What to Ask a Financial Advisor

Without counsel, plans fail, but with many advisors, they succeed.

Proverbs 15, 22. Hi, I'm Rob West. You should always interview two or three prospective financial advisors before deciding on one.

But do you always know what questions to ask? 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. Well, as you know, we always recommend you look for a financial advisor with the certified kingdom advisor designation.

And you can do that by going to faithfi.com and clicking on Find a CKA. Now, when you do, you'll also find a long list of questions you can ask potential advisors. We're going to give you some of them today, though, because folks have been asking. Okay, the first thing you should understand is the type of advisor you're interviewing will determine what you ask. And that only makes sense because you'll need different information from a financial planner than from an investment professional or tax attorney.

So let's go over some of these questions by category. First, a Christian financial planner. They equip people to use God-given resources to accomplish their God-given goals. The Christian financial planner can help clients identify their God-given goals and quantify how much is necessary to accomplish them. So some of the questions you'll want to ask include, how do you integrate Christian values into your advice? How long have you been a financial planner and what licenses do you hold? And describe the financial planning process. Okay, next we have investment professionals, and this could be a fee-only investment advisor or investment consultant. This person provides professional expertise to managing investment assets held in retirement accounts, trusts, individual and joint accounts. A fee-only investment advisor is compensated by fees directly from the client. An investment consultant is compensated from commissions derived from the purchase or sale of a stock or mutual fund.

Now, here are a few questions to ask. Again, how do you integrate Christian values into your advice? How do you determine whether or not a client should be investing? What is your investing experience and philosophy?

And how do you select the most appropriate investment options? Where are your clients' investments held? A brokerage firm? A mutual fund?

Which one? If a brokerage firm or mutual fund holds your client's investments, does the brokerage firm or fund charge separate fees for this? What type of investments do you use?

Load or no load? Stocks, bonds, annuities? How do you monitor and how often do you report investment performance?

And how do you consider the impact of income taxes? What about other financial services beyond investments? And do you offer faith-aligned investing?

That's a lot of questions for an investing professional, but asking them should give you the information you need to make a wise decision. Now, what if you need a tax or estate planning attorney? What should you ask those candidates? Well, you can start with these questions. First, can you tell me about your practice and ways you integrate a biblical worldview into your advice? What are your areas of specialty? What about some examples of complex cases you've handled? Have you handled many cases in my area of need, whether that's estate planning, business succession, tax planning, or something else? Now, if you need someone to help with tax preparation, you would typically look for a certified public accountant, and these questions could be used for this candidate.

Can you tell me about your practice and ways you integrate a biblical worldview? How long have you been a CPA? What other licenses do you hold?

Have you helped clients in a similar situation? And what is your approach or perspective in interpreting tax laws and regulations and accounting and audit standards? Now, what about an insurance professional? Well, you may ask them about their biblical worldview, whether they're required to recommend specific insurance products, how many companies they recommend, and the ratings of those companies, whether they receive higher compensation for recommending proprietary products, and what percentage of their business comes from insurance commissions. And finally, a few additional questions you should ask all CPA professionals you interview. How long have you been in practice? How long will it take for you to do my work? Do you have clients with situations similar to mine who might be willing to speak with me about your services?

And have you ever had any complaints filed against you with any organizations that regulate you? Again, we recommend you find a certified kingdom advisor, and you can do that on our website at faithfi.com. By the way, the complete list of questions is there.

When you click Find a CKA, you can download it at the top of the page. We hope that'll be helpful as you interview to find your next certified kingdom advisor. All right, your calls are next, the number 800-525-7000.

That's 800-525-7000. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. I'm so thankful you're along with us today as we help you think about your role in managing God's money in light of a biblical worldview. But we want to also tackle, as we do that, the specific questions and decisions you're looking to make in your financial life right now as you live, give, owe, and grow.

And by the way, God's word speaks to all of those. You know, once we understand the role of money, that it's morally neutral and that it can be used for good or bad, and that it's a blessing, it was created by God for good, that we should enjoy it and use it to support and provide for our families and make memories and, yes, meet the needs of others and be generous along the way. But as long as we do that in the context of understanding that we should be focused on the world that is to come, the eternal perspective and not the here and now, well, then money is now freed up to become a tool to accomplish God's purposes. It's not that money is bad at all. I mean, the Bible says that the love of money is the root of all evil. And so we've just got to check our hearts, and then we can apply those very specific practical principles we see in God's word around spending less than we earn and avoiding debt and having some liquidity or some margin, setting long-term goals, giving generously.

And when we do that, well, we put ourselves in a position to experience, I believe, God's best in this area. Well, let's do that together today with your financial questions. We've got some lines open. The number to call, 800-525-7000. That's right, 800-525-7000. Let's dive in today.

We're going to go to Columbia, Ohio. Matt, thanks for being on the program. I understand you've actually studied in this area, right?

Yes, I have a degree in finance, but I don't feel like I use it very well. Okay. Well, I'm delighted to hear you're at least interested in it, it sounds like. Well, I mean, I really enjoy your show, and I think it's a great way to learn. And, you know, it's a shame that financial literacy isn't taught in schools, but your show is a great way to learn, though, and I listen every day, and I really appreciate it. I'm delighted to hear you say that. I couldn't agree more. I think that, you know, the idea that we need more financial literacy in schools, and I keep hearing about more and more Christian universities, and some of our team have actually been a part of this, making personal finance required, which is so key.

But not only just the financial literacy side, but this idea of a biblical worldview, really seeing it through the lens of scripture is often another missing piece, even if we're teaching the blocking and tackling of compounding interest and debt and balancing a checkbook and all of those things. But I know you didn't call to talk about that. So let's dive in.

How can I help you today? So I have an equity line that is at 6.75. It was at 3.25. And I have about $7,500 that's on it. And I've been making payments on it and trying to chip away at it. But I also have some stocks, and I thought, should I just sell some stock that generates dividend income and pay that off and get rid of it? And I was wondering what to do, you know what I mean? I have an asset that grows, and that asset grows at a higher rate than the 6.75. So should I just keep doing what I'm doing or get rid of it?

Yeah, it's a great question. Let's just give me a rundown of the rest of what you've got going on. So what do you have in the way of investable assets, and what types of accounts are they in? It's basically blue chip stocks. And then I also have a 401k, which I can't touch.

It's actually a self-directed IRA. Okay. All right, great. And what do you have in the taxable account with the blue chip stocks? How much?

Probably about $350,000. Okay, and all of that is outside of retirement accounts, correct? Yes. Yeah, okay. All right, very good. And then how much do you have in that 401k, although you said I think it was a self-directed IRA? Is that right? Yes, I've rolled it into a sit. There's about $800,000 in there.

Okay, yeah. And why did you go with the self-directed? Are you buying real estate with it or something else? No, my company was sold, and I kept it at my fidelity where it was.

And for me to contribute to it, I had to make it a self-directed IRA. Okay, gotcha. Yeah.

Well, you know, here's the reality. I mean, you know, as with a taxable account, obviously, as you're liquidating positions, and by the way, let me ask, who's making the buy and sell decisions on all of this? Are you doing that yourself? Yes, we, my wife and I are basically doing it ourselves. Yeah, okay. And you're comfortable with that? It's been working out for you? It doesn't create unnecessary anxiety or anything? You know, at first it was, but I kind of got through that and, you know, kind of pay attention to what's going on and buy things that you know.

Yeah, yeah, okay. Hey, as long as it's working for you, I mean, at some point, if you thought, you know what, it's just, it's causing me to lay awake at night, I think, you know, considering hiring an advisor to manage this for you with the time and the expertise to do it makes a lot of sense, especially with an estate as big as the one that you have. And yet, if you enjoy it, or you, you know, you're good at it, and it's been working for you, again, I don't think there's anything necessarily wrong with that, as long as it doesn't occupy too much of your time.

And, you know, mental energy. In terms of paying this off, you know, I mean, obviously, that 7500 is pretty minimal, given the assets that you have, I would say definitely don't pull that out of a retirement account and pay taxes or a penalty. Let's keep that growing. But I would certainly consider it because of the fact that you've got so much in this taxable account. So as you're liquidating positions, especially if you've got any portion sitting in a cash account, like a money market sweep, because you've sold something and haven't redeployed it, why not put it to good use at a guaranteed six and three quarters and just wipe that out? You know, I think that makes a lot of sense, just given that this is, you know, money that as you liquidate certain positions will be available. You know, that probably makes some sense, especially with rates as high as they are now. And the fact that we don't see them really coming down in any meaningful way, at least through next year. So I probably wouldn't go in and sell something that you like and you plan to hold on to, but if you did, because, you know, whatever process you're following to buy and sell had you sell something and it's sitting there in money market, well, why not, you know, wipe out that loan?

Does that make sense? Yeah, I just haven't pulled the trigger on selling anything because I was wanting it to grow and then I was using the dividend to pay down the debt. Yeah, and I think that's a good strategy. So unless you're, you know, you get a buy signal, kind of however you do that and make decisions that you want to sell something and move into something else, you know, and you've got the money available, apart from that, I would say let's just let that money keep growing and, you know, just chip away at this over time, either out of current cash flow or dividends or both. So I wouldn't be making buy and sell decisions just to liquidate the $7,500 unless you just had a conviction around being debt-free as soon as possible and then go for it.

But apart from that, I would say only pay it off if you're going to sell something anyway. Okay, okay, I understand. Yeah, very good. Well, listen, Matt, all the best to you guys and we appreciate your kind remarks about the program from being a faithful listener. That means a lot and tell your wife we said hello. We're grateful that she listens as well. Have a great day. God bless you, my friend. Well, folks, we're going to take a quick break.

When we come back, we're going to take more questions, but we do have room for a few more. So if you've got something you've been wrestling with financially, you want to get in on the conversation today, well, we'd love it. Give us a call, 800-525-7000.

That's 800-525-7000. This is Faith & Finance Live. I'm Rob West and we'll be right back. Thanks for joining us today on Faith & Finance Live where we apply God's wisdom to your financial decisions and choices. Good news, every line's full. That means we've got some great questions coming up. Let's dive in.

South to Miami, Florida we go. Hi, Maria. Thank you for calling. Go right ahead.

Yes, hi. I have a question. My dad has me as a beneficiary on his saving account, but now he wanted me, he wanted to add me at his account and then now he changed his mind and he wants me to be the only one on the account and take it off. But I was thinking, if he do that, then I have to pay taxes on that money, right?

Well, so let me add, yes, not when you receive it, but you'd pay taxes on the interest. But let me back up for a second. What is he trying to accomplish? Why does he want to do this? Well, he's already old. He's like almost 90 and I don't know why he wants to put it on my name now and I'm like, yeah, but I don't know if that's good enough, but is this money and he can use it whenever he wants to. But he's been changing his mind. Now he wants me to be the only one on the account and end up like, I don't know what to do.

Yeah. Well, there's a couple of things here. I mean, essentially what would happen is if he changes the title of the account over to you, he's essentially making a gift to you of the amount in the savings account. How much is in there? I don't want 100,000. Okay, 100,000. So he'd have to file a gift tax form with the IRS because he's making a gift to you of $100,000. Now that's not taxable because he can do that and it would chip away at his $12 million lifetime exclusion for gifting. So now he's made $100,000 gift to you because you now are the sole owner of this account. And now let's say it's earning interest, you know, at 5%.

So it makes $5,000 over the next year. Well, that's $5,000 that's going to be interest income that will be taxed to you as the account owner as ordinary income. So now you're going to be paying taxes on the interest, which if it was a $10,000 account wouldn't be a big deal. You know, $100,000 account all of a sudden, especially at today's interest rates, that becomes meaningful.

There's two other considerations. One is, if in fact this is money that he uses on occasion, it's going to make it more difficult for him to use it because it's your money. And so it's going to have to just practically run through you, although you could set up mechanisms for him to do that. Maybe he gets a check, check writing privileges on it, or he gets, you know, login credentials from you for the online account. The second thing is, if he's really just trying to make sure that there is an efficient transfer of this asset to you at his death, well, putting you on the account is not necessary. You know, through the you being named as the beneficiary, which it sounds like that's what the way it was set up, you're going to get it outside of probate anyway. So it's going to come immediately to you, it's not going to go through the probate court, and then it remains his asset, which means he's still liable or will be liable between now and his death for paying the taxes on the interest. So I think you just need to step back and say, is this really necessary? And if really he's just trying to create an efficient way to transfer it to you at death, well, a beneficiary is going to do that. If there's some other reason he wants you to have it, well, then you all would need to talk about that.

It wouldn't be taxable to you upon the gifting, but it would create a taxable event for any interest moving forward. Does that make sense? Yes, that makes sense. What about if we put the account on both names? Well, then you would. Yeah, well, based on the percentage of ownership, so if it's a joint account, you would each be responsible for 50% of the interest with regard to taxes. Oh, okay. Okay.

Yeah. And then his 50%, it would need to state that you're the beneficiary of that. Otherwise, his 50% and his death would become a part of his estate, and then it would be passed according to his will, which may not necessarily mean it comes to you.

You'd have to look at the will. So I think perhaps maybe an additional conversation with him just to try to figure out exactly what he's trying to accomplish because there may be some unintended consequences here that he's not thinking through with regard to putting you on the account today. It's not quite as simple as it sounds. I hope that helps, Maria. Thank you for calling today. May the Lord bless you. To Indiana. Hi, Vicki.

Go ahead. Yes, I just had a new roof put on my rental house, and there's a $4,000 payout out of pocket. It needs some updates.

The windows are in bad shape. It needs a new water heater. And I was thinking about refinancing, and what I saw was adding, it would add five, yeah, five more years to my payments because I've paid to the point that I'm at 15 years to pay it off. But if I get a 20-year loan, it stays at about the same interest rate, but it also adds like $60 to my payment that I make now.

And I didn't know if that was a smart way to do it or not. Yeah, so, okay, so you're refinancing anyway, is that right? No, I'm thinking about refinancing. Okay, so tell me about the current mortgage that you have. I owe about $24,000, and the interest rate is at 7%. Okay, and why were you refinancing anyway?

Because I have to come up with $4,000 out of pocket because of the new roof that got put on. Right, right, but you wouldn't have to touch the existing mortgage. You could get a home equity loan for that, and then you don't pay the costs associated with refinancing the whole thing, especially if you're not going to improve your interest rate at all.

Right. Yeah, so what I would probably do is just leave that right where it is, and the other thing is with this being a rental property, it's going to be a higher interest rate anyway. So if you refinance it, I suspect it could even go up, although maybe you've looked into that. But I think what I would likely do is just leave that where you've got it, and then just borrow as little as possible in the form of a home equity loan to cover the renovations or the maintenance expenses that you have. I mean, you could certainly compare a refinance, but if it's going to cost you more, I'd probably leave that existing loan alone and just do it through a home equity loan.

The key is get a fixed interest rate, try to pay both of them off as quick as you can. Our friends at Movement Mortgage could help. Movement.com forward slash Faithfi. We'll be right back. Well, thanks for joining us today on Faith and Finance Live. I am Rob West. We've got a few lines open.

800-525-7000 is the number to call. Hey, it's the last day of August. I know it's hard to believe. School's now back in full steam. I've got my oldest that's now in college.

I still can't believe that and time is ticking by. But why am I mentioning all that? Well, here on the last day of August is the last day for us to close the monthly gap, if you will, on what we're expecting and planning and praying for in terms of listener support. So if you're a part of the Faithfi community, you listen to this program, Faith and Finance Live, with regularity, maybe it's been an encouragement to you, maybe you've gotten some helpful insights in your own financial life or it's just been a blessing to you and you'd like to support our work, we'd be grateful as a listener supported ministry, especially if you did it today before the end of the day. Just head to faithfi.com. That's faithfi.com and just click the give button and you can give at any level and that would be a real blessing to us. Faithfi.com and click give.

Thanks in advance. All right, we're going to head back to the phones again. 123 lines open, 800-525-7000. Adele, I understand you're in Fort Lauderdale.

How can I help you? Hi Rob, thanks for taking my call. My husband and I could pay off our mortgage. We don't have any other debt. Is it right to pay off a mortgage and then like how it would take up all of our cash and then do like a fine of credit for anything we did need in the future? Yeah, as much as I love you being completely debt-free, including your home, I would not do it Adele at the expense of depleting all of your liquid reserves. That's just going to put you in a really tough spot.

So let's try to kind of balance the two, if you will, and not go all the way in one direction or the other. Give me just a quick rundown of what you're talking about in terms of the cash reserves that you have now and then give me a just an overview of the mortgage that you have today as well. Okay, so what our mortgage amount is, you mean?

Sure, yeah. What do you own the home and what's the interest rate? Okay, the interest rate is 299 and we owe maybe 230. Okay, 230,000 and based on your current track, how long before you'd have it paid off? Well, we just refinanced a few years ago, so it's a long way off for sure. Okay, was it a 30-year loan?

Yes. Okay, so probably 28 years or so, but you've got a great rate. I mean, you're sub three, which just looks brilliant right now given that rates are seven plus, so that's great, but you've got a long way to go. Now, how far off just based on what you know today is retirement, Adele? Well, my husband is 68, he's still working, but he is receiving very little social security. I still have maybe another 10 years to work, so yeah, my husband is plans to work till if he can.

Okay, great. Now, give me a rundown of the assets that you have, the investable assets. We don't have any really 401ks. I have one that maybe has 15,000 in it. We have a couple of investments, some gold, but nothing other than that.

We own our cars, we own everything else, there's just no more debt. Okay, so are you talking about savings? Is that what you would use to pay off the mortgage? Sorry, yeah, savings.

And what do you have in there? Probably 230 to pay it off. So you've got just right the same amount as the mortgage, 230,000, and that's just in an interest-bearing account right now? Yeah. Okay, now, so what is the plan for when, let's say we're 10 years down the road. Well, let me back up. So if he were to retire in a couple of years, would your income plus his minimal social security be enough to cover your bills, including the mortgage? Yeah, yeah.

Okay, all right. Now, what about when you retire? What happens then? When I retire, probably, probably, yeah, probably not. We probably would be living a pretty minimalist life, but what I want to do is my condo because I can get a really good deal for my apartment. It's near the ocean, so. And that's the one where you, that's the one where you owe the 230? Yeah, yeah, yeah. Okay, so, but you'd have to buy something else, is that right? At this time, with the interest rates, I would probably just rent something. Yeah, I see.

Okay, well, here, here's the thing. I mean, I don't like the idea, especially with this low interest rate. I mean, you're, at least right now, you're offsetting, you can get more in the way of interest than you're paying on the mortgage.

So that's good because you've got a low rate. I think the challenge is you all have very little in the way of investable assets and interest rates at some point will head back down. So I think the, you know, really what you need to do as a next step is do some retirement planning, where you really look at the longer term picture to say, okay, what are our expenses going to be in retirement? Ideally, you would have this mortgage paid off by the time you reach retirement, which is you said, 10 years from now, because now all of a sudden, you know, you've got that major expense off the table, and it's much easier to balance your budget at that point. Do you, you know, with you working and him still working, do you all have a lot of surplus every month or are you living kind of right up to the edge?

No, no, we're doing pretty well. We're really able to put some money away in savings every single month. How much? $1,000, $2,000 more? $2,000 probably.

Okay, yeah. So what if at this point you didn't keep funding this savings account? What if now you started putting that toward the mortgage and trying to pay that down, you know, out of current cash flow?

It would be interesting to contact your mortgage company and say, run me an amortization schedule that shows me paying this off in 10 years, if that's how long you think you're planning to work. And what would I need to send every month to do that? And maybe what you find is that if you send $2,000 a month for 10 years, you know, you plus, you know, an amount that you would, you know, $2,000 a month will be $24,000 a year.

And if you did that for 10 years, you're there. I mean, that's $240,000. And maybe you put a little bit more on it from your savings. But the idea would be maybe for the next 10 years, you just say, hey, we're going to take every surplus dollar, and we're going to put it toward paying off this, this apartment or this condo, so that once I enter retirement, meaning you, then that's gone, it's paid off. Now the mortgage payment comes off the table.

And it's much easier for you all to balance your budget with the just the social security that you and he would both earn. Does that make sense? Yeah, absolutely.

Yeah. And then you take the the 230,000 and you invest it, you know, and get an advisor to start, you know, allowing that to grow over the next decade. And now we've got two things going on, we've got a plan to be debt free by the time you retire, and maybe that 230,000 becomes, you know, 350,000 over the next decade. And now all of a sudden, we've got a nice asset that we could be converted to an income stream. You know, if you built that up to 350,000, like I mentioned, and we just pull 4% a year, you know, that would throw off an extra $1,000 plus a month $1,100 a month that you can add to social security. So I think that's the way that I would go a couple of things. One is hire an advisor to manage the 230,000. You can find a certified kingdom advisor on our website at faithfi.com there in Fort Lauderdale, then call your mortgage company and say, Hey, I need you to run an amortization schedule. Tell me how much I need to send every month to have this mortgage paid off in 10 years. And let's keep both of these things going on a parallel track.

And then when you're ready to retire, I think you're in a much better position than you are today. Hope that helps. Thanks for your call. We'll be right back. Here in our final segment of the broadcast, we're going to try to get to as many questions as we can today on faith and finance live. Let's go to Westfield, Indiana. Salwan, thank you for calling. Go ahead. Hi, Rob. Thank you for taking my call.

I have a question. I'm very tired financially now. I only have around 2000 cash in hand.

And it's one income that I have. So do you think it's a good idea to buy a car now? And use car or new car? Can you please advise me with that? Because I need a car.

Since my wife's taking the kids to school back and forth, she used one. And now I'm using the same one. But but I'm tired of doing this thing.

Can you please help me with that? Should I wait? Or should I go ahead? Yeah.

Well, you know, it's a challenging environment. Number one, because although prices and inventory are improving, and the market has drastically improved compared to 20 and 21, prices are still for all intents and purposes, pretty high. So we're in a much better position, but it's still not great. So if you could wait, that'd be better, especially since what you're telling me is you really don't have any money to put toward a down payment. Is that 2000 that you mentioned the extent of what I would call your emergency savings? Or is that separate from your emergency savings? You can say it's emergency savings.

Okay, yeah. So you really because I would rather you have as much as at a minimum three months worth of expenses in liquid savings. So you don't have to, you know, take on debt when the unexpected comes. So I certainly wouldn't want you to put that toward a car, which means now you're financing 100%. You know, the average used car price right now is around $27,000.

The average interest rate is nearly 12%. So we're just in a really tough environment where you still got, you've got car prices, you know, that are better than 20 and 21 because of the computer chip shortage, but they're not great. And when you add to that the challenge of the affordability with the high interest rates, it just makes it really challenging and you don't have any down payment. So I think the key for you is just to do the very best you can to trim expenses to try to save as much as you can for that car purchase. Now, if you were to buy it now, let's say you were to buy finance 100%, you bought, you know, a used car, maybe instead of three or four years old, maybe it's five or six years, you know, you buy something that maybe has higher mileage than you might otherwise, you know, at that point, would there be something that could fit into your budget in terms of a payment? Because it sounds like you're living right up to the edge currently, right?

Yes. Well, actually, three months ago, we have been in a crash. And my car has just been total and whatever the insurance payment for it, I have to pay two of my bills since it's one income. So and then I started trying to get back to work six weeks in home.

And everything went already down completely. Now try to raise myself. And I came to a point that I need a car because I can't stay working at night.

It just makes me really tired of doing that. And that's how I thought about I mean, I find many cars like 15,000 14,000 is like 300,000 $300 a month. But I don't know, I mean, should I take that step?

And I don't think so. I just think given how tight things are currently, you're just going to put yourself in a real struggle there. If you take on on top of everything else, and the fact that you don't have any margin, you don't have any down payment taking on a car loan in this environment right now with the interest rates where they are.

I just think that's going to create real problems. I understand you're kind of stretched to the max you you're doing all the driving and the working and it's just creating challenges. But I think we need to get creative here, figure out ways you can save, trust that the Lord will provide maybe look for, you know, a way to take public transportation if you can or get creative in that area, but I don't just based on what I'm hearing, I don't feel good about you taking on a loan right now. So I think at this point, we need to try to make do with what you've got. And, and then try your best to trim your expenses such as you can sock some money away. So you'd be able to maybe buy something hopefully interest rates come down, you know, in the next year, maybe car prices continue to stabilize, and you've got a little bit of money for a down payment.

Now all of a sudden, we're in a different spot. So I know that's probably not what you want to hear. So one, but I just don't want you to call me six months from now and say, you know, listen, I can't afford this car payment, I'm gonna have to let it go. Or I'm, you know, I've run up a bunch of credit card debt.

I mean, that would make problems worse. So I'm sorry, I don't have better news, my friend, but we're going to ask the Lord just to give you some wisdom here as you navigate this. And we appreciate your call today.

To Miami, Florida. Hi, Gabriel, go right ahead. Hey, Rob, how you doing? Thanks for taking my call.

Sure. Um, I have, okay, this is my situation. I own a home. My girlfriend owns a home. And we're talking about getting married.

So I was thinking I have an account where I'm paid like almost $3,000 a month dividend. I want to I was thinking about paying her property off pulling out half that money. I know where to cut my dividends that have putting that money out and paying her property off. And because she's going to move in with me, we all move together. So pay her and winning her out winning her property out. Is that a good idea? Well, a couple of things here. Number one is I wouldn't merge your finances until you're married.

You know, to become one once you're married. And that's really the time, in my view to merge your finances. In terms of the, you know, paying off the house or not, you know, you could rent it out. And if your rental rate is right, I would imagine you should be able to cover the debt service on the property just through the rental income, correct?

Yes, I will. But the thing with Florida, the insurance like, like two years ago, my insurance went up. So it made my mortgage go up $700.

Sure, we just got hit by another hurricane. They're talking about is going to be another increase. And this is how I'm thinking. If I pay that property off, I don't have to worry about no insurance. I don't have to worry about no more. So I'm eliminating all that. But I'll get the money back. Because right now in Miami, rental property is going from like $3,000 to $3,500 a month.

Yeah, but I'm confused on something, Gabriel. Why? Why? Because there's the mortgage gone. Now you don't have to have homeowners insurance.

Because I could do I could do a loan, I could do an SBA loan, is there's plenty other ways to get money to fix your home. Plus, I was I combined income, we could pay it ourselves. Because, like I said, once we're married, like you said, we're talking about getting married, we're gonna have one income. So she still works full time, I work full time. If she moved in with me, her all her debt gone, because it's just her whole check.

She brings in like, like 30, she brings in like $4,000 a month on her job. So she's eliminating, she's eliminating the light, the more she's eliminated everything, because she's moving in with me. Sure. No, I understand.

She owns 165, 165,000. So I was thinking about pulling that out of my account and paying that house off. And I guess what I'm saying is a bird in the hand is the water. Yeah, I know I do. But here's the thing. I just wouldn't recommend you going without homeowners insurance. I understand Florida's a really challenging environment.

It's about to get more challenging. I get that I'm from South Florida. I know how those things go. And I know what's happened with homeowners prices. I think the last data I saw is about 13% of Florida homeowners are going without property insurance.

That's about double the national average of seven. But I don't recommend it. I mean, your home could be a complete loss. And you could, you know, in terms of protecting that asset, you're just you're taking on a huge risk there. So what I would rather you do is, you know, look at the opportunity of perhaps, you know, going with a much higher deductible, the highest you can and put that amount in savings, try to get that cost down as much as you can, is the money that is generating the dividends, is that in a taxable account or a retirement account? Taxable.

I get that every month. Yeah. All right.

Yeah. So, so it's a taxable account. So I mean, you certainly could pull that money out and pay it off. But I would look at it like a business. And if you've got a low interest rate on it, what is her interest rate on that mortgage?

I'm not sure. All right. I check that because what you may find is that if you raise the deductible on the homeowners as high as you can, keep that amount in savings, you guys are going to be throwing off, as you said, a lot of cash flow, you know, as you're combining your incomes after marriage, and your expenses are dropping because you're not maintaining two places. And, you know, I would look at the opportunity, especially if she's got an older mortgage that's, you know, in the twos or the threes, because she got it when that was her primary residence, then you're in a great opportunity with the cost of the debt service low, you know, just to go and rent it out, get those high rental prices that you're getting in South Florida, and use that to cash flow it, and then keep your money growing. Now, if that's not going to work, then maybe you do, you know, pay it off, you know, and then you start generating that rental income and then build your your investable assets back up.

But if she has a low interest rate, I'd probably be inclined to see if you could make it work, where the rental income could cover the debt service, the property taxes, and the homeowners policy. And if that could work, that'd probably be the direction I'd go, and then your investments can continue to grow. That's my best advice. I hope that helps you, my friend. Thanks for being on the program. Quickly to Grand Rapids. David, you'll be our final caller.

Go ahead. Right. Hey, thanks for taking my call. My wife and I will be retiring here in two years, in two years. And looking at we're debt free, we have a great retirement income going to be coming in cash flow. And at the end of the day, we want to buy a truck and a camper to pull. And so we are financially, we are definitely debt free. And we have a great pool of income that will be coming in. And we just want to know, what would be the best means to finance to actually go and buy that truck in a couple years in that trailer?

Yeah. So you know, I would just go out and get a loan with a fixed APR and a set repayment plan. You know, there there are loans for both camper, you know, trailers as well as RVs, you know, as much as up to 20 years.

So I would use either Lending Tree, I'd probably look at Bank Rate, do an internet search, get at least three bids before you do this. But it sounds like a blast. And I'm so excited for you all as you enter this next season. Thanks for calling today, David.

Faith and Finance Live is a partnership between Moody Radio and Faith Fi. I want to say thanks to my team today, Lynn, Tahira, Amy and Jim. Couldn't do it without them. Have a great rest of your day and join us tomorrow. We'll see you then. Bye bye.