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Should Christians Vote with Their Investments?

Faith And Finance / Rob West
The Truth Network Radio
May 8, 2024 5:32 pm

Should Christians Vote with Their Investments?

Faith And Finance / Rob West

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May 8, 2024 5:32 pm

In Matthew 10:16, Jesus called us to be wise as snakes and gentle as doves. But can we be gentle and wise when standing up for biblical principles and our voting rights as investors? On today's Faith & Finance Live, host Rob West will welcome Jerry Bowyer to share a biblical perspective on corporate engagement. Then Rob will answer your questions on different financial topics. 

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In Matthew 10 16, Jesus calls us to be wise as snakes and gentle as doves. But can we be gentle and wise when standing up for biblical principles and our voting rights as investors?

I am Rob West. It's annual shareholder meeting season for public corporations, and that means companies will be hearing from investors about their policies. Jerry Boyer joins us today with a biblical perspective on corporate engagement. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, Jerry Boyer is our longtime economist and a regular contributor here at FaithFi, as well as World News Group. Jerry, great to have you back.

Great to be with you, as always. You know, Jerry, in addition to being gentle and shrewd, it might help us to consider how Paul was willing to suffer loss and insults as a Christian, but also his ability to stand up for his rights as a Roman citizen in Acts 22. Paul, as you know, informed his captors they couldn't beat him without a trial because he was a Roman citizen.

So when you work with corporations and voting shares, are you helping Christians stand up for their rights in some way? Yeah, I like that Pauline analogy. By the way, notice he didn't tell them before they beat him that he was a Roman citizen. So I think he was being very subtle, you know, like a snake, basically kind of letting them do something that he knew then he could appeal to Caesar.

So I think he wanted to get to Caesar because he had something to say, and Jesus even talked about that. You know, you're going to stand before kings and it'll be given to you what to say. We don't have kings now. We don't have nobilities. We don't have dukes.

We don't have earls. We don't have lords and ladies, but we do have something like a ruling class. And you know where you can see that ruling class? You see them on boards of directors of public corporations, either CEOs, former CEOs, or former public officials, university presidents, foundation people, the ruling class of America is on the boards of directors of corporations. And so you can talk to them. How can you talk to them?

If you own enough shares, it's not that much, $2,000 worth for three years, you can put a proposal on the ballot and you can actually make your case. You can preach your message to them and you are legally afforded that privilege, but you have to be subtle. And that's the point because the rules are complicated and you don't necessarily know how to do it. Paul knew enough Roman law to arrange it that way. So he got to speak before Caesar. And what I try to do is know that law well enough so that I can help Christians also speak to the Caesars of our age.

Well, there's no question, Jerry, it's making a difference. Dig into this just a bit deeper and explain how proxy voting works and the potential impact it can have on a company. Pretty much every right that you have as a citizen in the United States of America, you have a similar right as a shareholder of a company.

In fact, the United States Constitution was to some degree that, you know, the model of a CEO as president, et cetera, that was intentional on the part of the founders. So, you know, if you're a citizen, you get to vote. Well, if you're a shareholder, you get to vote.

Well, who do you vote for? Well, if you're a citizen, you get to vote for members of Congress or the president. Well, if you're a shareholder, you get to vote for the board of directors. As a citizen, you can go to a town hall meeting and speak up. Well, as a shareholder, you can attend the annual meeting and speak up. How much do you have to own? Just one share. And you can speak at the meeting. Even a fractional share will get you in the door.

And by the way, it's not usually in the door. It's almost always a log on. So you can do that and you can ask questions.

I just did that with a major bank and was able to ask some questions. Citizens in some states can put a proposal. They call it initiative. You put a referendum on the ballot and all the citizens vote for it.

Well, it's not easy. You have to gain signatures. Well, in the shareholder world, if you own $2,000 worth for three years, you can also put a proposal on the ballot. And that enables you to speak at the annual meeting or delegate that to somebody else. And you put your question and your case before CSER, before the CEOs, the CSER EOs of American corporate life.

Yeah. And quickly, Jerry, and we'll pick this up after the break, but how do you actually get one of those proposals on the agenda? How does that work? Yeah, that's something we help with because there is a paperwork kind of thing. It's not easy to do. So we've been working with financial advisors.

We don't really work with individuals, but a financial advisor can help the advisor themselves can put these forward, or they can work with a client to put it forward. So there's certain kinds of paperwork that you have to put forward. You have to write it a certain way. There are word limits. There are deadlines.

Again, just like Paul had to know Roman law in order to use it, we have to know rule 14A8 of the SEC code in order to use it. But once you know how to use it, then it's in muscle memory, and it is that for us. And you get to have meat. Almost every single time we've done a proposal with somebody, there've been meetings with executives at the company beforehand. So there's a lot of ability to speak to kings with us.

Yeah, no doubt. We're talking with Jerry Boyer, our longtime economist. We're talking corporate engagement today.

Much more just around the corner. Stay with us. We'll be right back. Great to have you with us today on Faith and Finance Live.

I'm Rob West. With me, our longtime economist and regular contributor, Jerry Boyer. We're talking today about corporate engagement as we enter shareholder meeting season for public corporations. And before the break, Jerry was sharing with us how proxy voting and shareholder resolutions work. And Jerry, for all intents and purposes, this is a relatively new idea that those who hold to a Christian worldview are showing up and entering this conversation in this way.

Is that right? Yeah, that's absolutely true. Evangelical Christians, if that's the moniker you want to use, or born again Christians, or those who hold the historic faith, however you want to describe us, we're really new to this. There have been people in the past who've been sort of faith aligned, but it wouldn't really be the biblical agenda. And as we get into what I'm seeing on the proposal, it's shocking to see how often the faithful tithes of church members past are being used by current church funds to undermine a biblical worldview. But yeah, those of us who actually believe in what the Bible says are really very new to this process.

I think there were some wake-up calls, some of the stuff that Disney did, for example, was a wake-up call for a lot of Christians, or Target, some of the stuff that they did, which caused us to say, hey, wait a minute, what's going on? Well, it's been going on a long time. We just didn't know what was going on, and it's now coming to fruition.

You know, like the wheat and the tares, okay, the tares are showing up as tares now, weeds, and so we're kind of getting into there. I mean, the thing is, we have to avoid the temptation of just passive outrage at a distance, and that's largely what I've seen from conservative evangelicals up until now, is it's just terrible. It's really bad what's happening. Or an ever-growing boycott list. I mean, eventually you have to shop somewhere, right? As opposed to, wait a minute, let's change the culture of these companies, where maybe the other side thinks maybe they need to do the boycotting. You know, like they keep trying to boycott Chick-fil-A, but people like the chicken sandwiches do much, so it doesn't work.

So, you know, boycotting is a defense maneuver when you're losing the battle. Corporate engagement is a way to move things in our direction. Yeah, and although there's a variety of issues being discussed, Jerry, when you and others engage in this way, typically at the core of this, it seems like it's a call to return the company's focus to the core business and get out of politics and other issues that they shouldn't be concerned about. Would you agree with that?

Yeah, I agree. We're not trying to make these into conservative companies or companies spouting conservative propaganda. We're not trying to make these companies make Christian professions or anything like that. We're essentially trying to get them out of the culture wars. Now, it just so happens that from my standpoint, when they come down on a side, they're almost always coming down on the wrong side.

But I don't want them to come down on the right side either, frankly, for most of these culture war issues, because it's not their core competence. It's not their function, right? A family has a function. Church has a function. Business has a function.

School has a function. And I just don't I don't trust corporations to be able to know how to adjudicate culture war issues. So, you know, basically, I don't know of any company that came out against abortion after Roe versus Wade was overturned, but a lot of companies came out in favor of it. So we didn't come out to these companies and say, well, you need to reverse and now denounce abortion.

We just said, stay out of it. Not because we don't have views. I have very strong convictions about abortion just because that's not a company's role. The other issue is there's a lot of religious liberty issues. There's been a lot of de-banking of Christians or de-platforming of Christians because pretty much, you know, there's a lot of the Bible that some people point at that and they say that's hate speech. So if you can define biblical content as hate speech and they have anti-hate speech codes with these major banks or with these technology companies, what do you get? You get cancellation of Christian content under the label of hate speech. So we've pushed to say, let's get rid of these vague terms like hate speech. We want very specific language about who you can ban and who you can't. We don't want to leave it up to you, corporations, because, again, we don't think it's your core competence. Yeah. Now, Jerry, I know you're engaging both corporations as well as government funds these days.

So explain the difference between the two with regard to engagement. Well, the government fund is over sort of on our side. It's the investor, right? So what we do is we help governments to engage properly when they're investors.

So just like, you know, you might own a share of stock or maybe you have money in a 401k plan or you have money in an ETF or a mutual fund. Well, these governments have these large pension plans and they have a fiduciary obligation to invest for the good of the retirees and also to vote in a way that's good for the retirees. So whatever you might think about this particular issue, if you're a Texas pension fund or school fund and you're funded by oil and gas royalties, then it doesn't seem to be very fiduciary to your state. If you're out there voting for decarbonization or voting against the use of oil and gas, we can have a debate about that.

I've got my opinions and other people have their own opinions, but it doesn't seem to be in the interest of Texas to be undermining its own industry. So what we're seeing now is we've helped create proxy guidelines that governments can adopt and they're starting to do it so that they are voting for get out of politics. They're voting for, you know, do not be pushing these companies to get out of the oil and gas business because it's not good for shareholders and it's not good for our local economy and let's put everything through the lens of what's good for the shareholder. Now we call that fiduciary obligation, but it's there in New Testament parables. You know, the parable of the talents is essentially a fiduciary parable. It's about when you entrust assets to somebody, do they use them for your benefit or do they use them for their own benefit? Yeah, that's well said, Jerry.

Can you share some updates from this year's shareholder meeting season, which is now well underway? Yeah, we're seeing a whole lot of stuff from Christians now and or conservatives about de-banking, about de-platforming, and about religious discrimination based on religious or political view. So the debate is shifting. None of them are winning. They're not even getting very good votes. So we don't have a ground game yet.

I'm just going to be honest about that, right? We're putting the proposals forward, but we don't have a get out the vote effort. So that's, you know, that's on the to-do list. So we're really shifting the debate. And I'm seeing when it comes to the big companies, instead of it being 10 to one proposals or 20 to one proposals from them compared to us, it's now getting more like 40 or 50 percent.

So we actually really have a debate going on now. We've had a lot of meetings with companies. Some companies have responded very well and made changes and said, for instance, J.P. Morgan Chase got rid of, quote, social risk as a cause to de-bank someone, because that can be anything, any group. If you're banking Sam Brownback and somebody says, well, I'm mad because I don't like his politics. Well, that's social risk. Right. And you can cancel them.

But they got rid of social risk in their WePay app. So we're making progress with this. But it's a slow progress.

And I'd urge Christians to be part of the fruit of the spirit is patience. The other side's been at it for 40 years. I've been at it for about four. Most of the new entrants have been at it for about one. So it is going to take some time to get things moving in the right direction.

Jerry, just about 45 seconds left. What would you say one or two issues you see coming on the horizon? I think the big one that nobody knows about is just how much activists are using the proxy voting process to attack Israel, either by pushing companies to divest from Israel, pushing travel companies to keep people away from Israel or pushing technology companies and arms manufacturers to disarm Israel. It's sneaky. It's hidden in the details of these things. A lot of Christians are going to get a proxy statement. They're not going to know it's there. They're going to throw it away. Christian asset managers are going to say, oh, well, this is risk of doing business in a conflict zone.

I guess we'll agree with it and end up voting against Israel. Wow. Well, we'll have to leave it there for today, Jerry, but I'm sure you'll have more on that in the days ahead. Thanks for stopping by, my friend. Thank you. God bless.

That's Jerry Boyer, our longtime economist, also president of Boyer Research and a regular columnist for World News Group at WNG.org. Your calls are next, 800-525-7000. I'm Rob West and this is Faith and Finance Live. We'll be right back after this break. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. Hey, thanks for joining us today on Faith and Finance Live. I'm Rob West. All right, it's time to take your calls and questions today. The number to call, 800-525-7000. Again, that's 800-525-7000. You can call right now. Let's dive in today.

We're going to begin in Chicago, Illinois. Larry, thanks for calling, sir. Go ahead. Hi, Rob. How are you?

I'm doing well. Thank you. By the way, I want to start by saying congratulations to you and your staff for doing an extraordinary job. Well, thank you. That's very kind, sir. And your services are much needed. I appreciate that. I'm delighted to do it. It's an honor. Okay, do you have my question there or should I repeat it?

Yeah, if you could repeat it, that would be great. Anyway, Rob, I'm just wondering, I have some stocks and right now I also have an annuity and I've annuitized it and but I've discovered that the company that I have the annuity with will not charge me any cancellation fee if I decide to extricate myself from it. And I was thinking about doing that and combining it with my present stock funds. And I'm just wondering, is there a way that maybe I can get back to the same amount of my monthly income that I have from the both? Potentially, potentially, yeah.

So you can, in some cases, get out. In other cases, once you annuitize, you cannot. But they're saying they'll give you a lump sum amount even though you've annuitized. Is that right? Yes.

Okay. And what are they saying that they will give you? Do you have the cash value that they'd allow you to take out? The entire amount. Basically, about 100,000. About 100,000.

About 100,000. All right. And then what other investable assets do you have currently, Larry, outside of the annuity? I have about $30,000.

I have about $10,000 in the liquid cash. All right. And the 10 is in addition to the 30 that you mentioned a moment ago? It's probably yes.

I would say yes. Okay. And then what is the 30,000 or there about invested in currently? Anything? ETF, Vanguard ETF.

Vanguard ETF. All right. And what is your work status? I'm presently unemployed. Well, I'm part-time.

I'm a homeless person. I'm part-time. Okay. But you plan to continue working and you're looking for full-time work?

Is that right? Well, I look for work as it comes, to be honest with you, Rob. So if a client contacts me to do some work, then I'll consider taking it on. Got it. All right. And what are you getting currently from the annuity per month? About $500. About $500.

Okay. Which is not bad, because if we were to take that $100,000 as a lump sum and you were to invest it, and you were to invest it and try to convert it to an income stream, I'd tell you, you should probably only take 4,000 a year, which is $333 a month. You're getting 6,000 a year from that annuity, which tells me it may be better for you to leave it there if you need the income. Now, if you were to roll it out and pull the 100,000 as a lump sum and invest it, would you continue drawing on it?

Is that necessary for you to cover your lifestyle expenses? I don't know. I don't understand the question, Rob. Okay. So you're pulling $500 a month from the annuity, and that's your annuity stream. Is that correct? Yes. All right. If you canceled that and instead took the 100,000 lump sum and you were to invest it, would you be looking to continue to pull $500 a month out of that 100,000 that's now invested outside the annuity? Yes, I'd like to, yes.

Okay. And what I would say is that's a little bit more than I would like for you to take. Typically, if we're investing a lump sum and we're pulling a current income stream out of it in an attempt to try to preserve the principal balance and not see it decline over time, we'd like to try to limit our withdrawal rate to 4% or less per year. And 4% on 100,000 is only $4,000. And currently, you're getting 6,000 a year out of this annuity. And so what I'm saying is if you're looking to continue to draw an income of at least $500, I think you might want to stay where you're at, because if you were to pull it out and they're only giving you 100,000, I'd say I'd really like for you to drop your monthly withdrawals to about $330,000 or so.

And if you aren't in a position to do that, you may be better off just sticking with the $500 a month guaranteed. Okay. Does that make sense?

Yes, it does. Yeah, okay. I appreciate that advice very much.

Yeah, no problem. Now, here's the other option. If you can find some additional work that's steady that would allow you to cover this, I mean, I kind of like the idea of you having the lump sum available because this is all you've got. And right now it's tied up in an insurance product.

And I'd love for you to be able to have more ready access to it if you needed it. But if you're going to continue to rely on this for an income stream, I think you've got a good thing going there by getting $500 a month on what is the equivalent of $100,000 lump sum, because that's a pretty good rate of return. And if they're going to guarantee that for the rest of your life, that's not bad because that's a 6% return every year, $6,000 annually, which is $500 a month. That's pretty good. So if you're going to continue to need this money, I'd say leave it where it is, and then just try to pull as little as you can.

Or if you have a surplus because you picked up some extra jobs, then just take that money and sock it away, perhaps even reinvest it in your Vanguard ETFs. Hopefully that's helpful to you, Larry. Listen, I appreciate your call today and your kind remarks about the program, sir.

May the Lord bless you. Well, folks, we've still got a lot more to go here. We've got some great questions coming up, including Sandra in Texas wanting to talk about the challenge for low-income individuals related to housing.

It certainly is. We'll talk about that. And Jordan in Illinois wants to talk about transferring money from a 401k to a traditional IRA. If you have a question, call right now, 800-525-7000. By the way, we'd love to have you support the ministry. You can do that at faithfi.com.

Just click Give. We'll be right back. Thanks for joining us today on Faith in Finance live here on Moody radio. I'm Rob West.

We've got, it looks like three lines open. You can call right now, 800-525-7000. Let's go back to the phones to Texas we go. Hi, Sandra. Thanks for calling. Go ahead. Well, hello.

I was born in Chicago, but I live in Texas now. So, okay. And thank you for taking my call.

Sure. So, um, it seems to me that the biggest contributor to poverty is the rising cost of housing and the lack of affordable housing. And, um, uh, it seems like the main factors are student loan debt that is taken into consideration when you apply for a mortgage and the inflation under Joe Biden and his policies and Airbnb and verbal that remove houses from the market and flippers and realtors who get that 7% commission, which jacks up the prices of the housing every time it's sold, whether they've done anything to improve it or not. And, um, you know, the influx of illegal people can request the border. Um, um, and it seems like, um, a lot of people are being forced to live in RVs and tiny homes and shipping containers and hotels and homeless shelters more and more. And, um, so I want to know kind of besides habitat for humanity, are there any, well, can you tell me what Christian organizations are doing to help low income people here in the United States find affordable housing?

And I'm talking about people making less than 25,000 a year. Yeah. Yeah. It's a great question.

And you're right. Uh, shortages of affordable housing, you know, is a longstanding challenge here in the United States. It's more acute as of late, uh, driven by the high interest rates in the low inventory, which is really exacerbating the issue because, um, you know, we've got housing prices now, you know, average homes somewhere between 380 and $400,000 on top of at least it they're, they're higher than the recent, you know, a couple of decades, they're probably in line with historical averages, but certainly with these higher interest rates, uh, higher than what we've seen in the last 20 years or so, you know, that's just making it really challenging, especially for, as you point out, low income Americans looking for affordable housing, it can be really challenging. Um, and you know, there are folks that are looking to, uh, encourage affordable, you know, housing at the local level. Um, we're seeing, you know, a number of housing efforts, both nationally and locally, you know, with everything from mortgage programs to construction, uh, HUD has a number of programs that, you know, really has an objective of increasing the supply of affordable housing. And they have some programs that do that, that makes make grants to nonprofits, uh, to develop affordable housing units for low income buyers. Um, and so you you'd have to look, you know, obviously market by market as to what organizations are doing great work and taking advantage of some of these programs.

I wouldn't, I don't have necessarily any names to mention right off hand, but I would agree with you. It is a major problem and we need more and more of these programs that can solve for this, especially given the fact that, you know, we have these lower inventories now, largely driven by the fact that, uh, you know, we're seeing, uh, you know, the millennials, uh, are now reaching the age where they're buying single family homes. We've got more people working remotely. So they're moving out of densely populated areas to urban areas. You mentioned a number of the factors that are playing into this.

And so we're now at some of the lowest levels in terms of home affordability, which just gives, you know, more rise to the need for these types of programs. And the bottom line is there's just not enough of them. Um, now when you can combine some of these efforts with great organizations doing the work in the name of Jesus, I think it's even better because there's an incredible ministry opportunity there to your point. Um, you know, what are some of those specific organizations other, um, than, uh, than what you mentioned?

I don't have any right off hand, but I, I think you've put your finger on something Sandra. And what I'd like to do is maybe have our team look into what are some of those organizations that are looking to solve this beyond Habitat for Humanity, which is a great one, and see if we can do a program on this in the future, because I think it's a real need. Uh, but I appreciate you raising it. Thank you for, uh, for calling today.

And as believers, hopefully we can step into this significant gap that exists here today and, and provide not only practical solutions, which home ownership is one of those basic of needs, uh, on top of just an opportunity for the gospel. So thank you for calling today. We appreciate it. Let's go to Aurora, Illinois. Hi, Jordan. Go ahead. Hey, Ron. Hey, I'm kind of tying in now with your last caller. I have a 401k from a previous employer, uh, just left it there for the last nine or 10 years now.

And it's done pretty well anyway. I'm considering moving that money or a portion of it to an IRA. Um, part, part of the reason is we may need to pull some of that money for a, um, down payment on a home. We're trying to find a house right now. And it's, uh, been tough trying to do that, to find something that will be affordable as far as the monthly payment is concerned. But I just wanted to ask if there's any pros or cons, anything that, um, maybe I should be aware of that I'm not, um, as far as moving, moving that money or a portion of it. Yeah.

And would this be your first home that you'd be buying? Not a first, but it's been three years since we've owned. Okay. All right.

Very good. Yeah. I mean, there is an exemption for withdrawals up to $10,000 from an IRA, uh, as long as you're a first time home buyer, but that would not, uh, apply here. Uh, you know, I like the idea if you have a previous employer of moving from the 401k to a traditional IRA, simply because number one, you have more control over the investment options, you know, inside the 401k, you have a limited menu outside in the IRA, you have essentially an unlimited menu of, of investment choices. You have more control over how it's managed. So you could do it yourself.

You could hire somebody, you could find a robo solution. I mean, you've got essentially an unlimited options there, and then you have more control over the fees as well. Whereas inside the 401k, there's some administrative charges that are kind of churning in the background. When you get to the IRA, you can essentially eliminate all of those fees if you want to, and then add them back as you select the investments like mutual funds or ETFs that have management fees, or if you hire an advisor or both.

Um, so there's just a lot more control. Now I realized the problem to our last caller's point about home affordability being at at such low levels because of a number of factors going on here. But I don't love the idea of you pulling it out of the the IRA just because that's going to be expensive money. If you're under 59 and a half, you're going to have the 10% penalty, then you're going to have the taxes on top of that. And so you know, perhaps one option is you guys suspend new contributions for a period of time as you focus on building up that, you know, down payment and then resume those retirement contributions down the road.

I mean, that would be one option. If you have with your new employer, if you have any matching, I'd probably at a minimum take full advantage of any matching because that's free money. But then maybe you don't go beyond that to our typical recommended 10 to 15% into retirement savings, but you, you know, direct that money to your down payment savings account, if you will. And you know, maybe you're taking an extra year or two at the most to save build up that down payment, all the while waiting for interest rates to come down because we believe over the next 18 months, we are going to see rates considerably lower than they are today.

Question is just when does all that make sense, though? Yeah, so the potential for earnings is greater or equal to in the IRAs also is what you're saying? Oh, yeah, I mean, the exactly the same. It really comes down to which investment options you choose. The 401k and the IRA are identical in terms of the account type. They're both tax deferred vehicles. So the question is just which investments do you choose? You've got a menu of choices in your 401k, you've got a bigger menu in your IRA, and it's always going to come down to the performance of those underlying investments you select.

So just as much upside potential, just as much downside potential, just more flexibility. Thanks for your call, Jordan. God bless you guys. We'll be right back. Great to have you with us today on faith and finance live. I'm Rob last day before we head back to the phones here on a Wednesday. Let's jump into the mailbag.

What is that? Well, we have folks sending us emails all the time with questions where they don't want to be on the air or they would just be in a place where it's easier to send it in. And so we try to tackle a few of those questions. And to help us do that is my producer, Amy Rios. And Amy, I understand we have some good ones today, right?

We do. And there's four today. So let's get started.

And first off is Rick. I recently read an article about a bank, our bank participating in things that do not align with our Christian values. And we want to relocate our money to a more trustworthy bank.

Do you have any suggestions? I do. Yeah. You know, more and more people are really finding value in aligning their values as Christians with their banking partners, financial institutions. And we have an underwriter here at faith and finance live, as you know, Amy Christian community credit union, and folks can go to join Christian community.com and you'll find that their values align with yours as you both seek to honor God and the management of his resources.

And what's really cool is that they do a lot to not only support church buildings and ministries, but they also take a portion of their profits and direct those to Christian work and around the globe, which is great. Yeah. And that was really kind of an impetus for me. I did recently open an account with him myself, and I'm just trying to start to navigate that process.

It's not difficult, but I just haven't spent much time yet, you know, getting the funds back and forth and stuff, but it's very, very positive experience so far. So we're glad to be doing that. So, okay. So next, Steven, do you have any thoughts about indexed universal life policies? I do.

You know, I'm not a big fan. I wouldn't say there's never a place for them, but for most people, I like the idea of separating our insurance with our savings. And so I find it's better off to buy inexpensive term life insurance, get as much coverage as you need, 10 to 12 times your income as a starting place, and then invest the difference into a 401k or IRA or both, and use that as a vehicle for saving. An indexed universal life policy is essentially allows you to protect the downside. So you'd have a floor on your investments, but you don't get all the upside of the particular index that your policy is tied to. So let's say it was the S&P 500. You might get capped out at 5% growth, even though the market's up 15 or 20%. And when you do that, you just really miss out on your growth potential. While giving yourself that downside floor, I'd rather you have unlimited potential. And you can do that through a retirement plan instead of an insurance product. Perfect.

Okay. So next, Edwin writes, we want to move to Florida and build a new house. And we are thinking of using equity in our current home to do this. Is this possible or is there a better way to go about it?

Yeah, it's certainly possible. I would probably think about using that new home. And, you know, if that's going to be ultimately where you live, then get the mortgage on that property. And then when you sell the existing home, pay it off. But I'd prefer you keep the mortgage tied to the actual property. And that way we're not relying on one property. When we own both, let's keep the mortgages separate and tie it to the property that it actually goes with.

Okay. And then finally, Jeff writes, my wife and I are 50 years old and we have around 105,000 right now in my 401k. We're trying to catch up on our retirement savings and would like to have around 2 million in the next 10 to 12 years.

As such, we have 100% of my 401k funds invested in stocks. Should we stay this aggressive given our age and our goal? You know, that's ultimately up to you. I would just say generally speaking, a 50 year old couple, even if you feel like you're a little behind, I'd take a more sure and steady approach. A proper, more accurate, diversified portfolio recommendation for you at your age would be more like 60 at the most, 70% in stocks, which would mean you'd have somewhere between 30 and 40% in bonds. Just because you don't want to take unnecessary risk, even though you're trying to play catch up, that can work against you, especially if we get into a challenging market environment.

So I think the bottom line is if you're willing to be a little more aggressive, that's great, but I probably wouldn't go above 70%. Okay, well that's it for today, Rob. Thank you so much, and if you want to send us an email and ask Rob a question that way, just go to moodyradio.org forward slash finance and you'll see a place to do it there. All right, grateful for you, Amy. Thanks for joining me today. I really appreciate it.

You're welcome. All right, let's go back to the phones. We'll try to round out the broadcast here with a couple of questions to Elgin, Illinois. Hi Kim, how can I help?

Hi, thank you for taking my call, and I currently have a trust on my house that I've had for probably around 15 years, and a friend of mine recommended this lawyer that was a friend of hers, and that lawyer that made the trust has not been responding to any of my phone calls or messages in like the last few years. I've tried to message her and say that I would like to, you know, make some changes possibly, just revisit the thing, and I get no response whatsoever. So I'm a little bit concerned about that, and I would like to double check on what I've got going and maybe, you know, change a couple of things, and I'm not sure if you could recommend somebody or a pass to doing that. Yeah, yeah, happy to, Kim, and I'm sorry to hear about that. You know, maybe she's no longer practicing. Do you have reason to believe maybe she got out of practice altogether? I really don't know. It's like I know that her husband was a police officer for Chicago, and they had young children, and they lived in, you know, the very expensive area of the north side of the city, so because I had been to her house to have this done, and my friend that introduced me, she's passed away a little over a year ago, so I don't have any way of, you know, connecting.

Sure, no problem. Well, the good news is that a revocable trust can be updated by another attorney, and so you've already done the hard work of putting in place. Perhaps you just want to make some updates. You want to change how, you know, your assets would be distributed.

That can be done by anyone. What I would do is reach out to a certified Kingdom Advisor there in Elgin, and the way to do that is just go to our website at faithfi.com. That's faithfi.com. Right there at the top of the page, it'll say find a professional, and if you choose either financial planning or investment as your category, and then put in your zip code, you'll get a list of CKAs in your city. You'll just call them and say, hey, I listen to Faith in Finance Live. I'm looking for an estate planning attorney who shares my Christian values.

They will all have a godly estate planning attorney that they work with, and any one of those estate planning attorneys would be able to help you update this, okay? Oh, wonderful. That's great. I was hoping you would have that information for me, so thank you so much. I listen to your show and I really enjoy it. Well, thank you. That's very kind, Kim.

We'll call anytime if I can ever help you further, but again, that website, faithfi.com, just click find a professional. All right, we're going to finish today in St. Louis. Maureen will be our final caller. Go ahead.

Hello. I'm 71 years old and still employed. My employer, the rumor has it, is getting ready to possibly transfer our pension to an annuity, and part of that, I think, is going to be an option for lump sum, so I'm wondering if you have advice about what to watch out for this trend, this kind of a thing that goes on in the corporate world because I don't think they'd be doing it if it was to the pensioner's advantage. It's somehow going to be to their advantage and not mine. Right, right. Well, you know, this is not an uncommon trend.

You know, we see this happening a good bit. I think, you know, one of the keys is just make sure they have all of your correct information that goes into calculating your benefits, so your dates of employment, your salary history, any survivors benefit you and or you and a spouse if you're married, have chosen, you know, make sure they have the most recent copy of your individual benefit statement because they'll, the insurance company, when they take over the pension, will typically recalculate the benefits, and having that information will help prevent disputes over how much you're supposed to receive once you start receiving your annuity. Now, you may be given that option, it sounds like you're already on to this, of taking a lump sum instead of the annuity.

And in most cases, we advise that you do that. I mean, I think it would be good for you to take and connect with an advisor, perhaps a CKA there in St. Louis, to look over the options once they're presented to you, just so you can understand the pros and cons. And really, you want to understand kind of the the underlying rate of return that's implied by either the monthly income stream for life versus the lump sum just to determine which kind of on paper is the better option. I like the ability for you to have access to the money, which you would get with the lump sum. But in some cases, that, you know, underlying rate of return that is there, you know, would lead you to actually going with the annuity option, just because it's it ends up being a better rate of return over your life. But you just want to look at that. And that's going to take somebody who can kind of crunch the numbers and determine which is the best fit for you, given your overall plan, the other assets that you have, any other known income sources you'll have other than Social Security, all these other considerations.

So as long as you just make sure all they they have all the current information, then as soon as you're presented with your options, that's where I would take that to an advisor to do a little bit of number crunching and give you some advice. Does that make sense? Yes, sir. Thank you. Okay. All right. Very good, Maureen. This isn't something to worry about.

I think you just want to know what your options are and and make the best decision and there's not one right or wrong decision, it really is going to come down to what is the best thing for you. So all the best to you, Maureen, if we can help you further in the future, don't hesitate to call back. Take care. All right, folks, we are about out of time today. Hey, before we head to the close of the program here, let me just take a moment to mention here in the last couple of months of our fiscal year, that's right here at FaithFi, our year ends June the 30th. This is a really important time for us to close the gap, if you will, on our listener support between now and June the 30th. We still have a ways to go, about a little over $125,000 that we're looking to bring in from listeners like you. And we can do that when you give to support the ministry at any amount. So whether that's a gift of $100 or a gift of $1,000 or $10,000, it'll go a long way. Just go to faithfi.com and click Give. Faith and Finance Live is a partnership between Moody Radio and FaithFi. Thank you to Dan, Amy, Anthony, and Jim. Couldn't do it without them. We'll see you tomorrow. Bye-bye.
Whisper: medium.en / 2024-05-08 18:14:52 / 2024-05-08 18:32:31 / 18

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