This Faith and Finance podcast is underwritten in part by Guidestone Funds. Guidestone envisions a world transformed by Christian investing. Through screening, corporate engagement, and impact investing, our investment strategies allow investors to be more intentional with their investment dollars to make a meaningful difference in the world while preparing for their financial future. Learn more at faithby.com/slash guidestone. Trafficking thrives in the shadows, but even Wall Street can help shine a light.
Hi, I'm Rob West. Nearly 50 million people around the world are trapped in modern slavery, including forced labor and human trafficking. But Christian investors are using their influence to confront exploitation and encourage companies to protect the vulnerable. Will Laughlin joins us today with an encouraging update. And then it's on to your calls at 800-525-7000.
That's 800-525-7,000. This is Faith and Finance: biblical wisdom for your financial journey. Will Laughlin joins us again today. He's managing director of faith-based investing at Guidestone Funds, one of our valued underwriters. Guidestone helps individuals, churches, and ministry organizations pursue their financial goals through investment solutions designed to reflect their Christian values.
Will, always a treat to have you here. Thanks, Rob. Always glad to be here.
Well, Guidestone has made combating human trafficking a major focus of its faith-based investing efforts. I'd love for you to help us understand the scope of this tragedy and why investors have an important role to play in addressing it. Yeah, absolutely.
So, when you think about companies around the world and you think about issues there, human trafficking is something that maybe hides a little bit in the shadows, but is actually a very real problem. An organization called Walk Free estimates there are roughly 50 million victims right now of some degree of human trafficking. More than 27 million of those are in the forced labor area, and another 3.3 million of those specifically focus just on children being victims of human trafficking. You know, when I say it hides in plain sight, that can be everywhere from supply chains for things like cell phones, food, clothing.
So, the dollars that we spend that we have, you know, they vote whether we realize it or not. And when we think about it from a Christian perspective, you know, if you look at Proverbs 31, 8 through 9, it tells us to speak up for the vulnerable. And so, stewardship isn't passive in that case. You know, open your mouths. for the mute, for the rights of all who are destitute.
And defend the rights of the poor and needy.
So that's really the biblical imperative for us, and why we think it's critical to work on issues like this. I couldn't agree more. In the past, Guidestone's approach will focus largely on screening out certain companies. Today, you're also engaging directly through shareholder advocacy.
So talk to us about what that looks like in practice. Yeah.
So the idea of advocacy was really born out of that concept of stewardship. How can we be the best stewards of the companies we're investing in? And there are two levers that we can use to do that. The two levers are really proxy voting and then actual conversations with companies.
So making sure we vote every proxy ballot for every company that we invest in. And then the other side, sitting down with leaders of companies to talk through specific issues like child labor, forced labor, and online exploitation. And when we think about that as a practical solution and actual action in the marketplace, one of the more recent endeavors for us was becoming a founding member of something called the Eagle Freedom Alliance. And that is specifically focused on bringing anti-trafficking experts into boardrooms as opposed to just writing letters and trying to kind of name and shame companies, but it's bringing forth people who can help. Help companies with solutions because what we found is that many companies don't want to have exposure to this.
They want to proactively root it out. They want to be good actors in the space. And so, what we're trying to do is be proactive and engage in solutions-oriented dialogue that protects people and protects long-term shareholder value. Will, why is collaboration with other faith-based investors often more effective than trying to create change alone? Yeah, the idea of collaboration, I think, is important because we think about Christians.
It's working together, uniting believers. And that's where the collaboration works with groups like Eagle Freedom Alliance. We're trying to bring a united front of many voices to companies so that they perceive the severity of the issue and that people want real change. And it's the idea that as a unified body, we can bring real change by shining a much brighter and bigger light on issues. Yeah.
Well, we're going to have to leave it there.
So appreciate our partnership with Guidestone. And thanks for being here today. Thanks, Rob. I appreciate it. That's Will Laughlin, Managing Director of Faith-Based Investing at Guidestone Funds.
Guidestone truly envisions a world transformed by Christian investing. Their strategies allow investors to be more proactive with their dollars to make a meaningful difference in the world while preparing for their financial future. To learn more, go to faithfi.com/slash guidestone. That's faithfi.com/slash guidestone. We'll be right back with your questions.
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.
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Financial wisdom for living well, soundmindinvesting.org. Great to have you with us today on Faith and Finance. I'm Rob West. We're taking your calls and questions. If you have a financial question, Call right now, 800-525-7000.
We have a few lines open. Let's go to Alabama. Brad, how can I help you? Yes, Rob, thank you for all your information. You seem to be on top of all the issues.
My wife and I were discussing. Winner seventies. And blink. had pensions set up, so we're basically able to live off of our pensions.
So we've tried to keep this invested for the future, for God's work. And I was reading about Solomon how to Well we've got about eighty percent of our portfolio in stocks and only twenty percent in bonds. I really don't like gold and silver.
So how do you feel about putting 5% of our portfolio in classic cars. Yeah, it's a great question. You know, if you're asking whether classic cars should replace precious metals as a meaningful part of your investment portfolio, I'd be cautious. Classic cars can be fun, but I would view them as a passion investment, not a core retirement investment. You know, they're, of course, illiquid, takes time to find a buyer.
You've got to insure them and store them and maintain them, and you've got to upkeep, and the values can be unpredictable. It's really collector demand, and there's no, of course, income stream like dividends or bond interest or rental income. But, you know, if you're a car enthusiast and, you know, you have the ability to do that and you want to take 5% of your investable assets to do something you enjoy because you love classic cars and you can afford to do that, just given the state of your overall finances, then I would say go right ahead and enjoy that. But I wouldn't view that as a substitute for a well-diversified investment portfolio personally. Or what else would you recommend then if Yeah.
besides maybe another five percent of something else. Yeah.
You know, if you don't like gold and silver, I think, you know, just the stocks and bonds would be probably the way to go. I mean, maybe you dial up your bond allocation a little bit to reduce portfolio volatility, you know, rather than chasing returns. You know, the other options would be cash and short-term treasuries, real estate. Although in your 70s, I wouldn't encourage you to. you know, to take on the responsibilities of becoming a landlord unless it's something you really enjoy.
But I think a broadly diversified stock and bond portfolio with exposure to the U.S. and the international markets on the stock side and short and medium-term high-quality bonds and treasuries is probably the way to go. And if you don't want the precious metals, that's perfectly reasonable. But I wouldn't feel compelled to replace that with another, quote, alternative investment personally.
Okay, well, thank you. Absolutely. Let me mention one other thing, though, Brad, and that is you mentioned your passion to support God's kingdom. And, you know, I might think, and I don't know what you're spending on a monthly basis. I don't know what your portfolio size is, and I don't need to.
But the only thing I would just throw out is, you know, I hear from a lot of people saying, Rob, I'm going to die with one, two, three, $5 million in my trust someday. And, you know, then I'll give it to God's work.
Well, what about defining enough, whatever that might be, that's reasonable and allows for the uncertainties that might come down the road and accelerating some of that giving right now. You might have a blast doing that and get it into God's economy sooner, which never is a bad thing because there's real needs in the world.
So that might be the only thing I'd leave you with is just think about, is there any portion of what God has entrusted to you on your balance sheet that you could go ahead and put into work for the kingdom now rather than waiting and doing all of your giving at death?
Something to think about. That may not apply here. Again, I don't know your details, but just something I want to throw out. Brad, thanks for your call. Lord bless you, my friend.
Thanks for being a faithful listener. If I can help in any way in the future, give us a call. Let's go to Illinois. Hi, Gregory. Go ahead.
Yes, God bless. How are you doing today? I'm doing great, Gregory. How are you? I'm great.
I got a old financial question for you. Go back all the way in the Old Testament. My question is concerning tithing offering. I'm hearing some different teaching now according to the Old Testament, teaching that is still the same traditional, that you also give ten percent. And I'm hearing the other side of the coin that according to New Testament, that we're not caught up under law of giving according to the epistles you give according to your heart.
So I just want to hear what you have to say. Yeah.
So here's my thought on that.
So, you know, in truth, tithing is an Old Testament concept. And in fact, while the word literally means a tenth, So that's where we get the 10% idea from. There were actually three tithes in the Old Testament: there was one for the Levites, one for the temple, and one for the poor, and that one was every three years.
So, if you add it up, the quote-unquote tithe in the Old Testament was basically 23 and a third percent every single year, and that was just the beginning. Then, there were additional offerings that were on top of that. And we could, you know, go into all of those.
Now, when we look at Old Testament giving, you know, that clearly was under the law of Moses. We're under now the law of Christ.
So, what happened when Jesus entered the scene?
Well, I think he took giving to an even higher level. I would say he showed a different way of giving, what I'll call whole life generosity. He gave his life as the ultimate sacrifice on our behalf to pay the penalty for our sin.
So, when he talked about money, he taught, when we look at the scriptures, that we should give as we've been blessed. Luke 6:38. He said, To whom much is given, much is required. In Luke 12:48, he, of course, commended the most famous giver. We don't know her name, but we know she was a poor widow who gave her last two copper coins.
We also know he challenged the rich young ruler to give away all of his wealth.
So, I think there is some confusion on this. And what I would say is that also, in truth, Jesus referenced the tithe, even though, again, I would agree with you that we're no longer under the law of Moses.
So, what do we do with all of that?
Well, I think given for those of us who have seen what he's done on our behalf on the cross, we embrace a New Testament model of giving, which I would say is, you know, the hallmarks of New Testament giving are giving freely, giving sacrificially, giving proportionately to who much is given, much is required. I would say it's also giving cheerfully. We don't want to be legalistic about it. We don't want to do it as God's word says, under compulsion, 2 Corinthians 9:7, each of you should give what he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.
So, I think you're right. God wants our hearts, but he does also want us to be givers. I mean, that's clear throughout the whole of scripture. And I think, Gregory, it's the ultimate demonstration of our trust in the Lord because giving requires that we open our hands. It calibrates our hearts to God's, it gets our focus off.
Our own mini kingdoms and gets our focus on God's kingdom through our generosity. It allows us to participate with him.
So, what do we do with the tithe?
Well, I would say the tithe is a great guideline for our giving because it's proportionate. It's on the increase. It starts with the local church, which is God's plan A, but I don't think it ends there. I think to the point of what we see in Jesus' teaching, it really he raises the bar. And so, I like what Randy Alcorn, the author, says that the tithe is the training wheels of giving.
It's our starting point. And then we look to give beyond that sacrificially.
So, what are your thoughts on that? I just have a few seconds left. Man, that sounds great. I mean, that was wonderful and gave me some clear insight. That was beautiful.
I appreciate you. Thank you so much. Absolutely, Gregory.
Well, I appreciate you, and thanks for calling and raising this question. You know, at the end of the day, it's not what God wants from us, it's what He wants for us. And I think giving is one of the amazing opportunities we have to be connected into God's activity. Hey, we're going to take a quick break and then be back with much more. Stick around.
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That's faithfi.com/slash pre-born. Delighted to have you with us today. This is Faith in Finance. I'm Rob West. We're taking your phone calls today, 800-525-7000.
Let's dive in. We're going to head to Tennessee and talk to John. Go ahead, sir. Hello, Rob. I've learned a lot from you over the years.
Thank you. Absolutely. Thank you. You're welcome. I'm a retired pastor.
I uh have extra income. And it seems like the tax law has changed. About how much to report, and when do we fall into self-employment and have to pay Social Security taxes and That sort of thing. Can you help me? Yeah, I'd be happy to.
And I'm delighted to hear you're asking this question because we certainly want to get this right. You know, the tax law hasn't changed, even though there's been a lot of changes as of late, largely because of the one big beautiful bill and other changes recently, the Secure Act 2.0 and others. It hasn't changed in the sense that self-employment income has become exempt. You know, if you're receiving compensation for performing funerals as a retired pastor, that income is going to be generally taxable and would likely be subject to self-employment tax depending on your situation.
So the key points to understand are: first of all, all income is reportable, regardless of the amount, unless a specific exclusion applies. Self-employment tax, so that's Social Security and Medicare, generally applies once your net earnings from self-employment are $400 or more for the year, and you have to are legally required to file a tax return and report that income. And that would automatically trigger that $400 threshold, the requirement to pay self-employment tax, which covers Medicare and Social Security. And it applies to everyone. There is a carve-out, though, for those that have, quote, opted out for ministerial reasons of Social Security.
And John, you and I talked off the air, and you said you have opted out. And so, if that was done through the proper form and accepted by the IRS, then that would change things a bit. I would talk to your CPA about that because you would likely not owe self-employment tax, Social Security and Medicare on ministerial earnings, including those funerals, because you have, you know, you're exempt and that's irrevocable.
So you would still report the income for income tax purposes, but. The exemption is from the self-employment tax.
So, any follow-up thoughts on that, though?
Well, Rob, uh My my tax preparer mentioned a two thousand dollar figure and gave me the impression that other income other than Honorariums. and 43.61 income. It wasn't reportable until you reached two thousand dollars And I'm thinking there is other income at times. from assisting but not preaching Uh at a funeral home. a precinct voting worker.
There's some income there. Do you see how it seems complicated to me? And I'm not sure. I totally do. I want to honor Christ.
Of course. Yeah, absolutely.
Yeah, so there isn't a general rule that says that the first $2,000 of self-employment income or other income isn't reportable. You know, he may be referring to something else. Maybe it's a specific reporting threshold for a particular type of payment or a rule that applied to a particular credit.
So I might go back to him and just ask for clarification there. But I think at the end of the day, the income is reportable. The self-employment income, again, if you have the approved 4361 exemption, that would not apply. But I'm not aware of any general rule around a $2,000 exemption.
So you may just want to get some clarity on that from your CPA. John, I hope that helps. Appreciate your service to our Lord. And if I can help further along the way, don't hesitate to reach out. Let's see.
Texas is where we're going next. Hi, David. Go ahead. Yeah.
I'm eighty seven years old. If all of my assets have beneficiaries Designated. Is there any Reason to have probate? Or is there a maximum dollar amount that requires probate, so I would have to get a trust? Yeah, it's a good question.
You know, anything that has a beneficiary is going to pass outside of your estate directly to the named beneficiary.
So that really is kind of now been removed from your estate.
So the will is going to cover everything else because there are going to be other things that you're going to want to, you know, make sure you have covered at your passing.
So think bank accounts, well, that could have a beneficiary on it, but you know, any kind of personal, you know, property or furniture or jewelry, things like that, that's where the will is going to be helpful. If that's all that's in there, because most of your accounts have named beneficiaries, and you know, if you have a home with a transfer on death deed, which is like a beneficiary for a piece of property, then you know, I think a simple will will cover you and just make sure that you've decided in advance, you know, what those where those other personal assets are going to go that don't have the ability to have named. Beneficiaries. Does that make sense? Yes, it does.
So there is no certain amount of the estate it requires a probate in dollar value. No, there's not. I mean, you know, it's always going to involve probate, but in terms of the cost, you know, it's going to be very minimal. And, you know, typically, you know, it could just fly right through. It depends on the state.
I mean, smaller estates, you know, can avoid full probate, where there would be, you know, and again, it's going to come down to the state that you're in. And I'm not sure about Texas specifically, but if it's on the smaller side and it's below the state's small estate limit, then you could use just a simple estate affidavit to settle it pretty quickly and not have the time and the expense of the court costs.
So I would just check for the state of Texas and see what that is and see if you're under that threshold.
So if it was like a million point five, You think that probably would require probane? I do. Yeah.
So a small estate is typically, again, depending on the state, going to be somewhere between, you know, $50,000 and $200,000. I think in Texas, it's less than $75,000 before it doesn't go through probate.
So I think what you could do is, again, if you've got the beneficiary designations, those pass outside of the estate.
So then it would just be the other assets that remain.
Okay. Yeah, I think I would still the value of the home would be a trigger because it would be about 400,000. Yeah, so then it definitely would.
Now, on that, you could put, and I'm not sure if Texas allows this, you'd need to check, but you could do a transfer on death deed, you know, that would allow your house to pass directly to named beneficiaries if the state of Texas allows that.
So then the option to be out of probate would be a trust. Yes, that's exactly right.
Now, remember, those assets that have the beneficiary don't count toward the estate's value for probate purposes. But to your point, if your home was in it, that would automatically trigger it and need to go through probate.
So then, yes, your options would be if the TOD deed is available in Texas, you could do that. And that would pull that out, and maybe that would allow you to get below that small estate threshold. The other option is a revocable trust, which is going to cost you somewhere between two and five thousand dollars. And then that could pass out a probate as well.
Okay, very good. Thank you. All right, David. God bless you, my friend.
Well, we're so grateful for you being here today. Thanks to Sandy, Jim, and Devin. We'll see you tomorrow. Bye-bye. Faith in Finance is provided by FaithFy and listeners like you.
