Hedging Against Tax Hikes

Today's version of MoneyWise Live is prerecorded, so our phone lines are not open. Supreme Court Justice John Marshall once said, the power to tax is the power to destroy. Hi, I'm Rob West. In the early 1800s, Marshall was actually defending the federal government against taxation by the states. But what defense do you have against taxation by the federal government? I'll talk about it today. Then we have some great questions lined up for you.

But don't call in today, because we're prerecorded. This is MoneyWise Live, biblical wisdom for your financial decisions. History has shown us that given the opportunity, government will almost always raise taxes. As the national debt continues to rise, there's ever more reason for lawmakers to want more of your money. Even with the recent downturn of the stock market, Americans still hold trillions in 401k accounts. And you can be sure that many federal and even state lawmakers would like to get a bigger piece of the 401k pie. Now I'm not talking about the federal government confiscating your retirement savings, that would be political suicide.

It's much easier and somewhat safer for politicians to simply raise income taxes. So when the day comes that you withdraw funds from your 401k, you pay more in income tax. You have to understand something about the 401k, and for that matter the traditional IRA as well. One of the huge tax benefits of those plans is also a weakness. Money goes in tax deferred, meaning grow now, pay later. Contributing to these plans has always made sense because most of us assume that our income will be lower in retirement when withdrawals are taxed as regular income. The weakness in that is that government can always increase taxes on 401ks and traditional IRAs in the future, and there's plenty of reason to do it. It's one more thing you can blame on the coronavirus pandemic.

Business shutdowns and high unemployment caused a huge drop in government revenue. Add in the cost of relief programs and you have federal and state governments looking for ways to overcome budget shortfalls, even more than usual. So no doubt some lawmakers are looking at the trillions held in these accounts as the solution, and that's why we might expect tax hikes down the road. So what's your defense against that possible outcome?

Well, first of all, you don't want to stop contributing. Qualified retirement plans have a range of benefits that you should take advantage of, but you should heed the warning in Ecclesiastes 11 2. Divide your portion to seven or even to eight, for you do not know what misfortune may occur on the earth. That biblical principle tells you to diversify your retirement holdings, the same way you spread out your holdings in stocks versus bonds or by holding equities in different sectors of the economy. You can also diversify between taxable and non-taxable income streams in retirement. If you have a 401k, the easiest way to do that is by putting some of your money in a designated Roth account if your plan has that feature. This is a Roth account within your 401k where you would contribute after-tax money. Later in retirement, withdrawals of those contributions and earnings will be tax-free, so you're setting up a tax-free income stream in retirement. Of course, there are limits to what you can contribute to a Roth 401k. Those deposits count against the total allowed for 401k contributions.

In 2022, the limit is $20,500 or $27,000 if you're age 50 or older. If your 401k plan doesn't offer a Roth option, you would still want to contribute enough to get the maximum employer contribution if there is one. After that, if you still have discretionary income to invest, you can open a Roth account outside of your 401k, which of course you should do if your employer doesn't offer a 401k at all. Okay, by now you might be thinking, well, if government can raise taxes on withdrawals from 401ks and traditional IRAs, it can also start taxing Roth withdrawals. It could, but politically it wouldn't be nearly as easy to start taxing Roth accounts as it would be to simply raise taxes on other plans. You see, Roth accounts were specifically created to have tax-free withdrawals.

It's the whole reason for their existence. And remember, Roth contributions are already taxed going in. It would be far more difficult for lawmakers to suddenly do a 180 and effectively double tax Roth accounts. Now there's one more possible hedge against future tax hikes, and it's actually using a taxable brokerage account. It would allow you to get around the contribution limits of qualified retirement plans, although you would incur taxes year to year.

So it's not a great option, but if you're able to max out your contributions to a 401k and Roth and still have money to invest, a regular brokerage account is probably the way to go. I hope that's helpful. All right, we're going to pause for a break when we come back much more on the program, so don't go anywhere. We'll be right back. You're listening to MoneyWise Live with Rob West. You can find us online at MoneyWiseLive.org. However, today we're not live, so if you hear that phone number, please don't call.

But do stay with us. There's lots of great information ahead. There's big themes, big ideas on the heart of God as we look at the Council of Scripture related to our role in managing His money. That's right, it all belongs to God and we're His stewards, so money is now a tool to accomplish God's purposes. Well, when we look at it through that lens, it really changes everything. It puts us in a position where we can be found faithful as managers of God's resources, and when we do that, we can experience God's best.

It doesn't mean we're going to be without challenges, but what it does mean is that we can at least know that we're following timeless wisdom from God's Word as we handle His money. And it doesn't have to be complicated. That's the big idea here. All right, let's go right to the phones.

Chad in Texas, you're our first caller today. Go ahead, sir. Yes, I'm wondering if you should set a 10 percent spot in your portfolio for precious metals. And me personally, I'm looking at silver and whether that would be a sound investment.

Yes, very good. I'm a fan of the precious metals, Chad, as a way to diversify into other asset classes. You know, a properly diversified portfolio should include stocks and bonds and I think an allocation to the precious metals. In my view, that shouldn't be more than five percent, 10 percent at the most, but I would target five percent as an appropriate allocation.

Here's the reality. Yes, it's a store of value. It is a hedge against a falling dollar or against a falling stock market. It's what some call the fear trade, because when stocks are going down, the precious metals do tend to perform better. The reason I wouldn't overweight there, Chad, is that, you know, it does tend to be more volatile and the long term performance just isn't there when you compare it to a properly diversified stock and bond portfolio. So I like the idea of you having an allocation to precious metals, but just not more than five percent. But tell me what you were thinking. Well, see, I put a good amount of my whatever that's left over my capital into precious metals just because of the silver to gold ratio right now.

And then when you look in to how undervalued it is, if you go back, I just think that it's so undervalued and then it might actually come up dramatically. So I'm probably putting too much in it. Yeah. So that's really why I was asking.

Yeah. And I certainly understand that. I think, you know, it would be similar to saying, well, I just have a good feeling about this particular stock sector of the market. And the challenge is, you know, if we don't follow kind of a rules based strategy to investing, we can make an emotional trade. We can try to pick the winners and losers.

And, you know, without proper training, if we're just going on a gut, oftentimes most cases it just doesn't work out. So I think that's where I would say, yeah, let's with our serious money and that is money that's invested for the long term with a specific purpose in mind. You know, let's follow a prudent investment strategy.

And that's where just based on all the research and over a long, long time, I would, you know, look at a five percent allocation, no more than 10. But at the end of the day, you're the steward. And I certainly understand where you're coming from.

I would just be on your guard against trying to pick entry points, whether it's stocks or bonds or precious metals, because often that just works in a counterproductive way. So, Chad, we appreciate you checking in with us, sir. God bless you. Let's head to Kansas. Bart, you're next on the program.

Thank you for taking my call. I'm retired. My wife will be retiring in three months. We've we've tried to grow. We have a conservative growth fund that's got about three hundred and forty thousand in it. And it's made up of about eight mutual funds. And it's lost about 11 percent over the last year. We we've never actually even dipped into that fund.

It's just always stayed there and we hope that it would grow better than it did. But but nevertheless, we're wondering if it's smarter to keep everything right as it is and kind of ride out any future downturns or maybe consider some option that would freeze the amount that we have. Yes. Yeah. So you said you are retired at this point and not planning to return to full time work.

That's correct. Yes. OK. And what income sources are you living off of right now? We've got we've got three pensions and Social Security. OK. And that's enough to cover your expenses. Yeah. It covers more than our expenses. We're not in debt. OK.

Very good. So this is money that truly is free to grow at this point. That's true in the sense of. Yeah. In that we had considered at one point in time using a portion of it to move to a different part of the country. But it just simply appears like we're kind of questioning that at this point in time.

So, yeah, I mean, we want some availability of it, but at the same time, I don't want to watch it. I didn't know losing 11 percent over the last year is something that should be bringing up some red flags for us. Yeah. And you mentioned you're spread across several mutual funds. I think you mentioned eight different funds. How would you characterize the breakdown of stocks versus bonds and other asset classes in that portfolio over the entire portfolio? Oh, you know, while you're going to start asking me things probably that are going to be difficult for me to answer, I as I've looked through them, it appears as though many of them have moved more heavily towards cash right now. But as far as that breakdown of stocks and bonds in there, I'm sorry, I just don't have that information.

That's OK. Yeah, no, I certainly understand. And are you the manager of this? Did you select the funds?

And are you really the one overseeing it or do you work alongside and with an adviser of some sort? Yes, an adviser helped us work through this. And we just had expressed that we wanted to move everything into kind of a conservative growth fund about three years ago or so.

And this is where we landed. OK. And would you characterize this as active management, that there's an ongoing oversight to determine on the part of the adviser when it's time to move out of one fund and into a new one? Or was that really more of a one time type of consultation that got you into these and that person's no longer really overseeing this? Well, we've talked to them regularly, but I think that person probably would be a representative. It's a meters conservative growth fund that that's inside. When I go to look at it, it's in TD Ameritrade.

And the gentleman that sold it to us was from Prime America. I see. OK, very good.

Yeah. You know, I don't have a problem with you being in a conservative growth fund, although that can mean a lot of different things. And because you have multiple mutual funds, there's probably differing strategies in each of those funds. But I think it's time, Bart, for you to have somebody who's having a more active approach. That particular company you mentioned is a lot about sales and less about really high quality, low cost funds. So I'm going to recommend you connect with a certified kingdom adviser. I think having an allocation to stocks is right, given where you're at.

But I think you need some more active management. We appreciate your call today. Folks, we're going to pause for a quick break again. We're not here today taking some time off, so don't call in.

But more questions just around the corner. This is Money Wise Live, biblical wisdom for your financial decisions. I'm Rob West, and we'll be right back.

Don't go anywhere. We're so thankful you've chosen to join us today on Money Wise Live, biblical wisdom for your financial decisions. This is the program where we recognize that our financial journey is in many ways tied to our spiritual journey, often money, and the things that money can buy as a competitor to lordship.

So we want to hold what we have loosely, recognizing God's authority and ownership, our role as steward to be found faithful, applying his principles that we find in his word to the decisions and choices we make every day. Let's do that together. By the way, we're away from the studio today, so don't call in. But we've got some great questions that we lined up in advance.

Let's head right back to the phones. Just before the break, we were talking to Bart in Wichita, and Bart got about $350,000 in a retirement portfolio. It's been in conservative growth funds.

It's down 10% or so. It doesn't sound like he has an active management approach. We were talking a bit off the air about his desire to really protect what he has, preserve it, but also grow it to outpace inflation so he can have it as an inheritance, use it for long-term care down the road if he needs it to make a big move or to give away to many ministries. It's there and it's growing, but it's on a conservative basis, so it's not going to be down as much as the market, but it'll grow modestly. We talked about moving toward more of an active managed approach where he would connect with an advisor who would manage the money with a fee based on the assets under management that could build a portfolio with his goals and objectives in mind.

That person might be independent or a bit with one of the big firms, but the key is the active management strategy where they're a fiduciary, putting the best interests of the client first. I encourage Bart to connect with a certified kingdom advisor there in Wichita on our website at MoneyWise.org. These questions came in to us recently. We receive questions every day and all of them are answered by our coaches or in our community by other stewards there in the MoneyWise community, but several of them were able to get on the air and we always enjoy the opportunity to do that. So let's take a couple of those questions today.

This first one comes from Faith. She says, how can I get my fiance to understand that I'm working within a budget? It's becoming an issue in our relationship because we don't see eye to eye about money.

And Faith, I'm so glad that you wrote into us. You know, this is a huge topic that you all need to really lean into between now and when you're married. You know, we do a lot of premarital counseling to talk about a whole host of issues, but I don't know that there's any that are as important as this area of money.

And here's why. Money is the leading source of conflict in marriage. All of the studies that you look at will say that money is that primary source of conflict. And if we don't get on top of that and really begin to work through that, talking about things like how was money handled growing up? What are our earliest memories of money and how has that shaped how we handle money today? What do we believe the lifestyle that God has called us to is? What about giving?

Where does that fit into this? What about saving for the future? What are our values and our priorities and how can that inform how we're going to handle money moving forward? What about a spending plan and our understanding that the only way we can really accomplish what we want to in the long term is by living within our means and having margin. Here's the other reality that's so key.

Faith is that my friend Shanti Feldhahn, who wrote the book Thriving in Love and Money, which by the way, I would pick up a copy Faith for you and your fiance and work through that. She did quite a bit of research to determine that 70% of couples will say that this area of money is a source of conflict. And two of the four primary ways to overcome that were number one, communication. So you've got to be talking regularly.

We call that a money date, which needs to happen at least once a month. But secondly, margin was key. It's not about how much money you earn to alleviate the conflict. It's about whether or not you're living within that those earnings and have margin leftover that was really in her research, one of the keys to getting beyond money being a source of conflict.

So here's what I would recommend to you. I would start by you guys working through a book like Thriving in Love and Money or Money and Marriage God's Way from Howard Dayton. Either of those would be great just to begin to set the stage for understanding how to handle money God's way. Secondly, I would as a part of doing that begin to talk about some of the questions that I mentioned. How was money handled growing up? What are my earliest memories? What are kind of how has God wired me as a spender or saver?

It's not that one's good or bad. It's just we've got to understand that all these issues like what is our lifestyle going to look like? I want you all to have those conversations and to your specific question, talk about budgeting and really how you are going to approach that. In fact, I'd start working through your married budget as two flesh become one.

God's design is oneness and that includes our finances. So what is that budget going to look like when you merge your financial lives at marriage and begin to establish that, including having some flexibility in there. So, you know, perhaps each of you have a portion of the budget that you're able to do whatever you want with within reason.

But as long as it fits within the budget, then that becomes the instrument of peace that says if we operate here, we're moving toward what ultimately is our longer term objectives and goals, but we're doing it within God's provision. All of these conversations need to happen before marriage. And the last thing I would say is, I would be very open and transparent with one another, perhaps pulling credit reports for each of you just to see what assets and liabilities are there. So you all can talk about how you're going to handle that moving forward. This is a big one.

And if you're already having conflict now, because you can't communicate about it and see eye to eye, it's only going to get worse after marriage. So let's get on top of this one. Faith, we appreciate you writing to us today. God bless you. You know, folks, as we think about handling money God's way, it is so critical that we understand really the heart issues behind the money, because money issues are symptomatic of heart issues. Remember, Jesus said where your treasure is there, your heart will be also well, that's a really big idea. That means our heart follows our money. It also means that the way we spend our money or allocate God's resources is one of the clearest indicators into what we value, where we've placed our trust, what's most important to us, and I would say, where we're at spiritually. You know, the late Larry Burkett used to say that the way we handle money is the clearest indicator into what's going on in our lives spiritually. And that's because of this reality that money issues are just kind of the tip of the iceberg peeking out of the waterline, but the mass below the waterline is the values and the priorities and the heart issues that really govern how we handle God's money. We've got to get that right.

And then the outworking of our spending will take care of itself. Hey, we're going to pause for a brief break. We'll be back with much more. Stay with us. We're so thankful you've chosen to join us today on MoneyWise Live, biblical wisdom for financial decisions. This is the program where we recognize that our financial journey is in many ways tied to our spiritual journey, often money and the things that money can buy as a competitor to lordship.

So we want to hold what we have loosely, recognizing God's authority and ownership, our role as steward to be found faithful, applying his principles that we find in his word to the decisions and choices we make every day. Let's do that together. By the way, we're away from the studio today, so don't call in, but we've got some great questions that we lined up in advance. Let's head to Texas. Dan, you're next on the program, sir. Go ahead. I have a quick comment that might help some of your listeners. I recently had a large amount of debt with credit cards, and I was able to switch a lot of it over to a no interest credit card, or low interest, I should say.

And I think that helped a lot. But my question is involving more along the lines of income. I'm 66. And I'm kind of struggled to, well, I mean, 95% of Americans are not able to retire in very good fashion. It's from the statistics I've seen. And I'm not sure that our investing in the stock market has helped us very much.

And especially when it turns down like it is now. I was wondering if you had other sources of income. I hear people talking about, well, I actually did a little bit of real estate where I had a rent house and it appreciated at the same time that I was getting income from it. I was wondering if there were other things of, I mean, there's strange things like I had gotten an Arabian mare because we happen to know a lot about the horse business and we were able to produce $260,000 worth of foals from that one mare cost us roughly 40,000.

But I mean, that's specialized news, more risky, but I'm just wondering what else is out there and what kind of sources to go to to find them for income producing, especially passive. Sure. No, I certainly can understand that, Dan. And I would say, I mean, you know, oftentimes when we get into a stock market like this, the one we're in now where we've got quite a bit of volatility and downward pressure, you know, we tend to start to run for other quote unquote safe havens. And, you know, what's been challenging in this particular market is with interest rates rising so rapidly, it's put pressure on bond prices as well.

So it's kind of a double whammy, if you will. But if we look over the long haul, I mean, even if we just look at what happened over the last dozen years, I mean, we can see, you know, if we even go back to the last hundred years that a properly diversified stock and bond portfolio that's that gets more conservative over time as we near retirement is really the most prudent way among all of them to build wealth and then preserve that and convert it to a passive income stream. You know, even when we put in there all of the bear markets and, you know, the recessions that we've had, you know, it's still the best performer over the long term. And especially with people living longer now, you know, Dan, when you reach retirement, if the Lord tarries and you're in good health, you know, you have a decades long need for this money to continue to outpace inflation, which is more challenging now than ever, and to grow so that you've got something that you can rely on.

So I still think that really should be the core in my view of our retirement income strategy. But certainly there are other asset classes you can look to. I mean, of course, you can look to insurance products.

A lot of people use annuities for this purpose. You can look to oil and gas royalties, but that tends to be an area you need to understand. And obviously it's largely driven by the underlying price of the commodity.

And so you've got to be careful there. But, you know, a lot of folks use that and like it because they call it mailbox money. You just walk out and collect a check where you have the royalties on what's in the ground. And essentially, you know, you can do well if the prices, you know, are elevated. And, you know, it can obviously work against you if the energy prices fall and the underlying commodity falls with it.

But that's another option. Real estate is obviously used very effectively in this season of life. It's obviously more hands on unless you're looking at a real estate investment trust. If you are a direct owner of real estate that becomes an income producing rental property.

A lot of folks love that, especially with what's happened as of late in the housing market. You've got the appreciation of the underlying asset and then you can generate quite a bit of income. But there is a good bit of work involved with direct ownership there as well.

So you just have to understand what you're getting into. Beyond that, you know, in the stock and bond category, obviously, bonds are a great option. There's also what are called preferred stocks or master limited partnerships, which are very income focused. You've got dividend paying equities. So, you know, you can put all of these strategies together, whether it's an allocation of real estate investment trusts plus bonds, plus maybe a smaller allocation to a growth stock portfolio, plus more of income focused equities like MLPs and preferred stocks that can do very well in terms of income generation. And I think the key is, especially when you've spent your entire life building wealth, you want to have some professional management, in my view, overseeing this.

Now, of course, you're going to pay for it. And that would typically be somewhere between one and typically one and a half percent a year. And that can be a lot of money with a sizable portfolio. But in my view, it's worth it for somebody to really have a professional, rules based, thoughtful and unemotional approach to investing that really puts your goals and objectives at the center and allows a portfolio to be constructed in that way. So I'm not sure if I've shared anything that is new or revolutionary to you, but at least that's my thought.

Give me yours. Well, I hear what you say loud and clear, but I guess I go back to the story of the talents in the Bible. And I look at the stock market. And when you add inflation and you add fees, it's real close to zero over time. Whereas the other two guys went out and doubled their money.

And it doesn't say specifically in how long that season was. But I just feel like there's got to be something better. I can't think he would have put that in there for us if it didn't mean something. Yeah. I guess the only thing I would take issue with is that the long term performance of a properly diversified stock and bond portfolio, you know, even net of fees and any taxes, although taxes shouldn't be an issue in a tax deferred environment, is still very, very attractive over the long term. And when we look at a portfolio that's been properly diversified, in an indexed approach, if we look over the last 100 years and we look at even all the bear markets and recessions and everything that we've had, there is no better place to build wealth.

Now, if you isolate a particular period of time, you know, you can make the case wild on the upside or the downside. But I think over the long haul, it still is the very best place to do exactly what we see modeled in the parable of the talents. And that is to put the money to work in high quality companies that perhaps even align with our values through faith based investing, but where we're looking for long term appreciation and income alongside of that. And, you know, in my view and based on the data and the research that I've looked at, that's still, I think, the way to go. But at the end of the day, Dan, here's what I would affirm is that you're the steward and you're going to stand before the Lord and give an account for this. And so I want you to feel like you're honoring the Lord and what you're doing.

So I would certainly encourage you to continue looking, praying and thinking about what the best place is for you. We appreciate your call. Hey, an underwriter for this program is our friends at Sound Mind Investing. For more than 30 years, Do It Yourself investors have relied on SMI for proven strategies and trustworthy guidance. Sound Mind Investing helps people build wealth so they can provide for their families, prepare for the future and give generously. You can find more information at soundmindinvesting.com. We're grateful for Sound Mind Investing and their support of this program. All right, we're going to pause for a break when we come back. Much more on the program.

So don't go anywhere. We'll be right back. You're listening to MoneyWise Live with Rob West. This is our final segment of a broadcast we previously recorded.

Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of today's program. Here's another email that came to us from Emily. She writes, Should I consolidate my credit cards using a signature loan? The interest is so much lower.

And Emily, I can understand why that might sound appealing. Why wouldn't you want to replace that credit card debt with a signature loan, meaning where it's not collateralized with a lower interest rate, especially as rates have been heading higher on these variable rate credit cards. And the challenge with that is, and the reason I don't recommend loan consolidation is, even though number one, you're getting a lower interest rate, oftentimes we're getting a longer term. And when we do that, that can cause us to pay as much or more in interest over the life of the loan, even with that seemingly lower interest rate, because we've spread it out over a long period of time. Number two, oftentimes we're paying less per month.

And so that delays it as well. Number three, and this is perhaps the biggest, usually it takes the pressure off when we consolidate it. We feel better about the debt kind of hanging around because we have that lower interest rate. And so we're less inclined to get it paid off.

And the biggest problem is we don't correct the problem that got us into the debt in the first place. And that is spending beyond our means, lifestyle creep, if you will. And, you know, I would really rather you do the hard work of right-sizing your budget first to make sure you're living within your means, you have margin, you've got an emergency fund of three to six months expenses. So we don't have to ever think about using the credit card again. And then let's, you know, either do one or two things with a credit card repayment. Number one, if there's $4,000 or less in credit card debt, you can do it yourself through what I call the snowball method where you'd line up all the credit cards smallest to largest balance, not interest rates, smallest to largest balance, pay the minimums on all of them, and then attack the smallest balance first with every extra available dollar you have on a monthly basis. Let's say that's $750 and you have extra $250 a month you've been able to identify through cutting back in your budget.

Well, three months later, that one's gone. And when you tear it up, you will have the psychological boost and encouragement to keep going because you've seen your early win. And then we take that 250 plus the minimum payment on card number one, and we roll that to the second smallest balance and keep going right down the line until they're paid off. If you have more than $4,000 in credit card debt, I would recommend a debt management program through our friends at christiancreditcounselors.org. They can help you get those interest rates down so that more of your money is going to principal reduction, you'll pay through them one monthly payment, you'll get out of debt 80% faster using a program like that on average. So that would be my approach, Emily, I'd stay away from that signature loan, do the hard work, get the budget to balance, get that margin, and then either snowball it or use debt management. Thanks for writing to us.

All right, back to the phones we go here in our final segment today, West Virginia, Diana, thank you for calling go right ahead. I was just interested in some information about I bonds. Yes, not something I'd heard about until recently. But when I checked the website, it does say they're available through October and that they are paying 9% or nine point some percent. Can you just educate me a little bit about I bonds, please?

Oh, I'd be happy to Diana and they're always available. It's just that that 9.62% yield that they're paying right now is going to adjust again, come November 1. And it happens every six months. So these are 30 year bonds, essentially 20 year bonds with a 10 year extension. And the yield or the rate that it's paying is a function of two things, the fixed portion, which right now is set at zero, and the second portion, which is pegged to CPI, the consumer price index.

And because of what's happened, and is ongoing with this elevated inflation, that adjusting portion, the portion that adjusts to CPI is what's driving that rate up to 9.62%. Now come end of October, when the new rate is published, that everybody who owns these bonds will receive, we'll probably see that come down, but not come down a lot just because CPI is going to continue to be elevated for quite some time. So what you end up with is an investment of up to $10,000. These are electronic bonds, you can put in up to 10,000 per person per year, with a great interest rate right now 9.62%. And then something probably slightly lower than that for the next six months, you've got to hold them for at least a year. So you absolutely can't take it out for 12 months.

If you pull it out in less than five years, but beyond one year, you'll just give up three months worth of interest as a penalty. But there's almost zero risk, Diana, because these are backed by the US government. So this is a phenomenal investment. The only potential problem with them is you can't put more than $10,000 in but apart from that, it's a wonderful investment right now, given what's going on with inflation. So the place to go is treasurydirect.gov. That's the Treasury's website for buying bonds of all kinds issued by the US government, but also the Series I, the inflation bonds, you'll open an account there. And when you do, then you would transfer money in electronically to buy the electronic I bonds up to 10,000 per person.

Does that make sense? That's very helpful. Thank you so much.

Good. You're welcome. And all the best to you as you explore that a phenomenal investment that unfortunately, still a lot of people are unaware of.

We appreciate your call today. Let me mention quickly, you know, so often, we find ourselves either in a time of prosperity, or adversity, and it can create some real challenges for us. And the goal I think we need to be pursuing is wisdom. You know, Roman historian solace wrote in the first century BC, prosperity tries the souls even of the wise, you know, financial prosperity has its temptations, pride, greed, selfishness can clog our hearts if we forget our priority to love God first. But what about adversity? Well, facing hardships without wisdom can also lead to heart problems, self pity, bitterness, hopelessness, they're just a few of the human responses to hard times. But these aren't godly attitudes either. Why do we have such a hard time handling both prosperity and, in some cases adversity?

Well, the Bible is full of insight about both and according to God's word, the key to managing both prosperity and adversity, it happens to be the same. I'm talking about wisdom. Listen to Proverbs one seven, it says, the fear of the Lord is the beginning of knowledge, but fools despise wisdom and discipline. The fear of the Lord is where we have to start in good times and in bad times.

You see, folks, fearing the Lord means to honor and worship God and obey his commands. Well, the opposite of knowledge is foolishness. And the Bible comes down pretty hard on fools. Fools are those who despise wisdom and discipline. Well, God's word warns that fools will suffer shame, disaster, distress and even troubles. On the other hand, the book of Proverbs reminds us that the benefits of wisdom are substantial.

Listen to these, then we'll go back to the phones as we round out the broadcast today. Listen to this, Proverbs two nine says, the wise will understand what is right and just and fair. Proverbs three six is a promise in all your ways, acknowledge him and he will make your path straight. In Proverbs three 13, we hear that blessed is the man who finds wisdom. In Proverbs three thirty five, the wise inherit honor. In Proverbs sixteen sixteen, promises that through the fear of the Lord, a man avoids evil. Obviously, living wisely is much better than foolishness.

And when we're wise, we give up serving and honoring ourself and we serve and honor the Lord. So whether God and his wisdom has provided you with adversity or prosperity, you can face both with contentment. You can be confident in God's love and provision. You can be prepared to deal with any financial circumstance. And when you're focused on what's really important and that's following Jesus, that is the key.

Well, I hope that's an encouragement to you today. All right, let's finish out the program today. Heading back to the phones to Mississippi. Bessie, thank you for calling.

Go right ahead. Yes, my question is, do you have a plan that you can set up for like a consolidation, something, outpatient like doctor bills? I have Medicare Part A and B, but you know, that doesn't pay at all and leave me a pretty good balance to pay on.

Yes. Yeah, Bessie, you know, what I've found to be most effective there is for you just to engage the service providers directly. You know, medical service providers in particular are very accustomed to dealing with medical debts and helping folks get on repayment plans, even, you know, paying them in full at a discount if you're paying in cash.

You know, this is a very common thing. And so what I would do is just get all the bills in front of you so you know exactly what you have, and then just figure out first in your budget what you can afford. And then just start making those calls and saying, listen, I can do X dollars a month, or I want to come in and just pay this one off, and I'd like to do it at 50 cents on the dollar. And if I think if you start with that, you know, we'll find that they are very accommodating. It's going to take some work and some, you know, some time spent on the phone, but I think you'll be pleased with what you come out with. Just make sure you get it all in writing, Bessie, so that it's documented as to the plan. And the great news is that if you do that, it will keep you out of getting in collections, which can end up on your credit report, although recent legislation requires that once that's paid off, even if it hits your credit report, because it was in collections.

Once it's been paid in full, they have to remove it from your credit report. That's brand new. I hope that helps. We appreciate your call. Hey, before we wrap up today, let me remind you Money Wise Live is listener supported. That means we do what we do because of your generous support.

Would you consider being a financial partner? If you would, we'd certainly be grateful. Just head to our website, moneywise.org. Click the donate button. You can give right there online safely and securely. You can mail in a gift.

You'll find the address there, or you can call toll free. And one of our team members would be happy to help. Again, moneywise.org slash donate. That's going to do it for us today. Money Wise Live is a partnership between Moody Radio and Money Wise Media.

This is where God's word intersects with your financial life. Let me say thank you to my incredible team today. Hans on our phones today, Deb Solomon producing, Amy Rios Engineering, and Mr. Jim Henry providing some great research today. You know, this program is all about you. And so we're thankful that you join us each afternoon, that you call, you share your life and stories with us. It's a privilege to be able to speak into them. Come back and join us next time. We'll see you then. God bless you.