Larry Burkett once said, Today I'll give you seven marks of a good steward. 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 journey. Now when Christians hear the word stewardship, we tend to think of money or tithing, and obviously those things are important, but stewardship involves much more than that.
Jesus entrusted us with the gospel and gave us his immeasurable love by dying on the cross. As stewards of those priceless gifts, we're to share them with the world. So keep in mind that stewardship isn't just about money. So what are the marks or characteristics of good stewards?
Well, I've already mentioned the first. They acknowledge that everything belongs to God. They possess resources only temporarily to serve his purposes. They don't hoard or covet more. They understand that even the skills they possess to earn a living are a gift. Deuteronomy 8 18 reads, You shall remember the Lord your God, for it is he who gives you the power to get wealth. And 1 Peter 4 10, as each has received a gift, use it to serve one another as good stewards of God's varied grace. Next, good stewards fully understand the mission they've been given and how important it is. God has graciously given them a role to play in his plan, and they take that role seriously, but with humility. They take comfort in Proverbs 16 3, which reads, commit your work to the Lord, and your plans will be established. A third trade of good stewards is that they are faithful. Now, of course, this means they are faithful in following God's financial principles, earning, saving, investing, and most important, giving.
They are persistent and persevering. That means they're also faithful in their calling as stewards of the gospel, and they're not afraid to share it. First Thessalonians 2 4 reads, Just as we have been approved by God to be entrusted with the gospel, so we speak, not to please man, but to please God who tests our hearts. Romans 1 16 reads, I am not ashamed of the gospel, for it is the power of God for salvation to everyone who believes. A fourth characteristic of good stewards is that they are trustworthy. They're truthful and honest in all they say and do. Proverbs 12 22 warns, Lying lips are an abomination to the Lord, but those who act faithfully are his delight. Titus 1 7 follows that up with, An overseer, as God's steward, must be above reproach. He must not be arrogant or quick-tempered, or a drunkard or violent or greedy for gain. Next, good stewards are diligent. They don't waste time watching mindless programs on television or staring at their phones monitoring social media.
They develop good habits for eating and exercise. 1 Corinthians 15 38 teaches, Therefore my beloved brothers, be steadfast, immovable, always abounding in the work of the Lord, knowing that in the Lord your labor is not in vain. And Proverbs 13 4, The soul of the sluggard craves and gets nothing, while the soul of the diligent is richly supplied. And the sixth trait of good stewards is that they spend time in prayer seeking God's will and his wisdom. James 1 5 reads, If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him. Good stewards do not waste time worrying because they know that God will provide. 1 Corinthians 4 6 teaches, Do not be anxious about anything, but in everything by prayer and supplication, with thanksgiving, let your requests be made known to God. And the final characteristic of good stewards is that they act when they feel the spirit leading them to. 1 Peter 1 13 says, Therefore, preparing your minds for action and being sober minded, set your hope fully on the grace that will be brought to you at the revelation of Jesus Christ. Folks, those are the seven characteristics of a good steward. They, of course, set the bar pretty high, and none of us can expect to exhibit them all of the time. But we must always try.
The goal? Faithfulness. We need to be obedient.
And God's word says those who have been given a trust must prove faithful. We're going to take your calls next. The number is 800-525-7000. By the way, you can call that number 24 7 800-525-7000.
I'm Rob West. And this is Faith and Finance Live. We'll be right back. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.
Any information provided is not intended to replace advice from a financial, medical, legal or other professional who understands your specific situation. I'm so glad you joined us today on Faith and Finance Live here on Moody Radio. We're taking your calls and questions today on anything financial. We've got some lines open.
We're ready for you. 800-525-7000. Again, that's 800-525-7000. Whether you want to talk about your spending plan, your long-term investments, maybe it's your debt repayment, how you get that credit score up or giving wisely and anything in between.
The number is 800-525-7000. We'd love to tackle it with you together. We started today by talking about the seven marks of a good steward. You know, when it comes to managing God's money, this idea that God owns it all, which is absolutely true, we see that clearly in Scripture, is really the central idea that should govern all of our financial decision-making. It helps us to put money in its proper perspective and allows us to focus on our true role, and that is money manager for the Lord.
And so in order to reflect the heart of the master, we have to go back to the Scriptures and see what's on God's heart. And clearly, money is talked about in the Old and New Testaments, so we pull out those big ideas of contentment and generosity and trust in the Lord, our dependence on Him as our provider, providing for our needs. We see clearly in Scripture that God's creation is something to be improved and that we're to be productive in taking what God has given us and using it for His glory, including our money management as we provide and as we give and as we enjoy what God has entrusted to us. The question is, how do we find the right balance and how do we guard against getting caught up in the messages of this world, which will clearly tell us that we need more all the time, that it brings greater satisfaction and fulfillment in the things of this world. And yet we know experientially that that's just simply not true. And so we point back to God as our ultimate delight and treasure.
And when we do that, money becomes a tool to accomplish His purposes. We want to help you do that with the practical decisions and choices you're making every day. So what's on your mind today? We've got a few lines open. The calls are coming in quick, but we'd love to hear from you at 800-525-7000. You can call right now. All right, let's dive in. We're going to begin in Indiana. Jim, you'll be our first caller, sir.
Go ahead. Thank you for taking my call. I bought a used vehicle and they're offering me an extended warranty. I was wondering what your opinion is on extended warranty. You know, it's a tough one in the sense that, you know, it all comes down to the actual automobile you're going to own and the fine print of the extended warranty that you would purchase and whether or not you'll actually get the coverage you need. I mean, the benefit is they can cover costly repairs and, you know, cars these days are more and more technology, which is more expensive to repair. You know, the dealer can take care of the paperwork and although, you know, they are expensive and the key is they don't cover all the repairs. There's also in some cases limited access to approved repair providers. So for that reason, you know, we generally advise against it for most drivers, you know, for a commercial vehicle like a semi, they might be, you know, that would be a different story. But for the average driver who's just using it for personal uses, you know, oftentimes taking that same amount and just sticking it in a high yield savings account and reserving it for, you know, maintenance is often the better way to go just in terms of how often they're used and whether or not you can actually get the repairs that you need done. So I would just consider your situation, the car you're looking to cover and the cost, do some research online.
You know, what you will find is that Consumer Reports generally recommends against it because again, you know, just on the average folks will find these are expensive policies and some of the limitations and fine print just often render them not quite as effective as they're expected to be. Does that make sense? Oh, yes.
And I kind of thought you're going to answer that way just to kind of put the money in the savings account. So yes, it makes a lot of sense. All right, very good. Well, you're very welcome. We appreciate your call today. May the Lord bless you. 800-525-7000. Let's go to Memphis. Hi, Teresa. Go right ahead. Hi, again, my name is Teresa Collins from Memphis and I have a question regarding a pension plan.
All right. My former company has, they're offering a buyout. They're terminating the plan. So they're giving me the option for a buyout or just take the money immediately, like on a monthly basis or to wait until I'm sick until retirement or 65. So it's enough to pay my house off. So I'm trying to decide, should I take the money and pay my house off or should I just wait until I'm 65 to take it?
Yeah, very good. So, you know, this is often a decision that's complex enough and important enough, Teresa, to get an advisor to weigh in, to actually look at not only the specific offers that are being made and whether or not the lump sum versus the monthly payment makes sense, but also the timing of that, which, as you're pointing out, makes a difference in terms of how much you'll actually receive. But beyond that, even looking at how this fits into your overall retirement plan, just to help you consider all of the income sources you'll have and the assets so that you can be really thoughtful about when to tap the various income sources and the tax implications associated with them. So there's just a lot of moving pieces, but let's just talk at a high level about the specific decision that you would be making. And so is the plan simply to take the monthly payout versus the lump sum, or is there also a timing decision here as well?
Well, I only have until Friday to make the decision, and that's my procrastination that I didn't go ahead and get everything done. But I really, I think I need to wait until I actually retire, because I will get more, you know, and it'll be for a lifetime, as opposed to taking a lump sum now, but the money. Yeah, so what is the option given to you right now for the lump sum? When you say that, I don't mean they'll... What is the amount they'd be willing to give you today?
Do you know? It is about 62,000. All right. And then if you wait until 65, would you also have a lump sum option then? Or at that point, would it just be a monthly check?
It'll be a monthly check. All right. And when is that? How far down the road? I'm 58 now, so... Okay, seven years. Seven years.
Okay. And what would they be paying you at that point? How much per month? It's $600 and something. $600, I don't know the exact thing. $620, something like that.
Okay. So $620 a month is $7,500 a year, and that's a lot more than you'd be getting, obviously, off of the $60,000. If you had the same $62,000 now, it's going to have a chance to grow for the next seven years. But at $62,000, we would probably only encourage you to take about a third of that $2,500 a month, and you're talking about getting a full $7,500 if you wait. It just seems at face value. I'd probably wait this out if you have the ability to do so, because you've got quite a bit more coming down the road, and it's guaranteed, I would imagine, for the rest of your life.
So that's a pretty significant amount increase if you wait until $65,000. Thanks for your call today, Teresa. We appreciate you checking with us. We'll be right back. Well, it's great to have you with us today on Faith & Finance Live.
I'm Rob West. We've got a few lines open today for your calls and questions, 800-525-7000. I was up against a break when we were talking to Teresa in the last segment.
Just to build out on this a bit further, and Teresa, I hope you're listening. We were talking about that when you're making these decisions on taking a retirement plan and getting a lump sum early versus waiting until full retirement age, or in this case, age 65 to get a larger monthly payout. It can often involve a lot of decisions that really require a financial advisor.
I realize you don't have a whole lot of time because you have to make the decision Monday. But the reason I was saying you may want to consider waiting is simply because, and I ran these numbers during the break, if you take that $62,000 that they're going to give you today, Teresa, as a lump sum, and let's say over the next seven years, you don't add anything to it, but we were to invest it. Let's say you got an 8% return on that money annualized over the next seven years. That return would grow that money to about $110,000 over seven years. That's a nice increase, but keep in mind, at that point, we would recommend you take about a 4% withdrawal rate in order to preserve the balance, and that would only throw off about $4,300 a year or $360 a month, which is just a little more than half of which you'd be getting as a guaranteed payout at $620 a month or $7,500 a year.
So I think that's the reason. Now, the downside of the monthly payout is you have to make sure if you're married, that might be just on your life, and you have to factor in that that would go away unless there's a spousal benefit there. And then secondly, you don't have the principal balance. So you get the check for the rest of your life, but you don't have the principal that you could tap into or leave as an inheritance or if you needed some extra funds for long-term care or something like that. Obviously, there's a benefit of having the principal available, but just in terms of your monthly income, the ability to get $7,500 a year at $65 guaranteed versus what I would expect you to take off of $110,000, which is only $360 a month, it does make that monthly check at $65 if you wait look pretty attractive. So just some things to think and pray about.
I realize you're kind of down to the wire here on making this decision, but wanted to give you as many things to consider as possible. We appreciate your call today. All right, let's head back to the phones.
800-525-7000. I've got two lines open. We'd love to hear from you. Let's go to Cleveland, Ohio. John, you'll be next on the program. Go ahead.
Hi. I've got some collectible coins. They're slab coins, meaning they've been encased and graded by the professional grading services, and my question is I've owned them a little over 20 years, and when is a good time? I would like to sell these, cash them in.
When is a good time? Do they fluctuate like the equities market up and down, or are they maybe a little bit like gold, silver, where there's just a slow, steady increase? Some of them are made of precious metals.
Others are just older coins from the 1800s, rare pennies, nickels, half cents, things like that. Yeah, very good, John. And you said you have gotten them appraised or graded professionally.
That's great. That's always an important step. There's two factors here. One is just the spot price of the underlying precious metal itself when that's involved, and then beyond that, you've obviously got the intrinsic value where it's worth more than its face value because it's rare. And they do fluctuate. The problem is it really does take a professional to be able to give you any indication as to where these might be going in the future, and a lot of that is speculation. Now, we can look at historical trends just on the underlying value of the metal and what reasonable rate of return we might be able to attach to that. But often when it comes to rare coins, folks will just hold them forever and often pass them down unless they need to convert that asset to cash because they have another purpose for it, or they'd like to invest it somewhere else that might have lower risk and a better prospect of a return. The challenge is it would almost be impossible to provide any kind of rule of thumb that says when to keep it versus sell it because there's just so many factors here. There's the future underlying metal, and then there's the intrinsic nature of these rare coins that nobody's going to be able to tell you how they'll perform in the future. If you were to sell them, John, what would you do with the money?
Do you have some thoughts on that? Yeah, my wife and I would probably put it into real estate, a different home, maybe on a more valuable property. Yeah, and so obviously that has a lot of value to it. Would that be a home you'd live in or a home you'd use for a ride?
Yes, live in, yeah. Okay, yeah, and so I like that idea a lot just because real estate I think will continue to do well. We've got a shortage of homes in this country, and obviously there's another piece of that value there that you can enjoy that property. Whereas unless you're a collector, you're probably not getting a whole lot of enjoyment out of these assets, and they don't generate any income, which obviously real estate has the potential to do.
You know, I would say if you feel like you've got a good understanding of what the real value is on this, it's probably not a bad idea to go ahead and liquidate it, especially if you have something else in mind that you could do with the money. But at the end of the day, this is something I think you need to really pray about and discern where the Lord is leading, but I think it sounds like you're getting some wise counsel here as you move forward. This is Faith and Finance Live.
I'm Rob West. We've got a lot more coming around the corner, so we hope you'll continue to stay with us as we take your calls and questions today and continue to tackle what's on your mind. We'll be right back. Great to have you with us today on Faith and Finance Live. Hey, coming up in our final segment today, Bob Doll will stop by, and it's going to be a timely conversation. The market's been under some pressure as of late. That's continuing today.
Apart from the technology sector, the market's selling off again today. We'll get Bob's take on all of it. That's coming up in just a bit. But first, let's head back to the phones. Continue to take your questions today.
800-525-7000 to Georgia. Hi, Sharon, go ahead. Hi, I listen to you guys all the time. I'm really grateful for your advice. We're transitioning from newer vehicles to the older vehicles, and I want to know when's the best time to take off full coverage or have liability.
Yes, ma'am. So the rule of thumb that you'll see on that is when, if you total up all the annual premiums for that comprehensive and collision, and the total of the annual premiums is more than half the car's value, that's when you may want to think about dropping that particular coverage that's not necessary. Prior to that, though, I think it's a good idea for you to hang on to that. So when you say moving to an older car, is this still an automobile? I mean, used cars are still fairly expensive these days. Do you have any idea, Sharon, what the value of this automobile we're talking about is worth? My neon sensor is worth, I paid $12 for it, it's worth $20 now. I've had, I've got a 78 truck, and it ain't painted yet, and these people stop every day to ask for it. Really? And my husband's got a 4x4 towed, a Tundra, and everybody stops by and asks about it every day.
Yes, ma'am. Well, you know, you may want to consider that. What it would probably be helpful is for you to check the value of these cars, and you can do that if you're comfortable going online. You could go to edmunds.com, that's E-D-M-U-N-D-S, edmunds.com, or KBB, and that stands for Kelly Blue Book, KBB.com. And you could put in the make, and the model, and the condition of the car, and so forth, and find out what these trucks are worth. But I'd be careful not to drop that extra, the collision, and the comprehensive too soon, just because if you were, if you did have these in an accident of some sort, they could be costly repairs. But that's the rule of thumb to look at.
You know, when the total of the premiums on that portion of your coverage is more than half the car's value, you know, the general consensus is that's the point where you may want to consider dropping it. Well, thank you so much. God bless you. And you too, Sharon. Thank you for being on the program today.
Let's head to Schaumburg, Illinois. Hi, Terry. Go ahead, sir. Mr. West, how are you? I'm doing great, thanks. Awesome. Great show. I love it.
Hey, listen, I'll try to keep it short. I've got a 2010-2000 Honda Accord, had a recall on it for oil consumption. I took it back to the dealership under the recall. Supposedly they fixed it. But, you know, this many years later, I'm finding out that they really didn't fix it.
They only attached it. My question to you is, the car has 200,000 miles on it. When they did the repair, they didn't replace the tensioners, so I hear them.
Sounds like cans rattling an engine. So I took it to Christian Brothers Automotive. They said, I should fix it because if those go, the engine's done.
So it's going to cost me $1,300 for them just to fix the tensioners and not the original oil consumption issue. Yeah, yeah. That's my first question. So I started a new job on the 30th of this month. I'm living on borrowed time. I'm driving a company car right now, which I don't have to worry about insurance. I've dropped the insurance on the car that's sitting in the driveway with the 200,000 miles on it. So I haven't been paying insurance on the car. But I will be moving into a new apartment.
I'm going to have to soon. Right now I'm living with my mom. She's got some health issues, so that's kind of worked out for me. I didn't renew my lease, so she's just like, stay here, you can help me out.
But eventually I'm going to rent my own space. Yeah, yeah, very good. And so the main issue is just whether or not to continue to pour money into it or sell it? Yes, it looks new. It doesn't look brand new, but it's in mint condition. Looking outward, you can't even tell it has an issue.
It has no scratches, no dents, no dings, nothing. Okay. All right. And have you gotten the value of this car online?
I have not. Okay. Yeah, I think that would be your next step. I mean, I realize this could be costly. And yet, if you've got a car in good condition, I mean, used cars are still selling at top dollar right now, even though they've come down in terms of the amount of appreciation we're seeing.
They've gotten more reasonable as the inventories have built back up on the new cars. You want to be able to maximize the value on that. And if you can truly fix it with somebody who's reputable that you trust, and that could help you get the full value of this out of it on the sale, then that makes a lot of sense to me.
I think the question is, at some point, you will be putting more into it than it's worth. But at this point, if it looks great, and it's in good shape, and it doesn't have a significant amount of miles on it, then it's probably worth continuing to keep it maintained. Are you in a position where you can sell it because of the work car, or do you need a personal vehicle as well? Oh, I need a personal work vehicle because I just accepted a job offer with a new company. So I've got to give up the car I'm currently driving. I've got to give that up back to my company that I work for now. I've got to give that back. Okay, got it.
All right. Yeah, I think your next step is to determine what is the value of this car. And you could do that at Edmunds or KBB and just figure out, you know, basically, what is it going to take for you to get out of this vehicle and maximize the value. And it could be that, you know, going ahead and doing these repairs are what's going to allow you to realize the true value of this car. But you also may find that it's just not worth enough to justify it.
And I think that's really the next step. In terms of the housing situation. Tell me about the second part of the question. Well, if I buy a new car, and I don't mean new, it would be certified pre-owned or something like that. But if I get into a new car, I'm going to have a car payment and a housing payment. So I'm going to have, you know, so I didn't want to buy a new, I didn't want to have that new car payment thing over my head because sure, I paid it off.
And it's, I just don't want to deal with another car payment right now, because that's going to bring also insurance, you know, and that's also going to bring registration. And, you know, I mean, it doesn't happen every day, but, and you're living with a family member currently? Yes. Okay.
Yeah. Well, you know, I think there's, there's some sort of happy middle here. I mean, obviously, it's got to all come back to your budget. The challenge is, you know, you may decide just to keep it so you don't have this car payment. But it's going to get to the place where these ongoing repairs are eventually, you know, going to be more than the car payment itself once this thing, you know, is beyond its useful life. So I think number one, you've got to figure out what can I get out of this car? Number two, can I truly fix it with this next repair? Or is this, you know, just the beginning of more and more expensive repairs down the road? And then, you know, factor the housing into your budget as well. It could be that this is a season to stay put and just focus on getting that car up to par. We appreciate your call, Terry.
Sounds like you've got a few decisions to make here. Thanks for being on the program. We'll be right back. It's great to have you with us today on Faith in Finance Live.
I'm Rob West. Hey, with me during this segment for a few moments is Bob Dolly joins us each Monday with his market analysis. Bob is chief investment officer at Crossmark Global Investments and a frequent contributor at Fox Business. Bob, market's been under some pressure as of late, except for the tech sector that continues today. How should we analyze what's going on all around us here? Well, the big driver is, you and I have talked about, is the bond market. When interest rates go up so fast to these levels, it causes nervousness among equity investors. And so we've had a bond and the stock market so often in recent weeks. You throw on top of that the war, which has got people unsettled because of the concern it might bleed into oil prices. Earnings are coming through for the third quarter and they're generally OK, but they're mixed too. So you get this yo-yo.
Today is a perfect day. The S&P 500 ended the day almost unchanged, but it was all over the place, Rob, up and down. I think we'll have more of that until investors get a little better handle on where we are.
Yeah. What about U.S. consumption, Bob? I know you were talking about retail sales and your deliberations this week. Surprising, despite the inflation, the squeeze that Americans are feeling across the board.
We've got student loan payments coming back online. Housing prices are way up. And yet the American consumers continuing to spend, right?
Yes. I mean, you cited a good list of things to be concerned about. But don't forget, a lot of people are working and they're making some more money as wage gains have been pretty good.
And as a result, they've got money to spend and they're spending it. Yeah. No question about that. Bob, you touched on just what's going on, obviously, in near Israel there and Gaza. You know, I know you did a special report on that recently. What should we take away from that just in terms of the economic impact of that? You know, obviously, if it's contained, it's one thing just because of the lack of economic productivity from that region of the world. But the extent to which it broadens obviously does bring ramifications economically, right?
Yes. You hit the nail on the head. That is the GDP, the economic heft in that part of the world is pretty small. So it really doesn't matter a lot for the global economy and markets unless and until it affects oil prices. And so keep your eye carefully on Iran. Do they get involved?
Are they forced in? I mean, most people know they're funding a fair amount of some of the Hezbollah and Hamas efforts there. But keep your eye on Iran. If they're dragged into this somehow, oil prices will begin to go up and then they'll be concerned.
Yeah. Bob, you know, in terms of people throw around this term secular bear market where we could have, you know, 10, 15 years of essentially a flat market. You know, some are saying we could even be in one of those right now.
Obviously, you don't know unless you look at it in hindsight. But what makes a secular bear market? And what are the prospects that we are either in one or heading toward one where we could see essentially flat returns for a long period of time? You know, the ingredients for that, Rob, typically are high and rising inflation and slowing economic growth. Now, will inflation be higher over the next 10 years?
It was the last 10 years. Yes. Will economic growth be slower?
Probably. But that doesn't mean stocks have to go down. I would look at this instead of a secular bear market where 10 years from now stocks are lower than they are today. I think it's going to be an era of subpar returns. Probably the last couple of years, investors got used to double digit returns.
I don't think we should expect that going forward. But if we can get mid single digit returns and inflation gets contained, that's not all bad, Rob. Yeah, no question about it. And there's still a lot to be excited about economically in this country in terms of our ability to generate new technology. You know, corporations are getting smarter. We're still the largest economy in the world. I mean, there's a lot going for us despite these crosscurrents, right? Absolutely. And when you say technology, it's obviously technology very broadly defined. It's information technology, but it's communications, it's healthcare, it's even energy technology.
And the U.S. is the leader in most of these places and productivity can make up for a lot of the absence of population growth, which we're facing because we're having fewer babies. Yeah, no question about that. All right, Bob, always helpful to hear your insights, my friend. Hope it's a great week and we'll talk to you next Monday. I look forward to that. See you. That's Bob Dollies, chief investment officer at Cross Smart Global Investments.
You can learn more at crossmartglobal.com. All right, let's round out the broadcast today. We'll get to as many questions as we can to Chicago. Hi, Cheryl.
Go right ahead. Hi, I've been retired for almost three years and I have two retirement accounts drawing a pension. One of my rollover IRA has one hundred nineteen thousand and then the Roth IRA has like eleven thousand. I recently had to have my roof replaced and I'm wondering if it makes sense to borrow money from the IRA rollover to pay for the roof.
The roof was like forty thousand dollars and it's a guaranteed lifetime guarantee on the roof. I see. Yeah, you wouldn't be able to use the word borrow.
You wouldn't be able to borrow from the IRA. But are you asking just about taking withdrawal of the distribution? Right. Right.
What type of things do I need to consider before doing something like that? Sure. Yeah, very good. So you're living on the pension alone, Cheryl, or are you pulling from other sources? No, just from the pension. What about Social Security? I don't have Social Security.
I retired from the government. OK. Yeah, very good. And do you have any margin at the end of the month? Anything left over typically? Somewhat. You know, not that much. You know, I give to several charities and things like that.
You know, I can probably, you know, adjust it. Yeah, very good. And did you already do the roof and did you borrow to do that? Yes, we did. We financed it. OK. And what's the interest rate on that? Ten percent.
Ten percent. OK. And you are able to cover that monthly payment currently just out of your pension income? Yes, I could. OK. Very good.
Yeah. I like the idea of you paying this off, especially given that it's a guaranteed 10 percent return on this money, because, you know, you're not going to be paying 10 percent, whereas you certainly don't know you're going to get 10 percent guaranteed in the stock market in that IRA rollover. And as Bob Dahl just mentioned a moment ago, what he's expecting of the next decade is that we wouldn't necessarily be in a sustained, prolonged bear market, what they call a secular bear market.
But we could have lackluster returns, you know, not the double digit returns we got used to over the last couple of decades that we could see more modest returns. And because of that, this idea that you could pay off this loan and get a guaranteed 10 percent by not having a 10 percent interest rate, you know, is a big deal. So what I would do is probably work with your CPA because that all whatever you pull out is going to be added to your taxable income. So what you may want to consider doing is pulling half of it in 2023 and half of it in 2024. But your CPA can talk you through that.
That would make sure that you don't push any portion of this up into a higher bracket. The other consideration is we think the likelihood is that tax rates are headed higher in the future. We know Trump's tax cuts are expiring in 2025. There's obviously uncertainty around the future of Congress.
There's a presidential election around the corner. So there's a decent likelihood we could see higher tax rates in the future. The benefit of you pulling that money out now to pay off that loan at 10 percent is at least, you know, you're in a very low tax environment, even though it is all going to be added to your taxable income.
So I kind of like this idea of you going ahead and wiping this out using the IRA funds as long as you just communicate with your CPA about it and make sure you don't get caught off guard by the additional taxes you'll have to pay. Does that make sense? That makes a lot of sense. Thank you so much. I really appreciate that. Thank you. All right, Cheryl. God bless you. Quickly to Billy. Billy, I've got just about a minute and a half.
How can I help? Well, thank you, first of all, for taking my call. I bought some property about two or three years ago and never did anything with it. And my intention was to give it to my son. And what he did, he built a house on it last year and he sold it to the house this year. And I was told that I could quit claim at the closing, you know, to let him get his property and his name. But when we got to the closing, I was not allowed to do that. But I did go ahead and sign, you know, everything in my name at the closing. But I'm wondering, how can I, what can I do about, is there anything I can do about the capital gain tax on that property? So this property has always been in your name. It was in your name when it was sold.
And that sale has already taken place, right? Yes. Okay. And was this a rental property or your primary residence?
Go ahead. Well, one of the caviar, they did a right to check out to my son on the sale of the property. But it was your property? Yes. Okay.
Yeah. And this was your primary residence or this was somebody, this is where somebody else lived? No, it was not my, it wasn't nobody's residence.
It was a brand new house that he built. Got it. And sold it.
Yeah, got it. Yeah, unfortunately, I mean, that's your property, regardless of who the check's written to out of the proceeds of the closing, you owned it. So the capital gains are based on, you know, your original purchase price plus any improvements you made on the property establishes the adjusted cost basis. And then you've got the selling price. So you'd take the selling price minus your cost basis. And that's going to tell you how much profit you had. And then as long as you owned it for more than a year, it would be a long term capital gain. And for most folks, that's puts it at 15% capital gains tax on the profit. So you would need to check with your CPA on what's actually owed. But unless you roll that into another property within 180 days, there's and that sale has already occurred. There's going to be capital gains on it.
You just need to determine how much based on the actual profit you realized. Billy, we appreciate your call today. Thanks for being on the program. Errol, I'd love to take your question perhaps tomorrow. Let's see if we can get you scheduled for another broadcast.
Faith in Finance Live is a partnership between Moody Radio and Faith Buy. Thank you to Lynn, Jim, Dan, and Amy. We'll see you tomorrow. Bye bye.
Whisper: medium.en / 2023-10-23 19:54:15 / 2023-10-23 20:10:38 / 16