April 4, 2025 • 42 mins
Our financial decisions, priorities, and fears don’t merely reflect our budgets—they expose the condition of our hearts. On today's Faith & Finance Live, Rob West will explain how our money issues are really heart issues. Then he’ll answer your questions on different financial topics.
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Episode Transcript
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S1 (00:08):
When Jesus said, where your treasure is, there your heart
will be. Also in Matthew 621, he wasn't just talking
about money. He was exposing something deeper about us all. Hi,
I'm Rob West. Our financial decisions, priorities and fears don't
merely reflect our budgets, they expose the condition of our hearts.
Today we'll discuss how our money issues are really heart issues.
(00:32):
And then it's on to your calls at 800, 500, 25, 7000.
That's 800, 500, 25, 7000. This is faith and finance.
Live biblical wisdom for your financial decisions. Many see money
as just a neutral tool to earn, spend, save or give.
(00:53):
But Scripture shows that money has far more power than
we realize. It can shape our desires, test our trust
and reveal what we truly worship. This is why financial
struggles whether greed, debt, anxiety, or even generosity, are ultimately
heart struggles. When we overspend to maintain a certain lifestyle,
is it because we find our identity and our possessions
(01:16):
when we obsess over financial security? Is it because we
trust our bank account more than we trust God? When
we hesitate to be generous, is it because we're driven
by fear, believing there won't be enough money acts as
a spiritual thermometer, revealing our faith and priorities? Jesus spoke
so often about wealth not to condemn it, but to
(01:37):
caution us against its deceptive power. He knew that money
has a unique way of drawing our hearts away from God.
One of the clearest biblical examples of money as a
heart issue is the story of the rich young ruler
in Mark ten. This man approached Jesus with great enthusiasm,
asking what he must do to inherit eternal life. Outwardly,
(01:57):
he had claimed to have kept all of the commandments,
but Jesus saw his heart. Go sell everything you have
and give to the poor, and you will have treasure
in heaven. Then come, follow me. The young man walked
away in sorrow because his wealth owned his heart. He
wanted eternal life, but not at the cost of his riches.
His struggle wasn't financial. It was a matter of worship
(02:20):
revealing which God he had chosen to serve. John Calvin
once wrote, the human heart is an idol factory. We
all have things we cling to, believing they will provide life,
security or happiness. The rich young ruler story forces us
to ask what would make us walk away from Jesus?
If money is that thing, then our money isn't just
(02:41):
a resource, it's a rival to God. For some, the
battle isn't greed, but fear. Many of Jesus teachings on
money are directed at those who worry about having enough.
In Matthew 625 through 34, he tells his followers not
to be anxious about food, drink or clothing, reminding them
that God cares for the birds and the flowers and
(03:03):
he will certainly provide for his children. Worrying about money
isn't just a financial issue, it's a matter of trust.
When we believe our well-being depends entirely on our ability
to earn, save or invest, we carry a weight we
were never meant to bear. Jesus calls us to trust
God's provision and seek his kingdom first. This doesn't mean
(03:25):
we shouldn't budget or plan wisely, but it does mean
that financial anxiety often reveals a deeper struggle with trusting God.
If money is a heart issue, then generosity or the
lack of it reveals what's inside. The early church in
acts was marked by radical generosity, with believers selling possessions
(03:46):
to meet each other's needs. Why? Because their hearts had
been transformed by the gospel. C.S. Lewis wrote, every faculty
you have is given to you by God. If you
devoted every moment of your whole life exclusively to his service,
you could not give him anything that was not, in
a sense, his own already. You see, true generosity flows
(04:08):
not from obligation, but from a heart that recognizes everything
belongs to God. Do we see money as ours to
control or as God's to steward? Do we give joyfully
or do we resent it? Our attitudes toward generosity reflect
what we truly believe about God's provision. Since money issues
are hard issues, the solution isn't just financial literacy. As
(04:31):
important as that is, it's heart transformation. If we want
our hearts to align with God's when it comes to money,
here are a few truths to remember. Recognize that money
is a test of trust. Do we truly believe God
will provide? Practice gratitude. Discontentment fuels financial anxiety while gratitude
(04:51):
shifts our focus to what God has already provided. Give generously.
The act of giving loosens money's grip on our hearts
and reorients our trust toward God. And seek first the kingdom.
When we prioritize God's purposes over financial gain, we experience
the peace. Money can never provide. In the end, how
(05:13):
we handle money reveals what we treasure most. All right,
your calls are next. 800 525 7000. We'll be right back.
S2 (05:33):
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.
S1 (05:57):
Great to have you with us today on Faith and
finance live, I'm Rob West. Looking forward to taking your
calls and questions today. We've got lines open. The number
to call is 800 525 7000. Again that's 800 525 7000.
You can call with your questions at any point. But
right now is a great time because we do have
some lines open. And we're ready for you today. Again
(06:19):
that number 800 525 7000. Coming up a little later
in our broadcast today, we'll look forward to being joined
by Jerry Boyer. Obviously a lot to talk about with
the pressure in the markets today. If you haven't seen uh,
the where the big boards closed the Dow Jones off
2200 points, that's 5.5% lower today, the S&P 500 down
(06:44):
nearly 6% also on the Nasdaq as well. This comes
on the heels of really rough trading day yesterday with
a significant downward move. Today, new fears sparked related to
a possible global trade war. That came on the heels
of the retaliatory tariffs put in place by China overnight. 34%
(07:10):
on all goods imported into the US. The market still
processing the impact on our US economy, as well as
the world's economy, and where we go from here with
these tariffs. They were made known at least more clarity
as President Trump introduced what he called Liberation Day, where
we put reciprocal tariffs in place two days ago. And
(07:32):
the market has been processing that ever since. And we
can see the impact has been a significant downward move. Now,
we do need to put that into context of where
we've come from. I mean, we're back to levels we
saw only last year. And when we look at how
the market has done over the last 2 or 5 years,
we're still up dramatically. Nevertheless, we have taken a huge
(07:54):
step back. Many thought the market was already overvalued. The
question is, ultimately, where do we go from here? Are
these a negotiating tactic? Are these tariffs here to stay.
And we're kind of rewriting and repositioning not only the
US but the global economy. And we're adjusting to that.
What's going to happen over the weekend. No one knows.
And so we'll continue to process that. We'll of course
(08:16):
get Jerry's take on that a little later in our broadcast.
I think the key is to recognize where we started today,
that money issues are hard issues. Ultimately, we need to
see God as our ultimate treasure. He is our provider.
Recognize that we, the way we handle money, is one
of the most tangible evidences of where we've placed our
trust and what we value. As Ron Blue has taught
(08:40):
for many years, money is a tool. It's a test.
It's also a testimony. It's one of those expressions on
how we handle money as an evidence of our heart condition,
our heart posture, and also an understanding that God is
our provider when it comes to investing. Well, the best
approach is a long term perspective. Steady plodding is what
(09:02):
the Bible talks about. And so we should be investors.
And investing involves with regard to the stock market owning
real companies with real sales and earnings. Um, and so
that's really our perspective. It's not gambling. But we do
realize that, uh, you know, these ebbs and flows and
even significant corrections like we're seeing right now are a
(09:24):
part of investing. And that's why we we take a
long term perspective. We're not short term in nature when
it comes to how we view, uh, market investing. But, uh,
these days can be, uh, disconcerting. And so I think
it's important to be reminded of good, solid money management
principles And to be rooted in biblical truth. Well, we
(09:46):
want to take your questions today. I know there's things
on your mind, and so let's talk about them. When
you call 805 two, five 7000. We're going to begin
in Minneapolis today. Hi, Lynn. Go right ahead.
S3 (09:57):
Hi. Um, I heard you talk earlier about some ways
to save on taxes, um, for 2024. And one of
them was a traditional IRA. Um, it I just want
to clarify that I heard correctly, um, that we can
(10:18):
pay in before April 15th a lump sum to a
traditional IRA in order to save on having to pay
in on taxes for 2024.
S1 (10:28):
That is true. Uh, it's really April 15th, or whenever
you file your tax return for 2024, whichever comes first. Now, uh,
if you filed an amended return, perhaps you could, uh,
you know, go ahead and take advantage of that. But
let me just ask, have you already filed your taxes
for last year?
S3 (10:48):
I'm currently in the process, but I know I'm going
to have to owe in.
S1 (10:51):
Okay. Got it. Yeah. So as long as we're before
April 15th and you haven't filed your taxes yet. Absolutely.
If you're under age 50, the maximum IRA contribution for
2024 would be $7,000. If you're 50 or older, it
jumps up to 8000. So yeah, if you put into
that traditional IRA and you either have earned income yourself
(11:12):
up to that amount or you're a spouse of somebody
who does, then you'd be able to make that contribution
and that would exclude that amount that you make the
contribution to the IRA from your taxes for the tax
year 2024, which could be a savings and allow you
to get more, uh, you know, that could be invested.
S3 (11:34):
Okay. Is there a certain amount or how do we
figure out what amount?
S1 (11:38):
Well, in terms of how to how much to put
in based on the tax liability you have.
S3 (11:45):
Yeah.
S1 (11:46):
Yeah. Uh, you know, I mean, the amount that you
put in, it's not a tax credit, it's a tax deduction.
So essentially whatever amount you put in up to either
7000 or 8000 would be excluded from your taxable income.
So if you made 50,000 and you put in 7000,
you're going to pay taxes for 2024 on 43 instead
(12:08):
of 50,000. Um, and so whatever your marginal tax rate
is would be essentially the tax savings that you would have. So,
you know, let's say you're paying 22%. Well, 22% of
7000 is $1,694. So you'd have a tax bill that
would essentially be $1,694 less than, you know, you would
(12:30):
have if you were, uh, paying taxes, uh, on the
full amount. Actually, uh, it was 7,022%, 1540, 540. But essentially,
that's what how it would work. It's going to have
to do with what tax rate are you paying based
on your total income? And then by removing that amount
of the contribution from that total tax, you're you're paying
(12:53):
tax on, you know, it's it's equivalent to the tax
rate if that makes sense.
S3 (12:59):
Okay. So I take the 22% I'm over over 50.
So I'm 63. Okay. And I'm in the 22% tax bracket.
So I take 22% of the 8000. And I well, so.
S1 (13:13):
That I mean that would give you an idea. No.
So the way you would want to do it, do
you file your own tax return. Correct.
S3 (13:20):
No I'm having somebody do it.
S1 (13:22):
Okay. So you would just want to let that person
know that I've made a contribution to a traditional IRA
for tax year 2024, in the amount of in your case,
you could go all the way up to $8,000 and
then that person would be able to include that on
the 1040 that IRA contribution, which would essentially, uh, reduce
(13:44):
the amount of taxable income that you have for tax
year 2024 by the amount of the contribution. And your
tax savings would be equal to whatever your marginal rate is.
So they'll tell you ultimately what you owe, uh, and
whether you're getting a refund because you've already paid in
more than you owe, or whether you still have an
amount that you need to write a check for. But
(14:06):
as long as you make that, uh, IRA contribution, whatever that, uh,
taxable amount is, is going to be based on up
to $8,000 of less taxable income for the year. But
your tax preparer will ultimately need to tell you what
that total bill is. Stay on the line. We'll finish
up off the air. We'll be right back. Great to have.
S4 (14:32):
You with us today on Faith and finance. live.
S1 (14:35):
The market under a lot of pressure today. The Dow
Jones off 2200 points. Uh on the heels of, uh,
President Trump's tariffs that were announced just two days ago.
Jerry Bowyer will stop by on our last segment today.
We'll get his take on the implications of this. Where
might the market be headed for here? What does it
mean for our economy, and what should you be thinking
(14:56):
about as a long term investor of stocks and bonds?
In the meantime, though, we're taking your calls and questions.
We've got some lines open today. We'd love to hear
from you. Whatever's on your mind. 800 525 7000. Let's
go to Cleveland. Hi, Barry. Go ahead.
S5 (15:13):
Rob, how are you?
S1 (15:15):
Great. Thanks for calling.
S5 (15:17):
Okay, I'm calling about long term insurance. Okay. Um, yeah.
My wife and I took out a policy, uh, way
back in 1999. January, uh, corporation or whatever they were
We're calling and the timing was reasonable. We were paying
about $1500 to $2000 a year. And, uh, history showed that, uh,
(15:44):
they haven't they haven't had any increases in premiums for,
for many years. But now in the meantime, the premiums
keep going up and up and up. Last year it
was 6000 and some. And this year is 11,000. Now
we're wondering really is worth continuing to keep it because
(16:09):
we have gotten to the point now where we're about
to be able to use it. My I'm 83.5 and
my wife is 81.5. So we're getting close to being
able to use it. But the company is pressuring, uh,
policyholders and want them to sell because. we have a
(16:33):
clause in there whereby if one of us dies, the
other one will not have to pay any more premiums.
The rest of the. The rest of their life and
so on. So it's getting costly. But yeah, now I'm
trying to figure out whether you know what we should do.
S1 (16:51):
Yeah, yeah. No, I appreciate that. And obviously that's a
dramatic increase. So do I understand that it's now $11,000
a year in premiums? Is that right?
S5 (17:01):
Yes it is.
S1 (17:03):
Yeah. Wow. That's significant. Um, you know, here's the reality
is ultimately, this is going to come down to your
ability to continue, you know, to afford this. Um, so
talk to me about that piece of it. I mean,
I realize it's a lot of money, and you have
to decide. Is it is it worth it for me
to continue paying, although you've been paying it a long
(17:23):
time and, you know, now you're getting to those years
where it's, you know, the likelihood of you actually collecting
on this policy and policy being paid back for all
the money you put in is much greater than ever.
Just as you age. Um, so I'd be, you know,
really hesitant to just drop it at this point in
your 80s. At the same time, if it's creating a
(17:43):
financial strain on you, you know, what you may need
to do is, is consider even before dropping it. Do
we need to dial back some of the benefits just
to make it more affordable? Um, but how comfortably are
you able to afford the premium at these levels?
S5 (18:00):
Uh, right now we can, uh, but the thing the
thing about it is this. Okay. We share it. Both
my wife and I share it. If if one of
us used it alone, we can use it for four years. If.
If not, we can split it one half, two years,
the other one half, the other two years, and so forth. Um,
(18:24):
they have proposal each year now when they renew the policy, I,
you know, they they have propositions on how you can
reduce it and so forth and so forth. I wanted
to choose one of them, but then they have a proforma, uh,
policy that they show you. And there are a few
variations of wording in there that we are not comfortable
(18:47):
with because we think if we go ahead and take that, uh,
we'll lose the protection of one of if one dies,
the other one doesn't have to pay any more. That's
the that's the thing we're trying to protect. And I'm
not certain that if the proforma still has that in
(19:08):
there because the wording is. Go ahead.
S1 (19:12):
Yeah. No, no, that's really helpful. And you know, the
clause that you're talking about really is a game changer.
And most joint policies, which is what you likely have
just based in your description, do in fact drop the
premiums after the first death, you know, while covering the
survivor's care. So that's a big incentive to hang on,
especially in your 80s when the the odds of needing care,
(19:35):
you know, think nursing home or in-home help shoot up
a year in a nursing home could run you 90
to 100,000 a year or more. And if one of
you needs it, even for a couple of years, then
the policy could pay for itself and then some. And
to your point, it sounds like you could have up
to four years of this policy paying out, which could,
you know, run $400,000. Um, and so, you know, it
(19:59):
really is all going to come down to your daily benefit,
but let's say it's $200 a day for four years. Uh,
you know, that's that's a good, you know, bit of money. Um,
you know, that's going to be, uh, $73,000 a year
times four. I mean, that's almost 300 grand. Um, and,
you know, double that if you both use it compared
(20:20):
to the premiums you'd pay before one of you passes away. So,
you know, ultimately, it comes down to just your health status. And,
you know, ultimately whether or not you can afford this,
but to the extent it gives you peace of mind
knowing that you've got it. And, um, and then again,
we've got this clause that kicks in, um, you know,
if one of you were to pass away, uh, you know,
(20:42):
it can be, I think, a real benefit to hanging
on with this thing, especially if we don't see continued
dramatic increases. But we won't know that until we, you know,
each year, you know, you'll find that out. Um, so
I would be inclined to say, at least for right now,
hang on to it. Perhaps what you could do would
be to connect with an advisor who could evaluate this
(21:03):
for you in light of your overall financial condition, and
even run some pro formas for you, just to see
how would this and any other increases impact your cash
flow into the future? Because if you can hang on
to it, you know, I think you'll be glad you did.
But you know the extent to which it becomes a
real financial burden. You know, that could be problematic. And
(21:25):
it may mean that you need to start looking at
ways to cut the premium, which means starting to drop
some of the benefits. Um, let's do this. I've got
to take a quick break. Um, why don't you and
I finish up off the air? What I'd like to
know is whether you have an advisor. And if so, uh,
I really like this person to get in that conversation.
If not, I can recommend you connect with a, uh. Barry,
(21:48):
stay right there. We'll talk a bit more off the air.
We'll be right back. Great to have you with us
today on Faith and Finance live. I'm Rob West. We're
here on Moody Radio helping you live out of a
biblical worldview. And as it relates to this program in
(22:10):
the area of money management, if you have a question today,
you can call right now 800 525 7000. Let's go
back to the phones. Cleveland Heights, Ohio is where we're
going next. Santina, how can I help?
S6 (22:23):
Hi. Um, I was calling because recently I received, um,
a pretty large amount of money from, um, a dear
loved one who passed away in January. And, um, I
do have an appointment with with my bank to set up, um,
(22:43):
a CD account. And I know that I'm going to tithe,
and I know I'm going to have to pay taxes
on the amount. I just wanted to know, like, what
other type of investments I can make with the money.
I just really just want to make sure that I'm
doing the right thing.
S1 (23:00):
Yeah, yeah. Very good. Uh, I can certainly appreciate that.
And I love the fact that, you know, with this
unexpected amount, that's a significant sum of money. You're really
taking a step back just to say. How do I
be wise with this? How do I hang on to it,
but also put it to work and that's that's the
right approach. Let me just ask a couple of questions. Um,
do you have any consumer debt? High interest debt?
S6 (23:23):
Uh, well I do. I have one credit card that
was on my mind. I've been paying on it. I say, oh,
it would be nice to to get rid of that. Um, yes.
S1 (23:40):
And and what's the amount that you owe on that?
S6 (23:43):
Oh, the amount on that. I'm just going to tell
you it's over 3000.
S7 (23:48):
It's over. All right. Yeah.
S6 (23:50):
Yeah. So we've been making I've been making some significant
progress on that. Um, and I know that my husband,
he takes care of a lot of the other things
that we have, um, debt on. We we don't have
a car note anymore. He pays our mortgage for our home. Um,
(24:10):
he has no no credit card debt or anything like that. Um,
so that's pretty much. And then we have a child.
Two children in college. One's graduating next month. One is.
This is just her first year, and we have two
in high school.
S7 (24:26):
Okay.
S6 (24:26):
So that's kind of where we are right now with that.
S1 (24:31):
Got it. And, uh, are you adding to that credit
card debt or is this just kind of lingering and
hanging around a little bit longer than you wanted?
S6 (24:39):
You know, every now and then, to be honest, I
will contribute to it every now and then. And I
try my best to pay it off even with a
little bit more. Um, because I really just, I don't
I don't want that deal anymore. But it's nice to
have for, like, travel or for unexpected expenses or whatever. But, um,
other than that. Yeah. Every now and then, I'll. I'll
(25:02):
put something on it. Yeah.
S7 (25:04):
Got it. Yep.
S1 (25:05):
Okay. So I think that's kind of opportunity number one.
Now here's the only risk there is. It makes all
the sense in the world just to go ahead and
wipe that out. Because, you know, you're going to get
a guaranteed rate of return equal to the interest rate
on that card. And that's probably 20 to 22, maybe
more percent. And so that's a no brainer. The only
(25:26):
risk is that as soon as you do that, you're like, oh,
you take a deep breath and then you get a
little bit more lax in, you know, your budgeting. And
then all of a sudden the debt comes back. So
I want to make sure you kind of put the
pieces in place to live within your means. So, you know,
this debt doesn't creep back up when the pressure comes off.
But there's no doubt that that's going to be a
(25:47):
great use of that money because you're spending, you know,
a lot of money in interest. And I'd, I'd rather
you eliminate that 22% if that's what it is, versus,
you know, trying to get 5 or 6 or 8%
in a CD or the stock market or, or something
like that. Um, secondly would be an emergency fund. Do
you have one between you and your husband?
S6 (26:09):
We do. We do. Um, we have two, actually. One
has over a thousand and the other has over 400.
S7 (26:17):
Okay.
S1 (26:18):
All right. Good. So the key there would be, if
you've listened to the program, you've heard me say, you know,
this rule of thumb of having 3 to 6 months
worth of expenses in your emergency fund for the unexpected.
So you just take your not your income, but your
total spending for the month. Let's say it's I'm just
going to make up a number. Let's say it's 4000
a month. So then you'd, you know, you'd take 4000
(26:39):
times three. That's 12,000 all the way up as much
as 24,000. So you'd want between 12 and 24,000 if
your expenses were 4000 a month in emergency savings. And
you'd have to plug in your real number. So, you know,
that could take up a good portion of this. And
for that, I would put it into a high yield
savings account. You could do that with our friends at
(27:00):
Christian Community Credit Union. Just go to join Christian community.com.
Or you could go to one of the online banks
that you find at Bankrate.com. But in either case, you know,
I would keep that liquid and safe. Earning some interest
not in your checking account in a savings account that's
linked to your checking, but it's there for the unexpected.
If you have a job loss or a major medical
(27:23):
expense or something unforeseen in your financial life that would
allow you to tap into that without having to put
that on a credit card. Now, if you pay off
the the credit cards and you shore up your emergency
fund with a full 3 to 6 months expenses and
you have anything left. Well that's great. We could talk
about investing it. The first option is to get it.
(27:45):
If you're investing it into a tax deferred environment, uh,
are you or your husband or both of you contributing
to a retirement plan at work?
S6 (27:55):
So my husband is.
S7 (27:57):
Okay.
S1 (27:58):
And do you know what percent of his income is
going into that?
S6 (28:02):
Um, I'm not for certain, I don't know.
S7 (28:04):
Yeah.
S1 (28:05):
So the goal there would be 10 to 15% going
into retirement. Um, but another option would be with this money.
You know, maybe you open an IRA, an individual retirement account,
make a contribution to that. You could get it invested
to grow it for the future. And if you did
it into a traditional IRA and you could put in
up to 7000 if you're under 50 or 8000 if
(28:27):
you're over 50, um, you know, that would be excluded
from your taxable income. Let's say you made the contribution
for 2025 because you've already filed your 24 tax return.
Then when you go to file your 25 return next year,
you would have you'd pay taxes on, you know, whatever
the amount of the contribution was, let's say it was 7000.
(28:47):
You'd pay tax on 7000 less and you could invest that, which,
by the way, now is probably a great time to
invest if you're a long term investor because the market's down,
you know, 3500 points in the last uh, two days. So,
you know, we're down 10% plus, uh, on the Dow Jones,
which just means probably a pretty good time to buy,
(29:09):
so I think that that would be a great option. Uh, Santina,
in my kind of recommended approach, there would be pay
off the credit card debt, but at the same time,
really lean into your spending plan and make sure you're
living within your means. Shore up your emergency fund in
a high yield savings account, separate from your checking, equal
to 3 to 6 months expenses, and then with the rest,
(29:32):
make a contribution to one or even two. One in
your name for sure, but maybe your husband as well.
Into two IRAs with the balance. Get the tax deduction
next year and get it invested, especially while the market's down.
S6 (29:47):
Okay okay okay. That that's that sounds good. That sounds good.
Thank you so much for all your help.
S1 (29:54):
You're welcome. Listen, if you or he have questions along
the way don't hesitate to reach out.
S7 (29:58):
We appreciate your call today. Oh.
S6 (30:01):
Thank you. We sure will. Thank you.
S1 (30:03):
All right. God bless you. Well, uh, we're going to
take a quick break when we come back, Jerry Boyer
will stop by. We'll get his take on the markets. Plus,
Susie has been waiting patiently in Cleveland. Her? Excuse me.
Her son, who's 18, is headed to Scotland on a
mission trip. She's wondering how's the best way to protect
him if he needs access to cash. What about a
(30:23):
debit card? What if he loses it, I get that.
What then? We'll talk about that just around the corner
as well. This is Faith and finance live here on
Moody Radio, helping you see God as your ultimate treasure
and integrate faith and financial decisions for God's glory. We're
so glad you're along with us today. We're going to
take a quick break and then back with much more
(30:44):
after this. Stay with us. Thanks for joining us today
on Faith and Finance Live here on Moody Radio. We'll
be talking to Jerry Boyer here in just a moment
about the market's big sell off today. The Dow Jones
(31:05):
down 2200 points. That's 5.5%. The Nasdaq off nearly 6%.
This is day two of the big sell off following
the announcement in the Rose garden on the second just
two days ago regarding the reciprocal tariffs. The market really
continuing to sell off as we got word overnight last
(31:27):
night about China's retaliatory tariffs of 34% on all US
goods imported from the US. Still, big questions remain about
how long this is going to be in place and
what impact it will have here at home and around
the globe. We'll get Jerry's take on that here in
just a moment. But first, let's go to Cleveland, Ohio. Hi, Susie.
I know you've been waiting patiently. Go right ahead.
S8 (31:50):
Can you hear me?
S7 (31:50):
I sure can.
S8 (31:52):
Okay. Hello there. Thank you for taking my call. Um,
my husband and I are sending our son off to
Scotland for, um, a missions trip for five weeks, and
we are just. We are personally out of debt. Credit
card debt and want to help our children be out
of it too and never have it. And so I'm
hesitant to get a credit card, but I'm we're trying
(32:14):
to figure out the best way to send him off
and have him have money, reliable and safe and all
that kind of stuff. So I thought we'd call and
see what what what thoughts you guys had.
S1 (32:25):
Yeah. Well, uh. Well done. I'm delighted to hear he's
going on a mission trip. That's great. Is this with
your local church?
S8 (32:32):
It is? Yes. Well, it's just him, but it's with
a family that we support at our local church. Yes.
S7 (32:38):
Yeah. Okay.
S1 (32:39):
Excellent. That's great. Um, yeah. So I think, I mean,
a couple of options here. One is, you know, just
help educate him on some of the best practices with
regard to how he safeguards, safeguards, whatever he has, whether
that's a debit card or cash, you know, just kind
of keeping it on his person. Maybe, you know, it's
in a travel pouch or something. He has, you know, accessible.
(33:02):
but but also safe rather than a, you know, a
wallet or a phone in a back. Pocket that could
be compromised. Uh, you know, I think with regard to
a debit card. That could be a great option. Uh,
you know, we've had, uh, as far as a debit
card goes. The the Capital One money card for our kids. Um,
it's the teen money account, and, um. You know, it
(33:25):
has no fees. It has no minimums. It has a great, uh,
smartphone app that both you as the parent and the child,
although he's 18, so he's an adult now, but you
can both have access to it. Uh, very easy through
the app. If he were to lose it, uh, at
any point with the touch of a button to essentially
turn it off so it can't be accessed any longer. Uh,
(33:47):
you know, the nice thing is that that will have the, uh,
the tap to pay feature, which provides some additional safeguards
because the the contactless payment protects against what are called
skimmers because it sidesteps the physical vulnerabilities that these fraudsters exploit. So,
you know, when you're putting it into the reader, whether
(34:08):
it's a magnetic stripe or the chip, but you're inserting it,
you know, they can use something called NFC to kind
of skim that information. But the the no physical contact
makes it more difficult. So it adds through the technology
a layer of protection there. Um, so I would say,
you know, equipping him with some best practices, uh, you know,
(34:32):
some cash that, you know, preferably you get exchanged into
the local currency before he goes, maybe at your local bank,
they might need to order it. So give them time.
And then with a debit card where he knows that
he or you can turn it off, you can also
add more money to it, uh, if you need to
with the contactless payment options will probably, you know, give
(34:54):
him everything he needs.
S8 (34:56):
Okay. Wonderful. We really appreciate you. Thank you so much.
S1 (35:00):
Absolutely. Listen, tell them. Have a great trip, Susie. And
thanks for your call today. May God bless you.
S8 (35:05):
Thanks so much.
S1 (35:06):
Absolutely. Well, Jerry Boyer's here, and it's a great day
for Jerry. I know you've been on the road. I
appreciate you taking some time away to to check in
with us. Obviously the Dow Jones finishing at the lows
of the session off 5.5%, 2200 points. And that's on
top of uh of yesterday. Boy a lot to talk
about here, including the US Treasury, which perhaps that's the
(35:29):
the bright spot is the ten year is now below 4%.
But just kind of give us a high level read
on all this.
S9 (35:35):
Yeah. Well I wouldn't even consider that one a bright
spot either because, you know, generally, you know, falling interest
rates are a sign of slowing economic growth, not rising
economic growth. I know people think you want interest rates
low so you can borrow cheap. Uh, but that's not
what this is reflecting. What this is reflecting is that
people are selling stocks and buying bonds, and people sell
(35:56):
stocks and buy bonds when they're scared. Bonds are a
recession hedge. Stocks are a bet on future growth. So
markets are betting that future growth is going to be bad.
So they're dumping stocks especially tech stocks which is the
most growth oriented. And they're buying the safest thing which
is treasury bonds. And they're buying even more of the
super safest thing which is inflation protected Treasury bonds. Uh,
(36:19):
so that's the no default. And also they're going to
pay you back for any inflationary loss. So that is
an extreme anti risk trade. That is we're afraid of
two things at the same time. We're afraid of a
recession which at this point is looking more likely than not.
Especially if the president goes ahead with this plan. The
recession is pretty much baked into the cake. Um, so
they're afraid of recession, but they're also afraid. Afraid of inflation.
(36:42):
That's stagflation. That's two bad things. So, look, I don't
get political here. Um. I'm just. I'll call them as
I see them. Uh, this is not good leadership. If
we're coming from a Democrat, I'd say it's not good
leadership when it's coming from a Republican. I'm going to
say it's not good leadership and good leadership listens to feedback.
There is no more powerful feedback mechanism in the world
(37:05):
when it comes to economic policy than market reaction to it.
And this isn't some little dip. Something happened for 15
minutes or a day or two. This is a bear
market in the Nasdaq. So this is serious negative feedback.
And of course what I'm looking for the scariest negative
feedback is gold prices because that's the bet of some
serious inflation or default or a crisis. Gold's over $3,100
(37:27):
an ounce. Gold has been a very good performer. Stocks
have been a bad performer. That means that the markets
are afraid. Now, maybe the president knows something that the
other couple billion of us who are in the market
don't know. But I tend to think that the market,
which is all of us registering a vote, knows more
than any particular expert, even the president of the United States.
S1 (37:48):
Yeah, yeah. That's helpful. Jerry. We'll talk about what our
listeners need to take away from this as long term investors,
you know, in US markets. But the most recent comments
from the president came at around 330 this afternoon. Maybe
there's been something since then, but his post on Truth
Social was just very simply only the weak will fail,
(38:09):
end quote. And, you know, I guess a lot of
people are wondering, are we going to get some news
over the weekend that, you know, there's been some negotiations
and perhaps some of these, you know, are not going
to play out. It sounds like, if anything, he's doubling down.
S9 (38:24):
Yeah. And with a little social Darwinism thrown in there too.
Only the weak will fail. Um, you know, I mean,
first of all, that's not true. People can make perfectly
good decisions as a business and then get hit with this,
you know, bad policy. So, I mean, if there's going
to be a lot of failure if the president, uh,
embraces a policy at a highly aggressive level, which the
(38:47):
consensus of a few hundred years is that it's a
bad policy, protectionism And then a bunch of businesses fail.
Who's weak? Them or the president's economic policy team? I
would say that if you get a lot of business failures,
don't blame the business. Blame the person who's taxing them.
When you tax a lot of businesses, you know it
(39:07):
tends to be bad for them. Republicans used to understand that.
S1 (39:10):
Yeah, yeah. Now, Jerry, you know, this is all done.
You know, if you listen to what he said in
the Rose garden two days ago in trying to, among
other things, level the playing field because it does make
sense that if others have been either taking advantage of
us or imposing massive tariffs on us for a long time,
and we've just kind of been taking it on the
(39:32):
chin a bit as the largest, largest economy in the world,
that this is kind of a reset of sorts. Help
us understand that line of thinking.
S9 (39:41):
Yeah, well, a couple of things. One, if they do
something stupid, I don't see why us doing something stupid
is the right response. I'm hearing a strange argument, uh, from, uh,
from the president and Scott, who's a treasury secretary on
Tucker yesterday. Well, if tariffs are so bad, why are
other countries doing it? Well, maybe they're stupid. I mean,
America doesn't imitate other countries. We historically have had a
(40:04):
free trade country and we have a high standard of
living for that. If other countries are poorer and they
have high tariffs, maybe the tariffs are one of the
reasons that they're poor. There's a pretty strong correlation between
tariff high tariff countries and poverty. So I don't understand
why them why them hurting their economy is a good
argument for us hurting our economy. The other thing is,
(40:26):
I know I'm being tough on the president, who, by
the way, I've been generally quite supportive of these numbers
about the alleged tariff rates. You know, 57% or 90%
from Madagascar. This this math is completely squirrely. Those are
not tariff rates. They've gone through some kind of torturous
ratio of trade deficit to, you know, to trade surplus.
That's not a tariff rate. Some of these countries have
(40:48):
tariff rates of half a percent on us. That's the
actual statutory rate. And they've tortured the math to make
it seem like they're tariffing us at 50%, and we're
hardly tariffing them at all. Basically, we tax them about
as much as they tax us when it comes to
our major trading partners. Now, you do have high tariff
rates in third world countries that are very poor. And
(41:08):
I would say I don't want to imitate them. Um,
we have 300 years of of consensus on this. I mean,
it's partly how America was founded. Yes. Alexander Hamilton wanted
more tariffs, but largely we revolted against the British Empire
because they tried to they tried to manage trade this way,
and we saw it as contrary to our interests. So
we know this already. I mean, we saw it in 1929.
(41:31):
You know, the Smoot-Hawley tariffs, a whole bunch of tariffs
on one day, the day they cleared the key committee.
That's Black Monday when the stock market collapsed. So we've
run this experiment before. And you know, I want Donald
Trump to be Ronald Reagan. I don't want him to
be Herbert Hoover. A lot of what he's been is
Ronald Reagan. But this is Herbert Hoover stuff.
S1 (41:50):
Yeah. Jerry, let's finish and then we'll let you go.
And we're about out of time here as well. Let's
finish with what should our listeners take away if they're
long the market and their IRA, their 401 K their
invested in real companies with sales and earnings here in
the US. How should they think about their investments as
they're turning on the news tonight.
S9 (42:09):
Yeah. Ignore it. I mean absolutely ignore these fluctuations but
don't get worried about it. Just just stay in the market.
Trust God.
S1 (42:16):
There you go. All right, Jerry, I know we'll continue
talking about this. Safe travels, my friend. Thanks for taking
some time for us.
S10 (42:23):
God bless.
S1 (42:24):
All right. That's Jerry Bowyer. He's our resident economist. Joins
us each Friday, uh, with his market commentary. Bob Dole
will be here on Monday. We'll continue to, uh, unpack
and analyze everything that's going on. But as Jerry said,
God's on the throne. He's our provider. We can trust him.
Make him your ultimate treasure. Money's a tool to accomplish
his purposes. We'll see you next time. Bye bye.
When Jesus said, where your treasure is, there your heart
will be. Also in Matthew 621, he wasn't just talking
about money. He was exposing something deeper about us all. Hi,
I'm Rob West. Our financial decisions, priorities and fears don't
merely reflect our budgets, they expose the condition of our hearts.
Today we'll discuss how our money issues are really heart issues.
(00:32):
And then it's on to your calls at 800, 500, 25, 7000.
That's 800, 500, 25, 7000. This is faith and finance.
Live biblical wisdom for your financial decisions. Many see money
as just a neutral tool to earn, spend, save or give.
(00:53):
But Scripture shows that money has far more power than
we realize. It can shape our desires, test our trust
and reveal what we truly worship. This is why financial
struggles whether greed, debt, anxiety, or even generosity, are ultimately
heart struggles. When we overspend to maintain a certain lifestyle,
is it because we find our identity and our possessions
(01:16):
when we obsess over financial security? Is it because we
trust our bank account more than we trust God? When
we hesitate to be generous, is it because we're driven
by fear, believing there won't be enough money acts as
a spiritual thermometer, revealing our faith and priorities? Jesus spoke
so often about wealth not to condemn it, but to
(01:37):
caution us against its deceptive power. He knew that money
has a unique way of drawing our hearts away from God.
One of the clearest biblical examples of money as a
heart issue is the story of the rich young ruler
in Mark ten. This man approached Jesus with great enthusiasm,
asking what he must do to inherit eternal life. Outwardly,
(01:57):
he had claimed to have kept all of the commandments,
but Jesus saw his heart. Go sell everything you have
and give to the poor, and you will have treasure
in heaven. Then come, follow me. The young man walked
away in sorrow because his wealth owned his heart. He
wanted eternal life, but not at the cost of his riches.
His struggle wasn't financial. It was a matter of worship
(02:20):
revealing which God he had chosen to serve. John Calvin
once wrote, the human heart is an idol factory. We
all have things we cling to, believing they will provide life,
security or happiness. The rich young ruler story forces us
to ask what would make us walk away from Jesus?
If money is that thing, then our money isn't just
(02:41):
a resource, it's a rival to God. For some, the
battle isn't greed, but fear. Many of Jesus teachings on
money are directed at those who worry about having enough.
In Matthew 625 through 34, he tells his followers not
to be anxious about food, drink or clothing, reminding them
that God cares for the birds and the flowers and
(03:03):
he will certainly provide for his children. Worrying about money
isn't just a financial issue, it's a matter of trust.
When we believe our well-being depends entirely on our ability
to earn, save or invest, we carry a weight we
were never meant to bear. Jesus calls us to trust
God's provision and seek his kingdom first. This doesn't mean
(03:25):
we shouldn't budget or plan wisely, but it does mean
that financial anxiety often reveals a deeper struggle with trusting God.
If money is a heart issue, then generosity or the
lack of it reveals what's inside. The early church in
acts was marked by radical generosity, with believers selling possessions
(03:46):
to meet each other's needs. Why? Because their hearts had
been transformed by the gospel. C.S. Lewis wrote, every faculty
you have is given to you by God. If you
devoted every moment of your whole life exclusively to his service,
you could not give him anything that was not, in
a sense, his own already. You see, true generosity flows
(04:08):
not from obligation, but from a heart that recognizes everything
belongs to God. Do we see money as ours to
control or as God's to steward? Do we give joyfully
or do we resent it? Our attitudes toward generosity reflect
what we truly believe about God's provision. Since money issues
are hard issues, the solution isn't just financial literacy. As
(04:31):
important as that is, it's heart transformation. If we want
our hearts to align with God's when it comes to money,
here are a few truths to remember. Recognize that money
is a test of trust. Do we truly believe God
will provide? Practice gratitude. Discontentment fuels financial anxiety while gratitude
(04:51):
shifts our focus to what God has already provided. Give generously.
The act of giving loosens money's grip on our hearts
and reorients our trust toward God. And seek first the kingdom.
When we prioritize God's purposes over financial gain, we experience
the peace. Money can never provide. In the end, how
(05:13):
we handle money reveals what we treasure most. All right,
your calls are next. 800 525 7000. We'll be right back.
S2 (05:33):
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.
S1 (05:57):
Great to have you with us today on Faith and
finance live, I'm Rob West. Looking forward to taking your
calls and questions today. We've got lines open. The number
to call is 800 525 7000. Again that's 800 525 7000.
You can call with your questions at any point. But
right now is a great time because we do have
some lines open. And we're ready for you today. Again
(06:19):
that number 800 525 7000. Coming up a little later
in our broadcast today, we'll look forward to being joined
by Jerry Boyer. Obviously a lot to talk about with
the pressure in the markets today. If you haven't seen uh,
the where the big boards closed the Dow Jones off
2200 points, that's 5.5% lower today, the S&P 500 down
(06:44):
nearly 6% also on the Nasdaq as well. This comes
on the heels of really rough trading day yesterday with
a significant downward move. Today, new fears sparked related to
a possible global trade war. That came on the heels
of the retaliatory tariffs put in place by China overnight. 34%
(07:10):
on all goods imported into the US. The market still
processing the impact on our US economy, as well as
the world's economy, and where we go from here with
these tariffs. They were made known at least more clarity
as President Trump introduced what he called Liberation Day, where
we put reciprocal tariffs in place two days ago. And
(07:32):
the market has been processing that ever since. And we
can see the impact has been a significant downward move. Now,
we do need to put that into context of where
we've come from. I mean, we're back to levels we
saw only last year. And when we look at how
the market has done over the last 2 or 5 years,
we're still up dramatically. Nevertheless, we have taken a huge
(07:54):
step back. Many thought the market was already overvalued. The
question is, ultimately, where do we go from here? Are
these a negotiating tactic? Are these tariffs here to stay.
And we're kind of rewriting and repositioning not only the
US but the global economy. And we're adjusting to that.
What's going to happen over the weekend. No one knows.
And so we'll continue to process that. We'll of course
(08:16):
get Jerry's take on that a little later in our broadcast.
I think the key is to recognize where we started today,
that money issues are hard issues. Ultimately, we need to
see God as our ultimate treasure. He is our provider.
Recognize that we, the way we handle money, is one
of the most tangible evidences of where we've placed our
trust and what we value. As Ron Blue has taught
(08:40):
for many years, money is a tool. It's a test.
It's also a testimony. It's one of those expressions on
how we handle money as an evidence of our heart condition,
our heart posture, and also an understanding that God is
our provider when it comes to investing. Well, the best
approach is a long term perspective. Steady plodding is what
(09:02):
the Bible talks about. And so we should be investors.
And investing involves with regard to the stock market owning
real companies with real sales and earnings. Um, and so
that's really our perspective. It's not gambling. But we do
realize that, uh, you know, these ebbs and flows and
even significant corrections like we're seeing right now are a
(09:24):
part of investing. And that's why we we take a
long term perspective. We're not short term in nature when
it comes to how we view, uh, market investing. But, uh,
these days can be, uh, disconcerting. And so I think
it's important to be reminded of good, solid money management
principles And to be rooted in biblical truth. Well, we
(09:46):
want to take your questions today. I know there's things
on your mind, and so let's talk about them. When
you call 805 two, five 7000. We're going to begin
in Minneapolis today. Hi, Lynn. Go right ahead.
S3 (09:57):
Hi. Um, I heard you talk earlier about some ways
to save on taxes, um, for 2024. And one of
them was a traditional IRA. Um, it I just want
to clarify that I heard correctly, um, that we can
(10:18):
pay in before April 15th a lump sum to a
traditional IRA in order to save on having to pay
in on taxes for 2024.
S1 (10:28):
That is true. Uh, it's really April 15th, or whenever
you file your tax return for 2024, whichever comes first. Now, uh,
if you filed an amended return, perhaps you could, uh,
you know, go ahead and take advantage of that. But
let me just ask, have you already filed your taxes
for last year?
S3 (10:48):
I'm currently in the process, but I know I'm going
to have to owe in.
S1 (10:51):
Okay. Got it. Yeah. So as long as we're before
April 15th and you haven't filed your taxes yet. Absolutely.
If you're under age 50, the maximum IRA contribution for
2024 would be $7,000. If you're 50 or older, it
jumps up to 8000. So yeah, if you put into
that traditional IRA and you either have earned income yourself
(11:12):
up to that amount or you're a spouse of somebody
who does, then you'd be able to make that contribution
and that would exclude that amount that you make the
contribution to the IRA from your taxes for the tax
year 2024, which could be a savings and allow you
to get more, uh, you know, that could be invested.
S3 (11:34):
Okay. Is there a certain amount or how do we
figure out what amount?
S1 (11:38):
Well, in terms of how to how much to put
in based on the tax liability you have.
S3 (11:45):
Yeah.
S1 (11:46):
Yeah. Uh, you know, I mean, the amount that you
put in, it's not a tax credit, it's a tax deduction.
So essentially whatever amount you put in up to either
7000 or 8000 would be excluded from your taxable income.
So if you made 50,000 and you put in 7000,
you're going to pay taxes for 2024 on 43 instead
(12:08):
of 50,000. Um, and so whatever your marginal tax rate
is would be essentially the tax savings that you would have. So,
you know, let's say you're paying 22%. Well, 22% of
7000 is $1,694. So you'd have a tax bill that
would essentially be $1,694 less than, you know, you would
(12:30):
have if you were, uh, paying taxes, uh, on the
full amount. Actually, uh, it was 7,022%, 1540, 540. But essentially,
that's what how it would work. It's going to have
to do with what tax rate are you paying based
on your total income? And then by removing that amount
of the contribution from that total tax, you're you're paying
(12:53):
tax on, you know, it's it's equivalent to the tax
rate if that makes sense.
S3 (12:59):
Okay. So I take the 22% I'm over over 50.
So I'm 63. Okay. And I'm in the 22% tax bracket.
So I take 22% of the 8000. And I well, so.
S1 (13:13):
That I mean that would give you an idea. No.
So the way you would want to do it, do
you file your own tax return. Correct.
S3 (13:20):
No I'm having somebody do it.
S1 (13:22):
Okay. So you would just want to let that person
know that I've made a contribution to a traditional IRA
for tax year 2024, in the amount of in your case,
you could go all the way up to $8,000 and
then that person would be able to include that on
the 1040 that IRA contribution, which would essentially, uh, reduce
(13:44):
the amount of taxable income that you have for tax
year 2024 by the amount of the contribution. And your
tax savings would be equal to whatever your marginal rate is.
So they'll tell you ultimately what you owe, uh, and
whether you're getting a refund because you've already paid in
more than you owe, or whether you still have an
amount that you need to write a check for. But
(14:06):
as long as you make that, uh, IRA contribution, whatever that, uh,
taxable amount is, is going to be based on up
to $8,000 of less taxable income for the year. But
your tax preparer will ultimately need to tell you what
that total bill is. Stay on the line. We'll finish
up off the air. We'll be right back. Great to have.
S4 (14:32):
You with us today on Faith and finance. live.
S1 (14:35):
The market under a lot of pressure today. The Dow
Jones off 2200 points. Uh on the heels of, uh,
President Trump's tariffs that were announced just two days ago.
Jerry Bowyer will stop by on our last segment today.
We'll get his take on the implications of this. Where
might the market be headed for here? What does it
mean for our economy, and what should you be thinking
(14:56):
about as a long term investor of stocks and bonds?
In the meantime, though, we're taking your calls and questions.
We've got some lines open today. We'd love to hear
from you. Whatever's on your mind. 800 525 7000. Let's
go to Cleveland. Hi, Barry. Go ahead.
S5 (15:13):
Rob, how are you?
S1 (15:15):
Great. Thanks for calling.
S5 (15:17):
Okay, I'm calling about long term insurance. Okay. Um, yeah.
My wife and I took out a policy, uh, way
back in 1999. January, uh, corporation or whatever they were
We're calling and the timing was reasonable. We were paying
about $1500 to $2000 a year. And, uh, history showed that, uh,
(15:44):
they haven't they haven't had any increases in premiums for,
for many years. But now in the meantime, the premiums
keep going up and up and up. Last year it
was 6000 and some. And this year is 11,000. Now
we're wondering really is worth continuing to keep it because
(16:09):
we have gotten to the point now where we're about
to be able to use it. My I'm 83.5 and
my wife is 81.5. So we're getting close to being
able to use it. But the company is pressuring, uh,
policyholders and want them to sell because. we have a
(16:33):
clause in there whereby if one of us dies, the
other one will not have to pay any more premiums.
The rest of the. The rest of their life and
so on. So it's getting costly. But yeah, now I'm
trying to figure out whether you know what we should do.
S1 (16:51):
Yeah, yeah. No, I appreciate that. And obviously that's a
dramatic increase. So do I understand that it's now $11,000
a year in premiums? Is that right?
S5 (17:01):
Yes it is.
S1 (17:03):
Yeah. Wow. That's significant. Um, you know, here's the reality
is ultimately, this is going to come down to your
ability to continue, you know, to afford this. Um, so
talk to me about that piece of it. I mean,
I realize it's a lot of money, and you have
to decide. Is it is it worth it for me
to continue paying, although you've been paying it a long
(17:23):
time and, you know, now you're getting to those years
where it's, you know, the likelihood of you actually collecting
on this policy and policy being paid back for all
the money you put in is much greater than ever.
Just as you age. Um, so I'd be, you know,
really hesitant to just drop it at this point in
your 80s. At the same time, if it's creating a
(17:43):
financial strain on you, you know, what you may need
to do is, is consider even before dropping it. Do
we need to dial back some of the benefits just
to make it more affordable? Um, but how comfortably are
you able to afford the premium at these levels?
S5 (18:00):
Uh, right now we can, uh, but the thing the
thing about it is this. Okay. We share it. Both
my wife and I share it. If if one of
us used it alone, we can use it for four years. If.
If not, we can split it one half, two years,
the other one half, the other two years, and so forth. Um,
(18:24):
they have proposal each year now when they renew the policy, I,
you know, they they have propositions on how you can
reduce it and so forth and so forth. I wanted
to choose one of them, but then they have a proforma, uh,
policy that they show you. And there are a few
variations of wording in there that we are not comfortable
(18:47):
with because we think if we go ahead and take that, uh,
we'll lose the protection of one of if one dies,
the other one doesn't have to pay any more. That's
the that's the thing we're trying to protect. And I'm
not certain that if the proforma still has that in
(19:08):
there because the wording is. Go ahead.
S1 (19:12):
Yeah. No, no, that's really helpful. And you know, the
clause that you're talking about really is a game changer.
And most joint policies, which is what you likely have
just based in your description, do in fact drop the
premiums after the first death, you know, while covering the
survivor's care. So that's a big incentive to hang on,
especially in your 80s when the the odds of needing care,
(19:35):
you know, think nursing home or in-home help shoot up
a year in a nursing home could run you 90
to 100,000 a year or more. And if one of
you needs it, even for a couple of years, then
the policy could pay for itself and then some. And
to your point, it sounds like you could have up
to four years of this policy paying out, which could,
you know, run $400,000. Um, and so, you know, it
(19:59):
really is all going to come down to your daily benefit,
but let's say it's $200 a day for four years. Uh,
you know, that's that's a good, you know, bit of money. Um,
you know, that's going to be, uh, $73,000 a year
times four. I mean, that's almost 300 grand. Um, and,
you know, double that if you both use it compared
(20:20):
to the premiums you'd pay before one of you passes away. So,
you know, ultimately, it comes down to just your health status. And,
you know, ultimately whether or not you can afford this,
but to the extent it gives you peace of mind
knowing that you've got it. And, um, and then again,
we've got this clause that kicks in, um, you know,
if one of you were to pass away, uh, you know,
(20:42):
it can be, I think, a real benefit to hanging
on with this thing, especially if we don't see continued
dramatic increases. But we won't know that until we, you know,
each year, you know, you'll find that out. Um, so
I would be inclined to say, at least for right now,
hang on to it. Perhaps what you could do would
be to connect with an advisor who could evaluate this
(21:03):
for you in light of your overall financial condition, and
even run some pro formas for you, just to see
how would this and any other increases impact your cash
flow into the future? Because if you can hang on
to it, you know, I think you'll be glad you did.
But you know the extent to which it becomes a
real financial burden. You know, that could be problematic. And
(21:25):
it may mean that you need to start looking at
ways to cut the premium, which means starting to drop
some of the benefits. Um, let's do this. I've got
to take a quick break. Um, why don't you and
I finish up off the air? What I'd like to
know is whether you have an advisor. And if so, uh,
I really like this person to get in that conversation.
If not, I can recommend you connect with a, uh. Barry,
(21:48):
stay right there. We'll talk a bit more off the air.
We'll be right back. Great to have you with us
today on Faith and Finance live. I'm Rob West. We're
here on Moody Radio helping you live out of a
biblical worldview. And as it relates to this program in
(22:10):
the area of money management, if you have a question today,
you can call right now 800 525 7000. Let's go
back to the phones. Cleveland Heights, Ohio is where we're
going next. Santina, how can I help?
S6 (22:23):
Hi. Um, I was calling because recently I received, um,
a pretty large amount of money from, um, a dear
loved one who passed away in January. And, um, I
do have an appointment with with my bank to set up, um,
(22:43):
a CD account. And I know that I'm going to tithe,
and I know I'm going to have to pay taxes
on the amount. I just wanted to know, like, what
other type of investments I can make with the money.
I just really just want to make sure that I'm
doing the right thing.
S1 (23:00):
Yeah, yeah. Very good. Uh, I can certainly appreciate that.
And I love the fact that, you know, with this
unexpected amount, that's a significant sum of money. You're really
taking a step back just to say. How do I
be wise with this? How do I hang on to it,
but also put it to work and that's that's the
right approach. Let me just ask a couple of questions. Um,
do you have any consumer debt? High interest debt?
S6 (23:23):
Uh, well I do. I have one credit card that
was on my mind. I've been paying on it. I say, oh,
it would be nice to to get rid of that. Um, yes.
S1 (23:40):
And and what's the amount that you owe on that?
S6 (23:43):
Oh, the amount on that. I'm just going to tell
you it's over 3000.
S7 (23:48):
It's over. All right. Yeah.
S6 (23:50):
Yeah. So we've been making I've been making some significant
progress on that. Um, and I know that my husband,
he takes care of a lot of the other things
that we have, um, debt on. We we don't have
a car note anymore. He pays our mortgage for our home. Um,
(24:10):
he has no no credit card debt or anything like that. Um,
so that's pretty much. And then we have a child.
Two children in college. One's graduating next month. One is.
This is just her first year, and we have two
in high school.
S7 (24:26):
Okay.
S6 (24:26):
So that's kind of where we are right now with that.
S1 (24:31):
Got it. And, uh, are you adding to that credit
card debt or is this just kind of lingering and
hanging around a little bit longer than you wanted?
S6 (24:39):
You know, every now and then, to be honest, I
will contribute to it every now and then. And I
try my best to pay it off even with a
little bit more. Um, because I really just, I don't
I don't want that deal anymore. But it's nice to
have for, like, travel or for unexpected expenses or whatever. But, um,
other than that. Yeah. Every now and then, I'll. I'll
(25:02):
put something on it. Yeah.
S7 (25:04):
Got it. Yep.
S1 (25:05):
Okay. So I think that's kind of opportunity number one.
Now here's the only risk there is. It makes all
the sense in the world just to go ahead and
wipe that out. Because, you know, you're going to get
a guaranteed rate of return equal to the interest rate
on that card. And that's probably 20 to 22, maybe
more percent. And so that's a no brainer. The only
(25:26):
risk is that as soon as you do that, you're like, oh,
you take a deep breath and then you get a
little bit more lax in, you know, your budgeting. And
then all of a sudden the debt comes back. So
I want to make sure you kind of put the
pieces in place to live within your means. So, you know,
this debt doesn't creep back up when the pressure comes off.
But there's no doubt that that's going to be a
(25:47):
great use of that money because you're spending, you know,
a lot of money in interest. And I'd, I'd rather
you eliminate that 22% if that's what it is, versus,
you know, trying to get 5 or 6 or 8%
in a CD or the stock market or, or something
like that. Um, secondly would be an emergency fund. Do
you have one between you and your husband?
S6 (26:09):
We do. We do. Um, we have two, actually. One
has over a thousand and the other has over 400.
S7 (26:17):
Okay.
S1 (26:18):
All right. Good. So the key there would be, if
you've listened to the program, you've heard me say, you know,
this rule of thumb of having 3 to 6 months
worth of expenses in your emergency fund for the unexpected.
So you just take your not your income, but your
total spending for the month. Let's say it's I'm just
going to make up a number. Let's say it's 4000
a month. So then you'd, you know, you'd take 4000
(26:39):
times three. That's 12,000 all the way up as much
as 24,000. So you'd want between 12 and 24,000 if
your expenses were 4000 a month in emergency savings. And
you'd have to plug in your real number. So, you know,
that could take up a good portion of this. And
for that, I would put it into a high yield
savings account. You could do that with our friends at
(27:00):
Christian Community Credit Union. Just go to join Christian community.com.
Or you could go to one of the online banks
that you find at Bankrate.com. But in either case, you know,
I would keep that liquid and safe. Earning some interest
not in your checking account in a savings account that's
linked to your checking, but it's there for the unexpected.
If you have a job loss or a major medical
(27:23):
expense or something unforeseen in your financial life that would
allow you to tap into that without having to put
that on a credit card. Now, if you pay off
the the credit cards and you shore up your emergency
fund with a full 3 to 6 months expenses and
you have anything left. Well that's great. We could talk
about investing it. The first option is to get it.
(27:45):
If you're investing it into a tax deferred environment, uh,
are you or your husband or both of you contributing
to a retirement plan at work?
S6 (27:55):
So my husband is.
S7 (27:57):
Okay.
S1 (27:58):
And do you know what percent of his income is
going into that?
S6 (28:02):
Um, I'm not for certain, I don't know.
S7 (28:04):
Yeah.
S1 (28:05):
So the goal there would be 10 to 15% going
into retirement. Um, but another option would be with this money.
You know, maybe you open an IRA, an individual retirement account,
make a contribution to that. You could get it invested
to grow it for the future. And if you did
it into a traditional IRA and you could put in
up to 7000 if you're under 50 or 8000 if
(28:27):
you're over 50, um, you know, that would be excluded
from your taxable income. Let's say you made the contribution
for 2025 because you've already filed your 24 tax return.
Then when you go to file your 25 return next year,
you would have you'd pay taxes on, you know, whatever
the amount of the contribution was, let's say it was 7000.
(28:47):
You'd pay tax on 7000 less and you could invest that, which,
by the way, now is probably a great time to
invest if you're a long term investor because the market's down,
you know, 3500 points in the last uh, two days. So,
you know, we're down 10% plus, uh, on the Dow Jones,
which just means probably a pretty good time to buy,
(29:09):
so I think that that would be a great option. Uh, Santina,
in my kind of recommended approach, there would be pay
off the credit card debt, but at the same time,
really lean into your spending plan and make sure you're
living within your means. Shore up your emergency fund in
a high yield savings account, separate from your checking, equal
to 3 to 6 months expenses, and then with the rest,
(29:32):
make a contribution to one or even two. One in
your name for sure, but maybe your husband as well.
Into two IRAs with the balance. Get the tax deduction
next year and get it invested, especially while the market's down.
S6 (29:47):
Okay okay okay. That that's that sounds good. That sounds good.
Thank you so much for all your help.
S1 (29:54):
You're welcome. Listen, if you or he have questions along
the way don't hesitate to reach out.
S7 (29:58):
We appreciate your call today. Oh.
S6 (30:01):
Thank you. We sure will. Thank you.
S1 (30:03):
All right. God bless you. Well, uh, we're going to
take a quick break when we come back, Jerry Boyer
will stop by. We'll get his take on the markets. Plus,
Susie has been waiting patiently in Cleveland. Her? Excuse me.
Her son, who's 18, is headed to Scotland on a
mission trip. She's wondering how's the best way to protect
him if he needs access to cash. What about a
(30:23):
debit card? What if he loses it, I get that.
What then? We'll talk about that just around the corner
as well. This is Faith and finance live here on
Moody Radio, helping you see God as your ultimate treasure
and integrate faith and financial decisions for God's glory. We're
so glad you're along with us today. We're going to
take a quick break and then back with much more
(30:44):
after this. Stay with us. Thanks for joining us today
on Faith and Finance Live here on Moody Radio. We'll
be talking to Jerry Boyer here in just a moment
about the market's big sell off today. The Dow Jones
(31:05):
down 2200 points. That's 5.5%. The Nasdaq off nearly 6%.
This is day two of the big sell off following
the announcement in the Rose garden on the second just
two days ago regarding the reciprocal tariffs. The market really
continuing to sell off as we got word overnight last
(31:27):
night about China's retaliatory tariffs of 34% on all US
goods imported from the US. Still, big questions remain about
how long this is going to be in place and
what impact it will have here at home and around
the globe. We'll get Jerry's take on that here in
just a moment. But first, let's go to Cleveland, Ohio. Hi, Susie.
I know you've been waiting patiently. Go right ahead.
S8 (31:50):
Can you hear me?
S7 (31:50):
I sure can.
S8 (31:52):
Okay. Hello there. Thank you for taking my call. Um,
my husband and I are sending our son off to
Scotland for, um, a missions trip for five weeks, and
we are just. We are personally out of debt. Credit
card debt and want to help our children be out
of it too and never have it. And so I'm
hesitant to get a credit card, but I'm we're trying
(32:14):
to figure out the best way to send him off
and have him have money, reliable and safe and all
that kind of stuff. So I thought we'd call and
see what what what thoughts you guys had.
S1 (32:25):
Yeah. Well, uh. Well done. I'm delighted to hear he's
going on a mission trip. That's great. Is this with
your local church?
S8 (32:32):
It is? Yes. Well, it's just him, but it's with
a family that we support at our local church. Yes.
S7 (32:38):
Yeah. Okay.
S1 (32:39):
Excellent. That's great. Um, yeah. So I think, I mean,
a couple of options here. One is, you know, just
help educate him on some of the best practices with
regard to how he safeguards, safeguards, whatever he has, whether
that's a debit card or cash, you know, just kind
of keeping it on his person. Maybe, you know, it's
in a travel pouch or something. He has, you know, accessible.
(33:02):
but but also safe rather than a, you know, a
wallet or a phone in a back. Pocket that could
be compromised. Uh, you know, I think with regard to
a debit card. That could be a great option. Uh,
you know, we've had, uh, as far as a debit
card goes. The the Capital One money card for our kids. Um,
it's the teen money account, and, um. You know, it
(33:25):
has no fees. It has no minimums. It has a great, uh,
smartphone app that both you as the parent and the child,
although he's 18, so he's an adult now, but you
can both have access to it. Uh, very easy through
the app. If he were to lose it, uh, at
any point with the touch of a button to essentially
turn it off so it can't be accessed any longer. Uh,
(33:47):
you know, the nice thing is that that will have the, uh,
the tap to pay feature, which provides some additional safeguards
because the the contactless payment protects against what are called
skimmers because it sidesteps the physical vulnerabilities that these fraudsters exploit. So,
you know, when you're putting it into the reader, whether
(34:08):
it's a magnetic stripe or the chip, but you're inserting it,
you know, they can use something called NFC to kind
of skim that information. But the the no physical contact
makes it more difficult. So it adds through the technology
a layer of protection there. Um, so I would say,
you know, equipping him with some best practices, uh, you know,
(34:32):
some cash that, you know, preferably you get exchanged into
the local currency before he goes, maybe at your local bank,
they might need to order it. So give them time.
And then with a debit card where he knows that
he or you can turn it off, you can also
add more money to it, uh, if you need to
with the contactless payment options will probably, you know, give
(34:54):
him everything he needs.
S8 (34:56):
Okay. Wonderful. We really appreciate you. Thank you so much.
S1 (35:00):
Absolutely. Listen, tell them. Have a great trip, Susie. And
thanks for your call today. May God bless you.
S8 (35:05):
Thanks so much.
S1 (35:06):
Absolutely. Well, Jerry Boyer's here, and it's a great day
for Jerry. I know you've been on the road. I
appreciate you taking some time away to to check in
with us. Obviously the Dow Jones finishing at the lows
of the session off 5.5%, 2200 points. And that's on
top of uh of yesterday. Boy a lot to talk
about here, including the US Treasury, which perhaps that's the
(35:29):
the bright spot is the ten year is now below 4%.
But just kind of give us a high level read
on all this.
S9 (35:35):
Yeah. Well I wouldn't even consider that one a bright
spot either because, you know, generally, you know, falling interest
rates are a sign of slowing economic growth, not rising
economic growth. I know people think you want interest rates
low so you can borrow cheap. Uh, but that's not
what this is reflecting. What this is reflecting is that
people are selling stocks and buying bonds, and people sell
(35:56):
stocks and buy bonds when they're scared. Bonds are a
recession hedge. Stocks are a bet on future growth. So
markets are betting that future growth is going to be bad.
So they're dumping stocks especially tech stocks which is the
most growth oriented. And they're buying the safest thing which
is treasury bonds. And they're buying even more of the
super safest thing which is inflation protected Treasury bonds. Uh,
(36:19):
so that's the no default. And also they're going to
pay you back for any inflationary loss. So that is
an extreme anti risk trade. That is we're afraid of
two things at the same time. We're afraid of a
recession which at this point is looking more likely than not.
Especially if the president goes ahead with this plan. The
recession is pretty much baked into the cake. Um, so
they're afraid of recession, but they're also afraid. Afraid of inflation.
(36:42):
That's stagflation. That's two bad things. So, look, I don't
get political here. Um. I'm just. I'll call them as
I see them. Uh, this is not good leadership. If
we're coming from a Democrat, I'd say it's not good
leadership when it's coming from a Republican. I'm going to
say it's not good leadership and good leadership listens to feedback.
There is no more powerful feedback mechanism in the world
(37:05):
when it comes to economic policy than market reaction to it.
And this isn't some little dip. Something happened for 15
minutes or a day or two. This is a bear
market in the Nasdaq. So this is serious negative feedback.
And of course what I'm looking for the scariest negative
feedback is gold prices because that's the bet of some
serious inflation or default or a crisis. Gold's over $3,100
(37:27):
an ounce. Gold has been a very good performer. Stocks
have been a bad performer. That means that the markets
are afraid. Now, maybe the president knows something that the
other couple billion of us who are in the market
don't know. But I tend to think that the market,
which is all of us registering a vote, knows more
than any particular expert, even the president of the United States.
S1 (37:48):
Yeah, yeah. That's helpful. Jerry. We'll talk about what our
listeners need to take away from this as long term investors,
you know, in US markets. But the most recent comments
from the president came at around 330 this afternoon. Maybe
there's been something since then, but his post on Truth
Social was just very simply only the weak will fail,
(38:09):
end quote. And, you know, I guess a lot of
people are wondering, are we going to get some news
over the weekend that, you know, there's been some negotiations
and perhaps some of these, you know, are not going
to play out. It sounds like, if anything, he's doubling down.
S9 (38:24):
Yeah. And with a little social Darwinism thrown in there too.
Only the weak will fail. Um, you know, I mean,
first of all, that's not true. People can make perfectly
good decisions as a business and then get hit with this,
you know, bad policy. So, I mean, if there's going
to be a lot of failure if the president, uh,
embraces a policy at a highly aggressive level, which the
(38:47):
consensus of a few hundred years is that it's a
bad policy, protectionism And then a bunch of businesses fail.
Who's weak? Them or the president's economic policy team? I
would say that if you get a lot of business failures,
don't blame the business. Blame the person who's taxing them.
When you tax a lot of businesses, you know it
(39:07):
tends to be bad for them. Republicans used to understand that.
S1 (39:10):
Yeah, yeah. Now, Jerry, you know, this is all done.
You know, if you listen to what he said in
the Rose garden two days ago in trying to, among
other things, level the playing field because it does make
sense that if others have been either taking advantage of
us or imposing massive tariffs on us for a long time,
and we've just kind of been taking it on the
(39:32):
chin a bit as the largest, largest economy in the world,
that this is kind of a reset of sorts. Help
us understand that line of thinking.
S9 (39:41):
Yeah, well, a couple of things. One, if they do
something stupid, I don't see why us doing something stupid
is the right response. I'm hearing a strange argument, uh, from, uh,
from the president and Scott, who's a treasury secretary on
Tucker yesterday. Well, if tariffs are so bad, why are
other countries doing it? Well, maybe they're stupid. I mean,
America doesn't imitate other countries. We historically have had a
(40:04):
free trade country and we have a high standard of
living for that. If other countries are poorer and they
have high tariffs, maybe the tariffs are one of the
reasons that they're poor. There's a pretty strong correlation between
tariff high tariff countries and poverty. So I don't understand
why them why them hurting their economy is a good
argument for us hurting our economy. The other thing is,
(40:26):
I know I'm being tough on the president, who, by
the way, I've been generally quite supportive of these numbers
about the alleged tariff rates. You know, 57% or 90%
from Madagascar. This this math is completely squirrely. Those are
not tariff rates. They've gone through some kind of torturous
ratio of trade deficit to, you know, to trade surplus.
That's not a tariff rate. Some of these countries have
(40:48):
tariff rates of half a percent on us. That's the
actual statutory rate. And they've tortured the math to make
it seem like they're tariffing us at 50%, and we're
hardly tariffing them at all. Basically, we tax them about
as much as they tax us when it comes to
our major trading partners. Now, you do have high tariff
rates in third world countries that are very poor. And
(41:08):
I would say I don't want to imitate them. Um,
we have 300 years of of consensus on this. I mean,
it's partly how America was founded. Yes. Alexander Hamilton wanted
more tariffs, but largely we revolted against the British Empire
because they tried to they tried to manage trade this way,
and we saw it as contrary to our interests. So
we know this already. I mean, we saw it in 1929.
(41:31):
You know, the Smoot-Hawley tariffs, a whole bunch of tariffs
on one day, the day they cleared the key committee.
That's Black Monday when the stock market collapsed. So we've
run this experiment before. And you know, I want Donald
Trump to be Ronald Reagan. I don't want him to
be Herbert Hoover. A lot of what he's been is
Ronald Reagan. But this is Herbert Hoover stuff.
S1 (41:50):
Yeah. Jerry, let's finish and then we'll let you go.
And we're about out of time here as well. Let's
finish with what should our listeners take away if they're
long the market and their IRA, their 401 K their
invested in real companies with sales and earnings here in
the US. How should they think about their investments as
they're turning on the news tonight.
S9 (42:09):
Yeah. Ignore it. I mean absolutely ignore these fluctuations but
don't get worried about it. Just just stay in the market.
Trust God.
S1 (42:16):
There you go. All right, Jerry, I know we'll continue
talking about this. Safe travels, my friend. Thanks for taking
some time for us.
S10 (42:23):
God bless.
S1 (42:24):
All right. That's Jerry Bowyer. He's our resident economist. Joins
us each Friday, uh, with his market commentary. Bob Dole
will be here on Monday. We'll continue to, uh, unpack
and analyze everything that's going on. But as Jerry said,
God's on the throne. He's our provider. We can trust him.
Make him your ultimate treasure. Money's a tool to accomplish
his purposes. We'll see you next time. Bye bye.
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Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!