Ben Franklin once said, an investment in knowledge pays the best interest. Put another way, knowledge helps build wealth.
I'm Rob West. If knowing things is an important part of managing money wisely, we might ask, what do the wealthy know that others might not? I'll talk about that first today and then it's on to your calls and questions at 800-525-7000.
That's 800-525-7000. Call it 24-7. This is MoneyWise Live, biblical wisdom for your financial journey. Well, the French have a saying, you may have heard it, savoir faire.
It means literally to know how to do. We might say that people who've successfully built wealth have savoir faire when it comes to managing money. They know how to do. But what do they know? Well, there's no question that wise, wealthy individuals tend to follow certain money management practices.
And if you doubt that, Bank of America did a survey a while back of 700 people with assets of 3 million or more. They found that these people had grasped five important concepts. The first is something we all strive to teach our children, delayed gratification. 80% of these wealthy individuals said that investing in long term goals is more effective than trying to get rich quick or spending money now on things that give only temporary satisfaction.
Sound familiar? Well, Proverbs 21 5 teaches steady plotting brings prosperity, hasty speculation brings poverty. The next thing wealthy people know is to avoid debt.
Hey, that sounds familiar too. Proverbs 22 seven, the rich rules over the poor and the borrower is the slave of the lender. So the wealthy use debt only with a definite purpose. That means in a way that's likely to provide a return. Examples might be to buy a home, start a business, pay for education or buy a car for work. Stretching the point a bit, you might say that using a credit card to get reward points falls into that category. But only if you pay off the entire balance each month. Otherwise, the interest will gobble up any rewards you might get. It's interesting to note that these wealthy individuals have access to a tremendous amount of credit.
They could likely borrow however much they want. But the majority said they use it only when they have a reasonable expectation of a return on their money that exceeds anything they might borrow. The next thing that wealthy people know takes us back to the idea of slow and steady plotting.
85% of those surveyed said their biggest investment gains come by using a long term buy and hold strategy in the stock market. And they do that by not watching the market too closely. So it's interesting that these are not the investment gurus you see on financial shows trying to time the market. They just invest in solid companies and hold those shares for a very long time. 10, 20 or even 30 years in some cases. No hasty speculation on their part. Well, this next one can get a little more complicated. While these affluent folks don't watch the market closely, they do pay close attention to the tax implications of their investments.
But I suspect a lot of them get professional help for that and so can you. We always recommend you consult with a certified kingdom advisor for that. You can find one in your area by going to moneywise.org. Now, you don't have to worry about any of that unless you are investing in a conventional brokerage account. For most folks, investing means using a qualified retirement plan and taking maximum advantage of the tax breaks already built into accounts like a company 401k, an IRA or a 529 education savings plan. Now, the last thing that wealthy people know is the power of investing in tangible assets like real estate. President Franklin D. Roosevelt once said, real estate cannot be lost or stolen, nor can it be carried away.
Purchased with common sense, paid for in full and managed with reasonable care, it's about the safest investment in the world. Nearly half of these high net worth individuals said they like to invest in things that provide income. Now, you may not be able to buy a whole rental house, but earlier this week we talked about how you can buy shares in REITs or real estate investment trusts. Most of these derive revenue from the rent paid on the properties they own, which shareholders then receive as dividends.
So, REITs are a way that smaller investors can own a piece of big real estate projects. So, those are five things that wealthy individuals know and now you know them too. And it's certainly worth noting how many of these are actually God's financial principles. As we like to say often, the very best that Wall Street has to offer finds its roots in biblical wisdom. And don't forget, God owns everything.
That's the starting point because then we're his managers or stewards. All right, your calls are next. The number to call is 800-525-7000. We'll be right back. Thanks for joining us today on MoneyWise Live.
I'm Rob West, your host. We've got some lines open. We'll be taking your calls and questions here in just a moment. If you'd like to get in on the conversation today, we'd love to hear from you. The number to call is 800-525-7000. That's 800-525-7000.
Our team is standing by and we'll get you on the air very quickly. Hey, we started today by talking about what the wealthy know. That's right. Based on a Bank of America study of 700 people with assets of 3 million or more, they found five important concepts that we unpacked today on the program related to buying and holding and delayed gratification, avoiding debt, paying close attention to the tax implications of their investments, investing in tangible assets, things that they can understand like real estate. And obviously, those are key ideas, many of which find their roots in biblical wisdom. But I think one of the bigger ideas here is that we need to make sure that we put money in its proper context and that is that money is a tool to accomplish God's purposes.
The trappings of wealth are real. We see that throughout scripture. I mean, if you go to the parable of the sower, you'll see that when Jesus described what choked out for the seed from bearing a 30, 60, 100 fold return, it was the things of this world and the deceitfulness of riches. You know, that's a real warning to us that if we allow money to dethrone God from his rightful place and first position in our lives, well, it can become an idol. And when we see it, though, as a tool to accomplish his purposes and we hold it loosely and we live in surrender to him and we actually see our financial journey as a key way that God shapes our spiritual journey, well, it can be used as a powerful tool for good to help others and to provide for our families as we live simply.
Well, we want to do that together each day on this program. Explore the scriptures and talk about the decisions and choices you're making so you can make a wise decision about how to handle God's money. You know, we are incredibly blessed here. I saw a study recently that said the U.S. holds almost 30 percent of the world's total wealth.
The next closest is China with 18 percent. Well, we should quickly then go to Luke 12.48, for from everyone who has been given much, much will be demanded and from the one who has been entrusted with much, much more will be asked. So as believers, let's continue to be in pursuit of being generous and growing God's kingdom on earth in whatever way he leads us to do. And we want to encourage you in that endeavor. It's worth it.
And there's incredible joy that follows. Hey, do you have a question today? We'd love for you to get in on the conversation. 800-525-7000 is the number to call. We're going to begin today in Charleston, South Carolina. Doug, thank you for calling, sir.
Go right ahead. Thanks so much for taking my call. My wife and I are in a position where the house we've been leasing for six years and was up for renewal this month. We got notified on that day that the owner has decided to sell and has given us 30 days to vacate. And we're in an area where there when I say there's no houses available, that's a little exaggeration. But four out of 89 listings are not under contract.
For example, all are way overpriced and the rentals are the same way. So we're trying to determine, are we going to be better to overpay for a rental and wait or are we going to be better to overpay for a mortgage? And we just want to make the best decision we can in the long term for whatever we're going to be overpaying for. Yeah, yeah.
Well, I appreciate that question. I know this is a particularly challenging real estate market. I think in light of what's going on around us with some of the softening in the U.S. economy, clearly interest rates on the rise, mortgage rates now over 5 percent, although we have a really strong labor market and that was reinforced by our most recent data on the growth in the number of jobs. We are seeing some warning signs that perhaps there's a slowdown on the horizon that we could even see a recession here in the next year or two. Many economists that I trust say we could see something along those lines perhaps next year in the second half.
The Federal Reserve is trying to engineer a soft landing. But what does all of that mean for the housing market? Well, it's not that the housing market was in a bubble situation because there are real supply and demand issues there. We have a shortage of the best estimates are about 3 million homes in this country and because of some of the challenges with new home construction because of raw material prices and just the real demand for single family homes given folks moving out of urban areas into suburban and the millennials having kids and buying homes, I don't think we're going to see any kind of significant decline in the housing market. But I think what you will see is some of the premiums that folks have been paying to buy houses over and above real market values, certainly the extreme increases we've seen year over year in the last 12 months.
I think we'll see a cooling of that. I think the real key question here for you, Doug, as you think through a decision-making process on this would be, are we ready to buy a home? Yeah, we need to factor in the housing market, but at the end of the day, this is where we're going to live. So it's not a straight investment in the sense that you would typically think about an investment. Is it the best place to deploy capital?
And when it serves its purpose, liquidate it and move on to something else. That's not how we approach our homes. So although I don't like you overpaying for rental prices, which you're entirely accurate that with the elevated home prices and the demand, the significant demand we've had, it has caused rental prices to move up. But I'd rather you pay a higher rental price than try to buy a home that you're not ready for, because either you haven't saved enough given where home prices are today and what would meet your needs, or it's going to put a mortgage payment in your budget that just simply crowds everything out and is going to place unnecessary stress on you and your wife.
So I think to use as perhaps a starting point for that decision-making process would be to say, what price home would you be looking at given where the market is today and what meets your needs and your family and get you in the location you desire to be in? And do you have 20% down and could you end up with a mortgage payment that's no more than 25% of your take-home pay? Yeah, and right now we're looking at a budget of about $300,000, so we would not have a 20% down payment on $300,000. Okay, and what do you have saved up over and above your emergency fund? About $15,000. About $15,000. Okay, yeah, so you're only at about 5%.
So I would say that's probably an indication that we need to wait. And even though you're going to end up renting something that's going to be elevated, I think what it could present is an opportunity for you all to keep your expenses lean, continue to save and build up for that down payment, and find yourself buying, even though rates will be higher sometime in the next 12 months maybe or a couple of years where the housing market has cooled a bit, we wouldn't have so much of the frenzy that we're seeing right now that might cause you to have to pay beyond a fair market value for something, and it's certainly not going to put you in a position where you'd be upside down if we saw some modest decline in the housing market anytime soon. What about just the budget side of it? If you were to do this, and again, I'm not recommending it, but let's say you had a mortgage of $285,000. Have you looked at the payment on that and how that would fit into your budget? Yes sir, we can afford that.
We can afford about $2,500 a month, and that would put us at about $2,100 to $2,200 a month. Okay. And what percent of your income would that be, your take-home pay? A little less than 20 percent.
Okay. Yeah, so that's pretty good in the sense that if you could cover principal interest taxes and insurance and be a little over 20 percent, that means you have good cash flow and it would give you an opportunity to really focus on making sure you save up alongside that, because I would suspect you should be able to fit everything else in nicely. So I think that the downside is just that down payment. I mean, I'd love for you to get at a minimum to 10 percent in, which would be $30,000.
So I think that's the key for you. I like the percentage on the payment. I'm not crazy about the down payment. What kind of margin do you have on a monthly basis that you could use to add to this down payment? We could add that in. It would probably take us about a year, but I mean, we could gather another $15,000, but it would take some time.
Yeah, yeah. Well, I think that's a decision you've got to work through. That would be my preference, just that you don't go in paying private mortgage insurance with a 95 percent loan to value, that you push the pause button, you find somewhere to rent here for another year or so while you build up a little bit more in the way of the down payment, and really focus on keeping your expenses lean. Because the payment fits nicely into the spending plan, if you all said, you know what, we just really feel like we need to go for it, I could live with that, but that's not my preference.
My preference would be you all delay this, continue to save, and then buy it with a little more equity, and again, keeping that mortgage payment right in line with your spending. Make sure you have a good plan for that. So I think that's the decision to think through.
If it were me, I'd put it off for 12 months. I appreciate your call there, Doug. All the best to you in the days ahead. This is MoneyWise Live.
All the lines are full, so we'll be back with your questions just after this. Thanks for joining us today on MoneyWise Live as we apply God's wisdom to your financial decisions. And we say decisions because that's what they are. It's not about being prescriptive. It's about a decision-making process. How do I take and really define the decision I'm making?
And how do I look at all of the possible alternatives? Not what we call a binary trap, this or that, considering all of the alternatives, and then drawing from God's wisdom to apply to those principles to your decision, and then moving forward with the best decision possible. Well, we want to help you make some good decisions today. We'd love to hear from you. We've got two lines open at 800-525-7000.
Back to the phones we go. Illinois is where Catherine is located. Catherine, you go right ahead.
Hi, thank you so much for taking my call. Our bank has recently been purchased by a credit union company. And with the uncertainties of the economy and all, I was wondering if I could take some of my funds from my checking account, which is where I pay my bills, and put it into a money order and keep it in my safe deposit box, just pretty much for safekeeping. And then are there any concerns about it being audited if there's a large sum being put there? Yeah, I don't have concerns about that.
Talk to me, Catherine, about what you're trying to solve for here. What is the possible scenario you're trying to address with this action that you're describing? Well, I had heard that there may be some new currency coming in the future. And I didn't know if it was just printing of new currency or if it had something to do with the new matrix or the quantum. So I thought just since the money order is just a six month short term thing, I was thinking if there's anything that would until a transition would take place, maybe it would be safekeeping place. Yeah, yeah.
I certainly appreciate that. When you talk about a new currency coming, you may be referring to a digital currency. You know, what's referred to as CBDC, which just stands for Central Bank Digital Currency.
We're actually going to do a program on that in the next several weeks just specifically on that. And the discussion around that has come from the Biden administration, which basically released a paper saying that they were going to begin a process of researching it, not committing to it one way or the other, but saying, how would we secure it? What implications would it have on our financial system? Other countries have already done this. And the U.S. is just exploring whether it would want to do that as well, would not be interest bearing. So that would not be a mass exodus of U.S. dollars. But it would represent our first move as a nation into digital currencies with the central bank behind it. That's not going to happen anytime soon. If it happens, I suspect it will at some point. But I would say that would be several years away.
We'll talk at length about that. But in terms of you pulling money out, you know, I wouldn't if it were me, I would have cash on hand in terms of one to two weeks worth of expenses. Most experts will recommend one week's worth of expenses in cash that's safe in your home in a fireproof safe.
And the idea behind that and we always want to make sure we understand why we're doing what we're doing. The idea behind that would be that if there is a disruption in the financial system or a disruption in the banking system that had to do with your particular bank or credit union, that you'd be able to fund your expenses for a week to two weeks time to give that a chance to work itself through the system, but not put you in a position where you're hoarding lots and lots of cash, which, by the way, presents safety issues. And in light of the inflation we're experiencing, that's losing purchasing power. I believe that the backing of the full faith and credit of the United States government for your your dollars with that backing, providing both coverage for banks as well as credit unions, even though it's a little different. Banks use the FDIC, the Federal Deposit Insurance Corporation.
Credit unions use the NCUA. And in either case, it's federally insured. So it's backed by the by the U.S. government. And I think especially in light of interest rates heading up, Catherine, the fact that you wouldn't be earning anything on that money, whereas you could in a high yield savings account approaching one percent a year.
And it will continue beyond that. I just don't have any concerns with you having your funds there backed by the U.S. government and don't think you're really accomplishing anything necessarily by pulling it out, converting it to a money order for a period of time and then storing it in a safe deposit box. But give me your thoughts on everything I just shared. Yes, if it makes sense to me, I do have some cash currently as well. So I did cover the one to two weeks of expenses that you had mentioned previously.
And I figured, you know, it would not be senior indefinitely. I'd want to reinvest the money, you know, or just see what happens, if anything should happen by September, which is what I had heard. Yeah, I'm not aware of anything that needs to be on your radar related to September specifically. I think, you know, when we look at the U.S. vis-a-vis the rest of the world, we're in a pretty strong position in terms of our economy, our currency. There's nobody anywhere close. Ultimately, we need to trust the Lord, but I don't see anything on the horizon that would cause you to want to pull out of your bank or your credit union. We appreciate your call today. We'll be right back on MoneyWise Live. Stay with us.
active lately. Lots of folks, stewards just like you, posting their questions, sharing ideas. That's what it's all about as God's people come together to wrestle through the decisions and choices they're making as they're managing God's money.
That's in the app. That's our MoneyWise community. You'll find our Learn tab with all of the articles and podcasts from what I would say are the leading voices in Christian finance. We just recently added a whole library of Randy Alcorn's material, so you will find just wonderful resources there in the MoneyWise app when you download it. And our money management system, the cornerstone of the app that allows you to manage God's money using a spending plan, tracking your expenses with automatic downloads from all of your financial institutions. And there's three different approaches.
One of those will fit your personality and money management style. So head to your app store today, whether that's Google Play or your Apple App Store, and just search for MoneyWise Biblical Finance. By the way, you can catch all of our broadcast archives of this program in the app as well. All right, every line is full, so you're probably getting a busy signal if you're trying to call, but sit back and enjoy some great questions.
We're going to head next to Lorraine, Ohio. William, you're up on the program. Go right ahead, sir. Well, Rob, question. How do I go about getting a gift, you know, to, you know, family members?
Yes. How much are you looking to make in the way of a gift? It's a gift of things that I own, like a book collection of 1400 books.
I'm finishing some writing some books. I want to be able to pass along what I would make off of those books to my daughter and my son-in-law, my brother's son. How would I go about doing that in the course of a will? Yeah, so you've got a couple of options. If you want to give the gift while you're alive, you can give a gift of any value to anyone legally. The question is just, will you have to pay taxes on it? Generally, no, just because there's pretty significant limits. You might have to file a form, but you wouldn't have to pay any tax.
And here's what I mean by that. This year, you're allowed to give $16,000 a year to any individual and to as many individuals as you want. And if you were married, that would, of course, be 32,000 in the form of a gift that could be cash or other assets. If you exceed that amount, 16 individually or 32 as a married couple, then you would just file IRS gift form 709. You wouldn't pay any taxes on it until you're incredibly generous, exceeding over your lifetime $11.7 million dollars.
So if you're not planning on giving anything beyond that, then it would just be gift form 709 to report it, but you wouldn't know any tax on it. Now, if you want to handle this as a gift in your will, well, that's what your will is for, to expressly state how you want your executor to distribute your assets and personal effects to your heirs. And so you would work with an estate attorney to draw up a will. He or she would talk you through the various considerations, help you articulate very clearly what you want to distribute and to whom. And then at death, your executor, which you would name, would work with the probate court to settle your estate and then distribute the assets according to your wishes. Does that make sense, William?
That does. Do wills and should wills always be, do you make out with an attorney, should they also be filed with the probate court? Is that a standard?
Yeah. So it depends on your state, but you would typically, like for instance, here in the state of Georgia, it is filed. So you would talk to your attorney about that in terms of how to appropriately record that will. And that's why I recommend, even though you can do it yourself online, a little less expensive, I'd encourage you to use an attorney just to make sure you've considered everything.
A standard will will cost you somewhere around $500, maybe a little less. It would be a great time though, William, while you're doing it to consider other legal instruments that you need to have. So durable power of attorney so somebody can act on your behalf in terms of making decisions. If you're incapacitated, a living will with your end of life decisions being made and even what's called a health care surrogate. So somebody can make health care related decisions if you are incapacitated.
All of those things I think are really important. So if you have an attorney, great. If you don't, you could contact a certified kingdom advisor there in Ohio. Ask for a referral to a godly estate planning attorney. Just go to our website moneywise.org and click Find a CKA. William, we appreciate your call today, sir.
Chris in Orlando, you go right ahead. Hi, so I have really only the house and then the house expenses. And I pretty much paid off all credit cards and stuff. I'm just trying to find out what would be a good investment to put into that would be helping me when that time of retirement comes. I do have a retirement at my job. It's an ESOP, so it's something that you really can't touch yet until you're 55. So I'm kind of wanting to get something rolling now to just have something extra.
I don't have any children. Okay. Yeah, very good. Well, this is a great opportunity for you to be thinking about this, Chris. What is your age, if you don't mind me asking? 48. 48. Okay. And do you have a sense of what the value of that employee stock ownership plan will be when you reach a retirement date of your choosing? Actually, I don't.
I don't have a... Yeah. So I would try to get some understanding of that because the next step would be to do some retirement planning just to see what it would look like for you to stay on track for retirement and be able to have the assets building up. As a rule of thumb, ideally it would be great if you had 10 to 12 times your income saved up. I realize that can be a significant amount of money, but that would be great because the idea behind Social Security is that it would typically only cover about 40% of your pre-retirement income. So let's say in retirement you're living on 80%, you'd have to solve for that other 40%. Ideally being debt-free by that time would be great because that would allow you to keep your expenses as low as possible. Alongside that ESOP, do you have any other company-sponsored plans available to you like a 401k? No.
Okay. Then a great option would be a Roth IRA. Basically this is a retirement plan that you would set up individually. You could put in 6,000 this year once you reach age 70. You could put in 7,000 and the contribution limits change year by year, not every year but most years. So you could open a Roth at one of the brokerage firms like a Charles Schwab or Vanguard or TD Ameritrade or one of the robo-advisors like Betterment. That would allow you to put in 6,000 for this year and you could do that each year as a supplement to your ESOP. The opportunity there, Chris, is that this is after-tax money. So you're not going to get a deduction, but as that money gets invested and then it grows over the next, let's say, 20 years, if you were to retire at 68, all the investment gains that you'd have would be tax-free.
You could pull them out without any tax. It's a really powerful long-term investing tool. If you don't have someone who could help you with those investments, a real low-cost easy way to go is what's called a robo-advisor. I would look at the Schwab Intelligent Portfolios or Betterment. Either of those could be great options for you. Betterment or the Schwab Intelligent Portfolios.
Open up a Roth and you could put in a monthly contribution, 6,000 total. Thanks for your call today. We'll be right back on MoneyWise Live. Stay with us. Hey, thanks for tuning in today to MoneyWise Live.
I'm Rob West. We're so glad you're along with us today. We've got some lines open and time for a few more questions. In fact, I'm going to stay after today just beyond the program to answer a few extra questions when I have time and with four kids, it doesn't happen often.
But today is one of those days. So if you have a question, we'd love to hear from you. 800-525-7000 is the number to call. Canton, Ohio. Ruth is calling from Canton and we appreciate you being on the program. Go right ahead. Sure. Thank you so much for your ministry.
My question is actually a question to put my mind to these a little bit maybe and then some follow up to that. My brother has accumulated quite a bit of student loan debt. He has his juris doctorate, but he has a very large amount of debt.
I don't know the exact amount, but I've been told. His words are, I will never be able to pay it all off. So the first thing is, if something should happen to my brother, is there any way that this comes to me and my family to then take over the debt?
Ruth, no. In general, if he passed away, the debt would be written off unless someone else co-signed for it. If someone co-signed, well, that person is then legally responsible for the loan. But apart from that, it would be repaid out of his estate, which is basically just a settling of his assets, no one else's, to repay any obligations and whatever assets are there would be used to pay those off. But any debts that remained that are only his and not co-signed by somebody else that go beyond the assets that are in his estate would be unpaid and written off.
Yes, that's good news and that's what I figured, but I wanted to check that out. A deeper question would be for this debt. He has worked as a public defender in the courts for over 30 years and I know that there are programs available right now for debt forgiveness, but specific to his public service, I wondered if there was anything that could be explored there.
Yeah, there are a number of options specifically as a public defender. The most notable would be the public service loan forgiveness program, which he would qualify for as a government employee and basically that would mean that he would need to make his payments faithfully for 10 years, 120 monthly payments, and at that point the rest of his debt would be forgiven. He does need to look into that, make sure that he qualifies for it, make sure that he gets all of the payments in on time, and so there have been folks that have been surprised by that.
In fact, there was a recent acknowledgement by the US Department of Education that that program has not been handled efficiently and a very small percentage of people actually getting through on it. They made promises to rectify that situation, but nevertheless, I think that's certainly something for him to look at. There are other loan repayment options specifically for attorneys as well, but I think as a public defender that would be the one I would key in on for sure, just to see if he does in fact qualify for that.
He should, and if he does, then after 10 years it would be forgiven. Yeah, that's wonderful. I had heard you a long time ago speak about something and I just wanted to verify and check into it so that I can give him some information on that.
He feels that this is his debt that he has acquired and he needs to pay it, and I just think that for his public service that that should be something that is accepted after 10 years of faithfully paying, yes. Yes, yes, very good. Well, thank you for calling and for looking after your brother.
Hopefully that helps you, Ruth, and God bless you. Let's head to Hadai in Illinois. You go right ahead.
Hadai, are you with us? Oh, Heidi. It's Heidi. Okay, great. I had somebody put something on my screen that made me think it wasn't Heidi, but that was my fault, so how can I serve you? Go right ahead.
Thank you for answering my call. I was wondering about the new, or I don't know whether or not they're new or not, but the I-bonds that have a real good interest rate right now, do they have some kind of an insurance on that, like the FDIC for banks? Well, it's not the FDIC, but it's better because essentially they're both rock solid. The FDIC is a corporation that's government-sponsored that's backed by the U.S. government. In the case of the I-bonds, they're actually backed by the U.S. government, so these are essentially risk-free investments backed by the full faith and credit of the United States government. So they're issued by the U.S. Treasury Department.
You'd get them directly from the Treasury at treasurydirect.gov, so you really don't get any safer, Heidi, and obviously with the interest rates that are being paid right now, a 9.6% return, you can't beat that anywhere given the level of safety we're talking about. The only challenge is you can only put in $10,000 a year unless you get an additional five in through a tax refund, and you have to hold it for 12 months, but why wouldn't you want to at that rate? How many can you buy in one year?
Just one? You can buy up to $10,000, yes. So you'll be able to put in $10,000 up to in I-bonds, and you could do that electronically through treasurydirect.gov, and then if you wanted to put an additional five in, if you had a tax refund coming, you know, at some point down the road you could do that, but yes, $10,000 is the max. Annually or totally? Annually, so you'd be able to put in another $10,000 next year.
So you can do $10,000 annually. Wonderful, wonderful. Thank you very much. Okay, we appreciate your call today, Heidi. God bless you. Indianapolis is where Rachel's located. Rachel, you go right ahead.
Okay, thanks. So we interviewed quite a few financial advisors and found one who just kind of aligned with what our goals were and our comfortability with risk level, and we've been with him for a while, but the firm he's with is closing the branch near where we are, and he is now opening his own private firm, like I guess, or going off on his own, if that makes sense. So I'm really unsure on if the right move would be to stay with him, because of course he's trying to keep his accounts and his clients, or if that's too big of a risk since he's not with a big name firm anymore. Yeah, I don't have any concern, Rachel, with this advisor being independent. A lot of advisors these days are going independent. It doesn't mean that there's anything wrong with an advisor being with one of the what I call wire houses, so the typical brand names that you would know, but many of them are moving into an independent environment. They would still custody your assets with a major brokerage firm, so it would be like a Fidelity or Charles Schwab or one of those. They're just on their own in terms of managing their own business, but you would have the same type of back office systems and statements coming from a brokerage firm that are audited and all of that. So there's really not any additional risk in my view with that.
I think the key for you is just to find a financial advisor that you feel really comfortable with in terms of his or her experience and ethics and how they perform for you if they're actually managing assets and whether they understand what your goals and objectives are and really trying to meet those with a properly diversified portfolio and that there's proper communication in the rhythms that you're looking for and in the ways that you want to be communicated with, but just the idea that he or she would be going independent doesn't give me any concern. Okay, great. Thank you. Okay, yeah. Thanks for your call. We appreciate it very much. To Florida, Liz, thank you for calling. Go right ahead.
Hi. If you are going to retire and you have a 401k, but you're not going to really need that money monthly because I'll have a pension and what I get in Social Security, can I leave those money in the 401k or do you have to transfer them into some kind of a retirement program? You can leave your money in the 401k. I would typically advise you to roll it either to your new 401k if you're moving to an employer that has a 401k that will accept it or to an IRA. You'll usually get lower fees and with an IRA, you'll certainly have more investment options. I just think having, especially if you have multiple 401ks, it just gets complicated and the IRA is a great place to consolidate your retirement assets rather than leaving them with various 401ks. I would probably look first to your new 401k just because if you're still continuing to work and you're going to be contributing to another 401k, having all of your assets in one place so they can be managed together makes some sense, but if not, I'd look to roll it to an individual retirement account.
That's not a taxable event, but you would need to decide what custodian to use and how you want it invested, whether you'll hire somebody to make those decisions for you or whether you'll be doing that yourself. Okay, thank you very much. I enjoyed your program. Well, thank you, Liz. That's very kind of you. God bless you.
Let's stay in Florida and finish out today with Lynn in Miami. Go right ahead. Hi, thank you so much. So my question is what a quickly. So I currently have about $15,000 in a bank account, but I don't, I'm not currently working, but that's not considering my emergency fund. So it's just there just in case since I've been out of work since like about a month now, I was wondering if you have any suggestions or ideas what I could be doing with it or how I can invest it in such a way that it's not, you know, too.
Yeah. Well, the thing I would say is how many months' worth of expenses do you have in that emergency fund separate from this $15,000? Separate from that, I have about three to five months.
Three to five months. Well, given that you're out of work right now, we'll certainly be praying that the Lord will provide something quickly. I would not be looking to deploy this right away because I'd love for you to have, first of all, at least six months and given that you're out of work, what if it takes a little longer? Now, this is a strong job market, so hopefully you can find something quickly, but I would probably go slow. Once you have a job, if you want to put this to work, I bonds would be a great option.
We talked about those earlier. 9.6% return with no risk. You'd get them at treasurydirect.gov, but you've got to hold it for a year. But let's wait till you get a job, Lynn. Thanks for your call today.
MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Melody, Dan, Amy, and Jim. Thank you for being here as well. Come back and join us tomorrow. We'll see you there. Bye-bye.
Whisper: medium.en / 2023-04-21 01:26:32 / 2023-04-21 01:42:58 / 16