Only God is wise enough to see the future. I'll talk about that today with Amae Dodson, and 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 decisions. Well it's certainly a pleasure to have Amae Dodson with us today.
She's the National Director of Affiliate Relationships at Movement Mortgage, an underwriter of this program. Amae, it's a privilege to have you with us. It's great to be here. Thank you for having me.
Well, we're delighted. And I'd love to start with you just sharing a bit about Movement, how it started and what the mission is. Well, the mission is that we exist to love and value people by leading a movement of change in our industry, corporate culture, and in communities. When we started the company late 2007, beginning of 2008, our goal was to change the way financial services companies face the community, specifically and initially to make sure that we treated every single borrower like our little sister, that we were locked arms with people we love doing life with, and then to leverage our profits to serve communities around the world.
Well, it sure seems like it from my vantage point. You know, it's one thing, Amae, to treat customers well, so you get positive word of mouth and repeat customers. That's of course just good business. It's quite another, though, to give back from revenues, not just here in the U.S., but literally around the globe.
So tell us how that works at Movement. Well, we've always had the heart that our profits wouldn't be ours, that we would give them to God and use them in meaningful ways. And so a lot of that is done through our investments in sustainable projects that serve marginalized communities and through match giving. So we find a way to amplify the generosity of our employees by matching their money to qualified nonprofits around the world. Now I know Amae, Movement has invested more than $375 million in really compelling causes around the world. Perhaps you could share a story or two about how the Nonprofit Movement Foundation has helped to meet the needs of the underserved around the globe. Well, for a little over a decade now, we've been partnering with an organization that builds churches and hope centers in developing countries around the world. And in addition to funding the building of these churches and these hope centers, we've been sending our employees and teams on vision trips so that they might see firsthand the work being done with the profits that they're helping to generate. And while that's impactful, that's just a slice of what we've been able to do through the Movement Foundation.
Incredible. And what about some of the practical and even spiritual outcomes when a business decides to give back in the way that Movement has? First, the ability to show and lead our employees towards the generosity that already exists in their heart and giving them the opportunity to volunteer and serve with the organizations that we're supporting. It has a tendency to amplify everyone's desire to create greater significance in the work that they do. And it means more.
Amay, that's powerful. And I love how you get your employees involved in this giving. They're really at the core of this mission, aren't they?
Absolutely. And so are our borrowers and so are our referral partners. Every single person involved in the transaction, while we're serving the borrower's best interest by helping them get into a home and a responsible loan, everyone involved knows that the ultimate result is the profits are going to be leveraged into our communities. And that's powerful. People want to do work with those that are doing good in the community.
And that certainly is a valuable lift to the entire relationship. Oh, I can only imagine redefining the mortgage process and also impacting the marginalized and so many more literally all over the globe. Amay, how can folks get more information about Movement Mortgage?
Movement.com has all of the intel and you can find a local loan officer that can serve your needs. Awesome. Amay, thanks for giving us a new insight into how business can be used, not just for profit, but eternal purposes. Thanks for being with us. Thank you.
Have a great day. That's Amay Dodson with Movement Mortgage, an underwriter of this program. You can learn more at movement.com forward slash faith.
That's movement.com forward slash faith. We'll be right back. Hey, great to have you with us today on Faith and Finance Live. I'm Rob West, your host. All right. It's time to take your calls and questions now on anything financial.
Here's the thing. Probably you've got something you've been wrestling with in your financial life. You've been dealing with making a decision about paying down debt versus saving. Maybe you've been wrestling with how to handle your long-term investments.
Maybe it's some debt that's been sticking around longer than you like, or how you can finally balance that budget or stay on the same page with your spouse. Any and all of that we'd love to talk about and help you think about that through the lens of Scripture. The number to call is 800-525-7000. We've got some lines open today and we'd love to hear from you with your questions. Again, 800-525-7000. Give us a call right now. We're going to begin today with a couple of emails before we dive into your phone calls. These come in to us every day at AskRobAtFaithFi.com. Let's start with an email from a listener in Florida.
He writes, hello, I hope all is well. I'm almost 55. I don't have a retirement account yet. I know I'm late, but I still have time. I'm not sure which one is better for me, a traditional or a Roth IRA.
Thanks in advance for your response. I would say to this listener, given your late start, and I agree you do still have time, a traditional IRA is likely going to be your best option for retirement income in this season because you're going to want to pay the taxes in retirement when your income is likely less than it is during your prime working years. Now, if you are self-employed or own your own business, I might mention that you can set up a SEP IRA. That's an SEP IRA that would allow you to put away quite a bit more in the way of money, up to $66,000 or 25% of compensation, whichever is less. That's a 2023 contribution maximum. If that's not possible, make sure you take advantage of the catch-up provision in your IRA, whether you choose a traditional or Roth. You can put in an extra $1,000, and that would allow you to put in a total of $7,500.
If you're married, you can have a spousal IRA, whether or not that spouse has earned income, and then you would be able to put away, if you're both over 50, $15,000 this year. One other thing, I assume you've already filed your 2022 return, but until you file it, you can make a contribution for last year, but again, the deadline has passed, so I suspect you've already done that. All right, let's take one more, and then we'll dive into your questions. Again, line's open, 800-525-7000 is the number to call. Mac writes, I'm completely out of debt, and I'm in good shape with savings. My FICO score is 800. I have one credit card, which I pay off every month.
I got an offer to open a different credit card that offers cash back. Would that be wise, and how much will it affect my credit score? Mac, it would temporarily lower your score a bit, because that new card issuer would make what's called a hard inquiry on your credit, just to evaluate your credit worthiness. It would also rise when you open the second card, because your credit availability would increase, and you'd be able to demonstrate yourself to be an on-time payer with yet another card. So I would go ahead and close the first card after that new one is set up.
That way you avoid the temptation and the possibility of it being hacked by identity thieves. But I think the bottom line is, unless you're in the market for a mortgage or a car loan in the next six months, it really doesn't matter. That drop that you would experience from opening that new card would be temporary. Now, if you're next week or next month going to go out and buy a house, I probably wouldn't open a new credit card, because that temporary minor drop may actually push you down into a bracket that doesn't give you the most favorable terms and rates. But if not, I'd say go for it.
It will bounce back, and if you can take advantage of either a no-fee credit card or a better reward system, or both, and as long as you're using the card only for budgeted items and paying it off, then I'd say go for it. So Mac, thanks for writing to us. By the way, if you have a question, send it along to AskRob at Faithfi.com. All right, let's take some phone calls. 800-525-7000 is the number to call. We've got a few lines open. We'll begin in Illinois. Dusty, go right ahead.
Yeah, hi. I just started a small business, and my wife and I are wondering about how to do tithing now, because it's a lot different than getting a paycheck and just choosing gross or net. There's all the expenses and things like that, so just maybe if you have a quick formula for small business.
Yeah, it's a great question, Dusty. I love that you're thinking about giving not only personally, but also through your business. Now obviously with a small business, it's probably an S corp. You are your business.
Your business is you, so I get that. But it is a different approach when it comes to the tithe. So if we're going to give a tithe, that is we want to apply the principle of giving a tenth off of your increase, the question is what is your increase? Now for you personally, it's fairly easy to calculate, especially during your working years.
Whatever comes your way, I would say your wages and your income and inheritance and anything that you receive, it's easy to say, yeah, that's an increase. Not so with a business, because many businesses, based on the margins they have, if they tithed off of the gross, the business would go under. I mean, think of a small grocery store. They make a very small percentage of everything that goes across the register, and so again, if they were tithing off the gross, they wouldn't be around. So what you have to do is really determine what is the true profit. Now, hopefully you've gotten the business to a place where you've got yourself on a salary, and obviously as that comes into you personally as salary, then you could tithe right off of that. The question would be what retained profits do you have in the business, and I would generally look at that over a period of time. So you might say, okay, twice a year or even once a year, we're going to calculate what is the profit that was recognized in the business for that period of time, and then we're going to apply the principle of the tithe at that point to make a gift. But that would be after you subtract out all of the expenses of the business, including your salary, for you to arrive at that true profit number.
Does that make sense? Yeah, I guess I haven't gotten to that profit thing. Praise the Lord, I was able to write myself a paycheck for the first time.
That was exciting. So that really helps to maybe just decide just to have two categories of when I pay myself and then the overall profit. That's very helpful. Yeah, I think that's the right way to look at it, Dusty, because as you pay yourself a salary, and that's great that you've gotten to that point. Clearly, as that comes in, I'd say you can tithe right off of the gross of that. But everything else that stays in the business and may or may not be a profit, you've got to factor in all the expenses, the overhead, the equipment, any salaries you're paying, contractors, marketing, all the things that go into running that business.
And then at the end of whatever that period is, let's say it's a year, maybe it's when you file your tax return each year, you'd calculate that true profit in the business. And Lord willing, you'll have plenty of that down the road so that this business can not only serve the purpose that you founded it and bless a lot of people with your product or service, but also it can be an engine for giving, which is a whole nother opportunity that you have as a business owner. But you're going to have a lot of fun kind of figuring that out and seeing what God does as he expands your business, he'll expand your ability to give. And that's incredible. Well, I really appreciate you being on the program today.
Thanks for encouraging others perhaps that have a business to think about their giving in this way. We appreciate it. Well, folks, we're going to take a quick break and we come back. Kathy in Ohio coming your way, Barbara in Chicago, Chris in Nashville. We have a few lines open though. If you've got a question you've been wrestling with financially speaking, give us a call. We'd love to talk about it.
800-525-7000 is the number to call. By the way, so thankful to have Amae Dodson on with us from Movement Mortgage. If you want to learn more about the great work they're doing, check them out at movement.com forward slash faith movement and incredible underwriter of this program. Hey, we're back with much more just around the corner. Stick around. Thankful to have you with us today on faith and finance live. I'm Rob West and we've got three lines open 800-525-7000 in just a moment. We're going to be in Nashville and Chicago, but first new Philadelphia, Ohio. Hi Kathy.
Go right ahead. Hi, I have a question about financing a home project. I'm retired, so I'm getting a retirement payment. I also get an annuity payment about $650 a month and I need to side my house. It's an older home, but it needs new siding.
It's fairly big. And first I was thinking about getting a home equity loan. Then when I found out how much it would cost, I had a quote of $38,000.
So I'm 71 years old and I'm wondering, should I get at this being 71, should I get a large loan and go into debt? Well, so let me just clarify a couple of things. What is the 38,000? Is that how much this project is going to cost? Yes. Yes. Okay. And how many different bids have you gotten on this? Just one so far. Okay.
Yeah. So I would definitely get a couple more just to make sure that this is reasonable and you might be able to find somebody that has a great reputation who would do it for a lot less. Anytime you're taking on a big project like this, I would definitely get multiple bids. Secondly, based on your understanding of the need, how imminent is this project? Is this something where if you put it off, you know, it's going to harm the house in some way?
Well, there's places that the siding has come off and I should get those repaired and I was planning on doing it this summer if I could. Okay. All right. Very good. Okay.
So let's say that 38,000 is a good number. And so what options are you looking at? Did you say you don't have the cash? Is that right? No, I can't get any. I love some out of my annuity. Okay.
All right. So you've got enough with Social Security and your annuity to cover your expenses. Do you have any kind of emergency savings?
Yes. How much do you have? I have about $10,000.
Okay. And what are your monthly expenses roughly? What does it take for you to cover all your bills over a 30-year period? Let's say roughly, I'd say 2,000.
About 2,000. Okay. So you've got five months expenses. That's good. Tell me about the house. How much is it worth and what do you owe on it? I don't owe anything on the house. It's paid for.
It's worth about $140,000. Okay. All right.
Very good. Yeah. I mean, so you could certainly take out a mortgage on this and get a cash out mortgage for the purpose of doing this project. I mean, that just sounds like a lot of money. For a $140,000 home to spend nearly $40,000 for siding, something just doesn't sound right there. So I'd spend quite a bit more time just kind of talking. Maybe there's a contractor at your church, a general contractor that'd be willing to come out and take a look at this for you before you even talk to a subcontractor who might be in this business in particular.
Somebody who can just give you some insight on how to navigate this. Maybe it's better to do the repairs. If it is important to put new siding on the entire house, could you just do one side and make it match?
Maybe you paint it. So I would do quite a bit more work there. If you were to go out and get a mortgage on this for, let's say, you find somebody will do it for $30,000, how much margin do you have each month? Would you be able to afford that mortgage payment?
Well, I've never done this before, so I'm not sure. My annuity payment is $650 a month. Would that be sufficient, do you think? Well, do you need that to cover your bills, though? No. Okay. All right.
I started getting that last year. Okay. So yeah, I mean, if you got a $40,000 mortgage, and hopefully it's not that, we'd be talking about $350 a month for a 15-year mortgage. Hopefully you could pay it off a lot quicker than that. If you could put, you know, nearly the whole $600 toward it, then you'd pay it off quite a bit quicker. A $30,000 loan, you know, would run you about $250 a month. So that gives you just kind of an idea at today's rates, you know, what that would look like.
And if you were to, you know, put $600 a month toward it, you could probably pay it off in, you know, probably six or seven years. So that would be certainly one option. But before I went down that route, again, I would do a lot more homework, just making sure that, first of all, this is necessary.
And number two, that it's competitive. Does that make sense? Yes, it does.
Okay. Now, if I would decide to do a loan, a home equity loan, would that be the place to go? It probably would. I mean, the only other consideration is whether you should, you know, if you could put this off a year, for instance, I think rates will be in a better spot. You know, you could look at a home equity line of credit factoring in the fact that rates are high. And then with that variable rate, which we typically don't recommend, you would be able to ride that rate down as rates came down. And we expect they will once we get, you know, through this recession and inflation is back under control, then the Fed will lower the interest rate.
So you're kind of at the high water mark right now. So one option would be to get a home equity loan, hoping that rates will come down, you know, a year from now. And then you'd try to get it paid off as quick as you can. The other option is, again, if it's not going to create damage, you know, could you put this off for 12 months, try to save that 600 a month to build up a little bit of a cushion that you could use to at least put a payment toward the siding.
And then at that point, hopefully rates are lower in a home equity loan where you could get a fixed rate that doesn't change would be the way to go, you know, if you could wait 12 months. Does that make sense? Yes, it does. I appreciate your advice. Absolutely. Kathy, listen, all the best to you.
I know this is is challenging. So we'll pray the Lord gives you some wisdom there as you navigate that. We appreciate it. Barbara, Chris, Justin, coming your way. Thanks for your patience.
We'll get to you just on the other side of this break. By the way, folks, if you haven't checked out FaithFi.com recently, we'd love for you to do that. A couple of things you'll find there. First of all, make sure you check out the FaithFi community.
Folks are posting questions, answering each other's questions, providing comments as they encourage one another on their stewardship journey literally every day. We'd love for you to create a free account and jump into that community. Also, be sure to check out our content, the best podcast videos and articles in biblical finance.
It's at FaithFi.com. Stay with us. We'll be right back.
We're thankful to have you with us today on Faith and Finance Live. I'm Rob West. Let's head right back to the phones. We'll head to Chicago. Barbara, you're next on the program. Go right ahead.
Hi, Rob. Thanks so much for taking my call. My husband and I, we are planning on selling the property this summer and I heard you mention about the capital gains that we can kind of donate them somewhere else. And I just want to know what are the steps that we need to take to pay those, I mean, give the capital gains maybe to a ministry or something like that. Yeah.
So let me make sure I'm clear on this. Are you looking at giving the property, either all of it or a portion of it, to ministry or charity? Or are you needing the proceeds for yourself and you're just wanting to give away, did I hear you say give away the capital gains? The gains, right, right. That's what I thought you said before.
Yeah, no, I didn't say that. There's a couple of things you can do here. I mean, number one is if you're selling an investment property that you would normally pay capital gains on the profit, you could use a 1031 exchange to roll that into another property and essentially kind of kick the can down the road on the capital gains. You wouldn't realize them until you ultimately sell a property and didn't reinvest it in another similar property.
In terms of funding ministry with real estate, it is a very effective strategy. And essentially what you would do is you if you have a piece of appreciated real estate prior to the sale, you could give a portion or all of that property to a donor advised fund. So let's say, you know, for keeping the round numbers, let's say at one hundred thousand dollar piece of property that market value today and you wanted to donate 25 percent of that property to your donor advised fund prior to the sale, then when it's sold, you would only pay the capital gains on the portion that you retain, the 75 percent and whatever the gain was on that portion. And then the portion that was given to your donor advised fund that there would be no capital gains on that portion because it was given away prior to the sale.
And so that would be a way to reduce the capital gains. And then once that money is available in your donor advised fund, then you'd recommend it out through grants to your favorite charities or your church. Does that sound like that might work for you or would that require you to do more than you were looking to do in terms of the giving?
I just didn't understand it. That sounds like something we're interested in. So you said we would donate like 25 percent or whatever and of the property. And when we sell it, whatever the gains, whatever the value, they would get 25 or 50 percent or whatever it is. So essentially, by giving whatever portion of the property away to your donor advised fund prior to the sale, whatever portion was given away, there's going to be no capital gains on that portion.
Only on that portion. So again, using my example, let's say the property was worth $100,000 and let's say $10,000 of that was a gain. So your cost basis was $90,000 and it's worth $100 today. So you would normally pay capital gains on the whole $10,000. But let's say you gave 25 percent of the property away. So now $2,500 of that $10,000 that would be subject to capital gains is now you're not going to pay capital gains on it because you gave it to your donor advised fund. Then when the property is liquidated, that cash would come into your donor advised fund and then you could give that away and take a deduction on that amount against your tax return.
So it's a way to get more money going into ministry or charity, minimize your taxes through both the tax deduction as well as missing out on the capital gains, if that makes sense. Okay. All right. Thank you very much.
You're welcome. Let me recommend you contact my friends at the National Christian Foundation. This is what they do every day, set up donor advised funds and their specialty is really helping God's people do what they call complex gifts, non-cash giving.
And you could set up a call with somebody, they'll kind of walk you through it with your specific example in mind and help you understand what's possible to accomplish both the giving that you're wanting to do as well as minimizing the taxes using this strategy. You'll find out more information or you can contact them at ncfgiving.com. That stands for National Christian Foundation, ncfgiving.com.
NCF was founded, by the way, by Larry Burkett and Ron Blue and an attorney named Terry Parker and they're the best at what they do. So reach out to them today if you'd like to. Thanks for calling, Barbara.
To Nashville. Hey, Chris, what can I do for you? Hey, Rob. Thank you for taking my call. I've got a dilemma. So I've moved out of state and we've been renting for almost a year. My lease is almost up. So I sold my house. I sold my business.
I have plenty of money in the bank. So when I go to get a mortgage for a piece of property, they told me since I'm not employed that that counts against me and I'm transitioning into another career and it's going to take a little while for me to get certified in order to start this new job. My wife makes more than enough to cover what our mortgage would be because it would be either the same or less than our rent.
But they said that because of what the rent payment is, that she wouldn't qualify either. So what do I do about this? You know, I could use all my money, but then I wouldn't have any savings in the emergency fund, anything like that. Or I could go out and start working a job that I don't like, you know, just to qualify for this mortgage. So I don't really know what to do.
Yeah, no, I understand the dilemma you've got here, Chris. Tell me again, though, what is your plan with regard to your future employment? So I want to teach high school. I was in the restaurant industry. I want to teach high school, but my degree is not in teaching. So I have to go get certified in order to teach. All right.
Math, mathematics, high school. Yeah. And even though you don't have a current job, what kind of employment history can you show? I mean, I can show 17 years in the restaurant business. That ended at the end of last year. I see.
OK. Yeah. So, you know, I would definitely reach out to a couple of lenders. I'd start with Movement Mortgage, which is one of our partners here at Faith and Finance.
You'll find them at movement.com forward slash faith and talk this through. I mean, obviously, you're kind of caught in the middle here and you've got a couple of options. I mean, generally with a conforming conventional loan, they're going to require two years of employment history and at least six months on your current job. And that's a challenge just kind of given where you're at. So what do you do with that?
Well, you've got a couple of options. One is you get a nonconforming loan where you're essentially doing a no doc loan where you're not going to be able to show the income verification. You'll show significant enough cash reserves that would justify to the lender that you could make the payment long enough to make them comfortable. And you're going to have a bit of a higher interest rate that you'll probably want to refinance later once interest rates are lower and you've got your job. Second option is you try to qualify on your wife's income alone based on the fact that she does have that job as long as she's got the credit score and the income to justify it where the ratios work. And the third option is you just continue to rent for six more months until you get that payment, that employment history.
So it's going to be one of those three. I'd reach out again to our friends at movement mortgage dot com. If somebody can get it done, I believe they will be able to. It's movement dot com forward slash faith. You'll get there, Chris. I know this is frustrating, but hang in there. And if we can help further, let us know. We'll be right back. Great to have you with us today on faith and finance live. I'm Rob West. All right. It's Friday.
That's right. The weekend is here. And that means Jerry Boyer is here as well. Jerry stopped by each Friday with his insightful analysis on the markets and the economy through the lens of scripture. He's the president of Boyer Research.
He's a columnist at World Opinions and we always appreciate our time with him. Jerry, good news. I mean, markets up five hundred fifty points. Strong jobs report.
The Fed increased by twenty five basis points. Sounds like everything's fine now. Right. Well, better than it was maybe a week ago.
I'm joking. Better than it was even in the beginning of the week. I mean, things sort of switched up today a little bit with the strong jobs report. So we have one of those situations.
I think I've mentioned a few times before. You have to look at what people are buying and you also have to look at what they're selling, because that'll tell you what they're responding to and what their outlook is. Right.
This is a really important lesson for finance. Only God knows the future. God's eternal.
He sees everything at once. The rest of us, as Paul says, look through a glass darkly. We're looking out in the future. We don't know when it's kind of shadowy and we get new information every minute and we update for that information. And the information update that we got today was that the jobs were stronger than expected. The information update we got a couple of days ago was that the Fed did, in fact, hike.
Not a lot, but they hiked and said some things indicating that they probably will pause and not hike. Markets interpreted that as saying basically they're done. The probability markets for the next two meetings show basically 90 percent chance that they stand pat. And then in the September meeting, it's almost a 90 percent chance that they're going to cut. So that's consistent with the idea that we're going to have a recession or we've already entered into a recession.
So let me go back to this. What do you buy and what do you sell? So what they buy, they bought stocks, what they sell, they sold bonds. So when the market sells bonds, which are the sure thing, fixed income, they're considered safe, and they buy stocks which are chancier, that means they're more optimistic about growth. When they sell stocks and buy bonds, that means they're more scared.
So bonds are called a recession hedge. So when stocks go up and bonds go down, that's a little bit of a shift towards growth optimism. By the way, when they both go up, that means that the Fed's buying, the Fed's big enough to come in and buy everything and make all markets go up. When they both go down, that means the Fed is selling. So the story this week is not a lot of Fed stuff going on, very small rate hikes, standing pat, maybe a small cut, several months in the future. So the Fed's kind of on the sidelines now. So the markets this week were basically saying, OK, the Fed's kind of in neutral. What's happening with the economy? And they look at that jobs report and they said, yeah, we still might have a recession, but it'll be kind of a barely recession, kind of a shallow and short recession, which seems to be a reasonable point of view for the markets to take.
Yeah, no doubt. So the markets obviously are forecasting that shallow recession. The question is whether or not the economy follows suit. I mean, we have some still real challenges on the horizon, Jerry, even in the near term, namely inflation and the effects of this easy money policy we've had for more than a decade now with the near zero or at zero percent Fed funds rates. And we've got lots of other issues around the world as well, don't we?
Yeah, we do. And I think that markets are basically saying, look, with whatever the Fed's going to do to fight inflation, it's done it. If it's if it's enough, great. But if it's not enough, the Fed's not going to do more. That basically, there's only so much they're willing to slow down the economy.
Yes, they are slowing down the economy. Yes, that is a really weird kind of economics where you think that the way to fight inflation is to intentionally slow down the economy. A biblical approach to me, a classical approach to economics is if you want to beat inflation, you have growth, right? If inflation is too much money chasing too few goods, well, get more goods.
That's the answer. More stuff, right? The more stuff there is, the more affordable it is. So the answer is to get into growth mode, not to trigger a near recession to make people pessimistic so they're afraid to buy because they're scared of the future. That's no way to really, it doesn't solve the inflation problem for the short run. Inflation goes down a little bit during the recession.
Then when people aren't scared anymore, they go out and buy and the inflation's back. It doesn't really deal with the systemic problem. The systemic problem of inflation is debasement of currency.
It's a violation of the moral law as revealed in the Ten Commandments and the Torah that you must have just weights and measures that you shouldn't steal. So you have to deal with that issue. Otherwise we have what we have now, which is the Fed kind of micromanages and tries to muddle through. So the kind of the lesson this week is feds on the sidelines. They're probably done with their inflation fighting.
They probably didn't win. It'll slow down, but we're not going to get back to normal inflation and probably a mild recession. And we're thinking based on today's jobs report, the markets are saying a little milder of a recession than we thought yesterday. And that's how it is. We change our positions on a daily basis because we have unstable leadership at the top. And when you have unstable leadership at the top, you're going to have unstable behavior throughout society.
Yeah, no question about that. Jerry, obviously, we'll just continue to watch this as it unfolds. And, you know, as you said, the key is that we're willing to live by the principles laid out in scripture about how economies are supposed to function. And when we violate those, well, we pay the consequences, don't we?
We do. And our pattern has been when we get into a crisis, we get out of the crisis by cheating our way out rather than repenting our way out. So the way to deal with a crisis is to find a principled way out of it. The way to deal with an inflationary crisis is to return to stable money. The way to deal with a recessionary crisis is to return to, you know, pro-growth policies which are consistent with the human image of God. But we don't do that. Instead, we print money to get out of recessions and we slow the economy in order to get rid of inflation. And when you try to get out of a jam by violating principles rather than restoring principles, you're just creating a bigger crisis in the future. Every crisis that we've had in the past several years was created by our dysfunctional, non-biblical ways of dealing with the crisis before. Wow.
Yeah, Jerry. Well, I appreciate that. I mean, obviously it can be a bit discouraging and yet we don't have to follow that pattern in the future if we have people making these decisions who understand a biblical worldview, right? Yeah, and don't get discouraged.
I mean, human beings are made to be creative. So stay in the markets, stick to your plan. Discouragement, I mean, the irony is that fear and discouragement make you a worse investor.
Fear and discouragement make you poorer. The more frightened you are, actually the less likely you are to be a wealth creator through your investment. So you have a financial advisor, have one who's aligned with your worldview, put together a plan. There isn't one perfect plan. There's lots of plans that work.
The only bad plan is to not have a plan. Then what people do is they invest emotionally. When it goes up, they say, oh, I should have bought that.
OK, I'll buy it now. So they buy it when it's expensive. When it goes down, they get frightened and they sell. So they sell when it's cheap.
They act in really kind of foolish ways because they're driven by emotions, driven by the wind and toss, like it says in James. So don't get discouraged. Discouragement is a waste of time. Worry is a waste of time. It doesn't add one cubit to your lifespan.
It does add one penny to your retirement account. Just follow a basic plan. Don't get worried. Again, worry is wasteful. Stick to the plan. Don't let fear dominate your decision making process. Understand that God made humans to be productive.
So when you're an investor, you're essentially placing that bet on the image of God in man to over the long run be wealth creating. Well, that's a great place to leave it for today. Jerry's always appreciate your insights and encouragement, my friend. Have a wonderful weekend.
Same to you. All right. That's Jerry Boyer, our resident economist.
He joins us each Friday with his market and economic analysis. All right. Back to the phones as we round out the program to Bowling Brook, Illinois.
Justin, go ahead, sir. Hi. Just quick question. I'm about to close on my house and get probably net around one hundred thousand and want to see if I should just roll that into my next house, which I already bought. I did like a bridge loan. So I have a 30 year mortgage for two hundred forty and sort of try to reduce that down dramatically or take some of that and put in as emergency fund because I have about maybe two months of emergency fund cash on hand on to maybe bump that up to six months. So just want to get your advice on that.
Yeah, you certainly could bump that up. I mean, I'd be more inclined if this was part of what you've been paying into your previous homes, trying to reduce that mortgage. Let's continue that trajectory and not kind of have a blip where you all of a sudden have more debt than you left with. So I'd be inclined just to plow that into the next house with the goal of getting that one paid off completely. But let's not say we're willing to settle for two months emergency funds, which means where is that going to come from? Well, it's only going to come from limiting lifestyle, dialing back, spending, creating more margin out of monthly cash flow so we can continue to build up. Maybe it's going to take you six months or a year, but build up that emergency fund to where it's going to be, but not at the expense of not continuing to keep that mortgage coming down, whether it's your old house or your new one.
Does that make sense? Oh, yeah, I appreciate it. That would be the direction I'd go.
But again, that requires that you have some confidence that you can in fact do that and continue to build up that emergency fund, even if you plow all of these proceeds into the next property. Hey, God bless you, Justin. Quickly to Marion in Tampa. I've got just a minute. Go ahead. Hi, Rob. Thank you for taking my call.
I just have a question. My wife and I am trying to sell our house, but we don't know if we should rent this house or just completely sell it. Do you have 20% for a down payment on the next one if you don't sell it? No, I was thinking about getting an equity line. They're going to be about $90,000. I use that just to avoid the PMI and all that for the next house.
I wouldn't do that, Marion. If you don't have that 20% down payment, that tells me you're not ready to be a landlord on a second property just from a cash flow standpoint, not in terms of your financial maturity. I think from what I'm hearing, if you don't have that 20%, let's use that as a good indicator that you need the equity in this current house to buy the next one, especially with us heading into a recession likely.
I don't want you to be over levered and potentially have a rental property that you don't have a renter in and now that you've got yourself in a financial predicament, I'd sell it, plow it into the next house and buy that rental property later. Thanks for your call today. Faith in Finance Live is a partnership between Moody Radio and FaithFi. Thank you to Clara, Amy, Dan and Jim. We'll see you on Monday. Have a great weekend. Bye bye.
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