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Hi, I'm Rob West. God has designed life to unfold in seasons, and with each one comes new challenges, opportunities, and sometimes new finish lines. Today, Cody Hobelman joins us to talk about why it's not only okay to adjust your financial finish line, it's often the wise and faithful thing to do. And then it's on to your calls at 800-525-7000. This is Faith in Finance, biblical wisdom for your financial journey.
Well, we're glad to welcome Cody Hobelman back to the program. He's a certified financial planner and a certified kingdom advisor and serves as a wealth advisor at Wealth Squared alongside our friend Rachel McDonough. He's also a trusted contributor to our quarterly magazine, Faithful Steward. Cody, great to have you back with us. Thanks, Rob.
It's great to be here again. Cody, before we dive into your article that you wrote for the second issue of our Faithful Steward magazine, I'd love for our listeners to hear a bit about your experience as a Certified Kingdom Advisor. Could you take a moment and share what makes a CKA different from a typical financial advisor? Absolutely. I think the CKA exam and curriculum was one of the most impactful that I have ever taken personally.
The thing that sets a CKA apart from another financial advisor is the acknowledgement that scripture is our source of wisdom. For life, but specifically our finances as well. And CKAs have a commitment to communicating truth. not just the expertise that we gain through practice. Yeah, well, I appreciate that.
I think that really says it very, very well. And I think the differentiator is around the kinds of conversations a CKA has with his or her client. And this topic today of finish lines, I think, is right in the bullseye of the types of different conversations you and other CKAs are having. I'd love to dive into that. You've been exploring the idea of financial finish lines, beginning with the concept of a lifestyle finish line.
But again, in issue two of our Faithful Steward magazine, you wrote an article called A Spending Finish Line is Just the Beginning, where you make the point that your first finish line doesn't have to be your last.
So talk about why that's an important perspective for people to understand. Yeah, I think the idea of setting a finish line can feel very final. And there's the pressure to get it exactly right. But over the years, we've learned that it's not necessary to get it exactly right. It's more important that we're growing in our journey.
And so I like to remind folks that this is a way that we can set our first finish line. And through practice, we're going to refine it. And over time, we're going to learn how to actually live life with a finish line appropriately. In fact, there's probably situations where we should consider adjusting our finish line throughout time. Yeah, and let's dive into that a bit.
When should someone consider revisiting or adjusting their lifestyle finish line? I think it's healthy, just like a financial plan, to take a look at our financial finish line annually because a lot can change in a year. But certainly, when there are big changes in our lives, maybe it's a new person that we're financially responsible for, or a person that we're no longer financially responsible for. It could be moving to a different geography where the cost of living is dramatically different, or just major events in life like changes to our health. These all could change what it costs to maintain the same lifestyle and would be triggers that would cause us to take a second look at our financial finish lines.
Yeah.
Now, as a part of this, we're going to dig into some of the mechanics of what it looks like to set a lifestyle finish line and how you can determine what is truly enough for retirement and what about some of the unknowns in your life. We'll get into all of that. But before we head to this first break, Cody, I'd love for you just to describe and the work you've done at finishlinepledge.com, just some of the fruit, the benefits that come by capping your lifestyle and setting that finish line, even in your own spiritual journey. Yeah, I'd love to. I think The idea when we talk about limits or caps, it sounds like a restriction, but what I've actually found is this is actually a way that we can gain freedom.
And this is a biblical principle in other areas of life. It's just a tool that we can use to apply in how we manage our financial resources. And so, through setting a financial finish line, what I've actually found is contentment, peace, and purpose in my own life.
So good.
Well, folks, if you want to learn more about what Cody's doing, head to finishlinepledge.com. That's finishlinepledge.com. We're going to take a quick break when we come back. Much more with Cody. We'll get into some of the mechanics of how you should think about a finish line, when you should adjust it, and how you get started.
We're talking with Cody Hobelman today. He's a wealth advisor at Wealth Squared. His article appears in issue two of our Faithful Steward magazine. Become a FaithFi partner today to start receiving this magazine quarterly at faithfi.com/slash give. I was in ministry full-time, and I was always looking for a way to integrate my faith with this new industry around money and finances.
This is Mark. He is a Certified Kingdom Advisor. As a CKA, one of the best things I offer my clients is trust in knowing that they're working with a professional that understands their values. And I think, in all of the different challenges that clients go through, if we can go back to trusting in God, then He'll make the path straight. You can find an advisor like Mark at findaceka.com.
Faith in Finance is thankful for support from The Good Investor, a book by Robin John. In his book, Robin shares his journey from an immigrant child struggling in school to co-founder and CEO of Eventide Asset Management, a faith-based investment firm. This Faith and Work memoir seeks to inspire readers to view their work and investments as opportunities to honor God and bring blessing to the world. More information is available at goodinvestor.com. That's goodinvestor.com.
Great to have you with us today on Faith and Finance. I'm Rob West. With me today, my friend Cody Hobelman, Certified Kingdom Advisor and Certified Financial Planner. He's a wealth advisor at Wealth Squared. He's also a frequent contributor here at Faith Vi.
And in issue two of our Faithful Stewart magazine, he had a really powerful article on changing your financial finish line.
Now, you may say, what is a finish line?
So, Cody, before we get into some of the finer points of this, just give us a simple definition: what is a financial finish line? A financial finish line is simply an answer to the question, how much is enough? It helps us separate between what we intend to consume for our own use and what we choose to make available for investing in God's kingdom. Yeah, that's so helpful.
Now, I know you emphasize that a lifestyle finish line, and let's just describe the two. We can have a lifestyle or a spending finish line, and that's important. We can also have an accumulation finish line that really is about our balance sheet or our net worth. But that lifestyle finish line is just one piece of the broader financial picture.
So, how does it go beyond just saving and preparing for retirement? Yeah, I think the lifestyle and the net worth or accumulation finish line can actually be related to each other. We can think about the ways that we use money as divided into four categories. First is personal spending. This is what we're going to use for our own lifestyle in the next month or the next year, for example.
Second bucket is planning ahead for the future. These are things that we're going to spend on our lifestyle in the future.
Next is taxes. We don't have to go into detail on that. We're all familiar. And the last is building God's kingdom. This is the portion that we've decided in advance we're not going to use on ourselves.
And so the lifestyle finish line helps us understand what's an appropriate amount to spend. On ourselves and our lifestyle. And this can help us inform. The way that we do retirement planning, how much we save for the future, and how much we invest. Yeah, that's exactly right.
Because that lifestyle finish line really drives the other finish line, which is how much you're ultimately going to need for a net worth finish line.
So let's unpack that a bit. Explain a net worth finish line, what it entails and how it works. A net worth finish line is really an amount that we think is appropriate to accumulate throughout our lifetime.
So, this is a number that we can arrive at through financial planning. But at its core, this concept really comes from Luke 12 and the parable of the bigger barns, where the wealthy farmer accumulated far more than he ever needed, which created wastefulness and missed opportunities for his life. And so, he expected to have a long life where he could mobilize all these resources in a number of ways, but he wasn't promised that. Yeah, that's exactly right. And you really highlight three areas of what you might think of as spiritual wrestling that play a key role in identifying that finish line.
So, I'd love for you to just walk through those. Absolutely. The first area is the lifestyle finish line. This is how much our lifestyle costs right now. And so we can think of that again in an annual amount or even in a monthly amount.
Once we have an idea of how much we're going to spend, that can help us plan for the future. The second area is wealth transfer. we will not live forever, and someday somebody else will steward the resources that we are currently stewarding. And so we can think and plan ahead for how much is appropriate to pass on to our heirs or to the next stewards. And finally, is the conservative margin because we don't know what will happen in the future.
Life throws curveballs at us all the time.
So it may be wise to have a conservative margin, but there's a limit to how much we can actually rely on money as compared to God. Yeah, and that makes so much sense. I mean, when you have these three pieces that you just outlined, Cody, you know what your lifestyle finish line is, and you can run a math equation to determine how much you need to maintain that over the rest of your life, and then how much you want to leave to errors, which is your wealth transfer finish line, and then that conservative margin for uncertainty. You can really back into a number.
Now, we don't want to make it all about financial mechanics, so you want to take that alongside your advisor, hopefully, who understands these ideas, but make it a matter of prayer to ultimately arrive at that number. And then, as it relates to our conversation today, it can and does often change over time. Cody, though, when we find ourselves going beyond our finish lines, maybe over-accumulating, you suggest that there's an essential question we should be asking ourselves: what is it? I do think it's important to step back and ask ourselves: why am I holding onto these resources in the first place? I think when we run through the filter of our Ephesians 2:10 purpose, the good works that God has set in advance for us, it can help to inform how we use resources today.
Yeah, I think that's well said.
Now, when it comes to the finish line, you really emphasize that we should be continuing to give, even though we haven't reached that finish line. And I'd love for you to talk about the wrestling that goes into that idea. A finish line is really a tool designed to help you prioritize generosity in how you manage resources. And so, setting a finish line that might be more than you're currently earning, it may not feel like you have enough today. This was certainly the case in my story, but I wanted to prioritize generosity today, even when it didn't feel like I had enough.
So, I'd recommend that you continue giving, whether that's a percentage of your income or you set a giving goal, which is a dollar amount over a period of time. to actually build the habit of giving. Even before you've reached your finish line, and this helps you prepare for the future if God decides to give an increase in the form of financial resources. Yeah, and that helps us fight against this idea that that increase in standard of living shouldn't be in the way of increasing our standard of giving, which should be the big idea. All right.
So, now, Cody, some listeners might still feel unsure about where to begin. I mean, they hear this idea, it sounds actually really exciting, something they'd like to lean into. Can you offer a practical next step on where they should start? Yeah, I think an easy next step is to just try it for a period of 90 days. I've heard multiple stories, and this is actually my introduction to financial finish lines.
I decided to set a finish line for three months and see what I learned. And it honestly was transformational almost overnight. And it's been five years since that moment. That's powerful. And I know the implications are financial because if you set that finish line, you'll actually have more money that you can give away.
But there are spiritual implications to this as well. What does that look like in your life? A financial finish line really trained me to acknowledge God first in stewardship decisions. And so, in order to set a finish line, we must recognize that all of the resources that have been entrusted to us do truly belong to God. And so, it reorients us.
On how to steward his resources rather than trying to understand how much of our resources we need to give to God. And it makes me think of Second Corinthians nine, where Paul writes to the church in Corinth, You will be enriched in every way, so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.
So, there is a financial aspect to this conversation, but really, we are designed to be worshipers of our king, and this is one way that we can enter into that worship. Yeah, that's exactly right. Well, we're about out of time here, just about 30 seconds left. What's one key takeaway you can leave our listeners with today? The thing I'd like to leave with listeners is to try to take that next step.
It doesn't have to be final. It doesn't have to be set in stone for the rest of your life, but there is a next step for you on your journey of growth as a steward. Yeah.
Well, folks, if you'd like to take the next step and define how much is enough for you, FaithFi has created our very first FaithPhy field guide called How Much Money is Enough. We're giving it away to anyone who becomes a Faith Phi partner by May 31st. Just go to faith5.com/slash give to become a partner at $35 a month or $400 a year. Cody, thanks for being with us. Thanks, Rob.
Always great to be here. A quick break and back with your questions. Call right now: 800-525-7000. Stick around. Have you ever started a budget only to watch it fall apart a few weeks later?
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Taking your calls and questions today at 800-525-7,000. That's 800-525-7,000. We'll try to get to as many calls as we can before the end of the broadcast here today. Danville, Illinois. Larry, go ahead.
Hi, I said this question. My wife and I are both 62 years old. I am continuing to work, and I plan to work till at least 65, and depending on how my health is, possibly longer. She stopped working outside the home after we had our children, and we had four, and so she's not been in the marketplace till I've been working since she was for the last 28 years. My question is: we're both 62.
I have had previous health conditions like two heart stints put in a year ago and two heart stints put in like five years ago, and I've actually had recurring cancer that's come back like three times. My question is, should she Start drawing her social security. And putting it away and investing it. Because if the average male lives to 74 or 75 and the average woman, let's say 78 to 79. My point is, as long as I am working, if something happens to me, she's going to draw my social security, which is going to be much higher than hers.
And if we both wait, Would it not post potentially put her in a position where she would never draw anything out of her Social Security? Yeah, it's a great question, and that's an important nuance. And the health factor does change things a bit.
So she can't draw your Social Security while you're still working unless you file for benefits. It sounds like you know that. But if we factor in your health, and obviously we don't know the day or the hour any of us will be called home, but the delay as long as possible may not apply here because if you pass away, she's going to receive your benefit based on what you were receiving or would be entitled to receive. And so your decision matters most. If you delay, that means a larger survivor benefit for her.
So you don't want to take it earlier. But in this case, it probably makes sense for her to take her benefit early because she can collect her own reduced benefit now and then switch to your larger survivor benefit later. Her early claim does not reduce her survivor benefit so long as she's at least full retirement age when she collects or switches over to your survivor or her survivor benefit based on your record. Does that make sense? Yeah, and basically, that's what I was thinking.
Whenever you talk to people, let's say the Social Security office, they're always saying, oh, well, you should wait because where you could be. And if we were both in perfectly good health, then it may make sense because yes, maybe we'll live past eighty, in which case, based on my basic math and what I've seen on the numbers, it then would pay off to have waited. But given I'm just saying the metrics of where the average male lives and given my previous health conditions, I'm thinking I mean, and you again, you you mentioned it, neither of us know how long, only God does. Um but it to me it would make more sense to take hers, let her start investing it. Because she's going to get mine anyway.
And what's the worst that happens? We both live to like 80 or 81.
Well, we'll worry about that then. Right, right. No, I certainly understand it. And I think the key here is you're letting yours continue to grow, which obviously you'll enjoy both of them while you're both living. And then at some point, you know, when the Lord, if you were to pass away first, then she has the opportunity to switch over to that survivor benefit, which would be a higher benefit.
And she was collecting hers while she's waiting, you know, for that time to come.
So, yeah, I'm on board with the way you're thinking here. I think it makes a lot of sense, Larry. We appreciate your call today, sir. Call anytime. Charmin is in South Carolina.
Go ahead. Hey, Rob, I appreciate your ministry so much. My question has to do with converting from a traditional IRA to a Roth. And I want to do that so that I can avoid tax implications should I need to get into that money and for my heirs so that they don't have to pay taxes on it as well. I've got about six hundred thousand in a traditional IRA.
Should I go ahead, rip the bandaid off, convert it all, pay all the taxes up front? Or should I convert this incrementally over the next few years. Another piece of this is I am not drawing Social Security yet, even though I'm just about three weeks away from 69. I delayed that. My husband has been drawing Social Security for about six years.
And I'm waiting until it is 100% funded at 70% is my goal. Yeah, good. I like that. Yeah, you know, the key here is that Roth conversions are all about managing tax brackets, not avoiding taxes.
So the question isn't should I convert? It's really how much should I convert each year without jumping into a much higher tax bracket once you make the decision you want to convert? And that's where converting all at once is really problematic. I mean, it could push you into the highest brackets, you know, the top end at 37%. Not only that, but it could trigger or it would trigger higher Medicare premiums through what's called Irma and a higher percentage of your Social Security being taxable up to 85%.
So that would create a massive one-year tax bill unnecessarily. It's almost never the best move.
So the preferred strategy is in fact incremental. You convert it in chunks over multiple years. You fill up, you know, that's a term where you're kind of because we're on a graduated tax system, you fill up the lower brackets each year, like the 12 and the 22, maybe the 24. You stay below the key thresholds and that smooths out the taxes and keeps, you know, more of your money in your pocket. And, you know, this can work well for you.
You're in a prime window because you're in a lower taxable income bracket. You haven't started Social Security, but I still don't think you want to, you know, just rip off the band-aid and do it all at once because you would push it way up and end up paying more in taxes unnecessarily.
So yes, you should start right now if this is the way you want to go, but I would still sequence it over a number of years, if that makes sense. Makes perfect sense. One more question about Social Security. Can you draw your Social Security and have it go directly into the Roth? No, you have to have earned income to fund a Roth.
And if you don't, you would not be able to do that. The only other caveat I would throw out there is for any giving you want to do out of this, I would leave it in the traditional IRA because you can give it straight to a ministry as a qualified charitable distribution and never pay any tax on it. Even if you want to switch from giving, you were going to do out of savings. Let's talk about that off the air. Stay in the lane.
I want to make sure you understand that. Boy, what a great program today.
So appreciate your questions and your calls. Thanks for being along with us today. I hope we've encouraged you and your role as being a faithful steward and managing God's money. I couldn't do this without my team, Sandy Dickinson, Jim Henry, Taylor Stanrich, and Devin Patrick, everybody here at Faith By. We'll see you next time.
Bye-bye. Faith in Finance is provided by Faith Buy and listeners like you.
