This Faith in Finance podcast is underwritten in part by Praxis Investment Management. Since 1994, Praxis has offered investment products designed to meet the practical needs of everyday investors while supporting positive change through impact strategies that go beyond screening. Guided by faith values, Praxis strives to make a positive impact on the world. Learn more at PraxisInvests.com. Yeah.
Many investors feel attention today. They want their portfolios to reflect biblical convictions, yet they're navigating volatility, inflation, and uncertainty. I am Rob West. Do you have to choose between faithfulness and financial performance? The answer may surprise you.
Today, Stella Tai joins us to explore how disciplined, values-aligned investing can pursue both impact and competitive returns, even in uncertain times. And then we'll take your phone calls at 800-525-7000. This is Faith in Finance: biblical wisdom for your financial decisions. We're delighted to welcome back our friend Stella Tai. She leads stewardship, investing, impact, and analysis at Praxis Investment Management, one of the country's oldest faith-based mutual fund families, and of course, a trusted underwriter of this program.
Stella, great to have you back. Thanks for having me, Rob. Stella, a lot of investors today feel a real tension. They want their portfolios to reflect their Christian convictions and contribute to good in the world, yet they're also navigating volatility, inflation, and economic uncertainty. In seasons like this, Stella, it's easy to think, I need to focus solely on returns.
I can't afford to think about impact. Does that resonate with what you're seeing? Yeah, it absolutely does. Impact investing sounds wonderful in strong markets, but when things get choppy and investors feel rattled, There's this pull to step back from doing good and focus purely on survival. I think there's also a spiritual element to this tension.
People of faith know they shouldn't pull back from caring about justice, about stewardship, and communities that need investing, but they're also worried. They're wondering. Can I really afford to invest with my values right now? Will my returns suffer? That really is the right question.
Yeah, that's right. And so the dilemma isn't just psychological. There's actually a theological dimension to this as well, isn't there? Yeah, yeah, exactly. I think that's where our faith actually becomes an anchor.
A verse like Proverbs 21, 5 says that the plans of the diligent lead surely to abundance, but everyone who is hasty comes to poverty. And so there's a difference between being responsive to markets and being reactionary. And when we're anxious, we tend to make decisions driven by fear rather than conviction. And that's often when we make our worst choices. Yeah, let's talk about that discipline piece for a moment.
How does Praxis approach stewardship during seasons like this when discipline really matters? At Praxis, we return to fundamentals in three ways.
So first, we're committed to financial rigor regardless of the market cycle. And that means serious analysis, ongoing evaluation of risks and opportunities, and we use a team-based approach for decision-making so that individual emotions don't drive the ship. And then second, we integrate impact considerations without compromising those fundamentals. And these work together, they're not in opposition to one another. And then lastly, we maintain a long term orientation that's rooted in stewardship and not in speculation.
And another verse I think of here is Hebrews twelve, eleven, which reminds us that discipline seems painful rather than pleasant, but we know that later it will yield a peaceful fruit of righteousness. Really, that's what stewardship is. Mm.
So you're saying, Stella, that impact and performance aren't actually intention. They really are meant to work together. Is that right? Yeah, that's exactly right. When the market is choppy, it's actually when this becomes most visible.
Because when you're managing both with discipline and conviction, you're less tempted to panic sell or to chase returns. You're really making decisions grounded in something that's deeper than the next headline. That's right. Stella, for those who are drawn to investing in line with their faith but still worry about compromising returns, what do you want them to understand about Praxis approach to performance? That's a good question, Rob.
The short answer is Performance is a core responsibility. It's not secondary, and it's not an add-on to impact. It's really foundational to an investment strategy.
Well, we'll talk about what that impact looks like just around the corner. How do you actually choose companies? And do you take a variety of strategies? How does it play out in your investment? Stella Ty is here today.
Stella, lead stewardship, investing, impact, and analysis at Praxis Investment Management, an underwriter of this program. Following this interview, your questions today at 800-525-7000, stay with us. We'll be right back. Uh If budgeting feels like a second job, the new Faith5 Pro was built just for you. It learns your spending patterns, categorizes your transactions, and helps you build a budget based on your real life.
Plus, scripture readings and biblical devotionals help you manage God's money God's way. Try Faith Phi Pro free for 30 days and lock in 25% off a pro subscription. Download the Faith5 app from your app store or at faith5.com/slash app. That's faithfi.com/slash app. We are grateful for support from Praxis Investment Management.
Since 1994, Praxis has offered investment products designed to meet practical needs for everyday investors seeking to steward their assets consistent with their desire to promote positive social and environmental impacts. Praxis aims to bring a faith-based approach to ETFs, mutual funds, multifund portfolio solutions, and money market accounts reflecting their 500-year-old Anabaptist Christian faith tradition. More information is available at PraxisInvest.com. Do you have to choose between faithfulness and financial performance in your investing?
Well, we're talking about that today. Stella Tai is here today. She leads stewardship, investing, impact, and analysis at Praxis Investment Management, an underwriter of this program and one of the country's oldest faith-based mutual fund families. Stella, we've been talking about the fact that you don't have to sacrifice performance when it comes to investing in a way that aligns with your values. But I want to talk about what that actually looks like for your team at Praxis.
How do you put that into practice day to day? Yes.
So at Praxis, it comes down to something we call benchmark tracking. And I know that sounds technical, but it's actually quite simple. My colleague Benjamin Bailey, who leads our investment team, recently wrote about this. And the core insight is that when you screen companies based on values, that's for faith, governance, labor practices, things like environmental stewardship. you're not removing the best performing companies from the opportunity set.
you're making thoughtful decisions about who you own. And when you do that with rigor, you can still track the overall markets very closely. The key is something that's called optimization. We're not trying to beat the benchmark. We are trying to match it.
We minimize what's called tracking error, the difference between our returns and the broader market returns. And why are we doing this? Because if you match the market while excluding companies that don't align with your values, you get the returns you expect and you also get the stewardship that you really care about. Yeah, that's fascinating.
So in other words, you aim to keep pace with the market, but by investing in the right kinds of companies that align with your values. Yeah, precisely. This is tested most in volatile markets. When uncertainty is high, Investors are watching closely and they're asking, are we keeping up? Are we falling behind?
The answer is, we're designed to be consistent over time.
So, not every quarter, not every month, but over full market cycles, faith-based investors should expect competitive returns. That's our commitment. Yeah. Well, we've talked about staying invested and holding realistic performance expectations. I want to dig into the heart of it, the impact side of it, because impact isn't automatic.
I know it takes strategy that you all are committed to there at Praxis. You all just released your real impact report. What question were you hoping that report would help investors answer? The impact report is really about making impact visible and tangible.
So many investors have heard about impact investing. but they're not quite sure what it means in practice. Are we talking about screen funds, direct investments in communities, shareholder advocacy? And the answer is yes to all of these things. The Praxis Impact Framework we call Impact X actually encompasses seven distinct strategies.
And in our report, we will walk you through what each one looks like, how it works. We'll show real stories of change and we'll help investors understand that impact isn't one single thing. It's an ecosystem of approaches. Yeah, and that diversity of approaches really matters, especially in uncertain times, right? Yeah, absolutely.
Actually, one of the key lessons in the report is that different impact strategies work together at different points in the market, different market cycles and different conditions.
So for example, if you think about something like shareholder advocacy, where we are pushing companies to change their labor practices or their governance, it's pretty incredibly effective, but it takes time and it can face regulatory headwinds. And we've seen that recently, where certain resolutions are harder to bring all the way to a proxy vote.
So when that pathway becomes more constrained, we will lean more heavily into, let's say, direct community investing or into engagement or into screening. The flexibility to work across multiple strategies means impact doesn't stop when one approach, let's say, hits friction. Yeah, that's a really important insight.
So let me ask you about a specific example. Screening is perhaps the most familiar impact strategy, avoiding companies you don't want to own. But I suspect there's a story that might illustrate this about something more active than screening. Yes, there's a great example of that. Praxis has been involved in a long term shareholder advocacy effort with one of the nation's largest utilities that's been serving the Southeast.
And instead of divesting, we used our ownership stake with this company to encourage them to bring in meaningful change, particularly in three areas. One of those areas was ensuring a just transition for workers and the communities where the coal plants are and are retiring. Uh second was Setting science-based emissions reduction targets, which align with global goals. And then the last one was. Planning responsibly to grow electricity demand that's tied to renewable energy.
And so the company was willing to publish their just transitional metrics, and we are now tracking progress. And this has been a real sign of partnership. When you think about this, this is what Patient, active engagement looks like. It's steady, long-term work, it's showing up consistently. And we want to build win-win-win outcomes, let's say for the company, for the employees, for the customers, for the investors.
And so in this strategy, rather than stepping away, we stay invested because we believe that transformation happens when you accompany companies that are willing to operate more sustainably. Yeah, that's really exciting. And that's an important distinction, I think. It sounds like it takes real conviction about why you're investing in the first place to achieve these outcomes, doesn't it? Yeah.
Our faith calls us to pursue justice, to love mercy, to work for human dignity, and also calls us to patience, to long-suffering, to seeing the image of God in people and in companies that aren't perfect. And so shareholder advocacy and proxy voting and engagement, these are expressions of those beliefs. We're not giving up on anyone. We're saying, how can we help you move in a better direction? Yeah.
Stella, for someone who's interested in pursuing impact but maybe feels overwhelmed by all the different pathways, where would you encourage them to begin? First, begin with clarity about your own values and financial goals. Don't try to optimize for everything at once, but perhaps start by asking what really matters to me, what kind of world do I want to help build? And then find an advisor, ideally one who's familiar with faith-based investing options, who can help you explore what's available. The beautiful thing is you don't have to be an expert.
Funds like Praxis will do the research and the engagement and the strategy work for you. And your job is to say, I want my money to reflect my values and then trust the process. Because every small portfolio change, when it's multiplied across many investors, will actually move the markets towards justice. Wow, that's powerful.
Well, we're so thankful for our partnership and your time today. Stella, thanks for being here. Thank you, Rob. Our guest has been Stella Ty with Praxis Mutual Fund. Since 1994, Praxis has offered investment products designed to meet the practical needs of everyday investors while supporting positive change through impact strategies that go far beyond screening.
If you want to learn more, go to praxisinvests.com. That's praxisinvests.com. All right, your calls are next at 800-525-7000. Don't go anywhere. We'll be right back.
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Great to have you with us today on Faith and Finance. We've got room for you.
So, if there's something going on in your financial life, we'd love to hear from you today so we can chat about it. The number to call is 800-525-7000. Again, that's 800-525-7000. You'll get right through at the moment. We've got our team standing by and any financial question today, again, 800-525-7000.
Let's go to Arkansas. Hi, Mark. Go ahead. Thank you for taking my call. Yes, sir.
I have a uh four hundred one K and I need some advice on on what to do with it, how how to go about doing things with it. I'm sixty years old. I my job that I'd been working for for a good number of years. Um Last Half of 2025, they terminated that position, so I lost my job. Mm, I'm sorry.
So I really don't want to draw into this 401k if I don't have to, but uh Maybe you can give me some advice on what to do with it. There's last time I looked at it, there's about a 1.5 million in it.
Okay. I mean, when you look at it, it's all over the place.
Okay. I need to get that out into something that's safer. Yes, makes sense. Mark, are you going to look for another job or are you going to fully retire at this point? No, I'm currently looking for another job.
It's just a tough market. For where I live at, for what I was doing. Sure. Yeah, I got it. And what are you living on at this point?
Are you drawing from this 401k? Excuse me? What are you living on right now? What is your income? Um We live on approximately about forty eight K a year.
Okay, and where is that coming from? Are you pulling that from the 401k, or how are you funding that 40k? Um that was from my previous job. Um Okay. How are you paying your bills right now?
Where are you drawing your $40,000 a year from? Uh currently my wife works part-time.
Okay. All right. And I am getting a small stipend. for a number of weeks. Until that runs out from my previous job.
Got it. And if you didn't find another place of employment, you'd have to at least in part start to draw from your $1.5 million. Is that right? Yes, or settle for some different job, whether that's Minimum wage, or what? That's kind of what I'm looking at right now.
Yeah, that makes sense.
Okay, well, I like the direction you're headed here. I'm sorry about being terminated after such a long time with that company. And, you know, I realize it can be challenging depending on which region of the country you're in, and yet it's still a fairly robust job market.
So ultimately, God is our provider. And so let's just join together and asking the Lord to make it clear where your next assignment is. I think in the meantime, you're right, especially if there's quite a bit of volatility, maybe you're a little too aggressively invested. You know, I would say the right mix of investments, at least as a starting point, you can dial it up or down in terms of the risk level. But I would say probably a 50-50 portfolio at this point at age 60 would be right.
50% in fixed income, which would be maybe CDs and corporate bonds or treasuries, maybe a little bit of gold allocation there for half of the portfolio, the other half in stocks. It could be a mix of stocks, even. In some high-quality dividend-paying stocks, or it could be through mutual funds or ETFs. But I would say having an advisor who could, first of all, open an IRA for you, do some discovery with you on what your income needs are now and in the future, what your risk tolerance is, and then you'd roll that $1.5 million over to that IRA. You'd end up paying probably 1% a year, and the advisor would manage it for you based on your goals and objectives.
And at that point, you could dial way back the volatility by just getting a more conservatively positioned portfolio. But that's a lot of money. You've worked hard to build that wealth over your working years.
So I wouldn't want you to put that on autopilot. I think having an advisor to make that decision for you on a day-to-day basis on how that's to be invested is the right one. They can also help you with just tax efficiency on how you withdraw from that strategically when that time comes. They could also make sure that you are covering your income. Needs.
And, you know, let's say you pulled 4% a year. I mean, you could generate $60,000 a year when you need it. And let's say it continues to grow even more than $60,000 and hopefully maintain that $1.5 million or whatever it grows to. And that way it would last you well into your 90s and beyond. But I think getting that advisor in place and then rolling this to an IRA is probably the next best option.
And I'd recommend you connect with some certified kingdom advisors there in Arkansas. You can go to findaca.com. I'd interview two or three and find the one that's the best fit.
Okay. And when you say interview, what is that someone that just will you connect with as far as personality wise? Or what are you What are you looking for when you do the interview? Yeah, it's a good question. You're looking for a mix of kind of, you know, would you be in their core client base?
Like, you know, are people like you with the amount of assets you have, the needs you have? Are you a good fit for his or her practice? Yes.
I think secondly, it's just, you know, is there a good match relationally and, you know, communication style? Three, you know, I would want them to really be a student of you and be curious about who you are and what God's doing in your life. Four would be experience and expertise. And then five would be you need to fully understand how they get paid. And then, what their track record is in investments with clients who have a similar investment strategy.
So, yeah, I think there's a lot of the advisor getting to know you, you getting to know the advisor. And I think at the end of the day, make it a matter of prayer. And I think one will emerge as a good fit for you. I can't put a pin on exactly what that means, but I think you'll know it when you see it. Is that helpful?
Yes, sir. All right. Findacka.com as the website, and you can search for a certified kingdom advisor there in Arkansas. Listen, I appreciate your call today, sir. Lord bless you.
Thanks for being on the program. Let's go to Georgia. Hi, David. How can I help you, sir? Thank you for Faith and Finance.
I have a Social Security question. We know that retiring before our full retirement age results in an eight percent reduction for each year. That's right. How does Social Security cost of living increases offset this 8% reduction. Yeah, it's a great question, David.
And they don't correlate with one another.
So if you take it early, you're going to permanently lock in a reduced benefit. And you, as you mentioned, it's roughly 8% a year for every year. You take it early, you're going to reduce it by that amount. The opposite is true when you take it beyond full retirement age. You're going to see roughly an 8% increase of that check.
But whenever you take it, you're going to lock in your benefit amount. Whether you take it early, on time, or late.
Now, the cost of living adjustment. Doesn't affect that, you're gonna get the cost of living based on your primary insurance amount, regardless. And so, if it's 3.2%, that's how much your benefit is going to increase. It's not that you get less of a cost of living adjustment because you took it early. You get the cost of living adjustment on whatever your insurance benefit is, and that's locked in based on the timing of when you take it.
Does that make sense? Thank you very much. You're welcome. Thanks for your call today, sir. Call anytime.
Hey, big thanks to my team today: Devin, Sandy, Jim, everybody here at Faith5. If you'd like to become a partner, that's how you can support our work. Just head to faith5.com and click give. We'll see you tomorrow. Bye-bye.
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