This Faith in Finance podcast is underwritten in part by Timothy Plan. Good news! Since 1994, Timothy Plan has shared good news with investors and advisers by offering a family of funds that honor your faith. Learn more at TimothyPlan.com. Yeah.
What if the companies in your portfolio are working against the values you're trying to live by? Hi, I'm Rob West. Faith-based investing gives Christians a way to consider not only financial returns, but also what their investment dollars are supporting. Today, Brian Mumbert joins us to explain how it works, what the research says about performance, and how investors can get started. 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 decisions.
Well, we always learn a lot when Brian Mumbert joins us. He's president of Timothy Plan, an underwriter of this program, and a family of mutual funds and ETFs that helped pioneer faith-based investing nearly three decades ago. Brian, great to have you back. Great to be here, Rob.
Now, Brian, you weren't there on day one, were you? Oh, it would have been nice. My wife, Cheryl, was. I've been here 20 of the years.
Okay, yeah. A long time and now leading the charge, doing some incredible work. I want to start with the basics today. For someone who may be new to this, what exactly does faith-based investing look like for Timothy Plan? And how does it differ, Brian, from a conventional approach?
Well it really starts with the same goal. I mean we're all stewarding wealth for long term growth. But the big thing, of course, about faith-based investing is it adds a value filter.
So then you start by avoiding companies that profit or endorse activities that are contrary to biblical teaching. And, you know, some examples of this that are common are things like abortion or pornography or. gambling and other activities that might prey on the addictions of the most vulnerable in society. And then you look to seek out firms that create God honoring products. And then ultimately, you still use a very disciplined financial analysis And the screening comes before the portfolio construction.
So the end result is you end up with a product that has competitive returns and upholds your values.
Well, that's really helpful. And that's perhaps the biggest pushback we hear, that if you're going to screen out entire industries and limit your universe of investments, doesn't that hurt performance? What do the numbers actually show? You know, there's been some great studies done on this by some of the great partners in this space. Multiple independent studies that have really found no persistent performance penalty, and some even find better returns for the amount of risk taken.
But really, removing companies that face social and regulatory headwinds can also reduce this risk. And when you look at Timothy Plan as a whole, you'll see very competitive five and ten year track records against benchmarks that are secular, especially when you look at some funds like our small mid cap growth or even our Israel fund that exceed their benchmarks. Yes, exactly right. They've done phenomenally well.
Now another concern investors have is what may be hiding beneath the surface.
So how does your research and screening team evaluate companies and make sure the investments remain aligned with your biblical standards? What I love about being here with Timothy Plan is the 30 plus years of experience in screening. And so there's a proprietary screening process here that focuses on these big moral issues. And the research is updated continually. And you're looking really deep to see what a company might profit or promote.
and what the companies are doing at the corporate level. We leverage some third party data as well, and these companies are rereviewed periodically. Companies can change their missions and visions. As we've seen recently, they can change quickly. And then transparent reports at the end of the day let shareholders verify all the holdings that we have.
And of course, you can contact us by phone or email to get a report and see how your investments align with biblical principles. Yeah, that's exactly right.
Well, let's finish today with the actual options available to investors.
So, what investment vehicles can someone use to build a diversified portfolio and stay aligned with their biblical values? Rob, here at Timothy Plan, we have 12 mutual funds and now seven ETFs to choose from. The ETF is a great low-cost option. The mutual funds have been around for a long time. Very unique funds, like even an Israel fund, as I mentioned before.
Very low minimums. You can get in for as low as $1,000 or even do a $50 a month automatic investing plan that gets you access to it right away. And really, you know, at the end of the day, I always tell people, you know, I know costs are always a concern, but I'm willing to pay a little bit more for something that truly matches what I'm looking for. And in the case of faith-based investing and being a Christian, that's where I like to look. That's exactly right.
So, folks, take an inventory of your current holdings. In fact, Timothy Plan provides free screening tools for you to take advantage of that. Reach out to them, perhaps even find a certified kingdom advisor who can help build a faith-based investing portfolio using the Timothy Plan solutions. You can learn more at TimothyPlan.com. That's TimothyPlan.com.
Brian, thanks for your time. Thank you, Rob. We'll be right back with your questions. Stick around. Managing money isn't just a financial decision.
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Hey, thanks for joining us today on Faith and Finance. I'm Rob West. Listen, Faith and Finance is listener supported, which just simply means we bring you this program each day as a result of your generous support. Whether it's a one-time gift or becoming a FaithFi partner monthly at $35 a month or $400 a year, just know that it goes a long way toward helping us bring you all of these resources and this broadcast each day. And so, if you love the program, maybe you listen regularly and you'd like to support the ministry, just head to faith5.com/slash give.
That's faithfi.com/slash give. And thanks in advance. By the way, a few lines open at 800-525-7000. If you have a question, call right now. Let's go to Cheyenne, Wyoming, and welcome Debbie.
Go ahead. Thank you. My husband died this last January. And I'm a beneficiary on his IRA and his 401k. Are there going to be any taxes that I'm going to have to pay on those?
Mm. Yeah. Debbie, I'm so sorry that your husband passed away. And I'm glad you called. Yeah, if it's a traditional 401k and IRA, inheriting them is not a taxable event.
However, future withdrawals are going to be taxed as ordinary income.
So, as a spouse, what would typically happen is you would roll them into your own IRA, so they become your IRA in your name. Um and therefore it's treated as if it's your retirement account. And then the key question would just be: you know, when you need the money, as you pull it out, and you'd have flexibility on that, at some point, you're going to be subject to your own required minimum distribution where you have to start taking it out based on the IRS table and a factor that they create based on life expectancy. But it's not a taxable event, the fact that you've received it, it's only going to be taxable as you take a distribution.
Okay, that sounds good. On the 401k, he borrowed money. out of that 401k in 2025. and was making payments Um it was supposed to be for five years, but Um so I'm going to have to claim that as income or will I have to pay it back? Yes.
So typically what happens there is any unpaid 401k loan becomes due when either employment ends or upon death. And so, if it isn't repaid according to the plan's rules, which, you know, if there was a five-year runway and we hadn't completed it, then the outstanding balance, the amount that was still owed, is typically treated as a taxable distribution to your husband's estate or on his final tax return, not as a debt to you as the beneficiary. But in either case, it would, you know, with joint assets, you would be the one likely to pay it. But essentially, at his death, it does need to be repaid. And so that would be a taxable distribution.
So I would work with your CPA or tax preparer when you're filing your husband's final tax return or on your own return. to handle that outstanding balance appropriately.
Okay. All right. I was just wondering because he borrowed that in 2025 and then he never even got one year's worth. He was supposed to. um pay it back in five years, but he, um Didn't even get one year's paid back.
So Well, I appreciate your call. Let me do this. I'd love to send you a book, Debbie. There's a wonderful, sweet lady that her husband passed away, Bob Neff, and Miriam, his widow, wrote a book called Wise Women Managing Money, specifically for widows now taking over the family finances. And just as an encouragement, but also offering some practical assistance, I'd love to send you a copy of that book, Debbie.
I think it'll be a blessing to you and hopefully very helpful to you as well.
So if you would stay on the line, we'll get your information and we'll get it right out to you, okay?
Okay, thank you very kindly. Absolutely, Debbie. Lord bless you too. Bye-bye. Dan is in Indianapolis.
Go ahead, sir. Thank you for taking my call. I'm calling because I have a question regarding credit scores and credit cards. My wife had a credit card. She passed away.
She had my name was on it, so I was using that same credit card. A few years ago, I got one that was under my own name. From a credit score perspective, is it beneficial or a good move to have more than one credit card? Or is one credit card suitable? Yeah, it really is suitable, especially since you've likely got quite a history of credit that sits on your credit report that's benefiting you.
You know, the key really is just to stay focused on the fundamentals, especially in this season of life where you're likely not out looking for a lot of new credit.
Now, maybe you're going to buy a car, you know, along the way and you don't have the cash to buy it outright. And so you're going to take out a small loan.
So it's, of course, nice to keep a good credit history, but those fundamentals would consist of paying every bill on time, keeping your balances low, ideally paying it in full each month, and making sure if you do use it for budgeted items and you wait until the end of the cycle, you know, you actually might be charging up above 30% of the limit, which is actually going to start to pull your score down.
So one strategy is to actually pay it before the end of the cycle rather than waiting until the due date for that reason. But as long as you pay your bills on time, Keep those balances low, avoiding using too much of your available credit, and then keeping older accounts when possible, especially if they don't have an annual fee, since a longer credit history can help your score. And when you close an account, often not only is that account closed, but it's eliminated from the history of your credit that's being seen by these credit algorithms. But I would say, if you have one well-managed card that has some history to it, And you're an active user of that card for maybe a small budgeted item that you pay in full, that's about all you need to do, Dan. I certainly wouldn't pay one dime of interest for the sake of a good credit score because there's no reason that you shouldn't have a score in the high 700s, which is going to qualify you for the very best rates and terms for just about any loan by just following those best practices.
Does that make sense? Oh, that makes sense.
So basically, if I just have one card, which I have right now. I don't use it every month, but I do use it periodically. and just make sure I pay it off every month, that would probably be sufficient data that they would have from a credit card or credit score perspective. And if, like you said, I needed to get a different vehicle and needed to get a small loan, that I'd probably have enough credit history there to suffice. That's right.
On top of the other history that's showing there from the older accounts that you've already paid off from years gone by, other cars or homes, things like that. But yes, I would say that's true. That one active account that you're using regularly for a budgeted item, keeping the balance low, always paying it on time, is the kind of history that you're going to need to keep that score right where you need it to be for anything you could need it for in the future.
Okay, well that's helpful. I like the idea of just sticking with one credit card. That's easier than messing with you know, multiple bills every month or more than one bill a month. One notice a month, that type of thing.
So, Matthew, thank you for your input. Absolutely, Dan. And I would just concur with that and add to it: one card is not only simpler, but it's only one account that has the ability to be compromised. Because remember, if you have a card that's active, even if you're not using it and somebody compromises that account, you've got to stay on top of it just to make sure that that doesn't happen. And so, by paring it down to one, there's really only one active account that you need to be monitoring, just given the rise of theft and fraud taking place right now.
So, hopefully, that helps, Dan. We appreciate your call today. God bless you, sir. We'll take a quick break and then come back with much more. Here's our goal: to be an encouragement to you, to point you back to God's word and help you live as a wise and faithful steward.
Thanks for being with us. More to come right after this. 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.
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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. Davenport, Iowa.
Mary, go ahead. Hi, thank you for taking my call. We moved my mother into my sisters and I have four sisters. Moved my mother into right now she's in independent living in a senior uh residential situation Um I'm now managing all of her finances. She uh I think has a spending problem.
And we're concerned, we're trying to show her that she cannot continue spending at that level. because if she li she's in very good health, she's ninety. and in very good health, no serious health problems And I've even shown her, she has dementia, early stage dementia. I said, mom, if you have to go into memory care, your money is only going to last about four years. Um but she doesn't respond well.
To me or any of my sisters, when we talk with her about. About her spending. And the issue is that she's spending on. She's more of a collector than anything.
So she likes to collect Books She loves to collect sewing notions, and she's building up another inventory, big inventory, that we. won't be able to later turn into cash. And It's just difficult to know how to approach her. I I'm just wondering if there's any advice you can offer Yeah.
Well, first of all, I know how hard this is, Mary, but I'm glad you're leaning into it. It's an important conversation, and it's as much a family conversation as a financial one. And so I think it's important really to lead with concern rather than control. And I know that's not your heart to control here. You really are genuinely concerned.
So I might start by just letting her know that your goal isn't to tell her how to spend her money. It's really to make sure that she has enough for the rest of her life. And so, I think it's important to be, first of all, prayed up before you go into a conversation. Second, you know, pick a calm, private time to talk. I would lead with questions rather than any kind of finger pointing.
And again, I'm not getting that sense that that's kind of your approach here.
So don't get me wrong, but I think just to underscore the point, you know, maybe you'd lead with, hey, mom, you know, how are you feeling about your finances? And have you thought about how long your savings may need to last? And I think offering some assistance and perhaps assistance that's not tied to other family members, including you. And so, for instance, one of the things I'd be willing to offer here, just to be of help here, is a certified Christian financial counselor. And these are typically men and women that are retired.
They have a unique skill set in this area of financial management. Often, you know, they've been in the financial services industry, but their ministry now is just to come alongside God's people, to encourage them, to pray with them, but then also to help them see clearly. What they have and what they need to do in terms of a plan moving forward. And perhaps having that independent third party that could come alongside and just help her think about: okay, let's look at your income, let's look at your expenses, let's look at the last 90 days or maybe the last six months. And let me help you develop a budget based on what you have spent and then help you understand how long that may last into the future if you continue at this rate.
We'd be happy to provide that. I think if there are concerns about memory or diminished financial capacity, I think it's appropriate to begin to talk as soon as you can about the legal tools that would be used there. Because if you sat with an elder care attorney, you know, they would be quickly talking about durable financial powers of attorney, where if your mom's willing, she can appoint someone she trusts to help manage her finances if she's unable to do so. A revocable living trust would make it easier. Easier for someone to manage assets if she's incapacitated.
Not to mention it simplifies a state administration once she passes. Long-term care and Medicaid planning, you know, an estate plan review, those kinds of things, healthcare directives, you know, are really important. And if your mom is still mentally sharp, I think, you know, the first step is this loving conversation and then a meeting with either an elder care attorney or perhaps a certified Christian financial counselor who can just bring clarity to the situation and help her gain an appreciation for how her money may run out. And if the Lord tarries and she is in good health, her biggest risk in this season of life is something called longevity risk, where she outlives her money. And I think there's a kind and loving way to help point that out.
And hopefully, Lord willing, in a way that she receives it. But what are your thoughts on that? Um I I already do have Um, a power of attorney. She does have a revocable trust. Great.
And all of her assets are are in that. And so we carefully created an amount that she would be drawing out of her investments. Um every month. but that's only for right now. Those costs have gone up and they will go up Considerably, if she needs greater care levels.
So, but I do think, and maybe going back to the attorney that helped With her revocable trust and the durable power of attorney and all of those things. is is the way to go. Maybe I could start with them. They might do that. Yeah.
And so, what I'm hearing is she's not going beyond what you all decided would be kind of her monthly income, but you're anticipating potentially the need for further and much more expensive care, and that those future care costs are what could deplete her assets in a hurry. Is that right? Right. Right now, you know. there's a concern that she's building a stockpile that We can't convert later to cash.
So that's a concern. But yes, I think her the level of care that she needs might might increase significantly.
So I think, yeah, maybe we'll start with the attorney that helped us with those first steps. Yes.
Of course, they're not a financial advisor per se. Right. Well, if it would be helpful, I'd be happy to offer someone who could, you know, help her pull together or you and her current income and assets. And that's what would allow you to determine based on the current run rate, how long will they last? And then you could make some assumptions about what it might go up to and what that would mean.
And then you would just try to create a sustainable withdrawal and spending plan and reduce unnecessary spending now to try to preserve assets for the future. That attorney may want to talk about Medicaid planning to understand what options may be available if she eventually needs long-term care. And, you know, apart from that, we just need her to do her part in trying to preserve this as long as she can. Listen, if we can help with any of this along the way, Mary, don't hesitate to reach out. Thanks for your call.
But, folks, that's going to do it for us. Big thanks to my team today. Certainly couldn't do this without them. Grateful for Amy and Dan and Jim. Also, thankful for everybody here at FaithFy that makes this organization happen every day.
We'll see you tomorrow. Faith in Finance is provided by FaithFi and listeners like you.
