This Faith and Finance podcast is underwritten in part by The Good Investor, a book by Robin John. This Faith and Work memoir hopes to inspire readers to view their work and investments as opportunities to honor God and bring blessing to the world. You can learn more now at goodinvestor.com. That's goodinvestor.com. Mm.
Have you ever felt a quiet sense of pride after giving, like you were just a little more faithful than others? I'm Rob West. Today we're wrapping up our Why We Give series with a hard but important topic, self-righteousness. When our giving becomes a way to elevate ourselves rather than glorify God, we've missed the heart of generosity and possibly much more. We'll discuss that next, and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey.
Well, we've already looked at giving out of guilt and giving to control, two harmful motivations that distort biblical generosity. But today's topic might be the most deceptive of all because it hides behind good behavior. We're talking about giving to feel morally superior, giving to prove we're spiritually ahead, giving to show God or others that we've got it right. Jesus addressed this directly in Luke 18. Two men went up to the temple to pray, one a Pharisee and the other a tax collector.
The Pharisee stood by himself and prayed, God, I thank you that I am not like other people, robbers, evildoers, adulterers, or even like this tax collector. I fast twice a week and give a tenth of all I get. But the tax collector stood at a distance. He would not even look up to heaven, but beat his breast and said, God, have mercy on me, a sinner. I tell you, this man, rather than the other, went home justified before.
before God.
Now let that sink in. Jesus says the humble tax collector, not the tithing, fasting Pharisee, went home justified. That means the Pharisee, despite his religious performance, was not right with God. He wasn't saved. Why?
Because he trusted in himself. His giving became a way to elevate his righteousness and look down on others. This echoes Jesus' sobering words in Matthew 7, where many say, Lord, Lord, didn't we do all these things in your name? And he replies, I never knew you. They did religious things, even impressive ones, but their hearts weren't surrendered to Christ.
When we give to make ourselves look good, we miss the heart of the gospel and risk trusting in our performance rather than his finished work.
Now, don't hear this the wrong way. There's nothing wrong with feeling joy after giving. Scripture tells us God loves a cheerful giver. But if that joy turns into spiritual pride, if we start comparing ourselves to others or Feeling superior because of how much we give?
Well, we've crossed a line. Deuteronomy 8 warns against this mindset. You may say to yourself, My power and the strength of my hands have produced this wealth for me, but remember the Lord your God, for it is He who gives you the ability to produce wealth. The antidote to self-righteousness is remembering the source. Everything we have, even the ability to give, comes from God.
We're not the heroes of our generosity stories. He is. Jesus also warns in Matthew 6: Be careful not to practice your righteousness in front of others to be seen by them. When you give to the needy, do not announce it with trumpets. Truly, I tell you, they have received their reward in full.
If we give to be noticed, our gift isn't truly for God. It's for us. And any praise we receive in return will be our only reward.
So what does humble generosity look like? It looks like giving quietly, even sacrificially, without expecting praise. It flows from the praise. From gratitude, not superiority. It reflects Christ, not ourselves.
May we display the humility of John the Baptist, who, when others worried that Jesus was gaining more attention than him, simply said, He must increase, but I must decrease.
So, what do you do if you recognize pride in your giving? First, bring it to the Lord. Confess it honestly. His grace is enough to cleanse and correct us. Second, refocus on gratitude.
The most humble givers are those who remember how much they've been forgiven. And third, ask God to help you give in ways that reinforce humility. That might mean giving anonymously or choosing to give where no one else will see or praise you. Before each gift, simply pray, Lord, may this reflect you, not me. Because generosity is never about proving ourselves, it's about responding to the one who gave everything for us.
By the way, if you'd like to go deeper into the heart behind generosity, check out Faithful Steward, our quarterly magazine for FaithFi partners. When you give $35 a month or a one-time gift of $400, you'll receive this encouraging resource and join a community committed to spreading biblical financial wisdom. You can learn more at faithfy.com slash partner. Thanks for joining us for our Why We Give series. By the way, if you missed the first two episodes on guilt and control, you can find them at faithfy.com or wherever you get your podcasts.
All right, your calls are next. That number is 800-525-7000. I'm Rob West, and we'll be right back. Stick around. At FaithPhy, we believe that money is a tool to advance God's kingdom.
When you become a FaithPhy partner, you help more people discover the freedom of biblical stewardship and the joy of seeing God as their ultimate treasure. As a thank you, you'll get early access to our newest studies and devotionals, our quarterly Faithful Steward magazine, and the pro version of the Faith Phi app. Become a FaithFi partner with your gift of $35 a month or $400 a year at faith5.com slash partner. Faith in Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered financial wisdom for living well.
SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement. More information, including a short video webinar on profit and peace of mind no matter what's happening in the market, is available at soundmindinvesting.org. 2,300 verses in God's word about money and possessions. Why? Is it because God needs our money?
No, it all belongs to Him. It's because He owns everything, and we need to be reminded of that. We're stewards. It's because money reveals the heart. It really tells us what we value most.
Our financial decisions expose the true priorities of our heart, whether we trust in God or in wealth. And then, thirdly, well, faithful stewardship leads to flourishing for others and for eternity. You see, when we manage God's money His way through diligent work and generous giving and strategic, faith-aligned investing and wise planning, well, we experience spiritual fruitfulness and we participate in his kingdom purposes. That's why we do what we do every day on this program. Not so you can squeak out a little bit more in the way of returns or enrich yourselves.
Just a little bit more. It's so you can be fully formed as a mature Christ follower, ready to handle God's money God's way. And when you do, boy, there are wonderful benefits.
Now, it doesn't mean you'll be free from challenges. We will all struggle, we will all have our difficult seasons. Remember, God didn't redeem us and save us for a life of comfort, He redeemed us and saved us for us to find our identity in Him and to live the abundant life in Him with God as our ultimate treasure, to use money as a tool to accomplish His purposes and bring Him glory. The goal is intimacy with the Lord. And then we have the privilege of enjoying and stewarding and giving and investing His resources His way.
And that's what we want to help you do each day on this program. But we also take your very specific questions because we know there's things you're wrestling with in your financial life.
So if you have a financial question today, the rest of the program is yours. We'd love for you to call right now. That number, 800-5257. 7,000. Let me say it again a little slower: 850,000.
5257,000. We've got about three lines open. The lines are filling up, but we got room for you at the moment. 800, 525, 7,000. We're going to dive into those questions beginning in Kentucky here in just a moment.
But first, in the news today, a troubling trend is emerging in the auto market, one that's putting more pressure on household budgets. According to a new report from vehicle pricing company Edmonds, more Americans than ever are finding themselves upside down on their car loans. That means they owe more than their vehicles are worth. Here's what the data shows: more than 25% of car buyers with trade-ins are underwater on their loans. That's the highest level in four years.
Second, the average negative equity reached $6,755 in the second quarter. That's how much you're underwater with your loan versus what the car is worth. That's up nearly $500 from last year. Nearly a quarter of all these borrowers are upside down by $10,000 or more. And around 19% of consumers now pay over, you ready for this?
$1,000 a month for a car loan. That's right. The average is north of $700, but nearly 20% over $1,000 a month. Longer terms, some stretching even to seven years plus rolling in old debt.
Well, that's fueling the crisis. You know, it's always a good idea to save as much as you can for a down payment, whether you're buying a house or a car, and that certainly applies here. If you do have to borrow and the loan is paid off, what about keeping those payments going into a savings account to yourself?
So now you'll have a substantial down payment or better yet, be ready to. Buy with cash when you buy that next one because remember, you're going to drive it till the wheels fall off. My last minivan that Julie and I basically turned in when we got our next car had 230,000 miles on it. I mean, that thing had some wear on it, but that's how you get the most value out of these vehicles. And I think even allows you to buy new because you're going to plan on driving it, you know, as long as you can.
So, anyway, something to be careful there on. You know, as we think about the big budget busters, there's three of them. You won't be surprised. I'll give them in order of easiest to rectify to most difficult. Biggest number one, what do you think it is?
It's food. Yeah. I mean, and especially now, eating out, you know, prices are up, prices are up at the grocery store. The second big budget buster is this one here: transportation.
So we've got to get to a place where we can afford what we're buying. I realize more challenging, car prices are up, but we've got to make sure it fits in the budget. Thirdly, yeah, this one's the most difficult. It's housing. It's buying too much house.
So food, transportation, housing, those are the big three budget busters. If you get those in line, everything else kind of falls into place. Really important to work on that. All right, let's dive into those questions today. Call right now: 800-525-7000.
We're going to begin in Kentucky with John. Go ahead, sir. Hey, Rob, thank you very much for taking my call. I had a question for you about my 401k. I work for a Fortune 100 company, been there for a long time, 52 years old.
I have a 401k and Over the years, I have invested in my 401k within my own company's stock. I have about 71% of my 401k invested in my company's stock. And that has been over the past few years. Generating between a 30 and a 36% return for me.
So it has grown exponentially. It's great. But my question is: this: I didn't know, like I say, I'm 52, so I didn't know exactly when I needed to start. diversifying that a little bit more, putting it into something a little more safe. To basically just to make sure that I didn't lose it.
I know stops can be risky. I have. Super amount of confidence in my company. And they're projected to grow another 20% this year.
So, on one hand, I kind of want to gamble and keep it there and let it grow and make sure that I've got enough for retirement. But at the same time, I want to be safe about it and make sure that I'm doing well, that's just to be safe about it. What are your thoughts?
Well, I have some thoughts, as you might imagine. And yeah, I think that's the key is you are introducing elevated risk here by being so highly concentrated. And the classic example, and I realize, you know, this is not your typical everyday event, and yet it's real and it's possible. And I think it just underscores the risk. And it's Enron.
You know, what happened with Enron?
Well, you probably remember in the early 2000s, it was a high-flying energy company. The employees were in love with the prospects of the company. Many had most or all of their 401k invested. In Enron stock. And when the company collapsed due to accounting fraud, employees lost both their jobs and their retirement savings overnight.
You know, some lost hundreds of thousands of dollars with little time to recover before retirement. And so I think the takeaway here is, you know, heeding the counsel of scripture, particularly in the book of Ecclesiastes around diversification, don't put all of your eggs in one basket, spread the risk, because no matter how great your company is, concentrated stock is risky. And so a healthy 401k is diversified across sectors and companies to protect your future, even if your company has done well for you and has a bright future ahead of it.
So, you know, we're with the lack of diversification, we're introducing more risk. And at 52, you're getting closer to retirement. You've still got time on your side, but I think now is the time to begin to diversify.
Now, could you keep an elevated Position beyond what we would typically have, which would be no more than 10%. Sure, but 71% of your 401k, I think, is just unnecessarily risky. All right, folks, we're just getting started here. Let me mention we've got some lines open today. We're ready to take your calls.
Whatever you're thinking about in your financial life today, we'd like to help you look at those questions and decisions you're making through the lens of scripture, ultimately making God your ultimate treasure, but helping you make those practical daily decisions in light of God's word.
So, whether it's your spending plan that's out of control, or debt you're trying to repay, or some giving you're wanting to do, and you want to do it wisely, or maybe it's saving or investing for the future, whatever it is, call right now, 800-525-7000. This is Faith and Finance, and we'll be right back. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states. Guided by a mission to love and value people and a goal to redefine the mortgage process, Movement seeks to help others achieve their financial goals. You can find out more at movement.com slash faith.
Movement Mortgage LLC supports equal housing opportunity, NMLS, number 39179. For licensing information, please visit NMLSconsumerAccess.org. We are grateful for support from Timothy Plan. Since 1994, Timothy Plan has shared good news with investors and advisors by offering faith-honoring mutual funds and exchange-traded funds. More information is at TimothyPlan.com.
The investment objectives, risks, charges, and expenses are contained in the prospectus and summary prospectus available at timothyplan.com. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foreside Funds Services LLC. Investing involves risks, including possible loss of principal. Great to have you with us today on Faith and Finance, helping you live as a faithful steward of God's resources. I'm Rob West.
We've got one line open. You can call right now with your financial questions. The number 800-525-7000. Let's head to Virginia. Hi, Michelle.
Go ahead.
So my husband turned 62 last December. And I'm 58, so I know we have the option to start collecting Social Security now. My question is whether or not we should. We do have a business of our own.
So we are still earning an income between that and a small retirement that I'm getting every month. One thing that concerns me is if we start collecting Social Security now, does that mean we have to start collecting or start paying for Medicare? No. No, you don't. Those two are separate.
But I think there are some considerations here as you think about this, because remember, if he takes it at 62, he's going to take a permanent cut at 62, probably around 30% less than he would have received at full retirement age.
So those benefits are going to be pretty significantly reduced. And he also has the opportunity to earn more than his benefit that he would expect to get at full retirement age if you all wait until age 70.
So rather than waiting until full retirement age, you could wait beyond that.
So what are the factors to consider as you decide this, as you make this decision?
Well, the first is health and longevity.
So if you're both in good health, you have a family history of living longer, I think waiting can really pay off, you know, at least to full retirement age.
So you get the full benefit, if not until age 70. And by the way, if you gave up, you know, the what You would have been receiving between full retirement age, let's call it 67 and age 70, three years of benefits. It'll take you 12 years with that check you'd get at age starting at age 70 that's about 25% higher. It'd take you about 12 years to age 82 to get paid back for everything you gave up between 67 and 70. But then from 82 until the Lord calls you home, you'd have that higher check by about 25%, which can be a game changer.
The second factor is income needs. If you need the income now to make ends meet, then starting early may be necessary. But in your case, you all have a business. It's providing income. And I think, given the fact that you really don't, quote, need the money, delaying even just a few years will give you that monthly check that's significantly higher for the rest of your life.
In terms of a spousal benefit strategy, I think that's another issue is, you know, because he's 62 and has no retirement savings, it may be. Wise for him to wait to claim so his benefit grows, and that would then provide a higher survivor's benefit if he passes first. And then finally, his tax considerations.
So, taking benefits while he's still working is going to result in benefits being taxed or reduced if your income is over certain thresholds. And so, that's where I think waiting could ensure that you pay as little tax as possible and you don't have those benefits withheld.
Okay, tell me again about the taxes. I'm not sure. I'd be happy to.
So the Social Security is taxable based on your total combined income.
So, you know, by you working and you all having a business that's paying you income, that's going to raise your overall income. And now then, if he adds Social Security to that, the amount of tax that is going to be paid on the Social Security is going to be higher. And so if you wait and take it when you all are no longer working, because maybe you've sold the business and therefore your taxable income is lower, you may not have to pay tax on Social Security at all. And that's where that can really be helpful, if that makes sense. Oh, yeah, that makes sense.
Okay, right. Do you think the fact that we're considering buying a home to restore it and then either rent it out or sell it?
So, in other words, that's another way we want to invest our money. Will that have any effect on? whether we collect Social Security now or not. I mean, what if we were to take that money that we're getting now that we don't need and just reinvesting it in something else, whether it be that or mutual funds or whatever? Yeah, you know, I think the difference, though, here is that, you know, if we just look at the Social Security by itself, and then we'll talk about, you know, you all getting into a home restoration business, which is basically another business, you're going to get a guaranteed 8% increase on that Social Security every year you wait.
You're not going to, there is no guaranteed 8% increase in the stock market. You may get 8% a year. You may do better, but you also may do worse. And so this idea that every year you wait to get closer to Social Security, the fact that that monthly check from Social Security is going to go up by 8% on a guaranteed basis is something that I think could really be beneficial down the road, especially if you all aren't sitting on a ton of retirement savings. That monthly income from Social Security is going to be pretty important in terms of you all being able to have consistent income to cover your lifestyle.
So I would think, especially in this season, while you don't need it, letting that continue to grow. It provides a really solid base of income in retirement is pretty key.
Now, if you're saying, listen, our ability to do some of these other investments, whether that's the stock market or restoring homes and selling them at a profit, we believe we could take that Social Security money today and turn it into something much bigger just because we have a skill set here or we see an opportunity. You're just going to have to make a judgment call on that. I would not be able to comment on that. I would just say I would be really thoughtful about giving up that guaranteed increase by waiting to get that higher check from Social Security and have a lot of confidence that you could do better by getting that money now and doing something with it than relying on that guaranteed 8% from the Social Security Administration.
So, anyway, hopefully that gives you a few things to think about, Michelle. I realize that's a tough question to answer. Perhaps getting with an advisor to talk all this through would be helpful. You can find a CKA certified kingdom advisor on our website, faithfy.com. Let's go.
Go to Oak Brook, Illinois, and finish up with Leanne. Go ahead.
I have a three unit apartment building that I rent out. And I was wondering if there is a benefit to applying for an LLC. Yeah, there are several benefits for a rental business. First is what's called personal asset protection.
So the members of the LLC, the owners, are generally not personally liable for business debts and liabilities. And so you've got some level of. Protection through the LLC, which is embedded in the name Limited Liability Corporation. You have some management flexibility, so you can choose to manage the LLC yourself, or you could appoint a manager who may not have an interest in it. There's also what's called pass-through taxation.
So the business income is then reported on the members' personal tax returns, and it avoids the double taxation that you would have if you had a C Corp. And then it's often easier to attract investors if you're looking for investors because it presents a more professional image. And then you may even have a few banking benefits where you could open a business bank account and establish credit under the company name, that type of thing.
So those would be the primary benefits.
So I'd reach out to an attorney in your area and just talk through that, and they can share with you whether or not it makes sense in your situation.
Okay. Thank you so much. All right. You're welcome. Thanks for calling today.
Big thanks to my team today: Amy, Trish, Reena, Jim, and everybody here at Faith By. Come back and join us tomorrow. We'll see you then. Bye-bye. Faith in Finance is provided by FaithFi and listeners like you.
