryptocurrency, it's already peaked in value and on its way down. Proverbs 21.5 tells us that slow and steady plotting brings prosperity. Hasty decisions brings poverty. Instead of looking to make quick money, invest long term with a properly diversified portfolio and avoid the fads.
Okay. Time for one more way to lose money. And it's a big one that you may not have thought of. And it's losing your job.
You know, lots of people lost all or part of their income during the COVID shutdowns. And while for many people that was unavoidable, there are some things you can do to give yourself more job security, committing to do excellent work on the job, asking for more responsibility, looking for ways to improve the company's bottom line, even taking classes to increase your skill set. Your job is a blessing from God just like everything else he provides. So I want you to be grateful for it and never take it for granted. All right.
So those are five easy ways to lose money. I hope you can learn from other people's mistakes and not make them yourself. Hey, we're going to pause for a brief break. We'll be back with much more.
Stay with us. So delighted you could join us today on Money Wise Live, where God's word intersects with your financial life and the decisions you make on a daily basis around spending and lifestyle and how much to give and what's the right amount to save. How much is enough for the future? What about communicating about money with your spouse and developing a vision for how your spending plan can actually support your values, that which is most important? Remember, money is a tool to accomplish God's purposes and it tells a story about what we value. The way we spend money, the late Larry Burkett used to say, is the clearest indicator into what's going on in our lives spiritually. What's most important to us and does our money, the way we spend it or handle it, does it reflect what's truly most valuable to us? And if not, what changes do we need to make to perhaps simplify our lifestyle, to increase our giving, to pay off debt, to be free to respond to the Holy Spirit as he leads?
That's what it's all about. And here's the thing, folks, that leads to greater intimacy with the Father, because as I read the scriptures, one of the primary obstacles to lordship in our life is the money and the things money can buy. And the question is, are we managing God's money according to his principles? There's 2350 verses that deal with this topic.
We want to mine those scriptures and help you navigate your financial journey so you can handle money faithfully. We're going to begin today in Randolph, Vermont, listening to the light is Janet. How can I help you?
Hello, thank you for taking my call. My question is about financial gains when you sell property. I married my husband in 1995. Unfortunately, he passed away six and a half years ago. So I'm getting ready now to sell the house. Now, you know, he built it in 1979. I have no idea how much money he put into it to build it.
But how do I figure capital gains? Yes. So is this home in your name now, Janet? Yes. Yes. Okay. And you've lived there two out of the last five years, correct? Yes. Yes.
Okay. So you have the ability to miss out on or exclude the first $250,000 in gains because it's your primary residence that you own, that you've lived in two out of the last five years. That's not the selling price, $250,000.
That's the gain above your basis. So to determine that you would involve your CPA. But just a general idea here is that you would add the original cost of the home plus any qualified improvements you've made.
That would generally be additions and upgrades, not routine maintenance. And that then number would be subtracted from the selling price to determine what gain is there. So let's say you sold it for $300,000 and the cost basis plus the improvements that stay with the property. Let's say that was another $100,000. You'd have then the difference between the selling price and the original purchase price plus those improvements would be your gain. And if that's less than $250,000, then there would be no capital gains due on that. If it's more, then you would pay capital gains rates, which would be long term, probably 15%. So tell me what your thoughts are there in terms of what you expect to sell it for and if you have any idea what your cost basis might be.
Yeah, that's my problem. I have no idea how much my husband, you know, started with to build the house. He and his brother built it in 1979.
I don't know. I built the house in 1972. I think we started out with $36,000 mortgage peanuts. But I have no idea where he how would I find that out? Yeah, we're going to need to probably go back through the original records, whatever you have. You know, if that can't be determined, then I think I mean, obviously, there's the cost for the land and that would be a part of the public record. But what you want to try to nail down is the improvements that were made for the original construction than any improvements that stay with the property that increase the value throughout the time that he held it. And then that's ultimately going to be your cost basis. If that documentation is not available, you can't determine that.
That's going to get more difficult. At that point, you're going to need to really look to have a some counsel from a CPA who can help you determine what that number could be that you could justify before the IRS based on, you know, construction costs at the time that it was built, that type of thing. So I think you need to do some homework to see what records exist beyond what's in the public record and then visit with a CPA or accountant that can help you nail this down. The good news is, you know, you should have quite a bit of gain that you would not pay any capital gains tax on because this is your primary residence. What do you expect to sell it for?
Do you have any idea? Well, I would hope more than $300,000 up to $400,000. Okay.
All right. So if we know that you can have a minimum of $250,000 in gain without paying any capital gains tax, you arguably because of how long ago it was built, there could be some, but it's not going to be a whole lot. So that's the good news. So you should be able to take the vast majority of the proceeds of the sale and take that to purchase your next property. So I would, if you don't have a CPA or accountant, I'd go ahead and schedule a visit with one who can help you determine exactly what that number would be that you would put before the IRS.
And that will help you determine whether there's any tax due at all or not, which there may not be depending upon what that original cost basis was. I appreciate your call today, and we'll be praying that the Lord will give you some real clarity around what's next for you as you sell and move to where he might be leading you. And we appreciate you checking in with us today. We're going to go next to Miami, Florida. Jonathan is calling.
How can I help you, sir? Hey, how's it going? So my question is, is that given the housing market as it is now in Miami, it's kind of been, I guess, troubling to figure out whether I should buy or not. And if it's realistic to buy, I guess, the the amount of house I can afford.
I just got married probably, you know, during covid of last year. And, you know, just we're kind of tired of renting. So we're just wondering whether we should buy in this market or not.
Yeah. Well, clearly, it's a challenging market. You know, we've got a severe lack of inventory. The latest numbers I saw would were that the lack of inventory could be as much as six million homes were short nationwide based on the real demand that exists out there. So you've got that really driven largely by the covid shutdowns, the fact that so many people are looking to move into single family homes, perhaps where they had been living in small apartments downtown.
And now they're working remotely. You've got the millennials that are now reaching the age where they're buying single family homes because they're adding to their families as they have children and they need more space. You know, on top of all of that, you've got incredibly low interest rates. Now, there are certain pockets of the country that have been impacted even more significantly with this incredible run up in housing prices.
And clearly you're in one of them, Jonathan. They're in Miami, Florida, because there's no state income tax. We've got a lot of folks leaving northern states and coming from out west that are cash buyers and they are enjoying the lower taxes there in Florida, which is pushing the real estate up, not to mention the the beach and all the water that's there. So, you know, many folks think that this housing market is going to level off, perhaps even dip slightly. I don't think we're in a bubble situation like we were in 08 and 09 with entirely different issues than we have going on here today, which is really just supply and demand.
Now, what's going to right this ship? Well, there's a lot of professionals in this space saying that they expect the inventory will actually increase over the next year, that between six and twelve months from now, we'll have more homes available, which should cause the housing market to cool off a bit. The question would be, you know, will you see much in the way of a of a dip there in Miami? If you could hold off six months or a year, I don't think that would be a bad idea. But as long as you're willing to stay for 10 years, meaning you can buy something that you think would you could stick with for 10 years and you can lock in a really low interest rate, you'd have 20 percent down, which is really the minimum that I'd like for you to have. And the resulting mortgage payment for the 80 percent you would borrow would be less than 25 percent of your take home pay for your family, including principal interest taxes and insurance. Then I'd be OK with you proceeding even though you're buying into a very red hot market right now. But if you don't think you can stay that long or you don't have that down payment or that that mortgage payment is going to push you beyond that 25 percent and you're going to struggle to balance the budget, I think perhaps it might be a signal you need to hold off. But give me your thoughts on that.
Yeah. And I've gone through that and calculated exactly how much house we can afford at that rate. But it just seems obviously unrealistic because there's no house at that cost at the moment. So it's just been a struggle, I guess, to figure out what to do. I can completely understand.
And I think, you know, that's the real challenge. And so often where it causes us to want to stretch so we can buy a home in this market, especially in a place like Fort Lauderdale or Miami, because housing prices are so high and we want to kind of get in so we can get out of the the renting game, which, by the way, rents are very high right now, too, as I know you're probably experiencing. So I just save as much as you can and really dial into that budget and make sure that you don't respond emotionally in terms of making that final decision. Make sure you make the decision that's right for you, that fits the budget, that you can feel good about a year from now and two years from now and doesn't really put you in a bind financially as you try to move forward.
And I know it's a challenging time, so I'd make it a matter of prayer, ask the Lord to show you exactly the right place for you and your wife and your family. And we appreciate your call today. And you're listening to MoneyWise Live with Rob West.
Today's broadcast is prerecorded and that means we're not taking any calls. But we've got some calls lined up and great information coming your way that we think you'll find helpful. So stick around for more MoneyWise Live after this brief break. You're listening to an encore presentation of MoneyWise Live.
You can find out more information about the topics we're talking about when you visit our website, MoneyWiseLive.org. Today's program is prerecorded, so keep that in mind. But we think the upcoming information will help you and make you a wise steward of what God's given you.
So please stay tuned. Let's go right back to the phones. In Indiana is Vicki.
Vicki, how can I assist you? I was wondering, I just switched retirement age and I'm still working full-time. But my husband passed away and now I'm able to get his Social Security. And so that money is just going into my checking account. And so I've saved probably, I don't know, $15,000 or $20,000.
What should I do with it or is it okay to stay in my checking account? Yeah. Do you have any other, perhaps medium-term goals? And so let me just throw out a couple of ideas. I mean, one is, are you looking to increase your giving? Another would be, is there any, you know, purchases on the horizon? Do you need to replace a car at some point where we'd want to try to save specifically for that? Or is it really just you're in a position where you're debt-free and your expenses are covered? So this is really just surplus that you want to continue to build for the future so that if something down the road came unexpectedly or you needed some long-term care at some point or you had major medical expenses, you just want this to be available. Talk to me about kind of the priorities that you have moving forward. Yes, it is mostly like to build my future.
You know, as long as I'm working, I'm doing fine. But of course, once I get retired, I like I wouldn't be able to live where I'm living now. I'd have to go to a lower income type property. So I just want, I'm trying to build up some savings that way also besides my 401ks.
That was one of my other questions. I am debt-free except I did just have to buy a car last year because mine died. And so I have about maybe $2,500 in car payments that are, you know, I took it out for a couple of years, so I owed two or $3,000. I didn't know if I should pay that off with some of the surplus.
Right now I'm making double payments. I'm just trying to get it done in half the time. So I don't know really what is the best thing.
Okay. Yeah, I like the idea of you prioritizing that because keep in mind, if this money has a time horizon that you think you might need it in less than 10 years, we're going to want to be pretty conservative with it. And when we get to that point, given where the stock market has come from over the last dozen years and the prospects of the stock market's growth over the next, I would say five years, probably being somewhat less than what it's been the last several years, we're expecting modest growth in the market and we could have some bumps along the way just because of some of the headwinds we have out there right now. I think you would be wise to go ahead and really prioritize paying off this car loan because your return is guaranteed equivalent to the interest rate you're paying. The other benefit, Vicki, is that you are going to remove this from your budget, which is going to give you more surplus once that's paid off because you don't have a car payment anymore.
At that point, I would continue to put money away. I think, though, after you get to, you know, perhaps six months of expenses, maybe even up to a year at the most, then I think there's an opportunity to perhaps put this to work for you still on a very conservative basis and with a small amount of money that's building, you could look at one of the robo-advisors where by the questions and answers you provide would build a very low-cost, diversified portfolio with a good mix of stocks and bonds. I think that would be a great solution for you, but I'd prioritize the car first. The place to look for that robo-advisor would be either Betterment or Schwab Intelligent Portfolios or maybe the Vanguard Advisor once you pay off the car.
Those could be great solutions for you. Again, low cost, lots of diversification, and you're going to capture the broad moves of the market with a properly diversified portfolio. We appreciate your call today and thanks for checking in with us. Much more to come on MoneyWise Live. We have a number of subjects to cover and some wonderful calls all lined up in advance. 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. 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. Let's go back to the phone.
Chicago, Illinois. Melanie, how can I assist you? Hi.
I have a praise report. An hour and a half ago, I paid off my mortgage. Oh, wow. That's incredible.
Yeah. I listen to you guys a lot, so now I got to count MoneyWise. When I was in bank, I said the bankers were congratulating me, and I said, I think balloons and confetti should fall from the ceiling. That's amazing.
I'm so delighted to hear that. It was so weird to go up to her and say the words, I want to pay off my mortgage. And now I get to say I am debt free. So did you actually walk in and pay it off, or did you do that online?
How did that work? No, I walked in and I was on the phone with the bank last night and they gave me the payoff and I printed it out. They emailed me, I printed it, and I cut a check and walked right in. They took my check. It was so easy. I said it was too easy to give away this much money. I feel like I should frame the receipt.
I'm sure you do. Now tell me, what do you plan to do with this money now that you've got some margin? I haven't thought that through yet. I do have six months put aside. I got a 401k, I got Roth, and so I haven't decided yet. The first person I called was my accountant, and then I called my financial planner and told them. So I have a phone appointment with the financial planner next week and we'll talk.
But I don't know. I'm so glad to hear that. Well, that's the right thing to do as you think about where you go from here is think about how you can align your values and your priorities with how you use God's money from this point forward and getting some wise counsel and making that decision I think is really, really important. So I appreciate you sharing that praise report. That's so exciting. I know you're going to sleep well tonight as you think about the freedom of being unencumbered moving forward.
And we're so delighted for you, Melanie. Thank you for your call today. Thanks for your courage. All right. God bless you. Bye bye.
So exciting. You know, folks, that's what it's all about. You can hear it in Melanie's voice, the joy, the freedom that comes from being unencumbered, being able to respond to the leading of the Lord and being completely debt free. And I know for some of you, you may be thinking, I'm never going to get there. How am I going to do that? And yet I think it's so critical for us to really just do the next best thing and think about what can I do to limit my lifestyle and free up margins so that I can apply more to debt reduction, whether it's credit cards or auto loans or maybe a mortgage as well.
So that can be your story down the road. Let's all work together to make it happen. And Melanie, so excited for you. All right. Heading to Chicago, Illinois. Ernest, thank you for your call today.
How can I help you? Not Illinois. It's Florida. Oh, Florida. Okay.
We'll take that too. Go right ahead. Yes. Good afternoon. How are you doing?
I'm doing great. I appreciate your call today. All right.
Thank you so much. You have a question. I have the mortgage. I owe $280,000 from that, $280,000.
But I have a half-dupe list. It's valued at $250,000. I would like to sell it to pay the mortgage off.
What do you think? Because my mortgage is $45,000, $35,000 a mortgage. Okay.
All right. So you have two homes. And tell me what the first home is worth. First home is value.
They valued at about $580,000. Okay. Both of them together?
No, no, no. One is two house. One is two.
Okay. So the first house is worth about $580,000. Is that right?
That's correct. But I owe about $280,000 in that. You owe about $280,000. So you've got about $300,000 in equity.
Yes, almost. Yeah, let's do that. Okay. And what's the second home worth, do you think?
I don't want it, but it is half-duplex. It's about $250,000 to $260,000. Okay. Let's say it's worth $260,000. And what do you owe on that one? Zero.
Oh, zero. Okay. And so you're wondering if you should pay off or, excuse me, sell the half-duplex to pay off the first home. Is that right? That's correct, yes. Okay. And are you renting out the half-duplex? Yes.
All right. And are you bringing anything in after the mortgage is paid? Well, there is no mortgage. So all of that is money that's coming in. Yes, it's money coming in, but that's the money I collect. With my work, I pay. I pay the mortgage on the big one. Okay.
Very good. And tell me, are you looking to get out of that in terms of you're a landlord right now? Are you looking to, you know, simplify your financial life so you're no longer a landlord having to manage that? Or secondly, do you have a conviction around being debt-free?
Would either of those be true? Yeah, I'm trying to be debt-free to not a big house. My landlord, she buy house, she gonna move to it. She gonna move to another house. I see. Okay. So I think the key here is, you know, if you really have a conviction about being debt-free, this is a great real estate market to sell in because property values are very high.
If you're in Florida, they're even higher than other parts of the country. And so I think you've got an opportunity here to liquidate this property, this half-duplex, take that money, pay off that home mortgage, and then you could start saving and socking that money away that you are currently putting toward the mortgage that you'd no longer have. And I think at that point, the key is if you could be saving diligently and then when the housing market perhaps takes a dip because it's red hot right now, there's no question about that, then you'd have an opportunity down the road to perhaps buy another property, but do that, you know, maybe even with cash as you continue to save up. But in the meantime, you'd be unencumbered and know that you have the freedom and flexibility that comes with that. Does that make sense? That makes sense. That's my plan. That's my plan.
Yeah. My wife come to me today. She tell me, kick the house, or we finance it. What you think? I am not.
I don't like it. We finance it. Yes.
Okay. Well, it makes a lot of sense to me. And I think, you know, if that's your goal is to be debt free, then I think you should go for it and don't look back. And then, you know, again, take that money and continue to build it up. So perhaps you could buy something else down the road.
Just make sure on that sale you put aside anything you need for capital gains so that you've accounted for that along the way. And Ernest, God bless you. We appreciate your call today.
And thanks for checking in with us. Well, you know, this is folks as we talk about managing God's money, it's always about the priority use of these resources. We have limited resources. The question is, where's the best place to put that money? Is it toward additional giving? Is it toward saving for the future? Is it toward investing for the long haul?
What is it? And that's the key. We've got to evaluate that and look at it and then prayerfully consider how God would move us forward. That's what we're trying to do is to understand God's heart as it relates to our money here on this program.
We'll do more of that just around the corner. Here's the phone number 800-525-7000. We'd love to hear from you.
800-525-7000. Much more to come on MoneyWiseLive. By the way, we'd love for you to consider a gift to the ministry.
You can do that at MoneyWiseLive.org. Just click the donate button and we would certainly be grateful. We can do what we do only because of your generous support. We'll be back with much more MoneyWiseLive right after this. Stay with us. Thanks for joining us today on MoneyWiseLive. We're so glad you're along with us. Let's go right back to the phones.
Diana is next on the program in Idaho. How can I help you? Hi.
Good afternoon. I just sold my home for $300,000 and I paid off my bills and I've got maybe $272,000 in savings and I've been advised by a couple people to do mutual funds to invest. I talked to my financial advisor at my bank and he said there's really low risk in them and he would like to take $100,000 of that and put into the mutual funds. I think I would be getting 4%. He would take 1% and then the percentage fluctuates on the interest. I'm a little leery with the way things are going right now of doing it. I'm in my 70s and I'm on Social Security and I may have a couple hundred dollars to $300 left after I pay my expenses, my rent, utilities and stuff if that. So I'm going to probably be living a little bit off of the equity of my home. Something tells me to do it and something bigger tells me not to.
Yes. Well, I can certainly appreciate that. The good news is you have these resources. The question is how do we manage them wisely to cover your lifestyle and realize you're living modestly on a fixed income and so you want to stretch those dollars as well as you can. My first question, Diana, is your housing situation. How are you going to be renting? Did you move in with family? Where are you going to be living? I rented and my rent will be right now and unless it goes up, it's $8.40 a month.
God bless me with a nice apartment at $8.40 a month. Yeah. Very good. I'm not sure about the utilities in it, you know, but. Sure. And so now that you've got the budget in place, tell me about that. You said you're going to be short about $200 or $300 a month, is that right? Well, I might just kind of break even with my expenses and I make $1440, something like that, $37 a month in Social Security. Alright. And so you said after you paid off your debts, what do you have available now after the sale of the home?
I think I have about $272 in savings and a few thousand in my checking to get into my, right now I'm in between moving out of my home a couple of days ago and getting into my apartment. So I'm paying for a motel for the week. All of this is very expensive.
It's moving twice. Sure. But well, here's the good news is that you've got this money to fall back on. And you know, if you just put $100,000 in the market, meaning in a properly diversified portfolio, so you know, that $100,000 shouldn't be all in stocks, that would be too much risk. But whatever portion you want to put at the risk of the market, it's going to be a mix of stocks and bonds and other fixed income type investments, maybe some dividend securities or preferred stocks. And that's where I think having a professional money manager to come in there to help manage that would be key. The reason I like only using $100,000 there is because that would throw off at 4% a year, which is reasonable if we're managing it for income purposes, about 4,000 a year, which should cover your shortfall.
The good news is you'd still have 172 left. So if a portion of that was down, you wouldn't have to touch it, you could let that ride while you wait for it to come back over time. You know, even if we got into a recession and we saw the market down significantly, you know, that would typically work its way out in 18 months to a couple of years and you wouldn't have to liquidate any of those investments. Plus you'd have quite a bit that you could live off of that's still in cash.
And I think as interest rates come back up, you could look at some very stable types of opportunities there like CDs or high yield savings. So I think that's the perhaps the best approach. The only question I would have is, should you get some other professionals to weigh in?
If you have a good rapport and you feel good about this person, great. If not, you could perhaps interview a couple of others. The key is you find somebody that you just have a really good fit with, where there's going to be good communication, where you fit their ideal client profile, where you just feel like you have a good, you know, connection with that person.
And obviously they have the experience and expertise. So if you want a couple of others to weigh in, perhaps with some other options, you could go to our website MoneyWiseLive.org, search for Find a CKA and look for a couple of other CKAs in your area. Apart from that, I think this is a good plan because you've got quite a bit in cash. It's going to give you peace of mind in that portion that's at the risk of the market. Again, it's going to be income generating, which is good because this money needs to last if the Lord tarries and you have good health for several decades. But beyond that, you've got some cash to fall back on if you had the unexpected or you needed some long-term care or major medical expenses, that type of thing. Does that make sense to you?
Yes, it does. And is it reasonable for him? He said that I would be earning at least 4% but he takes 1% for his cost. Yeah, a 1% is reasonable. I mean, nobody can guarantee anything, you know, once you get into risk assets where, you know, you're taking a risk. I mean, obviously, his target would be 4% and that's not unreasonable.
But there's no guarantee for that unless you go to an insurance product where an insurance company through an annuity perhaps is the one guaranteeing that rate. But I believe what he's probably saying, if I understand what you're saying is that his target is going to be 4% and he's demonstrated that for clients like you, he can do that over time even though portions of it are going to be up and down along the way and that 1% management fee is very reasonable as well. So, I appreciate your call today. I think you're on the right track. You can feel good that, you know, you're making decisions that line up well with God's Word and I think they're going to give you a strong financial future moving forward. We appreciate your call.
Let's head to Nashville, Tennessee. Lori, how can I assist you? Hi, Rob. Yes, I wondered if you have any insight to and recommendations for protecting my cash, my bank accounts and my retirement accounts. My understanding is that there's a bill in Congress that is pushing through that is to replace physical cash with digital cash. And that is, that's not good. That's really scary. So, I just wondered what kind of protection can I take now by buying gold?
I hate the idea of buying bitcoins, but any ideas? Well, I'm not familiar with what you're talking about related to the retirement accounts, anything that, you know, would involve, you know, cryptocurrencies is not being discussed related to the US retirement system. So, I'd be interested in learning more about specifically what it is you're looking at. But I think, you know, as we look forward, you know, your cash is protected through the FDIC insurance, which is basically means it's backed by the full faith and credit of the United States government. Now, you could say, well, because of the national debt and because of other issues going on, you know, you lack confidence in that. I would say just based on the size of our economy and our resiliency, even though we may have some headwinds down the road, you know, I think we'll be able to make the decisions we need to make to overcome that. And I would say, you know, if my confidence, you know, ultimately is in the Lord, but in terms of being a part of the US banking system, I don't have any concern about that. And, you know, if you were to think about going highly concentrated into gold, I would have some reservations there because of number one, the volatility of it. You know, it's an asset that performs well when everything else is down.
But it's, you know, it's not income generating and it's very difficult, you know, to utilize, even if we were to get into a really bad situation economically. So I think the key moving forward is really just to focus on, you know, with what passes through your hands following biblical principles, which is how do I limit my lifestyle, live well within my means and, you know, how do I have proper savings and I want to give generously and ultimately my trust needs to be in the Lord, not in anything else. And I think being properly diversified in a stock and bond portfolio with an allocation of gold, but probably not more than five, 10% at the most is the approach that has historically done the best and I think puts you in a position to succeed over time in terms of limiting risk and giving you the greatest potential reward throughout your investing life. Going highly concentrated in the precious metals, I think just adds too much risk and volatility to the equation.
Even though I would agree with you, you know, we've got some things we're going to have to address, spending and debt levels and fiscal policy down the road as a country, I'm confident we'll make those decisions as we need to and ultimately we've got to trust the Lord for everything. So that's going to be my best advice for you today, Laurie, and I appreciate your call. I certainly can understand where you're coming from, but I would really have some reservations about you moving large amounts of money into the precious metals and we appreciate you checking in. Before we wrap up today, let me take an opportunity to invite you to be a financial supporter of MoneyWise Media. We are entirely listener supported and your gift would go a long way toward helping us finish the year strong and prepare for our ministry activities next year. If you count yourself among our MoneyWise family, we would invite you to give. You can do that quickly and easily on our website. Just head to MoneyWiseLive.org and click the donate button. That's MoneyWiseLive.org and click donate. You can give there online securely and quickly or you can find our mailing address or phone number if you'd prefer to give that way. And thanks in advance for your gift before December 31st.
Well, MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. I want to say thank you to my team today, Deb Solomon, Dan Anderson, Gabby T, and Jim Henry. Thank you for being here as well. Come back and join us next time. We'll see you then. May God bless you. Bye-bye.
Whisper: medium.en / 2023-06-28 03:36:40 / 2023-06-28 03:53:12 / 17