The Scoop on Career Assessments

Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. Did you hear about the guy who finally got his dream job as a historian, and then, sadly, realized there was no future in it? Hi, I'm Rob West. All kidding aside, finding the right work makes life a lot easier. As the saying goes, find a job you love and you'll never work a day in your life. But how do you find that job? Well, I'll talk about that today.

Then we'll have some great calls lined up, but since we're not live today, please hold your calls until next time. This is MoneyWise Live, biblical wisdom for your financial journey. I suppose it goes without saying that finding the right job starts with finding out what you love and what you're good at. Romans 12, 6 teaches that God has given each of us skills that enable us to do good works.

It reads, Having gifts that differ according to the grace given to us, let us use them. There are at least two times in life when finding the right job or career is especially important. When you're dissatisfied with your present work and when you're deciding on what education to pursue.

As we've talked about before many times, choosing the wrong college major can be a very expensive mistake. So why not discover what you're passionate about going in? You can do that by taking a career assessment test. The woods are full of them online and in print. For example, the Strong Interest Inventory by Myers Briggs, the Career Aptitude Test by 123test.com.

That one's actually free. And of course, there's Crown Financial Ministries Career Direct, which is one of the few that are biblically based and designed to show your God-given skills and interests. We'll put links to those tests in today's show notes. Now I say tests, but these assessments really aren't tests where you're given a grade like A, B or C. Think of them more as multiple choice exercises with no wrong answers. You don't have to study for a career assessment, but answering each question as honestly as possible is extremely important.

Base your answers on how you feel now, not what you'd like to be in the future. The results you get will only be as good as the information you put in. You also have to keep in mind that at best, a career assessment will only make broad suggestions for what field or fields you might pursue. For example, it might say that you're well suited for something in the medical field. It won't say that you should become a cardiologist and for that matter, even a doctor. And any results an assessment gives you are only a starting point for your career discovery process.

You'll need to do further exploration to confirm those results and narrow down the possibilities. In other words, a career assessment will get you to the right side of town, maybe even the right neighborhood, but you'll have to go up and down the streets yourself. You should also take the results seriously, even if you think they're off base.

The whole point is to reveal things about yourself that you may not be aware of. For example, an assessment suggests a career in engineering and you're tempted to ignore it, but then you realize that you always did well in your high school math classes, so you need to explore any suggestions the assessment comes up with. It's also helpful to think broadly about your results and not focus too strongly on a particular field. Let's say the assessment reveals that you're a good listener, you care about others and always want to help others with their problems. Does that make you a candidate for a career in psychotherapy?

Possibly, but it could also mean that you do well in ministry, perhaps even as a pastor. So think broadly about all the possibilities. You also need to take these tests with a grain of salt. There are dozens of assessments available and some are definitely better than others. Read reviews and testimonies of people who've actually been helped by a given assessment. You can be a little skeptical, especially if you'll be paying $100 to $500 for an assessment.

Of course, there are free assessments, but then again, sometimes you get what you pay for. So let your career exploration begin by checking out the assessments themselves. It's also helpful to take more than one assessment. That's a great way to corroborate any results that you might get.

If you take two assessments and the results are wildly different, well, taking a third might be in order. Now, having said that, you also don't want to get bogged down taking assessment after assessment. You might find that that's all you're doing and not getting around to the other important steps in your career hunt. You should also be talking to people who are actually doing the job or jobs you're considering. Find out what's involved.

Being good at something is essential for liking your work, but being well suited for a particular career doesn't guarantee that you'll like doing it. And don't forget that you have direct access to the greatest career counselor. God, as you go about your search, pray for wisdom and guidance.

James 1-5 teaches, if any of you lacks wisdom, let him ask God who gives generously to all without reproach and it will be given him. All right, coming up, we have some great questions lined up, but hold your calls because we're prerecorded. I'm Rob West and this is MoneyWise Live. We'll be right back.

Delighted to have you along with us today on MoneyWise Live. Our team is taking some time off. We're not in the studio. This is prerecorded, so don't call in, but we've got some great questions lined up. So let's head right back to the phones in Merrillville, Indiana is Lola. And Lola, thank you for your patience. How can I help you?

Good evening, sir. Thank you so very much for taking my call and I really appreciate your program. Very, very, very helpful.

Thank you very much. My daughter does graduate as a naturopathic physician and she just got her first job to work in the facility as an independent contractor. This is her very first job and we don't have any clue as to what she needs to put together as far as the financial aspect of an independent contractor is concerned.

We don't have any clue. I would appreciate that if you can just give us some advice of what she needs to do to run that kind of job. Very good. Well, I'm delighted to hear that she's got this job. I'm sure she's grateful that she does. And you're right to ask how to approach this because as an independent contractor, Lola, there are a few things she needs to be aware of. The most important thing is that she should probably be setting aside about 30% of her salary into a separate savings account for taxes specifically. So as an independent contractor, her employer, even though she's not an employee, but person who pays her bills or pays her won't withhold taxes for her. So she'll need to file and pay what are called quarterly estimated taxes to the IRS on the form 1040ES. And it may behoove her to get a CPA or accountant if she's typically done her own taxes or if she's not had to in the past, at least for this first year, just to get everything set up and make sure she's filing appropriately. But she doesn't want to wait and just pay the taxes when she files her return.

The IRS is going to expect an estimated tax payment every quarter. And if she automatically has that 30% just moved over every time she gets paid to the savings account, the money will be available when she makes her taxes. And that may be more than she needs to put aside.

You'll learn that in the first year. She may get a refund and perhaps you could back that down a little bit in year two. Just beyond that, I mean, good wise money management would say she should save up an emergency fund of at least three months expenses. Once she's done that, I would encourage her at this young age to open a Roth, R-O-T-H, a Roth IRA, and start putting in the maximum annual contribution of $6,000 a year since she doesn't have a retirement plan available to her. If she does that Roth every year and fully funds it for as young as she is, she's going to have a whole bunch of money saved up that'll be tax-free in retirement. And she could open that with one of the robo-advisors, Better Mentor, the Schwab Intelligent Portfolios, something like that. And then, of course, and this shouldn't be the last thing, it should actually be the first thing, even though I'll mention it last, I would encourage her to be generous to her church and start to learn what it means to give systematically, to give at a minimum the tithe, a tenth, of what she earns, or increase, to the Lord out of a recognition and grateful heart for his provision, and to recognize his authority, and ultimately it's an act of worship, and she can give cheerfully. But if she does those things, she'll put herself in a position not only to honor the Lord and to have the money to pay her taxes, but to really have a strong financial foundation under her for her future. Does all that make sense?

Yes, sir, please. Did you say 1040 ES, quarterly estimates, taxes? Yes, 1040 E as in Edward, S as in Sam. Yeah, 1040 ES. Okay, so she should file this quarterly.

That's right, yep. And that will be the estimated payments, the estimated tax, one-fourth of what she expects to be able to need to pay annually toward her taxes, and then when she files, she'll just list the amount she's already paid in as quarterly estimated payments, and that'll go against the total amount that she owes for the year. Okay, so you said for the first year she should get a CPA to kind of set up paperwork?

I would, just to make sure that everything's been being done properly and that her taxes are filed, and as an independent contractor, she's going to have a bit more ability to deduct certain expenses that may be related to her work, and that advice could come from the CPA to make sure that every available opportunity to deduct anything is fully maximized to the full extent of the law. So Lola, you tell her we're excited for her, and thank you for calling into the program today. We appreciate it. Let's head from Maryville, Indiana to Georgia, and welcome John.

Good afternoon. I'm going to be retiring, I guess. I've got five more years I can work.

I've got, let's see, about two more years to pay on this big truck I'm driving. Only five more years left on the house, and I've probably got more money in my short-term savings than I do in my Roth IRA. My Roth IRA, I only have $1,000, and I'm 63. I tried all over the place over the last 25 years to do the right things and save it at best, but all of it just got wiped out, stolen, taken away.

I'm wiped out. All I have is $1,000 in my retirement account, and I haven't been able to contribute to that for the last five years. So why in the world do they say you can only put $6,000 a year?

I finally landed a really good job. I've only got five more years. So why did they say you can only put $6,000 at a Roth IRA? Yeah, well, they're recognizing that for most folks, they have access to another type of retirement account that allows them to put in more. So for instance, with a 401k, the contribution limit is up at 19,500 for this year.

It's going to bump up to 20,500 next year. If you're self-employed, you could open a SEP IRA, which will also have higher contribution limits. With a SEP, you can put in 25% of your compensation or $58,000 for 2021, whichever is less. So you've got plenty of ability to contribute on a tax-deferred basis.

And then with a traditional or Roth IRA, usually that's supplemental because it's in addition to and can absolutely be invested additionally. So I think the question is, what's the best opportunity for you? I'm assuming you are considered self-employed.

Is that right, John? Yeah, I am. I am.

Okay. And so it may be a great opportunity for you to look at a SEP IRA, which would allow you to put in quite a bit more than you have for this year. And you could do a Roth on top of that.

So I would check with your tax preparer or connect with an investment professional, but this is going to give you the ability to sock some money away. I think the key for you is to maximize these five years. I'm delighted to hear that you'll be completely debt-free by the time you approach retirement. The truck's paid off, the house is paid off. That's going to get your lifestyle expenses down as low as possible. Then work up that retirement budget to see what income sources you'll have, perhaps social security if you can work until full retirement age, and then figure out what your gap is, which because you paid off all your debt, it's going to be as low as it possibly can be. And then figure out how much you need to save in order to make up that gap. And then let's really maximize these next five years with this good job to sock away as much as you can.

At the end of the day, trust the Lord and be a good steward of his resources. We'll be right back. Stay with us. We're grateful to have you along with us today on MoneyWise Live. I'm Rob West, your host. Hey, our team is taking some time off today. We are not in the studio. This is prerecorded, so don't call in, but we've got some great questions lined up. Let's head right back to the phones. Samuel is in Colorado Springs, Colorado. Samuel, how can I help you today?

Yes, Rob. Thanks for taking my call. My reason for calling is I wanted to know, I have a 401k with Venga, my company 401k, which I'm contributing about 15%. When I was looking, the thing that I chose was a targeted form 2030 because I was born in 54, so I'm in 57. But what concerned me when I look at the investment was that the 3% of my 401k investment is in cash and bonds, and 57% is in stocks. And so I have little concern because I was just talking about the thing where you said you take 110 monies and whatever you get, that should be your stock. I just see that my investment has invested mostly in stock at this point and I'm 57. Whether that is okay or not.

Yeah, yeah, very good. So you said how much is in stocks? Is it 70% of the portfolio? 67. 57.

And so you have the rest 43% in bonds? No, no, 67. 67. 67. Okay. And so 33% in cash and bonds. Yes.

Okay. And tell me how are you doing in terms of the portfolio? Do you feel like you're on track to have what you need to be able to supplement your retirement income when you retire? Are you ahead or do you think you're behind a little bit in your savings? I think I'm behind a little bit. Yeah, because I just started late, even though at this point I have about $360,000 in there.

But I don't know. How much do you have in the portfolio roughly? $353,000 in there now. Okay.

$353,000. All right. And do you think you're going to retire around 65 or what are your plans? Probably the full retirement, which would be 67 or more. 67. Okay. So you've got another 10 years or so before you would retire. That's right.

Okay, very good. Yeah, I'm comfortable with this allocation actually. I mean, unless you have a particular concern about the market, you're feeling like you need to be much more conservative. I think being in a 2030 target portfolio with 67% in stocks 10 years out from retirement is about right because that's going to give you a good growth engine. You've got time on your side.

And I think given that you're going to wait until full retirement age, unless again you felt like you just wanted to be extra conservative, I think this portfolio is just fine. So I would be comfortable with you proceeding unless you had a concern otherwise. Does that make sense? Yeah. Okay.

Yeah. And this will automatically rebalance each year and get more conservative over time. So I would just let this money continue to grow.

And I think it sounds like you're in a good place. The only other thing I would do is as you get closer and closer to retirement, you're going to want to start to think about what your budget looks like in retirement. What do you need each month to cover your expenses? I mean, hopefully if you're not already debt-free, you will be by then. And hopefully your expenses come down because you're no longer putting money into retirement savings and maybe you drop your life insurance because you no longer need it. But once you settle into that retirement budget, then we need to compare that to the Social Security income you'll have and then figure out how much you need to draw off of this account every year. And let's say this grows to half a million dollars. I think if you could plan to not pull more than $20,000 a year out of this, then you should be in a good spot where you're not going to impact the principal. We could have somebody invested for you in such a way that it protects what you have but throws off a decent income. And then you'd have a small growth component to it that would provide a little extra return over time. And if between that $20,000 roughly and what you would bring in from other sources including Social Security, hopefully that would cover your lifestyle. So I'd love for you to do some planning as soon as you're ready to begin to look at that and that will let you know what your ultimate target for this account is.

But I think this target date fund you're in and the allocation you've referenced sounds like it's a good fit. We appreciate your call today, Samuel. Hey, before we take our next break, let me check in and take an email here. We do hear from a lot of you who send us emails and you want your question read on the air and you can do so at questions at moneywise.org. All right, this next one comes from Larry and Larry says, my aunt has run up a ton of credit card debt. He wants to consolidate it or we want to consolidate it and get it paid off.

How can I help her without just giving her money to pay her bills? And I think perhaps, Larry, the best way to go would be credit counseling. Essentially, what would happen is if it's enrolled in a credit counseling program, the account would be closed. There would be a single monthly payment that would be determined based on the amount of credit card debt that's owed. But the kicker is it would be at a much lower interest rate, which would get a larger portion of that payment every month going to principal reduction. And the cool thing is that you can actually pay them directly for that amount.

So you would ensure not only that isn't going to get paid, but you'd be doing it in such a way that you know that the money is going directly to getting this paid down. So check in with our friends at christiancreditcounselors.org. That's christiancreditcounselors.org.

They'll get it all set up for you and I think you'll be glad you did it. This is MoneyWise Live. We'll be right back.

Stay with us. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

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More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. Understanding the Bible just got easier. You may already listen to OpenLine with me, Michael Wright-Hellman. Now you can benefit from my new book, 50 Most Important Bible Questions. You can also glean helpful insights from 50 Most Important Theological Terms written by two other Moody professors. These books will give you assurance of salvation and a deeper knowledge of God and so much more. Go to moodypublishers.com, type 50 most important, and you'll find both books.

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Navigating the Mortgage Maze, available when you click the Store button at moneywiselive.org. With SRN News, I'm John Scott. OPEC and Allied oil-producing countries are gradually increasing the amount of crude oil they send to the world. The decision comes even as Europe's proposed phase-out of Russian oil threatens to yank millions of barrels off a global market already thirsty for crude. The Walgreens pharmacy chain reaching a $683 billion settlement, with the state of Florida in a lawsuit accusing the company of improperly dispensing millions of painkillers that contributed to the opioid crisis. Stocks closing sharply lower on Wall Street as worries grow in markets that the higher interest rates that the Federal Reserve is using in its fight against inflation will slow the economy.

The Dow was down 1,063 points today, the NASDAQ lost 647, and the S&P dropped 153. This is SRN News. We're grateful you've joined us today for MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West, your host, and our team is not here today.

We're actually taking some time off. This is prerecorded, so don't call in, but we've got some great questions that we lined up in advance, like this one from Donna. And Donna, I understand you're in Texas, and you actually have a testimony to share, is that right? Yes. Go right ahead.

I do. I just wanted to thank you for the wisdom and guidance. I struggle, you know, to make ends meet from paycheck to paycheck, and I realized, you know, that there's things that I've been trying to quit that aren't healthy for me, and this really helped to think of, you know, how does the Lord see how I'm spending my money, and if I wasn't spending it on that, I'd have something to put up for savings.

One of my daughters is getting ready to go to college, and I have to find a way to help her with that, too. Very good. Well, Donna, I appreciate you saying that, you know, and this is a question we all should be asking ourselves and be willing to make changes as the Lord leads. You know, if we think about our money in terms of it being a reflection of what we value, of what's most important to us, the way we handle God's money says where our priorities are. And the question we all have to ask is, if this is telling a story about what's most important to me, is it consistent with the story I want to tell?

And if not, what changes do I need to make? And that doesn't mean we can't enjoy God's money. In fact, in 1 Timothy, a part of the reason that God entrusted to us is for our enjoyment. But we should do that in the context of a plan that allows us to live within our means. We should be content. We should be giving generously. And I think that we need to think about our values, what's most important to us, and make sure that our money is really aligned well with that. And, you know, your check register, whether that's online or physical, it tells really what your priorities are. And I think we always need to be evaluating whether or not we like the story it's telling.

And if not, then we need to make some changes. So you're in good company, Donna, and I appreciate you sharing your thoughts today and encouraging our other listeners. And we'll certainly pray that the Lord will give you wisdom as you make decisions moving forward.

God bless you. Next up is Pepsi and Pepsi actually called, didn't want to be on the air, but had a great question. So let me ask Pepsi's question, which was simply, she says, I want to start small with my investments. I'm looking for a place to invest $25 to $30.

Are there any resources you can suggest? And Pepsi, it's a great question, because, you know, here's the thing when it comes to investing, once we paid off our credit card debt, and once we have that emergency fund of three months expenses, we should be looking to set something away for the future, recognizing we shouldn't consume all that God entrust to us today, we should save a portion of it. In addition to paying our lifestyle expenses and giving, we should be saving a portion for the future. And when we think about retirement, it's not just about the mindless accumulation of wealth, but it is a recognition that there will come a day where we perhaps can't work. And we want to be able to support ourselves and a spouse in some cases.

And we do that by setting something aside on a systematic basis. And we all have to start somewhere. So if you have $20 or $35, then I would say, let's get started. Here's what I would look at. In the fintech age, and that just stands for financial technology, there's some wonderful, low cost investment solutions that allow you to start with no minimum.

And one of those is called Betterment, B-E-T-T-E-R M-E-N-T, Betterment. You'll find it at betterment.com or you can download the smartphone app by the same name. That would allow you to set up an investment account, contribute your $25. Perhaps you'd transfer it right there from your checking account. You can set that up on a systematic basis or just start with that amount. And by answering a series of questions, they're going to build a portfolio for you that's called an indexed portfolio, which is just a fancy way of saying you're going to mirror the broad moves of the market using a very low cost investment strategy.

So I would check that out, betterment.com, and I think that could be exactly what you're looking for. And we appreciate your call today. Randy is in Palm Beach Gardens. Randy, how can I help you, sir?

Hi, thank you so much. I listen to you so daily as I drive from my office to my home. I am a pastor and I have been in full-time vocational ministry since 1999. I don't have any debt outside of my mortgage. I don't have a lot of retirement savings because we've been raising our children and paying cash for things and staying out of debt.

So here's my question. I can pay off my mortgage rapidly in the next six years. I've sat down and figured the amortization out and all of that.

I owe $340,000 on my home. Should I try to do that and not put 15% of my income in an investment because I can't do both? If I do the savings of 15%, then I can't attack my mortgage. I would just have to keep it on a regular payoff.

What would you recommend I do? Sure. Let me ask you a couple of questions and I can certainly appreciate as somebody who's serving as a pastor, not earning a ton of money with a family, trying to honor God's principles of managing your money, staying out of debt.

It's challenging to do everything. But kudos to you for doing what you've done and I love the idea that you're weighing these two options of saving for retirement and paying off your mortgage. I heard you say you're 49, so would you expect that you'd be working for at least 15 years or more? Yes, I would.

I would expect probably at least 20, I would hope. Okay. All right.

Very good. And on your current trajectory, when would you have the mortgage paid off if you didn't do anything different than what you're doing right now each month? Literally in six years and two months. But that's with adding this extra, correct? That is correct.

Yeah. But if you were to prioritize the retirement contributions, then when would you have it paid off? We set it up on a 30-year mortgage a few years ago. So I should have looked that up before I called you, but I think about 24 years, I believe it would be. Okay.

All right. You know, I think one other option, because I like the idea that you would, you know, since you haven't saved a whole lot, that you'd start to take full advantage of the tax-deferred retirement account, get that money growing for you on a tax-deferred basis, which, you know, is a really powerful force. And, you know, even though you consider yourself a little behind in your retirement savings, you still got, as you said, a couple of decades for this money to grow.

And so I wouldn't want you to miss these next six years. Perhaps go back to your mortgage company or you can do this yourself online and get an amortization schedule that tells you how much you need to add every month so that you can sync up your payoff with your anticipated retirement date and then put the rest into retirement so that the idea would be you can save as much as you can for the next 20 years. But when you hit that point, you know that the mortgage is paid off. So now your expenses are as low as possible.

That might be a middle ground to consider that would allow you to do both things, take advantage of the compounding and the tax-deferred growth and make sure you still don't have that mortgage payment when you get into retirement. So that's at least my best advice. I think you could go either way and certainly it wouldn't be a bad decision. Stay on the line. We'll talk a little bit more off the air.

Hey, before we head to this break, let me remind you our team is not here today, so don't call in, but we do have some great questions coming up in the rest of the program. Before we take that break, let me also remind you that MoneyWise is listener supported. That means that we do what we do every day on the air, in our app, on the web and with our MoneyWise coaches because of your generous support. So if you'd consider a gift to the ministry, we'd certainly be grateful. You can give online at MoneyWise.org. Just click donate. You'll find ways to give through the mail, over the phone or a secure online form. MoneyWise.org and click donate.

Thanks in advance. We're going to pause, but we'll be back with much more right after this. Stick around. Glad to have you along with us today on MoneyWise Live. I'm Rob West, your host. Hey, our team is away from the studio today, so don't call in, but we've got some great questions that we lined up in advance. So let's head right back to the phones.

Landa in Oklahoma, go right ahead. You're on MoneyWise Live. Hi, thank you for taking my call. I have a 457 plan and a 401 plan and it's all combined in one pot. And they're telling me because now I'm 72, I will have to take a draw.

What can I do about that? I don't want to draw, but I guess I have to. Yes, that's right. So if you reached age 70 and a half after December 31st, 2019, then you start taking required minimum distributions at age 72.

So your first required minimum would be no later than April 1st of the year following the year in which you turned age 72. So would that be next year for you? Yes.

Yes. And so then you would take the next RMD no later than December 31st of the year following. So you can wait until next year and then make two RMDs if you want, or go ahead and take one this year. But yeah, based on that IRS table, Landa, you will have to pull it out. Now, one way essentially to kind of get around that, if you will, is through something called a qualified charitable distribution. So if you're doing some giving right now, let's say to your church or other ministries out of cash, just out of your monthly budget, if you wanted to not do that and make the distribution from your 457 or 401k, if you roll that to an IRA, then it could go straight to the ministry or charity, satisfy the required minimum and essentially accomplish the giving that you were wanting to do anyway out of cash. And then you just hold on to that money. That would be one approach that would allow you to satisfy the required minimum and get more money to the charity or ministry because you're not having to add that to your, you know, AGI, your adjusted gross income for the year. I realize that may be a little complicated. Does that make sense to you? It does. Is there a certain amount I have to draw? There is.

So there's an IRS table and if you use a CPA, they could tell you, but essentially if you go to the IRS's website, irs.gov and search for required minimum distribution, you can see based on your age and based on the balance in your account, the schedule that's based on your life expectancy that would tell you exactly what you need to pull out of the account. Okay. That's great information. You're welcome. And what I would do is, Landa, especially this first year, if you're used to filing your taxes yourself, I would get a CPA to do it for you for this first year. This is not something you want to get wrong because if you don't take out enough, there could be interest and penalties.

So I would make sure that you get some counsel to help you look at the accounts that you have and think about the most effective way to do it, whether that's through a qualified charitable distribution or just a straight distribution to make sure that you take enough out, but also for the timing of when it needs to happen and the calculation of the amount based on the balance in the accounts. So hopefully that's helpful to you. We appreciate you checking in with us today. God bless you. Alice is in Raleigh, North Carolina.

Alice, you go right ahead. Thank you for taking my call. My call is about trying to build some credit. I don't have bad credit, but I don't have any credit.

And I understand that that is important in terms of affecting your rates for like car insurance and things like that. That's why I'm trying to build it, not so much to borrow money because I've been an advocate of not doing that. But I just want to build it and I don't want to get taken on some credit card scams.

So what do you advise? Yeah, one way you could go about that, Alice, is if you don't have credit right now, just from a lack of credit, you could go get what's called a secured credit card. So I'd probably go down to your bank and just say, listen, I want to open a secured credit card. This is essentially where you'd put a certain amount on deposit, let's say two or $300. They would issue you a credit card against it with a limit that matched what you put on deposit.

The reason they call it secured is now it's secured by the balance that you've deposited into the account. So if for some reason you didn't pay, they just take the money. But assuming you pay it back every month, that would just sit there until you close the account. That takes all the risk from the bank, so they don't have to worry about whether you have good credit or bad credit.

Now, what does that do for you? Well, what that does is you could take a budgeted recurring charge. Let's say you have a charge that you plan for in your budget every month.

It might be a streaming service or magazine subscription, something like that, that you've already planned for. Have that hit that credit card every month. Pay it off in full. We don't want you to incur any debt or interest. Pay it off in full.

But here's what's going to happen. Every time that charge occurs and every time you pay it off, you're now going to be reported to the bureau as an on-time payer with that revolving account. And that's going to allow you to establish some positive credit history that over time will increase that score. Does that make sense? It does, but my bank doesn't offer secured credit cards.

I already tried that. Okay, so there's a lot of them out there and I would give you two different websites to look at that would help you find the best secured card for you. One is called NerdWallet, kind of a silly name, but n-e-r-d-wallet.com and you could just search for secured credit cards. The other is bankrate.com. Either of those would allow you to see who has the best secured credit cards. You want to make sure you have one with no fees and you really don't care about the interest rate because you're going to pay it off in full every month.

But that would give you a couple of options to consider and then you could go get that account open and start building some credit history. Okay. Perfect. Thank you so much. All right, Alice. Thanks for calling. God bless you.

Tampa, Florida, Victoria. Go right ahead. Thank you for taking my call, Rob. My question is I am going to be 63 years old in September and I am planning to retire 66 and 10 months or even work until I'm 67 years old. And so I have already set aside a good amount for my retirement.

But right now I am just concerned about because of the very unstable market, what else can I do to protect what I have already set aside? Yeah. What have you put aside? What do you have in that retirement account if you don't mind me asking? Yes, I actually have close to 800. All right.

Yeah. So I think the next step for you is to get some wise counsel, Victoria, because obviously you've been diligent in saving. You've built up quite a nest egg here and I can understand it, especially as you transition to this next season of life.

And by the way, congratulations on your upcoming retirement. Now is a time where you want to protect what you have, but you also want to allow it to work for you, especially in light of what we started by talking about today. You know, with the inflation, if you just take this money and put it in CDs or high yield savings account, even though those rates are climbing right now, they're pretty low. And so you're going to be losing purchasing power every month as the prices of goods and services rise. That doesn't mean you want to take unnecessary risk. So the idea here is that you want to find an appropriate level of risk that matches your risk tolerance, your needs and the assets that you've built. And so what that probably looks like is a combination of some bank type products, you know, CDs or high yield savings, and especially as the interest rates rise portion in bonds, which have been selling off as of late as interest rates rise. But those will stabilize and recover and then you'll get the coupon or the interest rate associated with them. And then probably a smaller portion allocated to stocks, maybe 20 or 30%, as an example, and that would be what provides the growth element to the overall portfolio. So you'd still stay on the fairly conservative end of the risk spectrum. But you have the potential to have a better return than if you were to just take it all and put it in bank type products like CDs and savings accounts. That typically is the best approach for you to generate let's say about a 4% return a year and on $800,000 we'd be talking about $32,000 a year. Are you planning on pulling anything out to supplement your income or is this just going to be free to grow?

Well, right now it's just free to grow and still working full time. Okay. And so really, I have no need to pull anything out of it. Okay.

And what I what I did last year was I was able to consolidate all of my retirement accounts into just one company to manage it. Yeah. Okay. So you have an investment advisor who's making the decisions for you? Yes.

Yes. And so we pretty much sat down with him and he sat down and proposed that to protect your money, this certain amount will be protected and this amount we will manage it in a moderate risk. But if you want it to be in a very low risk, we can do that as well. So we opted for moderate risk and we also have an annuity part of that was put in annuity. Okay. All right. And what was the annuity offering? Was it a fixed rate or a variable rate with investments inside it?

It was a variable rate. Okay. All right. And have you already done that?

Have you already purchased that annuity with that portion? Yes. Yeah. Okay. All right.

And how did you feel about that plan that he proposed? Well, because at the beginning it really looks very solid and it was a very good proposal. And so it's just that, you know, this year as I see how the market fluctuates, so I was thinking of going to the low risk or very conservative accounts instead of the moderate. Well, and you certainly could do that. I think, you know, I would perhaps take another look at that. The key is that you have got a long time here. So even though you're 67, if the Lord tarries and you're in good health, this money needs to last several decades.

So I'd take a longer term view of this, even though it still makes sense to revisit this from time to time. We're out of time today. You hold on the line and we'll talk off the air.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. That's going to do it for us today. Thanks for being along with us, folks. We'll look for you next time. We'll see you on another edition of MoneyWise.