Many people are using the FaithFi app to help provide the wisdom, community, and money management to stay on track, financially speaking. To date, over 37,000 members are using its digital envelope system, participating in our community forums, and engaging in virtual workshops. And one of the most convenient features is the ability to keep all your accounts in one place for an easy-at-a-glance view.
You can choose from one of three options, depending on your management style, and it's available on desktop or mobile. Go to faithfi.com and click App to get started. If you're struggling with money, living paycheck to paycheck, maybe it's time to put God's financial principles into practice. I'll tell you how, 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. So the first step in making financial changes is to take an honest look at yourself and how you're handling money.
What's not right with the way you're doing it? Maybe you worry about the car breaking down and need expensive repairs. Or you fear the phone ringing because it might be a bill collector. Or you're dealing with the gas or electricity turned off for non-payment.
Maybe you argue with your spouse about money. Or you've stopped giving to your church because you're afraid you won't have enough. Those are all signs that something needs to change. And you shouldn't fear that change. It might be a little scary at first, but when times are bad, change is good. In this case, it will bring welcome relief from your worrying about money. Isaiah 43 tells us, Remember not the former things, nor consider the things of old.
I am doing a new thing. I will make a way in the wilderness and rivers in the desert. The next step is accepting that God's Word contains everything you need to transform the way you handle money. Understanding and believing in biblical truth is essential. Hebrews 4 12 reads, The next step is understanding that God owns it all. In Psalm 24 we find, Because it's not yours. Instead, you'll begin to think about managing God's money. Because you're simply his steward or manager of the resources he's temporarily entrusted to you. And as his steward, God will not abandon you to fend for yourself.
He's always with you as he's promised to provide. Luke 12 24 reads, Once you realize that God will provide, Scripture becomes your guide for changing the way you think and act concerning money. If you've struggled with his financial principles before, now they'll be your guide. The Bible says a lot about spending, saving, investing, and getting out of debt, along with contentment and generosity. Everything you need to know so you can put them into practice.
And that's the next step. For now, just pick one biblical financial principle for managing money. For example, saving. Proverbs 21 20 reads, A budget, a will, a long range financial plan, and so on. If you're not living on a budget or a spending plan, now's the perfect time to draw one up. It's difficult, if not impossible, to save or avoid going into debt without one. And there's no better tool for developing a budget than the Faithfi app. It uses the tried and true envelope budgeting system to plan and track all of your spending.
You can download it wherever you get your apps. Just search for Faithfi, faith and finance. You know, most people will find it difficult to change by themselves. They need someone to encourage them and to hold them accountable. Designate someone to be your accountability partner as you strive to put God's financial principles into practice.
This could be your spouse, a relative, or a friend. Set a weekly check-in. Do this and your chances of success will rise dramatically. Proverbs 11 14 tells us, Where there is no guidance, a people falls, but in an abundance of counselors there is safety.
And Proverbs 27 17, Iron sharpens iron, and one man sharpens another. That's all you need to know to make big changes in your life and stop worrying about money. And I hope and pray you'll get started today. Alright, your calls are next. 800-525-7000. We'll be right back.
L.C., which is not an advisory affiliate, a registered investment advisor, nor do they provide investment advice. Every day, Faithfi is working to meet people right where they are. Through our national radio program, app and website, we're helping people put their faith in God and not in money and possessions. And we're encouraging and equipping Christians to have a passionate pursuit for sacrificially living and giving the money entrusted to them. If you believe in and have benefited from Faithfi, would you consider becoming a monthly Faithfi patron? Learn more about the Faithfi patrons membership at faithfi.com and click Give. Welcome back.
This is Faith and Finance. I'm Rob West. We're taking your calls today. 800-525-7000. That's 800-525-7000. Let's begin in Chicago.
Hi, Lisa. Go right ahead. Well, I was just wanting to ask about a large sum of money that we have put away in a Marcus account. And I believe, I don't remember the exact, I don't know if it's ETF or something like that where it's divided into like three different areas.
We're looking for some place to put it conservatively and just wondering if you know anything about that type of account. Okay. Do you think you're referring to an ETF, an exchange traded fund perhaps? Yes. Yeah. Okay.
Yeah, very good. Well, an ETF is basically just a basket of investments. So those investments could be, you know, based on the movement of the price of gold. Those investments could be all of the stocks in a particular index. Like you may have heard of the Dow Jones 30, the industrial stocks, the S&P 500, the 500 largest companies in the US. Those are indexes and you can buy those through an ETF that trades like a stock. So it's as long as the stock market's open, you can buy any number of shares of that exchange traded fund. And there really are ETFs that track all kinds of things.
So you can find just about anything you're looking for. They can be as conservative or as aggressive as you want them to be. So ETFs are not conservative or aggressive. It really depends on which ETF you're buying. I think we need to back up perhaps and just say what has this money been earmarked for, Lisa? And what is the time horizon on that?
The plan is for retirement. Okay. We're in early 60s. So we definitely wanted to leave it someplace that's not aggressive, but not something that's very slow either. So I get that. And when we've called Marcus and had questions, there is like no financial advisors available.
No. Which kind of is concerned. So I just wonder if that's maybe not a good place to keep it then. Well, they're basically an online bank is what they are. So they're a retail bank which you would use for banking products like a savings account or a CD. Probably not the place you want to go for management of your retirement assets.
So nothing wrong with it. It sounds like what you need. Let me ask a couple of additional questions just so I can have the bigger picture. First of all, this amount that you're talking about for retirement that's currently at Marcus, what's roughly the balance on it? Roughly $150,000.
$150,000. And what other retirement assets do you have like IRAs, 401Ks, things like that? None. Okay. And you said you're in your 60s. How far, just based on everything you know today, how far off is retirement where you'd transition away potentially from paid work? Well, we're hoping still to work maybe 15, 20 years. Okay, yeah.
Great. Well, I mean I'll tell you the biblical worldview of retirement is much different than the culture. This idea that we would retire and cease all productive work at age 65 just to live a life of leisure does not line up with the biblical worldview. It's a really modern concept that really came around about the time we put Social Security in place and, you know, our calling and service to the Lord to be productive and lean into our calling extends throughout our whole lives until God calls us home.
So I like the direction you're headed. Now, we also recognize there may come a time, and you alluded to this, where you would be unable to work perhaps in the same way you are now physically. And if that's the case, that's one of the reasons why we want to save prudently for retirement. So we have something that can supplement Social Security because that was only intended to cover at the most 40% of your pre-retirement income. Most folks live on 75 to 80% of their pre-retirement income in retirement. So that's not going to get it done for most folks, and that's where we save prudently, asking the Lord how much is enough, but then we convert that into an income stream when we get to that season of life.
Now, the good news is you all still have time on your side at the Lord Terry's, and you're in good health. You have the ability for this $150,000 plus whatever you'd add to it to grow for still a good bit of time here. I would say, you know, typically at your age, let's say at age 65, what would be an appropriate mix of investments? Well, usually these days, because people are living longer, we use the rule of thumb, and that's all it is. 110, the number 110 minus your age, so minus 65 would give you 45.
What does that mean? Well, that just means that the stock portion of your portfolio would be 45%, which means the balance of it, 55%, would be in fixed income type investments like bonds. Could be corporate bonds, could be government bonds, they're more stable, they pay an income, they're certainly less volatile than the stock market. And we happen to be entering a period where bonds are going to do well because eventually these interest rates that have been moving up 11 times consecutively from the Federal Reserve in the last year or two are going to start coming down. And as they do, bond prices will go up. So out of that 150, that would mean that, you know, you might put 67,000 or so in stocks and the balance of it in high quality bonds.
And you diversify them in those two asset classes. And the idea would be that although you'd have some volatility and you certainly could lose money, over the next 10 or 15 years, you'd have the ability to grow this so that it's not 150 when you retire, maybe it's 200,000. And, you know, that 200,000 then could be converted to an income stream to supplement your Social Security. And at 200,000 with a 4% withdrawal rate, we might pull out $8,000 a year and expect that the principal would remain the same. So that'd be about $650 a month. Not a huge amount, but still something that you could count on that you could pull out of it. So I think the next step for you is perhaps to hire an advisor who could not only help you with some retirement planning to drill down deeper into the things I just said around what is your budget going to look like?
How much income do you need when you get to that point where you all are more fully retired away from paid work? And what type of vehicle should you grow that money in? And then finally, which is the reason you called today, how should you invest it? And how do you deploy it in a properly diversified stock and bond portfolio? I'd recommend a certified Kingdom advisor there in Chicago, Lisa, and you can find a CK on our website at faithfi.com. To Aurora, Illinois.
Hey, Jeremy, go ahead. I'm trying to set up a 401k. I went on my work website and I have two different options. I have a traditional and a Roth option.
I just want to know what you recommended and how much percentages per check I should put in. Yeah. What is your age? I'll be 37.
Yeah. I like the Roth for you, Jeremy. You'd put in after tax dollars so you don't get the deduction today, but you get tax free growth. So let's say for the next 25 or 30 years, all that money that you're putting in there, it would grow tax free. And then when you get to retirement sometime beyond age 59 and a half, you'd be able to pull out all the gains and you'd pay zero tax and you'd have no required minimum distribution. So you could let it continue to grow as long as you wanted to. So I like that option a lot.
More and more employers are making the Roth option available, and I think you should take full advantage of it. Somebody your age. Like 10 percent, 20 percent, 15 percent.
What do you recommend? Yeah, 10 to 15 percent would be a good target. I mean, especially once you've considered your other priorities, as long as you're giving at the level that you feel like you want to. You've got your emergency fund fully funded, three to six months expenses.
You don't have any consumer debt, so you don't certainly know credit card debt, but no other high interest debt, you know, car loans, things like that. Yeah, if you could get 15 percent going in there of your paycheck every month, you'd be well on your way to having exactly what you need to supplement Social Security in retirement. Awesome. Thank you so much. All right, Jeremy. Hey, God bless you, man. We appreciate you calling. We'll be right back. Stay with us.
Principal loss is possible for Side Fund Services, LLC. Hope for Zambia, empowered by Family Legacy, is a ministry providing hope to vulnerable and orphaned children in Zambia by investing into their spiritual, intellectual, physical and emotional growth and well-being. Whether distributing five million meals each year to students or empowering them to graduate from high school and go on to pursue post-secondary education, we believe that when you educate a child, you change their world. Go to HopeForZambia.com slash faith to transform a life. Thanks for joining us today on faith and finance. I'm Rob West. We're taking your calls and questions today. Lines are open. Eight hundred five two five seven thousand is the number to call.
That's eight hundred five two five seven thousand. We'd love to hear from you. Let's head to Hoffman Estates, Illinois.
W MBI. Hi, Johnson. Go ahead. Hi, Robert. First of all, I want to thank you for your ministry. I got a question. I have a grand. Thank you.
Five months old. And I would like to set up or invest some money for his educational expenses for the future. So my question is, what is the best way to invest? Is it a five to nine plan or a series like savings bond? I know you're not a fan of that, but I was asking for any other custodial accounts I could set up. And I would like to have the opportunity to invest like additional investments also over the years or months.
Yeah, very good. Well, I think the key is let's tackle the education piece first. So anything that you would want to earmark for education, I would put in a 529 college savings plan. I'd go to the Web site saving for college dot com and just run through the questions that they'll ask you, including where you live and so forth in the age of the child. They'll help you determine how much based on your goal you need to put away. But they'll also recommend which 529 plan, meaning which states 529 plan, because each state sponsors one and they're all different.
Which one would be the best? Because it's going to look at any potential state income tax savings by using Illinois's 529 versus perhaps better performance in another state's 529. And you'll be able to make the decision based on the information that's provided. Then once that's open, then you can contribute one time or ongoing. And then that money can be used for qualified educational expenses up to ten thousand for K to 12.
But then certainly for college and beyond college as well. The great thing is it's not going to be counted as an asset of the child. So that won't hurt your ability or his parents or her parents ability to qualify for need based aid if they would. And there'll be a menu of investment options inside the plan, similar to a 401K that you could choose from for the contributions that are made.
And basically you can put in as much as you want. And then if they get a scholarship or a grant, the child does, that money can be taken out on a pro rata basis. If it doesn't get used, it could roll over to another child or you could eventually convert it to a Roth IRA and just let it keep growing for retirement, which would be a great thing for that child to have as they're starting out.
So that would be a really effective tool, I think, for education money specifically. Any money that you want more widely available for use by the child. I would recommend not using a custodial account because in the case of the custodial account at the age of majority, the child gets full control of the money regardless of their spiritual and financial maturity.
And so I like for you to have a little bit more control over how and when they get it. And so what I would do is just open a regular brokerage account at like Schwab, perhaps in either your name or the name of you and your wife. But I do a separate account that's earmarked for the child.
Child's name's not listed on the title of the account, but you know that's its purpose. And then you could again start contributing a systematic amount. And if you use the robo advisor there at Schwab, the Schwab intelligent portfolios, it'd be a really simple way for you to begin on a low cost basis to systematically fund that account. Every time you do it, it would automatically be invested in low cost index funds and then it would just capture the broad moves of the market over the next 15 plus years. And you'd have something hopefully significant to be able to bless the child with at the time and place of your choosing. Does all that make sense?
Yeah, it does make sense. I've got one follow up question for the 529. They live in Missouri, so if I choose a 529 plan which is better performing in Tennessee, and I purchase that one, so is that bound to the state or they can go anywhere they choose to? Yeah, it can be used for any university you want. It doesn't matter which state the 529 is in. You can take that money and send it to pay tuition for any university across the country.
That would not be the case with the prepaid college, but it is with the college savings. Okay, thank you so much. All right, Johnson. God bless you, my friend. Thanks for calling today. 800-525-7000.
Let's finish up in Florida. Joanna, you'll be our final caller. Go ahead. Hi, thank you so much for taking my call. I really appreciate your program.
Thank you. My question is, I have 12,000. I live to 6% of my traditional IRA, and I want to know if I should move it out of the fixed income and put it into stocks, and am I only two years away from needing to take required minimum distribution? I have no debts, I have car, house, and I have the emergency fund.
Okay, got it. I would typically have only about 40% at age 72 in stocks, 60% in fixed income. You're saying you have 12,000 of the 200,000. Does that mean that the rest of it is already in stocks? That's correct, yes.
Okay, so you're wanting to know should you go ahead and move 100% in stocks by taking the 12,000 that's in bonds and moving that into stocks as well? Yes, not in bonds. I actually don't know what it is. It's fixed income. I thought it was just like a money market or something.
Okay. Well, fixed income is a pretty generic term. It often means bonds. It doesn't necessarily automatically mean that. I mean, that's up to you.
It just depends on how aggressive you want to be. Again, typically, I would look for you at this age to have probably at the most 40% in stocks, 60% in bonds, just because it's going to smooth out some of the volatility. You're obviously taking more risk when you're 100% in stocks. We have no idea what the market is going to do over the next couple of years, so you'd want to be in this for the long haul, meaning 10 years plus. Now, the good news is if the Lord tarries and you're in good health, maybe this money needs to last another 30 years.
That'd be great. The stock portion would do well. It's just typically if you're going to need to draw an income from it, which seems like you will in the next couple of years through an RMD, or you need to supplement your income, that's where I would typically advise you to be a little bit more conservative just to protect this and be less volatile. But if you can stomach the volatility and you're saying, I would just do this until I start taking the RMD and then maybe for that portion, you maybe start moving more conservative, that's entirely up to you. It would just not be the typical approach.
Again, I would say typically at age 72, you'd want only about 40% in stocks. You're talking about having 100%, which is obviously a bit more aggressive. But as long as you know that going into it, ultimately you're the steward and you need to make that call. I see. Okay. Well, I thank you.
That's very helpful. All right, Joanna. Absolutely. Well, thank you for your call today and for your kind remarks about the program. We appreciate it. Well, once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandy, Rob and Ben. Couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you.
