Share This Episode
MoneyWise Rob West and Steve Moore Logo

A Movement of Faithful Stewards

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
November 28, 2023 6:42 pm

A Movement of Faithful Stewards

MoneyWise / Rob West and Steve Moore

On-Demand Podcasts NEW!

This broadcaster has 871 podcast archives available on-demand.

Broadcaster's Links

Keep up-to-date with this broadcaster on social media and their website.


November 28, 2023 6:42 pm

There’s a growing momentum of Christians that want to be good stewards. Many of us have recognized that it's not just about being wise with money—it’s about our faith influencing our money decisions. On today's Faith & Finance Live, host Rob West will talk with Chad Clark about a movement of faithful stewards and how you can join in. Then Rob will answer your calls and questions. 

See omnystudio.com/listener for privacy information.

YOU MIGHT ALSO LIKE
MoneyWise
Rob West and Steve Moore
Core Christianity
Adriel Sanchez and Bill Maier
Delight in Grace
Grace Bible Church / Rich Powell
Summit Life
J.D. Greear
Cross Reference Radio
Pastor Rick Gaston

If then you have not been faithful in the unrighteous wealth, who will entrust to you the true riches? Luke 16, 11.

Hi, I'm Rob West. In that verse, Jesus reminds us that we're to be faithful stewards, managing his resources to further his kingdom. Chad Clark is with us today to talk about a movement of faithful stewards that you can join. 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. Well, it's always a pleasure to have Chad Clark on the program. He's the executive director here at FaithFi, where he's always making sure we're on mission and have the tools to carry it out. Chad, great to have you back.

Happy to be back. So, a movement of faithful stewards. That's a big idea, Chad.

Tell us what that looks like, Chad, and what we're trying to do. Well, it really has been a movement over many years. We have a lot of listeners that go all the way back to Larry Burkett in the 80s and 90s, then over up to Howard Dayton, and now to our very own Rob West. It's just been incredible to see how many people have committed to the stewardship journey. And we're seeing growing momentum of Christians who want to be good and faithful stewards of the resources God has entrusted to them. And that's one of the main reasons we rebranded the ministry from MoneyWise to FaithFi earlier this year.

You know, we recognize it's not just about being wise with money. It's about our faith influencing our money decisions. Here at FaithFi, our mission is to equip Christians to integrate—integrate, that's the key word—their faith and financial decisions for the glory of God. And that integration, like I said, is so critical because we're often tempted to separate the two. We've got our Sunday morning faith, but then we go Monday through Saturday living as if God doesn't have any influence or any say in our lives. And here at FaithFi, we believe that the faith and the financial integration is absolutely critical. It's our faith that actually influences our financial decisions.

And that's really well said, Chad, and that's not always easy. Of course, among our listeners and users of the FaithFi app, there's a lot of questions out there. There's a growing sense of fear and anxiety with wars and rumors of wars, as well as economic and political uncertainty. Now, there's a lot of other financial resources out there trying to provide insights and solutions, but many of those are what we would call worldly advice.

Yeah. And I think, you know, understanding what worldly advice looks like is it's really focused on us with little to no regard for God. And that's really where FaithFi, where we differentiate ourselves, is we want to replace the lies of the world where it's really about just our comfort, our security. It really becomes self-centered and replace those empty promises with the truth of the gospel. Our vision is to redeem God's design for money and to see people come to view God as their ultimate treasure.

I'm going to just say that again, because I just love this so much. Our vision here at FaithFi is that we redeem God's original design for money so that people would come to see God as their ultimate treasure. Because here's the key thing, Rob, when our heart treasures God above everything else, our financial decisions simply become an expression of who we are in Christ as we seek first His kingdom and His righteousness. And you were talking about uncertainty. And it's through faith that we navigate that uncertainty, whether it's preparing for the future or the financial decisions that we make every day. And that's why FaithFi is here, is to help guide people with practical biblical wisdom and tools and resources to help you steward what God has entrusted to you.

Yeah. And what's so exciting is we're seeing this incredible movement of faithful stewards that love God, they love their neighbor, and they're making wise decisions with the money God has entrusted to them. Now, I know that's an exciting vision for our listeners, and many of them want to get involved in that.

How can they do that? Rob, that's a great question. And here on Giving Tuesday, one of the best ways you can get involved is by supporting FaithFi financially. We're in our end-of-year fundraising campaign, and we're just really excited about what we're working on and getting ready to launch in 2024. We are getting ready to launch a brand new Bible study series in 2024 that's going to help cultivate your heart to be positioned to see God as your ultimate treasure. We're working on a brand new version of the FaithFi app to make it even easier to manage the resources God has entrusted to you. And we are looking to reach even more people with this incredible stewardship message. All you have to do is go to faithfi.com slash give and join us on this journey. That's awesome, Chad. Thanks for stopping by, my friend.

Thank you. Well, it's Giving Tuesday, folks. If you'd like to help us reach our end-of-year giving goal, it's 250,000.

You can help us do that by heading to faithfi.com and click give. All right, your calls are next. 800-525-7000.

800-525-7000. We'll be right back. We'll be right back.

Well, it's great to have you with us today on Faith and Finance Live. I'm Rob West. All right, it's time for your calls and questions today. 800-525-7000.

That's 800-525-7000. Lines are open. Our team is standing by and we're ready to take your questions.

We'll be diving in here in just a moment. Let me also mention, you know, just picking up on what we were talking about with Chad Clark today. Here on Giving Tuesday, what a great opportunity for you to think about the ministries and causes you're passionate about and to be generous towards those. We certainly love when you're generous towards FaithFi and we're so excited about what God is doing and where we're going. And we have a new way to tell you that story to help you understand all that God is doing as we seek to challenge every Christian to see God as their ultimate treasure. You can learn more about that and where we're headed as we equip faithful stewards like you when you go to faithfi.com slash impact. That's faithfi.com slash impact.

And you can learn all about what God has done and where we believe he's leading in the days ahead. All right, we're ready to take your calls today. 800-525-7000. You can call right now.

Let's go to Montana and begin with Nicholas today. Go ahead, sir. Hey, thanks for taking my call today.

Sure. Yeah, and I was just curious. I have an outstanding balance on a credit card and I was just wondering if there's any pros and cons. They gave me a settlement offer that's significantly less than the balance owed, either a one-time or a 12-month or 24-month type of payment.

And I was wondering if there's stuff to watch out for when they do that. Yeah, so is this the actual creditor that's offering this to you or has it been sold to a collection agency? It's the actual creditor. Okay, and are they offering just to give you a payment plan or are they actually reducing the balance? Reducing the balance.

Okay. Yeah, so debt settlement, getting a forgiveness of a portion of that in exchange for a partial payment can ease financial burden. So it's certainly helpful if you're in a difficult spot, but it does impact your credit. It will hurt your credit score. Not only is it a part of the credit scoring algorithm, the fact that you settled the debt for less than the outstanding balance, but it will be notated on the account that it was settled in full there on the credit report. Now, it will show as a zero balance and all things being equal, it's important to get these paid off. And if you had the option to either just leave it outstanding because you couldn't pay it or to pay it, settle it in full, I would choose the settled in full option, but you do have to recognize there is going to be an impact on your credit score. So despite the potential downside, I like the idea of you making that partial repayment and getting it to zero better than leaving it unpaid.

But if you had the ability to pay it in full, I think honoring your obligations and protecting your credit is a better way to go. Does that make sense? Yeah, that definitely makes sense. And then how long does that usually impact the credit score for?

Yeah, there's no way to know. The longer something is in the past, the less it impacts you. So over time, it will gradually come back up, especially if you have other accounts that are in good standing and that are being repaid monthly on time. So you're being shown as an on time payer. That most recent information is going to impact you the most.

So it just widely there's such a wide disparity between how quickly it will come back. And a lot of that's going to have to do with how much good credit you actually have. So, for instance, part of your credit score is your credit mix. Do you have installment accounts and revolving accounts that are all active and being paid on time? What is your credit utilization look like for your active accounts? Is your total utilization below 30 percent of the available credit? You know, how much history do you have?

Was there one settlement or multiple settlements? So the bottom line is, again, let's get those to zero. I'd prefer you pay them in full. If you settled them in full, that's better than leaving them unpaid. It's going to bring it down.

But I think, you know, 12 months from now, you'll probably be back where you were before all of this happened, certainly 24 months from now, so long as you have other good credit that's replacing this negative information. OK, that makes sense. I appreciate it.

Absolutely. Nicholas, thanks for your call today. God bless you, sir. Eight hundred five two five seven thousand is the number to call. We've got some lines open today. We'd love to hear from you again.

Eight hundred five two five seven thousand. You can call right now. Let's go to Pflugerville, Texas. Hi, Ray.

Go ahead, sir. Hi, Rob. Thank you for taking my call. The question that I'm having is I had a little phone call conference with a Fidelity representative earlier today. And he he asked me about he was asking me one of the questions he asked me was about this. I have like fifty thousand dollars in a savings account. And he asked me if I would consider putting that in the high yield account.

And I said, well, you know, I've been thinking about doing that because I've heard it on this radio station that I listen to. And and he was telling me that if identity offers a brokerage account, that it's the same thing. And he called it a money market account.

And I didn't know that was the same thing as a high yield. Or they also offer this other account called Cash Management Account. Yeah, the challenge is I want you to use something that has FDIC insurance. So, yes, a money market account is very much like a high yield savings account. And usually if it's a money market account, not a money market mutual fund, you will often have that FDIC insurance.

But that's a question you would want to ask the person at Fidelity. And then you could go compare that to other options at Bankrate.com. So, for instance, you know, if you wanted to get a CD right now, you could get, you know, almost six percent, depending on which online bank you use. If you're looking for high yield savings, you know, there are some great options there for that as well. I think the highest you're going to find right now is just north of five percent with a five star rated online bank with FDIC insurance.

Probably five point zero five, I think is the best I've seen. And then if you go to a certificate of deposit and you're willing to lock it up, let's say for a year, you know, right now you could find, you know, perhaps as much as even five fifty, five point five. So, you know, I think that's your next step is really to compare the alternatives and then secondly, to ask him on this money market account if there's FDIC insurance.

And if so, then I would say you could consider that alongside the other options. OK, well, thank you, Rob, for that for that info and that advice. Thank you, sir.

All right. You're welcome, Ray. We appreciate your call today, sir.

God bless you. Well, folks, we're going to take our quick break when we come back. Judy, I know you're driving in Chicago. You be careful and we'll get to you first right after this break. We have some lines open as well.

Eight hundred five two five seven thousand. If you have a financial question today, here's my heart. My desire is for you to be encouraged and equipped to be that wise and faithful steward living according to biblical wisdom in your financial and financial life. And we want to help you do that. Give us a call today.

We'll do that together. Hey, by the way, if you want to check out more about Faith Fi and where we're headed in twenty twenty four here on Giving Tuesday, you can do that on our Web site. Faith Fi dot com slash impact back with much more just around the corner. Stick around. Well, it's great to have you with us today on faith and finance live.

I'm Rob West. We're taking your calls and questions today. Eight hundred five two five seven thousand.

That's eight hundred five two five seven thousand. Hey, before we head back to the phones today, most major banks are predicting interest rates, rate cuts in twenty twenty four. I know so many of you are wondering when are we going to start to see these rates come down, which will affect us negatively on the savings rates.

Obviously, for those loans that we have outstanding, especially where there's a variable rate or we need to get a new loan, obviously that will take some of the pressure off. Bank of America is saying that it expects inflation to gradually cool globally, allowing central banks to trim rates in the second half of twenty twenty four that to avoid a global recession. Twenty twenty three, they're saying, defied almost everyone's expectations, recessions that never came, rate cuts that didn't materialize, bond markets that didn't bounce except in short lived kind of rising spurts. And, you know, they're looking out to twenty twenty four as a year when central banks can start successfully orchestrating what they call a soft landing, though they recognize that downside risks may outnumber the upside ones.

Michael Gapon, the bank's head of U.S. economics, said he expects the Fed to make the first rate cut in June and then cut by twenty five basis points per quarter. So we'll continue to, of course, watch this. This is a big question that so many have that will affect the economy and the investments that you have in your portfolios moving into twenty twenty four. But a lot more to come on that in the days ahead. All right. Let's head back to the phones. Looks like all the lines are filling up. So we'll move quickly to Judy, who's driving in Chicago.

How can I help? Hi. I have about four thousand in credit card bills due to lawyer bills. And I was wondering, since it's 20 percent, would it be better to maybe take some money out of my IRA to pay that?

I am over sixty one. So, yeah, I don't want to have this hanging over my head either. Yeah, no, I can understand that.

Tell me, Judy, are you still working? Yeah. OK. And you do plan to continue working for the foreseeable future? Oh, yeah. OK. And how much do you have in that in that IRA?

Only about maybe five thousand. OK. So it would pretty much wipe it out. Yeah. Yeah.

Because you'd have to pull out enough to cover the taxes as well. What other retirement assets do you have? Are you contributing to another account somewhere else?

No, that's all I have. OK. And so you're going to work as long as you can and then, you know, try to live on Social Security, obviously. Yeah.

Yeah. OK. You know, I mean, you could certainly do that and you're not going to pay the penalty, which is good. You will pay the taxes on it, which, you know, you may end up being in a higher bracket while you're working than waiting and letting this continue to grow down the road.

You're certainly not earning 20 plus percent on this account, like what you're paying on that credit card balance. So I think you've got two options. One is you go and pull it out and pull out enough to set aside to pay the taxes.

So that didn't catch you by surprise. And then the second option would be if you're willing to close that account for that particular credit card. And maybe you have a second one that you use moving forward for budgeted items only. Then you could put it into a credit counseling program with our friends at Christian credit counselors dot org, where they could help you get that interest rate way down.

So let's say it's 24 today and they can help you get it to where, you know, it's between six and 12 percent probably. And then you just begin to or continue paying on it monthly, but at a much lower interest rate. And then you can leave the IRA there and let it continue to grow.

Which option sounds like would be the best for you? Unfortunately, taking it out of the IRA because this is the only card I have. Yeah. OK.

Yes. I mean, the other option would just be open another account and you use that one only for budgeted items. But I hear what you're saying. So you certainly can do that. I just make sure that I mean, I'm glad to hear that it was a one time thing.

I mean, you know, this is something out of left field, I expect, and it's not a part of just you overspending on a regular basis. So that's good. So I would take enough to make sure that you have the money for the taxes.

And again, because you're over 59 and a half, you're not going to have that penalty. So that's a good thing as well. So I would say I can get on board with that if you would rather not do the credit counseling option. I hope that helps you. And if we can help you further along the way, let us know. Judy, God bless you.

To Brandon, Florida. Hi, Ron. Go ahead, sir. Good afternoon. Thank you so much for your ministry.

Thank you. I wanted to ask if we have a small church and we have approximately five hundred thousand that we would like to park somewhere to get a little bit better yield. Right now, it's in a savings account and it's not really growing at all. I mean, it's very little interest. So what kind of recommendations for moving that money? We're going to probably need some of it within about 14 months.

OK. Yeah, very good. Yeah, I would look, you know, I would stay in the the guaranteed category. So I'd be looking probably at a money market account with two different institutions. So you don't go above the two hundred fifty thousand dollars for the FDIC insurance. But, you know, you should be able to get north of four percent right now. You know, with this being money that was given to the church by church members for the purpose of either church operations or a building project.

I just and this is just my conviction. If I were on your finance committee, I would tell you, you know, there's no reason why we would ever want to invest that money. You know, I don't believe taking risk with that money is in line with the time horizon here or the objective for the donor. And so for that reason, I would stay only in those guaranteed categories, which is either high yield business savings or a money market account with FDIC insurance looking to get more than four percent, which is that's the good news is, you know, for the next year, probably or more, you're still going to be able to get a fairly attractive rate and you don't have to worry about it's time to build. And we pull up our investment portfolio and our our portfolio is down 15 percent.

And so, you know, all of a sudden we've lost, you know, fifty thousand dollars or something like that or seventy five thousand. So I think that's the direction that I would go, Ron, as you think about this. Thanks for your call. We'll be right back. Great to have you with us today on Faith and Finance Live. Hey, before we head back to the phone.

Just before the break, we were talking to Ron. He's a pastor of a small church and they're working on a building project. They've got about a half a million dollars that they have taken in from givers in the church and wondering what to do with it. He's not earning a whole lot on it right now. And what I was sharing with Ron is I wouldn't put that money at the risk of the market.

I don't think that meets the purpose for which it was given. I also think the time horizon of the next one to two years before needing that money aligns with taking any risk, even if they had the right time horizon. So what I would do is look at either a money market account or high yield savings.

One other option to look at, and this would be a great option, especially for a church, is our friends at Christian Community Credit Union has what they call a welcome CD. So this is for a new account with new money coming in specifically for churches and ministries. And that CD at seven months is five percent APY.

For 14 months, it would be at five and a quarter percent. So I think that would be a great option. Again, this is specifically for ministries putting new money in. And this is Christian Community Credit Union. Ron, I would check that out. I think this might be a great option at JoinChristianCommunity.com.

That's JoinChristianCommunity.com and just check out the welcome CD. All right. Let's head back to the phones to Indianapolis. We go. Hi, Denise. Go right ahead.

Hi. I retired in January and I have two 401Ks. Neither one were performing real well. And now that I'm not putting any money in either of them, I was willing to know what percentage you think would be good. I want to put some money in something that's more guaranteed interest versus less speculation.

I don't plan on taking anything but the minimum distributions when I when I do start taking. But I just don't know what percentage. There's different opinions about that. Yeah, it's a good question, Denise. So let me just ask a couple of questions. So you are fully retired and these 401Ks are still with your previous employers?

Actually, no one's in a private firm, a Christian firm, investment firm that handles 401Ks. The other ones with Fidelity. OK. I can still move them around if I need. Yes.

Sure. What's the total between the two of them, roughly? How much money are we talking? I'm thinking eighty five thousand. OK. And how much are they down? Were they at one hundred or more?

Yeah, they were about at one hundred and they're down to eighty five. Yeah. Yeah.

OK. Yeah. You know, I would probably I mean, certainly you're the steward and so you need to make this decision. And I can understand your desire to want to limit the downside, especially with the talk of a potential recession next year and a whole host of things. I guess the issue is, you know, we need to outpace inflation. And the question is, how do you take an appropriate amount of risk and yet still have the chance to have these perform well over time and give you an appropriate rate of return? It's a matter of it's always a tradeoff between risk and reward. How much risk are we willing to take for how much long term reward potential? And the more we get into the guaranteed products and limit the downside, the more we give up the upside potential.

There's always a tradeoff there. And at the end of the day, you just don't have peace of mind being in anything other than a guaranteed account. Then you could certainly look at, you know, putting this into a guaranteed fixed annuity or, you know, rolling it out to an IRA and putting it in CDs. Things like that that are going to be more guaranteed, where you're transferring the risk away from yourself in the market to an insurance company or, you know, a guaranteed product from a bank with the backing of the U.S. government. But I guess, Denise, given that you really don't need this money other than just the required minimums when that time comes, I guess, you know, my preference would be that you roll these out of those 401ks into one IRA.

And then you find an advisor, if you have one with this Christian firm, great. If you don't, maybe another one that can manage the whole thing, but do it in a way that is appropriate for your risk tolerance, age and objectives. And the idea there would be, you know, let's say you were 70. It doesn't sound like you're 70 today, but let's say you were, you know, we'd probably look at maybe having 40 percent in stocks and 60 percent in bonds. The bonds are going to be more stable as the interest rates come down starting next year.

The bonds will do well. The prices will go up, plus you have the yield and then the stock portion, again, not over six months or a year or two years, but over the next 10 or 20 or 30 years, which you're going to need if the Lord tarries and you're in good health. You know, you can have a nice growth component to that portfolio as well. And what that's going to do is ensure that you don't lock in these unrealized losses you have today, give you the potential to see it recover, but also give you the potential to grow it.

And as long as you're taking a long term perspective with this, you know, I think that's an appropriate way to think about this with an advisor that you feel good about that's giving, you know, active oversight and management to it. But like I say, if you're just not comfortable with that, then I'm not trying to talk you into anything. Then we can explore those guaranteed options.

But give me your thoughts. Well, I like the idea of the 40, 60, and I'm still willing to risk a little bit. So that that gives me more peace. I was thinking 50, 50.

So you're a lot closer than they were trying to sell me on 70, 30. And I was like, huh? Well, at the end of the day, you're the steward, Denise, this is your money. They're there to serve you and and you want to seek wise counsel. But at the end of the day, you need to feel comfortable that you're being the steward of of this money that God wants you to be. If you've got an advisor, again, great. If you don't, you could consider a certified kingdom advisor there in Indianapolis on our website, faithfi.com.

Just click find to see. But once you land on one, I'd I'd have that advisor roll those 401ks into one new IRA individual retirement account in your name. And then, you know, they can take over the management at that point. Thank you for your call today. All the best to you.

Let's stay in Indy. Talk to Martha. Go right ahead.

My name is Martha and I'd like to ask a question. I have a home and it's about seventy two thousand on it. And I have about ninety thousand in my savings.

Now, should I pay the house off? Okay. Yeah.

So let's let's talk about that. So you owe 70 and you have how much in savings? About ninety thousand. All right. And is that in like a savings account or in a retirement account? No, it's just in a regular savings. Okay, very good. Yeah, that's great. And then do you have retirement assets in addition to that, Martha, or just Social Security?

I just have Social Security and I have a government check, a couple of government checks for my husband. Okay, very good. But in terms of investable assets, all you have is the ninety thousand. So you would be down to twenty thousand total, correct? Right. Exactly.

Okay. Yeah, and what do you think your total bills are on a monthly basis, roughly? I guess they're close to maybe with the house payment. It's like close to two thousand something, two thousand five hundred, something like that. Yeah, and obviously it would be a good bit less than that if you paid off the house.

Right, exactly. Yeah, well, I like that because that would leave you twenty thousand and that would be, you know, obviously I like for you to have at least six months expenses. But let's say your bills dropped to fifteen hundred, you know, for the month, even if it was two thousand.

You know, at twenty thousand dollars, that'd give you ten months worth of expenses. And you're going to have more surplus on a monthly basis between the two government checks from your husband and your Social Security. So you'd be able to continue to build that up. Plus, you'd have the peace of mind to know that you own your home free and clear at that point.

So I like this option. If you feel good about it, Martha, I don't think you'll look back or ever regret it. And I think the numbers make sense in terms of the additional surplus you'll have on a monthly basis.

Plus, the fact that you'll have probably almost a year's worth of expenses in the bank as your emergency savings. So I'd say go for it. Hey, thanks for your call today. We appreciate it. Well, folks, we're going to take a quick break and then back with our final segment.

So stick around. We'll be right back. Hey, great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions here in our final segment today. Let's go right back to the phones to Chattanooga. Hi, Lisa.

How can I help? Who did you say? Lisa in Chattanooga. Lisa. OK. Yes, that's me.

OK, great. My question real quick is that my husband and I sat down with some people last night to discuss getting a roof put on the house. And they wanted twenty five thousand for it. Our houses were out of debt. Our houses paid for. Our cars are paid for. And we we had an emergency fund, but we used it to repair some cars.

So that kind of dwindled down to not much. But I can actually make payments on that roof for probably a couple thousand every month. So is it wiser to wait and save all the money I can and then maybe pay a take out a very small amount of money or go ahead and get. And I don't even know what kind of loan to get.

You know, I think you said before, don't do home equity loans because they put a lien on your house. So do something else. So that was the other part of the question.

If I did do it, what kind of loan would you recommend? I think I told you it was twenty five thousand. Yeah. Yeah. So I don't we're kind of confused. I'm torn out. I don't want to get in debt again.

I do not want to. Yeah. Well, that's a good feeling because that means, Lisa, if you have to take out a loan because this is something you can't wait on either now or in the future, you know, then you're going to have a lot of incentive to get it paid off as quick as you can. And that's a good thing.

So a couple of thoughts. Number one is that's a you know, that's an expensive roof. Now, I'm not saying roofs don't cost twenty five thousand replace.

They do. And prices are up all over the place, including construction and and certainly with what it takes to replace a roof. But I would just simply say, let's make sure you get at least three bids and get folks competing for your business. Just because when you're talking about a spend like this, you want to make sure that, you know, you are getting a fair price.

Now, obviously, you want somebody who's reputable, who's licensed, who has great reviews, hopefully, you know, who's personally recommended. But I think getting more than one bid for an expense like this is is very wise. Secondly, in terms of how you pay for it, I mean, obviously, if you can put this off, if it's not necessary, it's not going to cause any damage to the home by waiting. You know, you delaying this and just taking whatever you have that you'd be paying toward the debt and starting to set it aside in a in a savings account for this purpose would be great because that would do a couple of things. Number one is it would allow you to borrow as little as possible because you'd be saving.

And then secondly, you know, we're seeing some, you know, some improvements in construction costs. And then thirdly, you'd give it some time for interest rates to come down. Now, once you decide you can't wait anymore, I do think, at least in this environment, a home equity line of credit makes sense.

Why? Well, normally I don't like home equity lines of credit because they're a variable rate. But with rates up as high as they are now, that would actually work in your favor because as rates come down, that variable rate, which is usually prime plus something, you know, with prime right now at eight and a half percent, let's say prime plus one. You're at nine and a half percent. Well, as prime comes down, as the Fed funds rate drops, which it will probably starting the middle of next year, at least that's a good estimate, then that rate on that home equity line of credit would come down with the the rates that are being dropped by the Federal Reserve.

So that would be good. Yes, your home is collateral. And so you have to understand that.

Why would you do that? Well, it's just simply because if you try to go get a loan, a personal loan without any collateral, you're going to pay a lot more in interest. So instead of, you know, nine and a half percent today or nine, you might be paying twelve, fourteen, fifteen percent interest. And so even though you are putting your home up as collateral, it's a very small loan.

As long as you feel like you have high confidence that it fits in your budget, then, you know, that's going to be the the cheapest source of funds for you to access. Does all that make sense, though? All of it does. Yeah. And my struggle was, you know, I can hear Dave Ramsey saying, don't do it, don't do it.

And from his class that we took, he said, if you don't have the cash to pay for something, you don't get. But but what if, you know, what if damage does come to the house? Then you got a bigger problem that's going to cost more to fix in the end. Yeah.

Well, I mean, I would I would echo what you're saying about Dave. I mean, I would say if you don't have to do it, don't do it. And let's save and pay with cash. But when it comes to a roof, you may not have that choice.

Now, that's where getting, I think, a couple of maybe two, even three reputable, experienced, trusted roof roofing contractors in there to tell you, you know, can we do a small patch job on a portion of the roof that's damaged and wait it out? Do we even need to do that? Maybe it's fine the way it is.

You've got got any leaks. Well, maybe this is just more cosmetic or you just know it's nearing the end of its useful life, but you don't have any issues with it. Well, if that's the case, then wait. There's no reason to borrow when you don't have to. But if you've got, you know, a situation where it's letting water in or it's going to cause damage to the home, then you just don't have a choice because you waiting and not borrowing could result in tens of thousands of dollars in repairs because of damage with water. So you just have to be wise about it.

And that's why getting a couple of, you know, two to three contractors in there to help you make that decision, I think will be helpful. Okay. All right. Well, thank you for your time, sir. You're welcome, Lisa. Thanks for listening to the program and calling today. We appreciate it. Let's go to Cape Coral, Florida. Hi, Kate.

Go right ahead. Hi there. Hey, my husband and I, we've acquired some rental properties in Colorado and in Cape Coral, Florida. And at one point they used to be passive income, but now they are definitely active income and we're very busy. So we've considered selling them, but we shy back every time we look at capital gains. So we're wondering, is there any other options? Well, I mean, no.

Well, there there are. So let me just explain that the two options would be number one, if you wanted to continue to invest in real estate, you could do a 1031 exchange where you essentially kick the can down the road on capital gains by rolling it into another similar property. But it's sounding to me like you want to get out of the landlord business. And if that's the case, the only other way to get around capital gains would be to donate a portion or all of the property to, let's say, a donor advised fund and then, you know, do some giving out of it. If you were planning to do some giving anyway, you might as well give it before you sell it to a donor advised fund. And then that portion that you give away, you wouldn't have any capital gains on it. Apart from that, it's a it's an appreciated asset and you will pay capital gains. Now, the capital gains rates are very attractive right now.

You know, they're probably headed higher in the future, depending on what happens with the next presidential election in Congress. So right now, if you're married filing jointly, you know, the cap long term capital gains rate, meaning you've held the property for more than a year. If your income, not your gain, but your income is between eighty nine thousand a year and five hundred and fifty thousand, you'll have a 15 percent capital gain just on the gain, the profit. If you make less than eighty nine thousand two hundred fifty one dollars married filing jointly, the capital gains rate is zero. So, you know, rents are still fairly attractive right now.

But in terms of you exiting the real estate market and not rolling this forward into another property, you know, the only way you're going to miss that zero or 15 percent tax rate, or if you make over five hundred and fifty thousand, 20 percent capital gains tax rate is by giving it away. OK. All right. Well, thank you. Thank you.

OK. All right. You're welcome. We appreciate your call today. Thanks for being on the program.

Let's see. We're going to quickly go to Coral Springs, Florida. I know it well. Hi, Erica.

How can I help? Hi, good afternoon. Thank you for taking my call. I have a lease and it's up next month. And if I decided to buy it, I have to pay eighteen thousand on it. It has thirty six thousand miles. And I was wondering, is that a good investment? We're trying to have kids, me and my husband. And it's a Jeep.

You know, fair size. And then I just also don't want to have any more payments. I don't want to do the payments. I was just thinking about just paying it out. Right. What do you think?

Yeah, it's a good question. Do you expect to go over your allotted mileage for the lease, Erica? No.

OK. All right. So I think if you don't and you're not going to have any fees, then you just need to look at what is the true value of the car and whether or not you could do better elsewhere by just turning it in and then purchasing a car outright. The value of used cars has decreased this year. So you you know, you might be happy with the current residual value that you pay.

You might not be. And so I think you just need to find out exactly what is going to be the total cost out the door of you buying this outright with thirty six thousand miles or less versus what it would cost for you to go out and buy a similar car. Perhaps the exact make and model if you were happy with it and see whether that residual value is at market, above market or below market. Now, if it's anywhere close to market, the added benefit of you going ahead and buying it, as long as it's been a good car and it's been reliable, is you know that it's been taken care of because you've been driving it versus buying another car that's three years old where you can get it checked out by an independent mechanic. But you don't really have a good feel for how well did they take care of it? Did they change the oil?

Did they run it hard? You know, those kinds of things. And so I like the idea that you would have some, you know, that insight. But I also want to make sure that you're getting a good deal on it.

So I would check Edmunds and KVB dot com Kelly Blue Book, put in the condition, the make, the model and just find out how the private sale value of a used car on the open market compares to what the dealership is going to charge you. And then you could also use that as a source of negotiation. I hope that helps. Erica, thanks for being on the program today. We appreciate it. Well, folks, that's going to do it for us. Faith and Finance Live is a partnership between Moody Radio and Faith Fi. Thank you to Robert, Gabby T., Dan and Amy.

Couldn't do it without them. I'm Rob West. Hey, be sure to check out our website, faithfi.com slash impact. Have a great day. We'll see you tomorrow. Bye bye.
Whisper: medium.en / 2023-11-28 21:31:07 / 2023-11-28 21:48:23 / 17

Get The Truth Mobile App and Listen to your Favorite Station Anytime