7 Qualities of a Disciplined Investor

One of the most cited verses on investing is Proverbs 21 5. Steady plotting brings prosperity. Hasty speculation brings poverty. But here's the thing about steady plotting.

It requires discipline. You can find financial calls and questions at 800-525-7000. That's 800-525-7000. I'm Rob West. Steve Moore is off today.

The 7 Qualities of a Disciplined Investor coming up next on MoneyWiseLive. And today especially. Mark, welcome back to the program. Hey, Rob. Good to be here with you.

Glad to have you here. And we say today especially because today was one of those days where it required discipline and not emotional reactions in the market. Isn't that true? Yeah, absolutely. It's been a little dicey out there these last several days. So people that had maybe gotten a little complacent since the earlier, you know, earlier in the year volatility.

Getting a little taste of that again here in September. Absolutely. Well, let's dive into this. SMI's founder, Austin Pryor, has a great article on the importance of discipline in the latest SMI newsletter. So I'd love today, Mark, for you to start by giving us the overall theme before perhaps we dive into the details.

Yeah, sure. So I guess big picture, you know, what we've learned over the 30 years that we've been publishing SMI is that really when it comes to investing, learning what you're supposed to do is actually relatively easy. But doing what you're supposed to do, that's surprisingly hard. And so, you know, we can be our own worst enemies a lot of the time, especially when the market becomes unusually volatile like we were talking about earlier last year and to a much lesser degree here in the last few weeks. You know, the one thing, Rob, that separates the top professionals from the rest of us and which can take years to really develop is emotional self-control. Our emotions tend to interact with the news and the market events in ways that sabotage us. You know, we've all heard the ideal of buying low and selling high.

But emotionally, it's really hard to do either one of those. And our experience shows that, you know, most investors tend to do the exact opposite. Yeah, well, and we're often willing to admit that only after we've made the mistake. So why don't you give us some examples, perhaps, of what you mean by that?

Yeah, sure. Well, you know, recently we've been seeing that very few investors were willing to sell high even after we'd had this huge market rebound since March over the last six months. You know, in recent weeks and leading up to the beginning of September, there were a lot of caution signs of really high valuations, a really steep ascent to the stock market. But as is usually the case when the markets have been good lately and our greed tends to kick in a little bit and investors want to keep making even more.

You know, on the flip side of the coin, the reverse is also true. It's not easy to buy low. We're seeing that right now. Today, we've had a little selloff. But instead of people getting, you know, probably more eager to buy, usually prices are dropping because the news is bad or the economy isn't looking good. People get a little more pessimistic and uncertain. And it's hard to put money at risk when you have those types of conditions. So instead of buying near the lows, people tend to wait for conditions to improve first.

And then at that point, prices usually aren't all that low anymore. You know, I think the big picture point is for most people, their emotions tend to run the investing show. And so you've got to figure out some way to break through that dynamic. For us at SMI, we do that by following mechanical strategies that sometimes force us to act even when we really don't want to because we've got a signal that we've predetermined is going to force us to take action. So we put in the work designing those systems on the front end when we're not under any emotional pressure from the market so that we can take action when the strategies say to instead of what our emotions are telling us to do. Well, we're going to continue to unpack this right around the corner with Mark Biller today. We'll actually get into the seven qualities we need to develop if we're going to overcome our emotions and then we'll take your phone calls.

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How are things in your garden? Have you seen the root of bitterness springing up? The book of Hebrews warns us, Watch out that no bitter root of unbelief rises up among you, for whenever it springs up, many are corrupted by its poison. Hebrews 12.15.

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That's Christiancreditcounselors.org or call 800-557-1985. Welcome back to MoneyWise Live. I'm Rob West.

Steve Moore is off today. Mark Biller with me throughout the program today. And Mark and I will be taking your phone calls if you have a question related to the markets, your investment strategy, retirement planning, hiring an advisor, whatever it is. We'd love to hear from you. 800-525-7000 or any financial question between now and the end of the program. We'd be delighted to hear from you.

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We'd love for you to do that. It's out on the Google Play Store, the Apple App Store, or you can go to app.moneywise.org. We've spent the last eight months building what we think is the best digital envelope system out there, plus a way for you to engage in the MoneyWise community, listen to all the MoneyWise broadcasts, connect with a certified kingdom advisor. It's all there in the brand new MoneyWise app. Again, app.moneywise.org or on your app store today. We're talking with Mark Biller today about the seven qualities of a disciplined investor.

Perhaps you've been a bit emotional in some of your decisions. Today's volatility in the stock market is a great example of why we need discipline, why we need rules, and perhaps even why we need to heed the Council of Scripture and hire someone to manage our money for us. The focus of our time today is really at the heart of an article that was written by Austin Prior. You can find it at soundmindinvesting.org. You'll see a link to it right there at the top of the page, and you can access it. It's a great read. I'd encourage you to check it out. Again, soundmindinvesting.org. And Mark, you've identified these seven qualities that we need to develop to overcome our emotions. Let's dive into the list.

What's first? Yeah, well, it's one that we actually don't often think about in terms of investing, and it's to be humble. You know, we need to accept that there's nothing new under the sun, as Ecclesiastes 1.9 tells us. The instructions that God's given us in His Word have proven time and again to be practical and effective. And there's real safety in following the priorities and guidelines that He's provided for our protection. You know, really, if we abandon those principles and those priorities, we're saying we have more confidence in our own thinking than in His, which obviously we don't want to be in that position. And the second quality really goes hand in hand with that, and that's to be conscientious. And what we mean by that is seeing yourself as a caretaker of what God has entrusted to you. You know, we need to acknowledge that when we take undue risks, we're really jeopardizing His wealth, because we're not in this just for ourselves, but to responsibly build our assets so that we can provide for our families and give more generously. You know, hopefully everybody listening to this broadcast feels similarly to the way we do at SMI, which is that we want to play our part in taking the gospel of Christ to the millions who've never heard it, and being good stewards and good investors is one way that we can help play that out. Yeah, there's no question about that. I love that. We've got to start by being humble, being conscientious.

You know, understanding that God owns it all isn't just acknowledging the truth. It's critical for keeping our emotions at bay, and I think when we understand that, it changes everything. Let's move through one more of these qualities of a disciplined investor before we turn our attention to some phone calls.

So, Mark, what's next on the list? Yeah, so next up is to be prepared, and that means developing a written plan that lays out your investment strategy. It should reflect your personal goals and appropriate level of risk, and understanding how all the parts of your portfolio fit together and the role that each part plays. And then once you've got that plan, you want your buying and selling to be dictated by the plan, instead of by your emotions or any other outside conditions or inputs. You know, our goal here is to be an initiator and not a responder, because there's always going to be input hammering you to try and get you to act, and you want to be acting inside out, not outside in.

Well, if you're reacting to biblical principles, you're reacting based on a set of rules that have been predetermined, you're always going to perform better as to how you're making decisions, rather than reacting to the news of the day, which will invariably take you in the wrong direction. Great insights, Mark. Let's turn our attention to the phone lines. Debbie is calling today from Chattanooga.

Debbie, you're on MoneyWise Live. Go right ahead. Hey, thank you. Thank you for taking my call. Yes, ma'am.

I've been listening to your radio station for several years, even when Larry Burkett was on, so it really has been a lot of help. Let me explain a little bit about my situation. Right now, I have an IRA that I self-manage, and I actually had it in a 401K and changed jobs, and so I rolled it over into a self-managed, so I've been doing it myself.

And that's been about ten years, and it's grown quite a bit. And I was considering using a Kingdom Advisor at this point, just because I don't feel like I really know that much, and I've never been really comfortable with it, and I do let my emotions take control sometimes. But the question I have is, when you move this over with someone else, like I would be doing, and all of a sudden it would be changing, if the market is at an all-time high at this point, does that mean that everything that I put in over in these new signs will be more volatile if we have a downturn?

Yeah, that's a great question. Debbie, do you mind if I ask what you have roughly in investable assets? Well, in that fund, it's around about $95,000 altogether, with mine and my husband's.

Okay, very good. Mark, timing on moving to an actively managed portfolio. Any considerations for Debbie? Well, the beautiful thing here, Debbie, is that the money is in an IRA. So first of all, if you do end up making changes with an advisor, you're not going to have to worry about taxes.

If your investments are up in that account, you can still make changes without that having any tax implications. Now, as far as the style of how that advisor is going to invest the money, there are lots of different approaches that different advisors take, and that's actually a really key part of hiring an advisor, is making sure that you're kind of doing an interview process to make sure you're comfortable with the approach that they take. So you may find an advisor that maybe isn't using a dramatically different approach than what you've been doing on your own, or you may find an advisor that's doing something dramatically different, and you need to make sure that you're comfortable either way. So I wouldn't assume that it's going to have to be a certain way when you go with an advisor, but that's definitely a question you want to get into fairly early in that process. Yeah, I think that's great, Counsel. I love that you're thinking of a certified kingdom advisor. That will ensure, Debbie, that you have an advisor not only who has competency, but really understands the biblical principles and admonitions from Scripture as it relates to managing money.

And Mark, what would be maybe the top three questions you would ask when you're interviewing a prospective advisor? Yeah, so I think that it's always good to kind of tick the box of finding out about the investors' qualifications, any certifications they have, that type of thing. As we just talked about, you definitely want to dig in a little bit into the specifics of how they're going to manage your money. You know, some people use mostly index funds and that kind of thing, which may be great with you, maybe not. Maybe you're looking for a more active approach. Maybe they have multiple strategies, which is kind of the approach that SMI advisory takes. So you really want to understand the strategies. It's very important because if you don't understand them on the front end, you might not be comfortable once you see them start to play out within your account. So those would be two really important ones. And then, of course, you always want to inquire about costs. Some people feel funny about asking those questions, but it's just like any other business transaction.

You need to know what you're going to be paying and how that is going to be built. So those would be three that I would definitely have near the top of my list. How about you, Rob? What else would you add to that? Well, I would just want to make sure the person asks you more questions than they do sell you on something because you want to make sure that there's a good rapport and that this is somebody who's interested in what God has for you, as opposed to trying to just convince you that they're the best advisor. Debbie, we appreciate your call today. I hope that's helpful.

More to come with Mark Biller right around the corner. We're talking about the disciplines of an investor from a biblical perspective. You can find the article at soundmindinvesting.org. We'll take more of your calls right around the corner, 800-525-7000. Thanks for being along with us today.

This is MoneyWise Live. We can pass down sclericardia or hardness of heart. In fact, if you find that that's the thing you deal with, it just pure coldness of heart. I'm going to tell you something that occurred to me while I was looking at this definition is that you and I are greatly challenged to be tender to anything our parents and grandparents were not. What has so often happened, if you got hardness back behind you, that stone's being broken off and handed down, broken off and handed down, broken off and handed down.

At what point do we quit handing that stone down? Because we can talk all we want about how we don't want our children to be like us. But I'm going to tell you, if you think, if you're a parent, just hear me for a moment. And boy, I'm listening to my own lesson. And if I think through what it is I want my children to be, ultimately I just want you to think. How do you want the thing to turn out for them? Then the best advice I could ever give you, biblically speaking, is become that.

What is it you want for it? Become that. Beth and Tim are thankful for the grace gift to serve you. Your letters, prayers, and support are a vital part of this program. To request this month's thank you gift, text the word GIFT to 57682.

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Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you. And it's available when you click the store button at moneywiselive.org. Welcome back to Money Wise Live. I'm Rob West. Steve Moroff today, sitting in with me throughout the broadcast today, is Mark Biller of Soundmind Investing, soundmindinvesting.org, where you can find the focus of our conversation today, the seven qualities of a disciplined investor. Well, we're so thankful that so many of you are calling in today with your questions. We're going to go right back to the phones and welcome Paula to the broadcast in Parkland, Florida. And Paula, you're on Money Wise Live. Yes, thanks for taking my call.

Yes, ma'am. I am thinking about selling my house, but I'm pretty nervous about it, and I just need a little bit of guidance. All right. Why don't you start, Paula, by telling me just a little bit about what you're thinking. In terms of your nervousness about selling, what is it that's really tripping you up?

Okay, the market is kind of good now for sellers, and I'm thinking I probably could get the best for my money right now, but then I'm thinking, should I rent or should I buy after? I'm not quite sure what to do after that. Yeah. Are you moving to a different area, Paula, perhaps? Are you moving out of Parkland? Or are you just relocating, perhaps, close by?

No, I think just somewhere close by. Okay. And what is your goal in selling? Do you need more space? Are you trying to downsize? Are you looking to cut your budget? I'm downsizing.

Okay, very good. And so I think the key, whenever we're thinking about buying a piece of real estate or renting, is really to start with that budget, because if that's your primary consideration for moving, and even if it's not, perhaps if you were just trying to relocate to another area, we do need to make sure that whatever you're doing moving forward is going to fit into your overall spending plan. If you were to buy something and you were to take on a mortgage, or renting for that matter, we would use as a rule of thumb, and that's all it is, is 25% of your take-home pay, no more than that going to principal interest, taxes, and insurance, or your all-in rent payment. And that would ensure that you have plenty left over for your fixed and discretionary expenses. Again, it's all got to balance, it's got to work in your plan, but that's at least going to put you in the ballpark in terms of a good starting point.

So as long as you start with that budget and understand what you're trying to accomplish, that's then going to give you a price range that says, okay, I can afford to buy X amount, and it's not going to be a budget buster. Now, as to whether you want to buy another piece of real estate or you want to rent, often I would look at the rest of your financial life as a good indicator of that. Is this somewhere where you think you can stay for a minimum of five to seven years? Do you have the down payment? Hopefully you've got some equity built up in this current property that you would be able to roll in, and at a minimum, you'd be able to put 20% down in this new property. Hopefully you've built up more equity than that and you'd be able to put down quite a bit more than that. But if it works in your budget, if you have the down payment to put in, if you don't have any other just kind of glaring issues financially, a lot of credit card debt or a budget that doesn't balance, things like that that would cause me to perhaps want to slow down in making another major purchase, then I think I like the idea of you being a homeowner building equity, again, as long as you're going to be there for some time and the budget works.

But give me your thoughts on everything I just shared with you. I was just thinking maybe I should sell now and rent maybe for a year or two just so I could look at the market and see where it's going. Yeah, and that's the only thing I would caution you on. If there was something else in your financial life that caused you not to want to make a big financial commitment into a home, that would be one thing. But to stay out of the housing market simply because you want to pick a better entry point, that just typically doesn't work out in your favor.

Usually you're going to do well on one side or the other, but usually not both. So in a seller's market like we're in now where there's low inventory, houses are up, you're going to get top dollar in most cases for your sale. Now, you are probably going to pay top dollar, but the idea that you would wait on the sideline for a period of time hoping and expecting that the market is going to roll over only to pick your entry point, it just typically doesn't work out well when you try to do that. And this is your home. It's more than just an investment. It's the place where you're going to live. And so I wouldn't approach it like an investment in terms of selecting the entry point like you're talking about.

So if it were me, as long as the other pieces line up, I'd go ahead and sell that piece of property and then move right into the next one as opposed to trying to wait for better timing, hoping that the housing market is going to respond accordingly. It's a great question, though. We appreciate you calling in today. We've got just a moment left. Let's go to Ray in Orlando, Florida. Ray, just about 60 seconds.

What do you have for us? Okay, so I retired. I got this big lump sum, 401K. Now, how do I calculate how much money I should take out of it, either monthly or yearly, so I don't destroy my nest egg?

Ah, okay. Mark, an average rule of thumb that you can pull from a 401K in the form of income? Yeah, you know, the standard rule of thumb is 4%, but that is, again, just a rule of thumb.

And it's very important to look very closely at your expenses, at your budget, and do a rough comparison there with the income that would be provided and see how that's going to last and make adjustments from there. Very good. Ray, I hope that's helpful to you. Anita, Peter, and Nathan, we're coming your way. More MoneyWise Live right around the corner. Mark Biller with us today.

I'm Rob West. Stay tuned for more 800-525-7000, and we'll be right back. So you can invest with the confidence to reach your financial goals while remaining true to your Christian values and commitments. We call this investing that makes the world rejoice. More is available at investeventide.com.

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You'll find it all in Master Your Money by Ron Blue, available when you click the Store button at moneywiselive.org. With SRN News, I'm John Scott. President Trump says he expects to quickly announce his pick for the Supreme Court on Friday or Saturday. The President told Fox & Friends he has a list of finalists and he wants his choice confirmed before Election Day. The Justice Department has identified New York City, Portland, Oregon, and Seattle as three cities that could have federal funding slashed under a memorandum by the President that sought to identify localities that permit anarchy, violence, and destruction in American cities. Florida's Governor Ron DeSantis says the state is going to get tough on people who turn violent during protests.

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Steve Moore off today, sitting in with me this hour, is Mark Biller of SoundMindInvesting.org. We've been talking about the seven qualities of a disciplined investor and, you know, Mark, in markets like this, especially where it seems like there's always a few high flyers, those particular companies that are just way out ahead of the others. I'm thinking about companies like Tesla and a few others as of late, and it seems like every season has one or two that are doing that. You know, there's a temptation to react and feel like you're missing out on something, and maybe I need to take a portion of what I've been squirreling away and jump into one of those stocks. How should we process that?

Yeah, you're so right, Rob. You know, one of the hardest things for investors is to resist the fear of missing out. You know, they talk about FOMO and chasing those high flyers because, you know, it might be somebody in the office or whatever that, you know, is talking all the time about how much money they're making, you know, trading Tesla or whatever it is, and it is hard to resist that.

You're trying to maybe do this slow and steady plotting thing, and here your neighbor is seemingly making money hand over fist, you know. I think that it's important to keep in mind that it's very similar to what we see in terms of consumer goods. You know, we see the person in the nice car or the nice house, but we're only seeing one half of the balance sheet, and so it is when you see somebody making a lot of money with high flyers during a particularly strong market. You're only seeing one half of the balance sheet, so to speak, the other half being what happens when the market turns, and oftentimes those quickly earned gains have a way of evaporating just as quickly. So, you know, we just want to try to stay anchored in that slow and steady wins the race, the steady plotting leads to prosperity as Scripture teaches us, and operating again, like we said earlier, inside out instead of outside in, not being influenced by the mania or the panic of the moment in the markets, but instead charting our own course, knowing what we need to accomplish our own financial goals, and just relentlessly operating and executing on that plan.

Yeah, there's no question about it, and clearly God's Word has a lot to say about how we should think and act as it relates to our investments, our management, if you will, of God's money. We've been talking today about the seven qualities of a disciplined investor. Mark, you told us we need to be humble, we need to be conscientious, we should be prepared, but this next discipline really speaks to what you were just talking about there with the urge to jump into a high-flying stock.

What is it? Yeah, you know, the next one on the list is an emotion that you want to have, and that's to be content. You know, when we're overly focused on profits, we run into a danger zone, as the Apostle Paul warns us in 1 Timothy 6, when he says, Those who want to get rich fall into temptation and a trap, and into many foolish and harmful desires. For the love of money is the root of all kinds of evil, some people eager for money have wandered from the faith and pierced themselves with many griefs. So as we're drawing up our financial plan, it's important to be reasonable in our financial ambitions, because we know that more money is lost due to greed than probably any other single factor. People tend to take on too much risk when they're reaching and shooting for really high returns.

Now on the other hand, if your plan is drawn up so that it's going to get you where you need to go while earning reasonable historical rates of return, maybe 8 to 10% per year at the high end, then you're less likely to go off script chasing these risky investments that promise the moon, because you can see how your plan is going to lead you to success without needing to take those big risks. Yeah. Well, this next question coming from Bowling Brook, Illinois, and Anita has to do with a particular segment of the market that involves a bit more risk. Anita, you're on MoneyWise Live. Go ahead. Hi, thank you so much for taking my call. I really enjoy you guys' show. Thank you. Just real quick, this is for Forex Trading.

I am Mastery Academy. I want to get you guys' thoughts on that. You pay a monthly fee to get in, and then you pay a monthly fee to stay in, or you can get these other people under you to buy into it, and then that way if you do that, then you wouldn't have to pay a monthly fee. But I wanted to get your thoughts about that Forex Trading, that day and night trading. Yeah, very good. Mark, perhaps a definition or two first, and then your thoughts.

Yeah. So, Anita, and anybody else that's listening here, Forex Trading is typically talking about trading currencies, and so without getting into a lot of detail, all of the currencies around the world trade on a floating basis, so they're moving up and down relative to each other. So, when you're trading Forex currencies, you're typically like trading the U.S. dollar against the euro or against the Japanese yen or that kind of thing. The Forex markets are huge. There's an enormous amount of money that trades in these currencies every single day.

However, I would caution anybody very strongly about this area in that this is swimming with the big fish. So, the institutions that are doing this type of trading, these are the sharpest knives in the drawer, and they've got systems and technology and firepower behind them that, as an individual, you just can't match. And it sounds like, Anita, you've found somebody who's offering a system, and obviously we can't say whether that system is good or bad, but the idea that you trading at home with somebody's system like that, that you're going to be competing with the deepest institutional benches in an area that can really get pretty wild and is really so moment by moment, that's a very difficult way to go. The other warning flag that I would just be very concerned about is the idea of, it sounded like there was maybe kind of a multilevel thing wrapped in there of getting people trading under you, and I would just be very cautious that any trading system that is bringing that in as a piece of the picture, that makes me very nervous. Trading and investing for your own account, you really shouldn't need some other income kicker to make that attractive, so that just is a little bit of a red flag to me. Rob, what are your thoughts?

Well, I couldn't agree more. I think all of these issues, both trading in the Forex markets as well as using one of these systems, especially where there's a multilevel aspect to it, I would stay away from all of that. I like to keep it simple. I'd rather you hire a really high quality mutual fund manager or build an ETF portfolio or just turn it over to an investment advisor. This is money you've built up long and hard over the years in your systematic investing, and let's not take unnecessary risk with God's money.

Let's put it to work over the long haul, even if it's not as exciting as it might be in the Forex market. Anita, thanks for your call today. Well, we're going to be talking about paying off an upside down car. We'll talk about whether to take a deferred comp. That's all right around the corner. Mark Biller's staying with us for the rest of the program as well, so we'll look forward to taking your calls. This is MoneyWise Live, where God's word meets your financial decisions. We'll be right back. Managing God's money is available when you click the store button at moneywiselive.org.

Hi, I'm Barry Maguire. I'm here to help you understand the urgency and how much fun it is to share your faith through the eyes of a layman. Just like anything else, the more you share your faith, the easier it gets, the better you are at it, and the more fun you have doing it. But God uses whatever you do to win the loss from the moment you first begin, because you're just a vessel. People get saved when the Holy Spirit speaks through you and leads them to Jesus.

That's not dependent on you other than your willingness to participate. You have no idea, but God knows exactly where every person is spiritually and what they need to hear to bring them to Him. That takes the pressure off of you. Jesus said you simply need to love on people for them to know you're His disciple, and then let the Holy Spirit speak to you with words that even surprise you. He's having an intimacy with God that's not possible any other way. There's nothing more exciting than knowing God is using you to move people closer to Him. Join us at igniteamerica.com.

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I'm Rob West, Steve Moroff today, Mark Biller in with me today, and we're so glad that you're along with us. We've been covering the disciplines of an investor, and this is all from an article you can find at SoundMindInvesting.org. We would encourage you to check it out. Speaking of checking things out, have you looked at the new MoneyWise app? We'd love for you to visit app.MoneyWise.org so you can see all that the MoneyWise app has for you, including a digital envelope system, connecting with the MoneyWise community, and even exploring all of the content we are bringing to you each day.

Again, app.MoneyWise.org. Mark, we've been covering these disciplines of an investor. You've mentioned several of them already.

I'd love for you to talk about this last one. It's accountability. What does that have to do with investing? Yeah, well, you know, we suggest that you, you know, we've talked about creating a plan, and we often talk about that on these programs, the importance of having a plan to operate from. And the accountability piece there is that we suggest showing that plan to either a spouse, maybe a trusted Christian friend, and then reviewing it periodically to show that you're being faithful with it. And the main reason that we suggest that is it's a lot harder, you'll think harder at least, about deviating from that plan if you know that you're going to be answering for what you've been doing to somebody else.

It's a lot, you know, you're going to think twice before you make exceptions if you're doing that. And of course, as we've talked about earlier in the program, if you're working with an advisor, that's a great form of accountability as well to help keep you on track. So, you know, to wrap all this up, Rob, you know, our main point here is taking these steps is going to help assure that you're honoring the Lord and His priorities. They're going to help you strike a wise balance between the risks and rewards of the marketplace. And that way, when you do run into these inevitable bear markets and economic storms, you know, we can be of good cheer. God tells us in Psalm 32, I will instruct you and teach you in the way you should go. I'll counsel you and watch over you. The Lord's unfailing love surrounds the man who trusts in Him. And that's what we're trying to do with these seven disciplines.

I love it. If you'd like to read all seven, you can find the article that's right at the heart of our conversation today at soundmindinvesting.org. Back to the phones.

Lakeland, Florida. Peter, we're delighted to have you on Money Wise Live today. Go right ahead.

Well, hello, fellas. Thank you so much for your program and just a pleasure to hear you share your wisdom and answer questions that people have. And I appreciate it a lot.

So thanks for taking my call. I just I just turned 50 last month and my wife and I were able to bless enough to pay off our house last year and our three kids are grown. And so we're in that we're in a place where we're trying to be smart and look at, you know, saving up some money for retirement. Haven't started a plan for it a little bit late, but God's blessed us pretty well, though. And I recently sat down with a that's a gal that to Edward Jones and and got some stock picks that.

That were recommended to the Oxford community, and I'm sure you all heard of that, but I just was kind of wondering if there's a percentage or like some advice on I'm doing some stock investments. And if I should just keep doing the 401K in the Roth or I should, you know, invest in stocks and dabble in that. So, yeah, look at very good advice. Yeah, absolutely, Peter.

And thanks for your kind remarks. So congratulations for paying off your house. You're 50 years old. It sounds like you are maxing out your 401K on a monthly basis. You're also contributing to a Roth, but you have some perhaps discretionary income in addition to that that you're looking to put into the market. Is that right?

Yes. So I invested like $60,000 in the market. And and I'm learning quickly, rapidly, you know, doing the trade stops or all this different stuff. And I'm kind of counting on this investor, this lady to to help me with it. Financial advisor, you know, she picked a few for me. And, you know, ultimately, I trust God that I'm doing something right.

You know, it is ultimately for his glory, but sure. What are your thoughts, Mark, on investing directly in the market, perhaps beyond contributions to a 401K in individual stocks? Yeah, you know, I think the big picture here is that we we would encourage you to view all of your investments, the 401K, the Roth, anything you've got in a taxable account that you're supplementing those others with, we would encourage you to view all of that as a single portfolio. So not you're not thinking about, well, that's my 401K and I'm doing that with that and that's my Roth and I'm doing that with that. But rather to think of that as one big portfolio. Now, you might favor certain types of investments in those specific accounts, and that's fine. But it's not like, well, in my 401K and Roth, I do mutual funds, but over here in this other account, I do individual stock.

It doesn't need to be that way. In other words, you can own similar things in these and all of these different accounts. And that may be a simpler way to think of your total portfolio. You know, in terms of individual stocks, there's nothing wrong with trading individual stocks. But I do think that that's harder for most individuals than investing through mutual funds. And the reason for that is the diversification that those mutual funds gives you, it's much easier to build a well-diversified portfolio with a handful of mutual funds than it is to get a similar type of diversification across a larger number of stocks. Individual stocks just require you to put a lot more effort into really knowing those individual companies. And if you're going to be investing in, you know, 10 or 12 of those, that's 10 or 12 companies you have to keep up with. When you use a mutual fund, you're kind of counting on the manager to do that for you. They're the ones that are needing to keep up with what's going on with those companies. So, Peter, I definitely wouldn't say don't trade individual stocks. It's not that at all. I just don't want you to feel like you need to do that in addition to investing in mutual funds.

If the mutual funds seem like they're putting you on a path to get you where you need to go, it's perfectly fine to have a mutual fund only portfolio across all of your accounts. Very good. Peter, we appreciate your call today. I hope that's helpful to you.

Let's go right to St. Petersburg, Florida. Nathan, you're on MoneyWise Live. Hi, guys. Thanks for taking my call. I have a question that's a bit off topic.

I apologize. But I find myself in a situation here where I'm upside down in my car note. My wife and I are actively just starting to be serious about getting out of debt. So we're just kind of taking down the debts and the credit cards lowest total and on up high. So our car is we owe, let's see, $21 on it and it's worth $19. So we'll say $2,000 upside down and just kind of wondering what steps we can take to get out of that. Whether we just have to wait it out until we break even or if we could trade it in for a cheaper car or really just anything. It just sucks.

Yeah. Well, the best way out of this is to continue making payments, Nathan, until you've paid off the negative equity. That's, of course, the amount the car depreciated when you drove it off the lot. When you reach the point where your Blue Book value equals the balance on your loan, then, of course, you could trade it in on another car or sell it yourself, which is where you'll typically maximize the value.

If you couldn't wait that long, you'd obviously have a couple of options. One would be take out a personal loan for the difference between the Blue Book and what you owe. Sell the car, pay off the big loan with those proceeds and then the money from the smaller loan. Or, as you suggested, just roll the difference into a new loan on a less expensive car. You'll just have to crunch the numbers to see which is the best of those two options. Either way, I think the key to take away from this is to make sure you don't buy more car than you can afford. Save up as much cash as possible for the down payment so you don't ever get into a negative equity situation.

Just drive these cars as long as you can. We appreciate your call today. Final call for today's broadcast. We go to Sterling, Illinois. Gary, you're on MoneyWise Live.

Go right ahead. Well, thanks, Mark, for taking my call. My call is about a deferred comp question. My wife and I, years ago, we had to start a deferred comp with the state. And to make a long story short, we ended up investing like $400 a month.

And I retired in 2012. I just kept on putting that money in there. Now we've stopped. Is it a good time? Do we get penalized for not putting money into that deferred comp?

Because the dividends keep adding and it keeps growing. Should I just keep that going? Yeah.

Mark, we've got just about 30 seconds. Rob, you know, you may have more experience with deferred comp accounts than I do. What's your thought on that? Yeah, I would say you want to keep putting into it. Obviously, you'll have the option to roll it out at some point, which is what I would encourage you to do, Gary.

Move that into an IRA once you separate from the company. In the meantime, I would just be a systematic contributor to that, and you'll be glad you did down the road. We certainly appreciate your call today. Mark, it's been great having you along. And Steve, see you today.

He'll be back later in the week. But we appreciate you sitting in and grateful for our partnership with Sound Mind Investing. Well, happy to do it, Rob. Anytime.

All right. God bless you, buddy. I want to say thanks to my team today, Dan Anderson, Aaron Houlian, Amy Rios, and Jim Henry. I'm Rob West, and this is a partnership between Moody Radio and MoneyWise Media. Thanks for tuning in today. Thanks for your calls. We'll look forward to having you back tomorrow on the next edition of MoneyWise Live.