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Principled Reasoning

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
August 9, 2023 5:39 pm

Principled Reasoning

MoneyWise / Rob West and Steve Moore

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August 9, 2023 5:39 pm

Christians know that the world hasn’t been right since the Fall. And that certainly is evident when we look at the economy. So, if the economy isn’t supposed to be this way, what exactly is the ideal? On today's Faith & Finance Live, host Rob West will talk to economist Jerry Bowyer about God’s ideal economy. Then, Rob will answer your questions on various financial topics. 

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Christians know that the world hasn't been right since the fall, and that certainly holds true for the economy. Hi, I'm Rob West.

So if the economy isn't supposed to be this way, if it isn't how God intended, what exactly is the ideal economy? Jerry Boyer joins us to talk about that and how we can fix things. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, there's only one person we know that can make economics fun and educational, and that's our good friend and resident economist, Jerry Boyer. Jerry, great to have you back.

Always a pleasure to be with you. Jerry, we're going to pick up where we left off last time. As you know, we're doing a series on the Christian economic worldview, and this time we're talking about what you call principled reasoning.

But we might add a subtitle, A Way Out of This Mess. So take us back to that ideal economy and tell us where you'd like to start. Yeah, I think that's a good place to start. You start with the ideal, right? First you study the way things are supposed to be before you study the way things are not supposed to be.

That's right. Because if you have that knowledge of the good, then you can understand the bad as well as the good. But if you start with the knowledge of the bad, you won't really understand the good, or even the bad fully for that matter. So you have to start with what's right and then kind of view through that prism. We've already talked about this in the series, which is in the garden we're given the model for God for what he wants the economy to be.

God is in the center, the state isn't in the center, the individual isn't in the center, human beings are not in the center, God is in the center. But we're over the material creation, and we're supposed to improve it looking at the way God made the world and then imitate him. We don't imitate him perfectly because he's infinite, we're finite, we're his image. We're not little gods, we're just in the image of God, and so our creativity is in the image of his creativity. We can't create something out of nothing, he can, but we can take something that already exists and make it better, and that's how we play out the image of God in man. But of course that went wrong, we went for I want it now, I want the fruit of the knowledge of the tree of good and evil, and I want it now.

I want to take, I want to steal rather than create because that was stealing from the tree, so it's a lack of respect for private property. And we're not going to obey God, we're going to do whatever we want, and that brings about a curse. So we talked about the curse, you know, in the second in this series.

What goes wrong? And then we talked about how our, and then the third part of the series, we talked about how our cursed response to the curse makes things that are bad even more bad. In other words, we could look at the world that's all distorted by the fall and say well we're going to repent, but instead what we do is we respond to it inappropriately. So if there's thorns and thistles and we're eating by the sweat of our brow, we don't necessarily become more disciplined and more productive, instead we just become more avaricious. You know, we just want more, more, more to kind of like salve the wound and give ourselves a sense of peace in this cursed world, and by doing so we make the curse worse. But there's a way out, and the way out is to follow fundamental principles that are laid out in the scripture to begin to reverse to some degree the curse.

Now the curse will be here until the second coming and the resurrection. We won't have the garden economy until Jesus comes back and resurrects and we have a new heaven and a new earth. But we can do better than we're doing now. We have a promise in scripture of the blessing of God that there is a tendency, it's not a guarantee, but there is a tendency if you act wisely and follow certain principles that life will tend to be better in every area of life relationally, obviously spiritually, in families, and yes in business and the economy as well. Well, Jerry, you're exactly right.

And I think that's the key. And when we follow principled reasoning, yes, the curse is still here. But when we understand God's design, we can see and experience God's blessing.

Many nations have experienced that the United States is one of those and yet it seems like in many respects, we've lost our way. So that background was helpful when we come back from this break, Jerry, I want to talk about what we can do about it. How do we approach the value of human life and the fact that we're created with God's operating system and his image as a blessing? How we put that into the system? What about risk?

What about investments? We'll talk about all of it and perhaps how we could return to God's ideal economy through principled reasoning. Jerry Boyer with us today. He's the president of Boyer Research, our resident economist, and we're continuing our series on the ideal economy following this interview.

Your questions today at 800-525-7000. Stay with us. We'll be right back. Delighted to have you with us today on Faith and Finance Live. With us today, our good friend Jerry Boyer, resident economist here at Faith and Finance, the author of The Maker vs The Takers, What Jesus Really Said About Social Justice and Economics. It's a fascinating read. I'd encourage you to pick up a copy today. We're talking about the ideal economy.

This is a multi-part series. We've talked about God's design, how it goes wrong. Today, we're talking about how we can perhaps redirect our nation back to what God originally intended. Jerry, you made the point before the break that until Jesus returns, we are in a fallen state. We will continue to be. And yet, the United States has experienced God's blessing in the past because in many respects, the founding fathers understood that we were created with God's operating system in his image and that human life, that God's creation, we're to be productive. And with that comes a virtuous cycle of expansion and productivity and investment and savings and giving.

So given where things have gone wrong, how can we return to that as a nation? Well, I think one of the things is to recognize that sin is not stronger than creation. We're created by God, and we're in his image, and a modifier to that is that we're fallen and sinful. We're not mostly sin, but we're also in the image of God. The most real thing about us is what God created us to be.

The most real thing about us is that we're made in the image of God, and sin is the distortion of that fundamental reality. And so when the fall happened, we didn't change metaphysically. Our minds still work.

Yes, they're distorted. We might not pursue the right goal, but the universe still runs on the operating system of God's mind, and our minds are made in his image. So we run on that operating system. So we're able to understand the world much better than people would think. Eugene Wigner, the famous mathematician, said, why does our math work so well when it comes to understanding physics and nature? You know, if we just evolved randomly, it wouldn't make sense that our minds would be so good at doing science. Science depends on the idea that our minds are made by the same person or three persons who made the world. And so that means there really is the possibility of having a lot of human flourishing in the world.

And I think that the Bible is about cursing and blessing, but it's mostly about blessing, not mostly about cursing. And I think what happened to some degree, we've talked about Thomas Malthus, the person who's kind of behind, really behind fascism and communism and eugenics and abortion. He didn't mean to be.

He was a Christian minister, but he read the account in Genesis 3 that said the ground is cursed because of us. And he kind of stopped there and said, well, that means there's too many people. So if you have too many people, there's bound to be mass starvation. And out of that, you get eugenics. Well, there's too many people.

Let's breed the right ones, right? And that you get genocides and the rest of that from that. But he didn't go on and see right after the curse is the promise of the blessing of the seed of the woman who would crush the head of the serpent. And so that curse can be managed and dealt with. Under the curse, we eat by the sweat of our brow.

Well, wait a minute. Does that mean that we're violating God's principle if we have air conditioning? I mean, you don't sweat.

I mean, it's hot right now, right? But air conditioning can reverse that a little bit. Yet you have thorns and thistles, but we also have modern agriculture, which means we don't get so many thorns and thistles and we're better at growing food. And yes, women will have pain in childbirth, but there's also medical care that makes that pain less. So the curse is not the main story or the whole story.

Blessing and redemption is the more powerful story. We won't get perfection in this world before Jesus comes. But the American experiment shows that we can do so, so, so much better than 1500 years of Christian thinking thought we could before. So Jerry, economically speaking, then where do we go from here with regard to the Fed and monetary policy and risk levels and interest rates and inflation? Obviously a lot there. So what would that path forward look like? Well, markets are reflecting the risk levels of the curse, or they're reflecting sometimes with fiat money, they don't properly reflect the risk levels, because easy money makes it seem like we're not cursed.

Right? Like we're like we're savers. When the Fed creates new money, it makes us look like we're a saving society. But we're not.

It's just new. It's not new wealth, it's just new money. So markets can get distorted and overcount the amount of risk or undercount the amount of risk. So the idea is to the way you decrease risk, Jesus has it in the Sermon on the Mount. If you build your house, if you see a house that's built on a foundation of sand, it is more risky than a house that's built on a foundation of stone. So as we dethrone mankind, and when we worship man, we don't usually end up worshiping the individual, we end up worshipping the state.

That's the big man. When we dethrone the state and put God back on the throne, and then we limit the power of the state, say the central bank, we limit its power to create new money, which causes inflation. We limit the power of the state to take more than it needs to in the form of taxation, or to spend more than it should in the form of overspending and borrowing.

When we do that, that is to some degree reversing that curse and it's making us a little bit more of a house built on stone and a little bit less of a house built on sand. And over time as societies do that, it reflects itself in the markets, which is why the United States markets are so much more highly valued, say, than European markets or emerging markets. Markets are reflecting and kind of voting yes or no on the cursedness or blessedness or the principle adherence of a nation at any given time. And so the US, I was just on a call where we were talking about how much the United States has overperformed European stock markets over a long period of time.

Why? Because our form of Christianity went more back to the Bible and more back to that idea of us being creative and economically productive and everything being a calling under God, including finance and commerce, whereas theirs was still more beholden to paganism. And that's reflected itself in our great economic expansion and our explosion of wealth. And the tapering off of that is reflecting the fact that we are drifting away from those foundations.

Jerry, just got about 90 seconds left. So what would be some of the next steps then for us economically? I mean, is it about money supply and not artificially suppressing our interest rates?

Is it about understanding that we need regulations that support productivity and wealth creation? Where do we go from here? Yes and yes, those are two great places to start. Sound money, unjust weights and measures are an abomination to the Lord. That's where most of the pain now is, the inflation and then the recession, maybe causing a recession because we think that's the way you fight inflation rather than being productive and growing. Those are great places to start.

But of course, always start with your heart and start with your own life. We can't expect the federal government to be biblically economic if we aren't biblically economic. Jerry, put a bow on this for us. For our listeners today, what would you have them take away from this as they look at God's handiwork and design for economics? Glorify God when the economy is doing well, but also glorify him when it's doing poorly because he's glorified. When you follow his principles and they work, that brings glory to God.

But when people violate his principles and things go badly, that also vindicates his wisdom. But don't stop there. Go back to the principles. Do it in the voting booth. Do it in your own life.

Do it in your own heart. Be generous. You know why?

Because I say in the video series, that calibrates you. I mean, it's good reason to be generous because people need our help, but it's also good for us. It dethrones us and puts God back on the throne. And around that throne, we build the great economy, which like the angels who are circling God and saying holy, holy, holy glory. When we are economically productive to his glory, that glorifies God.

That's worship too. Fabulous. Jerry, can't wait to continue the conversation next time. Thanks for stopping by, my friend. Always a pleasure. That's Jerry Boyer, resident economist here at Faith and Finance, also the author of The Maker vs.

The Taker is What Jesus Really Said about social justice and economics. All right. Your calls are next.

800-525-7000. I'm Rob West and we'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West.

All right. Well, what a fascinating conversation with Jerry Boyer. Always love when Jerry stops by to expand our thinking, take us back to the scriptures, but apply that to what we're seeing around us economically and in the markets.

And he certainly did just that today. But it's time to turn the corner and take your questions on anything financial. The good news is it looks like every line is full. So lots of great questions coming up in today, which means we need to dive in.

So let's head straight to Trenton, New Jersey. Hi, Ann. Go right ahead. Hello. My question is, hi there. How are you?

Doing great. I would like to be able to give each of my grandchildren, I have four, a thousand dollars per high school year at the time of graduation. So I'd like to be able to maybe invest some to be able to have a total of a thousand per high school year or a thousand per child. OK. Yeah. And you'd like to give them the gift as cash, right?

Not necessarily toward the cost of education. Cash. Correct.

OK. Yeah. Very good. So you want to be able to give them a total of a thousand or are you wanting to just, you know, put in a thousand now and grow that to as much as you can? No, I'd like to give them a total of four thousand, one thousand for each high school year. Oh, OK. Yeah, very good.

And what are the age ranges of these grandchildren today? OK, so fifteen, fourteen, nine and five. OK, great. So in how much do you have to be able to start to fund these accounts presently? I can certainly start them with a thousand.

OK. Yeah, very good. Well, I mean, obviously the one that's fifteen is only three years out from graduation. So if you want to have, you know, four thousand, we ultimately you're going to need sixteen thousand, but it's going to happen over time.

Right. So you could run the numbers and say, OK, I need four thousand in three years. I need another four thousand in four years. So then in the next four years, you're going to need eight thousand dollars if you want to do this upon graduation, hand them a check for four grand. And then, you know, another five years after that, you're going to need another four and then another six years after that. Or no, I guess another four years after that, you'll need another four.

So, you know, you've got to get to the total of sixteen. So it seems like probably the next option or next best approach would be to say, OK, I want to open four accounts. With the 15 year old and the 14 year old, you really don't have enough of a time horizon, meaning three years for one and four years for the other before you want to have the money available. You don't have enough time horizon to invest it, like put it in stocks and try to grow it. So what I would do for those two grandchildren is open two separate high yield savings accounts at an online bank and you could go to to find out which bank is offering the very best high yield savings rates.

It's probably going to be somewhere around four and a half percent. But that way you'd have one for each child. There's not going to be any cost to that.

These online banks will allow you to open a savings account without any fees and no minimums. And then I would figure out just at what pace you can fund that maybe with an initial deposit and then adding something to it every month so that you've got your full eight thousand dollars in there. Four thousand for each in the next four years. And that allows you when the 14 year old graduates, you know, to be able to write them each a check for four thousand. You're going to put most of that's going to come from your money, though, because, you know, you're going to get some interest, four and a half percent probably for the next couple of years and then maybe a little bit less than that for the following two years.

But that's still not going to be a whole lot of money. So you're going to have to have the ability to really fund that yourself. For the other two that are nine years away and 13 years away, we do have enough time horizon for you to invest this. So instead of opening two accounts at an online bank, I'd probably open two accounts with the Schwab Intelligent Portfolios. And this is basically an account you'd open at Charles Schwab.

Again, it would be in your name, but one would be earmarked for the nine year old, one would be earmarked for the five year old. And then you would automatically start systematically investing in those. And as you do, the money would be put into what are called index funds. So you'll capture the broad moves of the market through these exchange traded fund baskets. So basically when you make a deposit of any amount, whether it's one hundred dollars or a thousand dollars, it'll automatically be invested in the market. And as the market grows over the next nine years, up one year, down the next, up the next year, maybe up the following and then down a little bit. But over time, it's an upward trend over the next nine years and for the last grandchild 13 years, hopefully you get a little bit more growth out of that. And then as you get closer to their graduation date, you'd want to get more conservative.

But I think the two accounts at the online bank and the two accounts with the Schwab Intelligent Portfolios, and then you just figuring out how much to put in each one so that you reach your four thousand dollar goal by the time each of them graduate, that's going to accomplish what you're looking for. Does that all make sense, Ann? That all makes good sense.

Appreciate that. And do we have any idea what certificates deal do you say? CDs? Certificates of deposit?

Yeah. You could get one right now, 10 months to 12 months at five and a half percent. You know, so on a thousand dollars, you know, you'd get fifty five dollars in a year. But, you know, that's a lot better than you would get a year ago or a year and a half ago.

You might get, you know, less than one percent, whereas now you can get five and a half percent. OK, that's good to know. OK, well, you sound like a very generous grandmother and we appreciate your call. Let us know if we can help you further with anything else. May the Lord bless you. Well, we're going to take a quick break here. Donna, Tracy, Don, we're coming your way just around the corner. But first, we're going to pause and take a moment to hear from some of our incredible underwriters.

You know, in this program each day, folks, we just want to be an encouragement to you. And we live in the most prosperous nation in the history of the world. And yet there's so much discontentment.

And I think the reason is that money doesn't satisfy. We know that's true from God's word. We know that from our own experiences as well. The key is to realize that our abundance, it's not in things. It's in God himself. And not only is he the source of our abundance, he is our abundance.

When we start with that mindset, it changes everything. Much more to come just around the corner. Stay with us. Great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

Eight hundred, five, two, five, seven thousand. Although all the lines are full, so don't call right now. You'll get a busy signal. But we have some great questions coming up that I know you will enjoy. So let's do that right now and head right back to the phones to Austin, Texas. Hi, Donna. Go right ahead. Hi. Hi. OK.

I just had a quick question. OK, so I now have OK, I'm making my savings plan and I now have the opportunity to save my Social Security check each month. And I have the emergency fund saved. And now I need to save or I'm working on saving the six month emergency fund.

But where do I save the funds to get the best interest on it? Because, you know, at the bank, they don't give you nothing. Yeah. You know, so I don't know, like I need to give as much money in there as I can, you know? Sure. Sure.

Let me ask you this. First of all, I love this, Donna, that you're limiting your lifestyle, you're living within your means. Therefore, your Social Security is truly surplus, which you can sock away and build up a nice little nest egg. If you were to need it down the road for some medical expenses or you want to do some additional giving.

I mean, that's just great. Are you wanting to invest this and try to grow it over time and assume some risk with it? Are you wanting it, you know, in more of a guaranteed product? You just want a little better interest. Well, I don't really want to I am too old to be losing a bunch of money.

I don't really have time to regain, you know, losing a lot. What is your age, if you don't mind me asking? Well, I'm late, you know, I'm like 63. OK, you're young. I still have a good five years left that I can work and I can save, you know, I'm finishing up, I can save.

Well, here's the only reason I mentioned that, Don. I mean, and I say that and I'm not joking. I mean, you really are, for all intents and purposes, still young. If the Lord tarries and you're in good health, I mean, what we know today is that a female, a woman in the United States, once they reach age 65, has a life expectancy of 85 years old. Let's say you're in really good health and you live to 95. You could need this money to last for the next 30 years.

So I think as long as you had a minimum of a 10 year time horizon and obviously nobody knows the day or the hour the Lord is going to take us, but we plan diligently. And if you wanted to say, OK, I know I've got at least a 10 year time horizon because I don't plan to use this money in the next 10 years, then you could take it. And, you know, I think as a 65 year old, what I would typically recommend is, you know, you'd put about 45 percent in stocks and you put 60, 55 percent or so in bonds. If you want to get a little more conservative, you could be 30 percent in stocks, 70 percent in bonds. But you with the small amount of money that you'd be adding every month and you'd be doing something called dollar cost averaging, you know, you would just automatically invest it into what are called indexes, which just mirror the broad market indexes.

So you'd have 30 percent in the probably the stock index and you'd have 70 percent in a bond index. And that pays a nice dividend or yield. And then you'd have some appreciation as interest rates come down. But with that comes some risk.

I mean, in any given month or quarter or year, the market could be down. And so you'd have an unrealized loss at that point. So that'd be one approach. The other approach is to say, you know, and I just want to get the best interest rate possible. I don't want to take any risk. I want it guaranteed.

So I know it's there when I can get to it. Well, then I'd probably use either a high yield savings account or a CD, a certificate of deposit, high yield savings account right now at an online bank, which I don't have any problem with that. As long as it has FDIC insurance, you could get about four and a half percent right now with a CD of about a year.

You could get about five and a half percent. So you could take that money and just add it to an online savings account every month. And, you know, you'd start earning a little better interest than you're getting at your brick and mortar bank. And the place I'd go to find the right online bank for you is called They're not a bank, but they'll help you find the online banks that are offering the very best interest rates right now, yields on their high yield savings accounts. And then once you open it, you'd link it up to your checking. You could move the money electronically every month as you receive it from Social Security. And you'd get a, you know, a much better interest rate than you're getting right now.

Which of those sounds like it'd be the best fit for you? Well, I definitely think I'm going to go to that and check it out and the high yield. And I was wondering if it was safe to do the online banking because they seem to have pretty good rates. Yeah, yeah, I think it is.

I mean, they're both backed by the full faith and credit of the United States government. As long as they have FDIC insurance, whether they're online or brick and mortar, the difference is the online banks can pass on all that savings from not having the brick and mortar operations in the form of higher interest rates and no fees. So I think that's a great option for you, given what you've got here. And will give you the place to go. Hope that helps you. Donna, we appreciate your call today. God bless you. To Chicago. Hey, Tracy, go right ahead. Hi, thanks for taking my call.

You kind of answered a couple questions I had. I had the same idea. My husband and I are looking to see what we have, about $100,000 that we can invest. And I'm not sure if we should invest in like index funds or bonds. I know that I'm trying to find out what is it that I've heard you speak about and others speak about that has like a 9% return and that there's like little to no risk of it decreasing. I don't know what which one that is.

Yeah, there's really Yeah, well, so just to that last part first, then we'll talk about where you go from here. There really isn't anything paying that kind of rate of return that's guaranteed. What I'm not exactly sure what you're referring to, I can think of two possible scenarios. One is the average annualized return of the S&P 500. So think in terms of the 500 leading publicly traded companies in the United States. The average annualized return since its inception in 1928 through December 31 of last year was 9.82%. Now, keep in mind in any given year, you know, it might have been down, you know, 20%. But there's other years where it was up 40.

So if you take it over the, you know, that, that period from, you know, its inception back in the 20s, all the way through this year into last year, you'd come out with an average annualized return of 9.8. All that says is that has nothing to do with what's going to happen in the future. That just says to you that if you're invested for the long haul, you're going to do well. Are you taking risk?

Absolutely. That's why we say you shouldn't do that unless you have a 10 year time horizon. So that might be what you're hearing from. The other thing you might be thinking of is I bonds, inflation bonds, we're offering more than 9% yields guaranteed by the US government. That's gone. That that was back when we were at 40 year high inflation.

That number is now in the fours. So that's not an option either. I think the key for you all is defined the purpose of the money, which is also going to tell you what the time horizon is. And if the time horizon is more than 10 years, or at least more than five, then you certainly could invest it. I'd love for you all to get that into a retirement account, which means you know, if you have the option, I'd try to get it into a 401k or at least a Roth IRA. But is this money that's separate from your retirement? And if so, do you feel like you're already on track for retirement with other savings?

It would be. We do want to add to planning for retirement. We already have a deferred comp plan.

But we want to add to that as well because we are only five about five years out of retirement. Oh, I see. Okay. Yeah.

So if you want to invest it, I'd probably Well, let's do this. I've got to take a break. You stay on the line. We'll finish up just after this break is done. And Don and Lindsay were coming your way as well. We'll be right back. grateful to have you with us today on faith and finance live. I'm Rob West.

Before the break, we were talking to Tracy in Chicago. She's wondering what to do with about $100,000 that she and her husband have saved in a taxable account, not in a retirement plan. Tracy, what I was saying was that long as long as we have the right time horizon, you certainly could invest it. You all don't need any of this for your emergency reserves, correct? Correct.

No, we have it already satisfied. Okay. And you have the deferred comp. Are there any other retirement plans you have access to to either of you have a 401k or anything like that?

No, only the defer comp. Okay. So I think the next option is I mean, you could fund a Roth IRA each of you. So because you're over 50, you could put in $7,000 each.

So that's 14,000. And then you could turn around and put in, you know, the same thing in 2024. As soon as we turn the calendar year, so that would be a great option for you that would, you know, get 28,000 working in an environment where it could grow tax free. And then beyond that, you could just take and invest this money in a taxable form. So as it you know, as you have realized gains, you would you would pay capital gains tax on them because it's not in a retirement account. In terms of how to manage the money your options are you can hire an advisor to do that for you. Or you could go to a place like and they could help you, you know, pick some mutual funds that fit your age and risk tolerance. But in either case, if this is money that you want to grow for the future, you don't have any giving desires immediately with it.

You don't need it for your emergency fund, then you certainly could invest it and have it available down the road for long term care needs or an inheritance or whatever you might have. Wonderful, wonderful. Yeah, that was long term care.

That was another one. I'm glad you brought that up. We weren't sure if we should have purchased that or at what age should you purchase something like that?

Typically around age 60, a few years before or a few years after is fine. I think it's a good thing if you can afford it. The premiums can go up 20% plus in a given year. Can't happen on your policy. It's not individually underwritten. It has to happen in your state across the board for all the policies based on the rising cost of health care. But the average cost of a semi-private room right now is, you know, about $8,000 a month. So if something's going to erode your assets in this season of life, it most often is going to be long term care needs.

And that's where an insurance product could be great to help offset that risk. So hopefully that helps you. If you want an advisor to help with these $100,000, you could go to a certified kingdom advisor on our website, Just click find a CKA. Thanks for your call today.

Don in Rome, Georgia. Go ahead, sir. Yes. Thank you for taking my call. I have an insurance question, wholesale insurance. I purchased a policy for my wife about three or four months ago.

It's a $10,000 policy. Now she'll be 62 in a couple of months. But I'm wondering if I should keep that policy based on her age, my age. I'm older.

I was 75. So I don't really have other responsibilities like children or other special needs expenses. And I'm just wondering if I'm throwing the money out the window with it. Yeah, I mean, you're getting something in return because there's probably a little bit of a savings component if it's a whole life policy and you're getting this death benefit, but the death benefit is only $10,000. Is that right? That's right. That's correct.

So I'm not sure this does a whole lot for you. If it were me, I think I'd rather in this season of life if you're not trying to offset a risk that exists where if one of you passes away before the other, it would create some sort of hardship by loss of income or something like that. Usually in this season of life, that's not a factor. So in that case, I'd kind of rather you reclaim that $42 a month, put that in your budget and allow you to use that according to your values and priorities. And as you build out your spending plan, whether that's additional giving or maybe you sock it away in a little nest egg that you, you know, you're not using it to fund a relatively small policy that's increasingly expensive as you age. So I'd probably let it go and just reclaim the premium if it were me. And I thought that too, since she's in, you know, pretty good health and she doesn't produce any income. She's a homemaker. So it's not like there'd be a loss of income for her putting an extra load on me. And so that's what I wanted to call about. And I just want to get your take because I've only had it for three or four months.

I put like $42 into it for that length of time, but I thought that's not a big loss if I can just, you know, stop it and then just regain from this point. Yeah, she'd probably enjoy you taking her out to dinner once a month with that $42. I'm sure you can find something to do. All right, Donna, hope that helps you. We appreciate your call from Rome, Georgia today. God bless you.

Crystal Lake, Illinois is where Lindsay is. Go ahead. All right.

Thanks, Rob. Recently, God bless my husband and I with a large amount of money from selling cryptocurrency, 60K, maybe even up to 90 when all said and done. And I'm wondering whether we should pay off our mortgage, save for a new car, invest or, you know, a little bit of some of those.

Yeah, those are all great ideas. You know, the purpose of money is not to get more of it. The purpose is to accomplish a set of goals based on our values, right? So I think the starting point is always to say, wow, God, look what you've done. You've blessed me with this 60 to 90 grand that I wasn't expecting. Now, what's the best use of it?

And it's not that one use is better or more spiritual than another. You should, you know, if you decided to enjoy it, as long as you were thoughtful about that and really thought about your priorities. And if you decided to enjoy it and take a vacation, that's great. If you decide to pay off your mortgage, I love that as well. Investing, that's awesome.

So it really just involves you all, first of all, praying and saying, God, what would you have us to do? And then talking about it and then looking at the financial piece as well. In terms of the financial piece, as long as you don't have any consumer debt that's, you know, high interest or, you know, if you have your emergency fund of three to six months expenses, then you don't need to use it for that. If you had, if you didn't have your emergency fund or you had consumer debt, I'd say, let's start there.

Obviously, if you want to do any giving off of this, great. Beyond that, it really comes down to investing or paying down debt. Now, what I would love to see is, first of all, if you guys really pray about it, and this is where we come back to our values and you all say, gosh, we would really just love to be debt free as soon as possible. Then I would say, write that check, pay off that mortgage and don't look back. You won't regret it. I think that's great.

If you said, though, you know what? We want to be debt free, but we're okay hanging on to this mortgage. We have a low interest rate.

We got it back when interest rates were in the twos or threes, if that's the case. And so at the very least, I would love for you to have your mortgage paid off by the time you reach retirement, because that's going to take your major expense off the table. But you don't necessarily need to do that now. And then you may say, so we're therefore going to turn this around and redeploy it into some investments, whether that's stocks and bonds or real estate or whatever you all wanted to do.

And that would be great as well. But I think, again, it starts with asking the Lord, what would you have me to do? It involves some conversation with the two of you. And then it just really involves looking at each of these options, living, giving, owing or growing and saying, which one do we feel like is the most pressing opportunity for us in light of what we think God is doing in our lives? Does that make sense?

Yes, it does. All right. Given that, what what are you thinking that you guys, you know, as you've talked about it and considered it, what do you think you might do with it?

I would love to be completely debt free. Yeah, yeah. So, yeah, me and him will have to confirm and pray about it. Well, I would do that.

Yeah. I mean, I'll tell you, here's where I will affirm your thought there. I've been doing this a long time and I've never, ever had somebody call me after paying off their mortgage and say, Rob, you know what? Six months ago, we paid off that mortgage and we've just regretted it ever since.

I just don't get that call, Lindsey. So if that's what you guys decided to do, despite what somebody might say about, yeah, but your interest rate is this and you could earn that over here. And I wouldn't think twice about it. If you all have a conviction to be debt free, you go for it. But if you decided, you know what, we're comfortable either way or he said, I'd really like to invest in and you say, I really like to prioritize that. You may decide to do both.

Maybe you cut that mortgage down by, you know, forty five K and take the other forty five and invest it. So I think there's a solution here, but I do think you guys need to spend some time talking about it. And I wouldn't miss the opportunity to just ask the Lord to give you all unity as you make that decision. All right. Thank you. All right. Hey, God bless you. We appreciate your call today.

We're going to finish in Indianapolis. Alan, I just got about a minute and a half left. Go ahead. OK. Thanks, Rob.

I'll be quick. I have an inheritance tax and gift tax question kind of all in one. I want to make sure we're not double dipping. If a grandfather passes away and in his will, leave, say, one hundred thousand dollars to his son when the estate is settled and the debt transaction is all complete. Is it OK to then turn around that that son and give fifty thousand dollars to his son? Yeah.

Yeah, absolutely. And there's not taxes involved in either of those. So there is no inheritance tax. The only tax that would be paid would be at the grandfather's passing any estate taxes that are due. But the estate would need to be bigger than twelve million dollars before any estate taxes would be levied. So that's a tax free inheritance that's being received by the son. And then the son then turns around and makes a gift.

And that's the word you use. And that's the right word to his son, the grandfather's grandson, for fifty thousand. And because that's above seventeen thousand, which is the annual gift exclusion, or if it's done on the part of, you know, him and his wife, it because it's in excess of thirty four thousand seventeen thousand for each of them to the son, then you would just need to fill out gift form tax form seven oh nine with the IRS, which just basically tells the IRS that that gift was made. There's still not any taxes due. It's just going to begin to chip away at the twelve million dollar lifetime gift exclusion. So nobody's paying any taxes.

The question is just given the fifty thousand, it's going to need to be reported, but not taxable. Does that make sense? Yes, it does. Thank you very much. All right. Hey, God bless you, Alan. We appreciate it.

Debbie, I'm so sorry we didn't get to your question today. We'd love to get you on a future broadcast. Hey, folks, I couldn't do this without my amazing team. So on behalf of Amy Rios and on behalf of Tahira and Dan and Jim and Robert and everybody that makes this program possible and Lynn on our phones today, we're so thankful you're with us. Faith and Finance Live is a partnership between Moody Radio and Faith Fi. See you tomorrow. Bye bye.
Whisper: medium.en / 2023-08-09 18:08:47 / 2023-08-09 18:26:43 / 18

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