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.
06:49 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.
10:50 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.
15:41 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.
19:54 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.