Intro to Crypto

It's no wonder that so many people are confused about cryptocurrency.

The word crypto itself means secret or hidden. Hi, I'm Rob West. Two questions we often get are what is cryptocurrency and should I invest in it? Well, Mark Biller joins us today to answer the first one.

The second one, well, you'll have to decide. It's on to your calls at 800-525-7000. That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, our guest Mark Biller is executive editor at SoundMind Investing and there's no one better to shed some light on this mysterious thing called cryptocurrency. Mark, we're glad you're with us today. Thanks, Rob.

Always a pleasure to be back with you. Well, I'm looking forward to this topic. I know a lot of our listeners have questions about it and I know you're going to give us a bit of a primer on it today. Almost everyone has heard of Bitcoin and cryptocurrency in general.

We've even got commercials with Tom Brady and Matt Damon pitching it to us. But if I had to guess, I'd say they don't really understand it. And I'm excited you're going to unpack some of these key concepts. So where do you want to start? Well, Rob, it is a big subject, but I think the best place to start is probably to set this up, this whole broad topic of cryptocurrency as a new form of computing technology.

And that may be a different way than some of your listeners have thought about this before, but I think it'll help us to understand really what's going on here. So to set some context, let's think about how we got personal computers in the 1980s. Then we kind of evolved to the Internet in the 1990s, mobile computing by our phones and other devices since then. And crypto is potentially at least the next evolution in this computing sequence. So the primary focus of crypto, at least at this point, is creating a new digital financial system. Now, it's bigger, broader than just trying to come up with a new form of money. But since everyone is already familiar with money, that's probably a good place for us to dig in. Yeah. And the key to this new kind of money is that it's decentralized, that is not controlled by governments as with other currencies, right?

Yeah, that's exactly right, Rob. And this is where Bitcoin comes into the story and kind of kicks off this whole crypto era, if you will. So in 2008, this anonymous white paper was released that outlined a new digital currency called Bitcoin. Now, this vision was for a peer to peer currency, like you mentioned, that was outside the control of any government. Now, surprisingly, this whole white paper is only nine pages long.

So you can download it off the Internet and read the whole thing. And it's captured the attention, the imagination of millions of people in the dozen years since then. Besides being decentralized and outside of any government control, Bitcoin checks a lot of the boxes of functional money. So things like durability, portability, scarcity, divisibility, those sorts of functions. And importantly, and this is in direct contrast with most fiat currencies like the dollar, the euro, the yen, we see today the impact of the inflationary monetary policies that drive those currencies while Bitcoin was designed right out of the box from the very beginning to be sound money. So there's a fixed cap on the total number of bitcoins that can ever be produced. And so it was it was designed as a contrast to our inflationary currencies, government currencies. So when you think about it that way, Bitcoin has a lot of the same sound money appeals that have attracted people to gold over the years. And that's actually how it's often described as digital gold.

Yeah, really interesting. And we'll be talking a lot more about not only what is Bitcoin and the other cryptocurrencies, but should we invest in it? You know, a lot of folks have been marveling at what's happened to it as of late, to the extent it was really intended to be a store of value. Well, we've seen incredible volatility as these high flying growth stocks have gone down.

Crypto has literally been plummeting, at least it was in the early part of the year. So we'll talk about how do you think about it from an investment standpoint and continue to unpack this a bit further. Our question or your questions today from Mark Biller, a little later in the program. Mark is the executive editor at Soundmind Investing and just more to come around the corner. We're delighted you've joined us today on MoneyWise Live.

God's word intersecting with your financial decisions and choices. I'm Rob West, your host. Joining me in this segment, Mark Biller, our good friend, executive editor at Soundmind Investing, and he's shedding some light today on cryptocurrency. What is crypto and should you invest in it? And I'd love to turn the corner.

Mark, I appreciate your background explanation on what it is. Let's talk about the investment side. There's been a lot of attention given to cryptos as an investment. Yeah, for sure. I mean, they've certainly been the hot return place over the last decade, at least talking about Bitcoin.

But as you mentioned, that comes with a lot of volatility. Yeah. Give us a bit of an unpacking of what's happened just in the last several months.

Yeah. So you could go back, I suppose, if we go back to the beginning of 2021 or let's go back to the decline in 2020 when the stock market fell and the COVID crisis began. So at that point, Bitcoin and the other cryptos fell dramatically, along with most other investments, as everyone wondered whether we were facing the end of the financial world as we knew it and the regular world as we knew it. But then crypto rallied strongly in 2020 and 2021.

Last year in 2021, though, summertime swoon. So Bitcoin and the rest of crypto sold off by more than 50%, bounced all the way back to set new highs late in the year, set a new all-time high around $70,000 per Bitcoin just under that in November, and then proceeded to roll over and have a second 50% decline. So I know when I'm saying these numbers, Rob, it's maybe hard for listeners to really put this in context, but 50% declines. You can go back over the last 50 years in the stock market and there have been three of those.

We had one in the early 70s, in 2000 and in 2008. And what I just rattled off about the last 18 months is we've had two of those in the last year and a half in crypto. So the type of volatility that we're talking about, to put it in context for listeners, you need to be thinking about the volatility of tech stocks and then multiplying that by about four times. So at this point in the crypto lifecycle, you're talking about the extreme edge of the risk-reward spectrum as you're thinking about investment asset classes.

Yeah, that's really important to understand. Does that volatility mark fly in the face of the design to be sound money? You know, it certainly does at this point. But I think what the crypto proponents would say to that is simply that this is so new. This technology and this whole asset class is so new that it probably isn't fair to judge it based on where it stands today 12 years in. There is an expectation that as more institutional money comes into the space, which certainly has been happening over the last year, most of the major banks and investment players have been, in some fashion, have been, I wouldn't say embracing the space, but getting involved to some degree in the space, putting some capital to work in the space, that some of that volatility should come in over time.

I think that's probably reasonable. But as an individual trying to think about, is this something I should do now? We clearly aren't there yet, as far as that volatility being, you know, kind of driven out of the space. It's still a very volatile space.

So very high risk reward. Yeah, no question about it. Well, that was helpful.

All right. So we've covered what cryptocurrencies are. You've touched on them as an investment. Let's explore how they work. I know the article that really is backing all of this that you're talking about today that you wrote, if our folks can find it at soundmindinvesting.org, it goes into a fair amount of detail on how those cryptos work. Give us a high level explanation.

Yeah, you're right, Rob. It can get pretty technical. But the first thing to understand is that cryptocurrencies run on something called a blockchain. Now a blockchain is just a record of transactions that's updated and maintained by a decentralized network of computers. So think of this in contrast to like what your bank maintains. Your bank is a centralized institution that maintains a ledger of transactions. And so a blockchain is a decentralized version of that, that takes this out of the control of the big institution and puts it in the hands of a group of individuals of networked computers that can accomplish a lot of those same goals.

Now someone listening to that may be thinking, well, why would I ever want that? But if you think about it, we're seeing kind of all around us today the breakdown of trust in centralized institutions. So distrust of the Fed and what they're doing with our money, distrust of the global health institutions and what they're telling us about different health things.

And then, of course, you've got specific examples popping up all the time of these big tech companies, you know, deplatforming people, trying to censor different opinions they don't agree with, all these sorts of things. So you can understand why there's a big appeal of being able to accomplish a lot of these same tasks or goals in a decentralized way that doesn't require trust in a centralized institution. So the bottom line here, Rob, is most crypto projects are taking something that we're already familiar with, something like currency or saving, lending, these different financial functions that normally require us to interact with a big institution. And crypto is trying to redesign that particular function using computer code in a way that enables groups of people to accomplish it in a trustless, decentralized way. Yeah, really helpful and interesting.

Well, we're going to pause for a brief break. When we come back, Mark Biller will be with us to talk about the risks of cryptocurrency. Again, a bit more on investing and your questions. Eight hundred, five, two, five, seven thousand questions on cryptos, Bitcoin or anything investing related. We'll be right back on Money Wise Live. Stay with us. We're grateful you've joined us today for Money Wise Live. I'm Rob West, your host.

Joining me today, Mark Biller, executive editor at Sound Mind Investing. This is the program where God's word intersects with your financial life and choices, the decisions you make every day. We recognize you cannot serve two masters. Matthew 624 says you can't serve both God and money. And in my experience, if something's going to compete with God for first position in our lives, it's most often going to be money and the things that money can buy. So how do we see money as a tool? Recognize our rightful place as steward. God is the owner and follow his heart so we can ultimately give generously.

Well, that's what we want to do each afternoon on this program. Today, we're talking cryptos. We get a lot of questions about cryptocurrency.

What is it? Should I invest in it? How should I think about it as a form of currency in the future?

Is it something as a believer I should stay away from? Well, our good friend Mark Biller from Sound Mind Investing took a deep dive into this. You can check out the article. It is extensive, called Intro to Crypto. You'll find it at soundmindinvesting.org. Again, Intro to Crypto, soundmindinvesting.org. Mark's here for another segment or two. We'll answer your questions on cryptocurrency.

We'll also take your questions on anything investing related. We've got a few lines open. 800-525-7000. Mark, let's head to the phones.

Frankfort, Illinois. Hi, Mary. Thanks for calling. How can I help you?

Hi, thanks for taking my call. I was just wondering how Mark felt about crypto being accepted for your church. Like, for them to say you could give with crypto. Yeah. Interesting. Yeah, Mark, we're seeing more and more of the major retailers beginning to think about and even accept cryptos. What about a church?

Yeah. You know, I think that eventually, Mary, we're probably going to get there. I haven't actually heard of any churches that are doing that. There may be some out there that are really technology-savvy and kind of ahead of the curve. But, you know, I think the key, Mary, really is that crypto's hope, their goal is that anything you would be able to do with regular dollars, regular currency, that you'll eventually be able to do that with crypto as well. And so as more people have crypto, use crypto and are, you know, wanting to give in that way, I would imagine churches will eventually add that capability much the same way some churches will allow members to give shares of appreciated stocks or other financial securities.

So there are some extra steps that go into that that have to be done by the church. So I wouldn't expect that to be real broadly adopted real soon. But I tell you, this crypto space keeps evolving very, very quickly. So it probably won't be long before at least some people are doing that. And Mark, it doesn't sound like you'd have any fundamental problem with folks using crypto as a currency as long as they're not investing.

Is that right? Yeah, I think that that's true. I mean, really, again, ultimately, the goal for crypto is to kind of be used interchangeably as you would currency in any other context. So I think that down the line, that's certainly likely to be an option.

And again, for certain folks that are into the crypto scene and have these currencies already, then the flexibility to be able to use them in that way certainly would be attractive. Taking your calls and questions today from Mark Biller, 800-525-7000. Mary, thank you for your call to Warsaw, Indiana. Hi, William, thank you for calling today. How can I help you? Okay, thank you. Go right ahead. Hi, this is William from Warsaw.

Yeah, it sounds like you're breaking up just a little bit. Why don't you try to maybe move to the right or left a bit, see if we can get a stronger signal and go right ahead. All right.

This is William from Warsaw, Indiana. Is that better? Yes, sir. Yep. Go right ahead.

I'm pulling over now so we can do that. I'm sorry, was it David? Is that the guest? Mark Biller is with us today.

Mark, I'm sorry. Anyway, Mark, you mentioned two words of decentralization and then inflation. And so my first question is, my understanding is Bitcoin is the only one that doesn't have a corporation or something. It's all peer to peer. And I didn't know, is there another one where it's 100% peer to peer? And if not, are the ones that are controlled by groups, are any of them having software and pledges to not inflate away their cryptocurrency so it loses value like my U.S. dollars do? Yeah, Mark, your thoughts?

Yeah. So you're hitting on a real important point, William, and that is that there are thousands of these different cryptocurrencies. And this is actually one of the criticisms of the whole space is there are so many that it's impossible for anybody who isn't dedicating every waking moment to following the space to keep track of them all. So what ends up happening is the largest projects tend to gather most of the attention.

But there's a lot of variety between these. So you can't assume when you hear me talk about Bitcoin, for example, you can't turn to another project and assume that the same things are true. As you are pointing out here, William, a lot of these currencies do not have the same kind of sound money principles built into them that limit the issuance of the number of tokens, the number of coins of that particular instrument. And that's a criticism a lot of times that people who are fans of Bitcoin will criticize the other projects because of their lack of those types of controls. The other thing that happens within the space, we've seen this with the second most popular crypto, which is Ethereum, is we've actually seen them change some of the rules.

Let's just put it that way without getting into the detail. They've changed some of the rules about how their cryptocurrency operates. Now, the fact that they've changed them to make it more like Bitcoin, to make it more of a deflationary currency rather than an inflationary currency.

The Bitcoin folks say, well, that's all well and good, but the very fact that you could change the rules is a problem. So there's a lot to unpack there, William, but it is fair to say that Bitcoin kind of has its own niche within the marketplace as kind of that sound money representative. And while there are others that try to emulate that, there are a lot of other projects, a lot of other cryptos that really that is not a focus. And, you know, to be fair, a lot of other cryptos are not really trying to be an alternative currency. A lot of the other cryptos are more probably better thought of as many tech companies or many technology projects that are trying to solve a certain function. That's something different than being an alternative currency.

They may be a lending platform or a saving and borrowing platform. So there's a lot of variety within the space. I hope that was helpful, William. Yeah, very good, Mark. Thanks for those comments. William, we appreciate your call today.

Well, Mark's going to stay with us one more segment. So if you have a question today, we'd love to hear from you. Anything on investing or specifically cryptocurrencies, which we've been talking about today, 800-525-7000 is the number to call.

That's 800-525-7000. By the way, if you want to read the article that Mark has written on this topic, it's extensive and really helpful. You'll find it at soundmindinvesting.org. It's called Intro to Crypto. We'll be right back on MoneyWise Live.

Stay with us. Thanks for tuning in to MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, your host. Joining me today, Mark Biller, our good friend, executive editor at soundmindinvesting.org, where you'll find the article we're talking about today, Intro to Crypto. Mark, let me ask you, we talked a bit in an earlier segment about investing in crypto. You said, boy, it's going to be highly speculative, volatility off the charts. Any other risks we need to be aware of?

Yeah, I think there are. I think there really are three big risks that stand out. We talked about the volatility.

That's the first one. The second is we're at this early stage where, like I mentioned a minute ago, there are thousands of these different cryptos. And I think that we're going to see a winnowing process over the next several years where most of those end up probably ending up worthless, with a handful of survivors and a lot that fall by the wayside, kind of like we had with the whole Internet build out 20 years ago.

So there's a lot of risk in trying to pick particular winners as opposed to kind of thinking of the whole space advancing over the next several years as a group. And then the last risk that I think is really a big one, Rob, is I think we've reached the point in cryptos development where governments are beginning to pay attention. For most of crypto's life, it's kind of flown under the government radar.

And the fact that this competing currency was just kind of building a following and becoming popular kind of off in a corner of the Internet was kind of ignored. And it's gotten to the point now where the governments are no longer ignoring it. And I have thought all along that the biggest risk to crypto is governments saying we get too much value out of controlling our currencies to allow this competitor to chip away at any of those advantages that we get from that. And so I think we're at the regulation stage where not necessarily saying that governments are going to ban it, although some have done that. But I think that governments may start to make it more difficult, more regulation, more control over the on and off ramps to get in and out of crypto.

So I think we're going to have a few years here where a lot of this is being sorted out. And that is definitely a risk to the crypto space. Yeah, well, and I think the big idea here, Mark, is that we just don't need it as we think about our portfolios and what we're trying to accomplish with our long term investing, right?

Yeah, that really is the bottom line, Rob. I mean, in the same way that most investors don't need other speculative investments, crypto falls into that same bucket. So if you don't understand this, you're not intrigued and interested in learning about it.

Don't feel like you're missing out here. You know, if crypto really does hold all the promise that the optimists think it does, we're going to have chances over the next several years to participate in this with less risk as this industry matures. Now, on the flip side of that, if you are somebody who's intrigued by this, you know, I wouldn't wave my arms and say absolutely not. But what I would tell somebody like that is rather than putting their focus on getting a lot of money into this space right now, put the focus on really learning and understanding this space before you put a lot of money at risk. Go slow, keep the sizing small. Because like we've said a couple times, crypto really is a speculation more than an investment at this stage in its development.

So you really need to treat it just like you would any other really risky piece within a portfolio. Yeah, very good. Well, a few more questions on this topic. Let's quickly go to the phones.

Frank's in Tampa holding patiently. Frank, go right ahead. Well, thank you so much, Mark, you have great segue, a lot of really good information. So the if you can't ask this question, I'm going to ask on a Christian financial show, I don't know, you could ask it anywhere. But there's the 800 pound gorilla, there's a lot of Christians that feel uneasy about things that are happening in our world today. We think a lot of us think we're kind of living in biblical times. And certainly, the world global economic system seems to be very volatile as well. Do you have any thoughts in terms of what kind of role crypto may play in the future in terms of if certain currencies or governments have to do a reset with their currency because they've printed too much money? Yeah, yeah, that's a really good question, Frank.

It's really about as broad and limitless as, as a person's imagination, you can go in a lot of different directions with that. So I'll just offer a couple of quick thoughts. You know, I think that you're right, there are a lot of things that are concerning to Christians that we see in the environment around us related to the money related to government encroachment and control of populations as we're seeing around the world. And I think that that crypto may play a couple different roles. So on the positive side, the idea of a decentralized monetary system, a way to be able to do financial transactions that maybe is outside of the heavy hand of government is obviously very attractive. As is often the case, when there's a really good idea that's outside of government, government will often come in and try to replicate and kind of make it their own. And we're seeing that as well with government issued digital currencies.

And those are a totally different animal. Those have a lot of potential to make Christians queasy because they open the door to government surveillance and knowing every movement of those currencies through the financial system. So, you know, there's there's kind of a positive in these private cryptos, the potential that they have to steer us around some of the inflationary policies, some of the government control and oversight that that is uncomfortable to Christians. There's also a potential threat as governments themselves introduce their own versions of these digital currencies. So I don't want to take that too far in either direction. But Frank, I think there's there's both sides of the coin here as you look at it, both a positive potential side as well as a potential negative side. Well, and to your point, Mark, the Federal Reserve actually has a paper out right now that they're inviting comments on related to a digital dollar backed by the U.S. government, right?

Yeah, that's exactly right. And not surprisingly here, China has taken the lead. They already have their central bank digital currency.

I believe it's in circulation already. If not, it's real close. And it's easy for us to look at that one and go, wow, that looks like a really scary idea.

But of course, other governments can follow that same path. So a lot to think about there. Yeah, no question. Quick question before we wrap up today. How did Bitcoin initially get valued? We have just a few seconds left. Supply and demand.

As more people have wanted it, limited supply, more demand, the price goes up. Very good. Mark, this has been really helpful. We appreciate you stopping by today and your great insights.

Thanks so much, Rob. You can find this article at soundmindinvesting.org. That's soundmindinvesting.org. It's called Intro to Crypto. We'll be right back.

Stick around. Matthew 621 says, But where your treasure is, there your heart will be also. This is MoneyWise Live. We recognize that our heart follows our money. Therefore, the way we allocate God's resources tells a story about where we placed our trust, what we value, what's most important to us. The question we all have to ask is, is the way I'm handling God's money an accurate reflection of what's most important to me, truly?

And if not, what changes do I need to make? The good news is God's Word offers counsel on how we can apply His wisdom to our financial decisions today. On this program each day, we want to help you do that. We've got some lines open. In our final segment today, we'll be taking your calls on anything financial. 800-525-7000 is the number to call with a few lines open.

Let's head to Austin, Texas. Betty, thank you for calling and holding today. How can I help you? Yes. Hi, go right ahead.

Okay. And I'm calling to see what my direction should be. I am 75 years old and I am retired. I have like 18,000 in retirement, of which they've been giving me a 30 percentage each, every so often. I have a mortgage that's 44,000 and it's a 4.62%. I have a car that I purchased. The car is 10,000 and it's 3.615. I'm coming up now to homeowners insurance, which is skyrocketing. It's like 5,000.

And I'm just wondering if I should go ahead and take the 18 out and pay the car off, pay the homeowners insurance, and a couple of little other things that I have, then I would not have the car any longer, which is $474 a month. Okay. All right.

Let me ask you this, Betty. With your income that you have, which I assume is Social Security, and then do you have a pension or retirement plan as well? Yes. Two retirements.

Two retirement accounts. All right. So with your retirement income plus Social Security, do you have the ability to cover your expenses and continue to keep the mortgage and the car payment current? Yes. The only thing is it comes to the point where sometimes it's whatever comes in, the three to 4,000, you have to pull it out and pay the bills. Yeah. Okay.

But if you were to really dial into your spending plan and develop a budget based on those known income sources, those guaranteed stable income sources that you have of Social Security and two pension checks, you are able to cover your expenses every month, including those things you don't get a bill for and live within your means. Is that right? Yes. But it'd be no savings. No savings. No emergency. No.

Nothing. All right. All right. And do you have an emergency fund that's set aside? No. I had like $1,000 in the account. Okay. Would you be able to make any kinds of changes if you were to really kind of dial into your spending plan and look for opportunities to cut back?

Have you ever gone through it? I realize you're on a limited income, but have you taken a hard look at how you might cut back some of your expenses? Well, what I did once, I had some donations that I give out, like $450.

And I cut them for a few months and came back, and I still, I just know I need to give as well in my size at the church. Sure. No, I would concur with that. Well, I mean, certainly you could pull the money out of the retirement account, and there is a portion that you're going to have to take out each year that is a required minimum distribution out of this account. But I think this is expensive money in the sense that you're going to have to pay taxes on it as it comes out as income. And so if you could cover your expenses out of your current cash flow and leave that retirement account in place as something perhaps that you could fall back on if you had an unexpected expense later, I'd prefer you do that.

I think the key is taking a hard look at that spending plan to see what expenses you could eliminate, not starting with the giving, but looking at other places. And then once that car debt is paid off, and you'll get it paid off eventually, I'd keep making that payment to yourself at that point to try to build up first your emergency fund and then beyond that, you know, a short term savings account for a car replacement, things like that, that will come down the road. But I'd try to do that out of current cash flow, just trying to keep your budget as lean as possible. And let's try to keep this retirement account in place if we can, so that you've got something to fall back on if you need to down the road. I think that would be my first choice. If you just though had a real conviction that either I just can't make this work financially, or you just want to be out of debt with respect to the car, then I would say I'd probably start there, eliminate that car payment, which is a pretty hefty expense over $400 a month, you know, that would allow you to keep still about $8,000 in that retirement account.

And at least that one would come off the table. The key though, would be to make sure that that $450 or so a month goes back into, you know, a savings account to start to build up your emergency fund, because I'd like for you to set a goal of six months expenses in that emergency fund. The other thing will be to make sure that you pull out enough so that you can cover the taxes, because you don't want to be surprised with that tax bill.

So I would either say, let's go back to the budget, cut expenses where possible, and try to stay the course, or at the very least, let's pay off the car loan, but I'd probably not pull 100% out, because if you can't pay off that mortgage in full, it doesn't really do you much benefit because your payment is not going to change. Betty, I hope that helps you. We appreciate your call today.

To Rome, Georgia. Hey, Douglas, thank you for calling. How can I help you?

Yeah, thank you, Rob. I've got enough cash to buy a car outright, quality, high end use car. The question I have is I feel like I'll get a higher price or from the dealership if I tell them I want their best cash offer.

So do I go in with that? Or do I go in and say, no, I'll finance and go ahead and initiate the financing so I can get maybe negotiate a cheaper price. And then once on my very first payment on the car loan, just pay the whole loan off.

Yeah, you know, my experience is that that doesn't work necessarily. I mean, what I would try to do is first really do your due diligence, Douglas, on the make and model that you're looking for, whether it's new or used, find, you know, the car that you want after you've done all the research on the reliability and you've really landed on the car that you want, then I would just scour literally the country. I mean, the last car I bought, I flew three states away, spent the night in a hotel, bought the car the next morning, drove it all the way home just because I was able to save several thousand dollars at a dealership that just did high volume and had exactly what I was looking for.

But it takes time. I mean, it can take months to actually find the car you're looking for. But I would get somebody who's looking to just move their cars. And, you know, probably the end of the month is going to be the time you'd want to do it where they're trying to hit a certain threshold to be able to get a dealer rebate based on a volume from the, you know, from the manufacturer. And, you know, I would negotiate their very best cash price because even though they do have some incentives and make some money on that financing, you know, there's going to typically be some extra fees in there.

And I think you should be able to negotiate a cash price that would be even better as long as you're willing to wait it out and find the dealership that will do it. Does that make sense? Makes great sense. Thank you. Okay. We appreciate your call today, Douglas. God bless you, sir. We're going to finish today.

Miami, Florida. Hi, Angela. How can I help you? Hi.

Hi. I'm very indecisive right now as to whether or not I want to pull out money out of my investment to pay my house off, which is $80,000. And so I wanted to, the money that I'm paying to the mortgage company, I want to give that money to my church and to charity. A lot of people say you don't pay your house off because that's your tax break, tax write-off. But then charity also can be a tax write-off. So I wanted to know if that was a good idea.

Yeah. Well, I love the fact that you would be debt-free, Angela. So I'm never someone that says you should keep a mortgage for any reason, including taxes. Reality is 80% of folks don't itemize any longer because of the standard deduction being doubled. So you're probably not even getting any benefit. But even if you are, it's not just the financial side. There's the non-financial side as well, owning your home, being unencumbered, the peace of mind that comes from that.

And to your point, taking some money off the table in terms of your monthly expense and then your ability to give. So I think the first question, though, is just where would these funds come from? Is this in a retirement account or what I would call a taxable account? Okay.

I do have, yeah, it's a taxable but with Charles Schwab. Okay. All right.

So this is in addition to your retirement savings? Right. Mm-hmm. Okay. And is this money currently invested or is it in cash? It's currently invested. Okay.

And do you know what kind of capital gains you would generate by selling? I don't know the answer to that. Okay.

All right. So I would take a look at just the tax implications before you do anything. So you may want to check with a CPA if you use one.

If not, maybe this is the year to do that. But in terms of the trade-off between keeping a mortgage for any number of financial reasons versus paying it off, if you have the money, you're not going to deplete all of your reserves. If you've still got an emergency fund of three to six months expenses, you still have your retirement account intact, but you have the ability to be able to wipe out that mortgage, free up some cash flow that you're not going to use to increase lifestyle, but you're going to use to continue to save or give, I would say that's a no-brainer. I'd say you go for that, especially if you have a real conviction around it.

So I think that's a great idea, but I definitely want you to investigate the tax implications and the performance of that account before you make the decision. Not saying that that should prevent you, but you just want to understand that going into it so there's no surprises. Angela, thank you for your call today. God bless you very, very much. Well folks, 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 my team today. Thank you to Amy Rios, our producer, Dan Anderson, engineer.

Thank you to Mr. Robert Sutherland for providing research today, and thank you for being here. We'll look for you tomorrow for the Wednesday edition of MoneyWise Live. Come back and join us there. We'll see you. Bye-bye.