Investing for the Long Haul

With today's ups and downs on the stock market, mostly downs, people are asking, should I get out?

Hi, I'm Rob West. Well, there's no question that after one of the longest bull markets in history, folks are having quite an emotional time with bears running loose on Wall Street. I've got some advice on that today, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Okay, so folks work hard to build up a nest egg, and they can panic when they see their assets shrink, as they've been doing. I certainly get that, but at the same time, reacting out of emotion to what's going on in the market can be costly in the long run. Remember what Proverbs 21 5 says, steady plotting brings prosperity, hasty speculation brings poverty. That verse should be both a warning and a comfort to us. It addresses two human emotions that will derail your long-term investing strategy, fear and greed. It tells us that if we have a long investment horizon, where we don't need the money for at least five to ten years, it's safe to invest in things that carry more risk, because the markets always recover. It also warns that trying to make or save a quick buck by attempting to time the market can be very costly.

Here's an example. Zoom was hardly an everyday word before COVID hit in early 2020. That certainly changed. If you bought Zoom stock a month before the outbreak, the share price was $63. A month later, just before the shelter-in-place began, it went up significantly to $68 a share. If you then decided to take your profit, you could have congratulated yourself for making a tidy 8% return in just 30 days.

Of course, you had no idea that millions of Americans would be homebound in the coming months. Millions of churches, schools and businesses all started using Zoom in the next few months, and its stock was selling at $204 a share. If you'd held onto the stock instead of making 8%, you'd have made 325%. Now, that's just one example, but it illustrates what can happen when you try to time the market. Let's look at a scenario where you'd do it with the market in general and over a long period of time. If you bought $1,000 worth of an S&P 500 index fund in 1970 and did absolutely nothing with it, 20 years later that $1,000 would have turned into nearly $140,000. But if you tried to time the market, jumping in or out, either to take a profit or prevent a loss, and you missed just the best five days of the S&P 500 during that period, your stock would be worth only about $90,000. If you missed the best 25 days, your stock would be worth only $33,000. So we see that the negative impact of trying to time the market can be huge. On the other hand, it would have been extremely beneficial to have missed the market's worst five or 25 days. But who can do that?

No one. We can't predict the future, so how do we take the anxiety out of a bear market? Well, two ways. Obviously you can pull your money out and go to cash, but then there's a good chance you'll miss potential gains as the market recovers. The other way is to stick to a long-range investing plan.

At least five years, ten years is better, and by dollar cost averaging. That means you contribute a consistent amount each month to your retirement account without fail. That could be in stocks, mutual funds, or bonds, and you simply ignore what the market is doing on a daily basis. By investing the same amount each month, you're automatically buying fewer shares when stocks are expensive. But then when the market's down and you still contribute the same amount each month, you're naturally buying more shares. So no matter what happens on Wall Street, you're always building maximum equity at minimum cost. You'll also come to see a bear market as a great buying opportunity because stocks and mutual funds are down. This takes a certain mindset, one that accepts delayed gratification, and it brings us back to our verse, Proverbs 21.5, steady plotting brings prosperity. You see, dollar cost averaging doesn't make you wealthy overnight. It gives you small but steady long-term gains. And if you stick with it and don't pull your money out when things look bleak or try to take profit when the market's up, those gains become substantial over time. Well, we hope that helps you bear up with a bear market. I know this is encouragement today and often this advice is counterintuitive, so seek the wise counsel of Scripture and you will benefit in the long run. Your calls are next, 800-525-7000.

That's 800-525-7000. We'll be right back. And we'll be right back. Thank you. I'm just leaving the money in this educational place because I'm hitting 71 this year and I'm going to have to start taking a certain amount out.

Sure, yeah. So the required minimum will come after 72, but you do have the ability to roll that out to an IRA. If you left it there, which you certainly can do, I think the key is what's the purpose of this money? If it's not going to be used to generate an income, meaning your expenses are covered and you don't have anything you need to pull out of it other than what's required, then I would keep it invested. Typically, you would look at 72 at probably a 60-40 portfolio with 40% toward stocks, 60% toward fixed income. That's obviously just a rule of thumb that wouldn't be hard and fast.

You could go on either side of that, a little more conservative, a little more aggressive, but that would give you the ability to grow that into the future. And then with your required minimum, you can either take that out, which makes it taxable to you. It gets added to your adjusted gross income and then just sock that away. Or you could use what's called a qualified charitable distribution, which just means that as that required minimum comes out of that, it could go directly to your church or a ministry or charity of your choice, which makes it not added to your taxable income for the year and gives the full benefit to the charity. And it could even be a replacement for money you were going to give to the same ministry or charity out of your savings or cash, which would allow it to be done in a more tax-efficient manner because now you're not recognizing that income. As to the $30,000, I would look at this stage of life at somewhere between 6 and 12 months in expenses in liquid reserves in a high-yield savings account.

And you could certainly, depending on how comfortable you are with either ends of those spectrum, you can make that call. But I would put that in an FDIC-insured savings account that could be available and accessible for the unexpected. If you had a bit left over after you shored up that fund based on how much you're spending each month, one other option and to look at would be what are called I bonds that we've been talking about lately. These are issued by the U.S. government currently paying 9.62 percent. You've got to hold them for a year. So they're illiquid for 12 months. But given the rate that's being paid now, which will change every six months based on the consumer price index, with almost zero risk at nearly 10 percent, it's a phenomenal rate of return, especially given the safety.

But give me your follow up questions on any or all of that. Well, that's mainly what I wanted to do, whether I should just hold that money, $30,000, in a savings account. But you're saying take part of it and put it in a bond. And the retirement at $70,000, I'm not sure how much they take out at $72,000. Is there a standard amount? No, there's a table that would be based on your age and the balance of the account. You'll find it at IRS.gov that will tell you exactly what that required minimum is. So you'll just look at the balance at $1,231 of that year and then it'll factor into that equation. So whatever that amount is, the question is just, do you want to take that out and recognize it as income and then decide whether to save it or spend it?

Or if you want to give it away as either additional giving or replacement for giving you were going to do out of cash, that's where the qualified charitable distribution would come in, which would avoid you recognizing it as taxable income. Okay. I really appreciate it.

You helped me a lot. Okay. And I think the key on that $30,000 is just determining how much is the appropriate amount to have in emergency reserves. And so what are your expenses on an average monthly basis? Probably about $2,000 at the most. Okay.

Yeah. So I think if you wanted six months' worth of expenses, that'd be $12,000. If you wanted a full year, that'd be $24,000. So it sounds like you could keep the $20,000 parked in a high-yield savings account. I'd look at an online bank just because they have the same FDIC insurance, but you're going to get right now about 1.7% interest annually and that's headed up with interest rates. You could look at Ally Bank or Marcus or Capital One 360. But perhaps that gives you then $10,000 to look toward the I bonds given how great that rate is right now. As long as you're willing to leave it there for a year, you'd do that at treasurydirect.gov.

That's the U.S. Treasury's website where you can buy their electronic bonds. And I hope that helps you. We appreciate you listening and calling today. God bless you.

To Tampa, Florida. John, you're next on the program. Go ahead, sir. Hey, how are you doing today? Great.

Hey, I just have kind of a quick-ish type question. I am 57. We'll call it some quote-unquote some lifestyle changes. And I was curious to know what I would do in this late stage in my life to try to get involved in a retirement program. Again, I'm 57. I've moved from Pennsylvania to Florida, somehow in the Florida area. Took a while for me to get back up to what I'll call a financial situation where I'm at right now.

So, I am unsure of what we do, my wife and I, to get involved in savings for retirement at this late stage in our life, being that both of us will have some quote-unquote lifestyle marital changes that kind of change some of our financial savings to a different picture now. Okay. Are you both working, John?

Yes. And what is your employment status? Are you both W-2 employees or self-employed? W-2.

W-2. And do you, excuse me, do either of you have access to a company-sponsored retirement plan at work? Yes, we both do. Okay, great. And are you currently participating in that?

Yes, we are. Now, I've just started this three years ago. She started probably about seven years ago. Okay, very good. And are you, what percent of your income are you putting in? At this point, three percent.

I think she is at six. Okay. You know, I think that's the key. I mean, anytime you're playing catch-up, the key is just systematic disciplined investments.

We don't want to, you know, go highly speculative and try to go way up on the risk spectrum to try to make up for lost time. The best thing you can do is just limit your lifestyle and get as much as possible going in. The max employee contribution for somebody is $20,500. And then if you're over 50, you can put an additional $6,500 a year in there. So that'd be $27,000. So that's a lot of money that you could put away in a 401k each of you and get a good bit going toward retirement. So I'd look to do as much, as high a percent as you can to fully maximize that benefit every year. And then the other key is just try to get as much of your debt paid off as possible, including your home.

And if you could do those things, saving the 401ks to the maximum each of you and become debt-free, then you're going to enter retirement, let's say, you know, 15, 10, 15 years from now with as little lifestyle spending as possible and as much savings as possible. Stay on the line. We'll talk a bit more off the air and we'll be right back on MoneyWise Live. Stay with us. Great to have you with us today on MoneyWise Live.

I'm Rob West. This is where we apply God's wisdom to your financial decisions and choices, looking to the scriptures, the big themes to understand the heart of God as it relates to managing his money. That's right. You and I have been tasked with whatever passes through our hands to be the money managers for God himself. It all belongs to him. So how can we be found faithful?

You know, a steward is to reflect the heart of the master in managing the master's resources. We want to do that by looking to God's word each day together and trying to make decisions that align with God's wisdom. And we do that here on this program each afternoon and delighted that you've joined us. We've got two lines open today, 800-525-7000. Let's head right back to the phones to Little Rock. Johnny, thank you for calling. Go right ahead.

Thank you for having me. My question is, I've got double A savings bonds that I purchased in 1991 and they matured last year. And I need to know if I can transfer them in some way to the I bond or what would be the best way to do that. Yes. Are these electronic bonds or paper bonds, Johnny?

No, sir. They're paper. I bought them in 1991. Okay. All right. So I would take them to the bank and ask if they will cash them in for you.

The other option would be to convert them to electronic bonds and then redeem them there. Are you comfortable using the computer to transact financial matters? No, sir.

I'm really a dinosaur. Okay. I understand.

No problem. So I would try to redeem them at the bank. The answer that you'll get may depend on how long you've held an account there, that everything is moving as you might imagine more and more electronic.

The challenge is that once you've done that, then any bonds that you'll buy moving forward are going to have to be purchased unless you do it on the secondary market electronically through the U.S. Treasury's website at treasurydirect.gov. How much would you expect to get when you redeem these double E's? That's something over $70,000. Okay. Yeah. And are you married? Yes, sir. My wife is 76 and I'm 78.

Okay. The reason I ask is you can put in $10,000 per person per year into the iBonds. So if you wanted to do that, which makes a lot of sense, the double E's are paying 0.1% right now, one-tenth of 1%, whereas the iBonds are paying 9.62%, so nearly 10%. So a dramatic increase, but you can only put in up to $10,000 unless you're using a tax refund to get an additional $5,000. So between the two of you, you could put $20,000 of that $70,000 into the iBonds at that great rate. You'd have to leave it there for at least a year, but I think the rate will still be very attractive for the time being. You would have to get somebody to help you do that though, Johnny, on the computer, maybe a friend or a family member, somebody from church, because you're going to have to open an account at treasurydirect.gov and then once you deposit the proceeds from the redemption on the double E's, then you'll have to do an electronic transfer to fund that account and buy the iBonds directly from the US Treasury backed by the US government.

So I think that makes a lot of sense. The question then is what to do with the remaining $50,000. Do you have a savings account with what I call an emergency fund separate from these double E bonds? Yes, sir. I'm not suffering any kind of way for emergency funds.

I'm pretty stable. Yeah. So the question then is what to do with that remaining $50,000. What did you have in mind? Are you thinking CDs or something else? Well, about the only alternatives I would have would be like CDs.

Yeah, yeah. So if you want ultimate safety, I mean right now high yield savings accounts are approaching 2%. The CD rates are going up with the interest rates as they continue to rise. I mean right now you'll find a one-year CD at 2.7%. If you were to go up to a three-year CD, you're going to find a three-year CD, some banks paying 3.5% right now. So as rates continue to rise, that's going to become more and more attractive. So what I'd probably do is buy maybe a one-year and a three-year CD and then as the one-year comes due, roll it over or you could do a one-year and a two-year and then roll that over after 12 months because rates clearly are headed up and you'll be able to take advantage of the higher rates down the road.

So maybe a combination of the I bonds plus two CDs one-year and two-year with the understanding that you're going to take advantage of higher rates 12 months from now would probably be the way to go. Does that make sense? Yes, sir. It really does.

Yes, sir, it does. Very good. Well, you head to your bank and see if they'll cash in those savings bonds for you and then I think the next step is to find somebody to help you get the account set up at treasurydirect.gov. If we can help you further, Johnny, along the way, give us a call. God bless you, my friend.

To Kalamazoo, Michigan, Clarence, thank you for calling. Go ahead, sir. Hey, I got a couple, some money and a couple of Templeton funds and also an IRA account. I'm 74 years old and I see the market is losing like crazy. I'm wondering if I should get out now.

Well, let's talk about that. How much do you have in those Templeton mutual funds? Oh, about $30,000 altogether.

All right. And is that money that you're living off of in part? Are you pulling an income from that or is that money just socked away for the future?

Pretty much just socked away. I'm using the dividends to maintain a low interest card and then one of them I'm using to pay my car note with. Okay.

All right. Well, I think the key here, Clarence, is, you know, if this is money you don't need right now in order to overcome the loss of purchasing power through inflation, I think it makes sense to stay invested. The important thing is, is it properly allocated for your age and risk tolerance?

Typically at 73, we might say you'd want somewhere between 30 and 40 percent in stocks and somewhere between 60 and 70 percent in bonds. And if it's not in that position, perhaps reallocating it with a focus on a little more stable investment with income generation, but also the potential for some growth makes sense. And then if it's allocated right with the right time horizon, then the key is to say, okay, I'm just going to let it go. And after a 12-year raging bull market, I know there's going to be bumps along the way. We're certainly in one of them right now.

It could continue into next year. But if you're properly invested with the right time horizon, I'd stay the course. So I appreciate your call today, Clarence. Stay on the line. We'll talk a bit more, and we'll be right back. Thanks for joining us today on MoneyWise Live, biblical wisdom for your financial decisions. I'm Rob West. The lines are full. Great questions coming up, so enjoy as we head back to the phones.

Southeast Kansas. Mark, you're next on the program. Go ahead. Yes, I've listened to you on Bot Radio for years. I'm Larry Burkett in the past. I appreciate your program. Well, thank you. I have a question that I would – I'm not trying to change – I'm not trying to work my way out of anything.

I just want to be honest. And I farm, and you just said that a farmer in the Old Testament, they didn't deduct their seed or anything. They just paid off the gross income. Yes. Is that correct? Well, that's right. Okay. Uh-huh. And I can't argue with that, and I've tried to do that, but let me give you a couple of numbers.

And the last two years, especially this year, numbers are really crazy. But I run a family farm, a farm about 2,000 acres here in Southeast Kansas. And it's truly a family farm, and that's kind of a mid-size farm that can self-sustain itself, apparently. But I'll spend $600,000 in expenses, and I will sell $700,000 in product. Now, on the average – and that's just round numbers, but on the average, I will have a net taxable income of around $70,000 on the average, sometimes $40,000, sometimes $100,000. But I have spent $500,000.

Am I supposed to tithe on the gross income? And I would love to have that kind of faith. Sure. Let me throw one more thing in.

Thank you. This year, we're drying up, and I'm going to be $400,000 short of covering my expenses. And so if I get $150,000 worth of income, am I to tithe off of that gross before expenses? Give me your opinion on that. And I'd love to trust God for the whole amount, you know. Yes. Well, I'm never going to discourage you from going on an adventure with God in whatever he leads you to do.

But I would say, apart from that, no. As a business, you would not, in my view, tithe on the gross amount. The challenge is, if you did, depending on the business, you wouldn't have a business anymore. It's a lot different than what we were talking about in the Bible times, where basically it was the price of the seed and basically a lot of manual labor versus the farming of today, which is akin to most businesses. It's much more complicated with a lot of overhead and machinery and equipment and that type of thing to be able to get the job done that provides a really critical service to our country in the way of food production. You know, depending on the business, the margins are such that if you tithe on the gross amount, it just doesn't work. The numbers don't work out. Again, as you said, you could trust the Lord and do a reverse tithe and, you know, you can do any number of things and God's in the miracle business.

And if he leads you to do that, I would say you go for it. But apart from that, I think what we're looking at for a business is to say, what is the true increase of the business? Well, the increase of the business would be the revenue minus all of the expenses and then including the amount that's paid out to you as the employee or owner of the business that you would tithe on personally. And then whatever's left in the business has retained earnings. Let's say at the end of a fiscal or calendar year, that is true profit that stays in the business. If you as a business owner say, I want to honor the Lord with my increase in the business, that's the amount that you would give on. Different from, you know, an individual who's receiving a salary, whether that's being paid by a business he or she owns or you're a W2 employee, you would, you know, give off of the whole increase there.

But that just simply doesn't work. I mean, think about it as a grocery store. I mean, they make a very small percentage of margin on every food item that passes across that register. If they tithed on the gross amount, the grocery store would go out of business very, very quickly. And I think, you know, the same is true for most businesses. So I would say in your case, you've got to look at ultimately what is the profit of the business after all the expenses are paid, the salaries are paid and everything. And then that would be the amount that you'd give on based on your increase.

I understand. And that's the way I would figure it. So the Old Testament, those people are getting a tithe, they were just subsistence farming.

Those weren't businesses. That's right. Yeah. And basically, you know, that was their livelihood to make, you know, an income.

And it was their time and the cost of the seeds, you know, being put in the ground, but entirely different than the kind of business farming operations that are going on today. Yeah. Well, it's the same guy. And I have my rule of thumb, which I'd like to let everybody know, is I just make sure I know what my income is and I make sure I'm giving way over that, way over the 10 percent. So we just walk there. Well, as my friend Randy. I have dealt with this question in the past and yeah. Well, I think you're taking the right approach here, Mark. And listen, certainly I will ask the Lord to provide for you.

It sounds like it's a challenging season right now. I suspect this is not the first one and God's been faithful to you along the way. And yet it's real, just given what you're facing right now. So we'll ask the Lord to provide for you as he has in the past. And we appreciate you calling in today. And you're certainly giving testimony to your desire to be found faithful with the Lord. And I appreciate that. Well, thank you. And Father God is a grand provider. Yes, he is.

That's very true. God bless you, Mark. Call any time. We'll talk to you hopefully again real soon.

Crawfordsville, Indiana. Lee, you're next on the program. Go ahead. Yeah. I was wondering what I'm retired and my wife is self-employed and what the pros and cons of investing in physical gold or a gold IRA against a declining economy are. Yeah. You know, the challenge with that is, I mean, obviously it is a way to diversify. You bring another asset class into the equation. There's the security of value because there's an underlying asset and it's a hedge against a disaster.

It might be called a fear trade. The challenge though with gold is that historically it just doesn't have the historical return than a properly diversified stock and bond portfolio. Yes, there are seasons where you will see it outperform, but those tend to not be over the long haul as attractive as just a long-term stock and bond investment account. There are premiums that have to be paid on the buying and the selling, the dealer markups if you're taking physical possession, and it's not an income asset.

It doesn't generate any income. You've also got just the additional issue of securely storing these assets. And if it's there truly for a disaster, if somebody was doing it because they were thinking there might be a collapse of the banking system or something like that, I would just question how you would convert that into something that could actually be used to conduct business or commerce. So I think for me, I'd rather you'd keep a proper allocation to gold of about 5%, certainly no more than 10, and then use as the core of your portfolio stocks and bonds in a way that's appropriate for your age and risk tolerance. We see a lot of commercials for these gold IRAs when we get into seasons like this where there's a lot of fear and uncertainty, and then we don't hear about them a whole lot during a 12-year bull market like we had previously. I think we'll get past this whether we slip into recession or not. The market will recover well ahead of the economy, and we'll move to higher ground. Longer term, yeah, we've got some challenges on the horizon we need to deal with, but I still think your best option is not to go into a gold IRA where you're allocated fully to the precious metals.

History just does not say that that's going to perform as well as another type of account. Thanks for your call, Lee, and we'll be right back on MoneyWise Live. Stay with us. Thanks for tuning in to MoneyWise Live.

I'm Rob West, your host. This is where we apply God's wisdom to your financial decisions and choices. Why do we take an hour each afternoon to talk about money? Is it so we can accumulate a lot more of it or grow our nest egg or build bigger barns?

No, it's not that at all. It's that we recognize that we're charged with an incredible responsibility as a steward of God's resources, so we want to be found faithful because here's the reality. Money is a tool to accomplish God's purposes, and it's to provide for our families. It's something we should enjoy, but it's also something we can use to connect back into God's activity. He, frankly, gives us the privilege of joining and participating with him in his work through our giving and our generosity. It's a tangible expression of where we place our trust, and it's able to be used in so many ways to glorify God, but often it's just the opposite. It's something that becomes a stumbling block. We make it an end as opposed to a means to an end, and it can cause us to, well, miss out on God's blessing. In Mark 4, we see that it was the cares of this world and the deceitfulness of riches that was choking out the word from bearing a 30, 60, 100-fold return.

And if money is often the chief competitor to lordship, how do we put it in its proper context and level? Well, that's what we look forward to doing together each afternoon on this program. Let's head back to the phones to Mississippi. Gloria, thank you for calling. Go right ahead. Yes, I wanted to ask a question. Is there an age limit to giving the $16,000 non-taxable gift allowance?

No, ma'am. It's like what age? Yeah, there is no limit. So you can, in terms of age, you can give $16,000 for 2022 to another person of any age, and you will do so without filing any gift tax forms. Now, what's often misunderstood though, Gloria, is folks think that when you go beyond $16,000 per person, which is the number for this year, that all of a sudden then it's going to become taxable to them.

That's not true. It's still not a taxable event even if you give more than $16,000. It's just that at that point, you would have to file Form 709, the gift tax return, and anything over $16,000 per person would just go against your lifetime gift exclusion for all gifting of $12 million. So until you get to $12 million in gifts, you're not going to pay any gift tax at all.

The question is just whether or not you need to let the IRS know that you're doing it, and that's where the $16,000 comes into play. And can it even be a small child that you give this to? Oh, yes.

Absolutely, yeah. And so then you would have to just put it into a custodial account for that child, or they would have to figure out how to handle that if it's a minor and the custodian would have to give oversight to it until they reach the age of majority. So you can't let the parents use that for their upbringing? Well, there would be certain conditions under which a custodial account could be used for the benefit of the child, and so you'd want to look into that. That is entirely possible, but there would have to be certain conditions met for that to be the case.

But to answer your question, there is no minimum age as to being able to give that $16,000 gift. Okay, that's great. Thank you so much, and God bless you. All right, Gloria. Thank you for your call today. I appreciate that.

Chicago, Illinois. Hey, Anthony, thanks for calling. Go right ahead.

Hey, how you doing? I've got two quick questions. The first question is, I am on Social Security because my kidneys failed, and I wanted to know, am I still able to do some saving for retirement?

That's my first question. Second question number two is, my mom is about to retire, but come to find out, my dad was in the Army, so she would get survival or spousal benefits or what have you. Does she get that in Social Security, and how does she apply to get that money?

That's all. Okay, very good. So the first question as to your ability to save for retirement, that's not going to be impacted by the fact that you're receiving Social Security. Are you on Social Security disability, or are you on just straight social? Yes, yes, and I get long-term disability from my job. Okay, and are you still working right now?

I am not. I do cut, well, I pastor a church, and I'm a 1099 employee. Okay, so then how would you, what type of retirement plan are you looking to contribute to? Well, I'm just maybe $100 a month. I'm just starting. I had a 401k when I was working, but I took it all out when I left because I was waiting on my Social Security to kick in.

So I had to spend that, you know what I mean? Yes. Well, a disabled person on SSDI can earn up to $1,350 a month. So as long as you're earning less than that, you're in the clear there, and if you want to turn around and put that into a Roth IRA or a traditional IRA, you can certainly do that. Okay, great.

Yes, and then tell me the second question again. Sure, my mom is about to retire. My dad was in the Army, so she will get, they said survivor benefits. So I'm guessing she will get Social Security and that, or can she get both, or how does she go about getting those benefits from my dad who's now a distance?

Yeah, very good. So the answer is yes, you can get both Social Security benefits and military retirement benefits. Generally, there's no reduction of Social Security benefits because of your military retirement. Your Social Security benefit is just based on your earnings and the age that you choose to start receiving benefits.

As to collecting that SBP, the survivor benefit plan, basically you can apply at vets.gov, or you can submit a paper application to the VA as well, but that would provide a benefit in the form of a monthly payment known as an annuity, and then she would be the annuitant receiving those benefits as a spouse. Okay, thank you very much. I appreciate all you do. All right, Anthony, thanks for calling today.

To Jupiter, Florida. Hey, Mike, thanks for calling. Go right ahead, sir. Yes, sir. Thank you for taking this call.

I listen to it every day. Well, thanks. A minorly complicated question. Oh, boy. All right, I'm ready. Well, I'm getting married this fall. Both my soon-to-be wife and I have a property. We both have about, I have four or five hundred thousand dollars of equity in mine.

She has about three hundred thousand dollars of equity in hers. Besides my, I'm a long-term government employee and I make a lot of money. I tithe on the money, she tithes on hers, but I had a serious injury five years ago. And during that time frame, I was a paraplegic on life support and I've left, I have a lot of underlying disabilities related to that, but I still work.

I claim no disability. I had to use up. I at the time I had a year's worth of excess money that paid for the mortgage at the house.

During that time, I went through a divorce. I paid thirty five hundred dollars a month in life by Malamone. Now, the question I have is I can lease out my property on the water in Jupiter, Florida, seasonally lease it and essentially pay the monthly expenses if I seasonally lease it out for five months or I can sell the property, completely pay off the other property that my soon-to-be wife has and still have three hundred thousand dollars of equity left over. I'm torn on whether to just fund the place, seasonally lease it. I can't move into this property because our daughter, twelve years old, is very active in her community and we will be living in my soon-to-be wife's house.

I'm torn on. I have no excess funds right now. We are both essentially living month to month paying our bills.

Yeah. Well, you know, I would have said I could have gone either way, depending upon whether you all want to be landlords or not, just depending on, you know, this idea that once you pull it out, if you're sitting on this pile of money, what are you going to do with it? And is it a better investment to stay in South Florida real estate in terms of long term appreciation, especially if, you know, just five months worth of a lease is going to cover all the expenses for the year? And if you leased it year round, you could have another way to generate additional income while it's still appreciating. But that last statement that you just made makes me think that it'd be better for you to just to sell it.

Because if you guys are living paycheck to paycheck, essentially, you're very illiquid right now. You've got all your assets tied up in real estate and you're living right up to the edge, which just makes me a little nervous, especially given some of your prior health conditions. So, I think given that, what I'm inclined to do, just based on the limited information I have, is to say, why not sell this place? Let's pay off her mortgage. Now, your lifestyle, your monthly expenses just dropped dramatically.

You all move into her place. You own it free and clear, which gives you ultimate flexibility and peace of mind. And now, you've all of a sudden, overnight, got an emergency fund of six months expenses that you can put in a liquid savings account and then take the rest and invest it. If you want to buy another property down the road, you could, or just take advantage of this market that's down quite a bit and build this properly diversified stock and bond portfolio that can grow for the future.

That seems like, to me, that's going to give you a lot more peace of mind and less stress to know that your monthly bills have dropped dramatically. You're completely unencumbered and you have plenty of margin and flexibility built into your life now. You know, my heart says that. My brain says I want to retire on the water, my property where I'm at. I'm very torn on that. Well, and I would concur with that.

I grew up in South Florida, so I know how appealing that is. But the thing that gives me pause on that is just, Mike, it sounds like you guys are living right up to the edge without any margin or flexibility, sitting on a whole bunch of debt still. And I'd love for you just to be out from under that. I think that will give you a lot of peace of mind.

And at some point, you can sell her place once her daughter's grown and out of the house, and you guys could buy a nice place on the water. But do it in such a way where you're not carrying all this debt, living paycheck to paycheck right up to the edge. That's my best advice, but you pray about it, my friend.

And I'm confident the Lord will give you some wisdom here. Thanks for calling today. Folks, that's going to do it for us. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media.

Thank you to Gabby T. Handling our phones today are engineer Dan Anderson, Amy Rios producing, Mr. Robert Sutherland providing great research. Come back and join us tomorrow. We'll see you then. Bye-bye.