July 4, 2025 • 43 mins
Getting fit takes willpower. Earning a degree takes determination. Reaching your career goals takes hard work. In short, success takes commitment. The same is true when it comes to your finances. On Faith & Finance Live, Rob West describes the changes that occur when you commit to managing money God’s way. Then, Rob takes your financial questions.
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Episode Transcript
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S1 (00:04):
The following programme was pre-recorded so our phone lines are
not open.
S2 (00:08):
Getting fit takes willpower. Earning a degree takes determination. Reaching
your career goals takes hard work. In short, success takes commitment. Hi,
I'm Rob West and the same is true when it
comes to your finances. Today we'll explore what changes when
you commit to managing money God's way. Then we have
some great calls lined up. But please don't call in
(00:29):
today because we're prerecorded. This is faith and finance live.
Biblical wisdom for your financial journey. Well, you've heard the saying,
things worth doing are worth doing well. And when it
comes to your finances, there are certainly some things worth doing,
(00:49):
like saving for the future, creating a spending plan, paying
down debt, giving generously, and living with honesty and integrity. Now,
if you want to see real results in any area
of life. It's going to take effort sometimes a lot
of it. And that's true for your financial life too.
Following biblical principles takes determination, planning, patience, and even sacrifice.
(01:11):
So why is it worth the effort? Because while commitment
requires something of us, it also gives something to us.
When we live with faith and integrity in our finances,
we experience peace, contentment, and even joy. It's not just
about doing the right thing, it's about being transformed more
and more into who God wants us to be. When
(01:31):
you honor him with your finances, you join in his work,
bringing mercy and blessing to others. And as you experience
his provision personally, your faith deepens and your story becomes
a testimony to encourage others. The Bible is filled with
examples of faithful commitment. Hebrews chapter 11 is sometimes called
(01:51):
the Hall of Faith because it highlights men and women
who trusted God even when they couldn't see the outcome. Abraham. Moses. Rahab.
They placed their hope in God's promises before Christ even came.
But the ultimate example of commitment is Jesus Himself. Hebrews
12 two says, for the joy set before him, he
(02:12):
endured the cross, scorning its shame, and sat down at
the right hand of the throne of God. A Savior
who gave everything to redeem us is more than worthy
of our full devotion in return. Faith lies at the
heart of that kind of commitment, especially when it comes
to money. Hebrews 11 one defines faith as confidence in
(02:33):
what we hope for, and assurance about what we do
not see. That means trusting God's promises even when circumstances
feel uncertain. So committing to manage money God's way starts
with faith, but it also requires surrender. That means asking
who's really in charge, me or the Lord? In Matthew 624,
(02:54):
Jesus says, no one can serve two masters. Either you
will hate the one and love the other, or you'll
be devoted to the one and despise the other. You
cannot serve both God and money. That's a heavy reminder
for all of us. We can't be fully committed to
both God and money. One will always take priority, and
when it's not the Lord, we will feel that tension.
(03:16):
Here are a few honest questions to consider. Do financial
worries consume your thoughts? Do you find yourself chasing more
and more money? More stuff? More status? Is your sense
of security wrapped up in your job or investments? If
you answered yes to any of those, you're not alone.
Many of us wrestle with divided hearts. It's easy to
(03:37):
lean on what we can see, especially when life feels uncertain.
But money, career, or comfort can never offer the lasting
peace only God provides. Choosing to follow God's financial principles
takes daily trust and perseverance. Galatians six nine offers this
encouragement Let us not grow weary of doing good, for
(03:58):
in due season we will all reap if we do
not give up. Another gift of commitment is the encouragement
we receive from God's people. You weren't meant to follow
Jesus or manage your finances on your own. Colossians 312
through 15 paints a powerful picture of Christian community as
God's chosen people, holy and dearly loved. Clothe yourselves with compassion, kindness, humility, gentleness,
(04:23):
and patience. Let the peace of Christ rule in your hearts,
since as members of one body, you were called to peace.
If you've ever felt like giving up on your budget
or putting off your giving goals, you're not alone. We
all face struggles. But if everything were easy, we'd never
grow stronger. That's why we're here at Faith five to
walk alongside you. Whether you're just starting out or have
(04:45):
walked this path for a long time, we want to
offer help rooted in grace, wisdom, and truth. Most of all,
we want you to experience the joy of following Jesus
with every part of your life, including your finances. Because
true freedom doesn't come from having more. It comes from
trusting the one who gave everything for you. You can
(05:08):
check out more when you visit our website at faith.
Com that's faith. As we head to the break, let
me remind you quickly we're not here today. We're away
from the studio, so don't call in. But more questions
that we lined up in advance just around the corner.
Stick around.
S3 (05:38):
Hey, it's great to have you with us on faith
in finance live. But today we are pre-recorded and we
won't be taking your calls. However, we've lined up some
calls in advance that we think you'll find helpful, so
stay tuned and enjoy the rest of the program.
S2 (05:56):
Delighted. You're along with us today as we talk about
what it looks like to live as a faithful steward,
here's what we understand. God should be our ultimate treasure.
Money is a good gift, but it can rival our hearts.
Wealth isn't the problem. Trusting in it is. And so
we seek God's wisdom. We accept our role as stewards,
(06:17):
not owners. We live with an eternal perspective. We use
money as a tool to accomplish God's purposes. Because spending well,
the way we allocate God's money reflects our values, what's
most important to us. So we choose contentment. We live simply.
We have margin. We invest purposefully. We embrace gratitude. We
give generously, and we live rich toward God. That's the
(06:39):
ultimate objective here on this program. Each day, as we
walk alongside you to help you navigate and manage God's money,
we'll be turning to some calls we've lined up in
just a moment, but first, in the news today. Most
people are aware of the dangers of accumulating credit card
debt or missing payments. But there's another risky habit that
many haven't heard of, and it's called credit cycling. Credit
(07:03):
cycling happens when somebody repeatedly maxes out their card, pays
it off quickly, and then immediately starts spending again, essentially
churning through their credit limit to spend more than the
limit allows. While it might seem like a clever workaround,
experts warn it can backfire. Now, doing this occasionally may
(07:23):
not raise eyebrows, but consistently. Credit cycling is often seen
by issuers as a red flag, and it could result
in your credit card being shut down, reward points revoked,
or your credit score taking a hit. That's because your
credit utilization ratio, the amount you owe compared to your limit,
(07:44):
is a major factor in your score, even if you're
making payments on time. Credit cycling can signal financial stress
or risky behavior. If your card is closed, your total
credit limit drops, which could raise your credit utilization and
then further damage your score. Instead of cycling, consider healthier strategies.
(08:06):
Ask for a credit limit. Increase spread purchases across multiple cards,
or make early payments mid cycle to keep your utilization low.
It can be a smart move if you're frequently using
your card and want to improve your credit score. Bottom
line don't risk being flagged as a credit risk. There
are safer, smarter ways to manage your spending. But by
(08:29):
all means, I would say at the end of the day,
let's only use credit cards for budgeted items things you're
already planning on spending the money on. It's in the plan.
You've thought through it and you pay it off in
full every month, if not by the end of the cycle,
certainly by the due date. So you're not paying any
interest whatsoever, Soever, but just something to have on your
(08:51):
radar if it's not currently. All right, we're ready to
dive into your questions today. Now let's begin in Oregon. Lynn,
you'll be our first caller. Go ahead.
S4 (08:58):
I am retired, so I no longer have earned income.
Is it possible for me to open a Roth account
for a relative? He's 27. He is employed, so he
does have earned income. But I'd like to open that
for him and begin with putting money in there.
S2 (09:20):
Yeah. Uh, the account holder must have earned income. Uh,
so since you're retired and you, uh, have no earned income,
you personally cannot contribute to a Roth IRA, either for
yourself or on behalf of someone else. So what you
could do is gift the money to a relative who
(09:41):
does have earned income. They could then use that money
to contribute to their own Roth IRA, as long as
their total contribution doesn't exceed their earned income or the
IRS limit, which is 7000 for 2025. So that would
be the option there. Um, and this is not a minor.
(10:02):
So you couldn't do a custodial account. Um, but would
that be an option for you.
S4 (10:08):
In that scenario? Would he have to take the initiative
to open the account himself?
S2 (10:15):
Yes. Yeah. Uh, because an individual retirement account, uh, would
be in that person's name, and they would have to
prove their identity to the brokerage firm that's opening the account. Um,
so you could gift them the money and, you know,
tell him what it's for in terms of, hey, this
is designated for you to put into a Roth IRA. Um,
(10:39):
but they're going to need to be the ones to
open it. It's not like a 529 where you could
open that on behalf of another person. Um, you know,
with a Roth IRA. The the custodian is going to
want the person to verify their identity.
S4 (10:54):
So if I gifted him, let's say, $100, that would
just go into his account and he would have to
use his own money to open that Roth account.
S2 (11:06):
That's exactly right. Yeah. You could gift, uh, you know
him any amount you'd like. Um, and as long as
it's under the annual gift exclusion, uh, for this year, then,
you know, you don't even have to tell the IRS
about it. Um, and then, you know, that would allow
him to then turn around and put that into the
Roth IRA. But you're going to have to give him
(11:26):
the money and then trust that he's going to make
the contribution. By the way, that annual gift exclusion for
2025 is $19,000 just for this year. So if you're
under that, then, you know, you don't have to let
the IRS know that you did it. And it's certainly
not taxable.
S4 (11:43):
And what is the maximum one can put into a Roth?
S2 (11:47):
Yeah, it's this year. The Roth IRA contribution limit is 7000.
If you're under the age of 50, if you're over 50,
you can put in another $1,000. So it would be
a total of 8000. But you have to be 50
or older.
S4 (12:05):
Okay. Thank you very much.
S2 (12:07):
Okay. You're very welcome. Thanks for your call today, Lynn.
You know, the Roth IRA is a very powerful tool
for you to consider, especially for those that are younger.
Just because that after tax contribution, which means, by the way,
if you have the ability to do it, you can
put in more money because remember, you know you are
paying the tax on it first and then you're putting in,
(12:30):
you know, $7,000. Um, so that's uh, money that then
is growing tax free. You will never pay tax on
that money down the road, which is just really a
powerful tool. Now a lot of people have access. Um,
you know, more often than not these days, and they're
increasing if you don't. So you may if you haven't
had one in the past, check to see if you're
(12:52):
going to have one in the future. A lot of
people have access to a Roth 401 K, and you
know that acts just like the Roth IRA, except now
you've got a higher contribution limit, which allows you to
put away more money. And, you know, obviously that's key
because especially if you're a bit behind, uh, you know,
(13:12):
you have the ability to catch up quite a bit further.
It's salary deferral. So you don't make that direct contribution.
But for 2025, uh, up to age 50, $23,500 instead
of 7000 can go into the 401 K, and then
if you're 50 or older, you get another 7500 on
top of that, uh, 31,000 if you're between 60 and 63,
(13:34):
you get the super catch up. So instead of an
additional 7500, you get an additional 11,002 250. So $34,750,
then that's going into a Roth growing tax free, which
is just a huge benefit. You also may want to
consider doing a little bit in each one. Um, just
because that gives you both the tax free and the
(13:56):
tax deferred option. The unknown is the tax rate. So
you'd be able to choose which is better. Well, folks,
before we head to this break, let me remind you
if you haven't checked out Faith. Com that's faith. Philly.com.
I'd love for you to do that. You'll find the
best content in biblical finance there for you to grow
in your understanding of managing money God's way. You'll find
(14:18):
our community and the money management system. It's all there
at Faith. Philly.com. Now, again, a reminder we're not here today,
but more of your questions that we lined up after
the break. Helping you see God is your ultimate treasure.
This is faith in finance. Live. I'm Rob West. Such
(14:40):
a privilege to be along with you today. Hey, just
a quick reminder. Today is not the day to call in.
Our team is away from the studio. We did line
up some questions. Those will be coming straight ahead. But first,
we often receive emails from you at Moody radio.org. And
when we get those, we try to tackle those a
few each week. Let's do one of those. Now this
(15:00):
comes from Norma. She says. I'm receiving an inheritance and
also purchasing part of my dad's estate. I'd like guidance
on the best way to manage both the income and
the purchase. Well, Norma, this really is a significant moment.
Not just financially, but emotionally too. You're receiving an inheritance
and stepping in to help preserve part of your father's legacy,
(15:21):
and that's a privilege it's worth approaching with care. So
I love your question. I would say first, take your time.
Don't rush into any decisions. Treat the two opportunities separately
so the inheritance is a gift. Think through how to
honor the Lord with it and perhaps include some giving
some savings or paying off debt as a part of it.
The purchase is an investment, so be sure it makes
(15:43):
sense financially. Don't let emotion push you into terms that
strain your budget, and you don't have to go it alone.
You can find a certified Kingdom Advisor to help you
along the way. Just go to Faith Philly.com and click
Find a Professional. That's Faith 5.com. Before we head back
to the phones, you know, in our recent edition of
the Faithful Steward magazine, which, by the way, is a partner,
(16:05):
you'll receive four issues of Faithful Steward delivered to your door,
among other resources, including our new study, Wisdom Over Wealth
on the Book of Ecclesiastes. And if you want to
become a partner, just go to Faith com and click give.
But one of the articles that's in the current issue
of Faithful Stewardess is called Finding an Uncommon Retirement by
(16:26):
our good friend Jeff Hanan. And boy, I'm so excited
for you to read it. You know, as we think
about retirement and this is a topic that comes up
often on the program, you know, we really should have
a different perspective on retirement. Um, in as believers, uh,
because when we look at just our calling to be workers,
(16:47):
to be productive, to be co-creators with God, and to use, uh, that, uh, work, uh,
to bring God glory and to even promote human flourishing,
there's an opportunity for us to think about that fourth
quarter of life differently. You know, the secular vision of retirement,
I think, is weighed down with images of sailboats and
(17:09):
gag retirement gifts and vacations to the tropics. But the
Bible has a very different vision of aging. Listen to
this from Psalm 92. The righteous flourish like a palm
tree and grow like a cedar in Lebanon, writes the psalmist.
They're planted in the house of the Lord. They flourish
in the courts of our God. They still bear fruit
in old age. They're full of sap and green. That
(17:32):
Psalm 9212 to 14, you know the biblical call in
retirement is certainly to faithful stewardship, but not just our finances.
I think the deeper call is the stewardship of our experiences,
our skills, and our very lives for the well-being of others.
You know, Christian hope means aging. Uh, frailty and death
(17:53):
are not the end. We live in the ever shining
dawn of the resurrection. This life is just the beginning
of the life that is truly life that we read
about in First Timothy. In a biblical picture of retirement
is not one of heroism or hedonism, but I think
listening to God's voice and responding in love as elders
intent on sharing wisdom and blessing with the next generation.
(18:16):
It's simply a life of service, pointing beyond ourselves to
the servant in whose image we are made. And so
this question what am I going to do with my retirement,
I think, is an important one. And if we attune
our ears to God, we'll hear Christ say, peace be
with you as the father has sent me. Even so,
(18:36):
I am sending you. So I would just encourage you
to to think differently about this season of life and
step forward into it and faithfully pursue the work God
has entrusted to you. You have an incredible opportunity with
the wisdom and the experience God has given you to
be that elder at the city gate, dispensing wisdom, investing
(18:59):
in the next generation, loving the people around you and
serving our Lord. And now, this is just one of
the articles that we have featured in this edition of
Faithful Steward, just chock full of incredible, rich, theologically sound
content that will just encourage you and push you forward
in your stewardship journey. Again, if you want to check
it out, become a partner today. When you go to faith.com,
(19:21):
click give at the top of the page. All right,
let's dive back into your question. Let's go to Illinois
and welcome Carol. Go right ahead.
S5 (19:28):
Thank you for taking my call.
S2 (19:29):
Yes, ma'am.
S5 (19:30):
I have a I have a question. Uh, my husband
and I recently made an attempt to take out a
loan to build a small building on our property. It
was probably for around 50, 60,000. We were going to
have enough money to finance most of it ourselves. We
were turned down for the loan at the bank that
(19:55):
we have been with forever. Our credit scores are both
way over 800. Uh, everything we own is paid for.
Own the property already. Uh, I know there's other things
that go into the determination of whether you get a
loan or not, and I just kind of would like to.
The bank just didn't make things very clear about why
we were turned down. I thought maybe you could help
(20:16):
me a little bit with that.
S2 (20:18):
Yeah, absolutely. So this is a parcel of land that
you already own, Carol. And you were looking for a
loan to improve that, to put a new dwelling on it.
S5 (20:29):
Not a well, not a dwelling. It's basically a glorified
man cave.
S2 (20:34):
Okay. All right. Very good. Uh, yeah. And so you
were obviously this could be, you know, the land and
the improvements would have been the collateral. Is that right?
Or was it just a personal.
S4 (20:46):
Yeah.
S5 (20:48):
Well, I it would have been a I guess you'd
call it a personal loan. But yeah, I mean, we
everything we have, we own outright. So yes, there was
plenty of collateral.
S2 (20:59):
Yeah. Okay. But was the, the property going to serve
as collateral for the loan?
S5 (21:05):
Oh, that is a good question. I'm not sure. I
don't think the property where the building was going to
be was going to be on that, because that is
my mother's and my property, but it would be our
personal home and property would, would have been okay.
S2 (21:20):
And so tell me about that property. You own that
free and clear.
S5 (21:24):
Yeah, yeah, yeah. It's been assessed at about 160,000.
S2 (21:29):
And so you were willing to put a first mortgage
on that property and then essentially get cash out to
build the other property.
S6 (21:38):
That is a good question.
S5 (21:39):
I wish my husband was here to answer that, but
I was thinking it was more just like of a
personal loan.
S2 (21:44):
Okay. Yeah. Very good. Let's do this. I've got to
hit a quick break, but I think that's something we
ought to lean into. I'll give you a few more
thoughts on what else could have, uh, affected this. If
you can hold right there, we'll pick it up after
the break. Stay with us. We'll be right back. So
thankful to have you with us today on Faith and
(22:05):
Finance live. I'm Rob West, by the way. Our team
is not here today. We're away from the studio, so
don't call in. But we've got some great questions that
we lined up in advance. We'll get to those in
just a bit. You know, I'm reminded as we think
about the role of money in our lives that we
need to counteract the messages of this world. We need
to operate from a biblical worldview. And when we look
(22:27):
to scripture. I think we really see three big ideas
around the role of money. The first is money is
a tool. Yeah, we use it to buy things for
ourselves and others, and we use it to accomplish God's purposes.
But it's also a tool in the sense that God
uses money in my life to teach me to rely
on him. It's a daily demonstration of my faith. It
(22:49):
reveals where I've placed my trust and what I value.
So it's a tool. It's also a test. You know,
having too much or not enough can be a test.
Are we going to live with contentment? Will we choose contentment?
Are we going to rely on money in place of God?
It's a test in our lives, but it's also a testimony,
especially our willingness to trust God when we have little
(23:11):
or perhaps to share generously when we have much that
provides witness to an unbelieving world, even our faith to
handle money. God's way in the midst of uncertain times,
that itself can be a great testimony to the world.
So money is a tool. It's also a test, and
it's a testimony that God uses to both provide for
(23:33):
my needs, as well as to grow me up in
my faith and rely more heavily on him. I hope
that's an encouragement to you today. All right, let's head
back to the phones before the break. We were talking
to Carol in Illinois. Carol and her husband own a
piece of property. They're wanting to put a glorified man
cave on it. Obviously, it's a separate piece of property
from their current residence. They own nothing on that property
(23:56):
and their primary residence. They have a great credit score
of 800 plus and they were denied for that loan.
She believes that it was being they were seeking a
personal loan where they were just personally guaranteeing it, and
there was not any collateral for it. So she was
not adding a mortgage, uh, with Collateralizing either. The property
(24:18):
that would have the, uh, the new improvements on it,
the new man cave, or their primary residence where they'd
be essentially adding a first mortgage, trying to do cash out.
And so that's likely what was going on there. There
could be any number of reasons, Carol, why you were
denied from that. You know, that personal loan. You know,
(24:39):
common reasons, many of them don't apply to you. So
high debt to income ratio, that wouldn't apply because you
really don't have any debt. It could be limited income
or irregular income. So especially common for retirees. Um, you know,
lenders often prefer W-2 income. Uh, you know, it could
be an insufficient credit mix or history for large loans. Um,
(25:02):
you know, it could be just internal lending policies in
some cases. You know, if it's not income, they may
have age restrictions. Um, you know, so that could be
another factor or, uh, you know, no income verification. So
what I would do is ask the lender specifically for
the denial reason they're required to provide what's called an
(25:25):
adverse action notice. If you're denied, you could try a
credit union or a bank where you already have a relationship.
You could reach out to our friends at Movement mortgage
at movement. You could also try a secured loan where
the property becomes the collateral. And obviously that would dramatically
(25:45):
reduce the risk for the lender. Just given that, you know,
you've got a piece of collateral there that's worth far
more than the loan you would be seeking. And so that,
you know, would be the the suggestion I would make here.
Does that make sense?
S5 (26:00):
Yeah it does. It's it's kind of a moot point.
I mean, we just my husband ended up just selling
some stock in building it, but his first, the way
he wanted to do it first was to take the
loan out. And that's why we you know, I just
was a little puzzled by that. Yeah. I thought you
need to be able to offer some clarification. And you have.
S2 (26:18):
Excellent. Well, glad you called and you sorted it out.
But yeah, I would be scratching my head to thinking, well,
we've managed our finances so well, we're debt free, we've
got a phenomenal credit score. Why in the world wouldn't
wouldn't we be a great risk for this, this bank
to take on. And it's just probably one of their
underwriting standards just didn't line up with the situation here.
(26:38):
And so they just automatically denied it, which was probably
not a good decision on their part. Nevertheless, here we are.
Thanks for calling today. Call anytime if we can serve you.
800 525 7000 is the number to call. We've got
some lines open. We'd love to hear from you. Let's
go to Georgia. Hi, Pat. Go ahead.
S7 (26:56):
Thank you. Thank you for taking my call. I have
a quick question. Um, I bought we bought our home in, uh, 2001,
and I'm 93. In a few days. My question is,
if I were to sell it and it's. We paid 2.25,
and I think it's valued at 350. Now, do I
(27:18):
have to pay a capital gains on the difference you like. Wait.
S2 (27:24):
Yeah.
S7 (27:24):
Go ahead.
S2 (27:25):
No. You're fine. You likely would not, Pat. And here's why.
Because you've owned the home for two out of the
last five years. You've owned it for the last 21 years.
So certainly you would qualify for two out of the
last five. And you lived in that home as your
primary residence for two out of the last five. Then
you would qualify for up to 250,000 of capital gains
(27:50):
that are excluded from tax for a single filer, and
married filing jointly up to a half $1 million of
capital gains excluded from tax. So in your case, you know,
you would have at the most it sounds like 125,000
in gain. And since your gain is well under the
250,000 exclusion, no capital gains tax would be due. Assuming
(28:15):
you didn't use this exclusion on another home in the
last two years.
S7 (28:19):
Yeah. No I haven't. This is my main. My main home.
S2 (28:23):
Okay. Yeah. So you should be have confidence that you're
going to be able to sell that house without owing
any capital gains tax whatsoever. Uh, you know, assuming there's
no unusual factors going on here and, uh, you could
take that money and do whatever you want with it. Uh,
that what you do after the sale has nothing to
do with your ability to take advantage of that exclusion.
S7 (28:45):
All right. So, uh, it also wouldn't be affected by
the fact that I have CDs and, you know, IRAs
and so forth.
S2 (28:53):
No, ma'am, it would not. I mean, ultimately, uh, your
combined income would determine what capital gains bracket you fall into.
But given that you've got this exclusion, uh, from tax
for a capital gain of up to 250,000, uh, because
it was your primary residence for two out of the
last five years, it's not even taxable whatsoever. So your
(29:16):
other income has no bearing on it until you get
above that 250,000 and gain mark.
S7 (29:23):
I see. And the fact that if I sold it
and downsized, which would mean I would, you know, get
a less expensive home, that wouldn't affect it either.
S2 (29:34):
No, ma'am. What you do with the money after the sale,
if you turn around and invest it, you put it
in another property, you stick it in savings, you give
it all away. None of that has any bearing on
whether or not you owe capital gains. Given that you
have this exclusion so you can do anything you want
with it, including putting it into another home, and that's
(29:55):
not going to affect this exclusion. You will not owe
capital gains tax.
S7 (30:00):
Right. All right. Well thank you ever so much. And
I can't tell you how much I enjoy your show.
S2 (30:05):
Well thank you Pat. That's very kind of you. Call anytime.
You've been a delight to speak to today. May the
Lord bless you. Before we head to our break, you know,
as I read scripture, I see this big idea jumping
off the page around contentment. You know, I think as
we consider our role as stewards of God's money, we
need to foster this attitude that the apostle Paul talked
(30:27):
about and that is contentment. Remember, he said that it's learned.
I've learned to be content. He was in a time
of plenty and in a time of need, and he
learned to be content in either of those. Contentment is
a choice. And when we increase our contentment, well, then
we can focus on what God has given us and
not on what he's given others. I hope that's an
(30:47):
encouragement to you today. Again, we're not here today. We're
away from the studio, so don't call in. But just
around the corner. We have some more questions to tackle.
I know you're going to enjoy the calls we have
coming up. Stay with us. We'll be right back. Great
to have you with us today on Faith and Finance live.
I'm Rob West. Our team is away from the studio today.
(31:10):
We're not here, so don't call in. But we lined
up some great questions in advance and we'll get to
those in just a moment. First, you know, as I
look at the scriptures, one of the big ideas that
literally jumps off the page when you look at this
area of finance in light of a biblical worldview, is
the idea of contentment. We should foster an attitude of contentment.
(31:31):
And I think that's the first understanding is that it is,
in fact, an attitude. Matthew 633 says, but seek first
the kingdom of God and His righteousness, and all these
things will be added to you. If our aim is
the kingdom, then that changes our perspective. It makes it
focused on the eternal, not the temporal. And that's a
(31:51):
game changer. Well then, from an attitude, we learn that
contentment is in fact learned by the apostle. Paul said
it this way, not that I'm speaking of being in need,
for I have learned in whatever situation I am to
be content. That's Philippians 411. So it's a learned behavior.
It's also a choice. You know, I can choose to
(32:12):
be content in every circumstance. Rich or poor, happy or sad,
easy or difficult. Because as Christ followers, well, our position
in Christ never changes. And I think that's an important
reminder for us today. And perhaps it could change your
whole approach to your money. All right, let's head back
to the phones. Let's go to Ohio. Hi, Larry. Go ahead. Sir.
S8 (32:34):
Hi, Rob. How are you doing?
S2 (32:36):
Doing well sir. How can I serve you today?
S8 (32:38):
Well, um, we've talked quite a few times before, and, uh,
I listen to you all the time, but, uh, there
was a lady that called in, was talking about, uh,
gifting money and so forth, and you told me we
talked about this. I have a CD coming due, and
I wanted to gift that to my son, and I
think he told me that I could do that. And
(33:00):
I guess my question would be, um, when it comes
time to cash that in, I just roll it over
to his account or roll it into mine and write
him a check. How would I do that without getting
involved with the government?
S2 (33:13):
Yes. So that's a good question. So, um, yeah, in
terms of the mechanics of it, uh, you would typically,
you know, as that CD is coming to you, you
would let them know because some of these have an
automatic renewal where it just kind of rolls over if
you don't tell them you want to redeem it. Um,
or you just, you know, want it to go into savings.
(33:34):
So typically what would happen is it would not renew,
and therefore they would move it out of the CD.
And just whatever the savings portion of that account is.
And then at that point it's just sitting there like
any other, you know, checking or savings account. And then
you would then, you know, you could make that transfer
electronically to your son or write him a check. Um,
(33:55):
in terms of that part about, uh, you know, notifying
the IRS, uh, you do have, uh, a gifting amount
per person that allows you to, you know, not involve
the IRS. And that's $19,000 per recipient. So you can
gift as an individual. 19,000 to as many other people,
(34:17):
other individuals as you want without letting the IRS know.
And it goes without saying, but as a married couple,
you would each be able to do that. So you
could do 38,000 to a single individual. Um, if you
go above that 19,000 to any one person or above 38,000,
if your gifting is a married couple, then you would
(34:39):
be required to fill out IRS form 709 and just
let the IRS know. And then that is going to
count against your lifetime exemption. So there's an annual exemption.
And that's not a part of the lifetime exemption. And
then there's a separate lifetime exemption. And that's sitting today.
Now this could change. They could they could bring it
(35:00):
down as a part of the new tax overhaul. But
today it's at 13.99 million as a lifetime exemption. So
it wouldn't be any tax. It just would chip away
at that lifetime exemption, but it would involve you notifying
the IRS that you gave the gift.
S8 (35:17):
Okay. That's where I was confused. It's just a notification
to the IRS.
S2 (35:22):
Yes. And it is ultimately going to result in them,
you know, applying it toward that lifetime exemption. So it
will systematically reduce it. But yeah, you're not going to
get anywhere close to $14 million. So you should be
in good shape.
S8 (35:36):
Well I don't know.
S2 (35:40):
All right. Well maybe you do. So. Yeah. Just keep
that in mind.
S8 (35:44):
I'm just spend that money when I come down and
buy you a Mexican dinner.
S2 (35:47):
Hey, there you go. I'm still waiting for that, Larry. So. Yeah,
just let me know when you're coming. I've already got
the place picked out.
S8 (35:54):
I tell you what, Rob, I've got a pup here,
and we're trying to train this pup so when we
can get away from her, we're coming.
S2 (36:00):
All right, well, I'm going to be ready for you.
So you let me know when that is. And we're
going to enjoy a meal together, my friend.
S8 (36:05):
All right, pal, thank you.
S2 (36:07):
God bless you. Kansas is where Roger is located. Go ahead. Sir.
S9 (36:11):
Yeah, I'd like to move into my rental property. It's
been rented for 20 years, but I understand if I
move in it for two years that I could avoid
capital gains if I sold my current house.
S2 (36:23):
Yes. Yeah, exactly. So, um. So tell me, give me
a little bit more detail. So you have two properties.
That's right.
S9 (36:33):
Yes.
S2 (36:34):
Okay. Yeah. So you've got a rental property that you're
looking to sell and. Yes, from the date of the sale. Roger.
Going back, you would need to, uh, be able to
say that that property was your primary residence, um, for
two out of the last five years. Um, and in
(36:56):
terms of, you know, property, residence, uh, you know, the
IRS has a specific definition on that. That's your main
home where a person lives most of the time. And,
you know, so that would be the majority of the year. Um,
and if you can live there for two out of
the previous five years, then yes, you would be able
to have that $250,000 in gain or 500,000 as a
(37:19):
married couple that would be excluded from tax.
S9 (37:23):
Okay. That answered my question.
S2 (37:26):
Okay. Yeah. Very good. We appreciate it, Roger. And hopefully
that helps. You know, the only other option to consider,
which some people you know are interested in is if
you're going to have another rental property, if you're planning
to take the proceeds and, you know, roll it into
another property, you could do a 1031 exchange, which would
not exclude the capital gains, but it would kick the
can down the road. Um, now, if you're looking to
(37:48):
redeploy that money somewhere else, invest it or give it or,
you know, whatever that is, well, then that doesn't apply.
You probably be better off going with the strategy we
just talked about. But if you're thinking about buying another
rental property and you'd be willing to identify that property
in 90 days and close on it in 180 days, Um,
then you could essentially roll 100% of the money forward,
(38:11):
not pay the capital gains. And the IRS would just, uh,
you know, get you for that capital gains when you
ultimately sell, you know, another property down the road. Um,
but you could use 100% of that to get into
the next one. So something to at least think about
if you're planning to stay as a landlord in the
the rental property business. If you're not, then, uh, then
(38:32):
you might want to go with the, uh, the strategy
we've discussed. Thanks for your call today, sir. We appreciate it.
You know, one of the other issues that comes up
a lot here on the program that we, uh, tackle
in this current edition of Faithful Steward, is this question
is it okay to leave different amounts to my kids?
You know, and this is one of those issues that
just doesn't feel right. Because, you know, I think what
(38:55):
parents are getting out there is is it fair to
leave different amounts to my kids? And here's the reality.
You know, estate planning can be challenging. And, you know,
we and I certainly understand the desire to be fair.
And I think the answer lies in and this is
what we tackle with our friend Ron Blue, the popular
author and one of my mentors in this edition of
(39:17):
Faithful Steward. He has a principle that he calls the
uniqueness principle. And here's what it says. It says love
your children equally, but treat them uniquely. Now, what Ron
is not saying here is that we automatically need to
leave differing amounts. You may decide to, for whatever portion
you're not going to give to ministry, you're going to
(39:40):
leave to your heirs. You may decide to divide it
absolutely equally. And that's great. But what he's opening the
door to is this idea that each of my children
is different financially, emotionally, spiritually. And you may decide that
their individual needs and life circumstances warrant allocating varying amounts.
(40:02):
And he offers the idea that good stewardship means recognizing
these differences. And then again, in some cases, and you
need to make that decision prayerfully as the steward, allocating
resources differently. And that doesn't necessarily mean you're showing favoritism,
which the Bible warns against. I mean, we see that
in Genesis 37. Um, but as we consider it, here's
(40:25):
the three questions that Ron encourages you to ask as
you think about how much to leave to the kids.
Number one, um, what would be the worst possible outcome
if we leave this amount to this child? And obviously,
you would apply these questions, uh, you know, for each
of your children. So that's number one. What would be
the worst possible outcome if we leave this amount to
(40:48):
this child? Second, how serious is this outcome? And third,
how likely is it to happen? You see, remember, money
is going to be the fuel in the tank that's
going to propel your child in whatever direction he or
she is already heading. If they're heading in a in
a direction away from the Lord, that money could be
(41:10):
the fuel that that pushes them even further if they're
living a toxic lifestyle. On the flip side, it could
fuel them absolutely in the direction they're already going, if
they're generous givers and wise stewards. But asking those questions
might allow you to put a finer point on it.
And the purpose of the questions Ron makes. The point
is not to arrive at a predetermined answer. Again, you
(41:33):
may treat your children equally, or you may choose to
to handle a disproportionately, but the goal is to guide
you toward a well thought out decision. Ultimately, wealth transfer
should reflect God's wisdom, not just human emotions. And so
that's why factors like financial need and spiritual maturity and
(41:53):
life circumstances should all be prayerfully considered. But, uh, anyway,
it's hopefully that's an encouragement to you today. I'm today.
I'm sure there's somebody out there in our listening audience
who's kind of wrestling with that and just thinking about
as the steward in answering this question, and this is
a big one, is the next steward chosen and prepared?
We need to consider the impact of the money on
(42:15):
that next generation to the best of our ability. You know,
we can't play God in their lives, but we can
be wise and thoughtful and prayerful about how we approach
wealth transfer decisions. Hey folks, thanks for being with us today.
We're so grateful for how you joined the ministry each day,
and how you come alongside us and your questions inviting
us into your story. It's not just me here. We've
(42:37):
got a big team here at Faith by including our
team today. Couldn't do it without him. Amy, Dan, Gabby,
T and Jim. Faith and Finance Live is a partnership
between Moody Radio and Faith fi. Have a wonderful day
and come back and join us next time for another
edition of Faith and Finance live.
The following programme was pre-recorded so our phone lines are
not open.
S2 (00:08):
Getting fit takes willpower. Earning a degree takes determination. Reaching
your career goals takes hard work. In short, success takes commitment. Hi,
I'm Rob West and the same is true when it
comes to your finances. Today we'll explore what changes when
you commit to managing money God's way. Then we have
some great calls lined up. But please don't call in
(00:29):
today because we're prerecorded. This is faith and finance live.
Biblical wisdom for your financial journey. Well, you've heard the saying,
things worth doing are worth doing well. And when it
comes to your finances, there are certainly some things worth doing,
(00:49):
like saving for the future, creating a spending plan, paying
down debt, giving generously, and living with honesty and integrity. Now,
if you want to see real results in any area
of life. It's going to take effort sometimes a lot
of it. And that's true for your financial life too.
Following biblical principles takes determination, planning, patience, and even sacrifice.
(01:11):
So why is it worth the effort? Because while commitment
requires something of us, it also gives something to us.
When we live with faith and integrity in our finances,
we experience peace, contentment, and even joy. It's not just
about doing the right thing, it's about being transformed more
and more into who God wants us to be. When
(01:31):
you honor him with your finances, you join in his work,
bringing mercy and blessing to others. And as you experience
his provision personally, your faith deepens and your story becomes
a testimony to encourage others. The Bible is filled with
examples of faithful commitment. Hebrews chapter 11 is sometimes called
(01:51):
the Hall of Faith because it highlights men and women
who trusted God even when they couldn't see the outcome. Abraham. Moses. Rahab.
They placed their hope in God's promises before Christ even came.
But the ultimate example of commitment is Jesus Himself. Hebrews
12 two says, for the joy set before him, he
(02:12):
endured the cross, scorning its shame, and sat down at
the right hand of the throne of God. A Savior
who gave everything to redeem us is more than worthy
of our full devotion in return. Faith lies at the
heart of that kind of commitment, especially when it comes
to money. Hebrews 11 one defines faith as confidence in
(02:33):
what we hope for, and assurance about what we do
not see. That means trusting God's promises even when circumstances
feel uncertain. So committing to manage money God's way starts
with faith, but it also requires surrender. That means asking
who's really in charge, me or the Lord? In Matthew 624,
(02:54):
Jesus says, no one can serve two masters. Either you
will hate the one and love the other, or you'll
be devoted to the one and despise the other. You
cannot serve both God and money. That's a heavy reminder
for all of us. We can't be fully committed to
both God and money. One will always take priority, and
when it's not the Lord, we will feel that tension.
(03:16):
Here are a few honest questions to consider. Do financial
worries consume your thoughts? Do you find yourself chasing more
and more money? More stuff? More status? Is your sense
of security wrapped up in your job or investments? If
you answered yes to any of those, you're not alone.
Many of us wrestle with divided hearts. It's easy to
(03:37):
lean on what we can see, especially when life feels uncertain.
But money, career, or comfort can never offer the lasting
peace only God provides. Choosing to follow God's financial principles
takes daily trust and perseverance. Galatians six nine offers this
encouragement Let us not grow weary of doing good, for
(03:58):
in due season we will all reap if we do
not give up. Another gift of commitment is the encouragement
we receive from God's people. You weren't meant to follow
Jesus or manage your finances on your own. Colossians 312
through 15 paints a powerful picture of Christian community as
God's chosen people, holy and dearly loved. Clothe yourselves with compassion, kindness, humility, gentleness,
(04:23):
and patience. Let the peace of Christ rule in your hearts,
since as members of one body, you were called to peace.
If you've ever felt like giving up on your budget
or putting off your giving goals, you're not alone. We
all face struggles. But if everything were easy, we'd never
grow stronger. That's why we're here at Faith five to
walk alongside you. Whether you're just starting out or have
(04:45):
walked this path for a long time, we want to
offer help rooted in grace, wisdom, and truth. Most of all,
we want you to experience the joy of following Jesus
with every part of your life, including your finances. Because
true freedom doesn't come from having more. It comes from
trusting the one who gave everything for you. You can
(05:08):
check out more when you visit our website at faith.
Com that's faith. As we head to the break, let
me remind you quickly we're not here today. We're away
from the studio, so don't call in. But more questions
that we lined up in advance just around the corner.
Stick around.
S3 (05:38):
Hey, it's great to have you with us on faith
in finance live. But today we are pre-recorded and we
won't be taking your calls. However, we've lined up some
calls in advance that we think you'll find helpful, so
stay tuned and enjoy the rest of the program.
S2 (05:56):
Delighted. You're along with us today as we talk about
what it looks like to live as a faithful steward,
here's what we understand. God should be our ultimate treasure.
Money is a good gift, but it can rival our hearts.
Wealth isn't the problem. Trusting in it is. And so
we seek God's wisdom. We accept our role as stewards,
(06:17):
not owners. We live with an eternal perspective. We use
money as a tool to accomplish God's purposes. Because spending well,
the way we allocate God's money reflects our values, what's
most important to us. So we choose contentment. We live simply.
We have margin. We invest purposefully. We embrace gratitude. We
give generously, and we live rich toward God. That's the
(06:39):
ultimate objective here on this program. Each day, as we
walk alongside you to help you navigate and manage God's money,
we'll be turning to some calls we've lined up in
just a moment, but first, in the news today. Most
people are aware of the dangers of accumulating credit card
debt or missing payments. But there's another risky habit that
many haven't heard of, and it's called credit cycling. Credit
(07:03):
cycling happens when somebody repeatedly maxes out their card, pays
it off quickly, and then immediately starts spending again, essentially
churning through their credit limit to spend more than the
limit allows. While it might seem like a clever workaround,
experts warn it can backfire. Now, doing this occasionally may
(07:23):
not raise eyebrows, but consistently. Credit cycling is often seen
by issuers as a red flag, and it could result
in your credit card being shut down, reward points revoked,
or your credit score taking a hit. That's because your
credit utilization ratio, the amount you owe compared to your limit,
(07:44):
is a major factor in your score, even if you're
making payments on time. Credit cycling can signal financial stress
or risky behavior. If your card is closed, your total
credit limit drops, which could raise your credit utilization and
then further damage your score. Instead of cycling, consider healthier strategies.
(08:06):
Ask for a credit limit. Increase spread purchases across multiple cards,
or make early payments mid cycle to keep your utilization low.
It can be a smart move if you're frequently using
your card and want to improve your credit score. Bottom
line don't risk being flagged as a credit risk. There
are safer, smarter ways to manage your spending. But by
(08:29):
all means, I would say at the end of the day,
let's only use credit cards for budgeted items things you're
already planning on spending the money on. It's in the plan.
You've thought through it and you pay it off in
full every month, if not by the end of the cycle,
certainly by the due date. So you're not paying any
interest whatsoever, Soever, but just something to have on your
(08:51):
radar if it's not currently. All right, we're ready to
dive into your questions today. Now let's begin in Oregon. Lynn,
you'll be our first caller. Go ahead.
S4 (08:58):
I am retired, so I no longer have earned income.
Is it possible for me to open a Roth account
for a relative? He's 27. He is employed, so he
does have earned income. But I'd like to open that
for him and begin with putting money in there.
S2 (09:20):
Yeah. Uh, the account holder must have earned income. Uh,
so since you're retired and you, uh, have no earned income,
you personally cannot contribute to a Roth IRA, either for
yourself or on behalf of someone else. So what you
could do is gift the money to a relative who
(09:41):
does have earned income. They could then use that money
to contribute to their own Roth IRA, as long as
their total contribution doesn't exceed their earned income or the
IRS limit, which is 7000 for 2025. So that would
be the option there. Um, and this is not a minor.
(10:02):
So you couldn't do a custodial account. Um, but would
that be an option for you.
S4 (10:08):
In that scenario? Would he have to take the initiative
to open the account himself?
S2 (10:15):
Yes. Yeah. Uh, because an individual retirement account, uh, would
be in that person's name, and they would have to
prove their identity to the brokerage firm that's opening the account. Um,
so you could gift them the money and, you know,
tell him what it's for in terms of, hey, this
is designated for you to put into a Roth IRA. Um,
(10:39):
but they're going to need to be the ones to
open it. It's not like a 529 where you could
open that on behalf of another person. Um, you know,
with a Roth IRA. The the custodian is going to
want the person to verify their identity.
S4 (10:54):
So if I gifted him, let's say, $100, that would
just go into his account and he would have to
use his own money to open that Roth account.
S2 (11:06):
That's exactly right. Yeah. You could gift, uh, you know
him any amount you'd like. Um, and as long as
it's under the annual gift exclusion, uh, for this year, then,
you know, you don't even have to tell the IRS
about it. Um, and then, you know, that would allow
him to then turn around and put that into the
Roth IRA. But you're going to have to give him
(11:26):
the money and then trust that he's going to make
the contribution. By the way, that annual gift exclusion for
2025 is $19,000 just for this year. So if you're
under that, then, you know, you don't have to let
the IRS know that you did it. And it's certainly
not taxable.
S4 (11:43):
And what is the maximum one can put into a Roth?
S2 (11:47):
Yeah, it's this year. The Roth IRA contribution limit is 7000.
If you're under the age of 50, if you're over 50,
you can put in another $1,000. So it would be
a total of 8000. But you have to be 50
or older.
S4 (12:05):
Okay. Thank you very much.
S2 (12:07):
Okay. You're very welcome. Thanks for your call today, Lynn.
You know, the Roth IRA is a very powerful tool
for you to consider, especially for those that are younger.
Just because that after tax contribution, which means, by the way,
if you have the ability to do it, you can
put in more money because remember, you know you are
paying the tax on it first and then you're putting in,
(12:30):
you know, $7,000. Um, so that's uh, money that then
is growing tax free. You will never pay tax on
that money down the road, which is just really a
powerful tool. Now a lot of people have access. Um,
you know, more often than not these days, and they're
increasing if you don't. So you may if you haven't
had one in the past, check to see if you're
(12:52):
going to have one in the future. A lot of
people have access to a Roth 401 K, and you
know that acts just like the Roth IRA, except now
you've got a higher contribution limit, which allows you to
put away more money. And, you know, obviously that's key
because especially if you're a bit behind, uh, you know,
(13:12):
you have the ability to catch up quite a bit further.
It's salary deferral. So you don't make that direct contribution.
But for 2025, uh, up to age 50, $23,500 instead
of 7000 can go into the 401 K, and then
if you're 50 or older, you get another 7500 on
top of that, uh, 31,000 if you're between 60 and 63,
(13:34):
you get the super catch up. So instead of an
additional 7500, you get an additional 11,002 250. So $34,750,
then that's going into a Roth growing tax free, which
is just a huge benefit. You also may want to
consider doing a little bit in each one. Um, just
because that gives you both the tax free and the
(13:56):
tax deferred option. The unknown is the tax rate. So
you'd be able to choose which is better. Well, folks,
before we head to this break, let me remind you
if you haven't checked out Faith. Com that's faith. Philly.com.
I'd love for you to do that. You'll find the
best content in biblical finance there for you to grow
in your understanding of managing money God's way. You'll find
(14:18):
our community and the money management system. It's all there
at Faith. Philly.com. Now, again, a reminder we're not here today,
but more of your questions that we lined up after
the break. Helping you see God is your ultimate treasure.
This is faith in finance. Live. I'm Rob West. Such
(14:40):
a privilege to be along with you today. Hey, just
a quick reminder. Today is not the day to call in.
Our team is away from the studio. We did line
up some questions. Those will be coming straight ahead. But first,
we often receive emails from you at Moody radio.org. And
when we get those, we try to tackle those a
few each week. Let's do one of those. Now this
(15:00):
comes from Norma. She says. I'm receiving an inheritance and
also purchasing part of my dad's estate. I'd like guidance
on the best way to manage both the income and
the purchase. Well, Norma, this really is a significant moment.
Not just financially, but emotionally too. You're receiving an inheritance
and stepping in to help preserve part of your father's legacy,
(15:21):
and that's a privilege it's worth approaching with care. So
I love your question. I would say first, take your time.
Don't rush into any decisions. Treat the two opportunities separately
so the inheritance is a gift. Think through how to
honor the Lord with it and perhaps include some giving
some savings or paying off debt as a part of it.
The purchase is an investment, so be sure it makes
(15:43):
sense financially. Don't let emotion push you into terms that
strain your budget, and you don't have to go it alone.
You can find a certified Kingdom Advisor to help you
along the way. Just go to Faith Philly.com and click
Find a Professional. That's Faith 5.com. Before we head back
to the phones, you know, in our recent edition of
the Faithful Steward magazine, which, by the way, is a partner,
(16:05):
you'll receive four issues of Faithful Steward delivered to your door,
among other resources, including our new study, Wisdom Over Wealth
on the Book of Ecclesiastes. And if you want to
become a partner, just go to Faith com and click give.
But one of the articles that's in the current issue
of Faithful Stewardess is called Finding an Uncommon Retirement by
(16:26):
our good friend Jeff Hanan. And boy, I'm so excited
for you to read it. You know, as we think
about retirement and this is a topic that comes up
often on the program, you know, we really should have
a different perspective on retirement. Um, in as believers, uh,
because when we look at just our calling to be workers,
(16:47):
to be productive, to be co-creators with God, and to use, uh, that, uh, work, uh,
to bring God glory and to even promote human flourishing,
there's an opportunity for us to think about that fourth
quarter of life differently. You know, the secular vision of retirement,
I think, is weighed down with images of sailboats and
(17:09):
gag retirement gifts and vacations to the tropics. But the
Bible has a very different vision of aging. Listen to
this from Psalm 92. The righteous flourish like a palm
tree and grow like a cedar in Lebanon, writes the psalmist.
They're planted in the house of the Lord. They flourish
in the courts of our God. They still bear fruit
in old age. They're full of sap and green. That
(17:32):
Psalm 9212 to 14, you know the biblical call in
retirement is certainly to faithful stewardship, but not just our finances.
I think the deeper call is the stewardship of our experiences,
our skills, and our very lives for the well-being of others.
You know, Christian hope means aging. Uh, frailty and death
(17:53):
are not the end. We live in the ever shining
dawn of the resurrection. This life is just the beginning
of the life that is truly life that we read
about in First Timothy. In a biblical picture of retirement
is not one of heroism or hedonism, but I think
listening to God's voice and responding in love as elders
intent on sharing wisdom and blessing with the next generation.
(18:16):
It's simply a life of service, pointing beyond ourselves to
the servant in whose image we are made. And so
this question what am I going to do with my retirement,
I think, is an important one. And if we attune
our ears to God, we'll hear Christ say, peace be
with you as the father has sent me. Even so,
(18:36):
I am sending you. So I would just encourage you
to to think differently about this season of life and
step forward into it and faithfully pursue the work God
has entrusted to you. You have an incredible opportunity with
the wisdom and the experience God has given you to
be that elder at the city gate, dispensing wisdom, investing
(18:59):
in the next generation, loving the people around you and
serving our Lord. And now, this is just one of
the articles that we have featured in this edition of
Faithful Steward, just chock full of incredible, rich, theologically sound
content that will just encourage you and push you forward
in your stewardship journey. Again, if you want to check
it out, become a partner today. When you go to faith.com,
(19:21):
click give at the top of the page. All right,
let's dive back into your question. Let's go to Illinois
and welcome Carol. Go right ahead.
S5 (19:28):
Thank you for taking my call.
S2 (19:29):
Yes, ma'am.
S5 (19:30):
I have a I have a question. Uh, my husband
and I recently made an attempt to take out a
loan to build a small building on our property. It
was probably for around 50, 60,000. We were going to
have enough money to finance most of it ourselves. We
were turned down for the loan at the bank that
(19:55):
we have been with forever. Our credit scores are both
way over 800. Uh, everything we own is paid for.
Own the property already. Uh, I know there's other things
that go into the determination of whether you get a
loan or not, and I just kind of would like to.
The bank just didn't make things very clear about why
we were turned down. I thought maybe you could help
(20:16):
me a little bit with that.
S2 (20:18):
Yeah, absolutely. So this is a parcel of land that
you already own, Carol. And you were looking for a
loan to improve that, to put a new dwelling on it.
S5 (20:29):
Not a well, not a dwelling. It's basically a glorified
man cave.
S2 (20:34):
Okay. All right. Very good. Uh, yeah. And so you
were obviously this could be, you know, the land and
the improvements would have been the collateral. Is that right?
Or was it just a personal.
S4 (20:46):
Yeah.
S5 (20:48):
Well, I it would have been a I guess you'd
call it a personal loan. But yeah, I mean, we
everything we have, we own outright. So yes, there was
plenty of collateral.
S2 (20:59):
Yeah. Okay. But was the, the property going to serve
as collateral for the loan?
S5 (21:05):
Oh, that is a good question. I'm not sure. I
don't think the property where the building was going to
be was going to be on that, because that is
my mother's and my property, but it would be our
personal home and property would, would have been okay.
S2 (21:20):
And so tell me about that property. You own that
free and clear.
S5 (21:24):
Yeah, yeah, yeah. It's been assessed at about 160,000.
S2 (21:29):
And so you were willing to put a first mortgage
on that property and then essentially get cash out to
build the other property.
S6 (21:38):
That is a good question.
S5 (21:39):
I wish my husband was here to answer that, but
I was thinking it was more just like of a
personal loan.
S2 (21:44):
Okay. Yeah. Very good. Let's do this. I've got to
hit a quick break, but I think that's something we
ought to lean into. I'll give you a few more
thoughts on what else could have, uh, affected this. If
you can hold right there, we'll pick it up after
the break. Stay with us. We'll be right back. So
thankful to have you with us today on Faith and
(22:05):
Finance live. I'm Rob West, by the way. Our team
is not here today. We're away from the studio, so
don't call in. But we've got some great questions that
we lined up in advance. We'll get to those in
just a bit. You know, I'm reminded as we think
about the role of money in our lives that we
need to counteract the messages of this world. We need
to operate from a biblical worldview. And when we look
(22:27):
to scripture. I think we really see three big ideas
around the role of money. The first is money is
a tool. Yeah, we use it to buy things for
ourselves and others, and we use it to accomplish God's purposes.
But it's also a tool in the sense that God
uses money in my life to teach me to rely
on him. It's a daily demonstration of my faith. It
(22:49):
reveals where I've placed my trust and what I value.
So it's a tool. It's also a test. You know,
having too much or not enough can be a test.
Are we going to live with contentment? Will we choose contentment?
Are we going to rely on money in place of God?
It's a test in our lives, but it's also a testimony,
especially our willingness to trust God when we have little
(23:11):
or perhaps to share generously when we have much that
provides witness to an unbelieving world, even our faith to
handle money. God's way in the midst of uncertain times,
that itself can be a great testimony to the world.
So money is a tool. It's also a test, and
it's a testimony that God uses to both provide for
(23:33):
my needs, as well as to grow me up in
my faith and rely more heavily on him. I hope
that's an encouragement to you today. All right, let's head
back to the phones before the break. We were talking
to Carol in Illinois. Carol and her husband own a
piece of property. They're wanting to put a glorified man
cave on it. Obviously, it's a separate piece of property
from their current residence. They own nothing on that property
(23:56):
and their primary residence. They have a great credit score
of 800 plus and they were denied for that loan.
She believes that it was being they were seeking a
personal loan where they were just personally guaranteeing it, and
there was not any collateral for it. So she was
not adding a mortgage, uh, with Collateralizing either. The property
(24:18):
that would have the, uh, the new improvements on it,
the new man cave, or their primary residence where they'd
be essentially adding a first mortgage, trying to do cash out.
And so that's likely what was going on there. There
could be any number of reasons, Carol, why you were
denied from that. You know, that personal loan. You know,
(24:39):
common reasons, many of them don't apply to you. So
high debt to income ratio, that wouldn't apply because you
really don't have any debt. It could be limited income
or irregular income. So especially common for retirees. Um, you know,
lenders often prefer W-2 income. Uh, you know, it could
be an insufficient credit mix or history for large loans. Um,
(25:02):
you know, it could be just internal lending policies in
some cases. You know, if it's not income, they may
have age restrictions. Um, you know, so that could be
another factor or, uh, you know, no income verification. So
what I would do is ask the lender specifically for
the denial reason they're required to provide what's called an
(25:25):
adverse action notice. If you're denied, you could try a
credit union or a bank where you already have a relationship.
You could reach out to our friends at Movement mortgage
at movement. You could also try a secured loan where
the property becomes the collateral. And obviously that would dramatically
(25:45):
reduce the risk for the lender. Just given that, you know,
you've got a piece of collateral there that's worth far
more than the loan you would be seeking. And so that,
you know, would be the the suggestion I would make here.
Does that make sense?
S5 (26:00):
Yeah it does. It's it's kind of a moot point.
I mean, we just my husband ended up just selling
some stock in building it, but his first, the way
he wanted to do it first was to take the
loan out. And that's why we you know, I just
was a little puzzled by that. Yeah. I thought you
need to be able to offer some clarification. And you have.
S2 (26:18):
Excellent. Well, glad you called and you sorted it out.
But yeah, I would be scratching my head to thinking, well,
we've managed our finances so well, we're debt free, we've
got a phenomenal credit score. Why in the world wouldn't
wouldn't we be a great risk for this, this bank
to take on. And it's just probably one of their
underwriting standards just didn't line up with the situation here.
(26:38):
And so they just automatically denied it, which was probably
not a good decision on their part. Nevertheless, here we are.
Thanks for calling today. Call anytime if we can serve you.
800 525 7000 is the number to call. We've got
some lines open. We'd love to hear from you. Let's
go to Georgia. Hi, Pat. Go ahead.
S7 (26:56):
Thank you. Thank you for taking my call. I have
a quick question. Um, I bought we bought our home in, uh, 2001,
and I'm 93. In a few days. My question is,
if I were to sell it and it's. We paid 2.25,
and I think it's valued at 350. Now, do I
(27:18):
have to pay a capital gains on the difference you like. Wait.
S2 (27:24):
Yeah.
S7 (27:24):
Go ahead.
S2 (27:25):
No. You're fine. You likely would not, Pat. And here's why.
Because you've owned the home for two out of the
last five years. You've owned it for the last 21 years.
So certainly you would qualify for two out of the
last five. And you lived in that home as your
primary residence for two out of the last five. Then
you would qualify for up to 250,000 of capital gains
(27:50):
that are excluded from tax for a single filer, and
married filing jointly up to a half $1 million of
capital gains excluded from tax. So in your case, you know,
you would have at the most it sounds like 125,000
in gain. And since your gain is well under the
250,000 exclusion, no capital gains tax would be due. Assuming
(28:15):
you didn't use this exclusion on another home in the
last two years.
S7 (28:19):
Yeah. No I haven't. This is my main. My main home.
S2 (28:23):
Okay. Yeah. So you should be have confidence that you're
going to be able to sell that house without owing
any capital gains tax whatsoever. Uh, you know, assuming there's
no unusual factors going on here and, uh, you could
take that money and do whatever you want with it. Uh,
that what you do after the sale has nothing to
do with your ability to take advantage of that exclusion.
S7 (28:45):
All right. So, uh, it also wouldn't be affected by
the fact that I have CDs and, you know, IRAs
and so forth.
S2 (28:53):
No, ma'am, it would not. I mean, ultimately, uh, your
combined income would determine what capital gains bracket you fall into.
But given that you've got this exclusion, uh, from tax
for a capital gain of up to 250,000, uh, because
it was your primary residence for two out of the
last five years, it's not even taxable whatsoever. So your
(29:16):
other income has no bearing on it until you get
above that 250,000 and gain mark.
S7 (29:23):
I see. And the fact that if I sold it
and downsized, which would mean I would, you know, get
a less expensive home, that wouldn't affect it either.
S2 (29:34):
No, ma'am. What you do with the money after the sale,
if you turn around and invest it, you put it
in another property, you stick it in savings, you give
it all away. None of that has any bearing on
whether or not you owe capital gains. Given that you
have this exclusion so you can do anything you want
with it, including putting it into another home, and that's
(29:55):
not going to affect this exclusion. You will not owe
capital gains tax.
S7 (30:00):
Right. All right. Well thank you ever so much. And
I can't tell you how much I enjoy your show.
S2 (30:05):
Well thank you Pat. That's very kind of you. Call anytime.
You've been a delight to speak to today. May the
Lord bless you. Before we head to our break, you know,
as I read scripture, I see this big idea jumping
off the page around contentment. You know, I think as
we consider our role as stewards of God's money, we
need to foster this attitude that the apostle Paul talked
(30:27):
about and that is contentment. Remember, he said that it's learned.
I've learned to be content. He was in a time
of plenty and in a time of need, and he
learned to be content in either of those. Contentment is
a choice. And when we increase our contentment, well, then
we can focus on what God has given us and
not on what he's given others. I hope that's an
(30:47):
encouragement to you today. Again, we're not here today. We're
away from the studio, so don't call in. But just
around the corner. We have some more questions to tackle.
I know you're going to enjoy the calls we have
coming up. Stay with us. We'll be right back. Great
to have you with us today on Faith and Finance live.
I'm Rob West. Our team is away from the studio today.
(31:10):
We're not here, so don't call in. But we lined
up some great questions in advance and we'll get to
those in just a moment. First, you know, as I
look at the scriptures, one of the big ideas that
literally jumps off the page when you look at this
area of finance in light of a biblical worldview, is
the idea of contentment. We should foster an attitude of contentment.
(31:31):
And I think that's the first understanding is that it is,
in fact, an attitude. Matthew 633 says, but seek first
the kingdom of God and His righteousness, and all these
things will be added to you. If our aim is
the kingdom, then that changes our perspective. It makes it
focused on the eternal, not the temporal. And that's a
(31:51):
game changer. Well then, from an attitude, we learn that
contentment is in fact learned by the apostle. Paul said
it this way, not that I'm speaking of being in need,
for I have learned in whatever situation I am to
be content. That's Philippians 411. So it's a learned behavior.
It's also a choice. You know, I can choose to
(32:12):
be content in every circumstance. Rich or poor, happy or sad,
easy or difficult. Because as Christ followers, well, our position
in Christ never changes. And I think that's an important
reminder for us today. And perhaps it could change your
whole approach to your money. All right, let's head back
to the phones. Let's go to Ohio. Hi, Larry. Go ahead. Sir.
S8 (32:34):
Hi, Rob. How are you doing?
S2 (32:36):
Doing well sir. How can I serve you today?
S8 (32:38):
Well, um, we've talked quite a few times before, and, uh,
I listen to you all the time, but, uh, there
was a lady that called in, was talking about, uh,
gifting money and so forth, and you told me we
talked about this. I have a CD coming due, and
I wanted to gift that to my son, and I
think he told me that I could do that. And
(33:00):
I guess my question would be, um, when it comes
time to cash that in, I just roll it over
to his account or roll it into mine and write
him a check. How would I do that without getting
involved with the government?
S2 (33:13):
Yes. So that's a good question. So, um, yeah, in
terms of the mechanics of it, uh, you would typically,
you know, as that CD is coming to you, you
would let them know because some of these have an
automatic renewal where it just kind of rolls over if
you don't tell them you want to redeem it. Um,
or you just, you know, want it to go into savings.
(33:34):
So typically what would happen is it would not renew,
and therefore they would move it out of the CD.
And just whatever the savings portion of that account is.
And then at that point it's just sitting there like
any other, you know, checking or savings account. And then
you would then, you know, you could make that transfer
electronically to your son or write him a check. Um,
(33:55):
in terms of that part about, uh, you know, notifying
the IRS, uh, you do have, uh, a gifting amount
per person that allows you to, you know, not involve
the IRS. And that's $19,000 per recipient. So you can
gift as an individual. 19,000 to as many other people,
(34:17):
other individuals as you want without letting the IRS know.
And it goes without saying, but as a married couple,
you would each be able to do that. So you
could do 38,000 to a single individual. Um, if you
go above that 19,000 to any one person or above 38,000,
if your gifting is a married couple, then you would
(34:39):
be required to fill out IRS form 709 and just
let the IRS know. And then that is going to
count against your lifetime exemption. So there's an annual exemption.
And that's not a part of the lifetime exemption. And
then there's a separate lifetime exemption. And that's sitting today.
Now this could change. They could they could bring it
(35:00):
down as a part of the new tax overhaul. But
today it's at 13.99 million as a lifetime exemption. So
it wouldn't be any tax. It just would chip away
at that lifetime exemption, but it would involve you notifying
the IRS that you gave the gift.
S8 (35:17):
Okay. That's where I was confused. It's just a notification
to the IRS.
S2 (35:22):
Yes. And it is ultimately going to result in them,
you know, applying it toward that lifetime exemption. So it
will systematically reduce it. But yeah, you're not going to
get anywhere close to $14 million. So you should be
in good shape.
S8 (35:36):
Well I don't know.
S2 (35:40):
All right. Well maybe you do. So. Yeah. Just keep
that in mind.
S8 (35:44):
I'm just spend that money when I come down and
buy you a Mexican dinner.
S2 (35:47):
Hey, there you go. I'm still waiting for that, Larry. So. Yeah,
just let me know when you're coming. I've already got
the place picked out.
S8 (35:54):
I tell you what, Rob, I've got a pup here,
and we're trying to train this pup so when we
can get away from her, we're coming.
S2 (36:00):
All right, well, I'm going to be ready for you.
So you let me know when that is. And we're
going to enjoy a meal together, my friend.
S8 (36:05):
All right, pal, thank you.
S2 (36:07):
God bless you. Kansas is where Roger is located. Go ahead. Sir.
S9 (36:11):
Yeah, I'd like to move into my rental property. It's
been rented for 20 years, but I understand if I
move in it for two years that I could avoid
capital gains if I sold my current house.
S2 (36:23):
Yes. Yeah, exactly. So, um. So tell me, give me
a little bit more detail. So you have two properties.
That's right.
S9 (36:33):
Yes.
S2 (36:34):
Okay. Yeah. So you've got a rental property that you're
looking to sell and. Yes, from the date of the sale. Roger.
Going back, you would need to, uh, be able to
say that that property was your primary residence, um, for
two out of the last five years. Um, and in
(36:56):
terms of, you know, property, residence, uh, you know, the
IRS has a specific definition on that. That's your main
home where a person lives most of the time. And,
you know, so that would be the majority of the year. Um,
and if you can live there for two out of
the previous five years, then yes, you would be able
to have that $250,000 in gain or 500,000 as a
(37:19):
married couple that would be excluded from tax.
S9 (37:23):
Okay. That answered my question.
S2 (37:26):
Okay. Yeah. Very good. We appreciate it, Roger. And hopefully
that helps. You know, the only other option to consider,
which some people you know are interested in is if
you're going to have another rental property, if you're planning
to take the proceeds and, you know, roll it into
another property, you could do a 1031 exchange, which would
not exclude the capital gains, but it would kick the
can down the road. Um, now, if you're looking to
(37:48):
redeploy that money somewhere else, invest it or give it or,
you know, whatever that is, well, then that doesn't apply.
You probably be better off going with the strategy we
just talked about. But if you're thinking about buying another
rental property and you'd be willing to identify that property
in 90 days and close on it in 180 days, Um,
then you could essentially roll 100% of the money forward,
(38:11):
not pay the capital gains. And the IRS would just, uh,
you know, get you for that capital gains when you
ultimately sell, you know, another property down the road. Um,
but you could use 100% of that to get into
the next one. So something to at least think about
if you're planning to stay as a landlord in the
the rental property business. If you're not, then, uh, then
(38:32):
you might want to go with the, uh, the strategy
we've discussed. Thanks for your call today, sir. We appreciate it.
You know, one of the other issues that comes up
a lot here on the program that we, uh, tackle
in this current edition of Faithful Steward, is this question
is it okay to leave different amounts to my kids?
You know, and this is one of those issues that
just doesn't feel right. Because, you know, I think what
(38:55):
parents are getting out there is is it fair to
leave different amounts to my kids? And here's the reality.
You know, estate planning can be challenging. And, you know,
we and I certainly understand the desire to be fair.
And I think the answer lies in and this is
what we tackle with our friend Ron Blue, the popular
author and one of my mentors in this edition of
(39:17):
Faithful Steward. He has a principle that he calls the
uniqueness principle. And here's what it says. It says love
your children equally, but treat them uniquely. Now, what Ron
is not saying here is that we automatically need to
leave differing amounts. You may decide to, for whatever portion
you're not going to give to ministry, you're going to
(39:40):
leave to your heirs. You may decide to divide it
absolutely equally. And that's great. But what he's opening the
door to is this idea that each of my children
is different financially, emotionally, spiritually. And you may decide that
their individual needs and life circumstances warrant allocating varying amounts.
(40:02):
And he offers the idea that good stewardship means recognizing
these differences. And then again, in some cases, and you
need to make that decision prayerfully as the steward, allocating
resources differently. And that doesn't necessarily mean you're showing favoritism,
which the Bible warns against. I mean, we see that
in Genesis 37. Um, but as we consider it, here's
(40:25):
the three questions that Ron encourages you to ask as
you think about how much to leave to the kids.
Number one, um, what would be the worst possible outcome
if we leave this amount to this child? And obviously,
you would apply these questions, uh, you know, for each
of your children. So that's number one. What would be
the worst possible outcome if we leave this amount to
(40:48):
this child? Second, how serious is this outcome? And third,
how likely is it to happen? You see, remember, money
is going to be the fuel in the tank that's
going to propel your child in whatever direction he or
she is already heading. If they're heading in a in
a direction away from the Lord, that money could be
(41:10):
the fuel that that pushes them even further if they're
living a toxic lifestyle. On the flip side, it could
fuel them absolutely in the direction they're already going, if
they're generous givers and wise stewards. But asking those questions
might allow you to put a finer point on it.
And the purpose of the questions Ron makes. The point
is not to arrive at a predetermined answer. Again, you
(41:33):
may treat your children equally, or you may choose to
to handle a disproportionately, but the goal is to guide
you toward a well thought out decision. Ultimately, wealth transfer
should reflect God's wisdom, not just human emotions. And so
that's why factors like financial need and spiritual maturity and
(41:53):
life circumstances should all be prayerfully considered. But, uh, anyway,
it's hopefully that's an encouragement to you today. I'm today.
I'm sure there's somebody out there in our listening audience
who's kind of wrestling with that and just thinking about
as the steward in answering this question, and this is
a big one, is the next steward chosen and prepared?
We need to consider the impact of the money on
(42:15):
that next generation to the best of our ability. You know,
we can't play God in their lives, but we can
be wise and thoughtful and prayerful about how we approach
wealth transfer decisions. Hey folks, thanks for being with us today.
We're so grateful for how you joined the ministry each day,
and how you come alongside us and your questions inviting
us into your story. It's not just me here. We've
(42:37):
got a big team here at Faith by including our
team today. Couldn't do it without him. Amy, Dan, Gabby,
T and Jim. Faith and Finance Live is a partnership
between Moody Radio and Faith fi. Have a wonderful day
and come back and join us next time for another
edition of Faith and Finance live.
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Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.