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Aligning Investments with Values

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
October 30, 2020 8:03 am

Aligning Investments with Values

MoneyWise / Rob West and Steve Moore

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October 30, 2020 8:03 am

The Bible says that God provides, not just for our needs, but so we can also do good works that glorify Him. Christians hold a massive amount of the world’s wealth. So, what are we doing with the money God’s blessed us with? On the next MoneyWise Live, hosts Rob West and Steve Moore talk with financial advisor Rachel McDonough about the power of money. Aligning investments with values on the next MoneyWise Live at 4pm Eastern/ 3pm Central on Moody Radio.

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Did you ever think if I had all the money in the world I would, well you fill in the blank? The truth is Christians hold a massive amount of the world's wealth. Now the question is, what are we doing with it?

The Bible says that God provides not just for our needs but that we might do good works that glorify him. Today host Rob West talks with financial advisor Rachel McDonough about the power of money and it's your calls on anything later in the program 800-525-7000. 800-525-7000. I'm Steve Moore aligning investments with values. That's next right here on MoneyWise Live. Rob, Rachel McDonough is a certified financial planner and a certified kingdom advisor and she's made quite a career of teaching believers how their investments can have a positive influence in the world.

Well that's exactly right Steve. I'm delighted to have her today because this is a really exciting and growing segment of the investing landscape and Rachel it's a joy to have you on the program. Thank you so much for having me. I'm glad to be here. Well thank you for coming and you've been on a mission personally for nearly a couple of decades to change the way Christians think investments but really I want you to take us back a bit because my understanding is this all started on a trip to Kenya when you were a small child. So start there.

That's right Rob. When I was 10 years old my parents were called to the mission field and so we moved to Kenya and I moved back and forth a few times but spent a total of about four years there and it was really there in Nairobi actually the first time that I encountered people who were living in poverty where this idea of wealth and capital having influence really hit home for me. So picture with me for a moment. I'm 10 years old. I don't have a job but I do have some money in my pocket. You know just some allowance money or that kind of thing and a street kid in Nairobi comes up to me who's also probably about 10 years old and asks me for money and at that moment I realized I mean I couldn't have articulated it in this way when I was 10 but at that moment I began to realize that capital has influence and that as a believer or a person of conviction or values we really need to be careful with how we use it and to be sure that when we happen to be the one holding on to the money that we use it in a way that has a positive influence for the lives of others. I love that.

If God owns it all and he does and we're a manager and money is a tool then a tool to accomplish what right to what end and that's what you're getting at here. Okay incredible story. Obviously that had a foundational effect on you. It shaped you in the years following. Then you choose financial services as a career. What made you choose that? Well I was an unlikely financial advisor to be truthful. My parents as I said were missionaries so there wasn't any family money to start out with and there wasn't a past career where I could tap a network of former colleagues. I was young but I knew that God was calling me to do it and he confirmed it to me several different times and so what I came to realize is that God was calling me to be a financial advisor and to help people connect money with meaning and so not to just have a focus on you know preparing for retirement or making sure we take care of estate tax planning and that kind of thing but really helping people connect money with meaning and also telling people the truth about the deep connection between their investing and their personal values. I love that.

We've got just about a minute left before our first break. Give us some context here. How much wealth do Christians hold today and to take it a step further what challenges do you think that poses? Well believers across the globe actually manage a cumulative 150 trillion dollars and of course as Americans we are one of the wealthiest nations and about half of that actually is American Christian wealth and so for any of our listeners who might not feel like they're rich you know I just want to encourage you to realize that actually if you make more than $50,000 a year for your household income you're in the top couple percent of income earners in the entire world so there's really an opportunity for us here as believers to start being intentional with how we invest the wealth that's been put into our hands by God. Well and that's the key it's intentionality perhaps not just falling into the same patterns we've always been in related to our investments but perhaps thinking differently and Rachel it's an exciting time because there's an investment landscape today that's entirely different than even just a few years ago in this area of faith-based investing isn't there? That's right. It used to be just limb pickings to find a faith-based mutual fund.

They weren't very many to choose from and it's not that way anymore. We're going to talk all about it right around the corner Steve. That's right. Rachel McDonough is our guest today. She's a certified Kingdom advisor and self-described unlikely financial advisor. We'll chat some more with her and figure out just how to put our money where our meaning is. This is MoneyWise Live. Many people are experiencing financial challenges such as credit card debt, downsizing, debt in jobs and depleted savings.

In fact more than half of all divorces are the result of financial pressures at home. But there's hope in Your Money Counts. Biblical financial expert Howard Dayton shows that the Bible is a veritable blueprint for managing your finances and you'll discover the profound impact it has on your relationship with God.

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Hi I'm Mark Gregston with Parenting Today's Teens. It's amazing to me how pain brings certain blessings our way. Some only seen in the rear view mirror with time and perspective. My wife for example struggled through some agonizing circumstances in her childhood. But because of it she is wise, compassionate and has a tireless patience with struggling kids. In my work with teens I'm often reminded that God doesn't waste pain. He has a purpose for it and He promises to use every painful passage for His good. As C. S. Lewis said, Pain is God's megaphone to a deaf world.

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That's or call 800-557-1985, 800-557-1985. Hey, great to have you aboard today. It's MoneyWise Live. Your host is Rob West. I'm Steve Moore and today we're speaking for a few minutes with Rachel McDonough. She's made a career out of teaching Christians, believers, how their investments can have a positive influence in today's world. What does it look like to connect your money to meaning? It can be done in your planning. It can be done in how you allocate your spending. We've said every spending decision is a spiritual decision because at its core we're managing God's money. But what about your investments? Can you also connect your money to meaning in that context as well?

Today Rachel McDonough is going to tell us exactly how to do that. And Rachel, you've obviously been on this journey quite a while before even some of the recent rise in the faith-based investing universe. So what's been your experience with believers that are investors over the years and share both perhaps the encouraging side and maybe even some of the disappointing side as well? Well, I'll tell you, Rob, one of the things that I think is really beautiful that's come out of the faith-based investing discussion with clients is the ability to stay the course with their investments even when markets are choppy. So an investor who understands that their capital is being put to work in positive influence type of companies who are producing goods and services that are truly a blessing for humanity, they understand that that philosophy of investing is based on something that's not going to change. So it helps them to stay the course through the good times and the bad times when the markets are up or down. Yeah, exactly.

And that's a biblical principle as well, right? We should have that long time horizon but this added connection of deploying our capital perhaps for even kingdom purposes certainly would affect how we view our long-term investments. Well, we talk about, Rachel, with our listeners as I know you understand well, this idea that there's various approaches to allowing your values to be reflected in your investments. Perhaps there's companies you avoid because certain things they do with corporate profits or even primary business activities would be in conflict with your faith or values. Companies you might embrace because they're making a difference in the world or even having a kingdom impact or even shareholder engagement.

Let's start on the avoid side. You know, if someone were to completely eliminate companies that do harm from their portfolio, what effect would that have perhaps on their returns? Well, that's been a much disputed matter, Rob, but the truth is a recent research study came out from the BRI Institute. BRI stands for Biblically Responsible Investing. And they went back and did a 20-year snapshot ending in the year 2019 and said, what if we did a very rigorous screening and took out lots of negative companies, even those that might pass muster for another investor? And they found that actually a 20-year performance snapshot for the screened portfolio versus the conventional was almost identical. Interesting. Yeah. So that takes off the table immediately, this idea that we have to sacrifice returns in order to live out our values in terms of our investments.

But I know that doesn't tell the whole story. What might we expect from actively investing in companies, embracing companies that have a positive impact on the world? Great question. Companies that do a good job and serve their customers well can expect to experience tailwinds of referrals, repeat business, customer loyalty, and so on. And so actually that provides a very natural way for those investments to tend to outperform over the long period. Rachel, what do you think would happen then if Christians pulled that 150 trillion out of the companies that do harm, like the tobacco industry, for example? What changes, if any, would we see? Well, tobacco is a great one to look at because we have seen a huge decrease in smoking among youth in the United States over the past few decades. But what we don't know as Americans is what's happening in other countries.

So right now, if you go to a country like Indonesia, free cigarettes are routinely given out to children at concerts and sporting events. So it's easy for us as American Christians to say that we care about what's happening in other countries and to say that we love our neighbor. But if we're investing and profiting from those things, you know, it really is a conflict for us. And what if we, with the other millions of Christians across the globe, pulled all of our 150 trillion dollars of Christian managed dollars out of the tobacco industry and started funding things like finding cures for lung cancer, for example, or other technologies that could save lives?

Yeah. Incredible to think about, Rachel, the influence there just based on the money that's represented by the group you're describing, believers. Rachel, for many of our listeners, this might be a brand new concept. They had no idea that their values could, in fact, be reflected in their portfolios in the way you're describing. Where would they go to learn more and how might they pursue this type of investing strategy? It can be overwhelming for a do-it-yourselfer, I'll admit, because it's taken me as a professional financial advisor several years to really get confident with the strategy that I use. So I'd say for any investors who are looking for a financial advisor who's going to be skilled in this area, we would hope that the CKA search field on the Kingdom Advisors website would be a good place for them to reach out to a certified kingdom advisor who should at least be knowledgeable. And going to, not com, but co, so, would even get a more specifically vetted group of advisors that have said this is the primary focus of their practice to pursue that double bottom line, the financial return as well as the kingdom impact.

I love that. Rachel, for somebody who wants to understand a bit more about how this works, give them a sense of what it might look like as an advisor builds a portfolio and they want to do this type of screening out of companies or screening in of other companies. How do they even go about that? There are some great tools now available, screening tools. There are consultant groups that can help advisors or investors to put together portfolios that align with their values. The one thing I want to just be sure I encourage our listeners today is that this is not top of mind for most of us. And I know that when you go talk with your advisor and when you look at your portfolio, you're looking for, am I going to be ready for retirement?

Am I going to have enough? Those are the things that are top of mind. But this is actually an area of huge concern and an area of huge opportunity for believers who want to have a positive impact because for most of us, the dollars that we give away to charitable causes are just not nearly as substantial as the ones that we have to save for the future.

Yeah. Well, I know it's an exciting time. You know, the secular counterpart to this is something called ESG, environmental, social and governance investing. But really, a subset of that is this idea of faith based investing where you want your values reflected. And we've already seen a rise in this space.

I think covid has accelerated that. A recent study I saw just a couple of weeks ago, Rachel said ESG investments will represent perhaps as much as 50 trillion dollars by 2022. Do you see this space, including faith based investing, continuing to grow?

I do. And I'll tell our listeners one way that they could help it grow. Being sure to mention to your financial advisor that you're interested in aligning your investments with your values. We have a research study from Morgan Stanley that shows 85 percent of investors are either somewhat or very interested in values alignment in their investing, even more so for millennials. But advisors, when they are pulled, say that their clients are not asking about this yet. So be sure you do tap your advisor and say, hey, this matters to me. Yeah, that's a big idea, because given the opportunity, what we find overwhelmingly is that Christians would choose this investment strategy.

Perhaps they just don't know it's possible. Exactly. And we need to do a better job as advisors to get the word out.

Right. Well, Rachel, we're so glad that you stopped by today. I appreciate you shedding light on this exciting and growing segment of the investing landscape. We'll look forward to having you back sometime. Thanks, Rob.

All right. Rachel McDonough has been our guest today. She's a certified Kingdom advisor and a certified financial planner with We hope to have her back again real soon. Your call is next, 800-525-7000. I'm Steve Moore.

We'll be right back. This is Money Wise Live. Many people adopt an attitude toward marriage and finances that it'll all work out somehow.

But sadly, it often doesn't. Financial woes can devastate a marriage. But there is a better way. God's Way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy. Money and Marriage God's Way is available when you click the store button at Hebrews 4-12 says, for the word of God is quick and powerful and sharper than any two-edged sword.

Here's Beth Moore with a quick word. God's will for us is good, pleasing, and perfect. God's will for your life. And it means for this season of your life, for whatever's next in your life, for this present moment in your life, for the future of your life. For every season of our lives, this I promise you, God cannot have a bad will for your life. It just can't happen.

It just can't. His will for your life is good. His will for my life is pleasing. And even, it's perfect. We're going to come back to that word in just a second.

Good, it's agaphos in the, is the lexical word in the Greek language. It means all the things that you think it does. But my favorite synonym for it, beneficial. Beneficial. Listen, when we receive Christ as Savior, if we weren't meant to be of some good here, He'd just take us home in that second. You are here to be a benefit.

Whatever He's doing is not only beneficial to us, what He's got us going through right now. Remember the will of God. Remember that we've learned this word about the will of God, the lema, t-h-e-l-e-m-a, the word that is often used for the will of God in the New Testament. And that suffix right there, that m-a, anybody remember this? It means result.

Result. That m-a is result of the will of God. God's will is result-oriented. And He has something that's going to benefit you in it and not just you. What we call a living free profit sharing.

There are people around you that are going to profit from it, that are going to benefit from it. You've been listening to Beth Moore with a quick word for today. The study of Galatians is now available as an online experience. Sign up today at or join Beth in January 2021 for the release of the printed workbook edition.

And thanks for listening to A Quick Word with Beth Moore. Do you know if you have enough? Enough money? Enough house?

Do you know how much is enough? If not, Ron Blue can help with his book Master Your Money, a step-by-step plan for experiencing financial contentment. Learn how to save, invest, and give wisely, how to create a long-term financial plan, and how to get out of debt. You'll find it all in Master Your Money by Ron Blue, available when you click the store button at Hey, great to have you with us today.

It's MoneyWise Live. Your host is Rob West. I'm Steve Moore from Proverbs 20, Proverbs 20 verse 23.

Unequal weights are an abomination to the Lord and false scales are not good. A reminder that for the Christian, total honesty really is the only way. And Rob, I see a sticker on your, either you bought a new sweater and forgot to take that tag off or you went and voted today.

What was it? I went and voted today. Early voting, Steve. Yeah. It's a privilege and an honor to be able to cast my vote.

And I did that today. Amen. You know, in the old days, in the old day, I'm talking like Benjamin Franklin, you know, they used to give you either a cookie or a donut when you voted. Do you ever remember that? Yeah. They gave me things today. I got a bottle of water and I got all kinds of snacks. Yeah.

They were waiting outside. Where do you vote? At Chick-fil-A or what? I mean, goodness gracious. Okay.

You need to come down to my county. I guess so. You know, in your case, it's, you know, vote often, you know, and particularly around lunchtime, you know. No.

Only once. All right. State College, Pennsylvania. Haley Roy, thank you very much for holding, sir. How can we help you? Well, thank you for taking my call.

I really appreciate your ministry and I listen to this as much as I can. I guess my question is, I think I made a mistake back in the beginning of this COVID time. I had a financial advisor and he presented me with a lot of, a few options and it was my choice. I'm not blaming him or anything, but I chose to put about a third of my IRA, which was in the mutual funds and stock market type things. And I took it out of there and I put it in bond funds.

And I'm thinking that that was a mistake. It's, I lost around $9,000 out of about $80,000 and it doesn't seem to come back at all. And I didn't know if that's typical for bond markets or when I should get back into mutual funds or that's sort of my question. Tell me a little bit about your age and stage, if you will. What is your age and are you working? Are you retired?

Tell me what's going on in your life. My wife and I are both 65 or 66, I'm sorry. And we're on social security, but I still work. I had some health problems years ago and I went on social security early because I didn't know how that was going to turn out, but the Lord's been good to me. And so I'm working again, we have a little farm and my wife pretty much manages that, so that gives us some income.

We really don't need any money other than our social security and what I make working, we're fine, doing really good. Yeah. Okay.

Very good. Well, I don't think it's necessarily a mistake to have a third of your investments in bond like or bond securities, especially with mutual funds where you have a basket of bonds, you're not buying individual bonds, so you have good diversification. The bond prices have been falling, but that doesn't mean you're not earning income off of it.

You would be earning the yield and so that would add to the overall increase of the portfolio, even though you have potentially unrealized losses in the price of the underlying bond fund itself. But that probably doesn't include what you've been earning as some income coming into the portfolio alongside the growth aspect of the portfolio, which if I understand you is two thirds of the overall portfolio. So I think the question is, what is the right allocation to fixed income for you given your age and stage of life?

What are your goals and objectives? And if you don't need the money right now, you're not living on it. You have other income sources. This is money that's just growing for the future. Then I like the idea, especially now that you both are 65, of you not being fully allocated to the market.

You just don't need to be. You have amassed some wealth. So having a portion of that in fixed income type investments, even though, yes, depending on what's happening with interest rates, you could see the underlying value of the bond or the bond fund decline. It's still providing income into the portfolio that's helping to supplement the gains that are happening on more of the equity side of the portfolio. So I think the question right now, perhaps, is to now that you kind of been in this for a while, visit back with your financial advisor and just revisit your objectives.

What is it you're trying to accomplish? What is your desired risk level? What is an appropriate return for your portfolio overall? A hundred percent of the portfolio? And then are you in the right allocation to deliver those results and recognize that the stock portion may be up or down at any given time? The bond portion may be up or down at any given time. But overall, you're in an appropriate level of risk.

And hopefully over the long haul, not in any six month or even 12 month period, but over three to five years or more, you're achieving your desired results. You have the right amount of liquidity and that money is there growing for your future, but also providing you, you know, an amount that could be tapped if you needed to access funds beyond the income that you have coming into the portfolio. Does that make sense though, Leroy?

Yeah, it does. I just didn't understand the bond market that well, I guess. But yeah, I think, I mean, I really like the guy that helps me out with my finance. He's really a big guy.

One of your CKA's or whatever. He does a good job. I just didn't know if I made the right decision or not. Yeah. Well, I think that's the key is just perhaps revisiting that with him. Open that line of communication to say, help me understand kind of why we're in this allocation or perhaps why you suggested this as an option.

And do you think I'm in the right mix of investments given what I'm trying to accomplish and how should I view each of these asset classes in any given market cycle and perhaps a little more education will allow you to be prepared for the ebbs and flows. But I think the key is to take a long-term perspective and that's where you're going to win in the end. And Leroy, we appreciate your phone call today. Thanks very much. And here's our phone number, 800-525-7000. If you want to talk about budgeting or maybe finding a balanced biblical lifestyle, church giving, what about planning for a major purchase, a house or a car? We can talk about all those things and much more. Again, our phone number is 800-525-7000. If you have a brief email question for Rob and you want to send that along, that address is questions at, questions at

And we'll be right back with more after this. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

More information is available at Christian Health Care Ministries enables believers to meet their health care costs affordably, biblically, and compassionately. It's not insurance but a voluntary cost-sharing ministry based on the biblical example of Christians sharing each other's needs.

And members aren't fined under the law for not having health insurance. Christian Health Care Ministries might be your health cost solution. Call 800-791-6225 or visit Hi there, my name is Anna, a biblical studies major at the Moody Bible Institute. The Moody Radio Verse of the Week on this Pastoral Care Week is found in Hebrews 13 verses 7 through 8. Remember your leaders, those who spoke to you the word of God.

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Go to, The financial wealth you leave behind could be the best thing that ever happened to your loved ones, or the worst. In Splitting Heirs, giving your money and things to your children without ruining their lives, Ron Blue explains why it's important to make these decisions now instead of forcing your heirs to do it later.

Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you. With SRN News, I'm John Scott. The presidential candidates are busy on this Friday, four days before the election. President Trump and Joe Biden are both blitzing the upper Midwest. The president is making stops in Michigan, Wisconsin, and Minnesota. Biden will be visiting Iowa, Minnesota, and Wisconsin.

Full House actress Lori Loughlin reporting to a California prison to begin serving a two-month term in the college bribery case. A strong earthquake in the Aegean Sea between the Turkish coast and the Greek island of Samos collapsed buildings in western Turkey, killing 14 people, injuring over 400. Earthquake officials say a small tsunami struck south of Izmir. A daylight saving time ends this weekend. Set your clocks back one hour early Sunday. Sharp drops on Wall Street that out fell 157 points.

The Nasdaq was off 274. This is SRN News. Thinking about. Really great to have you with us today.

It's Money Wise Live. Rob West taking your calls, your questions, your comments, conundrums, anything you want to chat about. This is a good time, especially since we have a couple of lines open. 800-525-7000. Let's continue on. Ellis, Kansas.

Roger, what are you thinking about today, sir? Well, I put some money into a Roth IRA through my property and casualty insurance office. They've got their securities licenses. And I wondered if you can you tell me anything about BlackRock? That's where this particular insurance company, that's who they partner with for their investment side.

I see. Yeah, it's a massive money manager. In fact, last check, it was the world's largest over a trillion dollars. So they they manage a lot of money. They have some world class mutual funds and investment managers. And you'll be able to have plenty of options to select that would be commensurate to your goals and objectives. Obviously, you know, any investment has risk and can lose value.

So the key is to among that money management firm, among that mutual fund company, finding the right mix of investments among the options that are provided to you to match your goals and objectives, your risk tolerance. But it's a world class money management firm with with world class investment solutions. But they're they're a Canadian firm, is that correct? They based out of Canada. I didn't think they were. I thought they were U.S. based. I could be wrong on that, but I'm almost certain that they are based here in the United States. OK, yes, but you would find nothing, nothing.

What's causing my question? Another ministry I listen to your ministry, another ministry that I listen to, didn't have anything good to say about BlackRock, just didn't even know they're the largest. Yeah, they said they're the largest manage more assets than anybody. Yeah. So that's what I'm looking for. Sure.

I think the question, Roger, is, you know, what what is it you're trying to accomplish? Because, you know, they have S&P ETFs and, you know, so you can look at any kind of number of investment solutions inside BlackRock. I think the key is, are you trying to align your investment selections with your values? And if so, you know, you wouldn't find faith based investment solutions at a firm like BlackRock. You're going to find more traditional investments that don't have positive or negative screening, meaning they're probably not going to find investment options where you can screen out companies that might be objectionable to somebody with Christian values. You're probably not going to find a fund inside the BlackRock family where you can screen in companies that are making a kingdom impact necessarily. Now, they'll have a whole line of sustainable investment options in the space of ESG, environmental, social and governance. In fact, they have a number of those solutions.

But so you would be able to lean into that. But that's kind of the secular approach to what we would call faith based investing. So depending upon what you're looking for there, you know, you'll find plenty of traditional investment options and you could build a portfolio of things that really meet your goals and objectives in terms of having faith based screens. You're not going to find that there. And in terms of what BlackRock as a company might be doing with their profits in terms of what organizations they're supporting, I wouldn't be able to speak to that.

I just don't know. But I will point you to a solution where you could check that out. It's called Inspire. I'm forgetting the name now of the URL.

I'll get it and we'll give it to you before the segment's out. But it's the Inspire organization. And they've just come out with a brand new site for you to screen your investments. And you would be able to search there for BlackRock if you wanted to find what they were doing with their corporate profits. I just found it. It's So that would be an option for you to check out. Roger, we hope that helps you.

Thank you very much. And obviously, we don't want to necessarily make up someone's mind for them. But we fall on the being thoughtful and spiritual side of our investments, wanting to put our money where with companies who are doing things that are godly, represent godly values, and may even have an impact for Christ around the world. And while that may sound difficult, these days, it's not really difficult at all, right?

More than a few people doing this kind of thing. Well, that's exactly right, Steve. I mean, there's more options than ever before for you to align your investments with your values. And so I think as believers, the starting place is to say, what is my conviction around investing, recognizing I'm an owner, albeit a very small percentage wise owner of a publicly traded company, but when I own shares, I'm an owner. And how do I want to reflect my values in that? Do I want to own a company and then reflect my values by shareholder engagement, voting proxies, and maybe attending the annual meeting calling investor relations? Do I want to avoid certain companies and vote my values that way by abstaining? Or do I want to intentionally opt into investments that reflect my values because the countries that I'm invested in align with biblical economic principles or the companies are having some sort of a social or kingdom impact through their work.

Any number of options are now available today that have never been available before. And so I would encourage you to ask your financial advisor about faith-based investment options, if that's something that you're interested in. And you'll find information about these kinds of organizations because we interview many of them and talk with many of them routinely. Just visit our website, which is Search around there. You'll find lots of good information, ways to connect, URLs, things like that.

Henning, Minnesota. Rebecca, how can we help you? Oh, well, I have a question about annuities.

Hello. I just recently in August transferred over from my 401k money to a gentleman I used to work with many years ago. He has his own business and he has suggested, you know, you should put it into an annuity. And I didn't know anything about it.

I just trusted him. And then I listened to you guys one day and you said you weren't crazy about annuities. So I would like to hear your thoughts on if I should try and move it or if I keep it there or what are your thoughts? Well, Rebecca, talk me through kind of what your understanding was of why you made the move from the retirement account.

I assume it was in a 401k and you rolled it out and moved it into a retirement annuity. What did you feel like you were accomplishing by doing that? He said that it was a good move. And I just don't know much about that. So I just trusted him. Sure.

Sure. Well, here's what I would say. There's nothing inherently wrong with the decision you made.

And I'm not saying it wasn't the right move for you or that there was some ill intention with making that recommendation to you. The reason we talk about working outside of annuities is just because they tend to be complex, they tend to be expensive. And I would prefer folks to just invest in traditional investments as opposed to using insurance contracts apart from a few specific examples. And so inside a retirement account, you already have in a sense, a tax advantaged vehicle, whereas you either got the deduction and the taxes are being deferred until you withdraw them in retirement, or you have a Roth type of investment where it's growing tax-free.

You've already paid the taxes. So you don't need the tax benefits of the annuity. So then it comes down to the investments. And I just think you can do better over the long haul without the drag of the fees and the commissions. But I think the starting point is to go back and say, why am I in this?

What is it doing? And is this the right place for me? I'm Stan Lloyd.

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The Treasure Principle is available when you click the store button at You know, Rob, we've had a couple of people today and we get this call on a regular basis who have made a choice, an investing choice for the long haul, and then they start to rethink their position. If that's your case, if you're wondering if you can go back and make changes, maybe you're even embarrassed to go back and make changes, what's the best way to approach that? Yeah, you know, I think there's always changes that can be made. Now, are there not implications?

Sure. I mean, when you get into insurance contracts in particular, it does limit your options in order to pull your money out. There may be fees, there may be surrender charges.

You may need to wait a period of time for those surrender charges to decline so that you have access to make a change. But bottom line is, just do your due diligence, get to godly counsel along the way before you make decisions, and then don't look back. I say we always look forward. We recognize we're stewards of God's resources. We make the best decisions we can. Sometimes we'll make mistakes, but we can always take another turn around the corner and perhaps align our investments differently the next time.

But I wouldn't be terribly concerned about changing your mind, that's for sure. Alrighty. Indianapolis, hello Pam. How can we help you today?

Hi. I follow your ministry and I really enjoy it. And I followed for the first time one of your advice to donate socks to my church, which I did. But I was wondering, for tax recording purposes, what is the value of that sock? Is it based on the stock price and the day I donated it or the day they received it or the day I filed the taxes? Yes.

Well, it's a great question and it's something great to do. And you would typically take the deduction for the full fair market value of the transfer and it's based on the date of the transfer. And so you would look up the value on the date that it transferred out, the closing price of that particular investment, and you would be able to deduct as a qualified deduction because you were giving it to charity, a not-for-profit organization, 501C3, the full value of what you transferred.

And then what it does after that, whether it increases or declines, has no effect on you. And one of the primary benefits is that you're missing the capital gain because you don't have to realize the sale of the security. And if it's at a profit where you would normally pay a capital gain, short-term or long-term, you skip that. And so you get the full value of the deduction prior to any taxes that would have been taken out had you not made that direct gift of stock to your charity. So I would talk to your tax preparer or CPA about this transfer that was made, let them figure out exactly how that needs to be reported.

You always want to seek professional counsel, but essentially that's the way it'll work. So you don't have to worry about what the basis cost was or any of those things. It's just the market value at the time you transfer the stock. Is that correct?

That's exactly right because we don't need to calculate capital gains since the full value is going to be what was donated. Pam, thanks very much for your call and thanks so much for being a regular listener. Portage, Michigan. Janine, how can we help you?

Yes. I'm calling because, and thank you for taking my call. I'm calling because I have an IRA, which is down to around $80,000, maybe a little more. My husband passed away about six months ago and we had lived on that and our Social Security since he'd been retired, which has been about 24 years. So now we're down to about $80,000. And I talked to the secretary one day last week and she said that my financial guy had invested some of that money into, I believe she called it a money market, but I'm not positive it was where it had made, whatever he invested had made several thousand dollars on it.

And it sounded like he had done a good job on that. But my concern is, with the election coming up, if the election goes into the wrong hands and I'm worried about a, not worried, not concerned about a, um, let's not mention a particular candidate, but I, yeah, you know, go ahead. A stock market crash or something where, where, where I would lose it or most of it. And I was wondering, is it a wise idea to take it out and put it someplace else, but I do not know where to put it.

I have some money in a savings account in another area, another location, but I was told by them that I couldn't take IRA money or they didn't tell me, but I heard that I couldn't take IRA money and put it into a savings account that was not, um, that was totally just a savings account, like a passport savings. And I don't know if that's true or not, but I wondered what you would suggest. Uh, yeah, very good. Well, a couple of thoughts here, Janine.

Uh, first of all, I'm so sorry to hear about your husband's passing. Um, you know, when it comes to investments, we always need to start with what is your goal and objective. Um, and that really has to do with, first of all, you know, what has God doing in your life?

Where do you feel like he's taking you and what are your needs? Uh, you know, what does your budget look like and how much income do you need to derive from this investment asset? Is it something that you're currently accessing to supplement your income or is it something that can just continue to grow? And then based on your age and your risk tolerance, a portfolio should be built. And once that's built, as long as it's properly diversified and it has the right mix of investments that are appropriate for you, not trying to beat an index or, you know, outperform the market, but just where you're trying to match your risk level with your objectives and get a commensurate return.

Once that portfolio is built, we just let that go. We might make tweaks or small changes over time, but we certainly, in my view, wouldn't make a drastic change based on an election regardless of the election, wouldn't make a change based on a pandemic regardless of the pandemic, wouldn't make a change based on just an economic cycle where we might hit a recession that lasts a couple of years. Because what we know, Jeanine, is that when we take the long view, as long as we have the right investment mix, that's going to pay off in the long run. Historically speaking, the market, even when an election perhaps goes the way you don't want it to, it always recovers and it moves to higher ground. Even when we went through the financial crisis of 08 and 09, we, following that, had the best bull market we'd ever had.

More wealth was created than in the entire history. So, you know, as you look at that, we don't want to make emotional changes based on an event. That's just a losing proposition. So I would come back to what is the right mix of investments for you? Now, you mentioned money market. That's about as stable as it gets, depending on whether what type of money market it may have, FDIC insurance, it may not. But it's a very stable investment, not going to generate much in the way of a yield, very low, but it's going to be very stable. So I think the question is on this 80,000, are you trying to generate an income or is this money that's just growing for your future? I just want it so I can, I take a distribution out every, I get a distribution from them every month.

But it's a small distribution. And I get social security from my husband and from what I had. And then I have some money coming out of a savings account that I get every month too.

So I have enough money to live on. That's not the problem. I just don't want to lose what I have in my RRA. That's what I don't want to do. Do you have a financial professional that's helping you make these decisions or making them on your behalf in terms of the investments that are inside that IRA? I have a financial guy who's handled it for 24 years. Yes, same man.

Okay. So I would start by going back to him. Janine, I would not pull out or sell out of the market because of the election coming next week. What I would do is go back to that investment advisor, financial planner and say, based on what I'm trying to accomplish, where I'm at in my life, what my budget looks like, what assets I have, let's revisit this allocation to make sure that I have the right investment mix. So I'm not taking too much risk, but I'm also taking enough risk to generate the return I'd like to see over a five or a 10 year period. But I would not encourage you to pull anything out of the market or make a drastic change because of an election that's less than a week away.

I don't think that's the right reason to make a big change. I think what you need to be focused on is, are you in the right investments for the long term? And if this individual has served you well for 24 years, I'd start there by saying, let's revisit this portfolio. And I'd like for you to talk through with me why we're invested in what we're in. And is this the right place to be moving forward? Janine, thank you very much. We wish you the very best as you go forward. Thank you.

Lee High Acres, Florida. Ray, I'm sorry to say that we've got about 90 seconds. So let's see what we can squeeze in.

Go right ahead. Yes, thank you. I'm calling about a home that was recently sold. It was purchased by my mother and she owner financed the home to me. There's about $100,000 of gains on it. And I believe she's going to have to pay some capital gains on that. But I was also wondering how would that, how would the gains be transferred back over to me to a gift or some kind of a matter where I don't have to pay double taxes?

Yeah. So who owns the property, Ray? My mother was the owner of the property and it was sold to, you know, she's the owner and seller. So all the funds will be transferred to her for the sale. Okay. And so she would be responsible then for the capital gain.

But then what's the question after that? How would I receive, what's the best way for her to transfer the money back to me to reimburse me because it was an owner finance. So the gains are technically my gains.

Okay. Well, because she's the owner, I mean, I'd visit with your tax preparer or CPA on this because she's the owner. They're actually going to be her gains. And then with that, she would then satisfy the note that you were carrying. And so she would then pay off that note if you have that documented.

Hopefully you do, that there was some sort of note there. So she would be responsible for the taxes. And then after the taxes are paid, she would then be responsible to repay that note, assuming there was one in place. Now, if that's not the case and it was just her property, but she's trying to transfer it to you, then she would have to transfer it as a part of an inheritance or a gift, which she could do 15,000 a year up to the exclusion.

And then it would go against the lifetime exclusion after that. And Ray, with that, we're going to have to let you go and say goodbye. I hope that information helps you. Thanks very, very much. And Rob, thank you, sir. And hope you and yours have a great weekend. Don't forget church and your church still meeting on Sunday during all this crazy stuff. Still meeting. Yeah. And a good many going in person too. I'm happy to hear it. You've been listening to Money Wise Live, a partnership between Moody Radio and Money Wise Media. For Rob West, I'm Steve Moore. Have a great weekend. Join us again next time.
Whisper: medium.en / 2024-01-31 09:08:41 / 2024-01-31 09:29:41 / 21

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