Participants: Shelley Quinn (Host), G. Edward Reid
Series Code: IAA
Program Code: IAA000443A
|
00:29 Hello, I'm Shelley Quinn
00:31 and welcome to Issues and Answers. 00:32 We're so glad that you're joining us 00:34 whether you're watching on TV 00:36 or listening by the radio 00:38 or perhaps you're watching us over the internet. 00:40 Thank you for joining us. 00:42 Today we have a wonderful guest returning to be with us 00:46 and give us some great financial counsel, 00:48 and we are going to be talking about something 00:52 that's very near and dear to all of our hearts 00:54 and that is our financial security. 00:56 We are going to be talking about not life after death 01:01 but rather life after debt, D-E-B-T. 01:06 And so many people are in debt and want to get out of debt. 01:10 Returning to be with us today is G. Edward Reid, 01:13 he is the assistant 01:16 to the president of Planned Giving 01:19 for Adventist World Radio 01:21 and he used to be the stewardship director 01:24 for the North American division 01:25 of Seventh-day Adventist churches. 01:27 And when I start introducing you where do I start, 01:30 you've got an M... A master's in Divinity, 01:33 you have a master's of Public Health, 01:34 you are a lawyer, you have a law degree 01:37 and you're a certified financial counselor, 01:40 you're a smart man. 01:42 Well, I've learned a few things 01:44 but the more you study, 01:45 the more you realize you don't know, 01:46 that's unfortunate, isn't it? 01:48 But it's true. That is true. 01:49 Well, we're just really thrilled 01:51 that you've come back to us today. 01:53 And I think that when we look at the debt crisis 01:58 around the world 01:59 and I mean, not just individuals 02:02 but the debt crisis of governments. 02:04 We see that this world is kind of teetering on the brink 02:09 of financial collapse. 02:11 Talk to us just a little bit about this debt crisis? 02:16 Well, it's very interesting that in the United States, 02:19 you mentioned the world, 02:21 I mean, countries like Greece and others 02:22 are at the point of bankruptcy as you know, 02:24 but the United States we have 02:25 eight over eighteen trillion dollars in debt 02:29 and I give seminars, 02:30 and I can just tell you that 02:32 the average person has no clue what a trillion is. 02:35 So I'm just going to go through this real quickly, 02:36 a million is a thousand thousands, 02:38 that's a million. 02:39 A billion is a thousand million, 02:41 and a trillion is a thousand billion. 02:44 And the government is eighteen trillion dollars in debt 02:48 and this is unsustainable by anybody's calculation 02:50 and it goes more... 02:52 almost three billion dollars a day is added to that, 02:55 that's very, very interesting 02:56 but not far behind are the people 02:58 and that's people like us, 03:00 not you and I, our families 03:02 but because we follow the biblical principles 03:04 and we're debt free, 03:06 but the idea is that in the United States 03:08 the credit card debt 03:09 that's carried over from month to month, 03:11 the unpaid balance totals over $800 billion 03:15 just for the people 03:16 and they're paying over 12%... 03:18 Eight hundred billions? Yes. 03:20 That's just the amount that's... 03:21 Well, let's just say it this way, 03:23 when you get your credit card bill 03:24 it will say a minimum payment due 03:26 and whatever they pay. 03:27 Well, if you pay that than the unpaid balance 03:30 you pay interest on it over for the next month 03:32 and there's $800 billion 03:33 is carried over from month to month 03:35 on credit card people, 03:36 holders in the United States. 03:38 By the way it used to be 900 billion. 03:41 Do you know why it's only 800 billion now? 03:43 It's not because people got smarter 03:44 and paid their debts off, 03:45 it's because they file for bankruptcy protection 03:47 and that you can discharge these credit cards 03:50 but you can't discharge student loans or taxes 03:52 you owe the government, those kinds of things 03:54 and we'll talk about some of those in a minute. 03:56 The interesting part to me is 03:58 that people get further and further 04:00 and further in debt, 04:01 and the next big crisis 04:03 could easily be the student loan crisis. 04:05 Because believe it or not, this is hard to believe 04:06 but the student loans outstanding now 04:09 are over $1 trillion dollars for just students, 1 trillion. 04:14 And the reason this is such a crisis is 04:16 because even Senator Tom Harkin said 04:17 on the floor of the United States Senate, 04:19 this could be the next tipping point 04:21 that causes big problems in America 04:23 because if you have student loans avoiding some crisis, 04:28 this is going to be very, very serious. 04:29 Some people have student loans that are 30 years amortizing, 04:33 you know, like a house loan even 04:35 and it's amazing 04:36 because if you get a government backed student loan, 04:38 there's only two ways to get out from under the obligation, 04:40 one of them is to pay it off and the other one is to die. 04:44 So you cannot discharge it in bankruptcy, 04:46 this is incredible 04:47 and that's why it's such a big deal nowadays. 04:49 Wow, that's amazing. 04:50 What causes people when you think about it, 04:53 what are some of the major causes 04:56 for people getting into debt, 04:59 and why is debt growing this fast? 05:02 Well, the interesting thing about it 05:04 is that it's a real simple answer, 05:06 people are spending more than they're making. 05:09 You see what I'm saying, 05:10 they're not living within their income... 05:12 And they want immediate gratification... 05:13 That's what credit card, you see something 05:15 and I have a friend and this is her logic, 05:18 "I bought it and it's on sale," 05:20 but yet she pays the minimum payment each time 05:23 and I told her by the time you pay that off 05:25 you're paying more than the double. 05:27 It's not on sale anymore. 05:28 Yeah, it's not on sale anymore. 05:29 That's right. 05:31 Yeah, there are interesting things 05:32 and frequently people think they're poor 05:35 and so they want to buy something 05:37 with their credit card to satisfy some desire, 05:39 you know, that they have. 05:41 They're not satisfied or contend as you mentioned. 05:43 The big idea though 05:45 I think is to recognize 05:46 that there are major things that cause it 05:48 and one of them is a consumptive lifestyle. 05:50 For example, most people know 05:53 that in the months of November and December 05:55 most retailers make their profits 05:56 during that part of the year 05:57 because people just are out there spending. 05:59 And they're going to spend something, 06:01 they get gifts or do something or for themselves or whatever, 06:03 and they buy stuff 06:05 and they end up paying for it all year long 06:07 and that's the interesting part, 06:08 they'll put it on credit cards and so on. 06:10 By the way eight out of ten American families 06:12 have credit cards 06:13 and only about one-third of them use it for convenience 06:16 which means that they pay it off every month. 06:18 But the other two-thirds of them 06:21 are actually borrowers 06:22 and they're actually financing what they buy 06:24 using their credit cards at high percent. 06:26 Those are real high finances. 06:27 Yeah, it's really, really incredible. 06:31 What I'm going to tell you as people ask me, 06:34 "Should we even have credit cards?" 06:35 Well, if you travel you have to have a credit card 06:37 to rent a car typically and so on, 06:39 but I would think that for most families 06:40 one credit card would be all you need 06:42 either a MasterCard or Visa 06:44 and the interesting thing about it is, 06:45 I would never recommend anybody get a store brand credit card. 06:48 No. 06:49 Well, the reason is because you can only spend it at that store 06:51 and they know it, see and that's the... 06:53 they will also take the Visa or MasterCard 06:54 and that's typically the best way to go. 06:57 It will not hurt your credit to only have one credit card. 07:00 I'll give you an illustration, 07:02 I've visited with a man once 07:03 at an evangelical stewardship meeting 07:06 and he was a pastor of another church. 07:07 And he said to me, 07:09 "How many credit cards do you have?" 07:11 And I said, "Well, I'll have just one." 07:12 "So what do you do with all those 07:13 credit card offers that come to you?" 07:15 And I said, "Well, I have a shredder by my desk, 07:16 I just run it through there 07:17 so I won't have a tendency to do it 07:19 or no one else could do it on my behalf." 07:21 He said, "Well, you know, I... last year," 07:22 he said, "I filled out and sent in every one 07:24 of those credit card offers that I got," 07:26 and he says, "Now I have a $600,000 line of credit." 07:29 And I said, "Well, you just think you do. 07:31 Go down to a car dealership 07:32 and try to buy a car on your credit, 07:35 they won't sell it to you 07:36 because you've over extended yourself 07:38 just from getting that kind of credit." 07:40 So, it's very, very difficult, 07:41 but I think consumptive lifestyle, 07:43 just buying stuff because we can. 07:45 I'll tell you one other thing that's very interesting 07:47 that you have traveled around and I've traveled around 07:49 and we've seen poor people in places, 07:51 you know, like Haiti and India and different places. 07:54 If you own an automobile in any condition 07:57 you're in the top 5% of people worldwide. 07:59 This is incredible. 08:01 So no one in America should ever say they're poor. 08:03 We do have poor people in relation to some others 08:05 but, you know, we take care of our people pretty much. 08:07 This is pretty interesting to see. 08:09 Another one I think is the ease of credit 08:11 because even students are sent offerings 08:13 for credit cards and so on, 08:15 and they are encouraged to get student loans 08:16 and that kind of thing. 08:18 And then we talk about adult toys, 08:20 and I'll just give you an illustration of this 08:21 which is kind of interesting to me, 08:23 and I've been counseling people for many years 08:25 so I can just tell you that frequently 08:28 the women are accused of busting the budget 08:33 because they'll go out and spend some money 08:34 on credit card to buy another pair of shoes 08:36 and the husband already thinks, well, you've got 50 pair, 08:37 what do you need another one for, 08:39 but typically it's the men who bust the budget. 08:42 They're gonna come up with a new bass boat 08:43 or a new pickup truck or a new airplane or something 08:46 that just shoots everything, 08:47 you see what I'm saying. 08:49 And I'll give people a little bit of counsel 08:50 right off the way and that is... 08:52 That when Kathy and I got married, 08:54 we decided the first year 08:55 that neither of us would ever spend more than a $100 08:58 without consulting with the other one. 08:59 Well, we did the very same thing. 09:01 We've always done that. We did the same thing. 09:02 And the interesting thing about it 09:03 is when you do that, 09:05 you make decisions about things, 09:06 so I would never come home with a new car. 09:08 We've always buy our cars together, 09:10 we decide what we want 09:11 and you know, Kathy typically chooses the color and so on. 09:15 The idea is when you work together 09:18 you don't have big problems, 09:19 you see what I'm saying those kinds of things. 09:21 Another one is very interesting and that is eating out. 09:24 People don't realize it but if you eat out once a day, 09:27 that will double the amount of money 09:29 that you spend in a month on your food bill. 09:31 And I've actually counseled people 09:32 that ate all three meals out, 09:34 breakfast at McDonald's 09:35 and you know, dinner at Pizza Hut 09:38 and supper at Taco Bell or something and that just... 09:40 That goes from like a $200 a month bill up to $600 09:44 just right away. 09:45 It's not cheap to even eat all fast food. 09:46 It's not healthy either. 09:48 That's the big deal. 09:49 Another one I think is unexpected bills. 09:51 People think well, you know we're both working 09:52 so we can take care of things 09:53 but typically a couple that are both working, 09:55 they'll work right up to their level 09:58 and if one of them is laid off 09:59 or one get sick or whatever 10:01 that'll bust the budget or if you... 10:02 your car breaks down or the freezer goes out 10:04 you've got full of food, 10:05 you've got to get another freezer 10:07 and typically it goes on credit, 10:08 you know, those kind of things are quite interesting. 10:11 There's just a number of things that point to people 10:13 but probably enough of the problems, 10:14 we could talk about how to get out of debt 10:16 and some of the things like that 10:17 I think are really good. 10:19 I will tell you that the Bible itself 10:20 and I try to teach 10:22 what I call the biblical principles of money management. 10:24 The Bible talks about debt about 26 times 10:27 and doesn't say you shouldn't get in debt 10:29 but it encourages people to be out of debt 10:31 and always it is a negative context 10:33 where people get in debt. 10:35 So we want to see how can we get out of debt 10:36 and how can we stay out of debt. 10:38 And I think that debt results 10:39 from a lack of contentment sometimes, 10:41 we've talked about that before. 10:42 The Bible says godliness with contentment is great gain. 10:45 We brought nothing into the world, 10:46 we can take nothing out with us, 10:48 you know, that kind of thing. 10:49 Yeah. 10:50 And when you think about, 10:52 you know, people who are trying to get out of debt 10:55 typically what you run into are people then 10:58 who are talking about investments. 11:01 And they're interested in 11:04 how they can get rich quick to get out of debt. 11:07 So could you talk about that just a little? 11:10 Well, let me tell you something interesting. 11:12 It just happens while we don't 11:13 usually wrench in dates on the air 11:15 but that we're recording these in the winter 11:18 and the winter is typically 11:20 when people get involved in get rich quick schemes. 11:22 I don't know whether it's cabin fever or what it is 11:24 except I can tell you that in our church 11:26 we typically have like 11:27 a sundown worship on Sabbath when in the Sabbath closes. 11:30 And no one goes to bed at 6 o'clock 11:32 even though the sun may set down 11:33 and so some of your friends may say, 11:35 why don't you guys come over to our house for pizza or popcorn, 11:37 we got something to tell you about this just wonderful, 11:40 A multi level marketing. There you go. 11:42 The interesting thing is that the people get involved 11:44 in get rich quick schemes is very interesting. 11:46 They typically learn about it from their friends 11:49 and their friends sincerely think and believe 11:51 they're doing their other friends a favor, 11:53 then when the whole thing goes sour, 11:55 it messes up friendships, hurts churches, 11:58 you know, all kinds of things in that way. 12:00 But I will tell people 12:02 how to discover get rich quick scheme 12:03 and what to avoid. 12:05 One of the reasons is that 12:06 there's a promise of high returns, 12:08 inordinate amount of money will come in. 12:10 You're going to, you know, be giving a six figure income 12:12 and you know, that kind of thing. 12:13 Another one is something you don't really understand. 12:16 Could I add something to that? Sure. 12:19 I remember where, you know what a Ponzi scheme is... 12:21 Oh, sure. 12:23 Where somebody is, you're only receiving money 12:25 based on you're getting everybody else's... 12:27 New customers. New customers. 12:29 So there was a Ponzi scheme that went around 12:32 when we were in Dallas. 12:33 This is when we first were married 12:35 or back in the early '80s. 12:37 And people were being, 12:41 I mean, their names are getting arrested, 12:43 and they're being, you know, lawyers, doctors, 12:45 people are in the... 12:46 their names are right there in the paper. 12:48 But then not too many years ago 12:50 less than 10 years ago there was a Chris... 12:54 somebody put Christian twist on it 12:56 where you were gifting people... 12:58 Oh, yes. 12:59 And suddenly I even saw pastors getting involved in this 13:02 and it was the same idea, 13:04 you know, you put in your 50 or 100 whatever it is, 13:07 then there you bring in so many people 13:09 and you make such a big return. 13:11 People need to know 13:13 that these kind of things are based... 13:15 It's a house of cards, 13:16 and as soon as people quit bringing in new people, 13:19 there's no money that people are gonna lose money. 13:21 Yes, exactly. Don't get you interest at all. 13:22 This is interesting that the Ponzi scheme ideas, 13:24 they've taken in money to pay the people at the top 13:26 and then as soon as they get to the top 13:28 there's not gonna be much money left, 13:29 that's the big problem. 13:30 Another one is they have to risk money 13:33 that they can't afford to lose. 13:35 Somebody like if we were together 13:36 and I was telling you about, I'd say now, we need $10,000 13:39 to get you in on the ground floor here 13:40 and you've got to have, 13:42 you know, make your decision by Monday 13:43 and that's the fourth one, 13:45 you have to make a quick decision. 13:46 Those are the kinds of things 13:47 that you see in the Ponzi scheme, 13:49 Ponzi scheme but also the get rich quick schemes. 13:51 And the real interesting part about it is, 13:53 you don't want to invest any money 13:55 that you can't afford to lose, 13:56 that's the big deal. 13:57 I've been, I've been involved in hearing about... 13:59 Not even in the stock market. 14:01 Hearing about many of these, 14:03 and I don't know if any one person 14:05 that I've ever met 14:07 that actually made a good living from it. 14:08 The idea... 14:10 I do want to say this one thing 14:11 multi-level marketing 14:12 frequently is involved in these things 14:14 but it's not totally bad. 14:15 We have some good companies like Amway 14:17 that do multi-level marketing. 14:18 But in general they will try to mock that or follow it, 14:22 but the idea is you want to stay away 14:24 with from these get rich quick schemes. 14:26 Good hard work is what the Bible says 14:28 is going to be rewarded in the future 14:29 and that's what the Psalms 14:31 and Proverbs talk about as well. 14:33 And the Bible does talk about the bondage of debt 14:38 and essentially talk to us about the tyranny of debt. 14:41 Well, this is an incredible thing to understand. 14:43 The Bible says the rich rule over the poor 14:45 and the borrower is the slave of the lender 14:47 or the servant of the lender 14:49 and it is always true, 14:50 and this is Proverbs 22:7. 14:52 By the way it's interesting 14:53 the verse right before at verse 6, 14:55 it says, "Train up a child in the way he should go, 14:56 and when he is old he won't depart from it." 14:58 So we should train our kids not to get involved in debt. 15:00 Well, what, you know, but what is debt? 15:02 Let's explain this for someone that's watching 15:05 because there are times 15:07 when, you know, you have, you've got a medical bill 15:10 that comes in that's debt 15:11 but that's something you couldn't avoid. 15:13 There's times when, I mean, do you take a mortgage out... 15:17 We're thinking about discretionary borrowing 15:20 and you just talked about some non-discretionary things. 15:23 If you get sick you have to get well 15:24 but discretionary things, 15:26 I would just suggest, 15:28 I'll give you an illustration... 15:29 So we're talking about debt as being discretionary. 15:31 Well, it's living today on money 15:33 that you expect to earn in the future. 15:35 So it actually robs yourself a future use of money 15:38 because you already obligated it today. 15:40 Okay. 15:41 You see what I'm saying? Yeah, absolutely. 15:42 That's the idea. 15:44 I want to talk just briefly about bankruptcy 15:45 because this is an interesting topic. 15:48 Back in 2002 when things were great 15:51 and this is before 2007, '08, '09 and '10 15:54 when 12 million families lost their homes 15:56 through foreclosure and so on, 15:57 so many who lost their jobs 15:59 and the unemployment rate 16:00 was way, way up there and so on. 16:02 In 2002, 30,700 families in the United States 16:06 filed for bankruptcy 16:07 every week, 1.6 million families 16:10 because people were spending more than they were earning 16:12 and could not keep up the payments. 16:14 Incredible is that happens, really amazing. 16:17 But, you know, who ends up 16:18 paying for all of that in the end 16:20 because if a company takes a hit, 16:22 a financial hit if they can't pay back their... 16:25 if, if I take bankruptcy 16:26 and I can't pay back the companies that I owed, 16:29 those companies have to end that passing that cost on... 16:32 Yeah, it's a snowball all the way through society. 16:34 It's incredible when you think about it. 16:36 No wonder it's hazardous. 16:37 There are two other things that I wanted to mention, 16:39 one about bankruptcy, we just mentioned bankruptcy. 16:41 Somebody says to me, 16:42 "Well, bankruptcy is a biblical concept." 16:44 But Deuteronomy 15:1 talks about something 16:47 that may indicate like bankruptcy, you show... 16:50 Once every seven years 16:51 you should grant a release of debts, 16:52 it says in Deuteronomy 15:1. 16:54 Well, since you can file for bankruptcy 16:55 only once every seven years 16:57 people think, well that was bankruptcy 16:58 but when you read verse 2 it says, 17:00 this is the way the creditors 17:01 or the lender should treat their people, 17:02 they have to forgive the debt at the end of seven years. 17:05 So it wasn't bankruptcy, 17:06 it was God's mean of limiting long term indebtedness 17:09 to a maximum of seven years. 17:11 And that's very interesting 17:12 because the council was written to the creditors, the lenders, 17:15 so at the end of every seven years 17:16 any outstanding debts had to be forgiven, 17:18 this is pretty amazing. 17:19 There's one other thing is very interesting 17:21 that we need to talk about in this section 17:23 and that is surety, surety 17:26 and people don't realize what surety is 17:28 but that's cosigning for someone. 17:30 In the Book of Proverbs alone just that one book, 17:33 it says five places 17:35 that you should never cosign for anyone. 17:38 Now this is amazing, never cosign. 17:40 So let's just say that I'm a good credit risk 17:43 that I've worked at the same job for 30 years, 17:45 my cars are paid off 17:46 and I'm just about to pay my house off 17:48 and I come for a loan, 17:49 I would probably be a good credit risk 17:50 and the bank would loan me money, 17:52 but if I came 17:53 and there's somebody who had just repossessed my car 17:55 and I had 10 credit cards maxed out 17:57 and I was about to lose my house 17:59 would you give me a loan. 18:00 No, but you want to get the interest on the money 18:03 so you say if you get your pastor or Shelley 18:05 or somebody to cosign for you, 18:06 we'll give you the money and hold them responsible. 18:08 The Bible says you should never do that. 18:10 Not even for your children. 18:12 Well, that's kind of interesting. 18:13 Yes, I believe that's the case. 18:15 The only exception that I would see to that 18:17 is if someone wanted to help their child 18:19 to get a student loan only for the amount of money 18:22 that they needed to finish the school year 18:23 for a job that would bring them better income 18:25 and a lifetime of security. 18:27 But because I believe parents owe their children in education 18:29 but in general no, not for a car, 18:32 not for those kind of things. 18:33 Yeah, I mean, I could tell you stories 18:34 after stories of parents signing for their children 18:36 and wishing, wishing, wishing they hadn't. 18:38 I've got many people coming, 18:40 I wish you'd just been here two weeks before, 18:41 you know, because of getting involved with things like that. 18:44 Well, another one is personal surety 18:46 and that's the idea that you... 18:48 It's the difference between what you owe on something 18:50 and what it's actually worth. 18:51 Well, let me break the news to the viewers here. 18:54 Almost everybody who is making monthly payments on a car 18:58 owes more on the car than it's worth. 19:01 That's right. Isn't that incredible? 19:02 Oh, it's... 19:03 And you know, the thing that when I was in college, 19:05 I worked for a little while as a finance manager 19:08 for a car dealership 19:09 and I guarantee you, 19:11 I learned all the tricks of the trade how they... 19:12 Oh, my. 19:14 And that's something that 19:15 as soon as we were able to pay off a car 19:17 and we got our first car paid off 19:19 and we continued to drive it, 19:20 but I kept, I put away 19:23 I put away the same amount of that car payment in savings 19:27 and then when we had a couple hundred thousand 19:29 on the other car we were able to pay cash. 19:31 So I want to ask you a question, 19:32 how did you learn to do that? 19:34 What made you think of doing that? 19:35 Did you hear it somewhere? 19:36 No, I just... Saving your car payment. 19:38 No, it was just... 19:39 That's one of the so-called tricks of the trade 19:40 to get ahead financially 19:42 as to when your car is paid off 19:43 typically I ask people what time is it 19:45 when you pay your car off 19:46 and it's time to get another one? 19:47 That's what they want you to do. 19:49 But if you keep driving it, 19:50 if you keep your car for 10 years or longer, 19:51 it pays for itself. 19:53 Absolutely. 19:54 And I mean, to me, you know, we get a good car but we... 19:55 it's not a status symbol, 19:57 it's to be good transportation. 20:00 And the idea of paying 20:02 a finance charge on that charge on that car 20:05 and it's more than what they just finance rate you see, 20:08 there's all kinds of little things they do in there too. 20:10 Well, I want to give you some tips on how to get out of debt 20:12 and this will be very helpful to people. 20:14 And it's just a three step plan and it definitely works, 20:17 it's very, very interesting. 20:18 The first one is you establish the tithe. 20:21 Remember we're looking at this from a Christian perspective, 20:22 so you want to be faithful to God, 20:24 so you're in line to get His blessings. 20:26 Then the first step 20:27 is you declare a moratorium on additional debt, 20:29 no more credit spending. 20:30 Now if you're always used to borrowing, 20:31 this is going to be very difficult, 20:33 it's almost like stop breathing, 20:34 you know, and it's difficult but no more credit spending. 20:37 The second one is you make a covenant or promise with God 20:39 that as He blesses you, 20:41 any extra income you get from any source 20:43 when you get it you know why it came in, 20:45 it goes on debts, 20:46 that's pretty interesting. 20:48 And then the last one 20:49 is what we call the snowball effect 20:50 and that is to list your debts 20:52 from the largest to the smallest 20:53 in descending order, 20:55 typically you have on the top your home mortgage, 20:56 you pay that one off last for two reasons, 20:59 typically it's the largest bill you own 21:00 or take you longer to get to it 21:02 and another one, 21:03 the interest is still, still tax deductible 21:05 and lower interest typically as well. 21:06 But you just pay off 21:08 the minimum payment on every one 21:09 but the one on the bottom of the list 21:11 you add up to it any extra you get 21:12 and it's the snowball, once you get that one paid off, 21:14 you can pay it on the next one 21:16 and the next one and the next one 21:17 and many, many people, 21:18 most people get out from under their debt in two years 21:20 if they're willing to do that. 21:21 Yes. Very, very... 21:22 And there's other things that people can do also 21:24 and I mentioned that and there's Your Money book, 21:26 chapter seven in the book talks about how to get out of debt. 21:29 And talk to us for just a moment 21:31 because you've authored a number of books 21:32 and you actually did a couple of series here before 21:35 called, It's Your Money, Isn't It? 21:37 I love that title 21:38 and then the first time I ever saw you on television 21:40 was with By My Spirit, 21:42 but talk to us about this book, It's Your Money, Isn't It? 21:46 Well, it's just a simple 12 chapter book 21:48 with illustrations and lessons 21:49 and counsel on how to get out of debt. 21:51 One whole chapter, I think is chapter five, 21:53 I said seven earlier, it's chapter five 21:55 and it talks about first our relation with God, 21:57 a relation with our fellow men 21:59 and also planning for eternity, 22:00 so it's a good basic book It's Your Money, 22:02 and it's on our website so... 22:03 And what is your website? 22:05 It's Omegabooks.com. 22:06 Omega books, that's O-M-E-G-A books.com. 22:11 And then you can also I believe we still carry the DVDs. 22:15 Yes, you have the DVD's that we did here 22:17 and they were shown on 3ABN several times 22:19 and that series is available also on the website 22:22 and people can go there. 22:24 The main thing I'm telling you about this for us 22:26 because people want and need help and we're not... 22:29 with the books are available if they should they want so. 22:31 Amen, amen. Yeah. 22:33 And that's something... 22:35 And I don't know we've only got five minutes left. 22:37 Let me ask you this question. 22:39 Do you have just a second to explain 22:41 the amortization schedule 22:43 and how whether it's better to do a 20 year 22:47 or 30 or 15 year, 20 year or 30 year mortgage? 22:50 I can talk about that. 22:51 The typical mortgage in the United States is 30 years. 22:54 For most people if you are able 22:56 and willing to add just $100 a month 22:58 or up to $200 a month 22:59 depending on what the size of your mortgage is, 23:00 you could pay it off in half the time in 15 years 23:03 or if you do the bi-weekly payment thing 23:05 where you pay half of a payment every two weeks 23:08 you typically take 11 years off your house payments 23:11 and you know, this is amazing 23:14 that what people can do with it. 23:16 So Kathy and I have had two mortgages, 23:18 and we paid both of them off early 23:19 by prepaying principal 23:21 and so we're not going to be talking about retirement 23:23 but I can just tell you that there are three prerequisites 23:27 people have to think about for retirement. 23:29 One is to be debt free, totally debt free 23:30 including their home mortgage. 23:32 Another one is to have a reasonable income stream, 23:34 and the third one is to have health insurance. 23:36 So if you plan on getting out of debt 23:38 and paying off your debts and living within your income, 23:40 you have a much more pleasant time during retirement. 23:43 But let me go ahead and answer more specifically 23:45 the one that you ask about the housing thing. 23:47 Typically when you pay on your mortgage, 23:49 there's two parts of it aside from interest, 23:53 excuse me, for the taxes that you pay. 23:56 You have the principle 23:57 that you pay out on the interest due. 23:59 And typically in the first part of your loan, 24:01 for the first 20 years of a 30 year mortgage 24:03 you're paying more interest than your principal. 24:06 But so when you make your principal 24:08 your regular payment 24:09 you can just add another principal payment 24:10 and save the corresponding interest to it. 24:12 And that's all in chapter eight in the book 24:14 and it's explained very well 24:16 with illustrations and everything. 24:17 And you can get that, 24:18 I mean, that's great advice for all of them. 24:20 Oh, that's awesome stuff, yeah. 24:21 And it's in this book, It's Your Money Isn't It? 24:23 So you want to check out omegabooks.com 24:27 which features its books. 24:29 All right, I'm sorry to interrupt with that. 24:30 Okay, well, I'll tell you one other thing 24:32 and that's the other things 24:33 that people can do to get out of debt. 24:35 I just really, really harp on this. 24:37 If I was a musician I'd have a guitar with just one string 24:40 and that would be get out of debt, plunk, plunk, plunk. 24:42 And the reason is you live so much better out of debt 24:46 and you're so much more satisfied. 24:48 People would like you to be in debt 24:51 that is creditors, 24:52 you know, they want to loan you money and so on, 24:53 but I can share some other things, 24:55 one of them is establish a budget 24:56 and this is kind of a duh thing, you know, 24:58 but a lot of people just live from paycheck to paycheck, 25:00 they don't really know how much is coming in 25:02 or how much is going out. 25:03 I've had people tell me, 25:05 "Well, we make a pretty good income 25:06 but we don't know where it's going." 25:07 And I say, "Well, there's someone stealing from you?" 25:09 "No, no, no, we're spending it." 25:10 But you just have a simple budget, 25:11 it doesn't have to be exhaustive, 25:13 it can be on the computer 25:14 or it can be just on a single page 25:16 or whatever and we have a budget in the book as well. 25:17 But another one is set goals for your family. 25:20 And the goal... 25:21 I ask people for example, 25:23 how much do you owe on your house 25:24 and their answer is I don't know. 25:26 Well, you should know. 25:28 And another goal would be for example 25:30 to prepay the mortgage 25:31 but a simple goal would be, 25:33 you know, by this time next year 25:34 we're going to pay our car off, 25:36 we're just going to work together, 25:37 all family is going to work together 25:38 and we're going to pay that car off 25:40 and then save the payment like you said 25:41 for paying cash for the next one. 25:43 Several times when Kathy and I paid cash for a car, 25:46 the dealership has tried to talk us 25:47 out of paying cash withdrawal. 25:49 Oh, absolutely. Isn't that incredible? 25:50 Well, they make a lot of money on the finance. 25:52 They make a little money on their financing. 25:53 Yeah, that's incredible. 25:55 Another one and this one is interesting 25:57 is destroy credit cards. 25:58 And I have it... 25:59 if there in my notes 26:01 and there if is if you find that you're spending stuff 26:03 just because you can buy it with your credit card 26:06 even for people who pay it off every month, 26:08 study shows that if you have a credit card 26:10 you'll spend more than if you just pay with cash. 26:12 I use a credit card quite a lot but we pay it off every month 26:15 and it's interesting when we get our statement 26:17 for the end of the year 26:18 I'll say how much money we spend on the card and so on, 26:20 then it'll say how much interest you paid. 26:22 I like when I see zero, 26:24 we don't pay any interest. 26:25 But one thing that I guess today we have to add 26:28 because since we travel so much 26:31 and I don't have time to shop, 26:33 there's a number of times 26:34 that I will have done a little internet shopping. 26:37 And that certainly 26:38 when they're sending along a deal, 26:40 I found myself guilty of this too 26:42 is that I bought from a couple of places 26:44 suddenly they're sending you something 26:46 and you're going, "Ah, great sale," 26:47 and I get it just because I put it on my credit card 26:50 and they sent it to me 26:52 and I didn't really need it. 26:53 Yeah. It's interesting that... 26:55 We've only got about 30 seconds. 26:56 Okay, I'm gonna say the last one then 26:58 is have a sale. 27:00 Most people have stuff in their possession 27:02 that they'll never use again as long as they live 27:04 and this is somebody else's treasure 27:06 it's your trash, 27:07 you know, you carry stuff around. 27:08 Kathy and I lived in Maryland for 20 years, 27:10 there was about eight boxes we didn't unpacked 27:12 the whole time we lived there 27:13 which means whatever is in those boxes... 27:14 You didn't need. We didn't need. 27:16 So I would just say have a sale 27:17 and use the proceeds to go on your debts. 27:20 Oh, that's very excellent advice, 27:22 and thank you because I have to attest that life after debt 27:28 is the best life that there is, 27:30 it's a stress free life. 27:31 And we just want to thank you so much. 27:33 And our prayer for you is that 27:35 you will take these financial suggestions to heart 27:39 and that you will get out of debt. 27:41 May the Lord continue to bless you richly. 27:44 Bye-Bye. |
Revised 2017-08-28