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.
Faith-based investing shouldn't stop at the water's edge. Hi, I'm Rob West. Diversification is a key part of wise investing, and for many portfolios, that includes looking beyond U.S. markets. But how do you pursue international exposure while staying aligned with biblical convictions?
Today, Benjamin Bailey joins us to discuss faith-based investing, global diversification, and a new international ETF designed with Christian investors in mind. Then we'll take your calls at 800-525-7000. This is Faith and Finance: biblical wisdom for your financial decisions.
Well, we're delighted to welcome Benjamin Bailey back to the program. Benjamin serves as Vice President of Investments at Praxis Investment Management, a trusted and longtime underwriter of Faith and Finance. Benji, great to have you with us. It's great to be back. Praxis recently launched an exciting new international exchange traded fund, and I want to dive into that for a moment.
But first, Benji, for listeners who may be brand new to faith-based investing, would you define it for us and also add maybe what trends you're seeing in terms of demand? Yeah, so faith-based investing is an investing approach that says financial decision-making can be motivated and informed by faith, right?
So it holds in tension these two things, productive use of our financial resources, but also this deep-seated concern for the individuals, communities, and God's creation also that are impacted by our investment decisions.
So celebrating God's generosity and then really trying to actively follow the example of Jesus Christ.
So trends. This faith-based market's been growing a lot. Obviously, Kenyan advisors who you're involved with kind of estimates this market at about $22 trillion in terms of investments that are held by Christian church members.
So the opportunity is vast. Yes, it sure is. And we're just getting started, but good news that there's a lot of momentum behind it as awareness grows.
Now, Benji, from a diversification standpoint, let's talk about international investing. Why should investors consider looking overseas? All right.
So as advisors know and as people know, international equity exposure is an important part of a diversified portfolio. It's just as important in a faith-based portfolio, right? Faith-based investors want their values reflected across their entire portfolio. We've seen that international is a space where there's kind of less robust options.
So we wanted to bring something in there and people want choices and people want options. Yeah, they sure do. But what unique challenges exist when we apply faith-based screens in international markets? All right, so there can be some challenges, right?
So, and investors need to make sure they're getting solid and reliable information in terms of what things should be in and what things should be out.
So, that's why working with a large and global partner like MSCI or Sustainalytics, some of the people that we work with, they have these large global presences and they have people that have been doing this for a long time.
So, they know kind of what to look out for and really understanding kind of the culture overall can be really important. And another unique challenge is that some countries actually have a lot more companies that are kind of involved in problematic areas.
So, depending on your investment style, that could become an issue. Yes, no doubt about it.
Now I want to get to this new faith based international ETF that you just launched, PRXI. What gap does this product fill for both advisers and their clients? All right.
So, we want to bring a product to market that works with our strengths of praxis and that also fills a gap, right?
So, there's this mix, right?
So, there aren't many faith-based international ETFs out there, and we already have an international mutual fund that it's about 15 years old.
So, we've been involved in this kind of international investing space for a while.
So, bringing it to the ETF space is important. And one of the things we can certainly say, because we do optimized index investing, which means that we're trying to perform similar to the index.
Now, clients love that upside that can come with an active manager, but of course, they don't love the downside that can sometimes come with an active manager.
So, what we've seen is clients that can be new to this faith-based investing space, if they see an ETF or an investment that has less volatility around that public index, it can actually be something that's really appealing for at least a portion of their portfolio. Yeah, I love this because it gives investors an opportunity to seek a benchmark-like return while also maintaining that faith-based approach. And not only in the U.S. markets, but now internationally.
So, this is really exciting. Benji, we're so grateful for our partnership and congratulations to the Praxis team on the launch of PRXI. Thanks so much. Appreciate being with you. Absolutely.
Folks, that's Benjamin Bailey, Vice President of Investments at Praxis. Remember, a faith-driven portfolio doesn't have to stop at the border. With the right international investment options, you can pursue both global diversification and stay aligned with your convictions. Since 1994, Praxis has offered investment solutions that go beyond screening, really helping investors making a real-world impact through their investing. You can learn more at praxisinvests.com.
That's praxisinvests.com. Back with your questions after this. Stick around. What we do is very special and it's very unique. This is Bethany.
She is a Certified Kingdom Advisor. I became a CKA because we're not building bigger barns and we're not trying to figure out how can we just amass more and more and more. We're figuring out how much do you really need? What are your priorities? What has God called you to?
And then how can we give it away? How can we be more generous? You can find an advisor like Bethany at findacka.com. Every day, thousands of women face an unexpected pregnancy, scared, alone, and unsure where to turn. FaithFi is partnering with Preborn and you to bring the hope of Jesus to these mothers through free ultrasounds at pregnancy centers across America.
When a mother sees her baby's heartbeat, everything changes. Your gift of just $28 saves a life and shares the love of Christ. Give today at faithphy.com slash preborn. That's faithfi.com slash preborn. Um Great to have you with us today on Faith and Finance.
I'm Rob West. I'm looking forward to taking your calls and questions today.
So, if you have a question, let's have you get in on the action today by calling 800-525-7000. We've got lines open. We're ready for you. You can call right now, 800-525-7000. All right, we're going to dive in today.
We'll begin in Florida, Terry. Thank you for calling, sir. Go ahead. Hey, Rob, thank you for taking my call. I have a seven and a half year old granddaughter, and I'm wondering.
What method I could use to start investing for her college education? Yeah. You know, the best way to save for a college education is by opening and contributing to what's called a 529 education savings plan. You may have heard me mention that in the past here on this broadcast. 529 just comes from the IRS section where this is found in the code.
But essentially, it creates a college savings vehicle that you can contribute to over time. You can do it monthly, you can do it one time, and you can essentially put in as much as you want. I mean, there's very little there in the way of a cap. And you would choose which state you open that 529 in.
So in Florida, you know, there are no state income taxes.
So therefore, you wouldn't have any benefit of using the Florida plan versus another plan because other plans might give you a state tax deduction, even though there's never a federal deduction for a contribution to a 529. There might be a state deduction, but that doesn't apply in Florida.
So you'd be free to choose among any of the state's plans that have a really good traffic. Track record in terms of the investments. And you can check that out at savingforcollege.com. But essentially, you'd put the money in, Terry. You would invest it like a 401k in that menu of investment choices that State's 529 made available to you.
And then it would grow. And then at the time she's ready to go off to college, you would be able to, or she would be able to use that money for qualified educational expenses. Two things I'll mention: one is if she gets scholarships and grants, she can pull the money out penalty-free on a pro rata basis. And/or if she doesn't use all the money or doesn't go to college because she starts a business or does something else, goes to the mission field, then she would be able to roll that over to a Roth IRA that would be there for retirement 40 years later up to $35,000 of that money.
So it's a real great option. And essentially, it acts like a Roth in that the money grows tax-free. And then you pull it out tax-free so long as it's used for qualified educational expenses.
So, anyway, that's a bit of an overview. How does that sound? That sounds great.
Now, you said it was savings from college dot com as the website? Not quite, but close. Saving for college dot com. Savingforcollege dot com.
Okay, and one other question, Rob. Can I use my RMD to put into that? You sure could, yeah, because when you take out the required minimum distribution, if you're 73, which is what that RMD kicks in now, then you're going to go ahead and pay the tax on it. And then that's money that you can do whatever you want with. And so, if that was the source of money that you were then contributing to the 529, that's great.
There's not any tax advantage. You're still going to have to pay the tax on the money coming out of the IRA, but you could absolutely turn around and then make a contribution to a 529 after that.
Okay, yeah. 'Cause I give a huge portion of my R M D to my church because I'd rather give it to God than give it to the government. Yeah, sure. And you do that through a qualified charitable distribution, is that right? Yes, sir, QCD.
Yes, excellent.
So that's the only way to get that money out, as you probably know, Terry, without paying tax on it.
So the QCD wouldn't apply here with the five twenty nine. You'd have to take it out, recognize it as income and then turn around and make that contribution. All right.
Thank you so much. God bless you, Rob. All right.
Thank you, sir. We appreciate you being on the program. Let's go to Mississippi. Kim, how can I help you? Hey, Rob, my name is Kim.
Thank you so much for your show. I listen to it every day, and you've got some great wisdom to share with people.
So, thank you. My question is: my husband and I are both retired. We're 64 years old. We've never used a financial planner. We have looked into using a CKA.
We've listened to your show for about a year now. There's not one local. We live in a little town called Decatur here in Mississippi. Anyway, we want to know if you can recommend. We have money that we've been blessed.
Our house is paid off. We're debt-free. We are both retired. He's retired military. I'm retired government.
64 years old. We have TSP savings of about $700,000. We have a credit union account that has like over $100,000 in it. We have a checking account that, and really we don't need this, but it's got a good bit of about $50,000, $60,000 in it, savings of about $100,000. And we just need to know.
We've looked up for CKAs in our area. Unfortunately, there's not one right here. There's a couple in Mississippi. There's some in Birmingham and Tuscaloosa nearby. But we just I just want to call you and see what you're what we need to be doing as far as I hear you talk about Roth IRAs to Um, yes, yes, yeah.
Well, first of all, I really appreciate your kind remarks about the program. You guys are in great shape, Kim. Obviously, you all have been faithful in managing what God has entrusted to you. You've lived modestly, you've worked hard, you've saved quite a bit, you're in a really strong position, being debt-free, you know, having plenty of liquid reserves and having those retirement assets.
So, you each have three savings plans from your government work. Is that right? We do. All right.
And what what do you have accumulated between those two of those? About $700,000.
Okay, and are you pulling anything out of those or are you just living on Social Security? We are just living on my husband's military retirement and security. Yes, sir. And then I've got, you know, government retirement plus my Social Security. Got it.
Yeah, very good.
So, yeah, you're in really good shape. I mean, this is a situation where you can even start to ask how much is enough. And really, you know, even though there are some risks in this season of life, although he'd have VA benefits, you know, if you all needed expensive long-term care at some point, 70% of Americans 65 and older will need that. You know, if it ever required nursing care or memory care, I mean, that could be $100,000 a year or more. And that's going up.
So, you know, I'm not saying you're necessarily overaccumulated, but you also have the opportunity, you know, sitting on $700,000 and plenty of liquid reserves and the fact that you're not touching it, it's continuing to grow to start to ask the question, you know, is there some opportunity to do some additional giving? I also love the idea that you're thinking about aligning your values with your investments. And that's where I think a certified kingdom advisor could be really helpful. Although I'm a big fan of The TSP because it's, you know, got low-cost options and it's very simple to pick the investments that match your risk profile, you know, using the G and the C and the F and the I funds and the S. And so, you know, it allows you to build a portfolio that actually has great performance and it takes a lot of the guesswork out.
But if you rolled those TSPs over to two IRAs, one for each of you, and you had a certified kingdom advisor who could come into the mix, that would allow you to actually tailor the portfolio a little more dialed in because you have unlimited investment options to your risk profile and goals and objectives. It would allow you to do some additional giving because you'd have the qualified charitable distribution opportunity once you reach 70. And I know you're not there yet, but once you do, you'd be able to do giving out of your IRA that never becomes taxable, which is not possible with the TSP.
So that's nice. And then thirdly, You could find a certified kingdom advisor that could bring faith-aligned investments, which is not available in the TSP either, where it'd be screened to make sure that it aligns with your values. And even if there's not someone in your area, which we need to change that, so if you're hearing the program and you're an advisor in that area, be sure to reach out to Kingdom Advisors. There's plenty of advisors in the cities you mentioned, like Birmingham and Huntsville, that would be willing to work with you remotely and maybe you just visit in person once a year. Hang on the line, we'll talk a bit more.
A quick break and back with more questions after this. 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.
We are grateful for support from Movement Mortgage, who provides residential home loans and reverse mortgage options in all 50 states. Guided by a mission to love and value people, Movement seeks to help individuals and families make informed financial decisions from buying a home to planning for retirement. More information is available at faithby.com/slash movement. Movement. Movement Mortgage LLC supports equal housing opportunity.
NMLS number 39179. For licensing information, visit NMLSconsumerAccess.org. Great to have you with us today on Faith and Finance. We're taking your calls at 800-525-7000. Al's waiting patiently here in Arkansas.
Go ahead, sir. Thank you so much for taking my call. A week or two ago, I caught part of your program and you were talking about freezing your credit score. I didn't catch the whole works. I got on the pages that you explained to look and saw how I can freeze it.
But we have never, other than like forty-five years ago when we bought our first house, we've never taken out a loan or had a credit score required for anything.
So is there any downside to freezing them? You know, there really isn't. I mean, the only downside, and it's really not one, in my opinion, is if you're out seeking new credit, you'd have the perhaps I guess you could call it hassle of thawing, if you will, your credit file temporarily and then refreezing it just so you'd be able to allow that lender or lenders that you're shopping to access your credit file because that would be required. But given your situation, you're not out looking for more credit, you're not looking to take out a loan, I think it's absolutely in your best interest. It's just a really straightforward and free way for you to protect yourself from identity theft by simply restricting access to your credit file because it prevents lenders and others from pulling your report without your permission.
Which here's the key: it's going to stop fraudsters from opening new accounts in your name because the lender that they're trying to open the account with is not going to be able to access your credit report, which would always be a requirement.
So, basically, here's what you do. You just go to each credit bureau, Equifax, Experian, and TransUnion. You could do it online or over the phone. You can even do it by mail. You're going to get a PIN number for unfreezing your credit if you ever need to.
You're also going to want to ask about the timing. Usually it takes place almost instantly. You will need to check and see if that's automatically going to unfreeze at some point. I can't remember each of them, whether it's permanent or after a period of time, you'll have to redo it. But essentially, it's going to stop 90 plus percent of fraudulent accounts being opened per the FTC.
That's the data they tell us. And it's just really simple and easy to do, and it provides a lot of protection. Yeah, okay, that helps because their site kind of set up red flags that kind of scared me from doing it. And I thought, well, I trust you more than I trust them.
So thank you. Absolutely, Al. I appreciate it, my friend. Call anytime. God bless you.
Let's go down to Alabama. Dick, how can I help? Yes, Rob, thank you for your great program. Thank you. I'd like to give a shout out to Larry Vaquette's program.
My wife and I started that about 40 years ago. We got out of debt and saved our first ten thousand. We were exonerated. Wow. Successful to get our first one hundred thousand, we thought, How great this program is.
But then he had a good court saying how much is enough. Yes.
So we've accumulated some and what we do is we take the proceeds off that every year and give it to ministry.
So I didn't know if we should just liquidate the whole thing and give it to the ministries now. Or just keep letting it grow every year and take the proceeds and give it to the ministry because like killing the goose and the golden egg. I think in five years, we just about gave what we had in there, so it's been a blessing. Yeah. I love that.
Yeah. So how much do you have accumulated in this giving account?
Well, it could be anywhere. It's up to six fingers.
Okay, yeah, and where is it sitting? We have it in some investment accounts. Oh okay. Kind of an umbrella like the Roth that we can take out without having to pay taxes.
Now, we do some qualified charitable distributions on what we have to. fifty percent of it still, you know, being taxed. Yeah. So you have the ability to do up to more than $100,000 in qualified charitable distributions. It sounds like this is all in a traditional IRA.
Is that right? Well, some of it's TSP and some of it is ROT and some of it's IRAs, yes, sir.
Okay, got it.
So you got a mix. Yeah, I mean, as much as you can put into that, the traditional IRA, that's great. You know, I would just say, you know, God has entrusted these resources to you. And for whatever portion you've decided to give away, I would let the Lord lead in that. I wouldn't hold it back because of necessarily the earnings potential.
If the Lord gives you a clear direction and vision for where you want this money to go as you pray and think through that, I mean, think about the compounding effect of that money in eternity forever versus sitting in there. I mean, as good as that 10 or 12 or 15% you might be getting on that portfolio, I would put forward that compounding in God's economy doesn't compare to that 12% a year. And so, for me, it would be a matter of really discerning where that money wants you, the Lord wants you to give that money.
Now, you may decide, given on the size of it, you know, I wouldn't want it to be more than 10% of your church's budget if that's where it's going. And if you're making a major gift to another ministry, I'd want to know that that's a ministry that's stretching every dollar and really being good stewards of that. But as long as you're comfortable with this, it aligns with God's heart, it aligns with our passions, and we believe they're wise stewards of the resources entrusted to them as a ministry. Then I would say, once the Lord gives you that clarity, let's get that into God's economy right now. Let's not try to hold it back for a 10 or 12% return.
Does that make sense? It does.
So, are you saying probably liquidate the whole amount and give it now? Yeah, I mean, you could, you know, I think assuming the Lord gives you real clarity on where you want that to go, if that's money you're planning to give away anyway, the fields are wide under harvest. And so, why not get that into the kingdom? Immediately, if you've already essentially given it away in your mind, I don't see necessarily, apart from you just still waiting and discerning from the Lord where to give it. Once that's clear, I don't think there's any reason to hold it back at that point.
At our death, we were going to give it to each one of the kids, and they had to give it to the ministers of their choice. Love that. Does not Ron Blue have a. Great guide about which ministries are the most effective. Is that being selfish, praying for effective ministry?
No, I don't think so at all. I think that's part of good stewardship. You know, just asking where should this go and what, you know, ministries are stewarding well what they have. You could check out Charity Navigator. You could check out the Evangelical Council for Financial Accountability.
But Charity Navigator provides a rating on every ministry if you want to just understand their financial health and accountability and a whole host of factors. Apart from that, the National Christian Foundation that Ron and Larry started could be a great resource to you to advise you. You could go to ncfgiving.com and you could have the kids help give it away today. You don't have to wait till you all pass away. Maybe you involve them in directing a portion of this.
But I would say if you've decided to give it away and the Lord makes it clear where He wants you to give it, Don't hold back. Let's get that into God's economy and let's see what He does with it. And you get the blessing right now, not only tax-wise, but even bigger than that, the joy of seeing it used as a part of God's grand story. Dick, I hope that helps. Thanks for your call, my friend.
We're grateful for you. Call anytime. Well, folks, that's going to do it for us. Big thanks to my team today: Devin and Patty, and Pat, and Taylor, and Jim, and everybody here at FaithFi that makes this possible. Make sure you check out faithfy.com/slash give if you'd like to support the ministry.
We'd certainly be grateful. And then come back and join us tomorrow. We'll see you then. Bye-bye. Faith in Finance is provided by Faith Buy and listeners like you.
