12/5/2022_MWL

Hi, everyone. My name is Emma, and I serve as a producer here at Moody Radio. I want to take a quick second to tell you about our newest podcast, 52 Weeks in the Word. This podcast hosted by Trillia Newbell will walk you through the Bible cover to cover in 52 weeks. Each week, Trillia sits down with a guest for a 10-minute conversation about the weekly reading, Bible reading habits, and spiritual disciplines.

Some of these guests include our very own Chris Brooks, Jen Wilkin, Nancy Guthrie, and many more. If you've ever wanted to read the Bible in a year, now's your chance. Listen to the trailer, follow and subscribe on the Moody Radio app or anywhere you listen to podcasts.

Episode one drops on January 1st. Great to have you with us today on MoneyWise Live. I'm Rob West, your host, taking your calls and questions. Let's turn the corner and talk anything financial.

What's on your mind today? We'd love to hear from you. The number to call is 800-525-7000. We're taking your calls on really any financial topic, whether it's your credit score, debt repayment, your long-term savings, maybe it's your spending plan or how to set up that emergency savings fund and fund it on an automated basis, whatever it might be. We'd love to hear from you. Again, 800-525-7000.

We've got some lines open today, and we'd love to hear from you. Before we head to the phones, a quick announcement, just about some exciting changes happening here at the Ministry of MoneyWise right after the first of the year. We're pleased to announce that on January 2nd, 2023, the MoneyWise radio show will have a new name. It will be called Faith and Finance Live, along with our Faith Fi app and the website at faithfi.com.

That's faithfi.com. You know, as an organization, we sensed the need to strengthen the way we express the Christian worldview of faith and finances. As you know, if you listen to this program, our legacy should be more than simply being wise with money.

We should be used by God as faithful, selfless stewards to advance his kingdom. So we're renaming the ministry to Faith and Finance. And don't worry, we'll be the same trusted voice, continue to bring you the best biblical financial content and resources to be really to help you be a good and faithful steward. So listen for our name change.

But again, everything else remains the same. Coming January the 2nd, right after the new year, will be Faith and Finance Live. And we're excited to further strengthen the way we allow you and help you to integrate your faith into all aspects of your financial decisions. All right, we're going to be taking your calls today.

We've got lines open. We'd love to hear from you with whatever you have on your mind financially speaking. The number to call is 800-525-7000. Again, 800-525-7000.

Let's begin with a couple of emails today. By the way, if you'd like to write to us and have your question read on the air, you can do that by simply writing to us at questions at moneywise.org. This one comes from Anne. She says, We try to honor God by tithing on the gross income from our jobs. We own and rent out two single family homes.

One is paid for and one has a mortgage. Should we tithe on the total amount of rent we receive from our tenants or on the rental income minus expenses? And this is a great question and clearly you want to honor the Lord with your finances and in doing that, give a tenth, a tithe right off the top. I want to encourage you to differentiate between your regular income and what might come in directly to you, whether that's a Social Security benefit, a W-2 check, a gift, something like that where you would give off of the gross amount, a tenth of the first and the best back to the Lord.

But I would love for you to distinguish this rental property as almost a business. And as we think about giving a tithe on a business activity, we really do need to look at the net proceeds because in certain businesses, if we were to give a 10% right off the top, the business wouldn't be sustainable. So in this case, you would look at what is my increase as it relates to this investment property. Well, your increase would be the amount that you receive on a monthly basis after expenses are taken out. So you could evaluate that on a monthly basis.

You could evaluate that on a quarterly basis but specifically as it relates to these rental properties, I would look at the after expense numbers. So after you take out debt service, after you take out any marketing expenses, maybe what you're putting aside for maintenance of the property, certainly taxes and insurance, after all that is taken out, you'll have a gross profit amount that you would then tithe on as a part of your business activity. And I hope that's helpful to you as you think about how to give as unto the Lord specifically as it relates to this investment property.

And I know the Lord will be pleased by that activity. Again, if you would like to write to us, we try to read as many of these questions as we can on the air. The number or excuse me, the email address to send that to is questions at moneywise.org. All right, let's get to your phone calls today. We've got lines open at 800-525-7000.

We're going to begin today in Orlando, Florida, WKES. Hi, Jane, how can I help you? Hi, so I'm turning 50. And I was just trying to see what would be the best options to start for a retirement plan. What we have at our job is employment stock ownership that can't be touched until 55. So I was just wondering, like, what would be the best start off to just try and start putting away some stuff for retirement. I don't have children or anything like that.

And the only major bill I have is my house. Okay, yeah, very good. So the ESOP that you have, is that the only retirement plan or are you offered a 401k or some other retirement plan that you can contribute to alongside that? Exactly, that is the only retirement plan.

Okay, very good. So the next step for you would probably be a Roth IRA. And until age 50, you can put in for this year 6000. You could put in another 1000 once you turn 50 and that amount is going up. I believe in 2023, it'll be up to 6500 that you can contribute.

You'd want to open that with one of the major brokerages, probably Schwab or Fidelity. And then you could put that in systematically. So you could put in, let's say, 500 a month moving forward. If you have the ability to do more, I try to get as much as you can up to the 6000 in before the end of the year. So that is right here in the month of December, because the annual contribution limit is by calendar year or by tax year. So you could put in a full 6000 if you had the ability to do so. And then you'd have the ability to do another 6500 on top of that for 2023. But if you were to systematically fund that Roth IRA alongside what's growing in your employee stock ownership plan, I think that would be a, you know, really get you going in the right direction in terms of building additional assets.

Does that make sense? Perfect. Thank you.

Okay. Yeah, it's a Roth IRA. You'll put in after tax money, but that'll grow completely tax free, Jane. And I think that'll be a great additional tool in your retirement tool belt. Thanks for calling today. 800-525-7000. We've got several lines open today, perhaps one for your question on anything financial.

Again, 800-255-7000. We'll take a quick break when we come back. David, we're coming your way in West Palm Beach. Much more to come on MoneyWise Live.

Don't go anywhere. We'll be right back. 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. We've got some lines open today for your question. Financially speaking, the number to call is 800-525-7000. That's 800-525-7000.

Our team is standing by and we'd love to hear from you. We just heard from Rick. He asked a follow up question to our previous caller just before the break about Roth IRAs, specifically about the income phase out for the ability to contribute to a Roth IRA. Basically, that income limit is as follows. What's called your modified adjusted gross income must be under $144,000 for tax year 2022 if you're filing as a single person in order to contribute to a Roth IRA. If you're married filing jointly, that modified adjusted gross income would be under $214,000 for the tax year 2022. Above those limits, you're no longer able to contribute to the Roth IRA.

There is no income limit for the traditional IRA. This is for the Roth IRA alone. What I would also say though, Rick, is there is a way to contribute through what's called a backdoor IRA, a Roth IRA.

We could talk about that. It's a little more complicated. You could do some research on that but you could look at perhaps using that lever to still get funds into an IRA even if you're beyond the limit.

Specifically, in the case of the Roth, those would be the caps. We appreciate you asking that follow up question. 800-525-7000 is the number to call. To West Palm Beach, Florida, David, you'll be our next caller. Go ahead, sir. Yes, sir. How you doing? Good. How are you? Great. Great. I'm glad I was able to get you.

Excuse me. Yeah, what I was asking, telling your assistant on the phone is that I'm going to turn 65 in February. So I'm also going to wait for like Social Security in a few years, not more, 67 I guess, probably 20%. But the good thing is that after so many years of struggling, I finally won a VA case disability. So I'm at a 90% situation, so it's a couple of thousand dollars a month, tax-free, and you are the benefits with that. So my question was just, you know, I'm paying off my debts and I just started getting it, paying off my debts, which was air conditioner. I had to get a new air conditioner, that's paid for. Some car repairs, that's paid for. The car I own, I have 43,000 on my condo.

Excuse me. So I'm trying to also, once I get this money to invest a little bit, you know, put some in what you call the savings emergency fund. Thank you. You know, that kind of stuff. I didn't do very well over the years because I went through with the bars and this and that and the other thing. So pretty much stripped me for a while. Now I'm just picking up again.

Yeah. Well, I like the priority order you're describing here, David. First of all, thank you for your service and I'm delighted to hear that you're getting this disability compensation.

You are correct. That is a tax-free payment to veterans who either got sick or injured while serving in the military or if your service made your existing condition worse. Taking that and using that to pay off debt makes a lot of sense. I'd love for you to be able to get completely debt-free. I think building up that emergency savings in a liquid savings account where you're able to put that perhaps in an online bank or in a couple of percentage points a year in the way of interest. But getting that up to three to six months worth of living expenses will go a long way to ensuring that you don't have any other debts incurred as a result of an unexpected expense or something that you're not planning for. Beyond that, I'd look at other kind of short-term savings goals that you have.

Is that car going to need to be replaced and do you need to set something aside for that? But if you truly get beyond the emergency fund, you're debt-free and now you're looking to put some money away for the longer term, I love the idea of a systematic dollar cost averaging type investment where you'd open a brokerage account probably at Charles Schwab or Fidelity. You'd make a systematic contribution let's say of a couple of thousand dollars a month into that account. If you have earned income, you could put it into an IRA. If you don't, you could just put it into a taxable account and then systematically invest that into the market.

As long as you have a minimum of five years but even better than that 10-year time horizon where you wouldn't expect to need the money, then I think you could use something just getting starting out like the Schwab Intelligent portfolios where you're using indexed ETFs to capture the broad moves of the market and by investing monthly your dollar cost averaging which just means whether the market's up or down, you're putting the same dollar amount in. When the market's down, you're buying more shares. When it's up, you're buying less. But over time, you're systematically moving into the market and then you just capture the broad moves of the market. You wouldn't be looking at the kind of ebb and flow on a monthly or quarterly basis.

We'd be looking at it years at a time and I think the idea would be that you'd be able to build up an S-Stag here over time so that if down the road you had some major expense, some real need, you'd have the ability to pull from that or even convert it to an income stream as needed. Does that make sense? Yes. Is there any way some of that information can be sent like email or something more?

Yeah, let's do this. You can go back and listen to a replay of the broadcast at moodyradio.org. Just click on MoneyWise Live and you can listen to this particular broadcast. But let me also send you a book called The Sound Mind Investing Handbook.

I think this will give you a good overview of investing from a biblical perspective that will be really helpful to you as you think about all of these things and perhaps give you some education even a little broader than of course what I've been able to share here in just a couple of minutes around investing and how you might think about that in light of your overall financial picture. So stay on the line. We'll get your information and get that right out to you and we appreciate your call today. 800-525-7000 is the number to call. When we come back from this break, we'll be talking to Wendy and Leah.

Before we head to that break though, another email. This one comes from Steve. He says, My son is 29 and debt-free. He married a woman who has almost $50,000 in college debt. They're both believers, good with money.

They serve in ministries that don't pay much. My wife and I plan to help them based on some advice I once heard you give a caller. What would you say if we offered to match their debt payments to help them? What I would say is I love that plan, Steve. I think that would be a great way to help them and also at the same time encourage them in a very responsible money management decision and that is to reduce their debt. So as long as you all can afford to do that and it won't impact you adversely in terms of derailing your own retirement savings or causing you all a hardship, then I would say that's a great idea.

Again, I think it's the right way to do it because you're not just dropping it in their lap, although if you decided to do that and just wanted to bless them with kind of some unrestricted gifts, you could do that. But I love this idea of saying we want to partner with you to help you get out of debt completely and so every dollar you make will match it. And I know they'll be encouraged by that as you come alongside them.

So I'd communicate it up front, the heart behind it, why you're doing what you're doing, and then you all get started in that regard and I'm confident they'll see that as an enormous blessing. Steve, thanks for writing to us. Questions at MoneyWise.org if you have a question you'd like read on the air. We're going to take a quick break, then we're back with your questions at 800-525-7000.

Stick around. Great to have you with us today on MoneyWise Live. I'm Rob West. We'll head back to the phones in just a moment, but first each Monday in this segment of the broadcast, we're joined by our good friend Bob Doll. He's Chief Investment Officer at Crossmark Global Investments.

You can learn more and sign up for his weekly dolls deliberations at crossmarkglobal.com. Bob, good afternoon, sir. And same to you.

Happy Monday. Well, the stock future, well not futures, but the stock market actually selling off today, I guess, as all eyes are on the economic data due out this week. Is that right?

Yeah. And also renewed concerns about inflation and how much will the Fed have to do from here. And we got a good inflation report last week. As you know, Chair Powell had an extensive speech where he talked a lot about moderation and the market saying, well, not so fast. We still have an inflation rate.

Yes, it is falling, but to still unacceptable levels. So one day the market likes it, the next day not so sure. Yeah, exactly right. And as you point out, if the Fed is going to really focus on keeping rates up for a considerable period of time, perhaps as high as 5 percent, that's going to weigh on the markets and could likely cause a recession, right?

Exactly, Rob. 5 percent is a lot higher than we've been in a long time, many years. And the point I keep making is there's a lag impact on what the Fed does and when it hits the economy. And as you know, they've raised rates at a pace faster than we've ever seen before. And so the impact of most of what they've done, we've yet to experience in our economy.

So this is not a simple translation business. And that uncertainty will spook the market from time to time. As you point out, if they go to 5 percent, stay there for a while, it's probably going to be hard to avoid a recession, even a soft one.

Yeah. And we're going to see that, Bob, showing up in the earnings of U.S. corporations. What are you expecting there with regard to earnings going forward? Well, certainly we think the estimates are too high. If we have a recession, they may be a lot too high. Using S&P 500, the consensus at $230 for 2023, we're using 200. So we think there's more downside reductions to come.

Markets never like declining earnings. Yeah. And globally, Bob, more of the same as we look beyond the U.S.?

Yes, sir. A lot of weakness in lots of places. I guess the asterisk compared to our conversation a week ago is that China is loosening up some of the COVID restrictions, the lockdowns, and that caused stocks in that part of the world, in particular, to do well, particularly the more economic sensitive ones, which in a weird way puts the Fed back in a box of trying to get stronger. Does that mean the overall inflation rate stays higher for longer and they have more work to do? So, you know, is good news good news or is good news bad news?

Market doesn't help. Yeah, Bob, we talk a lot about interest rates when it comes to the Fed. What we don't perhaps talk as much about is just the Fed as an investor, perhaps by all accounts, the largest investor in the world. What are the implications on that side as we think about the Fed shrinking its balance sheet?

Yeah, great point. We all talk about the Fed funds rate and we don't realize or we do realize and don't want to talk about it because they have a massive balance sheet having purchased so many of those securities to keep interest rates low for many years to keep people to encourage people to do business, businesses and companies. Now they're beginning to reverse that. And so the unknown is how much of an impact will that have? Certainly not a positive impact, but how fast will they reduce that balance sheet? The good news, Rob, is no one has a gun to their head and says you have to reduce that balance sheet.

So if they're adverse effects, they can stop for a while. Yeah. Bob, what about the state of the U.S. consumer? I know you had some remarks about the savings rate in your dollars deliberations this week.

What would you have us to know there? You know, the bifurcation of the consumer is probably the most important point. That is to say, higher income people, kind of a higher half even still has a lot of cash on their balance sheet accumulated during covid. The lower half in particular, the lower quintile has spent that cash.

And so many of them are struggling slash using credit cards to purchase things. We have a bifurcated consumer and that's creating analytical difficulties. Overall, the consumer is still in OK shape, but that differentiation is really important to observe.

Yeah, really helpful. Bob, as we wrap up today, one final question. This one, perhaps on a slightly different topic, was really blessed by the article you and your wife, Leslie, wrote on the Gospel Coalition's website about planning your giving as a married couple. You know, here in the final month of the year where a lot of folks are thinking about generosity, what have you and Leslie learned about giving as a couple just briefly that you might share with us as we wrap up? I think we've learned that we have differences of opinion that might surprise you. And therefore, we have to be patient with one another, listen to one another, converse about it, pray about it.

You know, the Holy Spirit can move Leslie and not necessarily move me or vice versa. And we have to be able to give into that. So what we've done over time, among other things, is Leslie gives away about 20 percent of our giving. I do about 20 percent and 60 we do in common. I love that. Yeah. You guys have come together to make sure that you're each reflecting where God has you all in terms of your passions and priorities with your giving.

But then the bulk of it, you're coming together to do that as a couple. That's great. Well, Bob, always appreciate your insights, my friend. Go ahead. Of course.

We'll continue again next week. I was going to say, and we can't forget, God owns it all. None of it is ours. Even the part we don't give doesn't mean it's ours.

It's going to be given some way somehow later. That's right. Well, thanks for reminding us of that today. And that's a great place for us to finish. Enjoy your week, sir. We'll talk to you next week.

Sounds like a plan. Bye bye. All right. Bob Doll, chief investment officer at Crossmark Global Investments.

Learn more at Crossmark Global dot com. All right. With our final calls for the day back to the phones we go. Wendy in Ohio, thank you for your patience. Go right ahead. Merry Christmas, Rob. Thanks for taking my call.

Yeah, sure. Hi, I have a question about a life insurance plan. When my husband and I got married about 11 years ago, my father in law gifted me with a life insurance policy on my husband. I had been thinking that it was a paid up policy. However, he recently called my husband and mentioned that the our benefits were going down because we hadn't paid anything into this policy, which I wasn't aware that we needed to be.

He is the owner. I'm the beneficiary. It is a traditional universal life policy. I'm not sure if it's something that we should keep and pay into the benefit.

In the end, if something were to happen to him, it would be the looks like twenty thousand nine hundred something like that. So I wasn't sure about this policy at all. I'm not familiar with this type of policy. I'm just not sure what to do with it.

Yeah, well, it's a great question. And I think the question you have to ask is, first of all, do we need the insurance? And if the insurance is no longer needed, especially permanent insurance, which is going to get more costly over time as the mortality expense increases and therefore the premiums increase, if you don't need that, could you either drop it and go without that life insurance benefit or death benefit or should you replace it with a term policy? The only other piece of this to look at would be what is the internal rate of return on the money inside of it.

And as you said, because you haven't put anything in it, it's actually declining in value. So typically, in a situation like that, if it's not something that either the death benefit is needed and there's not some compelling internal rate of return inside the policy that's growing the funds that have already been put in it, I would say collapse the policy, take out any cash value that you have and move on. And again, you could replace it with a term policy for a period of time until you all have built up assets where you don't need it any longer or you may already have other insurance that's serving that purpose.

Give me your thoughts, though. Well, my husband is a pastor, so we don't have any other life insurance on him or death benefits, as you said. However, we are not in debt at this point in our life. He's 47. And so this would be the only policy and at this point where something happened to him, we would be I would be okay.

However, in the future, we wouldn't have, you know, like retirement benefits or anything on him because he is a pastor. Okay. All right. Yeah.

So a couple of thoughts there. I think first is you definitely need coverage is probably more life insurance coverage than you have right now in that universal life policy. So before you do anything with that policy, I would go ahead and get a new term policy in place with him being 47. You'd probably want to think in terms of a 20 year level term policy that's, you know, I would say as a starting point, ideally, you'd have 10 times his income. If you couldn't afford that, you know, much coverage, let's say he's making 75,000 a year, that'd be 750,000 in death benefit. You know, as a 20 year policy, if he's in pretty good health, that shouldn't be terribly expensive. And that would give you a significant asset that if the Lord were to call him home, you could convert that into an income stream.

As you said, you don't have any debt that would need to be paid off. So you would just basically use that for your other living expenses. And then you could look at canceling this policy, taking the cash value and using that as kind of a starting point to begin building up your retirement assets over the next 20 years. I'd be looking at, you know, whether there's a there's a retirement plan available to you at the church grade. If not, could we look at starting one? If not, at the very least, you know, let's do a an IRA or if you don't, you know, if you qualify for one, maybe a SEP IRA, where you can put away a little bit more even.

But I think the key is to get the right amount of life insurance in place and then do as much saving as you can toward retirement in a tax deferred environment so that you all can really leverage these next 20 years to build up a significant asset to provide the income to offset Social Security, assuming he hasn't opted out. I've got to get to the end of the program here, Wendy, but you stay on the line. We'll finish up off the air and we appreciate your call today. That's going to do it for us today, folks want to say thank you for being along with us.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Jim Henry, Deb Solomon and Dan Anderson. Thank you for being along with us as well. Hope you have a great rest of your day and we'll look forward to hearing from you tomorrow. Bye bye.