A Penny Saved

Benjamin Franklin said, a penny saved is a penny earned. I'm sure you've heard that phrase, but you may not realize that it's a crucial insight into good money management.

I am Rob West, and just ahead, I'll explain why that's so. Then the floor will be open to your financial questions. The number is 800-525-7000.

800-525-7000. Thanks so much for being with us. This is MoneyWise Live, biblical wisdom for your financial journey. Well on Mondays, as we start our broadcast week, we sometimes like to go back to basics and talk about one of the five things you can do with money.

Let me review those. You can earn money, you can live on it, you can give it away, you can owe it to someone or to the government, and you can save and invest it to grow it for the future. So those are the five, earn, live, give, owe, and grow. Today I want to focus on the first of those, earning.

But I want to do so in a non-typical way. You know normally when you think about earning, you think of getting a paycheck or perhaps receiving a pension or a benefit. But I want to home in on Ben Franklin's words that I quoted a moment ago, a penny saved is a penny earned. Now if Mr. Franklin were living today, he might say a dollar saved is a dollar earned, but the principle is the same. What old Ben is getting at is that if you can avoid spending, it has the same impact as earning.

Let me give you an example, and this is a real life example from a MoneyWise listener. His monthly cell phone bill was about $125. He thought he might be able to find a cheaper plan, so he shopped around and compared plans offered by several companies.

He found that one that met his needs was only $50 a month. So he made the change and thereby was able to save $75 a month on the cost of his mobile phone service. That works out to $900 a year. Now to return to Ben Franklin's principle, saving $900 a year is equivalent to earning an extra $900 a year. In fact, it's slightly better than earning it because if the employer of this MoneyWise listener paid him an extra $900, some of that money would have been taxed away.

So $900 saved was a tad better than $900 earned. When looking at your overall financial picture, it's helpful to view things through this lens. Always be asking, are there steps I can take to cut my cost of living? If you can reduce your expense, whether it's by $900 or perhaps even more, that's just like earning extra money, or even better. Now, I know you're probably thinking in a time of rapid inflation, how can I cut costs?

Well, first, think about goods or services where there tends to be a lot of competition, such as cell phone service or in some places internet service. You might be able to get a better deal from your current provider if you ask, or you might save by switching to another company, but you have to take the initiative to shop around. What about insurance? This is an area in which you might be able to save substantially by comparison shopping, not only for car insurance, but also homeowners insurance, or perhaps a Medigap plan or Medicare prescription coverage. It's not uncommon to find wide price variations in plans and policies that are quite similar. Another place to cut costs is at the grocery store.

The fact is some grocery chains are more expensive than others, typically because they offer more variety. Try buying all your staple items at a discount grocer and your savings will really add up over time. Now, I'm not saying that all this is easy, but think of it this way. Let's say you spent an hour figuring out how to cut your monthly spending by $100. That works out to be the same as earning $100 for an hour's worth of work.

That's not bad. Project that out over a year, your one hour's worth of work will pay a very good return indeed. Probably everyone listening to me right now would like to get a raise, and I hope you do get one, but a raise is something that's not going to happen very often. So think about the spending side of the equation. Ask, how can I, in effect, give myself a raise by cutting my costs? Now, you can't cut your expenses down to nothing. That's not realistic, but you may be able to cut more than you realize if you apply yourself.

Don't give up without trying. Who knows how much you might be able to save. So when it comes to earning money, always consider both sides of the balance sheet, and remember the principle from Ben Franklin, a penny saved is a penny earned. For more ideas that will help you in five areas of money management, earn, live, give, owe, and grow, check out our website. We have plenty of free content that will help you along your financial journey at moneywise.org. I'm Rob West and we'll be back with your calls and questions at 800-525-7000.

Stick around. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host. We're glad to have you with us on a Monday afternoon as we take your calls and questions on anything financial. The number to call with lines open today is 800-525-7000. Whatever you're thinking about today, we would love to help you apply the wisdom from Scripture to the financial decisions and choices you're making.

Again, 800-525-7000 is the number to call. We're going to cover some ground today, not only your questions, but we've gotten some, received some great questions by email recently. And by the way, if you'd like a question read on the air instead of calling in directly, you can email us at questions at moneywise.org. That's questions at moneywise.org. We heard from David asking about his child who's an adult who's still living at home and some thoughts on encouraging that child to spread his wings and move out on his own. I'll weigh in on that today. Plus, Elsie wants to know about helping her 17-year-old daughter establish credit.

We'll tackle that one. Again, if you'd have a question you'd like read on the air, feel free to send that along to us. We'd love to hear from you.

Again, questions at moneywise.org is the number to call. And again, if you want to be on the program today, we've got some space for you. We'd love to hear from you right now. 800-525-7000. All right, let's get started today. We're going to begin in Chattanooga, Tennessee.

WMBW, Gary, you'll be our first caller, sir. Go ahead. Yeah, I have two questions regarding my 401k. I have a 401k through work, and I also have a second one that I've started a while back through, like, Betterment. And I'm told that the total for that, that I can contribute to is 7,000. And is that combined between the two, or is there a separate total for, like, the work and the private one?

Okay, so tell me again what you have. You have a 401k at work, and then what is the second retirement account you're talking about? The second one is just a Roth that I've established through Betterment.

Oh, a Roth IRA. Okay. And what is your age? I'm 66.

Okay. Yeah, so you can contribute through salary deferral in a 401k, you know, $27,000 for 2022 if you're 50 years of age or older. So, you know, you have quite a bit of money that you can put into those plans.

On a Roth IRA, you can put in up to $7,000 for this year if you are over age 50. So, and you can contribute to both of them. Is that different though than what you're hearing? Well, I just wasn't sure. I've asked a couple different questions and gotten answers, but they've been not explicit enough to give me the information I need, but you've been very helpful in that regard. I do have one other question though. Yeah, go right ahead. The ones who work as currently set up in a target, like a 2025 target fund, but given my age and assuming that my health holds out and that my wife and I are both still alive that long, I'm anticipating maybe not needing that money until, like, I'm 75.

So, I'm wondering if it would be advantageous for me to move that out to, like, a 2030 fund or maybe something different altogether. Yeah. And so, you said your age is 67.

Is that right? I'm 66, yes. 66.

Okay. And your best guess on when you might need to start drawing an income from that would be what? Well, I'm hoping when I'm planning on working until I retire, again, if my health holds out and between that, I have a small pension through some prior stuff. So long as my wife and I are both alive, we'll be okay with that. We won't really need to draw on that income.

You know, the target is maybe 75 before we would actually need that. Yeah. Okay.

Yeah. I mean, I would certainly be fine with you getting a little more aggressive on that, especially given the fact that you would not expect to need that money. That would give you the ability, number one, to let it recover with the stock market being where it is right now and expecting a recovery to come sometime next year. By moving it out to a 2030 fund, you would probably expect to have, I think, a typical 2030 fund is going to have about 35% in bonds, about 65% in stocks. So you just have to recognize that with essentially 65% in or somewhere between 55% and 65% in stocks, you're going to be a little more volatile. So you just need to make sure that you're comfortable weathering a little more volatility even in this season of life. But so long as, again, you don't see a need for this, you just want to let it continue to grow and you're comfortable seeing a statement that is down 15% or maybe even 20% if we were to get into a full-blown bear market, whether that's next year or five or six years from now, that you would feel like you could ride that out and not feel compelled to rush to cash, which would cause you to have to lock in those losses.

So I think as long as you have a plan, some rationale behind it, and you're willing to stick with that long-term plan, then I would be comfortable with you taking slightly more risk than we would typically advise with somebody in their late 60s. Does that make sense? Yes, it does. Thank you very much. All right, you're very welcome, Gary. I think one of the other things I would challenge you to do is just define enough during this season of life. There's an exercise that you can go through, whether you do that yourself with an online calculator or by hiring an advisor to determine what is our ultimate savings goal and are we on track for that with the current amount that we're putting away plus what's already in there and reasonable growth rates over time or do we still have a ways to go and at what point do we draw kind of a financial finish line in the sand to say, you know what, we've accumulated enough and therefore we can increase our giving or do other things with that money beyond just continuing to save for saving sake.

So I think each of us needs to wrestle through that decision both for lifestyle spending, that's your income, but also for your ultimate long-term savings and accumulation just so you know what the end is, it's defined and then that gives you the freedom beyond that to say, you know what, we've accumulated enough or we're on track to do so and therefore maybe we ought to be looking for other needs around us or aligning our passions with giving opportunities, things like that. So if you haven't already gone through that exercise, Gary, I think that would be well worth your time and if you need an advisor to help you with that, there's some wonderful Certified Kingdom Advisors there in Chattanooga. We appreciate you calling today. Thanks for being a part of the program. 800-525-7000 is the number to call.

We have a few lines open today. Let's head to Ohio, WCRF. Hey, Ed. Thanks for calling.

Go right ahead. Well, hi, Rob. It's always a pleasure speaking to you. I hope you had a nice week off.

I tried calling Monday last week and it was all prerecorded. I said, well, these guys are taking a well-earned vacation, so that's cool. All right, I've sort of got a question that I've been pondering for a little while and it's outside of your realm of topics today, but I just thought I'd throw it out there anyway. Sure. Can you advise or are you aware of, and actually I'm going to split it into two tangents now, are you aware of any faith-based financial institutions such as banks and things like that? And how about any faith-based legal organizations, attorneys and things like that? Yeah, I wouldn't have a legal, although you could contact the CKA and ask for a referral to a godly estate planning attorney. They would all have one. With regard to financial institutions, there are some good ones.

I would direct you to look to the Christian Community Credit Union at cccu.org. We know those folks well, and I think that would be aligned with what you're looking for as a banking institution in particular. Ed, thanks for your call today. Stay on the line.

I'll make sure you don't have any other follow-ups and we'll be right back. Great to have you with us today on MoneyWise Live. I'm Rob West, your host. We're taking your calls and questions today. The number 800-525-7000.

Hey, just before the break, we were talking to Ed. He was wondering about a faith-based banking option. And I mentioned our friends at Christian Community Credit Union for believers, and I gave an incorrect URL.

So let me correct that now. If you'd like to reach out to the Christian Community Credit Union, you'd do that on the web at mycccu.com. That's mycccu.com. You can check it out today. All right, back to the phones we go.

Chattanooga, we'll stay right there. Lindsay, thanks for calling. Go right ahead. Yeah, thanks for taking my call.

I had a question. My husband got into some debt over the past few years on a credit card. Of course, the interest rates were very high once the promotional period goes away. So he recently took out a personal loan to pay off the credit cards so we could get out from under the weight of that interest rate. Yet I was wondering how can he build his credit score back up while we continue to pay off this debt?

Yeah, so what is the credit? What is his credit score? Right now, it's probably 650.

It used to be probably closer to 800. Okay. Does he have late payments? I'm pretty sure there were a few that were late. Yes.

Okay. So that will take care of itself over time as long as he continues to be an on-time payer. Now, what may be hurting him is a couple of things. Number one would be the credit mix. So based on the credit algorithm, 10% of your score comes from the various types of credit you have and the score rewards folks that have different types of credit. So having revolving accounts like a credit card on top of a mortgage, on top of an installment loan, like a car loan where you're paying a set amount each month, having multiple types of credit all in good standing is going to improve your score. And if he paid off the revolving account and replaced that with the personal, then that changed the credit mix and may have pushed the score down. Obviously, the late payments are going to impact it as well. And then the credit utilization would be the other big one, which has to do with the total amount available versus the balance. So if that utilization of credit is above 30%, that's going to drive the score down. I think the key right now is let's try to get out of debt. And so that's a number one, just doing whatever you can to keep lifestyle at a minimum and get as much going to the paying of those debts as possible to keep those balances coming down.

Obviously, you want to improve your score over time. So what can you do to that end? Well, one option would be what's called a secured credit card, Lindsey. So if he wanted to put or together you all wanted to put a certain amount on deposit with a bank and have a credit card issued against that, which prevents you from ever being able to go into debt because you can only charge up to the limit that's on deposit.

And then what I would do is put a recurring budgeted charge on that card every month, maybe a subscription that's already built into your budget of 10 or $12 a month and then pay that off in full. Well, that's going to do a couple of things. It's going to add that credit card, that secured card back as one of the credit lines in your credit mix. That's good. And then secondly, it's going to show you as an on-time payer every month with that particular account.

That will help improve that score over time and at the same time ensure that you all don't ever get overextended. So that would be a secured credit card. One other option would be do you have accounts in your name only that are current and in good standing that he is not a part of? I have like a home, I'm sorry, a car loan in my name. I don't believe I have any credit cards in my name.

Okay. Because if you did and you were using those for budgeted items, you can add him even without him using them as an authorized user and then that would be reported to his report. So I think perhaps this next step for you all is to have this secured card. Since credit cards have gotten you in trouble in the past, I would stay away from an unsecured card where they just extend you a $5,000 or $10,000 limit and just allow you to charge as much as you want against that. I'd go with the secured card because that's going to prevent you from getting into debt but still accomplish the same thing from a credit reporting standpoint as long as you just have a monthly charge on there. Again, it can be very small and then that on-time payment will be reported every month.

In terms of picking the financial institution, you could approach your local bank about that or you could check out nerdwallet.com or bankrate.com to find which banking institutions or finance companies have the very best secured credit cards right now. Does that make sense? Yeah, that's super helpful.

Yeah, thank you. I guess to follow that up, it's not necessary then for us to go into like a credit counseling arrangement. We can theoretically rebuild it on our own, taking these steps.

You can. In fact, credit counseling won't really improve your credit score at all apart from helping you get out of debt and it sounds like you're doing that on your own and what you have now is you've eliminated all of your credit cards because you replaced them with this personal loan, correct? Yes, well, it was actually one major credit card. Okay, but you no longer have that because it was paid off when you took out the personal loan? I believe I need to double check on that. I hope not but yeah, double check.

Well, here's what I'm getting at. If you have a balance on a credit card right now that's active, yeah, I would put that into credit counseling because again, even though that won't improve your score, it's going to help you get out of debt and that's really what's most important. Through credit counseling, you can get that interest rate lowered and get that paid back 80% faster on average. If you no longer have any credit card debt because it's all been paid off with a personal loan, that personal loan is not able to be put into credit counseling so you would just keep that right where it is and just try to free up as much money as you can on a monthly basis in your budget and just try to pay that off as fast as you can by applying principal reduction over and above the monthly payment. But again, if you check and find out that you have an active credit card with a balance, especially if it's more than $4,000, then I would absolutely contact our friends at ChristianCreditCounselors.org. That's my preferred way to get out of credit card debt.

It doesn't apply to a personal loan but if you have credit card debt, it'd be a great way to go. Lindsay, thanks for your call today. All the best to you guys as you seek to be completely debt free over time.

You can do it, just stick with it and you'll get it done here in no time. Hey, we're going to take a quick break. We have some great questions lined up that we'll tackle right around the corner. Don't go anywhere. Thanks for joining us today on MoneyWise Live. I'm Rob West. We're taking your calls and questions today, 800-525-7000. Again, that's 800-525-7000.

Let's head to Chicago Glenn. You'll be our next caller. Go ahead. Hi. Thanks for taking my call.

Sure. So I'm calling on more to get advice for my son. So he's 24. He just moved into his first apartment or just moved out, first time moving out over the weekend.

So excited for him about that. And he's got good credit. His goal is to buy a home and eventually bring down his debt and be debt free. But one of the things that is hanging over him and he's been trying to pay this off is a Sallie Mae school loan. And we've tried to refinance it a couple times and I don't know if it's because it's the type of loan, but it's because he's for that one, I believe he's making the minimum payment.

And so for about a year and a half, it's been at the same amount, which is like almost $16,000. And that's his main debt that he's really trying to get under control and off of his credit. So I didn't know if this was something that could go to the credit debt counseling and to try to refinance his interest rate or just a more, that's the main debt that we're trying to really get a hold of. He does have a car loan, a truck loan that he does really well paying on. His credit score is I think above 750.

And so he's been doing really well. But any tips on the school loan? It's not a federal loan. So obviously he's not getting many breaks for Sallie Mae. Yeah, unfortunately credit counseling is not going to be an option here, Glenn. I love the idea that he wants to get this paid off as quickly as possible.

You're right. Sallie Mae loans generally are private. That wasn't always the case. If there's an older loan, it could have been a federal loan, but all the more recent Sallie Mae loans are going to be private loans. So you don't have to think about that, which gives you the option to go out and refinance this. So if he has a good credit score and perhaps his income is stronger now than it was in the past, he could go out and look at perhaps refinancing to a lower rate. Although in this current interest rate environment, that's probably not going to be an option. Even if he's improved his credit worthiness with rates going up, he's going to be hard-pressed to find something lower. So I think at the end of the day, even though he doesn't have to worry about giving up the federal repayment options, which is what we're generally concerned about, if somebody were to refinance a federal loan and then gives up that income-based repayment and some of the other benefits of a federal loan, that's not applicable here. But at the same time, I think given that rates are higher, he's probably going to need to just stick with what he has. So then it just comes down to keeping his lifestyle in check, having a budget, getting on a plan and trying to free up as much as possible, protecting himself in terms of as his income rises, not allowing his expenses to rise along with it so that he can get as much margin every month going to that student loan as possible to get that paid back just as quickly as he can. But programs like credit counseling and others really don't apply here to student loans, so he's probably just going to need to stick with what he has. Okay, okay.

So I'll talk to him about that. Can I ask one more question regarding the kids in this age group? So for them, I have a daughter that's in her mid-20s also, and so Roth loans, are there any that you would recommend for them? Not Roth loans, a Roth account? A Roth IRA. Yeah.

Yes. Yeah, so the key is to get it open and just start contributing systematically. In terms of the investments inside of them, just buying a high quality stock mutual fund that really just purchases the broad market index from one of the big firms, I'd probably recommend Fidelity or Schwab as the place to open that Roth IRA, and then you can use either of their robo-advisor solutions to basically have a low-cost approach to capturing a stock market index that's just going to mirror the market as it rises and falls.

But the key is to get the systematic investments going into the Roth, meaning a contribution every month so that you can dollar-cost average in up to the $6,000 they can contribute this year as long as they have at least that much in earned income, and I would point them again to probably Fidelity or Schwab to get that open and get started. All right? Okay. Sounds good. Thank you so much. Okay. Thanks for your call today.

God bless you. Let's see. We'll head to Chattanooga.

We've been there twice already today. We'll go back. Howard, how can I help you, sir? Hello. How are you?

Doing great. Thanks. Yes. My question is, I have just started a new job, but I'm putting 8% in a Roth and then putting 8% in a 401k, but I didn't know. I guess my question is, how much can I put in those and not be penalized? And my age is 48.

Yeah. So under 50, you can put a good bit away. You can put in up to $20,500 this year. That's going up to $22,500 next year in the 401k. That'll come through salary deferral, so out of your paycheck, and then you can do on top of that another $6,000 under the age of 50 this year into a Roth IRA. So between the two, you could put away $26,500 between the 401k and the Roth. Right. Now, what did you say the amount was on the Roth?

I'm sorry. $6,000 for the Roth for this year and $20,500 for the 401k. Okay.

All right. I'm just having a flat like 8% put in each one. And what happens if you exceed that amount?

Well, you don't want to do that. So you're probably fine in the 401k. The question is if you're overfunding that Roth. So you're going to want to look at how close to $6,000 you are in the Roth. Now, you said you're having 8% put into it automatically. Are you talking about a Roth 401k? Is this happening through your employer or is this a Roth IRA that you set up? It's through my employer. It's managed by fidelity. Got it. Okay.

So let's back up just for a second based on what I told you earlier. So these are both 401ks. You can only put in up to the maximum amount between the two. So you can put in up to $20,500 for the year in all of your 401ks combined.

The IRS doesn't care how much you put into the Roth versus the traditional. You just can't exceed $20,500 between the two. So you just need to go look at how much you have going in. Your HR department should be on top of this. I doubt you've overcontributed, but the additional $6,000 I was talking about would be if you were contributing directly to a Roth IRA. That's not what you have here. So you just need to check with your HR department or the plant administrator and just see how much you have going into those two. And between the two, the Roth 401k and the traditional 401k, just make sure you don't put in more than $20,500 for the year.

If you do, you're going to have to take some back and you'll pay some penalties. Howard, thanks for your call. We'll be right back.

Stay with us. Great to have you with us today on MoneyWise Live, where we apply the wisdom from God's word to your financial decisions and choices. As we head toward the end of the year, it's a great time for me to remind you that MoneyWise is listener supported.

That's right, we do what we do on the air every day as a result of your generous support. And if you'd consider a gift, we'd certainly be grateful, especially here at year end, as we not only try to round out our giving for this year from listeners, but planning for next year as well. And if you'd like to give a gift to the ministry, you can do that quickly and easily online at MoneyWise.org.

Just click give, again MoneyWise.org, just click give and you can not only find a secure form to give online, you'll find our mailing address to send a check or even the phone number to contact our team. Thanks in advance. All right, back to the phones we go to Idaho. Patricia, thank you for calling.

Go right ahead. Yes, my husband and I are selling an apartment building and we're trying to decide what to do with the funds. It's all paid for, so there's no debt on it whatsoever. We don't want to put it into the 1031 exchange because we don't want to take on more responsibility and things to do. We're not excited about putting it in the stock market because really we've been advised maybe not right now. So our financial investment person and our accountant have recommended that we put this money into something that's called a real estate investment trust and that way it's considered to be an exchange.

We won't have to pay the taxes and the capital gains on it right now. So I'm wondering what your opinion is of that type of a trust. Yeah, so essentially a real estate investment trust is like a mutual fund for real estate, which gives you the benefit of real estate ownership but in a more passive environment and with much more diversification because instead of being in one particular piece of real estate, you would be in multiple properties. Depending on the fund, it could be in commercial properties or residential or a mix of the two.

So anytime you can get diversification, it's usually a good thing because you're not at the risk of one particular property. The challenge is that in just about every case that I know, you can't use a 1031 exchange with a real estate investment trust except for some very limited cases with something that's called a Delaware statutory trust or a DST, which is essentially like a real estate investment trust, has similar benefits and it's a trust that owns one or many properties so you can still get the same diversification of a REIT. You may have 10 or 20 properties and it can qualify for a 1031 exchange but you're going to need to have somebody who really understands this world, who can act as your intermediary and then you're going to need an agent that's also familiar here.

Typically, you'd have an attorney that is a part of this team and then your CPA. So you're going to need competent professionals who really understand this space and like I say, unless there's something that I'm unaware of, everything I've ever seen is that real estate investment trusts do not qualify as a suitable replacement property for a 1031 exchange because the IRS Internal Revenue Code says that it has to be a like-kind property and real estate investment trusts just don't qualify as a like-kind property. So I would do quite a bit more due diligence, Patricia, before you proceed with this and really have somebody who specializes in this area to help you make this decision. I can understand why you'd want to do the 1031 to kick the can down the road on the capital gains.

That makes sense and if you really are leery of the stock market and like owning real estate, if you go into something like this through a DST that could qualify for a 1031, then I like the idea that you'd get more diversification as long as you have somebody who's managing it that's really experienced and they're selecting properties that are very high quality that are going to perform well for you over time. Does all that make sense though? Yes.

Yes, it does. Okay. So I think you need to do a bit more research and due diligence on this to understand exactly what's being recommended and again, if it is a real estate investment trust, I would do a lot more research on it because my experience is it wouldn't qualify for that 1031 exchange and the last thing you'd want to do would be to go into something like this and have some surprises. So we appreciate you checking with us today.

Let us know how it turns out but if you do find a suitable replacement that qualifies for the 1031, I think the direction you're headed could be a great option for you guys in terms of what you're trying to accomplish. We appreciate your call today. Hey, before we head back to the phones, it's Monday which means our good friend Bob Doll stops by. Bob is Chief Investment Officer of Crossmark Global Investments. He's a Wall Street veteran. He publishes not only his annual top 10 which we'll be seeing here in the next 30 days but also his weekly investment commentary called Doll's Deliberations. He weighs in on his market analysis each Monday and he joins us today. Bob, good afternoon.

And to you, Rob. A market selling off today. It seems like, well, perhaps the China situation may be weighing on the market most heavily.

Is that what you're seeing? Yeah, that's the main excuse given and it's a legitimate one. China is big, it's important and unrest there is pretty unusual so people are taking it seriously. But I think it's also the market's run hard in the last several weeks, is a little tired. We have earnings expectations that have to come down some more.

The Fed's not done raising rates, inflation is still an issue and I think the market is just saying, okay, I hear you, I think I'll sell off today. Bob, how concerning is what's happening in China in terms of its ability to spill over into U.S. economic productivity? Well, without question because of its size, China is hugely important and of course we've been under a lockdown in many cities in China already. So economic growth has faltered there already, Rob. And perhaps we're going to see more of that, which is not great news of course for China itself, for the immediate region and again, because of its size, the entire globe. Could that come to the United States? Well, you know, if you're going to tell me some cities are going to lock down, I don't think that probability is very high. I guess we could get there, but the spillover effects are not pleasant.

Yeah, no question about that. Bob, talk to us about what you're looking at in terms of your deliberations this week, particularly related to the Fed and the possibility that we could see maybe a slowing of the rate hikes, but also you talked a good bit about just monetary policy. Yeah, it's not just the Fed and the Fed funds rate, but it's also the Fed's balance sheet and as you just pointed out, money growth. Money growth peaked almost two years ago, 25% growth rate year over year. That's a lot of money being printed. Year over year today, negative.

It's smaller than it was a year ago. That's a big change and has negative economic consequences. The Fed still has to deal with a massive balance sheet as it perches lots of securities to help keep interest rates low and now, of course, as they raise rates, the speculation is they've gone a long way in a short period of time, which they have. Maybe it's time to step back and say, let's see what impact our rate increases have had on the economy, which happens with a long and unpredictable lag. It's almost certain they will go 50 basis points, not 75 as they've been doing here in the month of December as that comes up. And then the debate is, will they do another couple of 25s and wait and see? Will they pause sooner? So we're in the later stages of this round of Fed tightening from a Fed funds rate standpoint and now the impact on the economy is going to be felt.

Yeah, that's helpful. And then finally, Bob, I know you were talking about just the next decade and tempering our expectations in terms of market results. Not that we'll be negative necessarily, but that we may be in more of a sideways market. What are the implications of that for the average investor?

Much more difficult. In fact, the white paper I'll probably write in the first quarter will be an update to the one we wrote the first quarter of this year when the market was near its high. And we said, be careful with your expectations. Actually, one of the benefits of a bear market is prospective returns get a little bit better, Rob. Not that they're back to what we've experienced in the last decade or so, but they're going to be more mediocre. And so investors have to educate themselves not to expect those kinds of returns and get used to a bit more temperate returns, probably in an environment, as you and I talked earlier, where active management does do better. When the market goes up 15% a year, the index funds and the passive products do very well, appropriately so.

But in a more mundane return environment, perhaps the stock picker, the bond picker can add some value to portfolios and investors should pay attention to that. Very good. Bob, always great to have you along, my friend. Enjoy your week and we'll talk to you next week.

Sounds like a plan. Bye bye. All right. God bless you.

Quickly to Florida. Eric, I've got just a minute left. How can I help you, sir? Yes. Good afternoon. I had two questions. What is the best way to begin paying down old debt on my credit that are 90% hospital, non auto, non eviction? Okay. And what was the second? The second one is now with those debts pending, are there any banks considered safe to deposit money into without funds, without notice on behalf of those companies?

Yeah. Let me just weigh in on the first, unfortunately, because I'm out of time here. The key for you is to go ahead and pull a copy of your credit reports at annualcreditreport.com. Get an up-to-date listing of everything you owe. Let's get the money set aside that you have available either on a monthly basis or on a one-time basis to pay those back. Then start contacting each of those smallest balance to largest and let's negotiate either a payment plan or a payoff.

Get it in writing and then start paying those debts back one at a time. You can do it. Just stay after it. Thanks for your call today. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to my team today and we'll see you tomorrow. Bye bye.