Still a Seller’s Market

It's hard to imagine, but despite mortgage rates around 7%, it's still a seller's market for buying a home.

Hi, I'm Rob West. Many analysts predicted that home prices would level off in 2023, and while that's happening in some areas, prices continue to rise in others. I'll talk about that and what prospective buyers should do in a seller's market. 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 journey. Okay, so the National Association of Realtors reports that in the first quarter of 2023, home prices actually rose in seven out of 10 metro markets around the country. That happened even as the Federal Reserve continued to raise interest rates, pushing the average mortgage rate to nearly 7%.

This isn't how things are supposed to work. When mortgage rates increase, prospective buyers typically bow out, resulting in fewer sales, which then cause prices to fall. That's economics 101. When demand falls, so do prices, but that's not happening, partly because demand is not falling. Prospective home buyers have apparently gotten used to the higher rates and are staying in the hunt. Meanwhile, prospective sellers are shying away from listing their properties because they don't want to pay those higher rates when financing their next home.

The net result is that inventory, or supply, remains low, and with demand steady, prices will stay up. Okay, so what can you do about it? How do you buy a home in this market without breaking your budget? Well, start by not going it alone. Interview at least three real estate agents and pick the sharpest one. You want someone with a track record of helping folks buy homes in the neighborhood of your choice and who will stay on top of new listings.

You or your agent may want to make a list of other real estate agencies in your area and make frequent calls to them, checking to see if they're working on potential houses that haven't been entered into the multiple listing service yet. You might be able to make an offer before a house hits the market, but be ready to make a quick decision. You also want to get pre-approved for a mortgage before you set foot in the first house on your list. That'll give you a leg up over the competition that hasn't bothered to look into financing. But understand that the lender will likely approve you for a bigger mortgage than you'll be comfortable with. Work up an estimated budget that allows 25% or less of your take-home pay for the mortgage payment. Also, you have to realize that in this market, buyers can't be choosers. The goal is to find an affordable home that meets your needs, not your dream house. Be flexible with your must-haves and be willing to make changes. Location is probably the most important thing to hold out for. Other things, like a finished basement, you can do later.

Here's one that should go without saying. Don't bother trying to lowball a seller. With most homes selling near the asking price these days, making an offer well below that won't get you anywhere. To be competitive, you'll have to come in very close to the asking price, if not a little above. Here again, your agent can help you come up with a realistic opening offer. It's happening less and less these days, but you could find yourself in a bidding war where emotions can run high.

You'll need to keep your wits about you or you'll find yourself with a fat mortgage payment and eating a lot of spam for dinner. Know the absolute upper limit of what you can spend and have the discipline to stop there. And don't try to put a lot of conditions on your offer. Sellers aren't in the mood to throw in a major appliance or give you a new roof allowance if you feel the house might need one. You have to keep the seller's interest in mind. For example, agree to a closing date of the seller's choice, not yours.

Oh, and one final thought, you might need to consider doing nothing. That means waiting until the market moderates even further. Don't expect home prices to fall significantly in the future, but eventually inventory should catch up with demand and you'll have less competition. You definitely should wait if you haven't saved up 20% for a down payment. There's no sense in adding the cost of private mortgage insurance to your mortgage payment, which is likely to be high to begin with. PMI is required if you can't put 20% down and it could run as high as $70 a month for every $100,000 you borrow. It only protects the lender in case you default.

It has no value for you at all. So those are some tips for surviving a seller's market. We hope you find them useful. If you're looking to buy a house this summer, let us know how it works out. And by the way, if you're in the market for a mortgage, check out our friends at movementmortgage.com forward slash faith. That's movementmortgage.com forward slash faith. All right, your calls are next 800-525-7000.

Those lines are open 24 seven 800-525-7000. I'm Rob West and this is faith and finance live. We'll be right back. Thankful to have you with us today on faith and finance live. I'm Rob West. All right, it's time to dive in 800-525-7000.

Again, that's 800-525-7000. We'd love to hear from you with your financial questions today. Also coming up on the broadcast, you know, I started today by talking about the fact that this is still a seller's market. It's not the frenzy that we saw during the raging seller's market where we might have a bidding war in 24 hours. No, as interest rates have head up, the housing market has cooled, but it's still clearly a seller's market largely because of a lack of inventory. We talked about how you should buy a home in a seller's market.

But what about selling a home? I'll give you some tips just around the corner as we talk about that. Plus your financial questions today at 800-525-7000. We'd love to hear from you. All right, let's dive in today. We're going to begin in Ohio.

Susie, you'll be our first caller go right ahead. My question is regarding an annuity, which is up for renewal. It was 25,000. My advisor is recommending putting 100,000 to get a higher interest rate into a five-year annuity, which would give me a 5.3% interest rate. I do have the funds. We have no debt. The assets that I have to work with are a few hundred thousand.

I don't need the money anytime soon for anything that I know of. I'm just really cautious. I'm just apprehensive about actually pulling the lever and the same institution that I meet him through.

He kind of works through that institution. Their current five-year CD rate is 5%. I'm thinking, yes, I know there's an interest difference, but I feel like if I had to withdraw the money from either, wouldn't a CD be a lot easier?

Am I just guilty of cold feet? I'm just looking for your advice. I know you're not a fan of annuities.

This is just fairly simple as far as I understand it. I don't understand a lot, but it's just a deferred annuity. I don't need it for income. It's not set up for income. It's just set up to grow. Very good. I think you just need to define what your objective is.

You're right. Without the complexity and the lockup periods, meaning the surrender charges to get your money back, you could take and earn right now a little better interest rate or at least an equal interest rate in a CD and not have all of the fees and surrender charges that are associated with the annuity. Why wouldn't you do that? Well, if you didn't want to take any risk and you were to say to me, Rob, I don't need the money and I don't want to try to grow this more than I would expect to with a guaranteed product, meaning I don't want to put it into a very small allocation in stocks, a larger allocation in bonds, and maybe try to do six or seven percent a year or at least five or six for the long term, but with complete access to your money, but assuming some risk beyond a CD or a guaranteed annuity. If you didn't want to do that, then the annuity is a fairly attractive option and here's why. Because although you can get that rate today in a CD, you're not going to be able to get that rate for much longer than 12 months because the bank knows they can't give you five, five and a half percent for five years or longer because the fed funds rate is going to start dropping probably sometime next year because they will have successfully slowed the economy. Inflation will be under control. And obviously that, you know, the reason the market's under pressure today is because there's still lingering inflation woes, but they will finally get that on top of that. And then they'll find that the economy sluggish and they'll want to stimulate it.

And the way they do that is by bringing those rates back down. And as those rates fall, well, CD rates will as well, which means the bank doesn't want to lock you in to, you know, five percent plus on a CD for the next 10 years because, you know, they're going to be struggling to be able to pay that as rates come down. So the benefit of the annuity is they will give you that guaranteed rate for a longer period of time. So if you're saying to me, Rob, I like the idea of transferring the risk away from myself, either in the case of a CD to the U.S. government because they're backing that or to an insurance company because they're guaranteeing the return on the annuity. Well, then that's where you might want to look at an annuity.

Why are they not my favorite offering? Well, for the reasons I mentioned, you're losing access to your money. You know, they're complicated.

They tend to be expensive. So I think for that reason, you know, as long as you had other assets. So if you said to me, hey, we've got three hundred thousand and I'm talking about putting one hundred in this. Well, you've got two hundred thousand left. And, you know, if your bills are covered, you might feel good about having a hundred thousand that's locked up for 10 years at five percent.

But again, I think you just need to make sure you understand the trade offs largely that you're just losing access to this money if you all needed it for something unforeseen medically or otherwise. Does that all make sense? Yes. Yes.

The CD actually for five years, it would be five percent. So it's OK. It's close to the same. Yeah. But I just don't know if I'm you know, and he does have some assets that are in a brokerage account and I'm becoming a little more comfortable with the idea of all that. But.

Yeah. If my only problem is cold feet, does an annuity even make sense? Well, how long would the term be on the annuity? It would be for five years.

Oh, it's five years also. Well, if you can get the same thing without having the you know, to go into that annuity product, you know, I'm seeing typically not I'm not seeing CDs beyond five and a half percent for five years. But if you could get five and five percent and a CD for five years, I don't know why you would opt for the you know, for the annuity option when you can do the same thing.

And you're right. The the breakage on that CD is going to be a lot less expensive and easier to do than trying to get that money back out of the annuity. You're going to pay some pretty hefty surrender charges because they need to make sure they can make up the money they're using to pay the insurance salesman who's talking you into buying this.

And that's going to be a pretty big commission he's going to earn. And so they offset that through this surrender charge. So if you if all things being equal, I'd prefer you go the CD route with this money, then getting the same guaranteed return in an annuity contract. Yeah, the annuity is a little bit more it's 5.3. But it's okay, I don't know how to quantify the difference.

But that does. There is a tangential question, which would be how do I actually find out the fees that are associated with an annuity? So I can ask him how he is compensated and he gives me his answer.

But it seems to be so layered in nuances that I'm left with with not feeling any more knowledgeable than Yeah, and you're not probably going to get to the bottom of that. Because what they're going to say is, well, it doesn't really matter to you what we get paid. This is what you're going to get, you're going to be guaranteed this return over five years. And so how they are able to take your money and invest it and pay you that return and pay his commission, they're going to do that by investing it and through these lock up periods and surrender charges and so forth. So there's multiple fees embedded into this product. But at the end of the day, what you want to carry compare is the actual internal rate of return that they're promising against what you could get in another guaranteed product outside of an insurance product. And that 0.03% difference is $300 a year on $100,000.

So it's not that significant. So I would say all things being equal, I'd probably go the CD route just because it gives you a little added flexibility and liquidity. I hope that helps you, Suzy. We'll ask the Lord to give you some wisdom as you make this decision. We'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West. Taking your calls and questions today, 800-525-7000 is the number to call.

That's 800-525-7000. Coming up in just a moment, we're going to be talking about credit scores. That's what Debbie wants to talk about. Danielle's asking about CDs and Dee wants to know about paying off a mortgage or not.

But let's head first to Chicago. Vicki, how can I help you with the question related to the home sale from your daughter and her fiance? Thank you so much for taking my call. My mother sold my daughter and her fiance at a very good rate. What do one of those companies pay you when they come in and buy your house and flip it? My mom sold it for roughly about $100,000 less than market value. A year later, the two, my daughter and her fiance have split up and they've sold the home. They made about $100,000 on the sale, $50,000 each. My daughter is getting information from some people that it's going to cost her right around $20,000 in capital gains tax. She's been told that she needs to pay the federal government in September around $7,500 in the state, $1,000, and then to do that again in January. Does that sound about right?

Well, I would encourage you to have her check with the CPA just given that this is an unusual situation, which is always a good idea to get some tax advice just to make sure this is filed properly and on time. But let's just talk generally for a moment. So your mom sold this property to your daughter and her fiance, so they were co-owners on the deed? Yes, they were. Okay. And so they each put in half the money?

Probably they got in for a little under $3,000, I think, and my daughter is the one who put down the majority of it. Okay. But they're going to split the proceeds, is that right? Absolutely, yes. Yeah. Okay. All right. And so their filing status from a tax standpoint was single, correct? Yes, it was.

Okay. Yeah. So the capital gains rate there on whatever portion... Now, did they live there a full year? Yeah, they bought the house in May. I'm sorry, in March of last year, they just sold it this July. Okay.

Yeah. So as long as they lived there at least a year, it'd be a long-term capital gain. And the 2023 long-term capital gains rate, if you're a single filing status, if you make under $44,000, you wouldn't have any capital gains, but between $44,600 and shy of a half a million dollars in income, not the gain, but adjusted gross income, which is where most people fall, then it's a 15% capital gain rate, long-term capital gains. So whatever portion is her portion of the proceeds, because they didn't live there a full two years out of the last five, which would have exempted all this from capital gains, but because they had a profit, they were there less than two years, but more than one year, it would be a long-term capital gain. The federal portion of that, not the state, would be 15% if, again, the AGI was between 44 and 492,000. And so she would take that profit, which is the selling price minus the purchase price minus any improvements that stayed with the property, and that would determine the gain, and then that would be a 15% federal long-term capital gain rate. But 15% on 50,000, did you say that was her portion?

Right, right. That would be 7,500, and then you'd have maybe some state tax on top of that, but that's not, I mean, 15,000 would be the full amount between the two of them, and then they would split that. Okay, all right, so really her portion would be around 75,000 for the federal. 7,500, yes, for the federal. So I would just, again, have her work with the CPA this year to file her taxes, and she may want to go and establish that relationship, let that person know that she's got this, because they may want her to go ahead and send it in ahead of time and prepay those taxes, make an estimated payment just so there's not any interest or anything like that.

But that's essentially the way it should come out if I'm understanding this correctly. Excuse me. Thank you for your call, Vicki. All the best to you and your daughter. We appreciate you being on the program. Let's head to Michigan. Hi, Dee. Go ahead. Thank you for taking my call.

Yes, ma'am. We're questioning, yes, we're questioning, we have a mortgage of about 58,000 on our house, and we have a 2% interest. And we have been paying 3,100 a month, where we're only required to pay the 1,200 a month. So we're paying it off quicker, and we would have it paid off in two years, approximately. And if we went with the 1,200, it would be six years. And we're just wondering if we should continue to pay the higher payments, being that all of our investments are making better.

Our money market is 5.5, and we're averaging 7.5 in our investments. So we're wondering if we would do better not to pay the full, to pay the 3,100, but to cut back. Yeah. Sure.

Well, I love this question. I think you all being debt-free is a great thing. The question is the timing. And apart from just a real conviction to be out of debt as soon as possible, and if you had that conviction, I'd say go for it. But apart from that, you're right. I mean, you've got a very low interest rate in the twos. That's great.

Today, it's seven. And you're getting a great return. You're getting a nice yield on the money that's in CDs. You said you're averaging more than 7% on your investments.

That's tremendous. So would you take and redirect this surplus that you were using for principal reduction? And would you put that into your investment accounts?

Is that what you were thinking? We were thinking we could do that or possibly some updates on our house. But we certainly would save it and determine if it should be used somewhere, but probably into investments for sure.

Yeah. And do you have enough in the way of investments to cover your income needs in retirement? We do.

We have 170 in each of our Roths and 25,000 in the money market. Okay, great. Let's do this. If you don't mind holding D, I want to give you my thoughts on this, but I've got to hit a quick break. So you stay right there and we'll be right back.

Stay with us. Great to have you with us today on Faith and Finance Live. I'm Rob West. Hey, we've got a few lines open today. 800-525-7000 is the number to call. If you have a financial question, we'd love to hear from you. Our team standing by again, 800-525-7000.

Just before the break, we were talking to Dee in Michigan. She and her husband have 58,000 remaining on their mortgage. It's down in the twos. It's in the nearly 2 percent, if not 2 percent, the interest rate on it. They should have it paid off in a couple of years just because they're adding a couple of thousand dollars a month over and above that monthly payment. But they're making 5 percent in their bank products. They're making an average of 7 percent on their investments annualized. And so they're just wondering, should we continue to accelerate this payoff so quickly?

You know, they also have some projects they'd like to do around the house. And I think, Dee, you know, my bottom line is, number one, there's the financial and then the non-financial side of this. The financial side says, well, absolutely, you can do better even with zero risk in a high-yield savings account. You could double your return over what you're paying in interest at 2 percent. So why not, you know, go ahead and at the very least just start building up that emergency savings or putting it in savings, earning let's say 4.5 percent in a high-yield savings account. And then, you know, as you sock that away, you've got a fund that you can use for the renovations whenever you're ready. Or you could start directing it maybe to some of your investment accounts for a longer-term approach and you're certainly doing, you know, three to four times better on that return than your mortgage.

So that all makes sense. There's, of course, the non-financial side of owning your home. So if you said, listen, we just want the peace of mind to know that we owe, you know, nothing to anyone or we just feel like the Lord's telling us get out of debt. If either of those are true, I would say, well, let's put the financial aside and just go for it. And I don't think you'll ever look back and regret that. But if you're comfortable knowing that you could pay it off at any point because you've got the assets to do it and you know that you have that lower interest rate and you just feel like as a steward, you just want to maximize the return and you're comfortable waiting on that payoff of the mortgage, not two years, but three or four or five or six, whatever that scheduled monthly payment payoff would take you out.

Well, then I'd say go for it and either sock it away and have it ready for the renovations and earn some good interest on it and an online high-yield savings while you're waiting or go ahead and take a portion of it and send it to those investments. Does that all make sense? It does. Yes, I appreciate that. That helps a lot. Okay, good, D. You're welcome. And thank you for calling today.

We appreciate it. Eight hundred five to five. Seven thousand is the number to call.

We've got, let's see, just a couple of lines open to Chattanooga. Hi, Danielle. Go ahead. Hi. Thank you for taking my call.

I think I tried to explain it as this. I have five children. We started a savings account for them when they were younger.

Their age is two to 15. And I just, I guess recently realized that was probably just a mistake and leaving it, it's earning, it was earning little to no interest. So we're looking to move those all into separate CDs for our children. And my question is, it's at a five percent rate right now and a minimum of six months. Should we invest in the six months reinvest? Does the market look like that interest is going to keep going up?

Or I guess my thoughts are, should we invest it longer or do the six months and reinvest it at the rate it is now? Yeah, very good. So that's really helpful background. And I'm thrilled to hear that you did this. And don't worry about not getting a whole lot of interest.

At least you were systematically saving. And so you have the ability to have something to work with here that you can ultimately give as a wonderful blessing to the kids. So I think that's great. And thinking about how to maximize that return in an appropriate way, given their time horizon on this money, is also a good idea.

So I'm delighted that you called. So talk to me about how you all are thinking about this being given to the kids. Are you thinking about, you know, everybody gets a check at age 18? Are you going to hang on to it and wait till they're financially and spiritually ready for it? So that may go beyond 18.

Is it money that's specifically for college? You know, what have you guys thought about in that regard? So my first inclination is to hold on to it until they are financially and spiritually ready for it.

They honestly don't, they're not even aware that it's there. It's just something we started and, you know, I just, like I said, I want it to be a blessing to them when they're ready for it and able to make, I would hope, wide decisions with it. Maybe college, maybe not. It just kind of depends on each particular child when they reach that age. Okay. So I think we can put it into two buckets potentially and say, okay, any of the children that are young enough where let's use 18 as a target, even though you may decide to wait longer or use it sooner, but let's say we're going to just plan the investment strategy for age 18. Well, any of the kids where that's less than five years, I'd say, yeah, let's go ahead and put it in a CD and I'd probably lock it in a little longer. I mean, I'd love to see you put it in a two or three year CD at 5% plus because although we may get one or two more interest rates hikes, we're near the top and they're going to start coming down sometime next year. So I think you being able to say, I know that I know we're going to get 5% plus and we don't have to take any risk and it's less than five years on when I might want the kids to get this, I think that's a great option.

You've got a little more flexibility with those that are young enough because I know they go all the way down to age two where, you know, we're talking not only is it five years, it may even be more than 10 years. And I think in that case you have to decide, okay, do we want, since the time horizon's there, do we want to take a little bit of risk and try to grow this over the next decade at a rate faster than 5%? And if you did, I'd say, let's pick some good high quality mutual funds or some index funds and maybe systematically invest this money and then as you get below five years, then we'd convert it to a more safe environment. Are you all wanting to take a little bit of risk to maximize the return or would you like to keep everything in more of a guaranteed product? Well, to be honest, I'm not really savvy in the mutual funds or any of that.

We're just kind of, I guess, realizing that we need to make some adjustments and, and I'm trying to learn, but, um, you know, it's just a lot to take in. So I'm not really sure how to do mutual funds and those sorts of things. Okay.

Well, a couple of options there. I'm going to send you a copy of the Soundmind Investing Handbook. So when we're done here, stay on the line, we'll get your information. That'll just be our gift to you. That'll introduce you to mutual funds. And again, as long as you've got more than five years, I'd say that's an option.

You may want to say, I'm only going to do that for those that are 10 years plus out. That would be even better because really over a 10 year period, you should absolutely have a positive return. Um, and then you've got a couple of options on how to do that because we're talking about small dollar amounts. You could either go and look at one of the robo advisors, like you could go to Charles Schwab and use their intelligent portfolios. You could go to Betterment and basically as you make these deposits, it would automatically deploy it in, in what is called an indexed ETF. And basically it's just a basket of investments that represent the broad stock market indexes. And it would be a mix of stocks and bonds. And the goal would be to outpace what you could get in a CD. The other option is you check with our friends at soundmindinvesting.org and they could give you some just really high quality mutual fund suggestions.

But if you just didn't get comfortable with that, then I think the CD route is great, but I would probably go out at least three years if you do that just to make sure you're going to lock in these 5% plus rates for the next three years. And I think that would be fine. So either of those makes sense. Stay on the line. We'll get your information. We'll get this a handbook out to you, but this is a great thing.

Danielle, you, your kids are going to read, be really blessed by this down the road. Thanks for your call. We'll be right back. Great to have you with us today on Faith and Finance Live. I'm Rob West. Back to the phones to Yorkville, Illinois. Linda, you'll be next on the program. Go ahead.

Thank you for taking my call. I, last year I bought two I bonds and maxed out the amount that you could take and it's already accrued some interest. And I'm wondering, do I pay income tax on those gains as it accumulates in the bonds or do I pay that tax when the bonds are cashed in? Yeah, the interest is credited at redemption. So when you redeem those bonds, you would then pay the tax that would be due, which it's taxed as regular income at the federal level exempt from state.

You'd pay the tax in the year that the bonds are redeemed or reach maturity, whichever comes first. Okay. I see. Yeah, I'm at this point, I'm considering cashing them in and doing something else with them because I realized that the interest rate is going down.

So do CDs and possibly invest in some money market. I'm not very good at this, but I'm loving it. Well, it sounds like you're doing just fine. I love the option that you picked up those I bonds and now as the rate's coming down and it is, you're exactly right and it will continue to.

I love that you're switching out and it's a very attractive environment for CDs right now. So I think you're doing all the right things, Linda. Hey, we appreciate your call today. God bless you.

Chattanooga is where Brian's located. Go ahead, sir. Hi, just very quickly. I'm about to receive an inheritance of about a quarter million dollars. I'm going to spend about 40 of it to get out of debt.

And I want to know what's a good strategy. I'm 60 years old and I need to decide what to do with the remaining 200. Yeah. All right. Talk to me about how you're doing, just kind of in your financial life. You said, will you be completely debt free when you pay off that amount you just mentioned? Well, I'll have about probably about 10,000 left on a car, but that's okay. I mean, I go ahead and pay that off too, but sure. All right. I'm not really set up for a really comfortable retirement.

The 0809 just devastated my retirement fund and I had to actually, in order to try to save my house, I had to cash it and what was left of it and still lost the house in any event. So I'm kind of down to just a small pension through public education that'll be there and otherwise it's social security and that's about it. Okay. Pension plus social security and how far off is retirement for you? I'm about I'm like say I'm 60. So, you know, seven, eight years, nine.

Okay, got it. And have you run a budget just to look at how much your pension plus your social security will be if you wait till full retirement age or let's say you worked even longer to age 70? Do you have a sense of whether that would cover your lifestyle?

I think it would probably cover some basics. Obviously we would not, you know, travel or things like that, but I'm kind of a homebody anyway. So travel is not that big of an issue for me. Okay. And what retirement options do you have available to you right now that you could contribute to?

Well, I just have a state funded teachers retirement fund. Okay. So you don't put anything into that.

That just is automatic. Well, I do. I put up at the max that they put in. Right now I'm putting in 8%. Okay. And how much could you put in? Well, once some things get squared away, I'll probably, I could probably put in upwards of 15.

Yeah. So what I might look at doing, Brian is trying to systematically transfer as much as you can from that 200,000 that's left after you pay off the debt into your retirement plan, even if that means by maxing out your annual contribution this year and every year for the next seven to eight while you're working, even if that means you need to live on portion of this 200,000. So let's say by maxing it out, your check gets down low enough where you're short at the end of the month and you need to pull 500 bucks. You know, I'd be comfortable with you pulling it from the 200,000 because what you're essentially doing is you're replacing that money that you're living off of out of the 200 with additional money going into your retirement plan, which gets it into that tax deferred environment so that over the next seven years it can grow on a tax deferred basis. So that would be one option and then you could fund some Roth IRAs. The other option is just to keep it in a taxable environment and just hire an advisor and have somebody manage that for you. And so now you're going to have your pension and you're going to have your social security.

And again, I delay that as long as you can. You know, if you'd wait till age 70, you could get an extra 24% of that check added to it for the rest of your life. And if you didn't need that money because you worked until age 70, then, you know, that'd be great. And that way you get that check up and then that give you, you know, perhaps another 10 years for this 200,000 to grow.

And I'd probably reach out to a certified kingdom advisor on our website at faithfi.com. And then that person could take over management of this and really build just a well thought out investment portfolio where you're not taking unnecessary risk. You know, at age 60, you know, you'd probably end up with probably somewhere between 40 to 50% in stocks, maybe 50 to 60% in bonds, perhaps as much as five to 10% in precious metals, you know, something like that. That's fairly conservative, but has the ability to grow over the next decade.

But you're not having to make those decisions yourself. And then the nice thing is maybe that grows to 300,000. And so that would, you know, give you the ability on 300,000. We'd usually look at about a 4% withdrawal rate, once you retire, that would give you another $1,000 a month that you can add to the social security and the pension. And ideally it would be managed in such a way that that 4% withdrawal rate would be made up with income and appreciation.

And you'd never have that balance, you know, go below 300,000, but you'd still pull out 12,000 a year. Does that make sense? Okay. Yes, absolutely. Yeah.

Okay. So I would interview two or three certified Kingdom Advisors there in Chattanooga. You can do that on our website at faithfi.com. That's faithfi.com.

Just click Find a CKA and that'd be a great start for you. You can also do some planning as a part of that as well. But thanks for checking in with us today. We appreciate it. And if we can help you further along the way, give us a shout.

To Cleveland. Hi, Debbie. Go ahead.

Hi, thanks, Rob. I'm 71 years old. I have $22,000 worth of debt. My credit score went from 680 to 580.

Some company reached out to me and offered me a consolidation plan that they say will the creditor will allow that they say will allow them to use past interest pay towards paying off my credit debt to those people. And, you know, they will be charging a fee. So I was wondering what you thought about that, because I know I've heard you. I listen to you almost every day.

And you say, you know, reach out and try to settle with the people yourselves, because all of my credit is very, very old. And I just want to know what you thought about that. That's helpful, Debbie.

I appreciate that background. What? So has all this debt been written off? Is it charged off? Do you know?

Nothing has been done today. It's my last day to finalize it, whether I'm going to go with him and see what they can do. And that's why I called you. And you say, God bless me. I was able to speak with you.

Oh, I'm delighted to. What kind of debt is this? Was this a personal loan? Was it credit cards?

What was it? Credit cards, credit cards. All credit cards.

All right. And have you been paying the minimums on these or are these in default? They're not in default, but I just started paying like interest, the interest, including the interest. My son paid off a house that cost me seventy thousand. He paid it off for thirty two thousand because when I bought it, my sister told me to pay interest. But I never did because I was raising, you know, somebody. And I just, you know, so you have. No, I get it.

I understand there's a lot of competing priorities and there's only so much to go around. Are you able to cover the minimum payments every month right now? Oh, yes, because I've shared that credit with my son and so we're in it together.

I don't use it as much. And they, you know, OK. Yeah. Well, I don't like the sound of this. I'm not sure what they're offering to do, but it sounds like either debt settlement where it gets delinquent and then they try to come in and negotiate a payoff or it's a consolidation loan where they're going to give you a new loan and pay it off with that.

And then you're going to end up extending the term. What I would rather you do before you do anything, Debbie, is contact my friends at Christian Credit Counselors dot org. Christian Credit Counselors dot org.

Do you use the Internet? OK, very good. So I would have him go to Christian Credit Counselors. What they're going to do is they're going to start by looking at your budget. They're going to start by seeing who are your creditors, who are those credit card companies that the debt is with. And then they're going to put you on a plan or at least tell you about what it would look like to be on a plan where they would try to get the interest rates reduced because through credit counseling, those interest rates would come down and you would have one level monthly payment every month where, you know, that payment is going much larger percent is going to principle instead of interest.

So have your son reach out to Christian Credit Counselors dot org. Schedule a phone call. Tell them we told you to call. They'll get on the phone with you.

They'll explain everything. They'll work on a budget with you. They'll make sure it fits in your budget. And then at that point, you know, hopefully that'll work out and that'll get you on a plan to pay this off 80 percent faster.

But I like the sound of that much more than what you're describing on this company that contacted you. If we can help you further, Debbie, give us a call back. But again, that Web site, Christian Credit Counselors dot org. God bless you, folks. That's going to do it for us.

Faith and Finance Live is a partnership between Moody Radio and Faith. I want to say thank you to Tahira, Amy Lynn and Jim. Couldn't do it without them. Hope you have a great rest of your day. Come back and join us tomorrow, will you? See you then. Bye bye.