Episode 84  With large data breaches at Capital One and Equifax, doing everything you can to keep your financial information safe is more important than ever. In this episode of GMR, we share 5 things you can do to make sure your identity and your finances stay safe.  SHOW NOTES      
   
     “ What are some recommendations and ways that we can protect ourselves financially? ” 
   
   — Diana from Frisco, TX 
 
      Let’s look at the two Diane mentions:     Capital One    Equifax      Capital One   March of this year 106 Million customers had their data stolen. But it wasn’t until July that Capital One allegedly found the breach and reported it.    Over 100,000 Social Security numbers were stolen, many were linked to bank account numbers and other personal information.    Equifax  In September of 2017, Equifax announced it experienced a data breach.  A class action settlement was submitted on July 22, 2019. Equifax denies any wrongdoing.    Approximately 147 million people’s personal information was compromised.    The Federal Trade Commission said last week that  Equifax has agreed to pay at least $575 million and up to $700 million  to help compensate victims of hackers who stole personal data from  Equifax servers.    The FTC said this week that because of the  overwhelming public response to the settlement , the amount of cash you get to  cover monitoring may be much less than $125.     The proposed settlement will start with a $300 million fund to compensate affected consumers who bought credit-monitoring services. Equifax will also pay $175 million to state and districts -- and $100 million to the Consumer Financial Protection Bureau in civil penalties.     Equifax has agreed to kick in $125 million more compensate affected consumers for a total of $425 million to consumers, the other $275 million will go to government entities.    The Federal Trade Commission said Thursday consumers who have already requested their checks — which are meant as subsidies for outside credit monitoring services — will soon be contacted by the third party administrator handling Equifax settlement claims. The administrator will provide consumers with the chance to switch benefits, the FTC said.    Just $31 million has been set aside for reimbursements for alternative credit monitoring, out of a total of $300 million that Equifax  agreed to pay  in a settlement with the FTC announced last week.  "Another clear failure by the FTC." - Sen. Ron Wyden      Things you should do to protect your financial information	  Change your passwords    It sounds simple, but making sure your passwords for your email and financial logins are complex and non-repetitive is key.     Don’t use your Social Security number as a password, and avoid using information that is easily accessible on your social media accounts as the answer to a security question    This continues to be a problem … people tend to repeat the same passwords and use very simple terms. This is the first basic thing [to do to protect yourself].”    Because we use our phones and emails for so much of our communication, it may be tempting to send personal information like our Social Security or bank account numbers electronically — Don’t do it!  Instead we recommend doing it in person as much as possible or share it through a password protected PDF.    2. Ignore unknown phone calls    When it comes to phone calls, scammers can spoof their number to make it look like it’s coming from a specific company.    You can only be sure that it’s coming from someone you know if you’ve initiated the call. If you see a number that looks suspect, just ignore. If you do accidentally pick up, as soon as you realize it’s someone asking for information, hang up and don’t give them any information.     Telephone Scams     You’ve won a free vacation package    Buy products    Invest your money    Receive free product trials    Offer you money through free grants and lotteries    Threatened with jail or lawsuits if you don’t pay them       Safety Tips     Don’t provide your credit card number, bank account information, or other personal information to a caller.    Don’t send money if the caller tells you to wire money or pay with a prepaid debit card.      3. Shop on secure sites    Before entering any sensitive information on a website (like your credit card number on a store’s website), take a look at the browser. If the web address starts with “https” instead of “http,” then you know it’s a secure site. (The “S” stands for secure.) and ensures that all the communication with the website is encrypted.”    Smaller sites may not give you that option, and you’re a little bit higher risk than with the bigger retailers.” (And avoid entering any personal information while using any public Wi-Fi — sorry, no more online shopping while sitting at Starbucks!).    4. Use safe payment methods    So much focus is on security when shopping online, but don’t let your guard down when shopping in person.    Keep only one or two cards on you at all times to minimize the damage if your wallet is stolen, and so you know which ones they are if they’re lost  You really don’t need more than two anyway.     Whenever possible use a credit card over a debit card — they will offer more protection. If you’re using a debit card, [a criminal] can drain your account, and there’s a good chance the bank will not be able to repay you for your losses.    Use your bank’s ATM when getting cash, less likely to have skimmers installed and your information be stolen.  Public places such as restaurants and gas stations should be avoided.    5. Monitor your credit    Because so much sensitive information has been compromised recently, monitoring your credit regularly is a must.     Know your credit score and keep an eye out for drastic changes.    Most banks are offering credit scores as a free activity and service, so you have the ability of staying close to the information.    You can also get a free credit report from each major credit agency (Experian, Equifax, TransUnion and Innovis) once per year.  They talk to each other, so don’t get them all at once. Spread them out throughout the year … that way you can get one every few months. Go to a reputable site like  Credit Karma  or  AnnualCreditReport  to do so.       Resources   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 84
With large data breaches at Capital One and Equifax, doing everything you can to keep your financial information safe is more important than ever. In this episode of GMR, we share 5 things you can do to make sure your identity and your finances stay safe.

     

 
 
      Episode 83  Financially Independent, Retire Early (FIRE) is a movement that started more than 27 years ago.  It’s an interesting approach to retirement, but is it a sound retirement plan, and more importantly, is it right for you?  In this episode of GMR, we’ll explore this growing movement and what if any aspects of it might benefit you.    SHOW NOTES     FIRE - Financial Independence, Retire Early    Kara in Keller, TX asks, “Hey David and Leo, I’m really curious to know your thoughts on the FIRE movement. Do you feel like it’s a realistic and balanced approach to retirement?    Fun fact:  David Sandhu is sponsoring a movie here in the DFW area called:  “Playing With Fire” , it’s a documentary focused on this movement of Financially Independent, Retire Early community.      What is Financial Independence, Retire Early (FIRE)?   Financial Independence, Retire Early (FIRE) is a movement dedicated to a program of  extreme savings and investment  that allows proponents to retire far earlier than traditional budgets and retirement plans would allow.     Dedicating up to 70% of income to savings, followers of the FIRE movement may eventually be able to quit their jobs and live solely off small withdrawals from their portfolios.     It requires extremely high rates of saving at the expense of current quality of life and lifestyle (must be considered).        How Financial Independence, Retire Early Works     Movement started with the 1992 best-selling book “ Your Money or Your Life ” by Vicki Robin and Joe Dominguez.    It came to embody a core premise of the book: comparing expenses and time spent at work against hours of your life. Every expense is compared to the time spent at work in order to earn the purchase.    Proponents of the extreme-saving lifestyle often begin by remaining for several years in the traditional workforce in order to save up to 70% of their yearly income. Once their savings reach approximately 25-30 times their yearly expenses, often roughly $1 million, they may quit their day jobs or completely retire from any form of employment altogether.    To cover their living expenses after retiring at a young age, FIRE devotees make small withdrawals from their savings, typically around 3% to 4% yearly.     Depending on the size of the savings and desired lifestyle, this requires extreme diligence to monitor expenses and maintain and reallocate their investments.     The danger is when stock markets fall and/or interest rate environments are low, the FIRE plan may fall short.       Additional facts from our friend David     The FIRE movement is marked by frugality, debt elimination and avoidance, minimalism, financial independence and extreme saving / investing.     One of the most influential currently in this space is  Mr. Money Mustache,  a pseudonym for Pete Adeney he was an engineer (him and his former wife were) and writes about extreme frugality, paying off debt, extreme saving/investing and became extremely famous after writing a blog post titled  "The Shockingly Simple Math Behind Early Retirement" .    He makes his current income by ads on his blog. What’s funny is that many more FIRE bloggers have found that to be a successful way of ea sing into FIRE (starting a blog, making ad revenue and then not actually using the full 4% from their portfolio, it's very common as you'll see from the bloggers featured in the documentary coming out and have the same trend:  Mad Fientist ,  Go Curry Cracker ,  Root of Good ,  Millenial Revolution .     So "retirement" in the traditional sense of "no income from a job" is kind of redefined with hobbies or other activities (blogging, rental real estate, house hacking etc.) that actually produce income.     Another trend you'll see is credit cards that have huge sign up bonuses or rewards for funneling all purchases through the credit card to then be used for no/low cost vacations / trips, which a certain blogger (Richmond Savers) made popular by writing a post titled  "Take Your Family to Disney World For Free: Step-by-Step Instructions ", who then merged with another blogger and created ChooseFI, an network of facebook groups and people dedicated to "travel hacking".    Another influential writer is JLCollinsNH, who became famous in the subculture after writing his  Stock Series , and then subsequently followed it by writing a book  "The Simple Path to Wealth" , he's a huge  Boglehead  and the summation of the book is to simply invest into  Vanguard low cost Total Stock Market Index Fund (VTSAX)  and use that as your only investment option.         Extreme lifestyles won’t fit most people.  If you are already living at a certain level of lifestyle, it will be very difficult to switch.       Income    Most have a fairly high income    Usually dual income, both in the $70K a year or more range, typically at least a household income of $100,000 a year, but often up to $150K - $200K in peak earning years (engineers, coders, banking).    Because of this high income, they live on less than half (be extreme), but still have necessities met.    The formula of living on 50% will allow anyone to retire in 17yrs, however it’s a lot harder to live on 50% of $40K than it is to live on 50% of 100K.    It is still possible on $30K, you can find ways to live on $15K a year, it’s just going to be extremely counter-cultural.    So education, hard work, and good income is a big part of this equation.    If you want to be FI, realize that there are two parts to the equation,  raising your income will often get you to FI much faster than simply lowering your lifestyle.  If you’ve got a great income, then it’s definitely time to start focusing on lowering lifestyle though.      Recommended take-aways:     The percent of income you save will dramatically impact how soon you can stop working full-time.   From Mr. Money Mustache (MMM) stats:    Save 10% = Retire in 51yrs    Save 30% = Retire in 28yrs    Save 50% = Retire in 17yrs       Don’t let FIRE bring you discontentment  across your whole life, don’t envy other people's lives, don’t overspend to match someone else’s life, but don’t necessarily dramatically change your life to match someone else’s life.     Start working on the thing you’re most passionate about,  the thing you love, that can provide a small amount of income. You might find that it’s easier to switch over to your passion full-time than you think. You can live on less, when you’re fulfilled by what you do.       Remember the We always recommend:    Spend on Purpose    Save before you Spend    Increase your Financial Margin    Invest Wisely      Resources   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Episodes  72  &  73  - The 4 Steps to Purposeful Living David Sandhu website -  DAVID$ DOLLAR$

Episode 83
Financially Independent, Retire Early (FIRE) is a movement that started more than 27 years ago.  It’s an interesting approach to retirement, but is it a sound retirement plan, and more importantly, is it right for you?  In this episode of GMR, we’ll explore this growing movement and what if any aspects of it might benefit you.

     

 
 
      Episode 82  With the average price of cars continuing to rise, leasing has become more popular in recent years, especially for luxury brands.  But, is leasing really a less expensive way to drive?  In this episode of Getting Money Right, you'll learn everything there is to know about leasing to help you decide which is best for you, leasing or buying.    SHOW NOTES     The average price of a brand new car this year is just shy of $35,000.   Cars have increase in cost due to:     Cars today have more expensive safety equipment and features than ever before.     Increasingly rigid government regulations also contribute. Government mandated emissions controls and fuel economy requirements drive costs up.       Actual dealer profit margin, as a percentage of sticker price, on new cars has gone down in recent years. Used to range from 7%-8%, with some vehicles up to 15%, but today the margins are down, with some being as low as 3%. In order to increase margins, many dealers will dramatically market leases because they have more fees and costs built in to increase the profit margin.     According to LeaseGuide.com, around 75% of all luxury cars are leased. The reason is because banks don’t like to loan out more than $30,000 for a car loan. If you want a car that’s worth more than that and you don’t have the money to make up the difference, leasing is your only option.     As automotive consumers attempt to deal with higher vehicle costs, they are opting for longer and longer loan terms — up to 84 months (7  long  years). This means higher interest costs and, in most cases, being “upside down” on the loan for years.     Costs:    Gap insurance (what you owe vs what it’s worth).    The Cap Cost, or Cost of Capitalization: refers to the amount that is being financed with a lease.     Money Factor: This is simply the interest rate on a lease but expressed as a decimal number. Dealers sometimes mark up the money factor for additional profit. If you feel you are being overcharged, ask the dealer for a lease based on their "buy rate."    Residual Value: This is the agreed-upon value of the car at the end of its lease term, after accounting for the car's anticipated depreciation. Banks or leasing companies typically set this amount based on industry data. The best cars to lease are those that tend to retain their value over time -- e.g. at least 50% of their original value after 36 months.    Acquisition Fee: Sometimes called a bank fee or administrative fee, this is a fee that leasing companies charge to arrange the lease. This fee is typically between $395 - $895, depending on the vehicle and leasing company. Note that acquisition fees can be bundled into the monthly lease payment, or paid up-front.    Buy-Out Price: If you think you may want to purchase your leased car at the end of the lease period, check to see whether the leasing company is flexible on the buy-out price. In some cases, they may agree to set the buy-out price lower than the residual amount.    Disposition Fee: This fee is charged by the leasing company to cover the expense of cleaning up and selling the car after you return it at lease end. Most charge between $300 and $400. You normally won’t be able to avoid this charge unless you buy the car at the end of the lease -- or, in some cases, lease another car of the same brand.    Sales tax: In some states, sales tax is charged up-front, and is usually added to the lease capitalized cost (unless paid in cash). However, in most states sales tax is simply paid as part of each monthly payment.    Early termination penalty fees.    Over mileage fees (10,000 | 12,000 |15,000).    Higher insurance cost over buying a used car, because you’re insuring a more expensive vehicle.    You can’t sell your car whenever you want. If you lose your job and can’t make payments, you’re stuck in the contract. Same might be true if you buy a brand new car. But if you buy a used car, then you can usually sell it for the same price you purchased it.    Normal Registration, License, Tag, and Title Fees.    Lessees often end up in a cycle of getting a new car every few years, the period during which cars lose their value the fastest. That typically leaves them paying much more than if they bought a new car with a loan and kept it for four years or longer.       Why leasing seems appealing on the front end:  Although leasing doesn’t change the price and one-time costs you pay for a new car, it does offer significantly lower monthly payments since you only pay for the part of the car’s value that you use — its expected depreciation in value — instead of its entire value. At the end of the lease, you return the car or purchase it for the remaining part of its value that you haven’t already paid.     Leasing can therefore make a new car much more affordable in terms of monthly cost, although leasing a new vehicle ever 3 years or so is obviously more expensive in the long run than buying one car and driving it for years. When you lease, you’re constantly paying for the most expensive part of the vehicle.  One thing you should never do is roll over your old car loan into a new car loan or into a lease.   Pros of Leasing    You drive the car during its most trouble-free years.    Cars have more electronics and are harder to troubleshoot requiring you to take it to an expert.    Cars are better designed today than ever before and there’s more diagnostic equipment available to the general public and a greater knowledge base (youtube) to help you with repairs when/if maintenance is required.       You're always driving a late-model vehicle, and one that's usually covered by the manufacturer's warranty, which may include free oil changes and other scheduled maintenance.    You can drive a higher-priced, better-equipped vehicle than you might otherwise be able to afford.    You don't have to worry about fluctuations in the car's trade-in value or go through the hassle of selling it when it's time to move on.    There could be significant tax advantages for business owners.    At the end you just drop off the car at the dealer.       Cons of leasing    Mileage limit - 5 to 20 cents per mile if you go over.    More miles allowed during the lease will cost you more up front    Normal wear and tear is covered but not if the wear is above normal    With a lease you’re stuck with the payment.  You can always sell and walk away from a purchased car.    Buying a car means the payments will one day end, not with leasing    When the lease is over you have no car and no equity to use to purchase the next car.       Which is cheaper?  Example:  We found a promotion for a 2019 Honda Accord Sedan 2019 lease deal listed by Edmunds.com  (you can find similar deals here) . After $1,000 down, the lease payments are just $401 a month for a 36-month, 45,000 mile lease. The total cost for three years comes to $15,436. Let’s assume you found a similar lease again for another three years. Your total cost comes to $30,872, or $5,145 a year for six years.  The same vehicle had a target price of $27,637. If you put the same $1,000 down and financed the car for 60 months at 3 percent, your monthly payment would come to $516. At the end of the 5-year loan, the total cost to purchase the car (including interest) comes to $30,980. Over six years, your annual cost would come to $5,163 a year.  Leasing is cheaper by $115 per month, but you have one extra year to pay compared to buying.  And, after the loan is paid off, you own your car. You have an asset. According to  Kelly Blue Book , a 2013 Honda Accord LX in mid-grade condition fetches about $13,000 on the private market. So whether you sell the car or apply the trade-in value toward your next purchase, your actual cost of ownership is reduced to $17,980 or $2,996 a year. That’s a savings of 2,149 a year and $12,894 over six years.  Buying in the long run is cheaper than leasing!    Resources   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 82
With the average price of cars continuing to rise, leasing has become more popular in recent years, especially for luxury brands.  But, is leasing really a less expensive way to drive?  In this episode of Getting Money Right, you'll learn everything there is to know about leasing to help you decide which is best for you, leasing or buying.

     

 
 
      Episode 81  Marketing is BIG business and it’s EVERYWHERE!  Whether you’re checking your media feed, doing your online banking, or driving down the street, you’re being influenced by marketing.  On this episode of GMR well share ways marketing pushes you to spend beyond what’s good for you and what you can do to overcome their influence.    SHOW NOTES    We are more connected today than ever before.  We can talk to anyone from across the globe, even have a face to face conversation and share what’s happening in our lives in an instant.  Social media platforms have made it extremely easy to stay connected to EVERYBODY. And advertisers know this. So, they are using those places where we hang out to entice us to buy their products.      
   
     “ We must shift America from the needs to a desires culture, people must be trained to desire, to want new things even before the old have been entirely consumed. We must shape a new mentality in America, man’s desires must overshadow his needs.”  ” 
   
   — Paul Mazur (Lehman Brothers) 
 
     
   
     “ “It is generally understood in our industry that we aren’t fulfilling wants and needs – we are creating them. A new product first needs to create a market for itself, before it can be sold into it.” ” 
   
   — Ad Agency Executive 
 
     
   
     “ “The biggest companies know people buy feelings, not things”. ” 
   
   — Tony Robbins 
 
      2019 Modern Wealth Survey      According to the survey:    Three in five Americans pay more attention to how their friends  spend  compared to how they  save .    An equal number saying they’re at a loss to understand how their friends are able to afford the expensive vacations and trendy restaurant meals they portray on social media.    The pressure to spend as a result of social media envy and the desire to not be left out of friends’ experiences is particularly acute among Generation Z and millennials.     Financial decisions are influenced by friends’ showy social media feeds      

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     Marketing Strategies that companies use:    Anchoring or Instant Markdowns     "Retail price $139.99. Our price $49.99."      "In Denmark, you can't advertise a 'before' price if it hasn't been sold for that price in your own shop for at least two weeks," the user wrote. "If you keep selling the product as this discounted price, then this price is considered the before price if you advertise that product again."      Expensive Decoys    The most expensive item on the menu that no one actually every buys.    Makes everything else feel cheaper in comparison, people think “at least I didn’t spend that amount”... and I shop at a high quality place.    $5, $6, $9 | Small, Medium, Large.      The Loss Leader with Long Isles    Marketing a single product for super cheap, even to where the company loses money on that product, but then people wonder the isle of the store and end up buying a bunch of other over-priced products.    This pairs well with confusing architectural layout of malls or shopping areas… architect Victor Gruen, started making malls with layouts that disorient visitors, slowing them down with the goal of increasing their impulse purchases.     Did you know that larger shopping carts, cause people to spend as much as 40% more. Grab a hand basket, instead of a shopping cart, it will make a difference on your bill.         Remedies – How to be Prepared to not fall prey to marketing     Limit your exposure  - Social Media, internet browsing, TV watching.     Go on a TV fast.      Pay for Commercial Free Services  (might actually be cheaper in the long-run).     Unsubscribe  from useless e-mail lists. Use “ Unroll.me ”      Clean up your mailbox.  Are you getting coupons and other magazines you don’t need sent to your mailbox every week? Use  DMAchoice .    Save your browser. Use  Adblock Plus . You’ll get to surf the web without all those annoying ads.    Be “Self Aware”    If you buy something you weren’t planning on buying only because of a discount, you’ve been fooled. And since the average American Household debt is $5,700 — a lot of people have been fooled.    All we have to do is look at how the average person’s garage, attic, or basement is running out of space. It’s full of times people have been fooled (they try to make up for it with “garage sales”, but by then it’s too late).    Don’t be fooled.          
   
     “ If something cost $100, and it is on sale for $75, and then you decide to buy it, you did not save $25.  You spend $75. ” 
   
   — Mark Cuban 
 
     8. Make a plan  (budget)  and stick to it    Make a list before you go shopping    Make a list of people you need to shop for, then only buy for people on the list.    Ask yourself, is this a need or a want?    If it’s a want, then wait at least one day to purchase it. Most of the time the desire to purchase will fade in just one day.       Schwab’s survey shows that more than 60 percent of Americans who have a written financial plan feel financially stable, while only a third of those without a plan feel that same level of comfort. Those with a plan also maintain healthier money habits when it comes to saving:    Saving habits of planners vs. non-planners     

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


      Investing habits of planners vs. non-planners:     

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     Despite the benefits of planning, Schwab’s survey shows that only 28 percent of Americans have a financial plan in writing. And among those without one, nearly half (46 percent) say it’s because they don’t think they have enough money to merit a formal plan, 18 percent say it’s too complicated, and 13 percent say they don’t have enough time to develop one.    Resources   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  GMR 2:  Creating A Financial Plan for Your Life Part 1  GMR 3:  Creating A Financial Plan for Your Life Part 2  GMR 6:  Breaking Down Budget Categories - Housing  GMR 7:  Breaking Down Budget Categories - Food & Transportation  GMR 8:  Breaking Down Budget Categories - Debt, Miscellaneous & Recreation  GMR 9:  Breaking Down Budget Categories - Child Expenses, Personal, Saving & Giving

Episode 81
Marketing is BIG business and it’s EVERYWHERE! Whether you’re checking your media feed, doing your online banking, or driving down the street, you’re being influenced by marketing. On this episode of GMR well share ways marketing pushes you to spend beyond what’s good for you and what you can do to overcome their influence.

     

 
 
      Episode 80  Student loans can delay or keep you from many of the good things you’d like to do. That’s why it’s so important to pay off your student loans as quickly as possible.  On this episode of Getting Money Right, we’re sharing 6 steps to help you pay off your student loans cheaper and faster.   SHOW NOTES   PAYING OFF STUDENT LOANS  Most graduates will need to start making payments starting 6 months after graduation.  It is tempting to try to make those payments as low as possible so you can do all the other things you want to do, but don’t forget that if you choose an alternative repayment option for your student loans, you typically pay much more in interest over the long term. Even though you make lower monthly payments, you pay interest for a longer period of time, which really adds up.    1. Start by knowing the details about each loan    The first step to building a strategy to paying down student loan debt is knowing how much you owe across all your different loans.     If you’re unsure of how many loans you have, go to the  National Student Loan Data System  for info on your federal student loans.     If you have a private student loans,  check your credit reports .  You loans are tracked on your credit report. Collect the information about each of your student loans, make a list to track:    Type of Loan (Federal or Private)    Fixed-Rate or Variable-Rate    Balance    Interest Rates    Term Length    Total Due (w/ Interest)    Grace Period (Interest Accrues)         2. Know the pros and cons of refinancing (or consolidating) student loans to lower your monthly payment.  Many people think about consolidating or refinance high-interest rate student loans.  Refinancing can help you lower your monthly payments, but can also increase the term length and interest rates.     ·You will also lose your federal borrower benefits (e.g. grace period, Perkins loan forgiveness, federal loan protections, etc).     Consolidation or refinancing your student loans can be a great option for you — just know how it will impact you financially.  Always do the math and make sure you understand what refinancing will help you gain and what it might make you lose!       3. Pay more than the minimum required payment  Look at your budget and see what you can reallocate to increase your student loan payments     Don’t have a budget?   Listen to GMR episodes 2 and 3 to create a budget and 6-9 to know more about how to allocate the right amounts to each area of your spending.    A budget will not only help you to pay down your student loans faster, it will help you live well, create margin, build wealth, and secure your future.    Paying more than the minimum payment will help by decreasing the amount of interest you pay and the time it will take to pay your loans off completely.  Who doesn’t love that!    Make sure any extra payments are designated to pay down the principal part of your loans.  You don’t want the lender to apply the extra payment toward a future credit, you want the balance to drop every time you make that extra payment.       4. Stay motivated by staying focused on your progress    Have a way to know how you’re doing by having a visual way to see your progress.  Use a pay off chart or some visual way to help you see your balances drop.    Use a debt snowball type of debt repayment plan to decrease the interest and the time to pay off.  See debt payoff plan on leosabo.com.       5. Make bi-weekly payments or pay extra payments every so often    By making more payments your principal balance will go down faster saving you time and money paid on interest.    Making bi-weekly payments decreases your interest because the principal balance is reduced every time you make a payment; you pay less interest because the balance is less.    Apply every tax refund and every raise and bonus to pay down the student loans.    Most people waste their tax refund because they have no plan for it.  There’s always something you’re going to think you MUST have when extra income comes in; make sure you designate it before it comes!       One the best ways to say goodbye to your student loans is to have them forgiven.     6. Consider student loan forgiveness programs.  If you have private student loans there are no forgiveness programs, so it’s important to knock these out first if you have other loans that do qualify and you plan to engage with a student loan forgiveness program.    Here are some of the most well-known programs:       Public Service Loan Forgiveness Program   is available if you work for the government or a nonprofit, no matter what your job is.        Stafford Loan Forgiveness Program  for Teachers  is for professional teachers who work at a nonprofit or a public school.      Perkins Loan Cancellation   is for certain public servants, such as teachers, law officers, military, medical providers, and firefighters. You must service low-income families, special needs students, or teach a subject with a shortage of qualified teachers. So, if you’re a teacher at a nonprofit or a public school, you may qualify for more than one of these programs.     There are also state-sponsored student loan forgiveness programs, especially if you teach in a high-need area. To learn more, check out the American Federation of Teachers  Loan Forgiveness and Funding Opportunities Database .    There are organizations such as  Nurse Corps  that offer scholarships and loan forgiveness to nursing students, faculty, and nurses who work in high-need areas.      Forgiveness typically requires paying loans for certain periods.  The Public Service Loan Forgiveness program wipes out your remaining balance after you pay your loans for at least 10 years or make 120 payments.     You must work full-time for an eligible public service or nonprofit employer, but it doesn’t have to be consecutive years of service.    For instance, if you leave public service for some years and eventually return to an eligible employer, your previous qualifying payments still count toward the forgiveness requirement of 120.    With the teacher program, you must complete five consecutive years of work, with some exceptions, such as taking medical leave or being deployed for military service.     While paying a loan for five years may sound better than 10 years, in some cases, it may actually cost more than the public service option. It depends on how much student loan debt you have.     The amount of forgiven student loan debt varies by program.    With the  public service program , you can have any amount of student loan debt forgiven.     For instance, if you have $200,000 in student loans, the program wipes them out after the 10-year payment requirement.        Having an unlimited amount of student loans forgiven is fantastic because it gives students a huge incentive to go into fields that require expensive education but may not pay big salaries.    However, for the Stafford Loans forgiveness program for teachers there is a debt cap. It only forgives up to $5,000 or up to $17,500 of student loans.    The amount of forgiveness you get depends on variables such as the subject you teach, your degree, and when you took out your loans. Highly qualified teachers—such as those in math, science, or special education—are eligible for the highest amount of forgiveness.    Highly qualified teachers, such as those in math, science, or special education, are eligible for the highest amount of forgiveness.        Perkins loan program  are available to both undergraduates and graduate students and are funded by schools using government funds.    The Federal Perkins Loan Cancellation program wipes out your student loans based on years of service, not on how many years you’ve made loan payments. It eliminates 100% of Perkins debt if you complete five years of qualifying public service.    Not all federal student loans qualify for forgiveness, so you will want to review the type of loan you have and specific program      RESOURCES    Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  GMR 2:  Creating A Financial Plan for Your Life Part 1  GMR 3:  Creating A Financial Plan for Your Life Part 2  GMR 6:  Breaking Down Budget Categories - Housing  GMR 7:  Breaking Down Budget Categories - Food & Transportation  GMR 8:  Breaking Down Budget Categories - Debt, Miscellaneous & Recreation  GMR 9:  Breaking Down Budget Categories - Child Expenses, Personal, Saving & Giving

Episode 80
Student loans can delay or keep you from many of the good things you’d like to do. That’s why it’s so important to pay off your student loans as quickly as possible. On this episode of Getting Money Right, we’re sharing 6 steps to help you pay off your student loans cheaper and faster.

     

 
 
      Episode 79  Student Loan debt is now at 1.6 trillion dollars, a figure that has tripled since 2005. To understand the magnitude of this number, consider that credit card debt is only 1 trillion dollars.  For those with student loans this crisis is all too real, but this predicament may soon impact many without student loan debt.  SHOW NOTES   The Impact of Student Load Debt on Young Adults   2018  survey  by Summer and Student debt Crisis.    19% putting off marriage    26% putting off having children    56% prevented from buying a house    42% prevented from buying a car    80% put off saving for retirement    50% could not donate to charity    58% reported a decline in credit score    13% failed credit check for apartment application    85% said student loan debt was a major source of stress       Thoughts on student loan debt    There’s a  moral obligation  that those who take on debt should repay it.    Cultural Ideology of  “I deserve it”  … someone else should pay for it.    Taxing “the rich” is forcing someone else to take their money and pay for me.    Cultural values that puts one group against another will cause deep divides and prejudice.    We teach… you should be responsible and take ownership.       There’s no such thing as a free lunch - everything has a cost!     There is no “secret sauce,” no top secret way to go through school without paying anything at all.  This goes back to the economic idea that “everything has a cost.”  You are going to pay for college in some way.  It may be:    Studying like crazy in high school to get the best grades, giving up nights and weekends out with friends to prepare for the SAT & ACT.    Spending 100’s of hours pouring over scholarship information finding people around the country willing to help with your education from their own generosity.    Working your way through school, studying 30hrs a week, while you work 30hrs a week, living a low cost lifestyle.    Going to a Community College… you’re paying by giving up some of the amenities that big 4yr colleges and private institutions offer, but you’re getting the education at a low dollar cost.    Using debt to pay for school.  You don’t pay now, but you’re going to be paying for years and years to come, with the interest and financial pressure being the added cost of not making different choices now.       Personal Finance Education  A recent  article  from Market Watch, reveals how the U.S. Treasury Department is finally understanding the importance of educating students on finances.  It is recommending initiatives to ensure students get the information they need before they make HUGE life altering debt decisions, such as taking on student loans.    Potential Solutions to Help Student Recognize the True Cost & Pain of Student Loans:     Financial-aid offer letters should have “an itemized and sub-totaled cost of attendance” that discusses the direct costs paid to colleges for things like tuition and other indirect costs.     The costs should also be calculated “after grants and scholarships are applied.” Currently, “award letters are sometimes unclear, leaving students with inadequate information to make financial decisions.”    There should be a “broad adoption” of debt letters in higher education.     The letters tell student borrowers the debts they’ve incurred annually and what their expected future repayment amount will look like. Debt letters are already required in 12 states.     The letters should spell out repayment options, estimate how much interest will pile up if payments are deferred and provide average entry-level salaries for graduates with the same sort of major.    Financial literacy courses should be required. If classes are optional, they might not “reach students who may be unaware of them or who do not value the benefits of financial education.”    The report admitted it could be tough finding the right teachers because the subject isn’t a focus at most schools. Alternative instructors could be trained students, financial-aid officers and outside financial professionals, the report said.       Elizabeth Warren’s Plan for student loan debt forgiveness would:     Cancel $50,000 in student loan debt for every person with household income under $100,000.    Provide substantial debt cancellation for every person with household income between $100,000 and $250,000.    Not making students pay taxes on the debt that is forgiven, currently it’s set up to count as income, when the government pays your student loans.    Also make private student loan debt eligible for cancellation.    Streamline the student loan debt forgiveness process using data and income information already available to the federal government.     Importantly, Warren's plan offers no student loan debt cancellation to borrowers with a household income above $250,000, which she says is the Top 5% of earners. There would also be "phase-outs" based on income. The $50,000 cancellation amount would phase out by $1 for every $3 in income above $100,000. According to Warren, for example, "a person with household income of $130,000 gets $40,000 in cancellation, while a person with household income of $160,000 gets $30,000 in cancellation."     How These Proposals Would Be Funded  Warren proposes we pay for this student loan forgiveness plan and universal free college plan as follows:    Ultra-Millionaire Tax. - The tax would include a 2% annual tax on the 75,000 families in the U.S. who have at least $50 million in net worth.    Warren also wants to invest an additional $100 billion in Pell Grants over the next 10 years and expand eligibility for Pell Grants to include more lower- and middle-income students.        Practical Example:   The average household income in the U.S. is around $50,000 of which 2% equals $2,000.  Imagine two police officers showing up at your door, demanding that you give them $1,000. They walk down the street and give the money to someone else.      Do you have an extra $1,000 you want to just give to the government?    People will say that taking 2% from someone isn’t a big deal, but no one would want to have the government forcibly take 2% from them.     When we vote to tax someone else, we’re voting for the government to take money away from someone. I really struggle with this concept. I do understand the value of taxes as a whole and the benefits the government provides. But I struggle with what amounts, in my mind, to “stealing”, taking what belongs to someone else, just because it benefits me.   This is promoting inequality….it’s forcing something onto one group that you don’t force onto another group.   France's wealth tax contributed to the  exodus  of an estimated  42,000 millionaires  between 2000 and 2012, among other problems. Only last year, French president Emmanuel Macron  killed it .  In 1990, twelve countries in Europe had a wealth tax. Today, there are only three     Culturally, there is a deep anger against the rich:  In an article from Currentaffairs.org, the following statement was made:   IT’S BASICALLY JUST IMMORAL TO BE RICH  Here is a simple statement of principle that doesn’t get repeated enough: if you possess billions of dollars, in a world where many people struggle because they do not have much money, you are an immoral person. The same is true if you possess hundreds of millions of dollars, or even millions of dollars. Being extremely wealthy is impossible to justify in a world containing deprivation.   Even though there is a lot of public discussion about inequality, there seems to be far less talk about just how patently shameful it is to be rich.   The Scripture’s perspective on the rich  1 Timothy 6:17-19 New International Version (NIV)   17 Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. 18 Command them to do good, to be rich in good deeds, and to be generous and willing to share. 19 In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.      Matt 25, parable condemns the servant who doesn’t multiply and grow the finances he’s entrusted with.     1 Timothy 5:8 New International Version (NIV)   8 Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.   Mark 4:19-20 New International Version (NIV)    19  but the worries of this life, the deceitfulness of wealth and the desires for other things come in and choke the word, making it unfruitful.  20  Others, like seed sown on good soil, hear the word, accept it, and produce a crop—some thirty, some sixty, some a hundred times what was sown.”    Matthew 7:1-3 New International Version (NIV)    7  “Do not judge, or you too will be judged.  2  For in the same way you judge others, you will be judged, and with the measure you use, it will be measured to you.   Exodus 20:17 New International Version (NIV)    17  “You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.”      A Global Perspective on Wealth    If you’re at the average household income in the United States, which is $56,000 per year, you are in the top 0.23% of the wealthiest people in the world.      RESOURCES   Global Rich List    Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 79
Student Loan debt is now at 1.6 trillion dollars, a figure that has tripled since 2005. To understand the magnitude of this number, consider that credit card debt is only 1 trillion dollars.  For those with student loans this crisis is all too real, but this predicament may soon impact many without student loan debt.

     

 
 
      Episode 78  Student Loan debt is now at 1.6 trillion dollars, a figure that has tripled since 2005. To understand the magnitude of this number, consider that credit card debt is only 1 trillion dollars.  For those with student loans this crisis is all too real, but this predicament may soon impact many without student loan debt.  SHOW NOTES    The impact of student load debt on young adults    2018  survey  by Summer and Student debt Crisis.    19% putting off marriage.    26% putting off having children.    56% prevented from buying a house.    42% prevented from buying a car.    80% put off saving for retirement.    50% could not donate to charity.    58% reported a decline in credit score.    13% failed credit check for apartment application.    85% said student loan debt was a major source of stress.       Thoughts on student loan debt    There’s a  moral obligation  that those who take on debt should repay it.    Cultural Ideology of  “I deserve it”  … someone else should pay for it.    Taxing “the rich” is forcing someone else to take their money and pay for me.    Cultural values that puts one group against another will cause deep divides and prejudice in our nation.    The right thing to do is to be responsible and take ownership.       There’s no such thing as a free lunch - everything has a cost!     There is no “secret sauce,” no top secret way to go through school without paying anything at all.  This goes back to the economic idea that “everything has a cost.”  You are going to pay for college in some way.    It may be:     Studying like crazy in high school to get the best grades, giving up nights and weekends out with friends to prepare for the SAT & ACT.    Spending 100’s of hours pouring over scholarship information finding people around the country willing to help with your education from their own generosity.    Working your way through school, studying 30hrs a week, while you work 30hrs a week, living a low cost lifestyle.    Going to a Community College… you’re paying by giving up some of the amenities that big 4yr colleges and private institutions offer, but you’re getting the education at a low dollar cost.    Using debt to pay for school.  You don’t pay now, but you’re going to be paying for years and years to come, with the interest and financial pressure being the added cost of not making different choices now.       personal Finance education  A recent  article  from Market Watch, reveals how the U.S. Treasury Department is finally understanding the importance of educating students on finances.  It is recommending initiatives to ensure students get the information they need before they make HUGE life altering debt decisions, such as taking on student loans.    Potential Solutions to Help Student Recognize the True Cost & Pain of Student Loans:     Financial-aid offer letters should have “an itemized and sub-totaled cost of attendance” that discusses the direct costs paid to colleges for things like tuition and other indirect costs.     The costs should also be calculated “after grants and scholarships are applied.” Currently, “award letters are sometimes unclear, leaving students with inadequate information to make financial decisions.”    There should be a “broad adoption” of debt letters in higher education.     The letters tell student borrowers the debts they’ve incurred annually and what their expected future repayment amount will look like. Debt letters are already required in 12 states.     The letters should spell out repayment options, estimate how much interest will pile up if payments are deferred and provide average entry-level salaries for graduates with the same sort of major.       RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 78
Student Loan debt is now at 1.6 trillion dollars, a figure that has tripled since 2005. To understand the magnitude of this number, consider that credit card debt is only 1 trillion dollars.  For those with student loans this crisis is all too real, but this predicament may soon impact many without student loan debt.

Episode 77
Congratulations to all the recent graduates!  To honor those who have worked hard to accomplish this great achievement, we’re sharing 7 money tips to help them build a solid financial foundation for their life.  If you’re not a recent grad, that’s ok, these tips can help you too!

     

 
 
      Episode 76  Congratulations to all the recent graduates!  To honor those who have worked hard to accomplish this great achievement, we’re sharing 7 money tips to help them build a solid financial foundation for their life.  If you’re not a recent grad, that’s ok, these tips can help you too!  SHOW NOTES     7 TIPS FOR COLLEGE GRADS TO MANAGE MONEY SUCCESSFULLY  1.    Create your own bank accounts.  2.    Create your Stability Fund  3.    Crush your student loans.  4.    Calibrate your credit.     5.    Clear out toxic debts.  6.    Consider your future home.  7.    Choose your investing strategy.    1. CREATE YOUR OWN BANK ACCOUNTS.  One of the first things you should do after graduating is make sure you have great checking and savings accounts.   You don’t want to keep your co-accounts which you probably opened with your parents, it’s time to get out on your own. You may want to rethink which bank you’ll want to have a long relationship with.  Bank accounts lay a foundation for your money management system, so they need to give you lots of benefits. Look for a bank or credit union that offers    No monthly fees    Interest earning checking and savings      accounts    A great mobile app    Easy transfers options    Free bill pay, and    Mobile deposits    Visit  Bankrate .com to compare the best  FDIC-insured  accounts available for your location or nationwide.   Working with a local credit union can be a great choice! If you have access to USAA (active and former military and eligible family members), there can be some major benefits to working with them, from insurance discounts to good savings rates, and great online service.     2. CREATE YOUR STABILITY FUND   We recently did an episode about the  “4 Financial Steps to Purposeful Living”.  Starting a stability fund was number 2!    Save before you spend -  We always recommend that you, “ Save before you spend...so you experience stability today and in the future .”   1.    1 Month of Living Expenses in Stability Fund (bare minimum)    1 month of living expenses will get you through most emergencies or expenses that are beyond your normal monthly budget expenses.    2.    Continue $150 into savings (any increment of $50 based on income).      Should I be saving or paying off debt?  Both …  always need to grow the habit of saving.    3.    3-6 Month Stability Fund    A smooth transition from one season to the next (job loss, medical emergency, maternity leave, other budgeted items in excess).        Think of the stability fund as an investment in yourself. It’s how you’ll stay calm and cool in the face of a potential crisis like losing your job.       3. CRUSH YOUR STUDENT LOANS    1. MAKE ACCELERATED LOAN PAYMENTS.  If you get paid every two weeks, a great strategy to knock out your student loans faster is to make accelerated or biweekly payments instead of monthly payments. There are 52 weeks in a year, not 48. So it’s a sneaky way to get the equivalent of one extra monthly payment made each year.   2. PAY MORE THAN THE MINIMUM.  The longer you take to pay off the loan the more it will cost you in interest.  It’s best to pay as much as you can from the start.  Start with paying at least more than the minimum payment.   Example : If you owe $50,000 at a 5 percent interest rate for 10 years.     Your minimum payment would be $53    You’ll pay $14,000 in interest over the      life of the loan.     If you pay an additional $100 each month      you’ll save about $3,000 in interest and pay off the loan two years      earlier.      When you send more than the minimum payment or make biweekly payments, make sure that you add a note to your payment indicating that you want the extra to go toward your principal balance. Otherwise, the lender may think that you’re prepaying the next month’s payment and simply hold it or apply it toward a credit, which won’t help you get rid of the debt any faster.     4. Calibrate your credit    How to Build Your Credit  Your Credit Score and Credit Report Matters    You may need to borrow for a major purchase (car, house, etc.) .     Without good credit you may not qualify.    With bad credit you’ll pay a premium.      Credit Score Overview : Information about you gets reported to one or more credit bureaus that maintain the data in your file, known as your credit report. Then companies who want to access your credit report pay the bureaus for your information.  Credit bureaus don’t make lending decisions; they just maintain your data. But credit reports are used by lenders who want a quick way to evaluate you. That’s why they were designed--to provide lenders a snapshot of your current credit worthiness.    Credit scoring model     Analyze the total amount of debt you owe on all your accounts.    Revolving accounts (credit cards), take in account the available credit vs. your utilization of that credit.  This makes up about a third of your overall score.    As long as you make monthly minimum payments on time, your revolving accounts will remain open.    Installment loans, such as car loans and mortgages, are different because they don’t have a credit limit and do come with a set maturity or pay off date. When you pay down an installment loan to zero, the account is closed.    A key formula that’s used to calculate your credit scores is called your credit utilization ratio. It’s used only on  revolving accounts . It’s a simple formula that compares your credit limits to your outstanding balances. This ratio shows how much available credit you’re using.    Example: if you have a credit card with a balance of $500 and a credit limit of $1,000, your utilization ratio is 50%.    Keeping a low utilization ratio, such as below 20%, is optimal for good credit. So, by paying down your balance on the card to $200, you could reduce your utilization ratio from 50% to 20% and boost your credit scores.    A low utilization ratio tells potential lenders and merchants that you’re using credit responsibly. A high ratio says you’re maxed out and may even be getting close to missing a payment. To maintain the best credit possible, never let your utilization ratio exceed 20% to 25%.    The utilization ratio is 30% of your score.  Paying all your debts on time is 35% of the score.    As a new graduate, you may not have much credit history, which means you probably have no or low credit score. But don’t worry, it’s easy to build good credit over time.    High credit scores tell lenders and merchants that you’ve been responsible with money. A good credit history comes with privileges such as low interest rates on loans and credit cards, which can save you a bundle.    But low scores mean that you won’t qualify for credit or that it will be expensive. And poor credit can trip up other areas of your financial life even if you never borrow a dime.       Other Ways Credit Affects Your Finances  Besides reducing the interest you pay when you borrow, your credit affects many other aspects of your everyday life, even if you don’t borrow money! There are a variety of companies and industries that use credit to evaluate you, even though they’re not giving you a loan or a credit card.     Auto insurance -  A few states have banned use of the credit score as a factor in auto insurance, but most allow insurers to look at your score and change your costs based on your score.     Home insurance  - Just like with auto insurance, home insurers also use your credit when setting rates for home, condo, and renters policies.      Employment -  Employers in most states have the right to check your credit reports, with your permission.  The idea is that if you have a poor credit history, you might not be disciplined or responsible when handling money. Employers may fear that you have the potential to steal or that you’ll be distracted at work due to financial troubles and not offer you a job.     Leasing -  Most landlords, property managers, and leasing companies check your credit as part of the application process to make sure you’re likely to pay rent on time. If you have poor credit you may get turned down to lease or have to pay a larger security deposit.     Cell phone contracts -  Cell phone companies check your credit when you apply for a new contract to make sure you’ll pay their bill. If you have poor credit you may be charged higher rates, a higher security deposit, and not qualify for top-tier wireless plan offers.     Utilities -  Credit also plays a big role in utilities, such as water, gas, power, and cable service. Applying for these services is applying for credit—so having poor credit makes it difficult to get them. You might have to pay a hefty security deposit, get someone with good credit to co-sign your application, or get a letter of guarantee from someone that says they’ll pay your utility bill if you don’t.     5. Clear out toxic debts  Once you have credit, it can be tempting to use too much of it.  Every new graduate needs to respect debt. It’s a powerful financial tool that can help you build wealth when used the right way. For instance, you can use low-interest debt to get an education so you earn more over your lifetime, or to buy a home that appreciates in value over time. But if you use high-interest consumer debt—such as credit cards and payday loans—to finance a lifestyle that you can’t afford, it can be devastating to your financial life.   To learn more about debt and how to eliminate it  check out Episode 34-35        RESOURCES   Budgeting and Debt Elimination Tools  GMR Episode 34 -  Help! I Can’t Pay My Credit Card Debt  GMR Episode 35 -  Dangerous Debt    Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 76
Congratulations to all the recent graduates!  To honor those who have worked hard to accomplish this great achievement, we’re sharing 7 money tips to help them build a solid financial foundation for their life.  If you’re not a recent grad, that’s ok, these tips can help you too!

     

 
 
      Episode 75  Congratulations to all the recent graduates!  To honor those who have worked hard to accomplish this great achievement, we’re sharing 7 money tips to help you build a solid financial foundation for your life.  If you’re not a recent grad, that’s ok, these tips can help you too!   SHOW NOTES     7 Tips for College Grads to Manage Money successfully    Create your own bank accounts.    Create your Stability Fund    Crush your student loans.    Calibrate your credit.       Clear out toxic debts.    Consider your future home.    Choose your investing strategy.      1. Create your own bank accounts.  One of the first things you should do after graduating is make sure you have great checking and savings accounts.   You don’t want to keep your co-accounts which you probably opened with your parents, it’s time to get out on your own. You may want to rethink which bank you’ll want to have a long relationship with.  Bank accounts lay a foundation for your money management system, so they need to give you lots of benefits. Look for a bank or credit union that offers    No monthly fees    Interest earning checking and savings accounts    A great mobile app    Easy transfers options    Free bill pay, and    Mobile deposits    Visit  Bankrate .com to compare the best  FDIC-insured  accounts available for your location or nationwide.   Working with a local credit union can be a great choice!  If you have access to USAA (active and former military and eligible family members), there can be some major benefits to working with them, from insurance discounts to good savings rates, and great online service.     2. Create your Stability Fund   We recently did an episode about the  “4 Financial Steps to Purposeful Living”.   Starting a stability fund was number 2!    Save before you spend -  We always recommend that you, “ Save before you spend...so you experience stability today and in the future .”     1 Month of Living Expenses in Stability Fund (bare minimum)    1 month of living expenses will get you through most emergencies or expenses that are beyond your normal monthly budget expenses.      Continue $150 into savings (any increment of $50 based on income).      Should I be saving or paying off debt?  Both …  always need to grow the habit of saving.      3-6 Month Stability Fund    A smooth transition from one season to the next (job loss, medical emergency, maternity leave, other budgeted items in excess).          Think of the stability fund as an investment in yourself. It’s how you’ll stay calm and cool in the face of a potential crisis like losing your job.       3. Crush your student loans.   1. Make accelerated loan payments.  If you get paid every two weeks, a great strategy to knock out your student loans faster is to make accelerated or biweekly payments instead of monthly payments. There are 52 weeks in a year, not 48. So it’s a sneaky way to get the equivalent of one extra monthly payment made each year.  2. Pay more than the minimum.  The longer you take to pay off the loan the more it will cost you in interest.  It’s best to pay as much as you can from the start.  Start with paying at least more than the minimum payment.    Example : If you owe $50,000 at a 5 percent interest rate for 10 years.     Your minimum payment would be $53    You’ll pay $14,000 in interest over the life of the loan.     If you pay an additional $100 each month you’ll save about $3,000 in interest and pay off the loan two years earlier.      When you send more than the minimum payment or make biweekly payments, make sure that you add a note to your payment indicating that you want the extra to go toward your principal balance. Otherwise, the lender may think that you’re prepaying the next month’s payment and simply hold it or apply it toward a credit, which won’t help you get rid of the debt any faster.     RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 75
Congratulations to all the recent graduates!  To honor those who have worked hard to accomplish this great achievement, we’re sharing 7 money tips to help you build a solid financial foundation for your life.  If you’re not a recent grad, that’s ok, these tips can help you too!

     

 
 
      Episode 74  Investing in the Market is investing in companies.  How those companies conduct themselves and what they’re involved in matters because as part owner what they do personally reflects on you, whether good or bad.   On this episode of GMR, we talk with David Sandhu, a financial planner whose specialty is Biblically Responsible Investing (BRI).  Find out why BRI is important and why you don’t have to sacrifice your beliefs to invest responsibly and make a good return on your investments.     SHOW NOTES   BIBLICALLY RESPONSIBLE INVESTING   Biblical Financial Stewardship includes how we manage investments on God’s behalf.   4 Point Approach to BRI    What is the problem?    What is BRI, why does it matter?    Can I have an impact    How to join the BRI movement      1. What is the problem?    Many Christians are shocked to discover they are invested in abortion, pornography and other immoral businesses in their 401k, IRA, mutual funds and other investments.    Profiting from and supporting immoral and unbiblical practices through our investments.    As an investor of a company, you are a part owner of that company.    Stocks represent ownership of a company.     David Sandhu’s Story    About 5 years ago, owners of Hobby Lobby argued that the mandate in former President Obama's health care reforms forced them to violate deeply held religious principles because they believe some of the contraceptives amount to abortion.  After the Supreme Court ruled in favor of Hobby Lobby, it wasn't long until Forbes did some digging and showed that Hobby Lobby actually held more than $73 million in mutual funds with investments in companies that produce emergency contraceptive pills, intrauterine devices, and drugs commonly used in abortions.    This news convicted me and I knew something had to change in my investments. I wanted to honor God through my investments, not oppose Him.    I had to ask myself the question.     do my investments reinforce my values, or contradict them?    Does God want me to be faithful with 10%, or 100%?     If God owns it all, does He care what my investments support, and do I care?        2. What is BRI, why does it matter?    Introduction to BRI     Growing movement of Christian investors that are aligning their investment dollars and decisions with biblical values to honor God as an act of worship. To be a good steward of the money we have.    Ensures that you're not invested in companies that are violating values that believers do not agree with.   Deuteronomy 23:18 - You shall not bring the wages of a prostitute for this is an abomination.   How much of the ill-gotten gain is ok to bring to God as an offering?     Negative Screening: Abortion, Porn, Substance abuse, human rights violations etc.    Positive Screening: Love thy neighbor philosophy, doing good in the community.    BRI is the solution to the problem.     Why does it matter?     1 Corinthians 10:31 - So whether you eat or drink do it all for the glory of God.     The Parable of the talents teaches us to be faithful stewards    Gives believers a Voice.     Matthew 5:13-16  (salt and light) preserving agent of our culture and an illuminating  agent to the dark and decaying culture around us.    Ephesians 5:11 - Take no part in unfruitful works, instead, expose      BRI gives believers a voice in two ways    Opportunity to increase the resources of good companies that are being good stewards.    Not giving money to companies that are doing bad, the more people that join the BRI movement the louder our voice will be heard.    Companies notice when investor dollars move, leveraging their wealth to give voice to their values. ( COSTCO)     Christian investors do not have to sacrifice performance in order to invest with biblical values.        3. Can I have an impact?    First and foremost that BRI is a matter of the heart, and the Holy Spirit will guide. No need for condemnation, because there is a way to do better and join the BRI movement.    Second, pray about it, this isn't about pressure, this is simply about being good stewards, and like  1 Corinthians 10:31 says, “In whatever you do, whether you eat or drink, do it all for the glory of God.”     Collectively we have a voice. You may think, my small amount of money doesn't make a difference, but imagine investors sitting in a boardroom saying, “we don't want the company to support  X Y Z activities,” and the impact that will have collectively.    4 - How do I invest biblically responsible?   How do I know what's in my portfolio?     It begins by an  impact analysis,  we look at what’s inside your portfolio and the report shows what activities investors are engaged in.    The report shows what the companies you own are doing:      What negative companies you're invested in.    The percentage of each offense you're invested in that doesn't align with your values.    The financial data (expenses, performance comparison, hypothetical impact for worthy causes).     BRI is the solution    Start working with your adviser to start the discussion.     BRI is growing in popularity, more brokerages are offering it on to their platforms, so talk with your adviser about your BRI options.     If you don't have an advisor, you send me an email and we can talk more about your options: david@wisewealth.com.     If you're a DIY type investor, we have an online tool you can look up company stocks, mutual funds and ETFs by their ticker symbol at  inspireinsight.com , and see a run down of the counts against each biblical value.   We also have an automated solution called brightportfolios. This is a do it yourself BRI robo-advisor that lets you answer some questions build an investor profile and builds a BRI portfolio for you that you can automate your investing, and listeners can visit  brightportfolios.com  to open an account.   The BRI movement is spreading like wildfire as Christians everywhere are discovering that they can invest for the glory of God and make a Kingdom impact with their investment decisions.    RESOURCES  Online DIY Tool -   https://www.inspireinvesting.com/insightpromo/index.html     DIY Robo-advisor -   https://brightportfolios.com/biblically-responsible-investing     David Sandhu’s website -   www.wisewealthtx.com

Episode 74
Investing in the Market is investing in companies. How those companies conduct themselves and what they’re involved in matters because as part owner what they do personally reflects on you, whether good or bad. On this episode of GMR, we talk with David Sandhu, a financial planner whose specialty is Biblically Responsible Investing (BRI). Find out why BRI is important and why you don’t have to sacrifice your beliefs to invest responsibly and make a good return on your investments.

     

 
 
      Episode 73  The world acts as if money is THE most important thing in life. We disagree! Money is not the most important thing, but money can be that vehicle that helps you accomplish that which is most important.  On this episode of Getting Money Right we conclude our 4 Financial Steps to Purposeful Living.  It’s a way of managing money that ensures your life is lived with purpose and impact.    SHOW NOTES   Methods of managing money to achieve financial freedom  1.     Dave Ramsey - 7 baby steps.  2.     Crown Financial - Money Map.  3.     Gateway Stewardship - Financial Roadmap.  4.     Radical Personal Finance - 5 Pillars of Finance.     Our mission  Getting Money Right is dedicated to helping you achieve financial freedom through education and inspiration, so you can be free to pursue your true life’s purpose.     4 Financial Steps to Purposeful Living      Spend on purpose   We recommend that you, “ spend on purpose...so that you know where you are .”     Save before you spend  We recommend that you, “ Save before you spend...so you experience stability today and in the future .”     Increase your financial margin  We always recommend that you, “ Increase your financial margin...to pursue your true life’s purpose .”     Invest wisely  We always recommend that you, “ Invest wisely...to increase your impact .”       Step 1 - Spend on Purpose     Live on written plan    Yearly plan managed monthly.    Categorized spending (use guidelines).    Unity with your spouse.      Track your expenses     Daily at first, then as often as necessary to keep you in the know.    Excel, apps, pen and paper, receipts. (YNAB, EveryDollar).       Net worth statement    Visual way to see if you’re moving in the right direction over all.    iShows  what you own  and  what you owe  so you understand your true Net Worth.    Net Worth Statement -  Download        We recommend that you, “ spend on purpose...so that you know where you are .”      Step 2 - Save Before You Spend     1 Month of Living Expenses in Stability Fund (bare minimum)      Continue $150 into savings  (any increment of $50 based on income)    Should I be saving or paying off debt?  Both …  always need to grow the habit of saving.       3-6 Month Stability Fund      A smooth transition from one season to the next (job loss, medical emergency, maternity leave, other budgeted items in excess).       Levels of Saving     Short Term (stability)    Everything above      Mid-Term (replacement)    Save for down payment on house or business.    Car Replacement, Appliances and furnishings.    Anything that will need replacing in 2 to 5 years.      Long-Term (retirement)    More on this in Step 4 (Invest Wisely).          We recommend that you, “ Save before you spend...so you experience stability today and in the future .”     Step 3 - Increase Your Financial Margin   Two ways to increase margin: spend less or make more (or a combination of the two).     Spend Less     Debt elimination (snowball)    Episode 34 - Help! I Can’t Pay My Credit Cards.    Episode 35 - Dangerous Debt.    Episodes 36 & 37 - Psychology of Credit Cards Use.      Life long consumer debt-free  lifestyle    Paid off cars.    No credit card debt.    No personal loans (student, furniture, 401k, home).      The Importance of Perspective - Episodes 38 & 39    There are outside influences that shape our view of money    Advertising, culture, materialism.    “More is better mentality.”    Wealth is increasing exponentially, but what are we doing with it?      Setting a proper lifestyle by defining needs, wants, desires         Make more     Career focus.    Learn a new skill (in person or online) to improve your income or change career fields.    Will a Master’s degree or additional certification increase your income?      Side business    Episode 30-31 (small business episodes).    Find your niche - you don’t need to be an expert, you just need to know more than someone who is interested to learn more about a topic.    Branding.    Passive income.    Business Structures:    Sole Proprietor    Partnership    LLC    C Corp    S Corp      Business vs Personal Bank Accounts    Business Taxes    12.4% S.S.    2.9%Medicare    15% Federal              Ask yourself:  How does increasing margin help you?  What is your end goal?    We recommend that you, “ Increase your financial margin...to pursue your true life’s purpose .”   Step 4 - Invest wisely      Strategy     Tax-favored retirement accounts    Episode 11, 12, 13.    Episode 41 - Darryl Lyons Money & Retirement.    Real-estate - Episode 14.      Invest in a business    Episode 30-31 (small business episodes).    Diversified    Fees    Goals    Asset protection           We recommend that you, “ Invest wisely...to increase your impact.”      RESOURCES  Net Worth Statement -  download   Budgeting and Debt Elimination Tools  Episode 11 -  Stocks, Bonds, Mutual Funds, IRA, Roth’s and 401(k)’s  Episode 12 -  Index Funds and Brokerages Part 1  Episode 13 -  Index Funds and Brokerages Part 2  Episode 14 -  Real Estate   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover .

Episode 73
The world acts as if money is THE most important thing in life. We disagree! Money is not the most important thing, but money can be that vehicle that helps you accomplish that which is most important.  On this episode of Getting Money Right we conclude our 4 Financial Steps to Purposeful Living.  It’s a way of managing money that ensures your life is lived with purpose and impact.

     

 
 
      Episode 72  The world acts as if money is THE most important thing in life. We disagree! Money is not the most important thing, but money can be that vehicle that helps you accomplish that which is most important.  On this episode of Getting Money Right we introduce you to our 4 Financial Steps to Purposeful Living.  It’s a way of managing money that ensures your life is lived with purpose and impact.     SHOW NOTES   Methods of managing money to achieve financial freedom  1.     Dave Ramsey - 7 baby steps.  2.     Crown Financial - Money Map.  3.     Gateway Stewardship - Financial Roadmap.  4.     Radical Personal Finance - 5 Pillars of Finance.     Our mission  Getting Money Right is dedicated to helping you achieve financial freedom through education and inspiration, so you can be free to pursue your true life’s purpose.      4 Financial Steps to Purposeful Living       Spend on purpose   We recommend that you, “ spend on purpose...so that you know where you are .”     Save before you spend  We recommend that you, “ Save before you spend...so you experience stability today and in the future .”     Increase your financial margin  We always recommend that you, “ Increase your financial margin...to pursue your true life’s purpose .”     Invest wisely  We always recommend that you, “ Invest wisely...to increase your impact .”      Step 1 - Spend on Purpose    Live on written plan    Yearly plan managed monthly.    Categorized spending (use guidelines).    Unity with your spouse.      Track your expenses     Daily at first, then as often as necessary to keep you in the know.    Excel, apps, pen and paper, receipts. (YNAB, EveryDollar).       Net worth statement    Visual way to see if you’re moving in the right direction over all.    iShows  what you own  and  what you owe  so you understand your true Net Worth.    Net Worth Statement -  Download       We recommend that you, “ spend on purpose...so that you know where you are .”     Step 2 - Save Before You Spend    1 Month of Living Expenses in Stability Fund (bare minimum)    Continue $150 into savings (any increment of $50 based on income)    Should I be saving or paying off debt?  Both …  always need to grow the habit of saving.      3-6 Month Stability Fund     A smooth transition from one season to the next (job loss, medical emergency, maternity leave, other budgeted items in excess).      Levels of Saving    Short Term (stability)    Everything above      Mid-Term (replacement)    Save for down payment on house or business.    Car Replacement, Appliances and furnishings.    Anything that will need replacing in 2 to 5 years.      Long-Term (retirement)    More on this in Step 4 (Invest Wisely).         We always recommend that you, “ Save before you spend...so you experience stability today and in the future .”     RESOURCES  Net Worth Statement -  download   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover .             

Episode 72
The world acts as if money is THE most important thing in life. We disagree! Money is not the most important thing, but money can be that vehicle that helps you accomplish that which is most important.  On this episode of Getting Money Right we introduce you to our 4 Financial Steps to Purposeful Living.  It’s a way of managing money that ensures your life is lived with purpose and impact.

     

 
 
      Episode 71  Social Security is in trouble but you don’t have to be.  In this last episode on Social Security we share some things you can do to ensure Social Security is not your only source of income in retirement.  Making these few adjustments in your financial plan can make a huge difference in income during retirement.  SHOW NOTES    HOW WILL the current state of Social Security IMPACT YOU AND YOUR FUTURE?   Possible scenarios    Lower benefit payments    Higher taxes    Or both    With a significant number of people having 90 percent of their retirement income solely from Social Security, the future doesn’t look great!    People aren’t saving enough.      Average retirement savings     Age  32-37: $31,644.  = $183 a month in retirement     Age  38-43: $67,270.     Age  44-49: $81,347.     Age  50-55: $124,831.     Age  56-61: $163,577. - $900 a month in retirement income     Average cost of living for a couple is between $3200 and $3600.    $217,441.27 =  $1,000 a month  withdrawal    $434,882.53 =  $2,000 a month  withdrawal    $869,765.06 =  $4,000 a month  withdrawal    (based on 4% withdrawal rate, 3% rate of return, 2% inflation)   Basic recommendation would be for you to live on 4% of your retirement savings.    Suggestion for having a better outcome    Get out of debt asap.    Live on a plan.    Downsize if necessary.    Reduce discretionary expenses - value based spending.    Build margin so you can save and invest more.    Save 10-20% or more of your income every year, the older you are, the more you should be saving.    The more you save now, the less you’ll be living on, so it will be easier to maintain a low lifestyle in retirement.    Stay healthy!  You may need to work more than you originally planned.    Postpone taking SS payments out until 67 or 70 if possible. Unless you’re projected to die before age 75, then take social security early.     How to prepare for retirement…    Make sure your cars are paid off.    Make sure your home is paid off.    Move to a low property tax state.    Downsize the house.    Connect with a local community center, church, and area to enjoy your retirement.    Turn a hobby into a part-time business.    Find a hobby that keeps you healthy.    Take cheaper vacations.    Reduce eating out (health & financial).      States with lower taxes and affordability     South Dakota    Florida    New Hampshire    Utah    Idaho      States with Lowest Property Tax      H awaii. Effective property tax rate: 0.29% ...    Alabama. Effective property tax rate: 0.40% ...    Louisiana. Effective property tax rate: 0.51% ...    West Virginia. Effective property tax rate: 0.53% ...    Wyoming. Effective property tax rate: 0.55% ...    South Carolina. Effective property tax rate: 0.56%     Seven  decent sanctuaries:  Florida ,  Nevada ,  South Dakota ,  Tennessee ,   Texas , Washington  and  Wyoming  have sales taxes but don't impose state income taxes, or levies on Social Security and pension income.   Three shopping shelters: Delaware ,  Montana  and  Oregon  do not have a sales tax.       RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover . US National Debt -  https://www.usdebtclock.org/

Episode 71
Social Security is in trouble but you don’t have to be. In this last episode on Social Security we share some things you can do to ensure Social Security is not your only source of income in retirement. Making these few adjustments in your financial plan can make a huge difference in income during retirement.

     

 
 
      Episode 70  The precarious position of the Social Security Program has been in the news lately, and for good reason.  It’s due to run out of money in the next 15 years. Is there anything that can be done to salvage it?  More importantly, how will this impact you personally if the program goes away or the benefits are severely reduced?  In this episode, we discuss what’s caused the current shortfall in the program and what the potential outcome will be as we look to the future.  We’ll also share some thoughts on what you should be doing to prepare.    SHOW NOTES   The Future of Social Security and Disability Insurance       According to the Social Security Trustees     In 2010 the costs of social security started being higher than what is collected every year.    Because of interest on the investments in the fund, Social Security hasn’t started to lose money every year yet, but this year (2019) the fund is expected to start losing more money than it gains through investments and payments into the program, so for the next 15 years the fund will get lower and lower until it’s completely empty in 2034.    Thereafter, payroll taxes are projected to only cover approximately 79% of program obligations.    So, Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future.     Possible solutions are: immediate reduction in benefits of about 13 percent, or an immediate increase in the combined payroll tax rate from 12.4 percent to 14.4 percent, or some combination of these changes, would be sufficient to allow full payment of the scheduled benefits for the next 75 years.       Sustainability of Social Security    The concept of sustainability for the Social Security program has come to have two separate meanings.     The first considers only the simple question of whether currently tax revenue is sufficient to provide scheduled benefits.     The second considers whether the current structure of the program, is viable for the future, without any changes.    According to projections by the trustees of the program, changes in benefits or changes in tax revenue (aka increases) in the future will almost certainly be needed to avoid trust fund exhaustion.    Lower payments and/or higher taxes       Birth rate effect    Birth rates averaged over three children per woman during the baby boom period (1946–1965).    After 1965, however, the total fertility rate shifted to a new level around two children per woman. It is this apparently permanent shift to lower birth rates in the United States that is the principal cause of our changing age distribution between 2010 and 2030 and the resulting shift in the ratio of beneficiaries to workers (dependency ratio).        

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     Dependency Ratio - the ratio of beneficiaries to workers  A major reason for the projected fund exhaustion is due to the change in the dependency ratio, which is due to lower birth rates.      For the past 35 years, there have been about 3.3 workers per beneficiary (consistent with the ratio of 3 beneficiaries per 10 workers).     After 2030, the ratio will be two workers per beneficiary (consistent with 5 beneficiaries per 10 workers).    With the average worker benefit currently at about $1,000 per month, 3.3 workers would need to contribute about $300 each per month to provide a $1,000 benefit.    But after the population age distribution has shifted to have just two workers per beneficiary, each worker would need to contribute $500 to provide the same $1,000 benefit.       Another measure of trust fund financial status is the infinite horizon unfunded obligation, which takes account of all past and future annual balances, even those after the next 75 years. The extension of the time period past 75 years assumes that the current law for the OASDI program and the demographic and economic trends used for the 75‑year projection continue indefinitely.  Table  VI.F1  shows that the OASDI open group unfunded obligation over the infinite horizon is $34.3 trillion in present value   https://www.ssa.gov/oact/tr/2018/VI_F_infinite.html      There is no one clear solution to the problem of increased cost for retirees because of fewer workers available to support the retirees, which in turn is caused by lower birth rates. This issue is not specific to Social Security, but also affects Medicare as well as many other private and public retirement income systems.     Like a family budget:  Spending is out of control, so they start borrowing.    First 401(k) loans (Social Security).    Then Home Equity Loan (Civil Service Retirement & Defense Retirement).    Then Line of Credit at the Bank (Borrowing from other countries).    Then High Interest Loans (Other countries jack up their interest rates).    Then runs out of places to borrow, and has to make dramatic changes to the budget, lifestyle, and other spending decisions.           

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


       How will all this impact you and your future?   Possible scenarios    Lower benefit payments    Higher taxes    Or both    With a significant number of people having 90 percent of their retirement income solely from Social Security, the future doesn’t look great!    People aren’t saving enough.       RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover . US National Debt -  https://www.usdebtclock.org/        

Episode 70
The precarious position of the Social Security Program has been in the news lately, and for good reason.  It’s due to run out of money in the next 15 years. Is there anything that can be done to salvage it?  More importantly, how will this impact you personally if the program goes away or the benefits are severely reduced?  In this episode, we discuss what’s caused the current shortfall in the program and what the potential outcome will be as we look to the future. We’ll also share some thoughts on what you should be doing to prepare.

     

 
 
      Episode 69  The precarious position of the Social Security Program has been in the news lately, and for good reason.  It’s due to run out of money in the next 15 years. Is there anything that can be done to salvage it?  More importantly, how will this impact you personally if the program goes away or the benefits are severely reduced?  In this episode, we discuss the history, current state, and uncertain future of Social Security and what it all means to you.    SHOW NOTES    What is Social Security?      Social security  is "a government program that provides monetary assistance to people with an inadequate or no income."       In the United States, the term   Social Security   refers to the  US social insurance program  for all retired and disabled people.     Its technical name is  OASDI  - the old age, survivors, and disability insurance program.     The OASDI is a comprehensive federal benefits program that provides benefits to retirees, disabled people, and their survivors.       Social Security History       The Social Security Act was  signed by FDR on 8/14/35 . Taxes were collected for the first time in January 1937.    The first recipient of monthly benefits—Ida May Fuller, whose first check in January 1940 was for $22.54.    The first boomer to sign up: Kathleen Casey-Kirschling. She was born just after midnight on January 1, 1946, and claimed her retirement benefits at the earliest possible time: as soon as she turned age 62. She received the first baby-boomer benefit (reportedly about $1,000) on February 12, 2008, by direct deposit to her bank account.       At the beginning of 2018, over 51 million Americans were receiving monthly retirement or survivor benefits totaling nearly $69 billion.     The program now provides benefits to over 50 million people and is financed with the payroll taxes from over 150 million workers and their employers.    The average retirement benefit for retired workers: $1,334 a month.    The maximum payment for someone claiming benefits at full retirement age (66) in 2018 is more than twice that amount: $2,788.    According to the Social Security Administration, nine out of ten Americans age 65 and older receive benefits.     22% of couples and 47% of unmarried beneficiaries  rely on Social Security for 90% or more of their income .         Social Programs today share Biblical Roots    Many of our common views on taking care of the poor stem from a Biblical root. The Jewish Torah which also makes of the first 5 books of the Christian Bible contains law that require people to give a tenth of their income every third year to the poor. This would be 10% every three years, so about 3.5% a year into a community type fund to support the poor, widows, and orphans.       There were also Biblical laws in place to allow the poor to glean the corners of a field and harvest during the  Shmita  (Sabbatical year).    Even our modern day bankruptcy laws find their root in Jewish tradition.      "At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the LORD's release" (Deuteronomy 15:1-2).      "...in the seventh year you shall let [your Hebrew slave] go free from you. And when you send him away free from you, you shall not let him go away empty-handed; but you shall supply him liberally from your flock..." (Deuteronomy 15:12-14).      How does this apply to me personally?    Basically, you qualify for retirement benefits after working in jobs covered by Social Security—which means jobs for which you pay payroll taxes on your earnings.     No matter how much you earn, you cannot accumulate more than 4 credits per year.  The minimum number of credits needed to be eligible for Social Security benefits is 40 credits, which translates to 10 years of working.    For 2018, the Social Security tax (6.2% for employers; 6.2% for employees; 12.4% for employed, who bear the full load themselves) applies to the first $128,400 of wages or self-employment  income.       Social Security Eligibility    You receive “full benefit” at between age 66-67 depending on when you were born. If you were born after 1960, that “full benefit” is at 67 years old.    Your personal benefit will be based on your taxed earnings in the 35 highest-paid years of your career.     When making the calculation, the government adjusts each year’s wages to account for inflation. So, for example, the $35,000 you made in 1981 will be adjusted to more than twice that amount in today’s dollars when figuring the average wage on which your benefit is based.    You can sign up as early as age 62; but if you do, your benefit will be cut by 25% to 30%, compared with what you’d receive at age 66 or 67.     The reduction reflects the reality that you’ll likely be receiving benefits for a longer period of time. In fact, the goal of Social Security actuaries (a fancy word for the calculation of risk and premiums) is that no matter when you start benefits, you’ll receive the same amount of total dollars before you die—assuming you die “on schedule,” that is, at the end of your estimated life expectancy.       If you live to age 60, then on average you’ll live to between 81-86 years old. It’s time to start planning for a long-retirement.    Currently, 70 is the latest you can wait to start taking Social Security.     Each additional year after “full retirement” age that you wait to take social security, your benefit increases 8%, so if your full retirement age is 66 years old and you can wait all the way till age 70, then you’ll enjoy a 32% increase in the amount you receive.     The difference between taking social security at 62 vs 70 is about 76%!       AARP has around 40 million members. It’s a non-profit group you’re eligible to join at age 50, and as a member of the group you get special access to discounts on a large variety of products, as well as other benefits. It costs about $16 a year. From the social security calculator I looked up what a 60yr person, who averaged $50,000 income, and the various amounts they’d get if they applied for social security at different ages.    Age 62 - $1,289    Age 66 - $1,778    Age 70 - $2,276       

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


        So there is a $1,000 different per month, for this person if they are able to wait till age 70. That’s $12,000 a year. Which means that if they live well past the life expectancy, they can expect to receive 10’s of thousands more, potentially a couple hundred thousand if they live to 100.     Social Security and Disability Insurance Fiscal History       Historically, both have reached times where tax revenue fell short of the cost of providing benefits and also times where the trust funds have reached the brink of exhaustion of assets.     For years 1973 through 1983, the combined SS and DI Trust Funds were operating with a negative cash flow that was depleting the trust fund reserves toward exhaustion.     The Social Security Amendments of 1977 and 1983 made substantial modifications to the program that reversed the cash flow of the program to positive levels and caused the substantial buildup of assets to the $2.5 trillion that exists today.     The 1977 amendments included a fundamental change in the indexation of benefits from one generation to the next. The 1983 amendments included increases in the normal retirement age (NRA) from 65 to 67 and the introduction of income taxation of Social Security benefits with revenue credited to the trust funds.         

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


          RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover 

Episode 69
The precarious position of the Social Security Program has been in the news lately, and for good reason.  It’s due to run out of money in the next 15 years. Is there anything that can be done to salvage it?  More importantly, how will this impact you personally if the program goes away or the benefits are severely reduced?  In this episode, we discuss the history, current state, and uncertain future of Social Security and what it all means to you.

     

 
 
      Episode 68  We hear the term “Middle Class” thrown around a lot, especially by politicians during election years.  They use it to try and relate to what’s supposed to be a majority of us Americans, but does the term and its use foster unity and satisfaction or just the opposite?  And more importantly, how does this classification make us feel and behave as it relates to money and lifestyle?  On this episode of Getting Money Right, we discuss the impact social classes has on how we spend money and the satisfaction we feel about our own life.  SHOW NOTES    Definition: The  middle class  is a  class  of people in the middle of a social hierarchy.      In socioeconomic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the  working class  and  upper class . However, this term has evolved over time and is now more indicative of the working class (blue and white collar).     For as much as politicians use the term “middle class,” you’d think it would be more clearly defined.     There is little consensus on what middle class really means, but everyone certainly  wants  to be middle class:     Nearly 70% of Americans consider themselves middle class, but only about 52% would qualify based on income.     The Pew Research Center found that middle-income families–in a three-person household–earned between $45,200 and $135,600 in 2016.     The Brookings Institute offered a broader range, from $37,000 to $147,000 for a household of three.    Still others argue that the swath of Americans below the top 10% is middle class.      A recent CNBC story, which featured a detailed budget breakdown from a couple jointly earning $500,000 that still felt “average,” to grasp just how muddled the middle-class label is.       Here’s how much you need to make to officially be middle-class:    Household of one: minimum of $26,093    Household of two: minimum of $36,902    Household of three: minimum of $45,195    Household of four: minimum of $52,187    Household of five: minimum of $58,347    According to Pew’s survey, that means in 2016 29% of America were lower-class, 52% were middle-class, and 19% were upper-class.     There are so many ways to break down what “middle class” is.     By Income    By job type    By lifestyle & home amenities        Income     20% lower income    60% middle income    20% upper income        Job Type     Manual Labor    Management    Ownership         Life Style & Home Amenities     No vehicle, no homeownership, no medical coverage, no savings, no vacations    2 vehicles, home ownership, medical coverage, savings, vacations     Luxury vehicles, expensive real-estate, private health, maxed out retirement accounts, travel & entertainment whenever wanted.       You can still have rich friendship, find a community, eat every day, enjoy a safe place to live, and pursue fulfilling work even at very low-income levels in America.    Why does this matter to us today?     There’s usually an agenda behind why news agencies and politicians are using this term. You have to look at who is behind these claims and what their agenda is.     You have to be very careful what you’re absorbing and how it’s affecting your actions and attitude.    The term is often used to bring dissatisfaction, instead of bring satisfaction to your life.    You might be living a great life, but still feeling poor, unhappy, and angry at others.        Discontentment vs Contentment     “I can’t even go out to eat”    “I only have 3 bedrooms in my home”    “My kids have to go to a public school”       Upward mobility in America is very high. (Pew Research Trust)    Family Wealth Half of Americans surpass their parents in terms of family wealth.5     55% of Americans have greater wealth than their parents did at the same age.     72% percent of Americans whose parents were in the bottom fifth of the wealth ladder and 55 percent of those whose parents were in the middle quintile exceed their parents’ family wealth as adults.  https://www.pewtrusts.org/~/media/legacy/uploadedfiles/wwwpewtrustsorg/reports/economic_mobility/pursuingamericandreampdf.pdf          Build a foundation of financial success    How a budget can help you succeed    Helps you have a clear picture of how much you make and how much you spend.    Spend on what’s valuable to you and not because of social pressures.    Allows you to plan ahead and meet goals, while still enjoying a good life and meeting all your needs.    Helps you avoid lifestyle creep - use income increases and bonuses to increase margin not lifestyle.    As you increase in income, you can’t allow lifestyle creep to grow at the same pace as income growth. Your margin should be growing. Moving from 10% toward savings, then 20%, then continue on till you’re living on 50% of your income.    Live on a little bit less than you make, then save & invest the difference over a long-period of time.      It’s the platform that will help you gain wealth and financial security.         RESOURCES   Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com  Book cover design - vote here:  https://www.stewardshippastors.com/jesus-on-money-book-cover    

Episode 68
We hear the term “Middle Class” thrown around a lot, especially by politicians during election years.  They use it to try and relate to what’s supposed to be a majority of us Americans, but does the term and its use foster unity and satisfaction or just the opposite?  And more importantly, how does this classification make us feel and behave as it relates to money and lifestyle?  On this episode of Getting Money Right, we discuss the impact social classes has on how we spend money and the satisfaction we feel about our own life.

     

 
 
      Episode 67  IPO’s (Initial Public Offerings) have been in the news lately with several well-known companies offering potential investors the chance to get in on the action and of course, the potential profit. In this episode we discuss individual company stocks and initial public offerings and whether they are a good option for your investment strategy.    SHOW NOTES    An IPO, or initial public offering, is the process by which a privately held company begins selling stock to outside investors, thus becoming a public company. From that point on, the company can raise the capital it needs by selling shares, but it must also comply with a strict set of reporting guidelines, as established by the Securities and Exchange Commission (SEC).  Most companies get their initial funding by emptying their bank accounts, taking out small business loans, turning to private investors or venture capitalists, or a combination thereof. But there often comes a point where more money is needed for a business to experience the growth it desires.    IPOs - Initial Public Offerings Coming Up:     Uber (transportation network)    Palantir (data mining | big data)    Airbnb (online hospitality market)    Lyft    Pinterest    Rackspace    Slack    Robinhood    Levi Strauss    Peloton    Cloudflare        Are IPOs good investments?    Though IPOs can be good for the companies behind them, they're not always great for investors -- especially the inexperienced kind. Though investing in IPOs can be profitable, it's generally a much riskier prospect than investing in established companies with a strong history of solid performance. Though there are certainly exceptions, IPO stocks tend to underperform for several years after being issued compared to the general market. That's because the companies behind them are usually more focused on growing the business than delivering profits to investors. Those inclined to invest in IPOs should therefore take the time to vet the issuing companies carefully before moving forward.   What is a stock  A stock (also known as "shares" or "equity) is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation's assets and earnings.   Dual-Class Shares - Dual-Class Ownership  Dual-class ownership is a type of common stock offering in which companies issue shares that have differing rights. In a dual-class ownership structure, the company can issue two classes of shares, Class A and Class B. These classes may have different voting rights, but they represent the same underlying ownership in the company.  For example, when Google went public, it issued Class B shares that had no voting rights to ensure that the founders and executives still had control of the company. Google, now trading publicly as Alphabet, has since altered its share class structure with Class B shares having 10 times the voting power as Class A.     RESOURCES  Credit Freeze: A New Way to Keep Your Identity Safe ( Podcast )   Budgeting and Debt Elimination Tools    Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 67
IPO’s (Initial Public Offerings) have been in the news lately with several well-known companies offering potential investors the chance to get in on the action and of course, the potential profit. In this episode we discuss individual company stocks and initial public offerings and whether they are a good option for your investment strategy.

     

 
 
      Episode 66  Having a healthy FICO score is important to your financial well-being.  Therefore, it’s important to understand how your FICO score is calculated and also to stay up to date on any changes that occur.  On this episode we discuss some recent changes to the FICO score and why these changes are good for your score.    SHOW NOTES     FICO Score Basic  Credit Score ranges between 300-850  Credit score rankings:    300-620 - Bad    620-660 - Fair    660-720 - Good     720-850 - Excellent       

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     How credit score is weighted:    35% - Payment History    30% - Amount Owed    15% - Length of Credit History    10% - New Credit    10% - Credit Mix - Types of credit       

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     FICO Score Change Updates    Medical debt not part of the equation anymore.      Other items such as, library fines and traffic tickets will no longer be on your report.    Tax liens and civil judgements have been removed from reports and will no longer impact your score.      Old consumer debt that’s paid off remains on your record but will not count against your score.    Creditworthiness of people who haven’t borrowed in the past (no extensive credit use record) will be more favorable.    Consumer debt that’s not paid in full will negatively impact your score.  The more you pay off the balance the better your score.       Remember you can also freeze your credit report for free now. Learn more from episode 53 “Credit Freeze - A Great Way to Keep Your Identity Safe”    Resources  Credit Freeze: A New Way to Keep Your Identity Safe ( Podcast )  Budgeting and Debt Elimination Tools   Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 66
Having a healthy FICO score is important to your financial well-being.  Therefore, it’s important to understand how your FICO score is calculated and also to stay up to date on any changes that occur.  On this episode we discuss some recent changes to the FICO score and why these changes are good for your score.

     

 
 
      Episode 65  I have yet to meet someone who wouldn’t like to become financially wealthy. Unfortunately, most people have little knowledge of what it takes to build wealth and even less have a plan on how they hope to accomplish it. Building wealth is not as hard as most people imagine. It turns out wealth building comes down to a few key habits applied consistently over a period of time.      SHOW NOTES     Overview from 1st Episode:    STATISTICS ABOUT MILLIONAIRES IN THE UNITED STATES  17.3 million individuals are millionaires in the United States, 41% of the world’s millionaires.     This means that 7% of the U.S. adult population are millionaires    The 2016 study also showed that 78 percent started out as middle class or poor, only 22 percent grew up in the upper class.    Education is important, with 84 percent of millionaires having a college degree according to   Spectrem  .      One in three funded their own college education    without debt.     Research conducted by Thomas Corley of   Rich Habits,   showed that 86 percent of wealthy people who work full time put in 50 hours or more each week at their career.    66 percent of millionaires own their own business.    The Millionaire Next Door cites that the percentage of first-generation millionaires is 80 percent, dispelling the idea that most millionaires just inherit their money from a prior generation.     3 Characteristics of the Wealthy    Self-Awareness + The Awareness of Others    True Grit    Have a giving mentality - always give more than you take      5 Millionaire Habits   1. Make Smart Buying Decisions    It may be great to have a shiny new Ferrari or a Lamborghini, and although these status symbols may look nice in your driveway, they will hinder your long-term goal of accruing wealth.     Financially successful people avoid buying “must have” status objects such as expensive luxury cars, boats, jewelry, and other luxury accessories.     The problem with buying status symbols is that you always have to upgrade them and buy the latest models.    Financially successful people save themselves from these hassles by avoiding gaudy status symbols. Trying to “keep up with the Jones’” will leave you in a never-ending cycle of being broke.    2. Live Below Their Means    Financially successful people are able to adequately live off of what they earn.    Living below your means requires keeping your monthly expenses below your monthly income.     Frivolous purchases and wants are postponed and only needs are met.    It doesn’t mean that you can’t splurge occasionally, but these purchases should be the exception rather than the rule.     It is impossible to increase your wealth if you spend every dime that you have. Just because you have the money doesn’t mean you have to spend it.    3. Make Their Money Work for Them    Wealthy people understand the importance of maximizing their dollars. They often take calculated risks with their money and seek solid returns for their dollars. Every dollar that they have produces for them and helps to build more wealth.    They do not waste their dollars on speculative ventures and get-rich-quick schemes.  Wealthy people understand that real wealth is built over time.    For many, this means a simple portfolio of low cost index funds.    4. Pay Themselves First    Paying yourself first is a great principle to follow whether you make $20,000 or $200,000 per year. Before you pay any of your bills, you should pay yourself first. Paying yourself first helps you to make savings a priority.    A good rule of thumb is taking 10% of your income and setting it aside as soon as you get paid. Making savings automatic is a great way of making saving money easier. Saving small amounts of money can add up over time.    5. Have a Plan and Stick to It    Millionaires plan to be financially independent. They devote their time, energy, and resources to building wealth. They create a financial plan and stick to their plan.     Their goal is to be financially independent and they allocate their time accordingly to make this happen. It’s not about how much money you make but what you do with the money that you make.       RESOURCES   Budgeting and Debt Elimination Tools    Jesus on Money  by David Thompson -  stewardshippastors.com

Episode 65
I have yet to meet someone who wouldn’t like to become financially wealthy. Unfortunately, most people have little knowledge of what it takes to build wealth and even less have a plan on how they hope to accomplish it. Building wealth is not as hard as most people imagine. It turns out wealth building comes down to a few key habits applied consistently over a period of time.