The Uniqueness Principle: Rethinking Inheritance with Ron Blue

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That's faithfi.com slash give. Now let's dive into the podcast. Puritan poet Ann Bradstreet once said, Wisdom without an inheritance is better than an inheritance without wisdom. Hi, I'm Rob West. Every parent hopes to leave an inheritance for their children, but doing so wisely takes careful thought and prayer. Today, Ron Blue joins us to discuss the uniqueness principle and how it can guide parents in passing down wealth effectively. And then it's onto your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions. Well, we always look forward to having Ron Blue on the program. He's co-founder of Kingdom Advisors, the author of many books on personal finance and a dear friend of mine. Ron, great to have you back. Good to be a part of it, Rob.

Thank you. Ron, studies show that around two-thirds of parents divide their estates equally among their children. And while this certainly isn't a bad thing, can you share with us how this can be problematic in some cases? Yes, I think, Rob, if we think about it, the way God treats us, he loves us all equally, but he treats us uniquely. He doesn't just divide up everything equally. Some have some things and others have others. But so when it comes to leaving an inheritance to our children, we have five children, and I can tell you this, they all sat at the same dinner table, but they sure didn't all turn out the same way.

Amen. I mean, they've done fine. I don't mean to imply something negative there, but they marry differently. They parent differently.

They're in different economic situations due to jobs lost, jobs taken. So what I have found over time is that when Judy and I started, our kids, none of them were married. Well, I'm sorry, there were two of them that were married. And we asked three questions, Rob. We said, if we left X amount of money to X child, what's the worst thing that could happen?

And it took us about two years to really think that one through. The second question then was, well, how serious is it? In some cases, it wasn't serious at all. Like we had one child who said, well, if we left them, whatever, they'd give it all away. So that's not real serious. We had different situations with another child where it would have really harmed their marriage because the husband really had a passion to provide for his family. So we asked those questions. What's the worst thing that could happen?

How serious is it? And then what's the likelihood of it occurring? And that's the process that we follow. It doesn't say how we'll end up. And I can tell you this now at my age, 83, with a daughter that will soon be 59, as the oldest and youngest being 47, circumstances changed over time. So how we would answer the question today that we asked for the first time 25 years ago is totally different. But it's the process that's the thing to think about. And in America, the default is equal. And then it's not necessarily wrong to be equal. But it is, I think, unwise to not think through the consequences of leaving this wealth to a particular child. Well, I so appreciate that about your teaching, Ron, because here, once again, you're not saying that it's better or worse to leave the same amount to each child. What you're saying is, what's important is to follow a decision making process, right? Absolutely. Because what you don't want to do is, you know, and you've heard me say this too, don't pass wealth unless you pass wisdom.

Because wealth never creates wisdom, but wisdom can create wealth. So what I want to do as a parent is the best thing for my children. And I need to think that one through very, very thoughtfully and very, very prayerfully. It may end up I treat them equally, but it may not either.

The most important thing is the process that I follow. And I, you know, if you don't ask the right question, you don't ever get the right answer. And the right question is, what's the worst thing that could happen?

Because I don't want that to happen. Okay. Yeah, that's right on.

Ron, I know you've said, well, transfer at the end of the day should reflect God's wisdom, not human emotions, because ultimately, we're accountable to him. This has once again been so valuable. Ron, thanks for stopping by. Always a delight, Ron. Thanks for having me.

That's teacher and author Ron Blue talking about the uniqueness principle. Your calls are next 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith and Finance.

We'll be right back after this break. Every day we hear life changing stories from listeners just like you who see money and possessions as tools to invite more people into God's kingdom. Instead of chasing wealth, you've chosen to embrace God as your source of love and provision. At Faithfi, we're passionate about meeting people where they live and work through our national radio program, app, resources and website to influence widespread positive change in our culture. Please consider becoming a monthly partner at faithfi.com slash give.

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This institution is not federally insured. Hey, great to have you with us today on Faith and Finance. I'm Rob West and I'm looking forward to taking your calls and questions today. That number to get in on the conversation, 800-525-7000.

That's 800-525-7000. Let's begin today in New York. Wayne, you'll be our first caller, sir. Go ahead. Rob, it's so good to talk to you. Thank you for taking my call. How are you?

I'm doing very well. Thank you for calling. You're welcome. Listen, real quick, I don't want to take a lot of time, but I want to mention real briefly, Larry Burkett was a great influence on my life early on and Howard Dagan. Oh, well, I couldn't agree more, Wayne. I appreciate you calling that out. Howard is a good friend to this day and, of course, the former host of this program before Howard, the late Larry Burkett, and it's amazing.

You know, I was just talking to some team members earlier today. I lead Kingdom Advisors in addition to Faithfi, where we disciple financial advisors, and Larry was a co-founder of Kingdom Advisors, and we give an annual award each year called the Larry Burkett Award in his honor. And the reason we do it is because he really popularized this idea of bringing together biblical wisdom with modern personal finance. And as you know, Wayne, he did it with a kind heart and just always rooted in Scripture.

And that's the reason I believe that people still reference him today is because God's wisdom transcends everything. And Larry pointed that way for us. And so we're certainly grateful. I appreciate you calling that out. How can I help you today?

You're very welcome. Sure. My first question for you is, Rob, how, and unfortunately, about a week ago, I was let go from my job. I was terminated from my position. And so I'm no longer working right now.

How do I restructure my finances since my unemployment? Yeah. Well, Wayne, my heart goes out to you. I mean, the good news is that we still have a pretty robust labor market. So hopefully you can find a new place of employment quickly. And that needs to be your sole focus right now, asking the Lord to give you wisdom and discernment, provision, but really pounding the pavement and doing your part to find that next job.

And let's hope you find something quickly. And you've got something to bridge between one and the other maybe, you know, unemployment insurance or some sort of severance. This is a time to pivot Wayne to what we call the May Day budget, which only has four categories and order of importance. It's first food, we've got to cut our food expenses as much as possible, no eating out, take out, ordering in or home delivery, make a menu plan, cut the frills, make a grocery list, but we got to keep food on the table. The next priority is housing, whether you own your home with a mortgage or you have rent, you have to keep a roof over your head. If you can't make the payment, call your lender or landlord, let them know ahead of time, don't run from them run run to them, perhaps ask for an extension. Third priority is utilities, we've got to keep the house heated or cooled and the lights on. And you can't, you know, make a gas or electric payment, contact the utility company and let them know about your financial difficulty. And you may also need to ask for an extension there. And so after food and housing and utilities, then the final priority is transportation, we've got to keep the car, you know, in good standing and keep gas in it.

So you can get to that next job and get out there and find it. And if you can't make that car payment, contact your lender. So that's the May Day budget, I would say once you're living on it, you know, your money will go a lot further. Obviously, this requires that everything else kind of is temporarily suspended. You know, with any remaining funds, you could target consumer debt or other loans keep those current.

But we really just need to go into a mode of, of hopefully just, you know, dialing back lifestyle spending as much as you possibly can. And this is hopefully where an emergency fund if you have one could be tapped to kind of weather this storm. But hopefully that gives you some ideas to think about. Do you think I should reach out to my church? You certainly could. I mean, you know, most churches have a benevolence ministry for this purpose.

And a lot of times people are giving regularly to the benevolence ministry and the money just kind of sits there, because they don't have necessarily an active way to get it into the hands of the people that need it. So I would say yeah, absolutely. This is a great opportunity for the body of Christ to step in here. And I think they could help you for a couple of months, maybe make some of those utility payments or something like that.

So I like that idea a lot. Wayne, hey, thanks for your call today and for your kind remarks about the program, sir. By the way, we do have a few lines open still today, we are taking your calls and questions on anything financial 800-525-7000. Let me take this opportunity before we hit that next break, to remind you that, you know, one of the most common questions we're getting right now is from folks saying, I just can't make the budget work. In fact, what our coaches are telling us, we have certified Christian financial counselors that are a part of our team that work with a lot of our listeners free of charge, just as a part of our ministry, and they're telling us they're even seeing a rise in the number of families that are buying homes together, because of the dramatic rise in housing prices. That's the only way they can make the numbers work.

They're actually going in saying, well, you know, we'll use the kitchen together, maybe we'll take the top floor, you take the bottom floor and let's go. You know, it's just really difficult out there right now. Well, one of the ways to stay on budget if you're struggling is to have a spending plan. I would recommend that you check out the Faithfi app, you'll find it at faithfi.com. It's based on the tried and true envelope system right there on your smartphone, Julie and I use it every day and there's no way we'd know what was left in eating out or in my girls clothing fun without the Faithfi app.

So download it today from your app store, just search for Faithfi. All right, let's head along here today to Pete, go right ahead, sir. Hey, Rob, thanks for taking the call. So I'm 60 years old, and I've got a pension worth about a lump sum of $700,000. I was interested in investing into a income variable annuity product, put it in for like three years to grow it.

It's got a buffer 20%. So I won't lose anything if the market goes down 20%. But I do gain based on the index, and then maybe start pulling it as fixed income in about three years at some pretty good withdrawal rates.

I'm wondering if that's a good idea. Yeah. So that variable annuity with the 20% buffer offers, as you stated market linked growth potential, partial downside of risk, absorbing the risk absorbing the first 20% of any losses. And it you know, it's balances the opportunity and the risk because, you know, with trade offs like capped gains, meaning you can only own so much and complexity and the costs with the downside protection. You know, these aren't my favorite, just because, you know, when you look at the historical average annual returns of most market indexes, what gets those 789% annualized returns up where they have been over a long period of time, is those years that have dramatic upside potential. And you've got to give that up in order to get the downside protection.

Now you may say, listen, the peace of mind, Rob, is worth it. And I'm happy with the upside. And if I can get the downside protection, I'm all in and I've got some tax deferral and I can convert that to an income stream. Okay, then then that's fine.

I just want you to go into it knowing that they're complex. There's some limited liquidity, meaning if you need to get to the money, you might have some surrender charges, at least in the first few years, and you've got that capped upside. But if the downside protection is worth it, then I'd say go for it.

I don't have a problem with it. I will say, Pete, get multiple bids. Talk to two or three advisors.

Let's compare two or three products before you make your final decision. Thanks for your call. By the way, if you're looking for advice from a financial professional and you'd like someone who shares your values and who has met high standards and character and competence and ethics, well, we trust the Certified Kingdom Advisor designation, the only financial services industry designation out there that is around biblically wise financial advice, pastor and client references, annual continuing education, experience, character, and ethics requirements all having been met.

You can find a CK in your area and I'd interview at least two or three. Just go to faithfi.com, click Find a Professional. That's faithfi.com. Hey, back with more in our final segment right around the corner.

Stick around. Equipping and empowering them to carry biblical financial wisdom to their clients, peers, and community. For more information, visit kingdomadvisors.com.

That's kingdomadvisors.com. We are grateful for support from Crossmark Global Investments. They are a faith-based firm with a goal of offering values-based investments to help align financial choices and faith, ensuring a portfolio that reflects what matters most. Crossmark does this through investment solutions that span the capital market spectrum from large cap to small cap strategies, including equity, fixed income, and balanced strategies. They are led by industry veteran Bob Doll, CFA, a regular guest on the Faith and Finance Program.

More information is available at crossmarkglobal.com. Great to have you with us today on Faith and Finance. I'm Rob West. We're taking your calls and questions today. I've got room for perhaps a couple of additional calls, 800-525-7000. By the way, if you appreciate the program, you want to help us reach more people, or maybe you've been able to apply something you've heard and you'd like to support our work, becoming a FaithFi partner would do that.

Those are folks that support us at $35 a month or more. We, as a way of saying thanks, will send you each issue of Faithful Steward, our quarterly magazine full of incredible, thoughtful, theologically sound articles to help you be a faithful steward. We'll also send you pre-release copies of all of our studies and devotionals and our new study comes out next month.

It's called Wisdom Over Wealth. It's a study on the book of Ecclesiastes that I know it'll be an encouragement to you. So if you'd like to become a partner, we'd be grateful.

Just head to faithfi.com, click give at the top of the page, and you'll find all the details. Let's head back to the phones to Pennsylvania. Hi, Carol. Go right ahead. Hi. My question pertains to a mutual fund in which I have an IRA and a separate investment account, and I have received correspondence and notices requesting a vote to approve the reorganization and merge of what, you know, like my shares into this newly created account.

My situation is I'm not sure how to evaluate and what factors I should consider when I go to make the vote. So I'm just feeling kind of blank here. Yeah.

Yeah. So this normally happens when basically you as the shareholder are being asked to approve some sort of significant structural or operational change to the fund. This isn't typically day to day management, but a bigger shift. So this might be a merger with another fund or a change in legal structure, you know, or converting it to a different type of investment vehicle, like, you know, from a mutual fund to an exchange traded fund. And so they want to restructure it. And they're asking for that shareholder vote because mutual funds are owned by their investors, you and the others holding shares.

And these are big changes. So they need your say so in order to do it so that the funds board is proposing this reorganization, but the shareholders get a vote, usually one vote per share or per dollar value own something like that to either approve or reject it. You know, often it'll be cost driven, or it might be a struggling fund in terms of performance, or maybe it's efficiency, something like that. So you get a proxy statement that allows you to essentially cast your vote.

And I think what's at stake for us, you know, many reorgs often, you know, means there's tax implications, because it, you know, depending on capital gains, might change the cost structure, it might also have an, you know, investment impact. So, you know, I think if you don't understand what you're reading, perhaps, you know, getting an advisor to look it over for you, or calling the company and having them explain it to you, you know, might be a next step. Do you manage your investments yourself, Carol? No, actually, I went through a rep, but it just went back in the 80s. And I think he got out of it.

So I really didn't know who to contact. And I just put it in, you know, with it be an IRA, and another small investment just made the investment and left it. I know that's just a way to do it. But yeah, well, I think this does speak to the bigger issue. You know, I know you didn't ask about this. But let me just, you know, go there for a moment. I mean, how much do you have by way of total investable assets?

Total between those two was around 64. So it's not large amounts. Okay, yeah. And then do you have other investments? Or is that the extent of your investments?

No, I do have other investments of what I had worked in an office. And at that time, they put it in a 401k. But when that office closed, then I stayed with whatever you might call that company and put it into IRA.

But again, it's under mutual funds, and they set it up according to like projected retirement years, you know, at the time when changed the IRA. So who's managing that that IRA from your old 401ks? The company. Okay, you want the company's name?

No, no, it's fine. I was just curious if there was an advisor that you had retained, but it sounds like it's still there. All in with all your investments, roughly, if you're comfortable sharing what, what do you have in the way of investable assets? No, it would be 200.

Okay. Yeah, I mean, anything north of 100, you know, would be sufficient for you to have an advisor, I guess, you know, perhaps, and obviously, if you just want to deal with this one issue of the restructure, you just need somebody to help you understand what's going on either you getting with the mutual fund company and having them explain it to you and then just making a decision on how you want to vote or getting somebody to weigh in on it. I guess what I'm wondering is, does this kind of surface the need or the benefit to you by securing an advisor who could really help you give oversight to all these investments? So they're kind of, you know, no longer on autopilot, but you've got somebody who's actually, you know, giving ongoing management to them, what you would typically do is consolidate all of these IRAs into, you know, a new custodian, wherever the advisor or custody is, his or her assets that they manage might be Fidelity might be Schwab might be LPL might be one of the big brokerage firms like a Merrill or a Morgan or an Edward Jones. But you know, I think finding an advisor to oversee that would probably make sense because this is a significant sum of money that you've put away over a long, you know, period of time. And, you know, I think that just is, is worthwhile. So if you wanted to go that route, obviously, this person could advise you on this question, as well. And you just go to our website, faithfi.com, click find a professional, and I'd find a CKA in your area.

But if you want to kind of stay with the current plan, I think the next step is for you just to get with the mutual fund company and have them explain to you what they're doing, and then just, you know, make the best decision you can. Okay. All right. Well, thank you. This is not uncommon. Yeah.

And hopefully that helps shed some light on what it is they're probably doing here. We appreciate your call today. Call anytime. Let's see. Let's go to Chicago. Brandon, your next step, sir. Go ahead.

Hi, Rob. I was just wondering, how do we balance stewarding our money well and living radically generously? Hmm. I love that question. Yeah, you know, I mean, this is the tension, right? Because if we understand that God owns it all and we're stewards, you know, those are both very appropriate objectives. You know, we want to—yes, we're stewards, so that's the starting point. God owns it all, and I need to be a faithful manager of God's resources. And so then the question is, you know, how much do I give?

Or perhaps we flip it around and say, how much do I keep? You know, I recorded an interview just yesterday with Paul David Tripp. He's the author of, you know, more than 30 books on Christian living and parenting. But his book on money, which if you haven't read it, I'd highly recommend, Redeeming Money. You know, he makes the case that, you know, and he backs it up with scripture, that perhaps the primary objective of what God has entrusted to us is so we should give and partner with God where he's at work and be about blessing and loving others through our generosity. So what if we flip that conversation and instead of asking the question, how much I'd give, we're asking the question, how much should I keep? And I think the big idea there is we're studying the heart of God in the scriptures. We're on our knees before the Lord asking what's right for me and what should my lifestyle be? And perhaps asking that question, not just how much should I give, but how much should I keep could be a great option.

Checking out Paul David Tripp's book on Redeeming Money, I think can help as well. Brandon, thanks for your call. Folks, that's going to do it for us. So thankful to have you along with us today. Let me say a big thanks to my team today, working really hard, Amy and Taylor and Dan and Gabby T on our phones today, plus everybody here at Faithfi. We'll see you tomorrow. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.