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Are REITs Right for You?

MoneyWise / Rob West and Steve Moore
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May 2, 2022 5:00 pm

Are REITs Right for You?

MoneyWise / Rob West and Steve Moore

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May 2, 2022 5:00 pm

Real estate not only can give you an income stream, it almost always appreciates in value. So, is there an easy way to invest in it without becoming a landlord? On today's MoneyWise Live, Rob West will talk about a “hands free” way to invest in real estate. Then he’ll answer your calls and financial questions. 

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Moody Bible Institute Founder Dwight Lyman Moody once said, If you're old enough to be on someone's mailing list, you've probably received those offers for a free or very cheap vacation if you'll just listen to a presentation on whatever.

It could be a timeshare or a multi-level marketing program or someone trying to sell you a new vacuum cleaner. Well, you don't have to pay that kind of price to still have a nice, inexpensive vacation. Hello travel junkies everywhere. Exploring the world or just the world next door doesn't have to break the bank. To help us discover ways to vacation on the cheap is our own cheapskate traveler Rob West and later he'll be taking your calls on any financial topic at 800-525-7000.

800-525-7000. I'm Steve Moore with Passport in Hand and this is Money Wise. Well, Rob, we've touched on this topic before when we talked about staycations, meaning you stay at home or at least nearby and explore things you may have never done before in your own hometown, right? That's exactly right. And by far, this is the cheapest way to take a vacation.

Think about it. Nearby museums, perhaps historical attractions. It's crazy, but folks often ignore hometown treasures that other people travel to get to.

The grass probably isn't greener on the other side, so don't miss those. Consider spending a relaxing day in a nearby park or even a nearby campground. Steve, I know you're not a big camper. Your idea of the camping is the Marriott, right? Well, Marriott Express. Okay.

Marriott Express. I'm not that hoity to it. I got it. All right. We do like getting out of the great outdoors, putting a tent up and having some fun, but perhaps you let the kids bring along a friend or two for some added fun.

Take some outdoor games to play and after a little while they won't know or even care where they are and neither will you. And the change of setting can refresh everyone, even if you're just a few miles from home. Amen. All right. But we also want to talk about ways to travel more cheaply if you do decide to actually get outside the city environment there.

And you and Julie and your family have done this a bit. I'm talking about cheap and often better alternatives to hotels, things like VRBO, Airbnb. So explain how those work and how they work for you guys. Yeah, they have worked well for us. Services like Airbnb and VRBO offer a community where hosts with an extra room or perhaps an entire house or even some unique accommodations, we'll come back to that, can connect with travelers through a trusted platform. The genius in this is the easy search, the detailed reviews and profiles so you know what you're getting from others who have stayed there as well as secure payments for you to actually pay for your time there and even customer service to back it all up. Now you can actually save a bunch of money, especially if you have a large family.

And this is where we've really used it because we have six in our family. We typically have to get to hotel rooms when we travel. Well, the nice part of Airbnb or VRBO is that you can often find an entire house or an apartment for the same price as you would for two hotel rooms. And often, Steve, you'll find some really unique places. There's even an Airbnb here in Atlanta that's known around the world and it's actually a tree house.

Really? A tree house? Yes, it is. Have you guys stayed there? We have, but it's become quite famous. Actually, there's igloos that are on Airbnb, all kinds of things.

So if you're looking for a little adventure that might add to your vacation as well. I'm sorry, Rob, that's dumb. I'm not staying in an igloo. I think Marcia would like it.

A tree house maybe, but a tree house maybe, but not an igloo. Okay. One final thought about paying for vacations. Don't use, you know what I'm going to say, don't use credit to pay for it. Make a vacation budget and then pay with cash. If you do have to use a credit card, and many people do, only use the card for what you've already budgeted for for the vacation, right?

Well, that's exactly right. We certainly don't want to go into debt for it. And if you could be flexible in your travel date, Steve, you can really save a lot of money. There's some great websites out there. Jot these down, just like it sounds, and also and others will allow you to sign up to be notified when great deals to your destination become available. And if you can move quickly and perhaps be somewhat flexible, this might help with the cost of getting you there and actually staying there once you arrive. We've got some other tips and cost-saving ideas to share as well maybe after the break here in a few minutes. All right. We'll do that. Kayak is interesting. You can use that site if you want to travel to your igloo, one would presume. 1-800-525-7000 is our phone number if you'd like to speak with Rob West on MoneyWise Live.

We'll be right back. This newly revised and updated book offers a six-step plan to finding the immediate pleasure and eternal rewards of the Treasure Principle. And once you discover it, life will never look the same. The Treasure Principle is available when you click the Store button at God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both Heaven and Hell. In Managing God's Money, author Randy Alcorn breaks it all down in a simple, easy-to-follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions, and eternity.

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Log on to Start your journey home today. Great to have you with us today on Money Wise Live. We're discussing ways to save some money on the family vacation. If you have any thoughts, if you've done anything with your family that saved you money but yet still was memorable and fun, memorable in a good way, give us a call. We'd love to hear from you.

1-800-525-7000. We began this topic, Rob, a couple of minutes ago mentioning that a lot of people grow up near something close by that they never go see that people from around the world pay big money to come and see. I grew up 60 miles from Niagara Falls and that really is a world destination.

People come from all over the globe. I never saw Niagara Falls until I was 23 years old and I grew up 60 miles from it. Isn't that crazy?

That is crazy. But it was always just what you'd think. Well, it'll always be there and one thing led to another and I just never got there. Well, now that you live in Atlanta, have you ever been to the world of Coke? I've been to the world of Coke and I'd say that's worth a visit if you're thinking of Atlanta. Come to the aquarium which is the largest aquarium in the world and lots of other things as well and now we'll probably get a check from the Chamber of Commerce. Alright, Rob, any other thoughts about, well, non-monthly discretionary expenses which is often what a vacation is. Yeah, that's the category that this fits into, Steve, and I would add that when we're doing a spending plan or a budget, these expenses are often overlooked. It would be the annual vacation, it would be Christmas, those things that don't happen every month but if you're not saving for them every month, they come up unexpectedly. Well, they're expected but we don't plan for them and then we end up defaulting to those credit cards. And so I would say be sure that you plan for your vacations at least a year out and that you divide that by 12 and get it into the budget. Perhaps you even set up a separate checking account which you can often do with no cost or savings account if you will and do an automatic transfer right into your vacation fund.

Do that for some of these items like Christmas and vacations and you'll be glad you did once that time rolls around. Alright, let's go to our phones. Oh, Russ just popped in from Meadville, Pennsylvania. I think he has some vacation suggestions or ideas. What do you have for us today, Russ? Well, I don't have an idea. I just heard that you said that you shouldn't use your credit in order to go on vacation.

Sure. I'm a single man. I'm on disability. I've got a son that's almost 13 and over the years, I don't want to miss all of his childhood spending vacation time with him. So about every two or three years, we figure a plan and we go on a vacation but I always have to use credit because we live month to month. Disability doesn't exactly pay what I used to make and so I was just wondering, you know, do you just skip the vacation if you have to use credit or what do you do?

Yeah. Well, it's a great question, Russ, and I don't want to pretend that the situation you're in is not challenging when you're living on a fixed income, especially in your situation being on disability income, having a child. Obviously, you have a responsibility to provide and you're doing that and I believe, you know, using these resources as a faithful steward, budgeting them carefully to make sure that you make the decisions you need to make to be able to put food on the table and keep a roof over his head and be able to enjoy what God provides is very important. And that's why there's nothing more spiritual of paying down debt or giving than there is taking a trip and enjoying the relationships God has given you.

So I would affirm that and I think, as you know, and I well know with kids, this time passes ever so quickly and so we need to cherish it and we need to lean into those opportunities we have to create memories. I would just say that I think, you know, within the confines of what God has provided for you, we just need to have a plan. And I can't tell you what that plan should look like.

That's really between you and the Lord. But I think it does really require that we sit down and we actually, you know, write it out and develop that spending plan and look at what we're spending in each area. And perhaps you do forego certain things to be able to put a little bit aside each month, you know, in not taking those vacations away, but really just figuring out how within God's provision you can meet the needs that you have. But also, you know, take a trip every few years and plan for it so you don't end up with a bunch of credit card debt on the back end.

I think it needs to be a matter of prayer and it really has to begin with the budget. Russ, does that make sense? Yeah, it sure does.

I keep them in Christian school because I want to keep them close to the Lord. But here's the thing, I figure that if we go on vacation every two and a half, three years and I'm able to pay that back so that we can go on the next vacation, you know, I'd rather do that than skip a vacation and end up going until he's graduating high school before we can go on a next trip. You see what I'm saying? Yeah, yeah.

No, I certainly get it. And obviously you've gotten kind of into a cycle now where you pay for it up front and then you pay it off and then you pay for it up front and then you pay it off. Obviously, ideally we would flip that cycle. So we, you know, we build up the savings and then we go. I realize your time is limited. And so, you know, that's why you're taking this approach. I think ideally we would save and then spend. But I certainly get the difficult spot that you're in. So I think you need to make it a matter of prayer.

Really look at your priorities around where you're spending, where you could possibly cut back and then enjoy time with your son. Russ, we appreciate you sharing that with us. Thanks very much. We wish you the best.

Thank you. Hi, I would like some advice. I'm recently married and expecting a child and we are renting a tiny apartment and can't afford a whole lot right now on our on our current income.

And we're looking to maybe get a new house, but we're not quite sure where to start. Yeah, well, I'm sorry. Go ahead.

Oh, sorry. Yeah, God has given us, well, a lot of a lot of blessings and we're currently debt free, but it's still at a kind of low point. So, yeah, well, it's a great time to be asking this this question, Amanda. And I think, first of all, you're debt free, which means that you're well beyond where the average person is. You know, the average person right now is graduating from college, at least last year, with thirty seven thousand dollars in student loan debt.

So the fact that you have no debt, even though you're starting out and you're living modestly and you're living in a small apartment, the fact that you have no debt gives you ultimate flexibility. So here's the priority moving forward. First of all, we need to learn what God says about managing money.

And so when we're done today, stay on the line. I'd like to send you a copy of Ron Blue's book, Master Your Money, so you can begin to understand with your husband what God says about how you should approach this area of money management, beginning with you being a steward, him being the owner, and then moving right there through all the principles of money management. I'd like for you all to begin sitting weekly to pray, to plan, to set some goals and then to look at your spending. I realize it's fairly simple right now, but that's a good thing. You know, as you begin to bring more income in, it'll get more complex. But right now you're kind of laying the foundation. I do think setting those goals is really important. Perhaps that first financial goal is just to save up the down payment for the house.

And that's really what you're focused on. And so if that's the case, let's do some forecasting to say, OK, how many years is it going to take for us to get that 20 percent down payment? How much house can we afford based on the budget we have today? Making sure that the payment, including taxes and insurance, is not more than 25 percent of your take home pay.

And therefore, how much do you need to actually put away beyond your emergency fund of three to six months expenses to be able to make that purchase? Now, maybe that's a year or two or three down the road. Well, at least, you know, and you have a goal that you're working toward. The other thing I would say is, you know, other than living on that spending plan and saving for your emergency fund and then your home down payment, look at your giving and really think about what the Lord would have you to do now to begin to establish the discipline of giving, of first fruits, giving percentage giving right off the top. But I think you guys are in a great spot.

I'm excited for you as you move forward and experience all that God has for you. And stay on the line and we'll get you a copy of Master Your Money to get you started. Yeah, Amanda, we'll need to get your mailing address and we'll get that right out to you. Thank you very, very much. You're listening to Money Wise Live with Rob West.

I'm Steve Moore. We're going to pause for a very brief break, then we'll come back and take some calls. We have some other vacation call suggestions coming up, I think.

So stay tuned for that and more after this. And we'll go right back to our phones because we are discussing vacations, vacation topics, ways to travel. In fact, Rob, any additional ways to save on vacation travel? Yeah, let me throw out three ideas here, Steve, just real quick. I think as we're looking to curb the spending on a vacation this summer, one thing to look at is credit card rewards.

Now, we talked about this extensively earlier this week. Be careful with credit card rewards. Only use credit cards for budgeted items. Pay them off at the end of the month.

But if you're doing that and you've demonstrated some discipline, I think we can really benefit from some rewards that come along with the use of credit cards. Number two, travel during the off season. I think that's where you're always going to get your most effective pricing for both airline travel as well as where you're staying when you get there. And then if you can, only pack a carry-on. You know, more and more of the airlines now are charging for checked baggage. So just an easy way is if you pack light, pack in a carry-on, you can save some money that way as well. Yeah, you know, I do that 99% of the time. I see it as almost a fun challenge. Can I get everything I'm really going to need for this trip in one carry-on so that it's not so wrinkled that I can't wear it when I get there?

But, you know, I really do see it as a challenge and I think it's something that you might want to look at if you find yourself checking luggage all the time and paying those fees. 800-525-7000. Michelle is in Florida and has some vacation suggestions for us. Great, Michelle. I'd love to hear what your thoughts are today.

Hi. Welcome to our family, guys, for about the past seven years now is that over the summer we rent a cabin in Tennessee, but we include our extended family too. So like my parents, my sister and her family comes, my mother-in-law and father-in-law come with us as well. And we're able to split the cost of the cabin four ways. So that cuts down, you know, on our expense quite a bit. And then also we're able to split the cost of groceries and we only eat out one time while we're there. So we're cooking our own food and stuff on that expense as well.

I love that, Michelle. You know, we do that a lot with my wife's family. We'll go and we'll get a big cabin somewhere in the woods and we do this in North Carolina a lot or down at the beach. And everybody goes in together and it's just a lot of fun and you can save some money. Do you have a favorite site that you use to locate the properties?

Do you use VRBO or Airbnb? Honestly, there's just different places in Tennessee. I think one is called Cabins For You. That's the one that we've booked through this year.

If you Google Cabins in Tennessee, a bunch of different providers come up. I love it. We actually did this last year. We took the whole family skiing in Colorado. It was the first time we had everybody out there and we went in with some family members and did that. And it was just a lot of fun. A great vacation to do as a group. So thanks for sharing that tip today. That's a good one.

Great suggestion. And so you had the whole family in Colorado last year. So are we closing in on the igloo thing, Rob? No, no. Pro igloo. There was a lot of snow, but no igloos. Hot tub.

There was a hot tub. There you go. Now we're talking. All right. Chicago, WMBI. And, Diane, what about you and your family?

What kind of arrangements have you made to maybe save a little money on a trip like that? Hi. Nice to talk with you. I'm sorry.

No, thank you. We have four children. Well, who are adults now, but two months before we would go, we would start a notebook up and look for make a scavenger hunt. So on the road, the kids would always have something to do that they were prepared for. And we'd play different games because we did the road trips a lot.

And whoever won a game for a thing would get to pick where we would stop and eat if we were eat now instead of picking or whatever. But yeah, that way the kids felt more involved and you didn't get the are we there yet. Yes.

Four kids, 10 years difference in age. You know, there would be a lot of are we there yet otherwise. That's right. We didn't have that.

Yes. And then when somebody wanted to stop, we always stopped even if it was half an hour after the last stop. And so many memorable places. Yeah, I love that, Diane.

And here's the benefit. There is that, you know, your your eyes are looking out, you know, so often today, kids, when they're in the car, just looking down at the screens. Well, here you might be driving through some of God's most spectacular creation and there's mountains or there's snow or there's trees. Everybody's staring down.

It's crazy. So if you have some kind of scavenger hunt or you're looking for something or, you know, we played the the the tag game where you're trying to do the alphabet with the letters on the license plates. I mean, whatever it is, it gets the family involved. You add some fun. And you mentioned stopping for food. You know, Rich, our producer said that when they travel, they would pack a cooler with food and eat at rest areas rather than stopping for fast food just to get out of the car and maybe save a little bit of money. He also pointed out, Steve, that if you stay in an igloo, you'll actually save on the cost of ice. So, you know, just just keep that. Yeah, I believe Rich probably recommended that.

Now, something that I know you've done, I've heard you would address it on other programs, actually. And that is you allow correct me if I'm wrong, you allow each of your kids on different days to choose the restaurant or something like that, just so that they're more involved in the vacation. Yeah. You know, we've actually turned over on a for an entire month. We turned over our eating out portion of our budget to the kids to actually manage that for a 30 day period just to have some fun. And they had a good time trying to decide where they wanted to eat and how they were going to maximize the money.

But you could absolutely do that on a road trip as well. That'd be a lot of fun and teach a financial lesson at the same time. If you say, OK, kids, we've allocated this much money to eating out while we're on the trip. You guys figure out how we're going to use it. You could teach a valuable lesson there and let them have some fun and some ownership of it at the same time.

Yeah. And often, you know, it's mom and dad who decides whether it's Burger King or McDonald's or something nicer. And I guess, you know, again, you'd have the kids a little more involved in the vacation. They'd feel more a part of the family and is as if they count. If you let them make some of those decisions on a on a daily basis, perhaps just a thought, just a suggestion. And here's just our phone number, one eight hundred five to five seven thousand. We'd love to hear from you.

Call right now. Many people adopt an attitude toward marriage and finances that it'll all work out somehow. But sadly, it often doesn't. Financial woes can devastate a marriage. But there is a better way.

God's way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate and cultivating Godly joy. Money and Marriage God's Way is available when you click the store button at Money Wise Live dot org. Money and life run on the same track. But unfortunately, sometimes it seems like your money is heading in a different direction from your goals and never enough. Three keys to financial contentment author Ron Blue helps you to break down all your financial options to a basic four and then shows you how to keep it all chugging along in the right direction on the same track. Never enough.

Three keys to financial contentment available when you click the store button at Money Wise Live dot org. A young woman hiking in the mountains was suddenly struck by a rattlesnake. One of her friends ran to the nearest camp and found a snake bite kit.

Opening it up, she was shocked to find it empty. Thankfully, they were able to get their friend to the hospital in time to save her life. It's terrible to realize the thing that claims to be able to save your life really has nothing to offer. Are you trusting Jesus with your life? Learn more.

Call 888-NEED-HIM or visit Our lives can symbolize that of an open or a closed hand. Each day you and I have the chance to give of our time, talent, and treasures or remain closed-fisted. So how do we approach giving and all of our financial decisions with an open hand? Join me, Steve Moore, and my friend Rob West as we look at what Gospel-centered generosity looks like in action. That's coming up next time on Money Wise Live at 4 p.m. Eastern, 3 p.m. Central on Moody Radio.

This is Money Wise Live with Rob West. We're taking your calls today on any financial topic. We have one coming up about establishing credit.

But before we go there, Rob, we're not going to be able to get to Nancy today, but she's been on hold for quite a while, and it looks like she has a real interesting suggestion. Can you maybe... Well, yeah, we've had some great tips on saving money on vacation. She said when her kids were younger, they didn't have a lot of money, but they would actually just pack the crock pot in the trunk when they went on vacation and throw some things in there in the morning and save some money by cooking maybe an all-in-one meal while you're traveling. Also, another idea from Rich, he would give the kids the responsibility for the eating out while they were traveling, maybe fast food, and say, if you guys want to save that money and not eat out, you can have it for spending money on the trip, which I thought was a creative idea as well.

Wow, wow. Maybe if they want to pack PB&J and take the money and buy some things on the trip, maybe so. You know, I like the crock pot idea.

I think that's kind of cool. And maybe, just maybe you could plug it into the lighter and actually be cooking while you're driving. Can you imagine the pot roast in the car? That just sounds awful, actually. Smelling that for eight hours. I'm sorry we ever even brought this up.

Kansas City, Missouri. Hey, Jeff, thanks for hanging in there, buddy. What's on your mind? How can we help you? How's it going, guys? I love your show. Listen all the time. Thank you, buddy. My daughter, 22, she's looking at renting.

She saw a place that she's interested in, put us through a property management company, and I've actually found a couple places that are by individuals renting, and she's thinking she ought to go with the property management part because of trying to establish credit. Sure, sure. And I'm not sure which... Yeah, it's probably not going to make much difference, Jeff.

Here's what we know. Fair Isaac, which is one of the most popular credit scoring companies, you've heard it probably mentioned as FICO. Their spokesperson said at one point that less than 1% of credit files contain rental entries. So even if the company reports the rental information, and in most cases they don't, but even if they do, the credit scoring formula in many cases doesn't even factor it in depending on which score is being used. So I wouldn't let that drive the decision. I'd probably look for the property to rent that is the best fit for her in terms of location, the safety, where she's going to be in proximity perhaps to work or church.

And then, of course, Paramount is whether it fits into the budget. I'd lead with that and not worry about credit. Now, if she's looking for a way to build some credit, she's just starting out, she doesn't really have a lot of things being reported to her credit file, but one option that we've recommended in the past that works quite well is something called a secured credit card. So basically she goes to her bank or credit union, she could put $300 or $200 on deposit, they give her a secured credit card tied to the balance, and then she can only spend up to that amount. She pays it off, and each month it's reported to the credit bureau. It removes the option to get in debt because you can only spend so long as there's money on deposit, but it does create a history there and build your credit file along the way.

We realize credit is being used for all kinds of things, employment consideration and insurance premiums and a whole host of things, so I see why she'd want to build it, but perhaps that's a better way than the rent. You make a good point there, Rob. When it comes to our credit reports, we really do have to depend upon the merchants that we're working with to supply that information. It's not as though the information is out there in credit report land and the various credit bureaus pull it down. It has to be reported by various people who collect your money, right? No, that's exactly right.

It's all about what's being reported to any one of the three bureaus and then how the credit score formula that's being used factors that information in. Thank you, Jeff. 1-800-525-7000, West Palm Beach, Florida. Lisa, what's your question today for Rob West? I have a question regarding deferred comp, and my employer offers it and just haven't gotten a good explanation about what it's all about.

Yeah. Tell me about the particular deferred comp that you have available to you. What are the parameters around how you contribute to it? Is there matching involved?

What has been explained to you? It's with the nationwide. We do have a pension that is offered that is matched, so the deferred comp is solely anything that I decide to contribute. I believe it is taken up before taxes, but I'm not 100 percent. I think it is.

Yeah, okay. Well, the whole idea and the reason it's called deferred comp is that it's an arrangement where the employee's income is paid out at a later date beyond the time that the income was earned. So examples of deferred comps, as you said, are pensions, retirement plans, even employee stock options would be a form of deferred compensation. So it's really just the option that's available to you, but if they are going to match in particular or if it's just going to vest over time based on you meeting a certain milestone of time with the company, it's a great way for you to lean into long-term savings. Something else to consider, depending upon what's specifically available to you, would be a Roth IRA, either in addition to or in place of the deferred comp program where you can have tax-free growth.

You don't get the deduction, but it grows tax-free over time. So I would probably get a bit more detail on the plan, specifically what you have available to you. If you don't understand it, perhaps you get an investment professional or a financial planner to look it over, explain to you your options, and then decide which is going to be most effective for you for long-term savings. So while you really like the Roth, it's not necessarily the best for everybody all the time. It really does have to be looked at in concert with the other possibilities, right?

Exactly, and so it's really just a function of what you have available to you based on where you work and their approach to the retirement plan that's available. All righty. Lisa, thank you for calling today. West Chicago, Illinois, WMBI, and Jackie, I understand you just got laid off. I'm sorry about that, but how can we help you? Oh, hi. It's so good to get through to you guys.

I call every day, and I'm never, ever able to get through. I love your show. Thank you. So, yes, I recently was laid off.

Well, maybe about three weeks ago. I have a new job. I'm a nurse. So what I did, I had a 401K that was at my job, and I've accumulated a nice amount, but I don't really understand the 401K. I don't know if I could just leave it there even though I don't work there, or should I take it out?

Right now, I do need some things for my house. I don't need a roof fixed, which is a lot, and I was thinking I could take from there, but at the same time, I didn't join the 401K at my new job just because I'm working part-time right now. So I don't want to lose the 401K, and I'm just kind of up in arms, like, what should I do with the money? Should I leave it there? Am I able to leave it there? I'm not understanding. Great questions, Jackie, and I'm sorry to hear about that, but it sounds like you have found at least some work to replace that, even if it's not where you'd ultimately like to be.

A couple of things that you brought up. Number one is what do you do with that 401K? Well, you've got two options, and in most cases, you can leave it right there and just continue to allow it to grow. The other option is you can roll it out to an IRA, a traditional IRA at another institution. The benefit of doing that is, in some cases, once you separate from the company, there's additional fees, and so you might pay a little bit more in terms of maintenance fees on that account inside the 401K, which is just going to put a drag on the investment results that you're going to see inside the account. The second benefit is you open up your investment options when you get into an IRA. So if you went to TD Ameritrade or you went to Fidelity or Vanguard and opened a traditional IRA, a rollover IRA, then that money was sent to that institution.

You would be able to invest in anything you wanted, mutual funds or exchange-traded funds, and if you needed some help figuring out how to invest it, our friends at would be a great resource for you. But I really do like the option of moving it out to the traditional IRA as a rollover and then managing it there. In terms of some repairs on your property or other expenses, I would try to do what you can to not tap into that 401K. If you're less than $59.5K, you're going to pay a 10% penalty right off the top, and I'd hate for you to pay that. Plus, it's going to be added to your taxable income, so you could have to set aside 30% of what you take out right off the top.

But even more than that, that money is no longer working for you for long-term savings to be able to have access to it down the road when you're not working, perhaps in retirement. So I would consider rolling it out, and beyond that, if you need some help, visit to check that out. And Jackie, we are glad that you got through today, and I hope that information helps you. If down the road you still have an issue or a concern, feel free to contact us again.

Our phone number is 1-800-525-7000. We'll be right back. Please don't go away.

This is Max MacLean. Why should we give praises to the Lord? Listen to the Bible from Psalm 138. I will praise you, O Lord, with all my heart.

When I called, you answered me. You made me bold and stout-hearted. May all the kings of the earth praise you, O Lord, when they hear the words of your mouth, when they sing of the ways of the Lord, for the glory of the Lord is great. Though the Lord is on high, he looks upon the lowly, but the proud he knows from afar. Though I walk in the midst of trouble, you preserve my life.

With your right hand, you save me. From Psalm 138. Listen to the Bible. It's great for the soul. The Bible says that faith comes by hearing. Be able to hear the Word of God today and every day.

To hear more, go to If we can help you with any questions you might have about managing your time, talent, or treasures, that's what we're all about. The program is MoneyWise Live. He's Rob West. He's the smart guy. He's the guy you want to chat with. 1-800-525-7000, Chicago, Illinois. We welcome Linda. Hi, Linda. Thanks for calling today. How can we help you? So, my husband has a terminal illness, and so I'm trying to educate myself on what's a SERP and how to deal with a 401k, and is there penalties for withdrawing them early if we need to, and I'm just kind of lost on what all this is, and so that's why I'm calling. Yeah. Well, Linda, first of all, let me just say that I'm really sorry to hear that.

I think you're doing the right thing in terms of really understanding what's out there. No matter what our health status is, we should know what we have, and as stewards or managers of that, have a plan moving forward, no matter what life brings our way. And you mentioned a SERP. You also mentioned a 401k. SERP is, for the benefit of our listening audience, is an acronym for what's called a Supplemental Executive Retirement Plan. It's basically a non-qualified retirement plan, meaning you don't get the deduction for the money going in, but it's a way that key company employees like executives can have benefits beyond what's covered in other retirement plans, like a 401k or a deferred comp plan. What you're going to want to look for is the parameters around the SERP that your husband has and really understand what's there in terms of is it a defined contribution, is it a defined benefit, are there stock options, and just really understand what's there and what are the parameters behind which that money is then paid out. Once it is paid out, then it's taxable at that time when you take that distribution. With regard to the 401k, it really just depends on his status. Obviously, if he separates from the company, then that could be rolled to an IRA. Regardless of whether you pass away first or he does, at death, the account would then be transferred, assuming your beneficiary designation was handled properly, over to the surviving spouse.

At that point, there are provisions for actually taking the money out without the 10% penalty, but of course it would be taxable. I think this is a time, Linda, for you to visit with a financial professional, somebody who can look over all of your financial affairs, make sure you have the proper legal documents in place, everything from a will, perhaps a trust, a healthcare surrogate, the healthcare directives, look at your retirement assets, look at your spending plan, look at how all these things are being managed, look at the tax implications, and really help you just kind of think through that. Do you all have a financial advisor that you use?

No, not at this time. Okay. If you don't have one or there's not somebody at your church that you know, you could go to and look for a financial or an investment professional who has the certified Kingdom Advisor designation in your area. This would be somebody who's competent but who's also really committed themselves to being a specialist in a biblical perspective of financial decision-making, and I think that'd be a great next step for you. Linda, any other question you might have that we could help you with?

Well, I have lots of questions but I think that is a great answer is that my next step is to contact a financial planner or some sort that can help us through the next step. Thank you so much for your time. I appreciate it. You're welcome. We appreciate you calling. Thank you, Linda. God bless.

1-800-525-7000. She's really asking all the right questions at the right time, right, Rob? Sure is. Yeah, and this is the time to do that. I mean, we all could take counsel from Linda just in terms of being well-planned. And we talked about this on the air the other day that as husband and wife, we may have one bookkeeper, but we need to know what's going on together. We need to set our plans together. We need to know where important documents are.

We need to have our legal affairs in place and we need to have a plan moving forward no matter what happens tomorrow or 20 years from now. Hartford City, Indiana. Levi, thank you for holding, sir. What's on your mind today? Hi, how are you? Doing great, Levi. How can we help you, buddy?

Good. I'm a young guy. I'm 18.

I'm a senior in high school. And I know it's good to start young as far as investing and all that goes. And I'm looking to save around $1,000 and then invest that. I've got a summer job ready for me. And so my goal is to save up $1,000 and then invest that. But I was just curious, you know, what's a good thing to invest in, you know, to get started in that whole thing?

Yeah. Levi, I love that you're starting early. You're already thinking about a summer job. You're thinking about investing.

This is all good. First thing I would say is you need to learn God's way of handling money. And so when we're done here today, I want you to hold the line. We'll send you a copy of Howard Dayton's book, Your Money Counts. This is going to teach you the biblical principles of how to approach money management based on the 2,350 verses in God's Word related to money and assets and possessions. So you can begin to understand God's heart as it relates to your money. Second thing is really, as you move forward, you know, we need to look at the various areas where you can spend money.

You can only do four things. There's money you live on, money you give, money you owe, and money you grow. Right now, you need to focus on the live area in terms of having a spending plan for what's coming in as you get your job. I would start early and being a giver and give on a percentage basis right out of whatever you bring in as your increase. Hopefully you don't have any debt. Doesn't sound like you do.

If so, we take the O category out other than taxes, of course. And then the grow areas, what you're talking about here, and that is, you know, after you put a little aside for just some emergency savings, starting to think about investing. You've got a couple of options. If this was long-term money, meaning money you just want to start socking away for the very, you know, for retirement, if you will, you know, you could open an IRA at Vanguard, a low-cost provider for as little as $1,000 and put it in either an ETF or a good high-quality mutual fund. If you want to invest in a taxable account, meaning you wanted this money working for you, I would want to make sure you have at least a five-year time horizon. If this is money you're planning on using in less than five years, it shouldn't be in the stock market.

But if it's five-year money or longer, I think you could absolutely start, allow it to start working for you. And you could open an account at Fidelity or Vanguard or TD Ameritrade and again, use high-quality ETFs to essentially buy the market. So you're going to mirror the overall index. You're going to get a lot of those tech companies, but you'll get some, you know, financial companies and some healthcare companies. And, you know, you'll really be well-diversified across the investment universe, which is where you want to be. You don't want to put all your eggs in one basket and try to pick a company.

You want to put this in the broad market indexes and just let it grow. So I think that's probably the next step for you. And if you stay on the line, we'll get you a copy of that book. Now, what book would you like to send, Levi? Let's send him Your Money Counts from Howard Dayton just to get him started and understanding God's way of handling money.

Okay. Levi, what's your summer job that you have in place already? My dad, he works for a surveying and engineering company. They hire guys throughout the summer. I worked there last year, but they hire guys throughout the summer, you know, just as summer help. So you're going to be out there standing in a field holding a pole or something, right?

Well, they do the measuring. It's hot. All right. Then here's my advice for you. Sunblock. Invest in sunblock.

It might be the best investment you'll make this year. All right, buddy, listen, you hang on the line. We'll get you some information. Thanks so much for calling. And, Rob, always a pleasure, Stan. Yes. Sir, thank you.

All right. Thanks, Steve. Hey, financial woes can devastate a marriage, but there's a better way and it's God's way. The book I'd like to mention to you today is Money and Marriage God's Way, which offers lots of great practical biblical principles and advice to real common problems. You'll also read encouraging stories of real life couples, which will give you and your spouse an opportunity to discuss your own challenges and financial goals. So whether you're engaged, newly married, or maybe even empty nesters, I'm sure this book will help you cultivate the joy God intends for your marriage and your money. And I know that we're in the month of May, so lots of people now thinking about getting married in June and July might make a nice wedding gift or perhaps a nice shower gift, something a little different that will have long-term impact.

Money and Marriage God's Way, you'll find it when you visit us at, Well, thanks so much for being with us today and for listening. Thanks to our production team, Rich Roussel, Robert Sutherland, Amy Rios, Judy Krohn, Chris Segar, Joel Swan, and Gabby with us today on phones. Thanks, Gab. Great job. Thank you for tuning in, listening, and calling.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. For Rob West, I'm Steve Moore, hoping you'll tune in again. We'll do a better job next time, I promise. For Rob West, I'm Steve Moore. God bless. Thanks for listening.
Whisper: medium.en / 2023-04-20 10:44:28 / 2023-04-20 11:03:54 / 19

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