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Music Well, you steady listeners know it's a question we get fairly often, but I want to go into a little more detail today. How do I get out of my timeshare? You actually have several options, although none of them are great. In a perfect world, you'd sell your timeshare for enough to get your money back. That's not going to happen.
If anyone has done it, please call us because we'd love to hear how you did it. Seriously. Now, just why is a timeshare so difficult to sell or get rid of at all for that matter? Well, for most potential buyers, it lacks a clear need. You can book a week at a similar resort anytime you want without a huge upfront cost and monthly fees. So there are few customers out there to buy your timeshare. Also, let's face it, timeshares have a significant public relations problem.
Most people don't like the high pressure sales tactics typically used by the companies that sell them. So timeshares in general have a badly tarnished brand image. Before you attempt to sell your timeshare, you should get all the information you can about the process and the best source we know is the Timeshare Users Group or TUG. You can find them at tug2.com. This is a community of timeshare owners who offer advice and share their experiences.
The membership fee is $15 a year and it's probably well worth it. Now, if you try to sell it on your own, you need to have a realistic idea of what it's worth and that's almost certainly a lot less than what you paid. Next, you'll have to advertise and TUG has an online marketplace that's probably the most active site you'll find for buying and selling a timeshare.
But you can also try eBay, Craigslist, Facebook and newspaper classified ads. Once you find a buyer, if you find a buyer, you'll need to write up a contract that specifies what each party must do and what they receive from the transaction. It would be wise to get an attorney to draw up the contract. Okay, let's say you've been unsuccessful in selling your timeshare. If you've given up hope for getting any return on your money, you can simply ask the resort to take it back. It's called a timeshare deed back and if the resort agrees, it's an inexpensive way to get rid of it. You'll probably need to have paid the entire cost of the timeshare, which could run around $24,000, so that would have to be a last resort. Your next option is to use a so-called timeshare exit company.
This one can be tricky because there's a lot of scams out there. You'll want to find one with a track record of helping people get out of their timeshare and be sure to ask for referrals. There's one more option for getting out from under a timeshare and that's to go with a contract attorney. You want to find one that's experienced in getting folks out of a timeshare.
It can happen because these companies don't always keep their end of the bargain and are found in breach of contract. Now, you're probably wondering what some of these options might cost you. If you're able to sell your timeshare, you'll probably have several hundred dollars in advertising fees. You'll also lose the difference between what you paid and what you'll sell it for, which will likely be substantial. If you go with a timeshare exit company, costs often start around $5,000 and could go well over $10,000.
Hiring an attorney could cost you nearly as much. Now, here are some of the don'ts. Don't go with any timeshare exit company that makes extravagant claims that they can get you released from your timeshare for a low cost. If the company asks for payment upfront, head for the door. Also, don't go with any company that suggests you do anything illegal or, in our case as believers, anything that would dishonor God.
Here's another don't. It might be very tempting to just stop making payments. That will result not only in being endlessly harassed by the timeshare company or some collection agency. It will ruin your credit and may result in foreclosure. You've also signed a contract, pledged your word that you'd pay this money, and the Bible is pretty clear about your obligation. In Psalm 327, it reads, do not withhold good from those to whom it is due when it is in your power to do it.
So, as I said, you have a few options for getting rid of a timeshare, but the easiest way of all is not to buy one in the first place. All right, your calls are next. The number 800-525-7000.
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That's faithfi.com slash give. All right, it's time to take your calls and questions today. The calls are coming in, but we've got a few lines open, perhaps one for your question today. We'd love to hear from you. The number 800-525-7000. That's 800-525-7000 you can call right now.
Let's see. Let's head to Connecticut to begin today. Hi Bella. Thank you for calling. Go right ahead. Hi Rob. I like your advice and wisdom. I'm calling.
I have a question. So I recently graduated from college and I have a better job now. But I, you know, with a better job, I needed a more reliable car.
So I got the car. I still owe the car. I owe all of it, like $16,000. I'm making monthly payments. And then I have my college loans that are, you know, the payments are coming in.
I work for a nonprofit organization. So those payments have gone down to $16 a month. And I've been educated that as long as I stay with a nonprofit, as long as I stay with my job for the next 10 years, they'll be able to forgive the loan. And my question was, I have so that, you know, the extra $500 that I had to pay for the school loan, I wanted to ask, should I use those $500 to pay off the vehicle quicker and get rid of that interest? Or should I invest them in possibly renting a parking lot so that I could provide my dawn training services that I did before I graduated from school?
Yeah, very good. And so you believe that you will be covered under loan forgiveness. Would that be the public service loan forgiveness program or something else?
Public loan forgiveness. Okay. Yeah. And if you're on track for that, have you called the Department of Education and just gone over your specific situation? And has somebody confirmed to you that you do qualify just based on the work that you're doing and so forth?
Yes, at least I quant my mojila. That's the loan company that I don't know if there's another number that I should call. Okay.
Yeah, no, that's fine. I would just make sure because there is some fine print related to the public service loan forgiveness. And I just want to make sure that you are correct that you will qualify as long as you make those 120 payments, 10 monthly payments or over 10 years on time. And so if you qualify for that, I'd say take full advantage of it. And if that's the case, then I would take this extra income that you have and pay down the car. Let's accelerate that payoff as quickly as you can. That's going to save you interest. And as soon as you get that paid off, you're going to be able to recapture that monthly payment in your spending plan for your other goals and priorities, whether that be additional giving or continuing to build up your savings or maybe putting that aside for investment or maybe investing back in your small business for additional equipment or marketing or whatever that might be.
So I think I would just pay the scheduled monthly payments on the loan forgiveness once you verify that, yep, I'm on track and I do qualify and then accelerate the car with that surplus. Does that make sense? Absolutely. Thank you so much, Rob, for your wisdom. You are welcome, Bella. We appreciate your call today. May the Lord bless you. Let's go to Cleveland, Ohio. Hi, Ellen.
How can I help? I'm working on opening up a new Roth IRA through my school system. I can't remember. It's like a 457 or something like that. It's comparable to a 403D. But the question is, she said there's like a new feature, I think, that you can choose to be protected with certain percentages from drops in the market. So I think that one of the choices was like if it's like a 40, 60 maybe. So I would be protected from drops unless it went below 40 percent or greater than 40 percent drop. But then I couldn't get gains if it rose over 60 percent. And then there was another option where it was like the gains was if it went over 115 percent. And then if it dropped more than it was either 40 or 60 percent, then you'll be protected from that. And I'm wondering, that sounds like a good idea to me. I didn't know which one would be the better choice or if it's even a good idea. Yeah, it's a great question, Ellen. And here's what I would say. First of all, the 457, you're right, is the government plan similar to a 401K in the private sector or a 403B in the not-for-profit space.
So they all basically act the same. And there is both a traditional and a Roth variety of those. And I like the Roth, especially if you're younger and you've got, you know, 20, 30 years for this money to continue to grow before retirement.
What you're describing sounds more of like an insurance product, maybe a retirement annuity of some kind. The only challenge I hear in that, I mean, I understand why you'd be attracted to the downside protection, is that, you know, when you look at the historical data and you look at the average returns that people get, you know, you might hear it cited that the S&P 500, the 500 largest companies, that index of the S&P 500 over the last 100 plus years has averaged like 9% a year. But that factors in the highest highs and the lowest lows. I mean, that would include, you know, the 1927. That would include 1987, the stock market crash. That would include the dot-com bubble bursting in 99-2000.
It would include the financial crisis of 07-08. But it would also include those kind of boom years, if you will, where we had some incredible growth in the stock market. And my experience is when you try to protect on the downside and you give up the upside, it's the upside in those years where it really went up significantly that gets you up into those higher average annual returns.
And if you take that off the table in exchange for the downside protection, yes, you're limiting your risk, but the data will say that the long-term annual growth potential is going to be minimized. And I think if time is on your side, for instance, what age are you, if you don't mind me asking? I'm 55. Okay, so you're 55. So, you know, if you're in good health, we need this money to last if the Lord tarries until age 95, probably. You know, people are living longer these days, so you might have four decades for this money to grow. Now, I would say that you should get more conservative over time as you get closer to retirement. You know, once you're 60, you probably want to be thinking in terms of having a 50-50 portfolio, 50% stocks, 50% bonds. And then as you, you know, 70, you flip that 40, 70, 40 stocks, 70 bonds. So you get more conservative over time, but you still take a long-term perspective. And my preference is to go that approach rather than trying to protect on the downside in exchange for giving up the upside. At the end of the day, Ellen, you're the steward. You need to pray about it and I'll support you in whatever decision you make. That's just my take on it. I hope that helps. Well, we're going to take a quick break, but we'll be back with much more just around the corner as we apply God's wisdom to your financial decisions and choices.
More calls right around the corner. This is Faith and Finance, and we'll be right back. Explore and reflect on a well-known biblical parable about a very rich man with a very big problem.
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Soundmindinvesting.org. Thanks for joining us today on faith and finance. We're taking your phone calls today at 800-525-7000. That's 800-525-7000 here in our final segment. Let's head right back to the phones. I will head out to Arkansas. Bob, thanks for your patience, sir.
Go ahead. Yes, I'm just looking for some ideas to fund a supplemental retirement for my wife when when she retires. She's basically on the collecting Social Security and I'm a retired federal employee and only chose a minimal survivor benefit for her, which won't be enough to really help her too much.
So I received some inheritance recently and was looking for ideas on how to maybe invest that into some retirement income for her. Yeah, very good, Bob. Well, let's talk about that for a second. So as you look at what income sources will be available, are you thinking about beyond your life?
So if if your income were to go away and then maybe she'd take a survivor's benefit, but you're seeing that that wouldn't be enough. Are you talking about right now? No, no.
After I'm gone. OK, got it. Yeah. So she would be able to take a survivor's benefit equal to 100 percent of your Social Security. And so I'm one of those government employees who's in the windfall elimination and PPO.
Yep. So OK, so so the benefit she will. Almost nothing.
Got it. OK, so she'll continue with her own. And what would you think, Bob, as you run that retirement budget where it's just her? I mean, what do you think roughly that gap is we're trying to solve for?
Oh, probably a couple thousand a month. OK, all right. Let's use that. And I think that might be a good next step for you to kind of dial into that a little bit more and say, OK, let me actually create the budget. Hypothetically, I'm gone. What would it look like for her on a monthly basis and and try to dial into what is that delta, if you will, that gap that we're solving for?
If you don't mind me asking, what was the inheritance? Seventy five thousand. OK, there may be a little more in the future, but but that's for sure that amount. Yeah.
OK. So, I mean, you've got a couple of options. If you want more of a guaranteed approach, you could put it into, let's say, a variable annuity where there's no downside. You get a portion of the upside and try to grow it. And then, you know, she could convert that to a guaranteed income stream for life at your death. And then that would supplement her Social Security. You could do a guaranteed annuity where it's growing at a guaranteed rate of return, or you could give that to an advisor. That's right about the minimum that a lot of money managers will take.
And not all of them will, but where they would build a portfolio that tries to protect it, but also grow it modestly. The challenge is that, you know, our typical withdrawal rate rule of thumb is four percent a year where you're trying to maintain that balance throughout your retirement years. And let's say she lives to age 95 and the Lord tarries, if he doesn't, doesn't matter. But if he does and she lives to age 95, we don't want that money to go away over time. The challenge is four percent a year on seventy five thousand is only three thousand dollars a year or two hundred fifty dollars a month, which is quite a bit off from the two thousand. I mean, let's say even that that grows to one hundred and fifty thousand between now and when she'd actually start pulling this money out because hopefully she doesn't need it right now.
Well, that's six thousand a year and that would get her up to five hundred a month. So I think the question is kind of given that we're quite a bit off there, what do we do with that money today? And I think you've got kind of these several options.
One is to hire an advisor. Second is to look at a more of an insurance product, which is not my typical advice, but I think in this case it could make some sense since we're solving for a time when you're no longer here. But then the other thing is, what can we do to continue to build assets between now and when the Lord calls you home? Do you continue to work part time, you know, where you can take one hundred percent of that and sock it away? You know, those are the kinds of things we may need to look at as a as a second option here just to get the assets up to a level where they could support a couple of thousand dollars a month. You know, for instance, if you could get up to four hundred and fifty thousand, you know, that would throw off eighteen thousand a year.
We're still not even quite there. I mean, we're probably looking more like a half a million. And I know that might sound like, well, I'm just not sure I can do that. And I get that. And so then the other option is to say, OK, well, what does it look like to dial back expenses so that she doesn't have as much overhead?
But give me your thoughts on all that. Well, I mean, those are, you know, a lot of good options and stuff. I do have a small variable annuity that I've had for years. It's probably only got about sixty thousand in it. Right now, I have a life insurance policy, but I'm 70 years old and it's a term life. And that thing is getting pretty darn expensive each quarter to fund that life insurance policy.
I'm not sure how much longer I can keep that going. Yeah. Well, if you're beyond the term, which is when it starts dramatically increasing, the idea is that you need to drop that. I mean, that's going to be really cost prohibitive.
And I realize that gives you even less if you were to die tomorrow and none of us know the hour that the Lord will call us home. But, you know, you really need that money going back into your budget. The idea behind term is that once that term ends, that the level term where there is no increase in the premium, then we need to let that go because that's going to be really cost prohibitive at that point. Yeah. Well, I don't know if it's considered a level term. I mean, I've had it for years and I hit certain age groups and the premium goes up.
Yeah. So it's maybe a whole life policy. What's the death benefit on that?
Well, it's not. I know it's not a whole life, but it's a hundred thousand on it right now. All right. What are you paying a year for that now? Well, I just hit the age 70 category and I think it's probably about two thousand a year. Yeah. Yeah, that's pretty expensive. So I'd probably look at letting that go and just starting to sock that away because that obviously is going to continue to increase as you hit these other categories. Well, hopefully that's given you some things to think about. Bob, if you do want to connect with an advisor there in Arkansas, you can reach out to a certified kingdom advisor on our website at faithfi.com.
Just click find a professional. May the Lord bless you, sir. Thank you for being on the program today. Well, folks, we covered a lot of ground today. You know, as we think about managing God's money, I mean, we can really boil down these principles once we understand that God owns it all. And that's the starting point, because that then affects every other financial decision, because every spending decision is now a spiritual decision because I'm managing the King of Kings money. But those principles we see in scripture are to number one, spend less than we earn, because that's the key to every financial success. We've got to live within God's provision.
That's contentment. Number two is we've got to avoid the use of debt because debt mortgage is the future. And so that's a self-discipline issue. Number three, we want to have some liquidity or some margin.
That's a discipline issue. How do we have a surplus, something left over to fund our goals? Number four, we want to set long term goals because the longer term, the perspective, the better the decision today. And then finally, we want to give generously because giving breaks the grip of money over our lives.
We want to exercise that muscle. Remember, we were created in the image of the ultimate giver, God himself. And so it doesn't mean you'll be free from financial challenges, but you'll put yourself in a position to experience God's best. And that's certainly what we want for you today. Again, if you want to support our work here at Faithfi, you can do that on our website. Be sure to make that gift before June 30th.
That would help us out as we head toward our end of the fiscal year. Faithfi.com, click give. On behalf of my team today, Taylor, Devin, Robert, and everybody here at Faithfi, thanks for joining us. We'll see you tomorrow. Faith and Finance is provided by Faithfi and listeners like you.
