Renovation Reservations

If you've been putting off a home renovation project due to the sky high cost of building materials, well there's some good news.

Hi, I'm Rob West. Prices have actually gone down a bit for one major building material. The bad news? It continues to rise for many others. I'll talk about that and some renovation projects you might want to think twice about. Then 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 the overall cost of building materials continues to rise, up half a percent in July, the latest month that figures are available. But the price of lumber actually fell nearly two and a half percent, helping to at least moderate a bit the cost of home construction and renovation projects. The bottom line is if you can wait even as much as another year before taking on a major remodeling project, you could save some money. New home construction is down nearly 19% from a year ago and that should help bring down the cost of building materials in the coming months. Now, about those remodeling projects, while it's true that most of them will increase the value of your home, that's only one part of the equation.

You also have to factor how much they cost. And despite what you might hear on some of those cable flip this or fail that TV shows, many improvement projects won't increase your home value anywhere near what you'll pay for them. You'll recoup some of the investment, but not all. First on the list is an in-ground swimming pool. Installing a pool could cost you $50,000 or more. Add to it the ongoing extra costs of maintenance and insurance.

So pools are pricey. But according to the National Association of Realtors, you'll only get back 43% of what you spent. The next low-return project is installing new carpeting throughout the house. I'd think that would be a plus, but it could actually lower your home's value. Many buyers don't like carpet, and if they do, what are the odds they'll like the color you chose? A much better alternative is more expensive wood flooring. Installing a hardwood floor could get you back the entire investment, plus 7%.

So it's in the winner category. The next money loser is any elaborate renovation of the master bedroom. Knocking out a wall to increase its size and putting in upscale features like French doors and gas fireplaces will get a whole home from prospective buyers.

The average return is just 50%. So instead consider a fresh coat of paint and maybe upgrading a few fixtures to give the room an updated look. Now this next one might surprise you because it's probably the most popular home improvement project of all, and that's a major kitchen renovation that could cost you a heart-stopping $100,000. The survey showed that a kitchen renovation returns just over 50% of its costs. And after a certain point, the more you spend, the smaller the percentage you get back. Obviously if you're selling your house, you don't want to have run-down appliances and beat-up cabinets, so you'll want to update those. But keeping the overall cost down to just $20,000 could recoup up to 80% of your investment.

But even then, you don't get all of your money back. Okay, time for one more, and this home improvement project is more popular in the South. It's adding on a sunroom.

It's a great place to hang out in nice weather, letting sunlight in and keeping the bugs out. But with an average cost of $30,000, it's also a losing proposition as far as an investment. On average, you'll get back less than 50%. Now I should mention that return on investment isn't the only consideration for doing a home improvement project. If you're trying to sell your house, but a 1950s kitchen or bathroom stands out like a sore thumb, you may have to do some updating just to sell the place. In that case, don't worry, you're likely to recoup your cost and more with appreciation. Something else you always have to consider is whether the project you're considering fits into your budget. Obviously it's best to save the money first and pay cash, but when that's not possible, folks often take equity out of the home to pay for the renovation. If you refinance your home and take cash out to renovate, don't extend the term of your loan. If you take out what used to be called a second mortgage, make sure you go with a home equity loan, not a home equity line of credit or HELOC, because they usually have variable interest rates. Well, I know that's a lot to digest, but I hope it helps you with your next home improvement project.

By the way, don't forget, future enjoyment's a big part of this as well, so if you're not thinking about selling right away, that may change your objectives in terms of thinking about your next renovation. All right, your calls are next, 800-525-7000. I'm Rob West, and this is MoneyWise Live. We'll be right back just around the corner.

Stick around. Great to have you with us today on MoneyWise Live. I'm Rob West, your host. We're going to turn the corner and take your calls and questions today here in just a moment. The number to call, 800-525-7000.

We've got some lines open. Again, 800-525-7000. Before we do that, if you need wisdom, practical help, or discipline to save for the future with regard to renovation projects where we started today, I can think of no better tool than the MoneyWise app. In addition to managing all of your accounts in one place, it also includes a handy goals feature for you to help save for future purchases. You can choose from one of three budgeting options, depending on your management style, and it's available on both desktop and mobile. By the way, the online discussions in the app are phenomenal. You can contribute, ask your own questions, or even weigh in on someone else's.

So just head to MoneyWise.org and click the app tab for more details. All right, let's head to the phones. Again, some lines open today. We've got, it looks like, at least three or four, 800-525-7000. Let's start in Broken Bone, Nebraska. Hey, Rylan, thanks for calling. Go right ahead. Hi, Rob.

Thank you very much for taking my call. I received a promotion from my company through the 401k, and they're asking if I'm interested in a managed account program, which would be different than my target date fund for my 401k. Do you have any experience with the managed account program?

I'm just trying to decide if it's worth the extra cost or what your thoughts are. Yeah. Who is the custodian of that?

So it's Vanguard is the 401k provider, and then it's, I think, Edelman Financial Engine or financial services that would basically provide an individual, maybe, to oversee the 401k plan. Sure. And what would be the fee on that? Do you know?

There was a promotion for like three months free, and then it was going to be 0.1 or 0.2%, but I didn't fully understand the fee schedule. So I talked to my financial advisor, and he goes, well, you're going to have a hard time beating the target date fund, because it's electronically generated. But I do see the value in having an individual review the financials. Sure.

Yeah. I mean, you could certainly go either way. You'll find plenty of data on both sides of this conversation. There's a pretty famous anecdote out there about Warren Buffett, and when he challenged some folks to outperform his indexed approach to investing, that he ultimately won.

That resulted in a lot of press around that. But depending on the right active manager, you can actually do better, especially in a market like this, where the market's kind of sideways. Well, it's been going down as of late, but I think we're going to be in this sideways trend here for a while. Extreme volatility up and down, especially as we navigate kind of the economic conditions we're in. This is a stock picker's market, where you're going to do better with a managed account where somebody can concentrate in certain sectors that are going to do better in various economies, especially like we're in right now, versus just capturing the broad news of the market. But there's a case for that as well. And again, there's plenty of data that would support that idea that we should not try to pick the winners and losers, even if it's by sector versus individual company, and just stay with a broad market allocation that automatically gets more conservative, moving more heavily toward fixed income and bonds over time. So it's really kind of the approach you want to take.

I know at Vanguard, they do have a managed account program, which is basically an advisory service for employee sponsored retirement plans like you have here. So I think the key is, number one, what is the fee? What's the cost to that? You want real clarity into that.

The target date funds are going to be very low cost. This is going to be more expensive. And who would be managing that?

And what is that person's track record? And what are they going to do different than perhaps what you have right now? And then at the end of the day, it's really just what you feel most comfortable with.

I wouldn't be able to say whether one is going to outperform the other other than to say, in a market like we're in now, you would typically look perhaps more toward a managed option if you have that option. But if we're taking a long term approach here 10, 20 years plus, I think there's a case to be made for the target date as well. So I could go either way.

I think it's really personal preference on your part. Perfect job. I appreciate you taking my question.

I think I might lean more toward the managed account fund where I'm in my mid 30s and have a little bit of time to maybe play the upside of things. So thanks so much, Rob. You're welcome. And yeah, let us know how that works out.

I don't think that's a bad choice at all. We appreciate you calling Ryland. Let's see, Hollywood, Florida. Hey, Michelle, how can I help you? Hi, Rob. This is Sheena.

This is Michelle. How are you? Doing great. Thanks.

Go right ahead. Okay. So my question is, I would love to purchase a home, hopefully sometimes next year.

But with the inflation and the increase in interest rate, I wanted to know, would it be a smart idea to purchase a home next year? Is this a first time home purchase for you, Michelle? Yes. Okay.

And what have you been able to save up to this point for a down payment? Um, a good amount. A good amount. Okay. Do you have a target for what you'd like to spend for this purchase when that time comes? I was thinking about maybe 200k to 300k. Okay.

All right. And have you done some looking to see if you know where based on the part of Florida you want to buy in the location, the school district, any of those kind of criteria that are important to you? Have you started to look to see what's available in that price range? Yes, I have. I have.

I'm looking to all of Florida, Fort St. Lucie area. Yeah. Okay. Yeah.

And those are certainly going to be more cost effective than West Palm or Fort Lauderdale or Miami. So that's not a bad thing. You know, I think the timing that you've got here is fine. You know, if you're going to be ready to make this purchase in the next year, I think that's a good thing. I don't know that you're necessarily going to be any better off waiting two years. If you're ready to make the purchase, meaning you've got the down payment and I'd encourage you to have at least 20% down and then the mortgage that you've got after the 20% down, I'd try to target no more than 25% of your take home pay going toward principal interest taxes and insurance, the mortgage payment. That's going to ensure that you've got plenty left over for everything else.

And if you can do that, then I'd say sometime in the next year would be fine. We've already seen somewhat of a transition from a buyer's market or excuse me, a seller's market to a buyer's market. Whereas, you know, they're still somewhat low inventory. But with the interest rates rising, you know, houses are staying on the market longer now. We're typically not seeing the bidding wars that we were the premiums over the true market value. A lot of that's eroding as the economy is soft and interest rates have been heading higher and that will continue over the next year. So we've already seen some signs, real signs that the housing market is cooling even in Florida where it's been one of the hottest markets across the country.

So I would say, Michelle, I would have no problem with a one year time horizon on that. I think the key is finding the right home that doesn't cost you to stretch beyond your budget and take on more mortgage than you really can afford. And that's where that 20% down and then no more than 25% of your take home pay for your mortgage payment will make sure that you don't get that out of line. All right. Hope that's helpful to you. We appreciate that and all the best to you as you find that new home.

We're going to take a quick break when we come back. More of your questions here on MoneyWise Live. We've got a few lines open. 800-525-7000 is the number to call. That's 800-525-7000. By the way, if you'd like to support the ministry, MoneyWise Media is listener supported. You can do that quickly and easily on our website, MoneyWise.org.

Just click Give. We'll be right back. Stay with us. Great to have you with us today on MoneyWise Live, where we apply God's wisdom from the Bible to your financial decisions and choices. We've got two lines open.

800-525-7000. The reason we take an hour each day in the afternoon to come together and talk about managing money is not because we're looking to make more of it necessarily, not because we want to be able to build bigger barns. It's really because we recognize that this is a high calling we've been given. We're stewards of God's resources, so we want to be found faithful as we manage those resources. And so each day we mind the scriptures and try to apply the timeless wisdom from the Bible, the big themes in scripture from the Old and New Testament, to how we can manage money today and do that in a way that allows us to live within God's provision, to hold it loosely, to define how much is enough, to not draw our cues from the world that would have us to believe our self-worth is equal to our net worth, and we need to keep up with the best version of someone else's life on social media, but to say, What has God provided me?

And Lord, what would you have me to do with that? How much should I give? What's the appropriate amount to provide for my family?

How much should I save for the future? Where is enough, both with my lifestyle and my accumulation? These are all difficult decisions, but they are decisions that I think will allow us to exercise our faith. And God has always really been about our hearts, and I believe the way we handle money, well, that's one of the training grounds of the heart. We see in scripture that if something is going to compete with God for a first position in our lives, well, money is a primary competitor to lordship.

So when we really focus on it this way and recognize every spending decision is really a spiritual decision, it does change the conversation and it puts money in the proper context. I hope that's an encouragement to you today. Listen, whatever mistakes you've made in the past, let's leave them right there, and let's move on with confidence and say, How can we honor the Lord from this point forward?

All right, we're going to head back to the phones to McAllister, Oklahoma. Julie, you're next on the program. Go ahead. Okay, yes, I'd like to know if I have to use a credit counseling service or if I can do it myself to contact my credit card company to get a lower interest rate. Yeah, how much do you have on credit cards, Julie?

I have about $1,200, but I'm getting ready to retire, so I'm not going to be using them. Okay, great. So are you able to live within your means?

You're not having to continue to charge for unbudgeted items? No. Okay, great.

Yeah, I think you're in a position here, Julie, where you could probably do this yourself. How many credit cards does this represent? Two. Okay. And what do you have available each month beyond the minimum payments after all your bills are paid that you could use to send extra?

Do you have anything left over? Okay, I've been sending about twice as much as what the minimum payment, sometimes three times as much on each card. Okay, very good. And how does that $1,200 break down between the two cards roughly? Okay, one of them is probably $1,000 and the other one is the $200.

Okay, so let's do this. Let's focus all the extra that you have on that $200 balance until that one's gone. I think once you pay that one off, you're going to feel a lot better knowing that you don't have two cards any longer, you have one. And then let's take all of that extra money plus the minimum payment that was going to the one with $200 and let's just focus in on the one with $1,000 and you'll be surprised that in no time you'll get that taken care of.

I think that's the better way to go and until you get to about $4,000 in credit card debt, Julie, it probably doesn't make sense to use a credit counseling program. I would say just do it yourself. Let's focus on that smallest balance first and then move right on to the next one. Okay. All right. Thank you very much. Okay, thanks for your call. We appreciate it. Jean in Minnesota, Gladys in Chicago coming your way. Next up, Ruth, you go right ahead.

How can I help you? Hi, thanks for taking my call. About four months ago, I transferred from my traditional IRA to the Roth. I'm 65 and I'm planning to retire within the next five years and I want to know if I made the right decision or should I transfer back to the conditional. Yeah, I see. You're close enough to retirement to expect that your income will be less when you stop working than it is now. Is that probably true? Yes.

Okay. So that means that you will be perhaps in a lower tax bracket when you begin taking this out, which would mean that the traditional IRA would probably be better for you now because you'll get more benefit with higher taxes today while you're still working through the immediate deduction that comes from the traditional contributions. And then that'll grow tax deferred. And then if you pull that out while you're earning less in retirement, arguably you would pay less taxes.

I don't think you made a bad move. I actually like having both options available to you. But if we just look at it from a purely a financial standpoint, you're probably better off given that you're so close to retirement and these are usually your highest earning years to take advantage of the traditional IRA and benefit from that deduction right now as opposed to when your income is a lot lower. The only benefit though beyond that to the Roth specifically is there's no required minimum distribution. So if you find yourself in a position, Ruth, in retirement where you don't need this money because you're living off Social Security or you have other income sources, the nice thing about the Roth is when you get to 72, the government won't make you take any of it out. So you could leave it there, let it grow for when you might need it down the road, or if you want to pass it on as an inheritance, something like that.

But apart from that, I think the traditional for most folks in this season of life is probably the better option. Okay, so just to make sure I understand, so after 70, if I haven't taken it out, I should transfer it over back into the Roth, is that what you're saying? No, not necessarily because when you do that, you're going to create a taxable event. I'm just saying that one of the benefits of the Roth for the money that you already have put in there is that anything that goes into the Roth is not subject to the required minimum at age 72. With a traditional 401k or IRA, when you get to 72, you've got to pull the money out based on a table that the IRS gives you. They'll tell you a certain amount each year based on your life expectancy that you're required to pull out and pay tax on. That's not the case with the Roth. I wouldn't necessarily move money for that reason, but I would just say you can know that that's one of the benefits for the money that you have put in the Roth is you're going to be able to leave that there as long as you want until you need it.

That's really the benefit there. Hope that helps you, Ruth. Thanks for calling today. We're going to take a quick break, but we'll be right back on MoneyWise Live. Stay with us. Thanks for tuning into MoneyWise Live, biblical wisdom for your financial decisions.

I'm Rob West, your host. Hey, coming up in the next segment of the broadcast, our good friend Jerry Boyer stops by with a recap of the market here at the end of the week. A lot of pressure on stocks today as the market continued to sell off green, excuse me, not green, red across the board. The Dow off one and a half percent to the S&P off 1.7, the NASDAQ off 1.8. We did cross through that 30,000 point on the Dow Jones ending today at 29,590. Interesting. We'll get Jerry's take on it.

Seems like the market's pointing to the fact that with the recession fears, perhaps the Fed has overdone things a bit. We'll get Jerry's take on that and much more again in the next segment of the broadcast. All right, back to the phones.

We go to Chicago. Hey, Gladys, thank you for calling. Go right ahead. Hi. Thank you again for your show and everything you do. And I have a question.

I listened quite often and I had started to, I went online to set up an iBond account. And for whatever reason, when I entered my information, they sent me back a message that said, we can't verify that this is you and you'll have to download a form and you have to send the form in. And once we get that form, then we can allow you to open the account and that it may take 13 weeks before that done.

So I know. And then my question was, I wanted to send it in as expeditiously as possible. I was going to send it by certified mail, but I don't know if when it's sent in, if there's someone who can actually sign for it or, you know, I don't know if that would be wise to send it by certified mail or not. Yes.

Interesting. OK, well, you know, I'm not familiar with that, but I will tell you that I'm on the the website right now at TreasuryDirect.gov. And I do see that there is a reference to the fact that they say, if you're asked to send us an account authorization form, and I suspect that that's what's going on here, you must submit the form before you can access your account. It says, don't forget to have your signature certified.

So it sounds like that is something that does happen, although I didn't experience that. But in this digital age, obviously, they have to be able to verify your identity. And if there's some sort of hiccup in that process, technologically, it may not be anything that you did. Then, you know, there needs to be another form of verification. I would probably try to reach out to them. I know when you get to the website, TreasuryDirect.gov, Gladys, if you click on the Contact Us button, although they will apologize for the long wait times, there is a phone number there for you to call Monday through Friday from eight to five Eastern. And I'd probably make that call just to see if there is a way to expedite it. You could also try to reach them electronically.

But it sounds like that absolutely is something that happens. It is legitimate. So I think you're right to ask, is there any way to expedite it? Because if you can, that would get this process done a little quicker.

I'd hate for you to have to wait that long. Yeah. And when I tried reaching them, they gave a message that due to the large volume that there's no one available.

Yeah, I can understand that. Well, I'd probably just follow the process. There is a good set of FAQs there. Maybe you can find some answers to your questions about how you can get this document in as quickly as possible.

Unfortunately, I don't have the details on that. But I would just say stay at it, Gladys. And if you do end up having to send it via the regular mail and just wait it out, well, unfortunately, that may be the case. But we appreciate you checking in with us. Sorry, I couldn't be more helpful to you. But if you want to update us along the way, don't hesitate to reach back out. God bless you.

Let's see, Jean's in Minnesota. I understand, Jean, you're driving. So you be careful, but you go right ahead. Okay, thank you for taking my call. Yes, I have a question. I'm retired and I have a pension and Social Security and a couple of 401Ks. But I recently attended a church informational session on variable annuities. And I'm just phoning to see what your understanding and knowledge is about that, about them, and if that would be something you would recommend for a 401K to switch over. Sure. So you are retired now or heading toward retirement? You are?

No, I am. Yeah. All right. And what do you have in that 401K, Jean? I'm going to say around 300 plus. Okay. Somewhere 300 to 350 somewhere in there.

Very good. And what income sources will you have now that you're retired? Are you already collecting Social Security? Yeah, and a pension from my employer, a past employer, and then some farmland rent. Oh, great. So are you planning to touch the $300,000 at all in the near term?

Yeah, yeah. I am planning to pay or have been taken some monthly. Okay. How much roughly each month are you pulling out of that? $1,200. About $1,200 a month. Okay.

Yeah. So you're pulling $14,000 a year. Normally, we would say we'd like for you to try to keep that to around 4% a year, and that's about $12,000.

So about $1,000 a month would be ideal on $300,000. You know, variable annuities, it's a contract with an insurance company, Jean, that pairs the growth potential of the stock market with the steady retirement income that annuities offer. So it's similar to a retirement account. It allows you to choose a portfolio of investments that fits your goals. You know, this means taking on more risk than you might with other annuities in exchange for better return. So if you have a fixed annuity, you get a guaranteed rate of return. With a variable annuity, there's the possibility of losing money, but a lot of them will have a floor where you can't lose below a certain amount.

And that's pretty attractive to folks, especially in a market like we're in now. I'm not a big fan because there are charges, surrender charges on the withdrawals. They have other fees that make them somewhat expensive.

They're complicated. You lose access to your money. So if you needed to tap into more than just a steady income stream in retirement because you had a major medical event or something like that, I like the idea of you being able to access the principal if you need it. So for me, my first choice would be for you to find a financial advisor, an investment advisor that could take responsibility, take discretion of this money. And as a fiduciary, that is acting in your best interest, managing this money around your goals.

So trying to at least make up what you're taking out every year just to protect the principal. That would be my preferred approach because you get all of the upside and you have access to your money. Whereas with the annuity, you're going to get some of the upside. You're going to get a limit on the downside but you're going to pay these extra fees and you're not going to be able to access the money if you need it. So if I were you, I'd head to MoneyWise.org and if you don't have an advisor that you're already connected to or that you know of, just search for a Certified Kingdom Advisor there in Minnesota on our website. Interview two or three.

Find the one that's the best fit and then hire that individual to manage this for you. But if at the end of the day, you'd feel more comfortable knowing that you want to transfer the risk to the insurance company and know what your downside risk is or rather than a variable annuity going into a fixed annuity where you have a guaranteed rate of return that the insurance company would pay you and you don't have to think about the stock market, that certainly is an option and it's one that's attractive to some folks because they just have more peace of mind that way. It's just not my first choice. Does that make sense? It does.

It does. Thank you very much. All right. You're welcome. Welcome, Gene. We appreciate you calling today. We've got some great questions coming up. Plus in the next segment of the broadcast, Jerry Boyer stops by to weigh in on the markets which have been under quite a bit of pressure as of late. We'll get Jerry's thoughts just around the corner and then back to your questions as well. This is MoneyWise Live where we apply the wisdom of the Bible to your financial decisions and choices, recognizing we're stewards of God's resources. And guess what?

That's a pretty high calling. We're managing money for the King of Kings. Let's be found faithful and stay with us.

More to come just around the corner. We're thrilled to have you with us today on MoneyWise Live where we apply God's wisdom to your financial decisions and choices. Before we head back to the phones here in our final segment, we're joined by our friend Jerry Boyer. Jerry is president of Boyer Research. He is a columnist and contributor at the Christian Post.

He joins us each Friday afternoon to reflect on the markets. Well, you picked a good one, Jerry. I mean, it's all read across the board.

What do you make of this? Well, I didn't pick it. I mean, it's there. It's on the Friday automatically.

It just gets handed to me. Yeah, it's been read for a while, right? We've had a rough year.

We've had a rough month for the most part. And that's actually sort of predictable given the design of things, which is that when a central bank artificially raises the value of assets by being a big intervener in the markets. Remember, our central bank is now the biggest investor in the marketplace. It used to be that investors were the investors.

Now the central bank is the biggest investor. And so when it's buying things, when it's buying investments, then investment prices are going up. But the problem with that is that it buys those investments with newly created money. So it has to create the money and then use that money to buy the investments.

So it pumps new money into the system and that new money is inflationary. So eventually, every time this is what always happens, and I don't understand why they don't learn their lesson, eventually, you get a bubble and you get inflation, and then the central bank has to come along and then cut back and move in the opposite direction, risking a recession, fighting inflation, but popping the bubble. And we're now in the long, painful bubble popping process.

And the key to that is painful. Jerry, it would be nice if we could anticipate these things a little bit sooner. So it doesn't seem like we have these dramatic rises and falls. And yet perhaps the market is signaling that the Fed has gotten ahead of itself.

Do you think that's right? Well, the market is signaling that the Fed is serious enough to really seriously fight inflation. And if they are, that seriously raises the probability of a recession. There's no easy way out of a bubble. So I look I know markets don't want the Fed to bring tough love to bear. I don't want the Fed to have created a bubble which brings the tough love to bear.

So I mean, look, there's a moral principle here. And I think part of the reason this happens is that we forget, you know, the Bible says that unjust weights and measures are an abomination, a toba. It's a serious thing to mess with the value of currency in order to help one group at the expense of another. And that's exactly what's happened. Our central bank has been manipulating the value of currency to the point where created bubbles and hurt people with savings account and hurt retirees, but help wealthy people who own a lot of stocks.

It put a thumb on the scale. And that's wrong. It's not just bad technically. It's wrong to do that. And one of the reasons it's wrong is that it hurts some people at other people's expense.

And the Bible says we're not supposed to be partial. The other thing is it makes it inevitable that something like this has to happen. The problem isn't the popping the bubble. The problem is the making the bubble.

Once that's happened, there's no painless way out. Yeah, that's really helpful. Jerry, I know you've taught us in the past that the word data comes from the word that means gifts or gift. What is the data telling you right now? Yeah, so data is Latin for givens or gifts.

You can translate it that way. The data is telling me the Fed futures, the Fed's serious. The market thinks the Fed is serious, is going to keep hiking rates. And even more serious than they thought before the meeting, you know, the announcement this week, they announced the hike.

And they also put some hints out there deep in the fine print that they're going to hike more than everyone thought. The markets are signaling that this is going to slow down the U.S. economy and the global economy. The markets are and that's in that stock markets go going down. But that's also commodity markets going down because industrial commodities, if the price goes down, that means less demand.

The markets are betting there's going to be less copper to make fewer houses and fewer phone systems around the world. The market is also the data is also telling us the market thinks that inflation is going to be going down. Tips, which are inflation protected securities, did more poorly this week than noninflation protected. So all of the inflation hedges did badly this week. So what are the inflation hedges? Gold, currency, Treasury inflation protected and other currencies. If you think there's going to be inflation in the United States, you invest in currencies outside the United States while the dollar is doing really well. Those other currencies are doing poorly. So every inflation hedge indicator got hit this week, which is suggestive that the Fed is pretty serious about fighting inflation. I don't think they're going to be able to fight it down to normal, like three and a half percent. But I think they're going to get it out of this like really weird eight, nine percent situation we've seen it in. Yeah, interesting.

All right. Just any any thoughts, Jerry, on what you're seeing around the rest of the globe as well right now? Trouble everywhere. Japan's yen is collapsing to the point where they've actually intervened in their markets, which they very rarely do. We have almost certainly a recession in Europe, largely driven by an energy crisis from Ukraine, from the war in Ukraine. China is really slowing down. Their housing market is breaking and they've got they're shutting down provinces for covid because they have a zero covid policy.

So they're shutting down large parts of the economy. So that's one of the things that's actually keeping us from not doing so badly, because as bad as things are in the United States and we're violating biblical principles and doing a lot of foolish things here. But the the rest of the world is in general in more trouble than we are. And over the past couple of months, world markets have underperformed US markets.

This week, US markets overperformed means went down less. OK, this this week we did a little less bad than most of the world. But over the past quarter, we've done more badly than most of the world. And so we're kind of propped up in the sense that we've got enough biblical heritage and institutions left. And I know it ain't much, but there's still something there in rule of law and in our past policies where we're still probably the haven of the world economically with all of our problems. OK, so against our peers, we're not doing too bad.

I guess we can hang our hat on that, Jerry, and then wait another week to hear the report. All right. Grading on a curve. We're doing better grading on an absolute scale, which is how Providence grades.

We you know, we've got some room for improvement, room for improvement. All right. Sounds good. Jerry, I always appreciate you stopping by, my friend. Thanks for your insights. My pleasure.

God bless. All right. Talk to you next week.

Jerry Boyer, president of Boyer Research, columnist and contributor at The Christian Post. He joins us each Friday. All right. Here in our final segment of the broadcast with a few minutes remaining, let's take as many calls as we can to Joliet, Illinois. Hey, Devon, thanks for your patience.

Go right ahead. Hey, thank you for taking my call. I love listening to your program. Thank you. Love your wisdom.

Hey, I have a question for you. We purchased a house that we were renting for the last like six years and we finally purchased it last year at a really good price at like 233. We purchased it for and obviously I was getting a call saying that we can refinance because we think the house is probably worth over $300,000. So I was thinking like with the interest rate that we got was three and a half percent obviously kind of went up.

And also like pull out money or to refinance next year either to pay off like credit card debt and like just little small loans in debt or to try to do a, to try to take the money out to buy an investment property. I'm just trying to get your idea. This is not my type of arena. This is my personal. Sure. Well, I'd be grateful for that mortgage that you have Devon. I wouldn't touch it. Certainly wouldn't consider refinancing. I mean, rates hit 30 year mortgage rates hit 6.7% today and you're down at 3.5 which looks pretty good right now. The other thing is, you know, I don't like tapping into home equity really for anything. I want to keep that home equity balance coming down. The fact that your home has appreciated at least for now, it's probably going to soften here, but the fact that it's appreciated is a good thing.

Let's be grateful for that. Not necessarily a means to tap into for other things. Number one is if you're looking to pay off credit card debt, you would be taking debt that is unsecured, meaning it has no collateral attached to it. Now you're attaching it to your house. If for some reason something happened, you lose your job, you can't make the payment. Now you've just put your home at risk. So I don't like that at all and I really would rather you not, you know, pull money out of the primary residence for a rental property either. I would save, save, save and try to get that mortgage to stand on its own. Usually what that means is you're going in, my preference would be instead of 20% down, as much as 50% down or at least being able to get there in a reasonable period of time. That's going to keep that mortgage low, which means you can service the debt through the rental income and have reserves and cover the taxes and insurance and you know, at the very least cover all of your expenses and let that property appreciate over time. If not, throw off a little bit of income coming back your way. But I'd love for you to see that as a separate business that's separate from your personal finances and not attach that to your primary residence, which puts that at risk. If for some reason we were to get into a really deep recession or we were to have a real problem that caused you to not be able to, you know, make good on that payment. So bottom line is I would leave that property right where it is. Don't touch that mortgage. Let's not access that equity with credit cards. If you have more than $4,000 in credit card debt, I'd contact our friends at christiancreditcounselors.org to try to get that interest rate down and get on a fixed monthly payment.

And with a rental property, I would just save and try to get a separate mortgage as long as it makes sense from a cash flow standpoint that's tied to that property only. Does that make sense? Absolutely. Thank you for the wisdom. All right, Devin, we appreciate your call today very much. Let's see. Dalton, Georgia just have about 45 seconds.

Holly, quickly, how can I help you? Yes, I think I already know what you're going to say, but my husband and I purchased property and we currently own our home now and we are going to sell it and pay off the property and then turn around and build. But it kind of sounds like that's not a good thing to do right now in this market.

Yeah. You know, it's a challenging market, although we are seeing some of the prices that have been sky high on construction coming down, which is certainly helpful. Lumber prices have come down quite a bit. The cost of building materials in general, though, does continue to rise up 24 percent from last year. So I'd probably hold off on that while we wait for labor shortages, inflation and the supply chain issues to work their way through.

And with these high interest rates, I think that's another challenge. So if it were me, I think I'd sit tight right now, just given all of these factors and what's going on right now. Holly, thanks for your call today. Sorry we didn't have more time.

MoneyWise Live is a partnership between Moody Radio and MoneyWise Media. Thank you to Clara, Dan, Amy and Jim. Hope you have a great weekend and we'll talk to you next week. Bye bye.