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Kids that Honor God with Money

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
April 10, 2023 5:09 pm

Kids that Honor God with Money

MoneyWise / Rob West and Steve Moore

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April 10, 2023 5:09 pm

Teaching kids to handle money wisely is a valuable gift indeed. But teaching them to honor God with their money is priceless. On today's Faith & Finance Live, Rob West will talk with Matt Bell about training up your children to handle money in a way that honors the Lord. Then Rob will answer your questions on various financial topics. 

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Teaching kids to handle money wisely to the Lord. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live! Biblical wisdom for your financial journey. Well my friend Matt Bell is our guest today. He's the managing editor at Sound Mind Investing and underwriter of this program. He's the author of several books on personal finance as well. And his latest, which was published by Focus on the Family, is just out.

I'm so excited about it. It's titled Trusted. Preparing your kids for a lifetime of God-honoring money management. And isn't that something we all want? Matt, great to have you with us. Rob, great to be with you. Well, so the first part of your book's title, Matt, is Trusted.

I'd love to start there today. What does that mean when it comes to teaching kids to honor God with his resources? Yeah, the title comes from Luke 16 10, which says, Whoever can be trusted with very little can also be trusted with much. And really, it traces back to the very first parenting class that my wife Jude and I ever took back in our church back when we used to live in Chicago. There was an associate pastor, Keith, and his wife, Keg or Caroline, who taught about parenting.

And we were about to have our first child. And they use the metaphor of a funnel. They said that when a kid is super little, super young, the funnel is really tight, right? We're making all the decisions for them, what they're going to wear, what they're going to eat. But as they get older, we should start teaching them and trusting them with more and more responsibility.

The funnel opens up wider and wider. And as they prove themselves trustworthy, we continue down that path. And so that's really the essence and really the framework used in the book.

I love that. I mean, faithful with a little is such a big theme here in God's Word, then we're entrusted with much later. And clearly that's something we want for our kids. Let's just talk about the importance of this, Matt. You and I know this is a critical skill that we need to teach our kids, not only on the literacy side, but really God's heart as it relates to money. But why?

Why is it so important? Because on the one hand, there's so much at stake here and also on the other hand, because there's so much opportunity here, so much potential. And I say there's so much at stake here, Rob, because it isn't that if we don't teach our kids about money, they won't learn. They will learn. But the culture, our consumer culture will be their teacher.

And that's not the greatest idea. And there's also so much potential here, because if you think about the idea of compounding, you know, people usually think of compounding when they think of investing is a very, very powerful idea that can really multiply money over time. But I love to think about that same power of compounding in all areas of finance. So you get a young child who catches a vision for generosity and starts to build some habits and practices of giving toward God's kingdom work in this world.

And the way that God could multiply that over their lifetime is just impossible for us to fully imagine. Or a young person who develops just a kind of generally healthy relationship with God and money, how that will flow into his future relationship with his future wife, how it will impact his lifelong relationship with Christ, how that will free him to make the difference with his life he was designed to make. I just love the potential of getting kids at an early age started in the right direction financially.

That's so good. We've got just about a minute before our first break here, Matt. Obviously, a lot of parents are struggling with their own finances. They don't see their own finances as being in order, and therefore they're hesitant to teach on the topic because of that.

How would you counsel them? Yeah, I would say for one thing, you know, none of us ever get the money thing fully right. We're all in process to some degree. And so be encouraged that you don't have to have your finances completely perfect in order to do this.

But secondly, in each of the really practical chapters in the book, I spend the first portion speaking directly to parents because it is important for us to serve as role models. And so as long as we're in the game, we're learning, we're continuing to apply biblical principles to our own finances. That's really the goal.

Yeah, that's so good. Well, there's so much to cover here, Matt. And as you said, a lot is at stake and we've got to start early. We've got to be really thoughtful about it and practical. But when we do, there's incredible benefits that can come from that. And I know you've seen that play out in your own life. So when we come back with Matt Bell today, we'll be talking about the role of social media.

How do you overcome the world's negative influences? He mentioned generosity. We'll unpack that a little bit more. So much still to cover. We're talking with Matt Bell today, more just around the corner. Stay with us. Delighted to have you with us today on Faith and Finance Live. I'm Rob West. Joining me today, my friend Matt Bell. He's managing editor at Sound Mind Investing. He's the author of the new book, published by Focus on the Family, titled Trusted, preparing your kids for a lifetime of God honoring money management. And isn't that something we all want? Matt, great to have you with us today.

So good to be with you too, Rob. Matt, we've been talking about the role we have and really the opportunity we have to train our kids in the ways of the Lord in all areas, but certainly as it relates to our discussion today in this area of money management, I'd like to pick up on your story, Matt. You grew up not knowing you had to work to earn money, but something happened in your 20s.

Why don't you tell us that story? Yeah, something very life-changing. I mean, totally unexpectedly, I received an inheritance of $60,000 from an uncle who passed away. And I saw it as this incredible, probably once in a lifetime opportunity. And so I wanted to make the most of it. I created my dream job out of that money. I created a newsletter for golfers who take golf vacations, which was this great excuse to go play Pebble Beach and some other courses that I wanted to play. And I was having the time of my life. But the one thing that was not true at that time was that the business was successful.

It was not successful. But I was so acclimated to that great life I was living and so blind to what was happening with the money that when the actual money ran out, I kept funding that life on credit cards and eventually got myself in a lot of trouble with credit cards, moved home with my parents for a time. It really was what I like to describe as the unintentional reenactment of the Bible's parable of the prodigal son. But through that experience of returning home, a good friend from college reached out, shared his faith. Ultimately, it's what God used to draw me into a relationship with Him and to introduce me ultimately to my life's work. That's powerful.

What were some of the biggest takeaways? You know, I remember reading the Parable of the Talents as a new Christian in my late 20s. And that was so profound for me because, you know, anybody that's around stewardship circles, they kind of take it for granted.

And it's easy to do that. But it was so profound for me to see what is my relationship with God and money to be. That God is the owner. He temporarily entrusts, generously entrusts everything that we have to our care. And we are to manage it wisely.

We're to manage it according to His principles and for His purposes. And that was a profoundly new way of looking at money for me. Well, it really is. And it's a great approach. And we think about passing these lessons on to our kids. Now, in the book, Matt, you encourage parents to start small. And I assume that means for both children and the lessons you want to teach them, right?

Yeah, that's right. I mean, if you think about generosity. So John Rockefeller, one of the wealthiest people that ever lived, he apparently once said that he never could have tithed on his first million dollars if he hadn't tithed on his first salary, which was a dollar fifty a week. And that's a good lesson. So, you know, sometimes people wake up in there like I did in my late 20s and come to faith and start to read what the Bible teaches about generosity. And it's kind of hard to just go from zero to, you know, where the Bible is challenging us to give it at a very generous level. But for a kid to grow up with that, just being normal for them, that we're going to honor the Lord with the first portion, the first fruits of all that we receive. That's such a helpful thing to get that from the get go.

Yeah, no question about it. Now, one of the challenges for parents you write about, Matt, is this idea of growing up in a target market. What do you mean by that? Yeah, I mean, marketing is just all around us. It's in the air we breathe. It used to be that that marketing messages, advertising messages were much easier to see.

You know, they would they would interrupt a television program that we're watching, for example. But now it's just woven into the fabric of everyday life. And so it's a little bit harder to see it, to notice it. And that makes it all the more powerful because we just we're just taking it in all the time. And so social media, you know, that's that's marketing on steroids.

You know, that's the comparison game on steroids. And so it's really important for us to teach our kids when they're super young to identify, OK, this is a marketing message and this is programming because very young kids don't even understand the distinction there. And then as they grow older, for us to help them navigate that, help them unpack the messages. So is this message true?

Is this product being promoted for its functional benefits, its value, its quality? Or is it or is there something large being conveyed there that may not be true that ties it to our identity and self-worth? Hmm. Let's talk about that a bit more, because that's so important, especially this world that our kids are growing up in. You talk about in this same section, the greatest identity theft ever. Unpack that for our listeners.

Yeah. In the I think it's around the 1920s or so or the early nineteen hundreds that the word consumer came into popular use prior to that time, people were talked about as workers or citizens. But that word consumer, you know, we hear it so much now that we just take it for granted. But if you look it up, you'll probably be a little offended to be called a consumer because to consume literally means to use up and to waste and to squander.

And so it's important to understand that that's not who God made us to be. God made us to be stewards or managers of his resources. So I like to encourage us to understand that and to teach it to our kids, because these two different identities that the consumer versus the steward come with a very different set of assumptions about our life purposes. The consumer believes that life is all about me, my pleasure, my comfort, my happiness, whereas God's word teaches us that life is about God. The consumer believes that that money and things are the causes of happiness, whereas really God's word conveys that that our relationships are the causes of happiness.

And the consumer believes that life is a competition to have more, whereas God's word teaches us that life is about contribution to use our gifts and talents and passions to make a difference in the world. Oh, that's so powerful. I know folks are taking notes because these are big ideas we need to instill in our kids as we counteract the messages of this world. Matt, you mentioned social media. What advice would you offer for our listeners today as they help their kids navigate social media as it relates to money management?

I would say a couple of things. I talk about different parenting roles in the book, and one of those important roles is the gatekeeper, which is hard sometimes as parents to to say no and to set up the rules. But it's really important for us to set some boundaries around the use of screens in general and then more specifically around social media to be willing to be that odd family that does not allow screens to be in bedrooms, for example, or doesn't allow certain the use of certain social media platforms or when we do start to allow it that we're intentional in talking to our kids about how to do it wisely. And I'll tell you, there's a great documentary out that's widely available called The Social Dilemma. And if people will watch that with their kids, that'll be a very powerful experience. We watched it with our kids and they ended up making some choices about their use of screens and social media that we hadn't even put on them. And we had some rules and regs around that, but they saw that and something about that documentary convicted them to take some additional steps. Wow, that is so good. Well, we have just barely scratched the surface.

There's so much more to talk about in this book, including the seven money management skills kids need to learn before leaving home. So Matt, will you come back in a few weeks and go over the rest of this? I would be more than happy to, Rob.

All right. Hey, thanks for joining us today, my friend. Grateful to have you with us.

Really good to be with you. Matt Bell's been our guest today. You can read a lot more about this in his book. It's called Trusted, Preparing Your Kids for a Lifetime of God Honoring Money Management. Again, you can pick it up wherever you get your books.

It's published by Focus on the Family and folks this is such a critical topic. Start early and be equipped by a great resource like this. All right, your calls are next. 800-525-7000.

That's 800-525-7000. I'm Rob West and this is Faith and Finance Live, biblical wisdom for your financial journey. We'll be right back with much more just around the corner. Stick around. Delighted to have you with us today on 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 to call is 800-525-7000. That's right, we've got some lines open. The number to call is 800-525-7000. Let's head to the upper peninsula of Michigan.

Lee, thank you for calling. Go right ahead. I have a rather large amount in my savings account and I was wondering if CD rates as high as they are, if that's a good way to invest it, and since it's a safe way to invest it. Yeah, you know, I actually wouldn't call it investing, more like glorified saving, but I understand the idea that you're getting. The only reason I mentioned that is investing involves risk with a corresponding opportunity for gain. There's really almost zero risk with CDs as long as you're under the limit of 250,000 dollars by institution or by account type with FDIC insurance.

But yeah, Lee, I mean there's a great opportunity right now. Now it's relative in the sense that yes, rates are up, but inflation is up dramatically. But you definitely need to be taking money that's parked if you don't want to take any risk with it and trying to maximize yield in this environment so that you offset that loss of purchasing power due to inflation. So all that to say, I like CDs right here. I would be looking at some of the online banks with FDIC insurance because you're going to get more yield. I was just looking at a CD over the weekend, 10 months, 5.05%.

I was at Marcus, the Goldman Sachs retail operation, But you could go to the website,, and look for CDs. You can type in the fact that you're looking for CDs. You can adjust the duration.

Are you looking for something six months, 12, 18? And then it will publish a list as of today as to which institutions have the best rates with FDIC insurance. So that way you could be comparing against alternatives that you might have locally. But bottom line, Lee, is I like CDs here a lot. Well, thank you.

That's what I was thinking of doing because I want to be safe with it. Yes, sir. I want to make sure. Thank you. Very good. Absolutely, Lee. And thank you for your call today.

800-525-7000. By the way, coming up a little later in the broadcast, Bob Doll stops by. Bob is Chief Investment Officer at Crossmart Global Investments. And Bob will give us his thoughts on the economy, the market as we start a new week here. And we'll hear what Bob's thinking about. Let's head back to the phone.

San Diego, California. Romel, thanks for calling. Go ahead.

Hey, Rob, appreciate it. I can start cashing in my pension. I can do it two ways. One is a lump sum, which is right now it is at $432,000. Or I can take an annuity for $2,422 for the rest of my life or my wife, whoever dies last.

Okay, yeah. And how would this fit into your overall financial picture? Is that roughly $2,000 a month going to be critical to you be able to maintain your lifestyle in retirement? Or is this money that's a surplus above and beyond what might be covering your living expenses?

It will be part of my overall monthly stream. I'm just starting retirement. I just ended my employment last month.

So I'm just getting started. So this will be part of my overall income stream. Okay. And have you done your retirement budget yet, Romel? Have you looked at what your expenses will be in retirement?

I figure between $90,000 to $100,000 per year is what I would need to live. Okay. Okay.

All right. So let's say it's $100,000 per year. And so you need about $8,300 a month. Let's call it $8,500 a month. What are your income sources going to be apart from the pension?

I can start drawing Social Security next year at age 65. And between me and my wife, that would be around $4,500 between me and my wife. And then the rest I have quite some amount in 401k. What do you have in the 401k roughly altogether? About a million. Okay.

All right. And so if we looked at that million at 4% a year, that would throw off $40,000. And that would be about $3,300 a month. So the Social Security plus if you were to take 4% a year out of that million, we're at right about $8,000 a month.

So you're almost there without the pension. Now, the question is, first of all, the stability of the company. How healthy is the company that's providing the annuity? And you could check the company's health by reviewing its form 5500 at free That's E-R-I-S-A, free ERISA. The Pension Benefit Guarantee Corporation will step in if there's a funding issue, but people may not get all they're entitled to.

And so I think that's always one thing we want to look at. Secondly, we have to look at the benefit of the income stream for life or in this case, you and your wife that goes away versus having access to the capital. So if you were to take 432,000 today and invest it conservatively, probably similar to what you're going to be doing or are doing with your 401k, and we took that same 4% a year withdrawal rate, that's going to throw off about $17,000 a year. If we take that monthly, that's about $1,440. Now, that's $1,440 a month, but you've still got access to your capital because the idea would be at a 4% withdrawal rate with the ebbs and flows of the market over a long term investment strategy, you should be able to preserve your capital. Versus taking the income stream with a $2,300 a month guaranteed for you and your wife's life, but you don't have access to the capital. If you needed a major medical expense, you all needed nursing care for a couple of years at $9,000 a month, you don't have access to the ability to pull that capital.

So you've got to do the trade-off between the $2,300 a month guaranteed for the rest of your lives versus what I'll say is about $1,500 a month, but you still have access to your capital. We've got to look at those too. I've got to take a quick break, but I want to get your thoughts on all of this because I've thrown a lot at you. So if you're able to, Romel, you stay right there and we'll talk a bit more just after this break. Stay with us.

We'll be right back. So thankful to have you with us today on Faith and Finance Live, where we apply God's wisdom to your financial decisions and choices as we look to the Bible for transcendent truth about every aspect of our lives, but certainly this area of money as well. Just before the break, we were talking to Romel in San Diego. Romel and his wife have been blessed. They've saved diligently between Social Security and a healthy 401k. They've got about 8,000 of the roughly $8,500 a month they think they'll need in retirement. On top of that, Romel and his wife are blessed to have a pension that they could take either as a lump sum at $432,000 or about $2,300 a month annuitized as an income stream for the rest of their lives, his life and hers, until both of them are deceased, at which point that would go away. And what I was saying, Romel, was that given that really the vast majority, all but about $500 roughly, of the income you'll need each month is covered between your 401k and at a 4% withdrawal rate and Social Security, you're in a pretty, you know, privileged situation here where you don't need the $2,300 a month. You could take the $432,000, pull just $1,000 or $1,400 a month, keep your principal intact if it's invested properly, and more than cover your bills. But if you really would have more peace of mind knowing that I've got this $2,300 a month guaranteed no matter what the market does for the rest of my life and my wife's life, well then you may prefer that option. You're just giving up access to the capital. And in addition to that, I'd love for you to check out just the health of the company before you made that decision.

But give me your thoughts on all that. The way I see it is if I take the $432,000 and buy myself an annuity outside of my company, that annuity, I think they will give me maybe $2,000 a month. And so it looks like the current 20, actually this $2,400, it looks like the current $2,400 is a little bit better than what the current market will do. So that's why there is an attraction to go for the annuity. Yeah, I would say though, I wouldn't say that that's what the market will do. That's what an annuity or an insurance company would provide, which also factors in the fees and expenses and profit that the insurance company is looking to make off of you.

So yes, it would be a little better. And if you wanted a monthly payout guaranteed for the rest of your life, I'd say don't take it out and drop it into an annuity. Leave it right where it is and just take the income stream. But if you wanted access to the capital, the alternative is to invest it. And I would say that's not with an annuity. That's in a stock and bond portfolio, probably largely bond, very conservative, with the idea being that you could take 4% a year, which you really don't even need that much, and still maintain the principal balance 10 years, 20 years down the road, you still have access to your 432 over the long haul if you're able to make up that 4%, which that's a good rule of thumb that you should. You know, the benefit is I still get to my money as opposed to the annuity where you give up access to more than just that monthly income stream. So I wouldn't compare it apples to apples with buying another annuity. I'd compare it to an investment strategy where you still get access to your principal. Does that make sense? Yes, yes.

Thank you so much. And as a general rule, would you advise people like me to have some part of your portfolio in an annuity? No, I wouldn't. I mean, that's not my preferred approach just because they're complex. You always give up something on the upside with an indexed annuity in exchange for the downside protection. They're complicated and they're expensive, lots of fees and commissions. So because of that, I'd prefer you, the average person, stay out of an insurance product, invest for the long haul in a properly diversified stock and bond portfolio, take advantage of the compounding, get the full upside in the good years with the down years, and let's rely on the last hundred years of investing returns that tell us if we do that, we're going to be a winner. You know, if we're long term, not trying to get rich quick, not taking unnecessary risk, but we're just disciplined over the long haul. That's a better approach, in my view, than an annuity. But you find yourself in a position today where you may have greater peace of mind in just having this guaranteed income stream, regardless of what the market does, regardless of what the economy does, the Federal Reserve, inflation. You don't have to think about any of it.

And you know that Social Security plus your 401k plus the 2300 a month is going to give you more than you need. And that may be a reason for you to do it, because that will make sure that you and your wife sleep well at night and give you the freedom to then go and pursue whatever the Lord has for you. I think that's the decision you have to make. I just want to make sure you understand that you're giving up access to that capital along the way. Good, good. Okay. Okay. I appreciate it. I think it's very good advice.

Very good. Thank you, Ramell. And make sure you pray about this. Ask the Lord to give you and your wife just one heart and mind as you make this decision.

I'm confident he will. Thank you for your call, sir. Let's head to Indiana. Hi, Vivian.

Thanks for your patience. Go ahead. Hi. How are you today? I'm well, thank you. Yes, yes, yes.

I have one quick question. I have been retired for 18 years. I just heard recently, and I am a tither. I've been a tither for many, many years. But I just heard recently that in retirement, we do not have to tithe on pension or Social Security because we've already done that.

Yes. Yeah, that's true in the sense that if you have been a tither and you tithed on the gross amount, then you have, in a sense, tithed on a portion of both the retirement Social Security benefit you're receiving and the pension. The challenge is it's a little difficult to calculate. The way you'd go about calculating it with Social Security is you would log into your Social Security account, you'd look at your benefit statement online, and you determine how much you paid into Social Security during your working years. And you can essentially establish a percentage of what is the portion that you paid in versus what you is investment gain. And you can apply that percentage to the tithe. The same would be true with a pension. You could essentially calculate how much in total you contributed to your pension and then apply that percentage.

It does get a little difficult to do. The simple approach is just to tithe on the full amount that you're receiving. But that does recognize that you're tithing a second time on a portion of it.

And so what I would say is if you are having trouble making ends meet, perhaps that's the way to go. And, you know, we certainly don't want to be legalistic about it. It's not about checking a box or, you know, anything like that. We want to give cheerfully as an act of worship. And we see everything we receive from the Lord as a gracious gift. But I also acknowledge the fact that a portion of what you paid in is an amount that's being returned to you that you've in a sense tithed on. So I think at the end of the day, it comes down to kind of how does my budget look? Am I able to tithe on the full amount?

And if so, great. If I'm not, then that's where I think just looking at your Social Security and pension and establishing some sort of percentage, maybe it's, you know, 40%, 30% of everything you're getting back is what you paid in. And 70% or 60% is profit or gain that's coming back to you. Well, you can apply that percentage to the tithe and say, okay, out of every check, I'm going to tithe on 60% or 70% as actually being the gain.

And then I'm going to give a 10th of that. So I think you just need to kind of pray through that, look at your budget and decide how you want to proceed. But the bottom line is we can't outgive God. And at the end of the day, we want to give cheerfully and do it in a way that really reflects God's ownership of everything and our worship of Him. Thanks for your call, Vivian.

I hope that's helpful. We'll be right back on Faith and Finance Live. So great to have you with us today on Faith and Finance Live. I'm Rob West. Hey, before we head back to the phones, and by the way, we might have room for one more question.

If you got a question today, 800-525-7000 is the number to call. We're joined now by Bob Dahl. He joins us each Monday with his market analysis and commentary.

Bob is Chief Investment Officer at Crossmark Global Investments, where investments and values intersect. And Bob, as we start a new week this week, just looking at the markets, Dow, S&P and NASDAQ, all in very modest, positive territory. But I guess we can celebrate the fact that they're not red today. What are you watching as we start the week?

Yeah, and as you know, most of the day, two of the three were red and they slowly came back all afternoon, closing near the high. So that's a welcome sign. What are we looking for this week? The beginning of earnings season.

They will start this week and come fast and furious over the next several weeks. And I think the jury is out, as you and I have chatted before, earnings estimates kind of stalled out over the last 30 days as analysts are unsure, given the banking crisis, what to do with their numbers. They almost definitely have to bring them down some, but they'll wait for those earnings announcements and conference calls with CEOs and CFOs to ascertain where to take the new numbers. Bob, in your estimation, how do stock valuations look just based on where we sit today and everything we know about the health of the stock market?

You know, not all that cheap, Rob. I mean, the line I used a year ago, they were egregiously expensive stocks and bonds. Fast forward to today, they're not as ridiculously overvalued, but they're not cheap either. For example, the price earnings ratio, the PE ratio of the U.S. stock market on trailing earnings is 20 and a half times. On forward estimates that are probably too high, 18 and a half times earnings. Those numbers are appropriate if inflation is two or three percent, but I'm not sure with inflation at five or six, these are the right numbers. So stocks not particularly cheap.

Lots of things have to go right, in my view, to justify these prices. Yeah. Bob, obviously you talked about it this week in your market commentary, the Fed is between that proverbial rock and a hard place as they deal with inflation and a banking crisis and now a softening job market. I mean, how in the world do they navigate these headwinds?

With great difficulty. As you know, the Fed has one blunt instrument called the Fed Funds Rate. They have a few other facilities that, by and large, the blunt instrument they have, they don't have scalpels to go in and say, OK, it's not so good here. Let's fix that with a plus.

And over here is too strong. Let's fix that with a minus. They have a blunt instrument. My assessment, which is I think consensus, is that they will raise rates one more time at their early May meeting, assuming we get from here to there without further banking crisis. And that will round the Fed Funds out at five percent, up a full five percent from zero that they started last March. Then my guess is they will just pause and watch for a while. Where I differ from the consensus is the consensus expects the Fed to lower rates two or three times before the end of the year. I'm not sure we're going to see enough progress on inflation for them to do that that quickly. Yeah, yeah.

Interesting. Bob, all right. Base case is a recession.

I know you've said that and you've said that for some time now. Just drawing from history, and that's really our best indicator where this market is headed, when does that bear market low occur throughout this cycle that we think is coming? Well, if history is any guide, Rob, the low will come after the recession starts. When we've had a recession in the U.S., the stock market has never made a low prior to the start of the recession. So was October last year the low for the stock market?

I hope so, but if we're going to have a recession, I doubt it, and probably means we have to test that low. All right, Bob. Well, we'll certainly keep our eyes on it. We know you will as well. We appreciate your insightful remarks each week, and we'll talk to you next week.

Sounds like a plan. Bye-bye. All right, Bob Doll, Chief Investment Officer at Crossmark Global Investments.

You can learn more about the funds he manages and sign up for his weekly dolls deliberations at All right, back to the phones we go. By the way, perhaps room for one more question between now and the end of the program. We'll move through these quickly. 800-525-7000 to Elgin, Illinois. Hi, Lynn. Thank you for your patience. Go ahead.

Yes, hi. I received over, let's see, I have over 10 grand, an unearned income from a settlement, and I was told I don't have to pay taxes on it. But if I put that in an I-bond, would I have to pay taxes on that?

Because currently I'm on military disability and I don't file taxes right now. Yeah, you typically do not pay taxes on a settlement, as you said. Now, if you were to take and put that into any investment, you would pay taxes on the gain, either the capital gain on the appreciation of the investment or the interest or dividend income or both. In the case of the I-bonds, you would only pay when you cash it in. It's a one-time thing, not an annual tax. So the interest, although it's credited to your account every six months, you can see it added to the balance. In terms of when you actually get it, it's only when you redeem the bond, when you cash it in.

At that point, they would return to you your initial investment plus the interest that you received, and at that point it would be taxable, but only on the interest itself. Okay, and would I have to pay taxes then? Or file taxes, I mean? Just depends on what your tax picture is. So you'd have to check with a CPA or account to determine whether that would push you into a threshold where you had to file. And so, if you have a question about that, I would certainly reach out to a tax preparer and go over your situation, what income sources you have, what amounts, what you're thinking to do, and so on.

What amounts, what you're thinking to do with that. But I wouldn't let the ability or the possibility that you'd have to file stop you from taking this money if you don't need it, and putting it to work. Whether that's in an interest-bearing high-yield savings account at nearly four percent, or a CD at five, or an I-bond at 6.8 for the next six months. We want to overcome the effects of inflation, and the only way we do that is we earn interest on it, or we invest it, and the taxes are just symptomatic of the income. So I wouldn't, you know, put it under the mattress just to avoid the taxes or the need to file. That can be fairly simple, especially in a situation like you're in, if you have a very simple income structure. And I certainly want you to be able to take this money and grow it, because otherwise you're losing purchasing power every day, especially given this high inflation.

So perhaps to get the specifics on it, you might want to reach out to a CPA. I hope that's helpful for you, Len. Thanks for calling. To Chicago. Hey Mike, thank you for calling.

Go ahead. I'm seeing a lot of stuff in the games I play and on TV about this new stimulus package that is for older citizens, but yet when I click on it, it seems to be talking about something insurance-oriented. Is this valid?

Is it something worthwhile, or is it really just a hoax? Yeah, it's probably right in the middle, in the sense that it's not valid in that the final federal stimulus checks were mailed out in 2021, although some states are still sending stimulus payments in 2023. Illinois is one of those, so that could be it. But you may also be thinking of rebates from some auto insurance companies that some people have incorrectly called stimulus checks. So auto insurers made huge money last year and have been criticized for it. Some have elected to return some of that money to customers.

They're all doing it differently. So for instance, Allstate is giving customers up to $600 million through its shelter-in-place paybacks program. Liberty Mutual, Nationwide, State Farm also have credits or refunds that they're doing as a result of just the fact that we were sheltering in place. Nobody was driving for a period of time. Therefore, automobile accidents were way down, and so they're offsetting some of that that they didn't have to pay out in claims by sending these checks that, again, some are calling stimulus checks.

But there is no federal stimulus program that would be ongoing. Is that helpful? Very, thank you. Okay, Mike, we appreciate your call today very much. Let's see, let's head to Indiana for our final caller today. Karen, go right ahead. Yes, thank you.

I appreciate you taking your time for me. I may have to pay the government some money for federal taxes in the state because of lack of being withdrawn from my check. Do you know how much a penalty is if you can't pay it off by the 18th? It's just going to depend upon how much you actually owe.

I think the key for you is to go ahead and file your return and pay as much as you can by the due date because you certainly want to go ahead and file. And then you can request an installment agreement. There's a special form for that and see if you qualify for an installment payment plan. They'll likely be very quick to put you on a payment plan if you can't pay. But I would go ahead and file. As to the penalties and the interest, it really is going to be dependent upon how much you actually owe. So I would, if you're in a situation like this, perhaps reach out to a tax preparer to help you. Maybe you can find somebody through your church that'd be willing to assist you. The form specifically for this installment payment plan is form 9. 465. That's what you're going to want to be looking to add to your return if you're not able to pay in full.

So I'm confident you can work this out, but I would get some help from somebody who can help you navigate this, Karen, just so you do everything the very best way you can and avoid or minimize any penalties or interest where possible. Thanks for calling today and being on the program today. We appreciate it.

Well folks, that's going to do it for us today. So thankful that you joined us today. You were a part of the program with your calls and for listening. We're always grateful to serve you here on this program each day. I want to say thanks to my team today. Certainly couldn't do it without them.

Jim Henry, Amy Rios, Dan Anderson. Thankful for our call screeners as well today and hope you have a wonderful rest of your day and come back and join us tomorrow. We'll do it all over again. In the meantime, you can visit us on the web at That's May God bless you. Bye-bye.
Whisper: medium.en / 2023-04-11 17:21:25 / 2023-04-11 17:38:13 / 17

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