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Just click Sign Up. Now let's dive into the podcast. I have no greater joy than to hear that my children are walking in the truth. 3 John 1 4.
Hi, I'm Rob West. In that verse, the apostle John praises his friend Gaius and other believers for their generosity toward missionaries. As parents, we want our children to be generous toward God's kingdom. Dr. Art Raynor joins us today with some steps we can take to grow our kids in generosity. 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, it's always a pleasure to have Art Raynor with us. He's director of the Institute for Christian Financial Health, the organization that certifies Christian financial counselors. Art, great to have you back.
Hey, Rob, thanks for having me back on. Art, it's often said that more is caught than taught when teaching children. So as parents, we really need to be mindful of that, don't we?
We certainly do. You know, parenting is an awesome but difficult responsibility. As parents, we know that everything we do and say can impact our children's lives.
So we want to leverage that influence to point our children to God and His plan for their lives. And generosity is a part of that plan. So we should always be asking, how do we help our kids move away from selfishness and towards selflessness? How do we help our kids become more generous? Oh, it's such a great question. And we can assume that being generous doesn't come naturally to adults or kids. It's a learned behavior.
So let's talk about this. How do we teach our kids to be generous? Well, there are several tangible steps that we can take.
And here are a few that I have found helpful. First, you can model gratefulness. Expressing thankfulness for the resources God has given you can teach your children two things.
It shows that God is the owner and giver of all things. And it will also reveal the impact generosity has on your own family. As you often teach Rob, giving breaks the power that money can have over us. And then just talking about generosity can have an impact in our kids' lives.
You should always tell them why you think that living with open hands is important. Connect your heart for generosity to God's generosity. We love because He first loved us.
We give because He first gave to us His Son for our salvation. Yeah, that's a great reminder. And so I think it's so key to model gratefulness. But you also talk about modeling generosity as well, which is different, right?
Yeah. Well, we've talked about modeling gratefulness. It's also critical to model generosity. We can't just talk the talk.
We need to walk the walk. Kids are amazing at detecting hypocrisy. So it's not enough just to tell them about generosity.
We must actually be generous. Show them how you are giving. And then when you do that, you can also help them see and understand the needs of others. Talk about those who have needs that you may be able to help meet.
Ask them to recall a time when they were in need and someone helped them. And then along those lines, you can help them earn money, whether through an allowance or chores around the house. Let them earn money from which they can give. Because when they possess money, the feelings of sacrifice and joy will become a little more real.
There's no doubt about that. But let's say they do start earning some money, Art. How do you help them establish the where of their giving, their giving priorities, you might say? Yeah, I recommend introducing them to pastors and missionaries. Giving to the local church should be a priority.
So let them meet those who help multiply their money's kingdom impact. Hopefully they will see that they are giving to something much larger than themselves. And then show them how to give at church. It's probably best not to start with online giving. If there's a moment when they can give during a kid's worship time, tell them about it. If they sit with you in the main service, bring some cash and drop it in the offering plate or let them do that. And finally, don't guilt them into giving, which won't produce joy, but resentment.
That's great. And I know finding those practical ways to get them involved in the giving is key. That's where sponsoring a child can be great from any one of a number of organizations that allow you to do that, right? Yeah, absolutely. In fact, we had a compassion child that we supported throughout their childhood and even into their early adulthood.
And we would regularly tell our kids about that child. And man, there's just something about giving to somebody that is in a place where there's significant need and letting them be a part of that person's journey and story. Man, it just makes the world of difference. That is so good.
Well, thanks for those insights, Art. We appreciate your time today. Thanks for stopping by. Thank you. That's Art Rayner, Director of the Institute for Christian Financial Health. Now you can read more about teaching generosity to your kids in Faithfi's brand new quarterly publication, Faithful Steward. To receive that in your mailbox every quarter, become a Faithfi partner at faithfi.com slash give.
We'll be right back. . Have you ever wondered where your money goes when you deposit it in a bank? Christian Community Credit Union believes in helping advance God's kingdom through everyday financial transactions. For over 67 years, they have provided values aligned banking solutions to thousands of Christians and ministries. Consider Christian Community Credit Union as your banking institution by visiting join christiancommunity.com. Membership eligibility required. Each account is insured up to $250,000.
This institution is not federally insured. Great to have you with us today on Faith and Finance. Well, it's time to take your calls and questions today. We've got lines open and you can have the rest of the broadcast. 800-525-7000. Again, that's 800-525-7000. Lines are open. You can call right now. We're going to begin in Harrisburg, PA today. Allen, go ahead.
Hi. I have a 401k. I have like 128,000 in and I'd like to invest 60,000. I'm going to roll over into an annuity that I talked with a person. He's going to call me next week to get the finalized my statement if I want to do it or not.
He's thinking about that choice. What kind of annuity are you looking at here? It's like a short annuity.
Okay. So there are two big categories of annuities. One is a fixed annuity where you get a guaranteed fixed rate of return. And then there's what's called a variable annuity where you put the money into the annuity and then it gets invested in what are called sub accounts, basically mutual funds. And then you get a floor on the downside and a portion of the upside.
Does one or the other sound like what you're looking for or considering? Well, I learned saying that you cannot lose anything. All you can do is gain. Yeah.
Okay. Yeah. So this is what's called a variable annuity, which is basically a way to invest in a tax deferred environment where they're going to set a floor on it. So to your point, you cannot lose money. And it will get invested in sub accounts that might mirror, let's say an index. So for example, it could mirror the the S&P 500. But as you also correctly pointed out, the way these work is, you get a portion of that upside.
And that's how they give you the downside protection. Because keep in mind, when we look at the average annual returns of the stock market, pick an index, let's stay with the S&P 500. If we were to go back over the last 75 or 100 years, and let's say I don't remember what it is at the moment, let's say the average annual return over that period was north of 9%.
Well, the way that we get those average 9% yearly annual returns over a long period of time is, in large part due to those big up years, kind of like the year we've had this year, which were outliers, we saw dramatic increases in the stock market, when you add those to the the few down years, and then those years that were kind of flat, and you put it all together, those really big up years are what get us up into those higher average annual returns. Well, one of the challenges with a variable annuity is you don't get that, because you're going to give that up to the insurance company, they're going to keep that. And that's the way that they provide the downside protection. Now, you do get that peace of mind to know that you're not going to lose any money, you're just not going to get the full upside.
And when we're in a big year, like this year, you're giving up a lot. The other thing you're going to give up with an annuity is you're going to give up access to your money. So in that 401k, although you'd have to pay some tax on it, if you pull it out, you do have full access to the money without penalty. If you're over 59 and a half, the same would be true with an IRA. So if you needed the money, something unexpected, whatever it might be, you can get it with an annuity, especially in those early years, you're going to be limited in what you can access.
And then the third issue would just be the fees and expenses. But I'm not one who says don't ever consider an annuity. If you're looking for peace of mind, if you're looking for downside protection, if you're taking a portion of your total investable assets for retirement, and you're saying I want to carve away a portion of it in a, an insurance product and annuity, where there's a floor on it, that gives me some peace of mind. And maybe down the road, I can convert that to an income stream when added to my social security meets my minimum monthly amount that I need to cover my lifestyle spending and my obligations. And I have other assets still in my 401k or IRA or whatever it might be that I could get access to, and even invest and perhaps seek a higher average annual return, then this annuity may be a very appropriate part of your full financial plan. But I did want to throw those things out, which would be the only perhaps negative considerations as to why you might not want to do this.
But give me your thoughts on all that. Yeah. Well, I talked to the person and he said, if I invest, well, I don't know if it's 50 or said, I told him I'm going to invest 60,000. He said, well, you invest 60,000, you get 8,600 some dollars right off the bat at it.
He said, after two years, you can take 20% out. Yeah. Yeah.
And that's, that's pretty typical. And what he's talking about is a lot of these annuities have a feature called a bonus where you get a bonus right up front. So yeah, again, I would look at this in light of your overall financial plan, your total financial life, and just make sure this fits, understand what you're giving up, which is access to the full amount of the money. Yes.
You'll get the 20% in the first year and maybe 10% after that, or perhaps another 20. But I think at the end of the day, you know, as long as you count the costs, you understand the fine print know exactly what you're buying. I don't have a problem with it.
But I just at least wanted to share with you some of the reasons why they're not my first choice. Appreciate your call today. We'll head to Kansas. Hi, Douglas. Go ahead. Yes. Hello. Thank you for taking the call.
Sure. I am 51 years old. I retire at the end of next year. And I have a state pension. In addition, I also have some 401ks and 403bs that I've tapped into over the last, you know, 30 years that I've been employed or attributed to rather.
My question is, is what do I do with those 401ks and the 403bs at that time of retirement? Yeah. Do you have an advisor, Douglas, that you work with? Or have you kind of managed all this yourself along the way? I've been managing myself along the way.
All right. Yeah, I think this is the time perhaps, as you transition to this next season, and what God has for you next to engage with an advisor, not only on the planning side, and doesn't have to be elaborate or complicated, but just looking at what your new retirement budget might look like based on where you feel like the Lord is leading, looking at the assets that you have, how to position them, because what I would recommend just to try to simplify your situation would be to roll whatever you can certainly the 401ks and 403bs from previous employers into one IRA individual retirement account. The benefit of that is you keep it in a pre tax environment. The other benefit is that you have unlimited investment options, which is also one of the reasons why I think it's time to connect with an advisor because instead of just having this kind of limited menu of investments in the 401k and 403b of unlimited options inside the IRA, which just gives rise to having an advisor who's kind of taken responsibility for this, so that it's not a top concern for you while you're pursuing whatever is next, and letting somebody give, you know, active oversight to that. And you could even have that advisor make sure that the investments are aligned with your values, you know, you're not investing in companies, you know, whether you know it or not that are making abortion drugs or, you know, alcohol or tobacco, or involved in, you know, pornography, even in an indirect way. So all of that could come by you connecting with a certified kingdom advisor, I'd interview two or three, find the one that's the best fit.
And then once you establish that relationship, which now is a great time to do it, being about a year out, then you'd let the advisor open the IRA, and you consolidate all those accounts in one place, and they're off to the races. Very good. I like that. Thank you very much.
Absolutely. Just go to faithfi.com, faithfi.com, click find a professional at the top of the page. Thanks for your call, sir.
Several lines are open today, 800-525-7000. We still have half of our broadcast left, so plenty of time to perhaps tackle your question today. You know, folks, the big idea here is once we understand God owns it all, we want to live within our means, have some cushion or margin, set long-term goals, but giving generously is key because that's going to loosen the grip of money over your life. Much more to come just around the corner here on Faith and Finance. I'm Rob West, and we'll be right back.
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Find more information at kingdomadvisors.com slash get certified. Thanks for joining us today on faith that finance all the lines are full. So let's head right back to the phones to Cleveland, Ohio. John, you're next up, sir.
Go ahead. Thanks, Rob. I'm 65. Half of my nest egg, if you will, is in real estate. The other half are in stocks. And my question is the old adage was you should move more into bonds as you get older. But bonds haven't really done a whole lot the last five years in the stock market's been incredible. What are your thoughts?
Yeah, well, you're exactly right. I think that the benefit to bonds as you age is number one would be capital preservation. So bonds help to protect the principal portion of your portfolio from significant volatility and high quality bonds. So that would be US Treasuries or investment grade corporates provide a lower risk counterbalance to equities, if you will, they generate income, which is nice.
So you can get the predictable income through the interest payments. And they mitigate some risk because they reduce the volatility, but they also are not correlated. There's a low correlation with stocks, meaning, you know, they may perform better during equity market downturns.
Now, because we haven't had a recession in some time, and Scott stocks have been just on an incredible run the last couple of years and even the last few decades. And we've come off a three year period where bonds have not done well, which is they've, you know, perform more poorly than we would typically see. And that's largely because we had that dramatic increase in interest rates and bonds are directly tied to interest rates as bonds price as interest rates rise bond prices fall.
And so that's why you've seen that it's a little bit of an anomaly. And I think moving forward, we will, you know, see as rates come down, you know, we will see certainly bond prices increase and they will do better. So I think you've been in a pretty good spot because you've enjoyed that run up in stock prices. But I do think adding some bond exposure here to provide a little less volatility, especially if we, you know, there's some economists that think the market could be as much as 20% overvalued. So we're, we're way overdue for a correction, if not a major downturn. And I think the bonds could help to smooth that out, you'll also benefit from the decreasing interest rates, even though that's probably going to play out over a longer time period, you know, then then we would have expected at least, you know, a few months ago, because, you know, inflation has cooled.
And, you know, we probably are going to keep these rates high just to, you know, not, you know, stimulating even more inflation. How do you think about this in terms of adding bonds to your portfolio? Well, we used to use the number 100 minus your age, and that would be the portion that you would put in, in stocks, and then you'd put the balance in bonds, we've raised it to 110, just as kind of a rule of thumb, because people are living longer. So at 65, that would mean that, you know, you'd have 45% stocks, the balance in bonds, if you're not planning on retiring anytime soon, you may want to bump that up to 5050, or even 6040 stocks to bonds. But I think, you know, beginning to bring some fixed income into the portfolio will position you well for the future. And especially as you transition from kind of thinking about the overall objective to be capital appreciation, you're moving to a capital preservation and capital distribution phase as you begin to kind of hang on to what you've got, and then, you know, begin to pull out from it to supplement maybe social security when you do eventually retire. Does that make sense, though?
It does. And that's, and that's kind of, you know, what I've heard and what's been, you know, you know, the way to do things, if you will, I don't plan on taking Social Security until I'm 70. Yeah, I'll max him out and see who wins that horse race. But I, you know, my thinking is the with half of my assets in real estate, which continues to do real well, and rents are like incredible, maybe that counts towards the quote, unquote, 50% fixed income, and I could let the rest right out the stock market for now. Yeah, I mean, you certainly could. Here's the bottom line, though. I mean, these are rules of thumb, and that's all they are.
So that doesn't mean it's right for you. And if you are in a position because you're living modestly, you've got good diversification, even among asset classes between stocks and real estate, you add some bond exposure, you being on the lower end of kind of those rules of thumb for your bond allocation doesn't give me any concern. You know, as long as you understand that we've been on this kind of wild ride on the upside, and we're way overdue for a, you know, pretty significant pullback.
So let's say let's just play this out. Let's say the stock market will we use that term broadly was down 20%. And your your stocks were down with it, would you be okay kind of riding that out? Or would that cause you, you know, so much concern that you'd jump in there and try to start selling things and moving things around?
That would tell me that you're probably not positioned properly. But if you could say to me, No, I could weather a 20% downturn, even if it took, you know, two plus years to recover, and I would be okay with that, and I could stay the course, then that's telling me, conversely, that, you know, you could weather that extra volatility and, you know, and maybe that's okay. Yeah, and I agree with that completely, because I lose no sleep over it. A friend of mine years ago a friend of mine years ago told me the only money you put in the market is money you can afford to lose. So, you know, and I agree that it is overvalued. And someday, whatever the, you know, quote, unquote, recession or correction is going to come. And although inflation is cooled, I don't see prices going down either. So, you know, it's all kind of a relative figure here.
I'm, I'm just trying to be to put things in a position where I'm being the best steward of that, which, you know, I've been entrusted. So yeah, yeah. Well, a couple of things on that one would be the reason you haven't seen prices come down is because that's the dirty little secret of inflation. We never see any declines. We just see a slowing of the increase. And that's what we've got because inflation is cumulative. You know, that 9% inflation we had a couple of years ago didn't go away. We're just adding on to that at a slower pace. So things continue to cost a lot. I would just say whether you factor your real estate in as a part of your quote, fixed income portion or whatever it is, starting to add fixed income is not going to be a bad thing, especially when we hit that recession.
I wouldn't want you to be if I were your advisor a hundred percent in stocks and real estate, but I don't, I wouldn't say you need to go to a 60, 40 portfolio either. Hopefully that gives you some things to think about, John. Thanks for your call, sir.
Well, folks, we're getting near the end of the program today. You know, our role as stewards has significant implications. You see, we have responsibilities, not rights. We're to manage God's resources according to his will, not our own desires. And so that means making decisions based on what pleases God and what aligns with his word. We're accountable.
We're going to stand before the judgment seat and give an account. We're to live with an eternal perspective. We should be faithful in the small things. We want to hold God's money loosely and give generously.
And you know, that's one of the keys to, I think our role as a steward is to live that generous life with an open hand posture, ready to receive and know that's a blessing from the Lord, but ready to give it away as well. I hope this program will encourage you in that each day. Listen, I couldn't do this without my team today, my producer, Devin Patrick on our phones today, Sandy Dickinson doing an amazing job and Mr. Taylor Stanrus providing great research and support today. Folks, I hope you'll come back and join us tomorrow. It's been a pleasure to be along with you today. May the Lord bless you and we'll see you next time. Bye-bye. Faith and Finance is provided by Faith By and listeners like you.
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