Financial Discipline Brings Joy

This faith in finance podcast is underwritten in part by Guidestone. Guidestone envisions a world transformed by Christian investing. Through screening, corporate engagement, and impact investing, our investment strategies allow investors to be more proactive with their investment dollars to make a meaningful difference in the world while preparing for their financial future. Learn more at guidestonefunds.com slash faith. You've probably heard it said that anything worth doing is worth doing well.

Hi, I'm Rob West. Today we'll find out why working hard at something can pay big dividends, spiritually and financially. Then we'll take your calls at 800-525-7000.

That's 800-525-7000. This is faith in finance, biblical wisdom for your financial journey. What does it take to succeed? Talk to any successful person and they'll probably tell you that it takes work. Former US Secretary of State General Colin Powell said, there is no secret to success. It's the result of preparation, hard work and learning from failure. In other words, when you want to succeed in your finances at your job, at school or in relationships, you can't just sit around thinking about it.

You have to take action. Success in any area requires discipline. Athletes know this. The more reps you put in at the gym or the more miles you put in, the better you can do on competition day. No pain, no gain, right? In the area of education, a good student understands discipline.

Study a little bit each day, take good notes, do your homework and you're in a better position to ace that test. It's the same with your finances. Practice discipline with your saving, spending and giving and you're more likely to reach your financial goals. Unfortunately, if athletes or students or you and I fail to practice discipline, the results won't be as positive because without the pain of discipline now, we're likely to face the pain of regret later on. Here's what Hebrews 12 11 says about discipline. No discipline seems pleasant at the time, but painful. Later on, however, it produces a harvest of righteousness and peace for those who have been trained by it. So the Bible confirms that discipline is an important part of a Christian's life for spiritual as well as practical reasons.

We can't grow as disciples of Christ if we're sitting around like sanctified couch potatoes. And while discipline is hard, it can be a source of joy. Let's look at a few examples of financial disciplines and the benefits of staying the course.

Maybe you're working hard at one or more of these. Perhaps you're determined to save a little money from your paycheck every week. That certainly requires discipline, but the benefit of consistent saving is that you feel a lot less stressed about future financial needs. Another example of a financial discipline is giving faithfully to the Lord. When you do, you have the satisfaction of participating in his kingdom work and the joy of helping others.

Or how about this one? It takes discipline to pay down your debts, but the benefit is you're making progress towards financial freedom. Think of the joy you'll experience when you're finally debt free. Finally, it takes discipline to stick to a financial plan, but when you do, you'll reap the rewards of financial peace and confidence. Knowing where each dollar is coming from and where it's going is a key to financial stability and success. By the way, if you're not exercising the discipline of a spending plan, we can help with that.

Download the FaithFi app or visit us online at faithfi.com and we'll show you how to start your own personalized spending plan. The point is that it takes discipline to be a good manager of the resources God's given you. It might be painful to endure the disciplines of saving, giving, paying off debt and sticking to a plan, but the pain has a higher purpose. The verse from Hebrews that we quoted earlier tells us something we already know. Discipline hurts, but discipline can also be a source of joy.

Here's why. First, the results of discipline are positive. In the realm of finances, we can rejoice when our nest egg grows, when we see progress in paying off our loans and when we see the fruits of our planning and generosity. These happy outcomes make the hard work of saving, paying down debt, planning and giving worthwhile. Also, when we follow God's blueprint for stewardship and integrity and money matters, we experience peace in our financial life. And finally, when you compare the lack of financial discipline to the discipline of careful stewardship, it's easy to see which one is more joyful.

It's much better to have all your ducks in a row than to be constantly chasing them around the pond. One more thought about financial discipline. As hard as we try, none of us will make the right financial choices every time. So whether you blew your budget or missed a loan payment, it's not the end of the world. Acknowledge your mistakes, get help if you need it, submit your plans to the Lord and get back on track. God has set before you certain resources to manage. And when you exercise discipline with your money and your spiritual life, you'll experience a harvest of righteousness and peace, which is success in anyone's book. All right, your calls are next, 800-525-7000.

We'll be right back. We're grateful for support from Guidestone, whose diversified suite of investment solutions align with Christian values to create positive change in the world. More information is available at Guidestonefunds.com slash faith. Investing involves risk, including potential loss of principal. Carefully consider the investment objectives, risks, charges, and expenses of Guidestone Funds before investing.

They're distributed by Foresight Funds Distributors, LLC, which is not an advisory affiliate, a registered investment advisor, nor do they provide investment advice. 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 costs 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 faithfy. That's chministries.org slash faithfy. Great to have you with us today on Faith and Finance. The calls are coming in, but we still have a few lines open, so if you've got a financial question today, we'll be encouraging.

We'll take you back to God's word and help you make a wise decision in light of biblical wisdom. The number to call, 800-525-7000. That's 800-525-7000. You can call right now.

Let's start in Virginia today. Hi, Lisa. Go right ahead. Hi. I had a question. I recently inherited a retirement account from my deceased husband. I wanted to convert the money into a down payment for a house, and I wanted to know if you had any advice on the least painful way to do that. Yes.

Boy, I'm sorry to hear about your husband's passing. So you want to take it out. How much is in that account and how much are you looking to use? I have about a million and a half in the account.

I'd like to use about half of it, honestly. Okay. All right. Yeah. So that will come out taxable, so it is going to be added to your taxable income. What do you feel like is the timing on this, ideally?

I don't know. I feel like to buy a house with the current interest rate versus the interest rate I'm earning in the investment, it makes more sense to pull the money out, put it in a house, and then I'm going to get that money. Whatever money I lose, I'm going to get it back when I resell. That's how I'm feeling.

Yeah. I would agree with that. I mean, real estate obviously has done well. We have no reason to believe it won't continue to do well. We are experiencing a dramatic increase in housing prices here in the US and that's not a bubble situation in my view. Most economists feel like that's driven by just pure supply and demand. We just don't have enough homes in this country for the need that exists, at least today.

And so that's why we've seen housing prices, although their pace of growth has leveled off, we haven't seen any kind of decline despite now going on quite a bit of time here over a year with these higher interest rates. I think the idea that you would have both real estate and stocks and bonds working for you with somebody managing that stock and bond portion makes sense because you're properly diversified then, not only in your stock and bond portfolio, but among asset classes, real estate, stocks, bonds, precious metals, whatever else you have. I think the only consideration is just the tax consequences of this and making sure you do this in a way that is tax efficient. So I would work with your CPA. So one option to consider would be, you know, maybe you delay this until the first of next year, and you take half of what you need in 2024. And then you take the other half in 2025. And you could take it on January 1, if you wanted to, what's the benefit of that? Well, because whatever comes out is going to be added to your taxable income, you just want to keep it from pushing that portion up into a higher bracket, if possible. And the nice thing about that strategy is not only does it spread it over two tax years, so maybe you won't spill as at least as much of it into a higher tax bracket. But secondly, the Tax Cuts and Jobs Act expires at the end of 2025, going into tax year 2026.

So we don't know, of course, the outcome of the election, and we won't until November. But if we see that expire, the Trump Tax Cuts and Jobs Act, we know rates are going up. And that would mean that perhaps after 2025, if you tried to take that money out, you'd pay even more because of higher tax rates.

So I think spreading it out over two tax years makes sense. The other potential benefit to you on that, Lisa, is we expect that interest rates will start to come down at some point this year. Now, we don't know, we thought they would have come down by now. But inflation's been a little stickier than we expected. And the Fed is wanting to see several months of declining inflation. They haven't seen it.

They're still saying they expect cuts this year, but you might find yourself maybe in the first quarter of next year getting a better interest rate than you would get this year. How does all that sound, though? That all makes sense to me. And yeah, I appreciate the comment. I'm going to continue to think about it.

Yeah, I think you need to. I mean, sir, you know, this is obviously more than investment. This is your home.

This is where you live. So there are both financial and non-financial considerations. And so I think, yeah, you'd taken a time to step back and just say, Lord, what would you have me to do? We want to factor in the financial, but we don't want to let that be the driver necessarily, especially, you know, your home. I really don't look at as an investment per se. What do I mean by that? Well, we want it to appreciate and it should. And usually it does. But it's also where you live. I mean, the definition of an investment is as soon as it accomplishes its purpose, you would sell it and move on.

And that's not what we do with our homes because they're also the place that we live. So there's other elements to this that I think you certainly need to think and pray through. But if we can help along the way, don't hesitate to reach out. And at least I'd like to send you a book.

It's our gift to you just for being on the program today. It's called Wise Women Managing Money. And it was written by a wonderful lady who has a ministry to widows called Widow Connection.

Her name is Miriam Neff. And it really is for women who are now find themselves in that primary decision making role in the financial area. And I think it'll be an encouragement to you and give you some further things to think about. Okay. That's very nice. I appreciate it.

Absolutely. Stay on the line. We'll get that right out to you and get your information. Thank you for calling today. Let's go out to St. Petersburg, Florida. Hi, Ryan. Go ahead.

Hi, I'm 46. And I have a traditional IRA that I am strongly considering converting to a Roth. And I was wondering your thoughts on that. And, you know, if you could maybe go through some of the mechanics from a tax perspective on what that would involve. Yeah, well, anything you convert would be added to your taxable income in the year of the conversion.

So you're just going to have to factor that in. I mean, the benefits you're going to have is you still have time on your side. So let's say you're 20 years out from retirement, you're going to have tax free growth on that money as opposed to tax deferred growth for the next 20 years. And if you can go ahead and pay it now out of current cash flow, now you've got that money working for you on a tax free basis.

When you pull it out in retirement, you pay zero tax regardless of where the tax code is at that point. And we're at a fairly low level now. If nothing changes, the Trump Tax Cuts and Jobs Act expire at the end of 2025. So we know rates are headed higher. Now, we don't know what's going to be the outcome of the presidential election.

Let's say he were to win. And certainly if he gets the House and the Senate, then you would expect to see a continuation or a renewal of those tax cuts. He even talked more recently about further cuts beyond even the current Tax Cuts and Jobs Act that has these low rates in place.

But we would imagine that, you know, two decades down the road, if rates are heading anywhere, tax rates, that is, they're probably heading up over the long haul. So you'd be paying these low taxes today, although you have to factor in and this is a conversation with your CPA, perhaps, you know, the implications of this money being added to your taxable income on top of you, you know, perhaps at the peak of your earning potential, you know, as you're working. So, you know, one of the benefits of taking it in retirement is, in most cases, you're no longer working or you're working at a much reduced rate. And so, you know, you're, you're not adding in on top of a healthy income, which can put it up in, you know, into the higher levels of the bracket, if you will. The other benefits are no required minimum distributions. And so if you don't need the money, when it's in the Roth, you can let it sit there, you know, so that I think can be helpful.

And then from an inheritance standpoint, Roths can be advantageous for heirs because they inherit the account without owing taxes on the distributions, although they have to take required minimums. So those are the reasons why you'd you'd want to look at it. I think you just want to consider, namely, you know, what is the impact on your taxes today? And, you know, could it push this portion up into higher brackets because it's being dropped on top of your current income?

So that would be the primary consideration. Does that make sense? Yes, sir. Thank you. OK, you're welcome. Thanks for calling today. We appreciate it. Back with faith and finance just around the corner. We've got the lines filling up. Some great questions coming up.

Eight hundred five two five seven thousand. I'm Rob West and this is biblical wisdom for your financial decisions. Stick around. What's most important to you when it comes to choosing your financial adviser? Someone who's aligned with your biblical values?

How about someone who will take the time to explain your options? Certified kingdom advisers are professionals who meet high standards and competence and integrity and have been trained to offer biblical financial advice. To find a certified kingdom adviser in your area, visit FaithFi.com and click Find a CKA. Do you feel like your hands are tied with debt, preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80 percent faster while honoring your debt in full. For more information on how Christian credit counselors can help visit Christian credit counselors dot org. That's Christian credit counselors dot org or call eight hundred five five seven one nine eight five eight hundred five five seven one nine eight five.

It's great to have you with us today on faith and finance. We've got some lines open today ready for your calls and questions. The number eight hundred five two five seven thousand.

That's eight hundred five two five seven thousand. You can call right now. Let's head to Tennessee. Hi, Natalie. Go right ahead. Hi.

Thank you for taking my call and I certainly have enjoyed your program over the years. Quick question. My 19 year old is doing junior college and he receives a Tennessee promise, but he also wants to do some investing in hopes to purchase a duplex by the time he's 21. So we don't want to mess with like his FAFSA and mess him up to where he would not be able to receive that free money for a Tennessee student for junior college. So what could we do for his benefit?

Yeah. So as you probably know that, you know, that Tennessee promises a great blessing and it does cover tuition and fees not covered by other grants. Having investment assets would affect your child's eligibility for federal student aid. So stock bonds, mutual funds are specifically listed as assets that affect eligibility. Would these funds that you're looking to put aside, are they earmarked for college specifically or is this money you just want to be able to bless him with beyond college? It would be money to bless him beyond college. Okay.

Yeah. So one approach would be, you know, for you all to just go ahead and invest this money on your own. And then if you decided to, you know, and you could keep it in a separate investment account because an asset of the parent is treated at a much lower level from in terms of the FAFSA. And then if you decided to give it to him down the road, you know, you could gift it to him, whether you gift him the actual shares of stock or just the cash. But obviously, depending upon where he's at financially, you may decide, you know, to give him more or less. And so that would be up to you at that point. But if you want to go ahead and put these, you know, these funds in a separate account and let's say you get them invested into a mutual fund or stocks or whatever it is, as long as it's in your name, but earmarked, you know, in your mind for him, then it would count at a lesser level, and then you could decide what to do with it down the road. Okay. All right. Well, that's perfect, because he genuinely wants to, he works very hard and he's wanting to become active in that again, like I said, by the time he's 21, he would love to purchase a duplex.

And so we wanted to help him with that, especially when he has his mind focused on investing and doing passive, you know, passive income at an early age. So thank you so very much. Oh, you're welcome. I appreciate your your call today and all the best to him. He sounds like he's going to do quite well down the road.

Let's let's go to Cleveland, Ohio. Hi, Bob, how can I help? Hi, thank you for taking my call. I appreciate all you're doing. You're a blessing. Well, thank you.

I have a question. I have six months off from retiring and I have a pension and my mortgage is at a low interest rate. But I have about one hundred thousand and a deferred tax deferred account. And I want to put it's not growing very, very much right now because it is a guaranteed return. I put in the guaranteed return before I retired just to preserve it. But now I'll be separating from my employer and I want to move it somewhere where now I can maximize my earnings some more. Is there somewhere? How would you recommend going about doing that? Yeah.

So you said it's one hundred thousand dollars and it's in a tax deferred account, but you do have the ability to move it into to roll it over into an IRA, I would suspect. Is that your understanding? Correct. Yeah.

OK. Yeah, very good. And so, you know, this is an amount that's probably up high enough that an adviser would be in a position to take this on for you. And so that would be generally what I'd recommend.

I mean, it's a substantial amount of money. And rather than you just kind of dropping it somewhere with this not being your primary focus or expertise, you're obviously still working. I think going ahead and establishing that relationship with an adviser who could manage this for you would be a great option. And if you wanted to do that and didn't have somebody, I would probably head to our website at faithfi.com.

Click find a professional and you could find a certified kingdom adviser there in Cleveland that could take it over for you. Apart from that, if you wanted something that, you know, where you're keeping control over it, but you've got more of a low cost automated approach, you could look at one of the robo advisors. This is essentially, you know, where an algorithm based on the questions you answer, the inputs you provide builds an index portfolio. So it just kind of captures the broad moves of the market in the stock and bond market. But you'd be properly diversified among domestic and international and across lots of different sectors. And then, you know, in the bond space, a similar diversification. But given your age and proximity to retirement, it would, you know, get more conservative over time and be and skewed toward the fixed income side.

The nice part about it is it's very low cost. So I would look at the Schwab intelligent portfolios or betterment that would be kind of a middle of the road approach where you're not doing it all yourself. But you're also not, you know, hiring an advisor to manage it for you.

So which of those sounds like the best fit for you, Bob? Well, I had actually thought about the kingdom advisor. I have to go out to option. And I do know, of course, you know, my lovely wife was like, Well, how much is that going to cost us? Can we do something on our own? Yeah, I was like, Well, we might lose more money than we spent to have somebody advise us. You know, that's my concern on gains, I should say, if I try to do it myself.

Yeah. You know, my perspective is, I mean, if it's worth doing, it's worth doing well. And you've spent a long time building up this wealth. And, you know, think about it, anything you're going to do that involves a large transaction, like selling a piece of real estate, I'd get a professional to help you even though you're gonna have to pay for it.

You know, you can do your will online, I'd rather you get an estate planning attorney. I think the same applies here with your investments, the idea that you'd have somebody that can wake up thinking about this and be the one to make the buy and sell decisions, help you manage this portfolio, even align it with your Christian values. I just think it's worth the cost.

Could it cost you 1000 to 1500 a year, it certainly could on $100,000 portfolio, in my view, it's worth it. But you guys pray through it. You're the stewards of this.

And if you decide to hire a CKA, just go to faithfi.com. All the best to you, Bob. Well, folks, we're about out of time today. We covered a lot of ground.

You know what? I love being invited into your stories each day. It's an incredible privilege.

It's the thing I most look forward to when I wake up every morning is just talking to our listeners because you want to be found faithful. You realize God is incredible. And boy, what a gracious gift He's given us starting with salvation before even the first dollar. We are rich.

We have an abundance. But then beyond that, He gives graciously differing amounts. But our charge is just to be found faithful to enjoy what He's given us and to manage it wisely and to give it generously and to help others in need along the way.

I mean, what a privilege it is. Well, the whole goal of this program each day is just to help you do that. Come alongside you and say, you got this, you can do it. Maybe we've made some mistakes in the past, but going forward, let's make those wise decisions that align with the heart of God and the Council of Scripture. I hope that's been true about this program for you today, and I hope you'll come back and join us tomorrow. We'll do it all over again on behalf of my team today, Adam Sunneth, Pat Montague, Devin Patrick, Jim Henry, and the rest of the team here at FaithFie. I'm Rob West. Hope you have a great day and we'll look for you back here again tomorrow. Faith in Finance is provided by FaithFie and listeners like you.