What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice.
To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Do you think of yourself as a generous person? Most of us would like to think we are, but do we know why we're generous?
Hi, I'm Rob West. Jesus told us that it's better to give than to receive, and Christians as a group are very generous people. Today we'll hear from Chris Gabriel about why we're generous and how to be more so.
And then it's on to your calls at 800-525-7000, that's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, Chris Gabriel is the author of Wise Generosity, a guide to purposeful and productive living and giving. Chris spoke to financial professionals recently at the Kingdom Advisors Conference in Orlando, but his keen insights on why and how we're generous apply to all of us. There's a very simple explanation for why we behave this way and why human beings have a drive to behave this way.
God, God made us this way. And so all roads of generosity, all conversations about generosity ultimately lead to God. Maybe not immediately, maybe not initially, it's not the first thing that comes up in the conversation, but if you're having an opportunity to share your own story about giving and priority and purpose and meaning and money, it's going to be ultimately a more satisfying answer. There's something about generosity and conversations about generosity that are extraordinarily powerful, and I don't think that's by accident. Who's the most generous person who ever lived?
Jesus. There's a generosity mindset also that is the counterbalancing force to what we see in the wider world and what we might ourselves fight against and what our clients certainly fight against is that prevalent scarcity mindset that says whatever you have, it's not enough. It's one of the biggest lies that the enemy hands to us in our lives. The contrast to that is God's abundant economy, God's mentality of limitless opportunity. And how do we access that most directly in our work and in our lives? Through our giving and our generosity. That's the way in which we engage with others, and not just with money, across all dimensions of our lives. And that's what's really important.
This translation of Proverbs 11 24 is one of my favorites. Life gives to the giver and takes from the taker. And isn't that the truth?
And why is that? Because that's how God made us. That's how God wants us to live.
That's how we pursue the kingdom. But I do want to give you two tools that are part of this toolkit that may help you engage in conversations about giving in ways that help unlock the mystery of it. And really the whole point of this process is to do two things. It's got a positive purpose and a negative purpose. The negative purpose is to remove the barriers to giving that keep people from giving at all or giving as much or in the way that they should.
And what are those barriers? It's just this sense of identity when it comes down to it. People don't see themselves as generous. They look out into the wider world and they see other people who they label as generous and say, oh, that's not me.
So I guess I'm not generous. The positive reason for giving is affirmative. It's illuminating and presenting opportunities to serve God and to serve others through giving. And so this whole system, this process is designed with those purposes in mind.
We're going to look at two things in particular. The first are the three expressions of generosity, kindness, charity, and philanthropy. So kindness is the most common form of generosity. It's everywhere, I'd argue. It's most of what makes life meaningful and enjoyable comes from kindness, simple human kindness.
Would there be more of it in our lives than in the world? I'm going to focus more on charity and philanthropy because those relate more to our work as advisors. Those terms are sometimes used interchangeably.
I suggest that they are distinct. Charity and philanthropy are two different approaches to giving, each of which is meaningful and relevant and appropriate, but each of which is going to resonate differently with different people. So one of removing the barriers to giving is to help you and your clients appreciate which you are. Are you more charitable or more philanthropic? Charity essentially is people helping. You are engaged in giving in a way that directly benefits the lives of others, either individually or in a group. Philanthropy is problem solving.
It's looking at a wider problem or issue in society or in the community and figuring out what needs to be done in order to address that problem. Which is better? Ah, trick question. They're both really important and good. So we're going to see where you all are thinking on that topic with that idea. Are you more charitable or more philanthropic? Are you more interested in helping people really tangibly getting involved in giving situations in which you're going to be seeing firsthand the benefit of the giving that you do? It's going to be more face to face, maybe more one on one, a little bit more emotionally connected or are you more about what's wrong in the world and what can I do to fix it?
How can I be involved in solutions to bigger problems, et cetera? That's author Chris Gabriel. You can find out more about Chris at wisegenerosity.com. Your calls are next 800-525-7000. I'm Rob West and this is Faith and Finance, biblical wisdom for your financial journey.
Stick around. Every day we hear life changing stories from listeners just like you who see money and possessions as tools to invite more people into God's kingdom. Instead of chasing wealth, you've chosen to embrace God as your source of love and provision. At Faithfi, we're passionate about meeting people where they live and work through our national radio program, app, resources and website to influence widespread positive change in our culture. Please consider becoming a monthly partner at faithfi.com slash give. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states. Guided by a mission to love and value people and a goal to redefine the mortgage process, Movement seeks to help others achieve their financial goals. You can find out more at movement.com slash faith. Movement Mortgage LLC supports equal housing opportunity, NMLS number 39179.
For licensing information, please visit nmlsconsumeraccess.org. Hey, great to have you with us today on Faith and Finance. We're so thrilled that you've joined us today. We've got lines open. We're ready to take your calls today. 800-525-7000. That's 800-525-7000.
You can call right now. Before we head to the phones today, some interesting info in the news today. Americans can't stop apparently spaving. That's right. This is essentially spending more to save more, also known as spaving.
That's exactly right. It's a common pitfall. The opportunities for so-called spaving are nearly everywhere, whether it's the lure of a limited time deal or a buy one, get one free or tacking on additional items to get to bigger discount or simply to reach the free shipping threshold. But spending to save can actually lead to excessive buying habits and high interest credit card debt if you aren't careful. By nearly every measure, Americans are financially strained, yet even as inflation and high interest rates squeeze budgets, consumers continue to fall for these financial traps. So what do you do about this so-called spaving that is spending to save more? Well, here's a couple of ideas, create some shopping hurdles.
If you're shopping online, delete stored payment details. That can create a purchase hurdle that forces you to think through your buying decision so it's not just the instant click of a button. Set some time rules. When in doubt, sleep on it. Give yourself 24 hours to think through a purchase before you hit that buy button.
Chances are you will have moved on. Do the math. For some, buy more, save more deals. The percent discount is often the same but disguised as a greater value.
For instance, getting $20 off $100 is no better than $10 off $50, so don't let this fool you into buying more. And then finally, pay with cash. Buying big ticket purchases in cash can also help to avoid impulse spending. You're less likely to part with your hard-earned dollars on something you didn't plan to buy or don't really need when you're handing over actual bills. In fact, the studies say you'll spend 30% less if you spend with actual cash, so something to keep in mind.
Maybe a new term for you, spaving. Just keep on the lookout for them luring you in to save more by spending more. It doesn't always work out in your favor. All right, we've got some lines open today. We're ready to take your phone calls, 800-525-7000. You can call right now.
Let's go out to Texas. Hi, Daniel. Thanks for your call, sir. Go ahead. I'm just, before I started something, I wanted to make sure I was in the right. I'm hiring a young man during the summer to help me with my small agricultural operation that's been normally done, just me and my wife and family. But it's a lot of work, and I have the opportunity to get help, so when I pay this young man, do I 1099, do I report it, or do I have him self-reported and just making sure I'm in the right?
Yeah, absolutely. And so I think the key here is you just need to keep good records of all payments to a hired hand. You'll want to check with your CPA, but you can probably just pay this person, and typically would, as a contractor if you end up paying more than $600, which you will. You'll need to file what's called a 1099 NEC. That stands for Non-Employee Compensation, and your CPA can help you with that, too. I would also make sure you have adequate liability insurance in case this person is injured on your property or working for you offsite. But yeah, it's going to be a 1099 that you'll file, and as long as this person is 16 or older, you should be in good shape, and you need to check on things like the minimum wage and overtime hours if they work more than 40 hours in a week, that type of thing. And then you have to decide what kind of contract agreement you're going to have, if any.
But generally speaking, with regard to the compensation, it's going to be the 1099. Perfect. Thank you for answering the easiest question I think I've heard you answer yet.
No problem. Hey, listen, all the best to you. What's going on out there on that ranch, Daniel?
What do you have? Well, I've worked every day for 35 plus years, and I am now just rising my own beef. I got my chickens and just a long list of honeydews, and it's kind of overwhelming and I'm a little bit slower than I was, but I do appreciate your ministry and your advice and all that you are part of. Well, thank you. I appreciate that, and all the best to you.
That sounds like a great operation out there and probably a fabulous part-time job for a student over the summer months. So thanks for checking in with us. We can help further down the road. Let us know.
To Wyoming. Hi, Steve. Go ahead, sir.
Okay. I cashed out $16,000 in stocks that I have for the purpose of giving $50,000 into our church building fund. And the balance of that $50,000 is going to come from our savings account. So will I have any tax liability for cashing out the stock that I should be aware of?
You certainly could. What type of account did it come out of? Was it from a taxable account or was it a retirement account? No, it was, well, I got a disbursement every year from the stock before I cashed it out and they gave me the option of cashing it out.
So it's not a retirement stock as such, no. Okay. So eventually, so you've already been taxed on this as a part of your compensation. Is that right?
No, I don't think I have been, no. Okay. So you just need to understand the implications of that. So typically, you know, if it's a part, so would it be like a stock purchase plan? Is that right? Or was this just a part of your compensation as they gave you shares of the company? That's right.
That's right. Okay. And so did these vest over a period of time? When did they become available to you? I mean, they probably became available 30 years ago, so I was fully vested back when I worked at the former employer.
Okay. So what you're probably going to have is capital gains that you will have to pay on this. You're going to want to check with your CPA just to see, depending upon how this was structured, you know, when you receive these stock awards, they're typically taxed on their value as of the vest date.
That's the date they became available to you. And then they're treated as income and you pay tax on them. And then from that point forward, if you don't liquidate them, you then can incur a capital gain.
And that is only based on the sale. So what we would have to do is your CPA would help you establish the cost basis, which was the value when you received it or when it became taxable to you if it was a stock option that was vested. And then any gain from that point forward is a capital gain. And that's going to be based on the amount of taxable income you have in the year of the sale will determine whether you pay zero, 15% or 20% on the appreciation, the difference between what you sold it for and what you bought it for or received it at.
So there's a couple of kind of hoops to jump through here. And then with regard to you being efficient in this gift, I think given that you're going to be giving a large gift in one year, there's a good likelihood that you're going to be able to go over. Well, certainly with a $50,000 gift, you will, you'll go over the standard deduction, which means you'll be able to itemize your taxes and claim this charitable contribution to a not for profit. In this case, it's I think you said it was your church and then take a tax deduction against that. So the first question is, talk to your CPA about the taxation related to the shares of stock. Have you already recognized them as income previously? And then do you now have to recognize a capital gain? And then secondly, make sure you get the deduction for the amount that you are giving. In the future, what I'd rather you do is send the gift of the stock to the church before you sell it. Let them sell the stock.
You get the full tax deduction for the full amount and you miss the capital gain, but you have to give it before you sell it in order to do that. I've got to take a break. Stay on the line. We'll talk a bit more off the air, Steve.
We'll be right back. What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values? How about someone who will take the time to explain your options? Certified kingdom advisors are professionals who meet high standards and competence and integrity. And have been trained to offer biblical financial advice.
To find a certified kingdom advisor in your area, visit faithfi.com and click find a CKA. Paying too much for health insurance? Frustrated by high deductibles and increasing premiums?
There's a better way. Christian Healthcare Ministries, CHM is a Christian community delivering a faith-based solution to the high cost of healthcare. Take control over your healthcare costs with a program from CHM that could save you up to 40%. Learn more and enroll today at chministries.org slash faithfi. That's chministries.org slash faithfi. Great to have you with us today on faith and finance. We're taking your calls and questions today. We've got some lines open, so if you have questions, we'll try to find you an answer. We'll promise to do it in a way that's encouraging to you, but also in light of biblical wisdom. Call right now, 800-525-7000.
That's 800-525-7000. But first, let me mention here, we're actually headed toward the end of our fiscal year here at Faithfi. Our year ends, if you will, June the 30th, which means as we finish out our year from a budget standpoint and try to finish strong and prepare with our planning for the year to come for ministry under Faithfi. As you might imagine, we've got financial goals to hit, and as a listener-supported ministry, this is always an important time for us to hear from you. We would just simply ask that if you've benefited from this ministry, maybe you listen regularly and you'd like to be a part of the Faithfi community in supporting this work, we'd certainly be grateful and now more than ever. You can just head to faithfi.com, that's faithfi.com, and click Give, and a gift of $25 or more would allow us to send you our brand new Rich Toward God four-week study as our gift to you. The other way to get involved is through by becoming a Faithfi partner, and this is just someone who supports the ministry at a minimum of $35 a month or more, and for those partners we're able to send not only our new quarterly publication that's going to be coming out starting this summer, but pre-release copies of all of our studies and devotions. So, the current study Rich Toward God, our next study coming out in July called Look at the Sparrow, a 21-day devotion on fear and anxiety related to money that I think will be a real encouragement to you, and then some great studies planned for the balance of the year. We'll send you a pre-release copy of those and just keep you informed on the ministry as somebody who's kind of in the trenches with us.
All of that is available and would certainly be a blessing to us when you visit faithfi.com and click Give. All right, let's head back to the phones. Let's go to Nashville. Hi, Lori. Thanks for calling. Go ahead.
Hi, Rob. To diversify my portfolio, is there an insurance stock fund? Yeah.
First question. And then the second question would be, what do you think about fixed index annuity? But I really am interested about the insurance stock fund if one exists. Yes.
So, let me just make sure I'm understanding. So, you want a mutual fund or exchange-traded fund that primarily invests in companies within the insurance industry as opposed to an insurance product that just has investments in it. You specifically want to invest in the industry of insurance? Yes, sir.
Yeah, there absolutely are. So, again, these would be both in the form of mutual funds, which the only difference between a mutual fund and exchange-traded fund is they're both a basket of investments, so they can allow you to pick a certain sector or segment of the stock market or a specific asset class and invest just in that. But do it in a diversified way, so you're not having to pick all the individual companies. You just invest in the fund itself. Now, mutual funds just trade a little differently. You get the price at the end of the day called the net asset value, and you can only buy it after hours.
You can place your trade during the day, but you'll get the end of the day's net asset value, whereas an exchange-traded fund is similar in that it's a basket of investments, but it trades like a stock, so you can buy and sell it at any point during the trading day. But in your case, you would be looking for those that specifically invest in companies within the insurance industry. So this would include various types of insurers like property and casualty, life insurance, health insurance, could be also brokers and service providers. And so you would be getting exposure to the insurance sector, and you would do that because you think this particular industry has potential for growth and stability. They also generate a lot of steady cash flow and tend to be fairly resilient during economic declines, just because most people don't drop their insurance because they need it. They can, though, be affected by things like natural disasters or a large-scale economic shift. So you would have some sensitivities, just like any sector does.
But yes, the short answer is you absolutely can find those. And you would just want to do a search probably at one of the big exchange-traded funds platforms like iShares or one of those. Okay. And then what are your general thoughts about a fixed-index annuity? You know, I'm not a big fan of fixed-indexed annuities. Just you know, it depends on what you're looking to accomplish.
So essentially, and let's just make sure we're talking apples to apples here. You know, this is where you are looking for steady retirement income based on the performance of an underlying index. And so it could be any number of indexes.
So for instance, take the most famous, like the S&P 500. So unlike owning stocks, you are protected against most losses, but your total upside return is limited. And that's how they protect you on the downside by taking some of the upside. So once you annuitize this during your accumulation period, it's growing based on whatever the underlying index is. So that could be a generally a stock market index. And again, you get a portion of the upside with a floor on the downside. And then at some point, what typically happens is you would annuitize this, which would convert it to an income stream.
Who are these for? Well, they're for people who want to really protect the downside. And so it's very common for that floor to be a 0% where at the worst case, you would break even, but you'd never lose money. And if that's really important to you for this part of your investment portfolio, then this could be an option. But you do have to take with that the minimum return because they might pay a small guaranteed interest rate or return no matter how the market performs. But again, you're not going to get the full upside. There are quite a bit of fees.
So you know, those are going to weigh on your performance for sure. And there's a cap on the return. So they're going to set a limit on the amount of returns you can receive on the upside. So for instance, and this is not every fixed index annuity, but one example would be they might say, no matter how high the index goes, you can only get at best 5% on your money. Even if the index is up 15% or 20% or more.
So I think that's the downside. So my preference is to assume that risk and then build a properly diversified portfolio, take the full upside. But yes, with that, you take the downside, but you mitigate against that risk by having a properly diversified portfolio. And as you age, you'd move more toward fixed income type investments like bonds and CDs and corporate and government bonds, things like that.
But if you feel like you could get more peace of mind by having a guarantee from an insurance company and you're willing to lose access to your capital in part, and you're willing to take the limited upside in exchange for that downside protection, then that's where this could be an effective tool for you. Does that make sense? It does. It does.
So thank you so much. And I'll check the iShares platform for the insurance stock fund. Yeah, that's one of the big ones. If you're looking for other ETF companies, you probably want to look in addition to iShares. You could look at Invesco, you could look at Estate Street, and then perhaps Vanguard would be the other one. You could also check Charles Schwab. I like Schwab a lot.
Any of those will likely have an insurance sector ETF. Hey, thanks for your call today, Laurie. We appreciate you being on the program. We're so thankful you're along with us today. Thanks to my team today, and we'll see you next time. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.
