The Importance of Financial Margin

Margin is one of those important things in life that we often take for granted, and that can lead to trouble.

Hi, I'm Rob West. Margin basically means something extra, a little extra time or even distance from the car in front of you. It's critical, especially with your finances. I'll talk about financial margin today, and then it's onto your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial journey. Well, you may not always connect the word margin with personal finances, but you're probably familiar with its use in the business world, where the term is usually profit margin. When we buy an item at the store, we don't consider how it got there, but someone had to make it, usually many people working for a company. They all need to be paid wages. Then salespeople had to get retailers to buy the product or service, and they need to be paid a salary and often a commission on top of that. Transportation people have to get the product to retailers, and they need to be paid.

Then retailers have to mark up the product because they have bills to pay and need to make a living too. So you've got several business entities involved in getting that product to where you can purchase it. At each step along the way, the manufacturer, trucker, and retailer all need to have a sufficient margin or profit to make it worthwhile for them or the product never gets to you.

Now, how much is sufficient? Well, it varies widely depending on the product and how much it costs to bring it to market. Other factors play a role, competition, market size, and volume. The more units you sell, the smaller your margin needs to be. A new automobile has thousands of dollars of margin, but a lot fewer of them are sold than say hamburgers at fast food joints.

You know, so many billions served. If you sell a billion of something, even with only a few pennies margin, you'll probably do all right. So how do we apply this lesson to our lives? Well, the same principle holds true when it comes to our margin and not just for money, but for our time and energy as well. How much do we have left over after all of our obligations are met? You have your job, family commitments, chores around the house, and obligations to your church. So you must also prepare for unexpected or irregular expenses, a broken water pipe or car repairs. All of these involve time, money, and effort on your part. Do you have time and energy left over to recharge your batteries and spend time with God?

That's another form of margin that we all need. Now, I'm not equating time with God to your other obligations. That's not just something to check off your to-do list. Time with God isn't something we have to do. It's something we get to do, and it's critical for living a balanced life with our time, families, service to the Lord, and of course our money. Now, what does having margin with our personal finances look like? Well, it simply means having extra for the so-called rainy days, family emergencies, medical expenses above your deductible, or helping a visiting missionary or college student if God speaks to your heart.

The key to acquiring that margin is living on a budget or a spending plan to help you decide in advance where your money will go. Did you know there are only four things you can do with money? You can live on it, give it away, owe it to someone, or grow it. Every dollar you've ever made or ever will make goes into one of those four buckets. A budget is just a way of deciding ahead of time what goes where. By the way, this isn't the same as balancing your checkbook, for example. That's just seeing where your money went, not deciding in advance where it should go.

If you haven't downloaded the Faithfi app at your app store, we encourage you to do so. It uses the envelope system and gives you three different ways to set up your budget, making the process really easy. If you're not making spending decisions ahead of time and giving yourself financial margin, your income won't be able to keep up with your outgo. As you set up your spending plan, you may see that you have more month left over when the money runs out. If that happens, you've got to make some changes, find a way to increase your income or reduce your expenses, or both. The key is learning to live on less than you make, having margin or money left over at the end of the month. Without it, you'll slide into debt and never be able to save for the future. And here's a bonus. When you finally get financial margin, you may find that you also have more physical and emotional margin.

You'll sleep better, feel more relaxed, and be better able to use your spiritual gifts to serve God and help others. So that's the importance of margin, financial and otherwise. All right, your calls are next, 800-525-7000. I'm Rob West and you're listening to Faith and Finance Live, biblical wisdom for your financial decisions. We'll be right back. I'm so thankful you've joined us today for Faith and Finance Live.

I'm Rob West. All right, it's time to take your calls and questions today on anything financial. The number is 800-525-7000.

That's 800-525-7000. Why don't we dive in today? We'll begin in Florida.

To Fort Myers we go. Hi, Glenn. Go right ahead, sir. Yeah, Rob.

Yes, sir. Yeah, I've got a question on regarding I-bonds. I know the current rate is 6.89%, but that rate changes, I believe, on May 1st, and that will announce the new rate for the next six months. That's right. But if I was to put 10 grand in and buy an I-bond, let's say today, on March 1st, would I get that 6.89% rate for the next six months?

You would, yeah. So when you lock it in, you get the current rate for a full six months, and then when your rate adjusts at that point after your interest has been credited, which it would be credited to the account at the end of that six-month period, then you would get the new rate for six months. And as you point out, we won't know what that rate is until May. But you won't get a shortened window of time for the current rate. You'll get the full six months prior to receiving the current rate at that point for the following six months, if that makes sense. Yeah, it does. That's what I was wondering.

I just wanted to make sure I wouldn't just get the 6.89% rate until May 1st, and then I'd go to the lower rate, which I'm sure it's going to go down. That's right. But anyway, that was my question.

I really appreciate the answer. Absolutely, sir. Yep. TreasuryDirect.gov is the place to go. You can only buy them electronically there up to $10,000, and then an additional $5,000 could come through a tax refund, but you'd have to note that on your tax return.

You'd get the paper bonds in that way, but that would allow you to put in a total of $15,000 per person, per calendar year. So hopefully that helps you. We appreciate you being a part of the program, sir. God bless you.

To Missouri. Hi, Julie. How can I help you?

Hi. Okay, so I have a question because I have not been the full-time worker at all. I'm currently 40 years old, and my husband's 20 years older than I am, and he is the next five years or so wanting to retire.

He's in the military, and he also has a civilian job. At that point, the understanding is that I would have my kids out of the house out of high school, and then I would take on a full-time job, and I've not done that at all, and I'm concerned for a couple of reasons. First of all, I don't have any retirement at all because I've been only working part-time, and then I don't know if it's better for me to go back to school. I have about at least five years to go back to school to maybe get a degree in a higher-paying field. Currently, my degree is in education, and everything about how I'm wired is like working with helping people, more like a social work. Right now, I'm a therapeutic mentor, and I work with at-risk kids. The things that I do well don't pay very well, and there's just a lot of pressure for me to be the one making a higher income, and I feel like I'm late starting, and I don't know the best advice.

What would you tell somebody going into the situation starting at 40? Yeah, it's a great question, Julie, and I can certainly appreciate that. We've got to balance your passions and giftings with your marketable skills, both today and skills you could acquire in the future, and the cost to attain those by seeking additional education that may or may not pay for itself depending upon what field you're entering in and the availability of jobs as well as the pay that goes along with that particular industry or field. So there's a lot of pieces that have to come together.

Let me ask you this. When your husband retires, will you all, with his retirement, have enough to cover your bills, or will you be dependent upon your income at that point to maintain your lifestyle? From what I understand, now, he normally is taking care of the money, but from what I understand, he would still be working part-time as a counselor, and then I would need to be making some money. Not as much as he does, because he makes like six digits, but I would need to be making some money, but he's 60 and I'm 40, and so there's also that difference that I need to be thinking about as well.

Yeah. Well, the good thing is, though, that I suspect his retirement or at least a portion of it would be available to you even if he predeceases you, which men do on the average. So you'd have that on an ongoing basis, and then obviously the longer the time you have for your work, the more it would pay off if you needed to get some education in order to improve your marketability or perhaps to move into another field where you might have some interest, you'd have some potential for higher pay, and you need to acquire some marketable skills. What I would counsel you to do, perhaps as a starting point, is just to really do some career assessments and try to understand how God's wiring in your life, your interests and passions align with the current job market and what's available or what will be available when that time comes for your husband to retire and you're no longer a stay-at-home mom ready to enter the workforce. I think the work you can do to pray and plan and talk with your husband about that will go a long way to you determining which direction you're going to go and whether you actually need more schooling or perhaps there's a specific certification or track you need to go on as opposed to just seeking the degree. The degree is not automatically required depending upon the field. It may better serve you to go get a specific certification of some kind. For instance, and this is just an example, but if you were going to be a graphic designer, it'd probably be better for you to go take some classes in an art school in graphic design than it would be for you just to go ahead and complete your gen ed degree.

So let me do this and I'd love to make this available to you as our gift, Julie. We work with an organization called Career Direct and they have a career assessment that is wonderful. It's been countless hours of research developed by researchers and a PhD in career assessments, but it not only lays in kind of the skill side of it and the personality and wiring side of it, but it lays in kind of God's handiwork in your life.

It brings the values into it as well. I'd love to make a career direct assessment available to you. It's an online assessment and then we'll have one of the career coaches get on the phone with you and help you in an hour phone call, analyze the results and just see what comes out of that. And perhaps that could be a great starting point to uncover where God may be leading you.

Perhaps some fields or opportunities for work are identified in that career assessment that you haven't even thought of and yet they align perfectly with what you're interested in and kind of how God has gifted you. And we'd love to do that just as our gift, our way of saying thanks for being a part of the program. So if you stay on the line, I'll get your information and we'll get all of that to you so you can get the assessment done, go through the career counseling and there won't be any charge for any of it.

And then perhaps we can talk again about where you go with that information and whether or not schooling makes sense. Does that sound good? Yeah, thank you so much.

Awesome. So you hold the line, Julie, we'll get your information and get that right out to you. And we appreciate you calling today. You know, folks, as we think about how God has wired us, it is so critical to start there, whether it comes to choosing a career or planning a budget, maybe even setting financial goals. How does our faith inform where God is taking us and how can our career or our money, God's money be a tool to help us accomplish what he's called us to do? He has a distinct purpose and plan for each of our lives.

And so uncovering that is one of the great joys that we have. Hey, we're going to take a quick break, much more just around the corner. Stay with us. Thankful you're joining us today on Faith and Finance Live.

I'm Rob Last. We've got a couple of lines open today, perhaps one for your question or your story of God's faithfulness in your life financially. 800-525-7000.

Let's head to Naples. Hi, Harold. Thanks for calling, sir.

How can I help? Hi, Mr. Rob.

My name is Harold. I was just calling because I recently got married and while I was in my honeymoon with my wife, we actually got a timeshare. And the whole idea behind it was to actually put that into rental or Airbnb or purple and stuff like that.

But I just now recently doing all my homework on timeshares and it doesn't seem like it's as easy as I thought it was. It would have been. So I just wanted to know was that a bad investment or why can't I do that as well? And I have a second question too, but I'll wait.

Yeah, very good. Well, it's hard for me to answer that in kind of retrospect. I mean, if you had called me and said, Rob, we're considering this, should we buy it?

And you hadn't made the decision. I probably would have said I get a lot of calls from people saying I bought this and I regret it. Don't get many calls from people saying I bought it and I love it. Doesn't mean they're not out there. I'm just saying the general consensus from folks who buy them, especially, you know, maybe down the road five or 10 years is, wow, I kind of wish I didn't have this thing.

Now, you may have something you're going to use a lot and really enjoy and hopefully it fits into your budget. And if so, that's great as to your ability to rent it out. You may or may not be able to rent it out.

It's not guaranteed. Not all resorts allow you to rent out a timeshare. If yours does, typically you'll need what's called a guest certificate to use the unit. So if the resort doesn't give you those as a part of the timeshare agreement, you'll often have to purchase that for your renters. And then, of course, you just have to be aware that you're responsible for any damage caused by your renters. So you may want to use a timeshare rental company to manage this for you.

Again, assuming that your particular agreement allows for that. Be careful, though. Don't allow yourself to fall for any scams.

There are plenty of them out there. So read all the fine print. Don't pay anything upfront. Do a lot of look at a lot of reviews before you get somebody that can take over the management of that rental for you. Again, if it's allowed.

If you can, that would be one way to cover the timeshare costs by renting it out. But it's not going to be easy. It's going to take some work.

And again, you've got to start with the the agreement itself. So I hope it's something you guys use a lot and enjoy. Unfortunately, my experience, though, with these is just that a lot of folks end up regretting that they made the decision. And if you end up in that case, you can just kind of learn from it and move on.

But in the meantime, I hope you get a lot of enjoyment out of it. What was the second part of that question, Harold? The second part of the question is that my parents are in their 60s now and they do not have like a retirement plan or any sort of retirement funding way to fund like their retirement. And I just wanted to know, like, how can I what can I do in order to help them out with that? Or who can I speak with?

Or? Yeah, I'm retired around 70. Just to give them life because I think my my dad is five and my mom is 62. And so are Yeah. And why don't they have any retirement savings? Have they just been spending everything they've been bringing in all these years?

Well, they're, well, cultural, like they're, my dad's from the island, maybe my mother, when they travel here, and I guess they, they were misinformed about many things. So I see. Okay. Harold, do you happen to know whether they're going to have enough work here in the states paying in to Social Security that they're going to be eligible for Social Security benefits? Right, but it's not enough to sustain the house or anything else.

After retirement, I think, yeah, $1,000, $1,000 for my dad every month. And that's, yeah. Okay, so they will be eligible for benefits. It's just not going to be enough to cover their expenses. Yeah, yeah.

Okay, yeah. And that's typically the case, it was never intended Social Security to cover more than 40% of your pre retirement income. So you know, the key here is they're going to need to just try to work as long as they can. So if they can work another decade, that's going to be really important to try to eliminate as many expenses as possible. So one of the goals will be to have the house paid off by the time they retire, because now that comes off the table, and that's going to just lessen the need they have for resources because their, their expenses, their budget is going to be lower without any debt.

So prioritizing becoming debt free, I think will be really key. And then just leveraging these next 10 years to put away as much as they can, which means living below their means so they have surplus, and then either taking advantage of a company sponsored retirement plan, like a 401k, or just socking as much as away as they can. And, you know, a couple of IRAs, that would be another option, and then just try to build up a little bit of a nest egg that could supplement their retirement. And then what they're likely going to have to do is beyond age 70, they're going to have to be thinking about working part time, you know, hopefully slowing down, but as they're able, generating some income that, you know, once they take Social Security and hopefully build up a little nest egg that they could use to supplement those two income sources and bring in some more funds. The other thing that will be helpful is if they can wait to take Social Security until age 70, every year they wait beyond full retirement age, which is probably, you know, somewhere around 66 and a half, that benefit check that Social Security check is going to grow by 8% a year for every year they wait up until age 70.

So they could have, you know, an extra 24% on their check every month for the rest of their lives if they can wait until age 70 to take it. That could be really helpful as well. So perhaps the next step is to sit down with an advisor or a financial planner and just help them do some planning and just to look at what are their needs going to be, what are their savings goals over these next 10 years, and really put a plan together so they at least know what they need to do and they can have a plan to get there. You can find a Certified Kingdom Advisor on our website. That'd be a great resource to help them. FaithFi.com.

Just click Find a CKA. Thanks for your call, Harold. We'll be right back. We started today by talking about the importance of financial margin, a surplus, a buffer in your financial life. Well, that concept is one of the five big ideas or principles for successful money management. Those are to spend less than we earn, avoid the use of debt, set some long-term goals aligned with your values, and give generously. But in addition to that, number five is to have some liquidity or some margin. That buffer is what's going to allow you to accomplish your goals because we're spending right up to the edge as we get increases even over time or bonuses. If our lifestyle continues to expand with those, well, we're never going to have anything left over to accomplish what's really important to us, accelerating our giving and saving for the future, maybe accomplishing a short-term goal like paying for a car with cash or reducing our mortgage. All of those things require margin in our financial life. The only way we'll have it is if we start with our spending plan and rein in our spending so we can have a surplus at the end of the month. That's a big idea. Easier said than done. If we can help with that, the Faithfi app is a great way to manage your spending.

You'll have clarity and control over your finances, perhaps in a way you never have. You can download it today. Just head to our website, faithfi.com.

That's faithfi.com and just click app. All right, let's head back to the phones. Cindy is in Illinois. Cindy, go right ahead. Hi, Rob.

Thank you for taking my call. I have a question about my granddaughters. I have temporary custody of them and their father has passed away, so they're both getting SSI. The money I have is just in a savings account, saving up for them for when they get older, but it's getting up there now to where I'm thinking I should... I don't know if I should leave it in that savings account or if I should do something with it. Yeah.

Do you have a sense of what the timing is on when this money will begin to be used? Well, right now they're only six and seven years old, so. All right. Yeah.

So we've got a good bit of time here. In your mind, are all of their expenses covered until they perhaps head off to college or start out on their own? Yeah, because my husband and I pretty much take care of most of it, you know. I use their money for them on certain occasions, but not a lot. We want to mainly have it saved up for them for when they get older. Yeah.

Okay, very good. Yeah, so I think there's a couple of options here. Obviously this money has to be used for their benefit, but it can be invested, so it could have the opportunity to grow. So I think you need to start by saying, okay, what is our target for that that we'd want to keep liquid, readily available for expenses related to them that could happen at any time? And that you'd want to put in a savings account. You could leave it right where it is, or depending on the interest you're earning, you may want to look at an online savings account like Marcus or Capital One 360, where you can get, right now, three and three quarters percent. At least you're earning some interest on it.

So I think that would be a great option for that which needs to stay liquid. You know, that which you can lock up a little longer term, you could get a better rate of return, like with a CD. I mean, right now you can get over five percent on CDs. You could look at opening an I-Bond account for them.

Inflation bonds right now are paying six point eight nine percent. That money is not available for a year, but after a year you could get it back and at least you'll know that the money that you put in there is going to offset the effects of inflation, which has been, as you know, very high and that is eroding the purchasing power of this money. So that would be an option there. You could put in up to ten thousand dollars per year per child in an account like that. If it's in a custodial account or if it's just in an account in your name, you know, with them as the beneficiary, then you could put in up to ten thousand each, you and your husband, and then you could earmark it for their purposes. So that would be an option that's got at least a year time horizon, but you're going to get a little better rate of return and you do that at treasurydirect.gov. Beyond that, we could look at investing it. I mean, you could drop it into a 529 plan if you want to earmark it specifically for college and it could grow tax free and some investments for the next, you know, eleven or twelve years between now and college age. But if you want it more widely available, you don't want to necessarily earmark it for college, then I'd probably just drop it into an investment account like with a robo advisor like the Schwab Intelligent Portfolios where you'd open an account in the name of you and your husband. So a joint account, but you'd have one account earmarked for one child, one for the other. So you've got the funds separate. You know exactly what the purpose is and then it would start, you know, automatically investing it in broad stock market indexes. So you're capturing the broad moves of the stock in the bond market at a very low cost. And that would give you the potential to grow it beyond bank products and and CDs and even I bonds.

You've taken a little more risk. But as long as you've got a time horizon of eight to ten years, you know, I'm OK with that. So which of those options and it doesn't have to be one or the other. It could be several of them. But which sound like the most aligned with what you're looking for. Well.

I'd like for him to go to college, but you never know what they're going to do when they get to that age. Yeah. I just I want to do something with I just don't want to lose any of it for them. Sure.

Yeah. Well, so if you don't want to take any risk with it, then you need to stay on the more conservative end. So I mentioned three different things you could do. One is stay in savings. FDIC insured savings backed by the U.S. government. And if you're getting a good interest rate right now where you are, just stay right there. Or you could move it to an online bank and get almost four percent right now. Second option would be I bonds again.

Complete safety because it's backed by the government. And you do that at Treasury Direct Gov. That's paying six point eight percent right now.

And you could get that for the next six months. And then the third option would be put it into some CDs. And, you know, you can get over five percent right now with CDs and you could find the best option for those at bankrate.com. They you could look and see who has the best rates right now with the strongest banks. And as long as there's FDIC insurance, I think you'd be fine there. So those are three options for you to consider as you think about this. If you don't want to take any risk because anything beyond that, you have the potential that you could open your statement one quarter and it's down. You've lost money on paper. But if you don't want to take that risk with this money, I understand that you just have to stay in these other types of products that I'm describing. So why don't you think and pray about that?

Talk to your husband and see which direction you guys want to go. And if we can help further along the way, don't hesitate to reach out to us. Thanks for your call.

Quickly to Florida. Hey, Caitlin, go right ahead. Hello.

Thanks for taking my call. My question is I'm just turned 30 and I don't have much savings. I have a normal nine to five job getting paid average salary.

I'm just wondering from your expertise on how to go about starting to invest or, you know, building up a good savings account for my future. Yeah. Do you have any emergency savings?

That you would fall back on if you had an unexpected expense? I do. Yeah. Okay.

Yeah. So my goal there is three to six months expenses. I'd start there and try to build that up. But once you have that, then I think for the longer term, do you have a retirement plan at work available to you? I just started a year ago, so it's not very much. Okay. Well, I would say that that's really the best option for you. Do they do any matching?

Do you know Caitlin? Yeah, they do. Okay, great.

Yeah. So that's free money. So your goal is going to be to get that up to 10 to 15% of your pay and just have that come right out of your paycheck through salary deferral. Get it in there, put it in some good growth mutual funds at 30 years old or in your thirties. I mean, you have maybe 30 more years before retirement.

That's a long time. And so if you can get this money going into your 401k, get the deduction and just let it grow at 10 to 15% of your pay, plus your emergency fund, you'll be well on your way. Stay on the line. I'll talk a bit more and I want to send you a gift. Thanks for joining us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today. A few lines open, 800-525-7000.

Let's head back to the phones to Illinois. Hey Roger, thanks for calling, sir. Go ahead. Hi there. How are you today?

I'm great. Thanks. Good. Thank you for fitting me into your program.

Absolutely. I gave the question to the lady that took it, but here's what it is. In IRAs, the RMD, QCD, whatever all the initials are, in giving to the church, they put it, the amount, they listed it in with my regular giving. And I said to them, I can't claim it as normal ties and offerings and stuff like that.

The only thing I can, advantage to me is I do not have to claim it as ordinary interest income. Am I right on that? Or can I double check? No, no, it's not possible.

You're exactly right, Roger. So when you make a qualified charitable distribution, the amount of the gift doesn't count toward your adjusted gross income for the year. So it's like you never received the money. And as you said, it can count toward your required minimum, but you aren't allowed to deduct it because it was never added to your adjusted gross income. And that would, in fact, be double dipping if you tried to deduct it on Schedule A. Now, a lot of churches or charities are just not terribly familiar with the QCD because it doesn't happen that often. And so they may just not know exactly how to handle it. What they are supposed to do is give you written acknowledgment of that contribution as a qualified charitable distribution, because you do need to include or I would recommend including that confirmation of the receipt of the QCD from the church with your tax return.

But you are correct. You will absolutely not count that as a deduction if you itemize, because it's not a deductible contribution. That's what I understood, because I know from some other organizations.

Yeah, yeah. So what you may want to do is just go back to them and say, listen, can you adjust my contribution statement? Give me a contribution statement only for my contributions and then give me a second contribution or a receipt of my qualified charitable distribution. And if they're confused, we just maybe you can ask them to ask their, you know, tax preparer or whoever does their financials or something like that, because they just may not be very familiar with this. But they should give you two different receipts on that one for the charitable contributions, which are deductible, and then one acknowledging the QCD. Okay, well, thank you for your time. I appreciate it very much. Absolutely, Roger.

I have to get called in and then I have to try to explain to the IRS. I don't want to do that. No, you don't want to do that. So I'm glad you asked the question and you're absolutely on the right track. I'm thrilled to hear you took advantage of that QCD. It's a wonderful tool. So thanks for being on the program, sir.

We're going to stay in Illinois to Crystal, Illinois. Hi, David. Go ahead, sir. Hi. Hello.

Thank you for taking my call. As I was listening to your radio program, I'm just really interested in what type of investments I could make. I've got a little bit of money that I could make.

I'm a little bit older, 57. And I've got like roughly maybe about $5,000. And I'm just looking for some advice as to what would be the smartest investment I could make?

Yeah, as you think about this 5000, David, kind of what is your thought on this? I mean, what would be the time horizon on it? How much risk would you want to take? And what would you ultimately use it for? Ultimately, I guess I would want to use it for some of my retirement. And, okay, as also a, as, you know, part of the nest egg.

Yeah, yeah, very good. So one option would be just drop it into an IRA. So if if you, you know, have you want to take some money off of your tax bill, you could, you know, put it into a traditional IRA and, and then you'd reduce your adjusted gross income by 5000 for either 2022, if you haven't filed that return, or if you have for 2023. And you get a little bit of tax benefit, and then that money is going to grow tax deferred. And then you'd go ahead and invest it. And you've got a couple of options there with 5000, you probably want to put it in either index funds or mutual funds to see get enough diversification as opposed to buying individual stocks. And if you wanted a more hands on approach, you could connect with our friends at soundmindinvesting.org.

They could suggest some mutual funds through the sound mind investing newsletter, that would be really helpful to you, you'd want to just get a really high quality, you know, mutual fund that you could drop some money into and just let it go. And you know, not don't worry about it too much. It's going to be up and down. And when we hit a recession, this market could, you know, test its lows, but eventually over the next, you know, 10 years, and even once you get to retirement, let's say that's 10 years down the road, you still need this money to last for decades if you're in good health and the Lord Terry. So, you know, you still have arguably a 30 plus year time horizon on this. So, you know, I think you can still put it to work in investments. If you wanted a more passive approach, kind of an automated approach. That's where the robo advisors shine with a $5,000 investment. And I've often recommended the Schwab intelligent portfolios, you'd open the traditional IRA, you drop the money in, and then they would based on the questions and answers that are you would provide, you know, they would automatically using that algorithm, invest it in the broad market using in ETFs. So you'd own some large cap and some small cap and international and domestic and some bonds and you just kind of capture the broad moves of the market moving forward. And it would be tailored to your risk tolerance. And then anytime you add anything to it, it would automatically be reinvested without any transaction costs. So I think either of those options could work for you.

And then you could get that money, you know, growing for the future. How does that sound? That sounds really good. I appreciate it, buddy. Okay.

Yeah. God bless you. And thanks for listening and calling the program today, sir.

Let's head south to Florida. Hi, Meredith. How can I help you? Hi. Hi, Rob.

Thank you for taking my call. Sure. Um, my question is about a self directed IRA. I have like a Roth IRA for about 65,000. And then I have a traditional IRA of like 40,000. And I was told that I can buy a property or invest a property using my using a self directed IRA. So I just want to know, how do I go about that?

Yes. So you absolutely can. And what you would have to find is you'd have to find a self directed IRA custodian. The custodian is the, you know, the brokerage firm or the organization that is custody, taking custody of the assets. And as because a self directed IRA is a little different than a typical IRA, because it allows you to invest in really any type of investment in most notably alternative investments like real estate or precious metals or private loans or, you know, things like that. You'd you'd want to find an custodian that really specializes in self directed IRAs. They'll typically charge some extra fees for that could be anywhere from, you know, depending on the account size and what you're investing in 150 to more than a couple of thousand dollars annually because they have to administer that. But once it's set up, then you absolutely could take the money in the self directed IRA and invest it in real estate either through direct ownership or a pool type investment. So the I think your next step is to find a self directed IRA custodian. And I'd probably just do a search on the web to see which are the most highly rated and just read a lot about them and find out the ones that, you know, are getting the highest ratings out there. And then once you open the account, they'll help you.

Their job is really to help you get it set up and walk you through all the steps in funding it and then also making the real estate purchase. All right. I see. Okay. Are they are they are they banks, those custodians? No. Yeah. So they would be, you know, either a trust company or a brokerage firm or, you know, an investment company, something like that.

They are not going to be banks typically. All right. Thank you. Thank you so much. All right. Thank you, Meredith. Thanks for calling today. God bless you. Quickly to Muncie.

We're going to finish with Carla. Go right ahead. Yes. I am interested in Treasury bonds. I haven't received a lot of knowledge about those, but my family members have purchased purchase Treasury bonds. And I just wanted to know, like, what's the advantage of a Treasury bond over other bonds or disadvantage? And where do I go to find out how it purchased those?

Yeah, very good. So these are low risk, long term investments. And that's their low risk because they're issued by the U.S. government so you can buy them from the government directly and or you can buy them through a broker or a bank. If you buy them directly from the U.S. government, you do that at Treasury Direct dot gov.

That's Treasury Direct dot gov. That's the same place you buy the I bonds, the inflation bonds. You can buy other Treasury bills, bonds and notes there as well. And what you're going to want to look at is kind of the annual coupon payment.

So that's the total investment interest payment over the course of the year and then the payment frequency, which is how often the payments are made generally every six months until maturity. And then you'll look at the duration of the bond, how long or short, you know, so you can, you know, typically they're issued in 20 or 30 year terms and you can buy them in increments of $100. And then you can, you know, buy them through brokerage firms as well.

You don't have to go direct to the government. So I think, you know, what might be interesting for you is to do some reading on T-bills, bonds and notes. And Soundmind Investing would be a great resource to you. Also NerdWallet has a lot of great information out there as well. So I would head to soundmindinvesting.org.

Just do a search for treasury bonds and start reading and then decide which direction you want to go. Thanks for your call, Carla. We appreciate it.

Well, Faith and Finance Live is a partnership between Moody Radio and Faith Fi. Thank you to Amy, Dan, Tahira, Jim and Luke. We'll see you tomorrow. God bless you. Bye bye.