If I told you there's a guaranteed way to save tens of thousands of dollars, would you be interested? Hi, I'm Rob West. Well, there is a way to do it.
It's not complicated and just about anybody can do it. All you have to do is pay off your mortgage early. I'll talk about that first today, and 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. When you think about it, the amount of interest you pay over the life of a 30-year mortgage should be plenty of incentive to pay off the loan as fast as possible. Let's say you take out a $250,000 30-year mortgage at 7%, which is about the going rate now. At the end of that term, you'll have paid almost $350,000 in interest alone, making the true cost of the home closer to $600,000. But let's say with 25 years to go, you decide to put an extra $250 a month against the principal. That will actually shave off 6 years and 10 months worth of payments and save you just over $83,000 in interest. So the potential payoff for getting rid of your mortgage early is huge, and it really needs to be a priority in your financial decision-making.
There are four steps to getting there. First, you need a spending plan, not just because it's a good idea and everyone should have one, which is true. You need a budget because you can't start the process of accelerating your mortgage payments without one. And setting up your spending plan is now easier than ever with the Faithfi app. It uses a digital envelope system to make budgeting easy. It will also track your spending and reveal things you can cut out to free up more cash.
Download the Faithfi app wherever you get your apps. Here are a few budget cutting ideas, by the way. Dump your cable or satellite service and go with the streaming package. You can probably save $50 or $100 a month just doing that. Take a break from eating out. Try to go a month making all your meals at home. You'll probably save a few hundred dollars at a minimum.
Finally, see how long you can go without buying new clothes. That would probably save you many hundreds of dollars as well. You can probably come up with some great ideas yourself to save money that you can then apply to your mortgage. Once you know how much extra cash you have to put on your mortgage, you can make it a budget category all by itself. Remember, even $100 a month applied to the principal on your mortgage will shave off a few years of payments. So you'll want to put as much as possible into that mortgage payoff category. You may start to feel deprived because you've cut out a lot of your fun spending.
It helps to celebrate milestones along the way. A special dinner out maybe whenever you've paid off another thousand dollars in mortgage principal. Just keep celebrating within the budget. Now, the next step is something anyone can do even if you've been thinking up to this point that you have no surplus cash to put on the mortgage. It's using money that comes your way outside of your normal paycheck. Some call it found money or mad money. Make a commitment to put that unexpected cash on your mortgage principal as well as the surplus money from your budget. Where does this extra money come from?
Well, it could be just about anywhere. Overtime pay or a work bonus. Money from work you do on the side, a tax refund, gift money or cash you get from selling stuff. The trick is to apply that money to your mortgage principal as soon as you get it. Don't think of it as mad money that you can spend any way you like.
Don't let it sit around tempting you. If you haven't set up an online account with your lender, do that now. Most lender websites now make it easy to apply extra payments to the principal just by clicking a button or two. And while you're logged in, you'll be able to see the running balance of your principal. Keep track of it. Watch it go down faster as you make extra payments.
That'll help you stay motivated and again celebrate your progress. This isn't something you want to delay. The sooner you start, the more money you'll save and that's money you can put to better uses. Be patient. You're in this for the long run.
Proverbs 21 five says slow and steady plotting brings prosperity. Oh, and by the way, in addition to all the interest you'll save, having that mortgage paid off by the time you enter retirement will ensure that you can meet your bills with your monthly income in retirement. This is your biggest expense.
So when you eliminate it, it's going to help you balance the budget that much easier in this season of life where income is at a premium. Okay. We hope that helps you get started today on your early mortgage payoff plan. Let us know how it's going. We'd love to hear from you in our faith by community. You'll find it in the faith by app.
Download it on our website. Your calls are next 805257000. That's 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, it's time to take your calls and questions today. We're ready to go.
800-525-7000 is the number to call. We've got lines open. We're ready for you at 800-525-7000 coming up a little later in the broadcast. Bob doll will stop by the markets.
Well, at least for the Dow Jones and the S&P 500 relatively flat one positive 31 negative 30 points, but the Nasdaq was some strength today up by one and a half percent. We'll get Bob's take on the recent pressure on the markets and what he makes of all of that in the week ahead. That's coming up with Bob doll a little later in our broadcast. But in the meantime, let's dive into your phone calls today.
Again, a few lines open 800-525-7000 to Spokane, Washington. Hi Fran. Go right ahead. Well, hi Rob. Thanks for taking my call.
Yes, ma'am. My question is my husband and I purchased a home with cash for our kids because the home would not pass home inspection for them to qualify through a, for a home loan. So now we are wondering, do we resell the home to him, to them? Cause then they would have to pay closing costs again and sales tax. Or do we add them to the title, sign off our portion, have them get a home equity loan and then repay us that way.
But we are concerned about tax consequences either for us or them, capital gains or something we may not foresee. Yeah. Yeah. Very good. Okay. So he purchased this home when? We are doing it right now.
We are going to, my husband and I are closing on this house in about 10 days. Okay. And then is he going to put a good bit of work into it or are you both going to put in a good bit of work? Yes.
My husband, he's really talented guy. Um, he'll be doing the repairs. We will then the home will be able to pass home inspection once we complete our repairs.
Okay. And then at that point, what is the plan related to the kids? You ultimately want them to have this when you all pass away, you want them, you know, are they planning to keep this property?
What do you think will play out here? Yes, we are just helping them get into the home. Um, they were already pre-qualified for a home loan, but the catch was the home when it passed the inspection. So our desire is to have them own their home, that home on their own, and they would pay us back or get the home loan. I see.
Okay. And so they're going to need to go out and secure a mortgage, but they won't be able to do that until you all get it up to a place where it can pass inspection, which is why you're purchasing it, then doing the renovations, and then your hope is to sell it to them. I think that's really going to be the key is to sell the property to them. And then that way, upon the sale, they can go out and qualify on their own for that mortgage, which is a good thing, because now you're not, you know, asking them to get into a mortgage that they can't actually afford. Let's try to make sure that that mortgage hopefully is, you know, no more than 25% of their take-home pay. I'd love for them to go into this with some equity. Do you all anticipate selling this to them below market, or would you anticipate them buying it at market value? We believe it will be below market, or excuse me, it would be, they will have equity in the home because we were able to purchase it at a lower price due to the cash offer, and so we believe there will be built-in equity once the repairs are complete.
Okay, yeah, very good. And do they have any cash to put into this deal when they make the purchase? Yes, they are already pre-approved for a home loan. Yes, so they had already done their portion ahead of time, found the house, then the house wasn't able to pass inspection, and then that's when we entered the picture.
Got it. But are they, is it all of the proceeds coming from the mortgage that they will secure, or are they actually going to put a down payment down as well? They will put a small down payment as well, yes.
Okay, alright. And so hopefully the combination of that down payment, maybe less than we would have encouraged 20%, that plus the fact that you bought it under market value, maybe that gets them up to 10% plus on the home equity in terms of loan to value. So yeah, I think that is the next step is that you all buy it, you close on it, you make these renovations, you get it to the place where it will pass inspection, and then they go out on their own to secure a mortgage to buy it from you.
I would get a real estate attorney to help you with the contract for the purchase and sale so that everything is done properly and filed, you know, that new deed filed with the county. So now they're the owner, they're buying it from you, you're taken out with a combination of their cash plus the proceeds of the loan that they'll secure and all that will happen at closing. And then that will establish their new cost basis moving forward. And then if they live in it two out of the next five years and turn around and sell it because they're moving or they need something bigger, well, then they'll be able to enjoy assuming this is still in place, up to a half a million dollars in gains and not have any capital gains tax at that point.
Right. Well, we were wondering, so the, our issue is if we, if they go ahead, we resell it to them. So we're going to purchase it.
We'll close. We are paying closing costs for my husband and I to purchase it. Then when we sell it to the kids, they're going to have to go ahead and pay the sales tax again, the closing costs for title search and all of that again. But if we put them on the title of the home and then just basically gift it our portion to them so they would already be owners of the home, then they could get a home equity loan to repay us back. But we're wondering, that would save us money on the closing costs, but are we going to incur unforeseen tax consequences if we were to go that route? Not really, because, you know, they would inherit through the quitclaim deed, which is what you would do. And again, I'd use a real estate attorney to make sure all this is done properly. They would inherit your cost basis, which is what you're paying for it right now. And then your improvements would be factored into that in terms of establishing the new cost basis that's, you know, higher than your actual purchase price because you're improving the property. So it's not like, you know, you bought this 20 years ago and now you're quitclaim deeding it to them and they're inheriting your original purchase price from 20 years ago.
So given the fact that this is all happening in a relatively short period of time, I would agree with you. That probably does make some sense where you'd essentially just gift them the property and you'd have to file a gift tax return to let the IRS know that you're making a gift beyond $34,000, which is the limit between the two of you, you and your husband, that you can gift to someone in one year. There's not taxes due on that. It just eats away at your lifetime gift exemption of over $12 million. So unless you plan to give away $12 million in the aggregate, you're fine. The only thing I would just look into in advance is making sure that, you know, that's not going to create any challenges with this mortgage that they're getting, but it shouldn't because they'll be the rightful owner of it through a gift. And then, you know, they will essentially have to get the cash out to pay you all.
And you're just going to have to let the mortgage company know that, that there's an expectation of repayment on that gift, because that does often play into whether or not they'll qualify for the loan. Does that make sense? Yes, it does. And thanks very much. I appreciate your help today.
Absolutely. No problem. So yeah, I think the next steps are talk to a real estate attorney and then do your due diligence on the mortgage to make sure that the mortgage company understands exactly what's going down and that that's not going to create any problems with them qualifying. If you need help with that, our friends at Movement Mortgage could be a great resource, at least maybe one of the three that you look into.
We recommend getting at least three bids. You can go to movement.com forward slash faith and you can learn more there. Thanks for your call, Fran. Back with much more on Faith and Finance Live. Stay with us. Great to have you with us today on Faith and Finance Live.
I'm Rob West. We've got a few lines open today for your financial questions. 800-525-7000.
That's 800-525-7000. Why do we take an hour a day out to talk about money? Is it so we can enrich ourselves? Is it so we can figure out how many we can add a few zeros to our net worth?
No, it's not that at all. It's that we recognize as we live with a biblical worldview that part of that approach to our lives needs to include our finances. So we want to help you cultivate and develop not the culture's view of money, but God's view of money. There's the world's way and then there's God's way and they're entirely different in every respect and certainly that includes this area of money. You see, through a biblical worldview, we recognize that God owns it all and we're a steward and money is a tool and we're to hold it loosely and give it generously and that we should pursue contentment and that we can align our spending and our investing with our values and priorities and that we can allow money to compete with God for first position in our lives if we're not careful. So we need to be on our guard about the deceitfulness of riches. That's the goal here is to help you pursue a more intimate relationship with the Lord as you handle money in such a way that it's evident that God is your true treasure and not your things.
That's our entire goal here on this program every day. Now, we recognize as a part of that effort, you have practical decisions you're making as you use God's money every day to live, give, owe and grow and we want to help you do that through a biblical worldview. So with whatever questions you have today in your financial life, give us a call.
800-525-7000. Let's head back to the phones to Clara in Miami, Florida. Go right ahead. Yes. Hi. Hi, Bob.
76 years old. I own a rental property, which I owe 70,000 on it, but it's worth 400 right now. Okay. And I want to buy a condo for 150,000 plus closing cost and the actual price on that is 339,000. I applied for a home equity loan for 80,000 because I do have 100,000 cash. I wish I can tell you about all this in more detail, but we don't have time.
This is also the glory of God. Yes. Very good.
Well, I'm delighted to have you on the program, Clara, and I understand what you're trying to do. So you want to buy this second rental property, this condo that would be 150,000 plus closing costs. Are you considering using some of your cash to buy it or are you wanting to borrow all of the money to make the purchase? No, no, because, no, I want to do something with that money, which I have it for more than 40 years. And I just want to use it, you know, for something like that, to buy another property.
Because the one that you rent, yeah, go ahead. Well, when you say use that money that you've had for 40 years, are you talking about the equity in the first rental property or cash in savings? No, cash in savings, 100,000. Okay, you have 100 in savings. And is that the, is that all of your savings? So if you put all of that into the rental, this new condo, would you have any liquid savings remaining? No. Okay.
So we don't want to do that. And maybe you're not suggesting you would, but we want to make sure we set a portion aside to keep in your savings so that you have what I call an emergency fund. Let me ask you, Clara, if you were to guess how much you spend, not on the rental properties in the business, but just on your monthly expenses, what do you think you spend on a month's basis? I don't spend, I have everything down, maybe 1000. Well, that's counting the new wealth. My expenses, personally, are only around 600 something dollars.
Okay, very good. So let's say it's 1000. So you probably need, you know, to have enough in the way of reserves for at least $6,000 for your personal savings. Now, you also need reserves for the rental property.
Now, you got plenty of equity there. But what if an unexpected expense comes up? So typically, what we would say is you probably want to take about 30%, if you can, of the rental income and set it aside for maintenance.
Another approach would be to say, I'm going to, you know, look at totaling up all of the known expenses I'm going to have, you know, you need to replace a roof, you know, you need to replace the air conditioner, total all those up. And you could set that amount aside, but you're going to need going to need to determine how much of that 100,000 you need to keep liquid to have as reserves not for your personal expenses, but for that rental property specifically, okay. And then once you determine what that number is, let's say it's 25,006,000, you know, for your personal emergency savings, and then, you know, another 19,000 for, you know, the reserves on the rental property, then I think you could take the remaining and put that toward this new property, which is going to be income generating, so that's good. And then the rest, you need to decide, do you want to get a home equity loan from the $400,000 property? Or do you want to take a first mortgage out, you know, against the condo itself? Have you talked to a lender about your options there? Yes. Because I'm planning to do the 80,000 that I want to borrow to buy the condo cash, I only going to need I'm going to have maybe $30,000 left.
And that's what I was going to put my personal emergency money and all that. Okay. That's my thinking. But I want to know if I'm doing the right thing.
Yeah. Because the mortgage is 8.9%. Yeah, that's high because it's a home equity loan.
So here's what I want you to do. I like the plan as long as you're going to have enough income coming in between the two properties to more than cover the debt service. But I think you holding back 30, putting 70 in, borrowing 80 plus closing costs is the right approach.
I'd love for you to reach out to my friends at Movement Mortgage at movement.com forward slash faith, movement.com forward slash faith, get them to look at this and decide is it better to get a mortgage on the condo or get a home equity loan on the $400,000 rental? Stay on the line. We'll finish up off the air. We'll be right back.
Great to have you with us today on Faith and Finance Live. I'm Rob West, your host. We're taking your calls and questions today. 800-525-7000. Give us a call. Let's head right back to the phones and welcome Karen in Walnut Creek, California. Go ahead.
Hello. I have a question regarding Social Security and when to collect. My husband is turning 69 this year. So we are waiting until he turned 70.
And we were doing that for two reasons. One, his monthly benefit will be greater. And two, the amount in the event of his death, the spousal payoff will be greater if he waits until age 70. So for him, how much can he earn after he turns 70 and starts collecting?
How much can he earn on a paycheck? I had heard someone saying that if you make a certain amount of money, they'll reduce your benefit, your monthly benefit. That's only prior to full retirement age. So it doesn't once you reach full retirement age, which is either 66 or 67, then you can earn an unlimited amount and you won't affect your benefit.
Okay. The second question for me is I am 63 and I was just going to wait until I turned 70 to collect, but my husband left his, um, job that paid, um, quite a bit more money to work in public service. And I'm thinking that little bit of extra money might help us out to act as a buffer. And I was looking at the amount per month that I would gain if I waited until 65 or 67, which is just about $400. And if I take the $400 and times it by two years, the difference that's only five monthly payments that they would be making me now.
So would it be advantageous for me to start taking it now? Yeah. Now keep in mind, you can file for your benefits now and then switch to spousal benefits later if that would be higher than what you would get on your own record. Okay. And then is there, let's say I wanted to have a part time job.
How did they figure out, um, what my benefit is and the extent of what I can earn and not have my benefits affected? Well, keep in mind. So what is your age?
63. Okay. Um, and you know, anything that it's reduced by, um, is going to be eventually paid back to you. Um, so what happens is there's a reduction of a dollar for every $2 you go over the limit on what you can earn prior to full retirement age. But when you reach full retirement age, that's all paid back to you in the form of a higher monthly payment until you've been repaid in full for the amount that you were reduced by. Oh, okay.
Does that make sense? Yes, it does. So basically the limit is right now, uh, $21,240. So if you're under full retirement age, that would be your limit. If you go over that, then that's when they'd reduce you a dollar for every $2, but eventually you'd be make made whole.
That would be the annual limit. Yes. Okay. And then we have an IRA and I'm wondering, we've just always thought, oh, well, we'll save it for our kids, but we're thinking we may want to take a trip. We may want to do something.
We may want to have some fun. And so I'm wondering, how do people go about taking money out of an IRA? Because some of it's invested in stocks and other things. It's a great question. So is somebody managing this for you, Karen, is somebody picking your investments? Okay.
Yeah. So what you would want to do, I mean, most, a lot of people, most people, when they reach this season of life, their IRA, they convert to a monthly income stream. Um, so they will say, okay, you know, I want to take 4% a year. So, you know, they take a $100,000 IRA and they, you know, they pull out 4,000 a year or they tell their advisor, listen, send me $330 a month. And they add it to their income. If you're in a situation where you don't need it as income, but you just want to take it periodically as a lump sum distribution, just tell your advisor that that's what you're doing. They would typically always have some portion of the account in the money market portion of the account. And if they knew you were planning to take a trip next summer and you needed $10,000, they would plan accordingly. And so perhaps as they liquidate an investment that, you know, is they're ready to get out of it and take their profits, they'll leave a portion of it in the money market so that when you're ready to write the, you know, you could have check writing privileges on it, or you just call your advisor and say, send me a check or transfer it electronically. But, you know, they can plan for that as a, as the normal course of managing the account. Okay. And is there a maximum that we can take out?
No, no. So basically what happens is anything you take out gets added to your taxable income for the year. So the only thing you'd want to consider is whether you're taking out enough that a portion of your income would push up into a higher tax bracket. But you could, you could take the whole thing out if you wanted.
It would just all be taxable income in the year of the withdrawal. Okay. Well, I can tell you it's such a comfort to be able to seek godly counsel.
Oh, what a weight off my shoulders. Thank you so much. Well, you're so welcome, Karen, if we can help further along the way, don't hesitate to reach out. May the Lord bless you. Let's talk to another Karen.
And this one is in Kansas. Karen, go right ahead. Thanks for calling.
Hi, Rob. Thanks for taking my call. Sure. My husband and I have been retired for a year and we have an emergency fund set aside and we both call our we qualify for a Roth IRA. We're gonna that that was my question. Do we want to contribute to our Roth IRA at 15,000? Or do we want to put that in a 12 month CD? Hmm.
Yeah, I mean, I think so there are two different things. One is the type of account that has you put in after tax dollars and you have to have the benefit of the tax free growth. And as long as you have earned income, you can put in up to at your age 7,000 a piece of 14,000 or, you know, then the second thing you're talking about is CDs.
And that's really an investment vehicle. And you can actually hold a CD inside of a Roth. So the first question is, do we want to take that money that you have and just leave it in savings in a taxable account and either put it in a CD or invest it or do we want to put it into a Roth IRA? The benefit of the Roth is if you don't need the money for the foreseeable future, it can grow on a tax deferred basis. But the most effective way to leverage that is through investing it.
Are you wanting to eliminate the risk and just keep it in guaranteed products like CDs? I don't know, because a year ago when the market was so low, we we just haven't contributed since I retired last summer, we haven't contributed to our IRAs. And we had the money we could put it in the Roth this year. That's that was the dilemma. I didn't know if you once you pay your advisor, you know, after they take their cut, does that add to the contribution?
No. So the total amount that you can put in for the year as a contribution is 7,000 each. And then if you have fees that go out to an advisor, it would come out of the account. You can't put in more than that to cover the fee. So the question is, Roth or not, I would talk to your advisor about that. And then based on your time horizon, I would either invest it or use CDs.
But ultimately, that's going to have to do with your risk tolerance and your ultimate goals. I've got to take a break, but we appreciate your call. We'll be right back. Great to have you with us today on faith and finance live.
I'm Rob West. We're taking your calls and questions today. But first, here in our final segment, we're joined by Bob doll.
Bob is our good friend, Chief Investment Officer across smart global investments, a frequent contributor at Fox Business and CNBC is a Wall Street veteran, but also a Christ follower and helps us apply our faith and our values to our investments. Today, we're going to talk about where this market is headed. And, you know, Bob, despite a really strong year for the first seven months, we've been under some pressure as of late. Just give us your assessment of where we find ourselves here in the middle to the end of August.
I think, Rob, we have digested or trying to digest an incredible first seven months. And some of the issues out there that I'm going to say ignored are coming to the fore. And that's causing a bit of consternation and a bit of a sell off.
The NASDAQ was up nicely today as were tech stocks, but they're lagging since the peak in the market July 31st. And the problems are, okay, earnings are less bad than feared, but they're still down 3%. Inflation is down from nine, but it's still four. So you get this list of things that are just not great relative to a stock market that is selling at 20 times earnings. It's expensive. Yeah.
And there's still real pressure on the American consumer. I mean, if you think about it, and I know I'm not talking to you here on this because you know this full well, but inflation, you know, is there's a compounding effect here, right? It's cumulative, which means that the 9% we were up last year. Yeah, we're down to four, but that's four on top of nine, right? Bingo. So that's 13 and two years. You're absolutely right.
You can do the math. And so consumers are spending money, Rob, as you know, but to pay these higher prices, they're having to dig into their savings. They're having to run up credit card bills and we're starting to see some delinquencies and paying back car loans and the like. So let's hope that doesn't get more, more publicity and more extension. That would not be good news.
Yeah, no question about that. Uh, Bob, we keep hearing about this inverted yield curve. Uh, no, that gets complicated, but will you give us a layman's explanation of that and why that typically indicates a recession is coming?
Sure. The yield curve most of the time, Rob, as you know, is positively sloped, meaning short term interest rates, 90 day key bills, cash returns are lower than the yield on 10 year and 30 year bonds. And inverted yield curve, of course, means it's the opposite. Short term interest rates are higher than long term interest rates. That typically happens because the feds at work, meaning they're raising interest rates to fight something, typically inflation. And that gives us the inverted yield curve. And that's often a sign that the economy is going to weaken and maybe have a recession. And this yield curve has been inverted for a lot of months now.
Yeah, no question about that. All right, Bob, let's finish today by talking about just what we're seeing in terms of the housing market. I know your deliberations this week were, was citing some research around housing values, uh, but also, uh, looking at, uh, household wealth.
Yeah. So, so in the, the run up in house prices has added $12 trillion of wealth to us consumers, by the way, stock price appreciation, 7 trillion. So there's 19 trillion because so much of it is in housing.
Rob, lots of people are feeling really good. I bought my house at exit selling at two X or three X, but you typically can't spend that money. And we're starting to see, of course, mortgage rates go up, which means you have to be careful about those home values. Home values have held up brilliantly, uh, since, um, the pandemic. And my guess is in some areas we'll get some weakness at some point. All right, uh, Bob, what about, uh, you know, those that are sitting on a lot of bonds right now, they're in that retirement season of life. They've been beat up over the last couple of years. They're waiting for a win. They'll start to see some recovery there. Is it going to take the fed dropping rates for that really to happen?
Probably, or the anticipation of that, Rob, look, if I were in that boat, I feel badly. I've lost a bunch of money, but, uh, you know, reference the 10 year treasury with it at four 35 yield. Uh, that's probably not a place to go dump your bonds and take your loss.
Uh, I think, um, there's value being created in the bond market, so I just be patient. Uh, very good, Bob, always appreciate your insights. I appreciate you. Uh, I know you're traveling today, so thanks for giving us your time. Have a great week. All right. That's Bob doll, chief investment officer at cross smart global investments. Hey, why don't you head over to cross mark global.com, sign up for his free dolls deliberations, and, uh, you can receive his weekly market commentary by email every week.
There's no cost. Uh, it's something I rely on. All right, let's head back to the phones.
As we round out the broadcast today, we've got a little bit of time, maybe five minutes remaining to Chicago. Hi, Tommy. Go ahead.
Hi. Um, I'm a pastor in Chicago and, um, we are a church that has never had the opportunity to invest, have the opportunity. Now, uh, we have about a hundred thousand dollars that we're looking to get into some sort of investment, but it is our kind of emergency fund and we're not sure if it makes sense to use it, um, to invest or how much of it should we invest in the different options we have, um, whether it's CDs or mutual funds or, uh, anything of that sort.
Yeah. I like the idea of you all having an emergency fund for the church. I think you need to establish a philosophy of reserves. And I would talk about that among the leadership of the church, perhaps, uh, you know, you with the finance committee and establish a rationale for your reserve target.
And this would be in addition to what a mortgage company would require. This is operating reserves, uh, somewhere, you know, zero is not in zero months worth of, uh, reserves is not enough. Probably more than 12 months of reserves is too much.
I'd say, you know, it's somewhere in there, probably six months or so, um, would be ideal, but you all need to establish that, uh, when it comes to that amount, then I would say anything beyond that, we put it to work for the purpose in which it was given, whether that's, uh, you know, programming or, uh, you know, reaching people with the gospel. I mean, you know, all of the things that you're doing, um, obviously if you've got money that's been given for a specific project or you're about to do a building campaign, well, that's different and we'd separate that out. But I think the key is we don't want to just build up a war chest, so to speak, beyond what would be reasonable as reserves because the money was given to get into circulation in the kingdom as to what to do with that money. I wouldn't put stocks or anything that has risk on the table. Uh, you know, in my view, the money wasn't given, uh, to, you know, put at risk at all. So I think it's there so it can be liquid, it can be safe. So we're looking at, um, probably CDs at the most, um, you know, high yield savings account, business, uh, high yield savings, something like that. Um, but I wouldn't be looking to, uh, put it into the markets.
And again, I would establish a rationale, uh, not considering the amount that you have currently just a philosophy of reserves as a church and then apply that to what you've currently got in the bank. Does that make sense? Yeah, it does. Thank you so much. All right. We appreciate your call, Tommy.
God bless you, my friend. Uh, let's head to Kentucky. Hi, Dan. Go ahead. Hi, Rob.
Um, just real quick. My wife and I just retired, uh, to southeastern Kentucky. I retired at the end of June with 41 years of federal service. Uh, we've already had one visit with a CKA turned over some of the pertinent estimates and budget, uh, related items to that, uh, advisor, but we're going to meet now in a few weeks. I wanted to know, uh, if you could recommend some sources or resources, uh, that would help me educate myself going into this phase of, of investing, uh, we're debt free for the first time in our lives and we want to stay that way. Yeah, that's great. I love what you're describing here.
Dan, you guys are making some great decisions. Give me a sense of what it is you want to, is it really just how to approach this next season of life in terms of, you know, how you're going to spend your time and how you'd prepare to, uh, you know, live out what God has for you next? Is it really getting up to speed on investments and understanding investing, uh, or is it wealth transfer and all the questions that come with, you know, putting your estate plan together? Where, where do you feel like your biggest need is today?
Uh, the biggest need is asking the right questions of going into this phase of investing. Uh, I would like to remain retired as it were to be able to serve in ministry, wherever the local body needs us. And, uh, and to that end, I don't want to put our, you know, we haven't, uh, we haven't made a decision yet on a home and so we need to take that into account.
But at the same time, I don't want to put our, our finances in a situation where I'm going to have to go back to work if I don't have to, not because I'm adverse to it, but I'd rather have the freedom to, to do ministry more effectively. Yeah. Very good. Very good.
Well, that's where this advisor comes in. I think, uh, have you seen the list of questions we provide on our website at faithfi.com? Yes. Okay. That's a good start. I think beyond that, I'm sorry, were you going to say something there? Well, I was going to ask about, uh, I know that we're familiar with Ron Blue and, and, uh, the other resources, but, uh, is there a good, uh, for you call it a short course that you would point to or some, um, uh, pertinent resources in terms of, uh, faith-based, uh, investment vehicles. I know that CK, uh, CK, um, a advisors, they have, um, there'll be different philosophies on where, and depending on who they're associated with and where and how to invest. Yes. Yeah.
Uh, yes. I think a great place for you to go, uh, would be a website called faithandinvesting.com. Uh, this is put out by the Eventide Center for Faith and Investing, and it's basically an educational initiative, uh, that will really help to guide you in understanding what is faith-based investing?
What's the theological underpinning for it? What are the practical ways that you think about it and work it out? Um, you know, what does faithful investing look like? Um, and there's even a course there that, uh, I think would be helpful for you. There's one for advisors, but there's also one for individuals that helps you look at not only the, you know, the frameworks, but also just an understanding of, uh, you know, God's word on why you might consider faith-based investing. So between those free articles and then that course, I think that'll give you what you're looking for.
Again, it's faithandinvesting.com. Hey, all the best to you, Dan. Uh, God bless you. We appreciate you being on this program. By the way, stay on the line. I'd like to send you a book. It's called An Uncommon Guide to Retirement, finding God's purpose for your next season. I think you'll enjoy it. Faith and Finance Live is a partnership between Moody Radio and FaithFi. Thank you to Dan, Amy, Josie, and Jim. We'll see you tomorrow. God bless you.
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