Hi, everyone. My name is Emma, and I serve as a producer here at Moody Radio. I want to take a quick second to tell you about our newest podcast, 52 Weeks in the Word. This podcast hosted by Trillia Newbell will walk you through the Bible cover to cover in 52 weeks. Each week, Trillia sits down with a guest for a 10-minute conversation about the weekly reading, Bible reading habits, and spiritual disciplines.
Some of these guests include our very own Chris Brooks, Jen Wilkin, Nancy Guthrie, and many more. If you've ever wanted to read the Bible in a year, now's your chance. Listen to the trailer, follow, and subscribe on the Moody Radio app or anywhere you listen to podcasts.
Episode 1 drops on January 1st. For we are his workmanship, created in Christ Jesus for good works, which God prepared ahead of time for us to do. Ephesians 2 10.
I am Rob West. Today, Christians are expressing a variety of considerations and needs as it relates to their financial decisions. I'll talk about meeting them with David Spica today, and then it's on to your calls at 800-525-7000.
That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, we're delighted to welcome David Spica to the program for the first time. David is the chief investment officer at Guidestone, a financial services firm helping those in ministry as well as the broader Christian population and an underwriter of this program. David, great to have you with us today. Thanks, Rob.
I'm honored to be on here with you today. David, I know vision and a clear mission really drives you and the team at Guidestone. Would you share your vision and mission for helping Christian investors as we get started here today?
Absolutely. When I got together with my team and we talked about what our vision and mission should be, we thought about, well, what does Scripture tell us? So we went to Scripture, and we saw three verses that really guided us. The first is the great commandment. That is Jesus telling us to love God with all our heart and all our soul and love our neighbor as ourself. Then there's the great commission, where Jesus tells us to take the gospel to the ends of the earth.
And finally is John 3.16, really the essence of the gospel, why Jesus came to earth. Those things really helped guide us to come up with our vision. And from that, we came up with a vision that we want to transform the world through Christian investing. Now I've learned that a vision—this is from Andy Stanley—a vision is the solution to a problem.
So what's the problem that we're providing a solution to, Rob? And the problem is that too few evangelical Christians invest in a way that honors the Lord. Only 15 percent of evangelical Christians today invest in God-honoring investments, and we want to change that. And so that vision is what's helping us get to that point.
Wow, that's compelling. And we're going to talk about the growth of this whole space of faith-based investing and the opportunity to align your values as a believer with your investments a little later in the program. But I'd love for you to build on that mission and vision and just share a little bit about what you actually do at Guidestone and how you serve God's people. Guidestone was formed in 1918 to provide financial support to retired pastors and their widows. And over the ensuing 100-plus years, we've become a multi-line financial services firm providing insurance, retirement, and investments to Christians, institutions, and Christian individuals. And so we've really developed into an organization that provides the needed financial services for Christians across the United States.
So how do we, on the investment team that I lead, how do we impart the values that we hold in our services and in our products? So it begins with Guidestone Funds. We're the largest faith-based investment firm in the country.
Today we manage a little over $18 billion in total. Guidestone Funds are available to investors across the United States, either directly through Guidestone or from a financial advisor. Secondly, we offer services through our personal advisory service, Guidestone Advisors, where we provide customized faith-based investment solutions for believers. And then finally, through Guidestone Investment Services, we provide customized faith-based investment solutions for Christian institutions. So a variety of ways that individuals and institutions can access the faith-based investments that we produce.
Yeah, that's exciting. Well, David, we're going to unpack all of that in terms of what that actually looks like. How can you have an investment portfolio that aligns with your values as a believer? And I know one of the things that's really important to you is that believers have access to organizations like this that share their values but who can also provide the tactical outworking of that through specifically their investments.
We've got just about 30 seconds before our first break. Talk about the importance of that. Well, I'll tell you what's important, Rob. There's a term called greenwashing, which I know you're familiar with. That's firms that create values-based investment solutions just to raise assets. They don't really believe what they're doing.
That is not Guidestone. We are a 100-plus-year-old institution. We live every day the values that are imparted in our investment solutions, and that's important for investors to know. We're going to talk about this and perhaps some stories of what this impact actually looks like and what about the advocacy side of it as well.
As a shareholder, you can actually express your values to company leadership. David will weigh in on that as well. David Spica joins us today. He's the chief investment officer at Guidestone, and much more to come on faith-based investing just around the corner. Delighted to have you with us today on Money Wise Live.
I'm Rob West, your host. Joining me today for this segment of the broadcast, David Spica, chief investment officer at Guidestone, a financial services firm helping those in ministry as well as the broader Christian population and an underwriter of this program. And David, just before the break, you were sharing the legacy and history and really the heart behind this organization. You know, we hear from more and more believers all the time on this program who really desire to have their faith reflected in every facet of their lives, and that includes their financial decisions and investments. Why do you think it's important for Christians to be working with a faith-forward organization like Guidestone in their financial dealings?
That's a great question, Rob, and the way I would answer that is I would say that Christians understand the need to tithe, to give back to the church and to give to those in need, but I don't think they understand that they have a need, that they have an obligation to invest in a way that honors God. So we provide that opportunity three ways through our mutual funds. First, we provide exclusionary screening. We've been doing this for decades. There are five industries that Christians do not want to support that we will not invest in.
They include abortion and alcohol and gambling and pornography. Secondly, we do shareholder advocacy. So shareholder advocacy is where we represent our shareholders and advocate on their behalf with companies that we own in order to encourage those company management teams to operate in a more Christ-like fashion. And then finally, and the piece of this that I'm most excited about, is impact investing.
Impact investing is proactively investing in companies that are doing good around the world and helping to spread the gospel. Yeah, that really is compelling and exciting to think that as a shareholder, even though I may own a small percentage of a company, that my voice can be heard through advocacy and that I might be actually making an impact through the investments that are made. Perhaps you could share a few success stories about both the advocacy side and the impact side in the work that you do. Yeah, and advocacy and impact, Rob, are how we truly, truly are going to change the world. We want to change the world, and this is how we're going to do that. So on the advocacy side, we work with other Christian investors through the Interfaith Center on Corporate Responsibility, and we've made several gains in certain industries, opioids being one of those. So we've worked to reduce aggressive sales practice of opioids, knowing how big a problem that is in our country. Secondly, we've had success in certain technology areas, for instance, with Google Chromebook, where we've had success creating safeguards so that children aren't going to places on the internet they don't need to be.
So that's the advocacy piece, and that's just a small sample. On the impact side, we really, truly want to promote the sanctity of life and the spreading of the gospel. So how are we doing that? We are investing in bonds that provide capital to Christian schools and universities. Obviously, they need capital.
We're providing that. We also invest in bonds that support housing and education for single mothers. This is important because we've learned that 75 percent of abortions occur with women who live at or below the poverty level. We want to reduce the impediments they have to having the child, and so that means providing a home, providing education.
They're going to be much more likely to keep that child. The last thing that we've done is we've committed 20 percent of the revenue of our Impact Mutual Fund to Christian causes, specifically life and gospel causes. And so over the last couple of years, we've given $200,000 to Send Relief, an organization that spreads the gospel and provides relief organizations relief opportunities around the world. And we've also given $100,000 to crisis pregnancy organizations and entities that are promoting the sanctity of life.
That's powerful. And I know it's an exciting area of the work that you do as you think about both expressing the values of believers through shareholder advocacy and engagement, but also through the impact side as you look for new and compelling ways through either direct stock ownership or, as you said, through bond issues that can actually facilitate and encourage a kingdom impact. David, you mentioned a moment ago that 15 percent or less of believers are actually deploying these types of investments. I think that's going to grow over time.
I know you do as well. But what are the challenges facing Christian investors today in terms of being a good steward of God's resources, specifically related to their investments? Well, first and foremost, Rob, they don't know that the opportunity exists to invest in God honoring investments. They need to know they exist and they need to know that really, just like tithing, they have an obligation to invest in a way that honors the Lord.
So they need a guide. They need an adviser that can lead them to these investments. Secondly, those advisers need to know that firms like Guidestone exist and that we're providing these investments. So that's up to us to make sure that we're providing the education for those advisers so they're aware that these funds exist and they can help their clients meet their goals. Finally, investors need to make sure their advisers know that investing in a way that honors God is a priority for them. So they need to be very proactive in sending that message to their advisers so that their advisers will seek out firms like Guidestone and they'll be able to honor the Lord through their investments, just like they do in the offering plate when they go to church every Sunday. Now, as a chief investment officer, David, obviously you're well aware of the need to have compelling returns, right?
Because there's a dual mandate here. Yeah, we want to make an impact, but we also want to grow the resources God has entrusted to us so we have them available later when we need them. But the exciting thing is that in this faith-based investing space, we don't have to sacrifice return when we're trying to have an impact at the same time. Would you agree that that's possible?
Absolutely, that's possible. And thank you for mentioning that, Rob. We've actually twice been awarded by Lipper as the best small mutual fund family in America. And we're the only firm that practices faith-based investing that has won that award. And that award is based on risk-adjusted returns. And so clearly we're able to provide returns at the same time that we're providing the values-based investing. So no, you do not have to sacrifice returns. And that is absolutely a key component of what we do.
Yeah, very good. I also want to unpack a bit more just the advocacy side of what you're doing. You know, some people might think, you know what, David, I'm such a small investor.
You know, I really can't make a difference. How do you use the power of the mutual fund structure and the influence you have as a manager of, as you said, more than 13 billion dollars to actually make a difference and make sure that the voice of your investors is heard? Well, the 13 billion dollars that we own is combined with the assets held by other faith-based firms through the Interfaith Center on Corporate Responsibility. So we aggregate those assets together.
It's a big number. So when we contact the CFO or the COO or whoever it is at that company, they're going to want to talk to us because they know that we can move the market on their behalf. And so they want to make sure that they are responding to us and to our needs. And so that asset base gives us the opportunity to do that. I love that.
Just 30 seconds left. Who can work with you and your team at Guidestone, David? Anybody can work with us. We offer self-service options, full-service options through Guidestone Advisors. And as I mentioned earlier, our funds are available through your current financial advisor.
The best way to contact us is through our website at GuidestoneFunds.com. Excellent. David, great work and we appreciate you stopping by today. We're grateful for the way you all have served God's people for a long, long time. Thanks for being with us. Thank you, Rob.
I enjoyed it. That was David Spica from Guidestone, the Chief Investment Officer. The website, again, it's easy to remember, GuidestoneFunds.com. Your calls are next. The number, 800-525-7000.
That's 800-525-7000. I'm Rob West and this is Money Wise Live, biblical wisdom for your financial decisions. Stick around. Thanks for joining us today on Money Wise Live. I'm Rob West, your host. All right, let's turn the corner and take your financial questions. What are you thinking about today, financially speaking? We'd love to hear from you. I've got some lines open and Clara standing by today to take your call. We'll get you on the air quickly at 800-525-7000 with whatever you're thinking about financially today, 800-525-7000. Give us a call right now. Let's begin today in Maryland. Frederick, you'll be our first caller. Go ahead, sir. Hi, Rob. How are you? Good. Thanks for calling.
Good, good. I am going to turn 67 next month. I want to retire after 38 years with the airline industry. I got in late in the stock market. I have about 165,000 in the 401k with Fidelity. I'm debt-free other than my mortgage. My mortgage is 185. I pay $1,300 a month with three and a quarter percent interest rate. I give 20% of my income to the Lord and I'm like, with the way that this country is going and all these crazy things going on, I was wondering about, I know it's a silly question, but should I take my 401k, cash it out and pay off most of my mortgage and then, uh, I don't know. I bring in, when I retire, I should be bringing in with a pension and my social security about 3,800 to 4,000 a month. So I'm just not sure what to do with it, uh, or how to handle it.
I'm in good health, so I should be okay for hopefully for a long time, but just not sure what to do with this money and where to go with it because I think I can leave it in Fidelity. I may have to move it. I don't know.
I have to check that out, but I'm just curious. Very good. Well, Frederick, these are great questions and this is an exciting season of life you're heading toward. A couple of questions for you. What did you say your age was?
I'll be 67 January 13th. Okay, very good. Um, yeah. And you said you've got 165,000 in the 401k. You also said that your pension plus social security without touching that 401k would be roughly 3,800 to 4,000 a month. Have you prepared your retirement budget, uh, you know, with a detailed look including those things that you don't get a bill for and maybe, you know, where you're escrowing for things that only happen a couple of times a year like an insurance payment that's semi-annual or homeowner's insurance. Do you know what your monthly expenses are all in? No, I'm not good at that kind of stuff.
I always kept it in my head and I, so I just, I work, work, work, work, pay my bills. And, uh, yeah, no, I, I don't know. Okay. What do you think you're living on right now? What would be your best guess? How much per month?
Uh, well, with the mortgage at 1300 electric is low, uh, car insurance probably about 2000 some a month. Okay. So you feel like once you're retired that that 3,800 to 4,000 should cover it? Correct. Okay.
All right. Well, I do want you to go through that exercise and really put together your retirement budget. I mean, typically what we see is, um, you should be able to live on 70 to 80% of your pre retirement income. However, there's probably things you're spending money on in a monthly basis, uh, you know, that you don't realize.
And that's where tracking for a period of time, uh, to really create that detailed budget that allows you to put money away for car maintenance and home repairs and be ready for that, you know, homeowner's policy. If you're not as growing with your mortgage payment, I mean, all that's kind of baked in. Um, you know, you're probably spending a good bit more than you think, but let's say you can live on that 3,800 to 4,000, which means you don't need the 165,000 in the 401k. That's good news because, uh, once you separate from your employer, you could roll that out to an IRA, which is what I would recommend.
And I'd encourage you to connect with a certified kingdom advisor and hire somebody to manage that for you to deploy that in an account. Um, it would stay in a tax deferred environment, so there'd be no tax implications, but they would invest it according to your goals and objectives and age. So typically at age 70 or close to it, you might think in terms of putting 30 to 40% in stocks, maybe 60 to 70% in bonds or fixed income type investments.
So you'd have kind of a stable conservative portfolio throwing off a lot of income, but not as volatile as if you had a full stock portfolio. What about paying off the mortgage? I don't really like that option for you, Frederick, unless you were to tell me, Rob, I just have a real conviction from the Lord as I prayed about it, that I'm to get debt free as soon as possible.
And if that would be the case, I'd say, well, you need to follow the leading of the Lord. But if that's not the case and you're willing to kind of stick with this mortgage and just keep going on your current trajectory, maybe accelerating it, but doing it out of current cashflow, I like that better for a couple of reasons. Number one is you don't create this massive taxable event by pulling it out of the 401k. Number two, you give the 401k time to recover. It's undoubtedly down with the market. And so this is not a good time to lock in those losses.
Let's let it recover. And then when you retire, hopefully it is recovered. And at that point, then you're transitioning perhaps to a slightly more conservative portfolio at that point. The other thing is even if you were to take 100% of this and put it toward the mortgage, you'd still have the mortgage payment.
So you're not getting rid of it. And I realize it'd be a lot lower. So you'd be much closer to paying it off.
And at that point, it would go away. But in the short term, it wouldn't even get rid of that mortgage payment, which would be one of your key objectives. So if it were me, because you can balance the budget with just the pension and Social Security, and because you have this 401k that you could just let continue to grow for the future, because as you said, you're in good health. And if the Lord tarries, you need this money to last perhaps for a couple of decades or more, I'd let that money just continue to grow, recover and then grow. And I'd hire an advisor to help you do that.
Does all that make sense? No, it makes perfect sense. And I had thought about that exactly what you said. But I just wanted somebody smarter than me to tell me that that was a good idea. Well, I'm not sure that I'm smarter than you, but I do think it's a good idea.
So I appreciate you checking in. Listen, if you want to go and connect with that advisor, I'd interview two or three Certified Kingdom Advisors. So you have the one that you're going to use picked. So when you retire, you can immediately roll that out to the IRA.
Just go to our website moneywise.org, click find a CKA and I'd interview again two or three there in Maryland and find the one that's going to be the best fit for you. Frederick, God bless you, my friend. Listen, all the best in this next season of life.
I'm sure God has some pretty exciting things in store for you. Be looking for it because your calling doesn't have an expiration date. Hey, thanks for your call today.
800-525-7000. We still have lines open. Give us a call right now and we'll be right back. Hey, thanks for joining us today on Money Wise Live. This is where we apply the wisdom from the Bible to your financial decisions and choices. We've got some lines open today, perhaps one just for you. Maybe there's something you've been wrestling with financially and you're wanting to talk about it, perhaps bring biblical wisdom to bear from God's Word.
Well, this is the place to do it. We've got some lines open. Give us a call at 800-525-7000.
That's 800-525-7000. Before we head to Ohio to talk to Benita, some exciting news that we announced a couple of days ago. A generous donor from the Money Wise family stepped up to say, I want to help you reach your year-end giving goals there at Money Wise Media. I'm going to put up $50,000. We'll match every dollar that comes in this week for the next couple of days until Friday, close a business, and we're well on our way to taking advantage of that, but we're not there yet. So if you're a part of the Money Wise family, you benefit from this program and you're like other Moody Radio listeners like Tia and Christian and David and Coretta that have supported this work here at Money Wise Media, we'd invite you to be a giver and help us maximize this $50,000 match. You can do it online at MoneyWise.org.
Right there at the top of the page, you'll see our progress toward our year-end goal. You'll also see a link to Give Now. You can give online or by the mail or by phone if you want to call one of our team members toll-free. Again, MoneyWise.org. Just click Give Now and your impact will be doubled when you give between now and Friday, and thanks in advance. All right, 800-525-7000 with your financial questions today. To Ohio, Benita, you've been waiting patiently. Go right ahead.
Hi, how are you doing today? Great, thanks. So my question is, I've been listening to your station for years now, 47 years old. I've already paid off my home. I have a 401k through my job. I also have a Roth, both at 15%. I also have rental property that is now paid off. Now, I have this influx. So at this moment, I'm trying to look at what type of investments should I look at. Would the economy the way it is?
Would a CD be best suited? I'm just trying to figure out what would be the next move for my retirement down the line. Yeah, wow. Well, other than just listening to this program, Benita, maybe you should be hosting this program because it sounds like you're doing a phenomenal job. I mean, you paid off your house. You bought some rental property.
You paid that off. You got 15% going into your Roth and your 401k, so you're well on your way toward your long-term savings, and now you've got a problem, and that is you got more money and you don't know what to do with it because here's the thing. These four buckets, live, give, owe, and grow.
Well, here's what happens. When I cap my lifestyle and say I don't want to spend any more on my monthly expenses, well, that bucket goes away because I've kind of frozen that, and then all of a sudden I've paid off all of my debt. Well, that bucket goes away, so the only two that are left are give and grow, right? So the grow is what do I want to save and invest for the future? The give is what do I want to give to the Lord's work, my local church, the people in need, the ministries that are doing work in the name of Jesus around the world that are on my heart, and eventually I need to cap the grow bucket too and say how much is enough not only for my lifestyle but also for my accumulation because here's the reality. If you've done some retirement planning and perhaps that's the next step with a financial planner to say what will I ultimately need when I get to that season of life where the Lord may redirect me away from paid work or maybe I won't be able to work for pay anymore but he's going to reassign me to some other project in service to him and therefore I need to be able to replace that income, you may be already well on track through your rental properties that are debt-free or property and your investments, your retirement assets, you may be well on your way such that the financial planner would say, you know what, Benita, you really don't need to save any more other than what you're already doing.
So if we were to eliminate the live, the owe, and the grow buckets, well guess what the only one that's left is? Give. And now you can kind of do some hilarious giving as the Lord leads because you say, I've already set my financial finish line. Does all that make sense? Yes.
Okay. Have you ever done that? Have you ever done some kind of in-depth retirement planning to determine if your current trajectory, excuse me, let me try that again, trajectory is going to get you to what you ultimately need to be able to put away to replace your income and meet your expenses in retirement?
Have you done that? So I've already like thought ahead so I already also have an annuity that I'm like growing right now along with my retirement from work. So it's like my goal is when I retire I don't want to eat peanut butter and jelly sandwich.
I want to be able to not worry about anything, travel, but also be a blessing to someone else. You know what I mean? Like, but I also have to look at, I also have to look at like, God forbid I go into a nursing home. Like what will that look like?
Or what, you know what I mean? So I'm trying to look at what 65 and 67 is going to be like. Yeah. And what is your age right now? I'm actually 49. Sorry, 49.
I will be 50 in August. Yeah. Okay.
So you know, you still got quite a bit of time on your side. I know you told me the percentage, but what do you think you're going to put in your 401k this year? Are you going to max it out at the full amount?
So I've already maxed it out every year I max it out. Okay. All right.
Yeah. So beyond that, the only other way to save beyond the fully maxing out your 401k plus the Roth, which you're already doing that is through an insurance product where you could actually get some additional tax deferral and that would be an annuity. You're already doing that. So I think at this point, I mean, other than just continuing to build your real estate assets, the other option would be to grow this in a taxable account where you just start to systematically invest your surplus.
But I suspect Benita that if you did some detailed planning, you could get peace of mind around the fact that, okay, wait a minute. Based on my current trajectory with all that I've got saved, plus what I'm planning to continue to save between now 49 and retirement, let's say it's 65 or 66. I'm going to have far more than I could ever spend unless I plan a dramatic increase in my lifestyle. And when you get to age 55, somewhere between 55 and 60, you could get a really significant long-term care insurance policy that you would start paying for that could step in if that need existed. And I agree that could be expensive. I mean, nursing home care today could run you 9,000 a month and we're talking 15 years from now at least. So it's going to be quite a bit more, but that's where you could offset that risk with a really nice long-term care policy. So I think by doing some of that planning, you could take the guesswork away to say, well, I'm hopeful I'm going to have enough. No, we can actually project out what you're going to have in real estate and in stocks and bonds and with a long-term care insurance policy and say, you know what, we can cap this and now you're free to start giving away to helping more people as the Lord brings them to you right now without having to wait until that point down the road. Do you follow all that? Yeah, I do follow and I did look into that.
The only issue is, is that I do have a pre-existing medical condition, which most insurance companies will not assure you for. So that kind of knocked me out of that realm. You know what I mean? Yeah. Now, depending on what it is, we're not talking about life insurance, we're talking about long-term care and the medical underwriting is completely different.
You're right. You may not qualify, but it's going to be looked at differently than if they were insuring your life. So you may still be able to qualify and certain companies will treat your condition differently than others. So I would do this. I'd schedule an appointment with a retirement specialist, a certified kingdom advisor in your area.
I'd get a long-term care insurance specialist, although you're probably five years away from that. And then the other two options is more real estate and taxable stock investing. Stay on the line. We'll talk more off the air and we'll be right back. Hey, great to have you with us today on MoneyWise Live.
I'm Rob West. Hey, as we head toward 2023, it's hard to say, you probably are thinking about maybe this is the time of year, right, with my fresh start to finally get on that budget. Well, we can help with that. The MoneyWise app will help you use the tried and true envelope system and a beautiful digital expression right there in the palm of your hand on your smartphone to finally set up that budget, to fund your envelopes, have your expenses, your transactions automatically categorized so you can see at any given moment in the month, what do I have left in eating out and clothing and entertainment? You can stay on top of your budget and be a wise manager of God's resources. You can find the MoneyWise app in your app store. Search for MoneyWise Biblical Finance or check out our website, MoneyWise.org.
Just click the app button. All right, before we head back to the phones, a quick email. This one comes to us from Mary. She writes, I got a car for my son in college. Then he dropped out. He hasn't kept his obligations to me. How do I get rid of the car? I still owe more than $20,000 on it and he needs a car.
Well, Mary, this is tough. You probably are going to have to exercise some tough love here as much as you don't want to. First of all, if you're upside down in the car, you're going to have to try to get a personal loan for the difference to sell it and I would try to get out from under this as quick as you can. The dealer, the lender may give that to you or you may need to go out and find another lender to give you a personal loan but I try to get out from under that as quick as you can. If your son isn't working, he doesn't need a car. If he is, perhaps he can get one on his own and if you can help him, I wouldn't by any means co-sign with him. If you have the ability to help him get into a car that becomes his responsibility solely, perhaps you help with that down payment but the Bible is clear. One who lacks sense gives a pledge and puts up security is what Proverbs tells us we should never co-sign especially with family members.
It changes the relationship and 40% of the time according to the Federal Trade Commission, people who co-sign don't end up making the payments and that just not only creates financial damage but also relational damage as well. So this may be the time that you go to your son and say, as hard as this is, you're going to have to learn this lesson now because if you don't, it's going to be much worse down the road. Mary, we'll certainly be praying for you.
Thanks for writing to us at questions at MoneyWise.org. All right, back to the phones we go here in our final segment to Ocala. David, thank you for calling, sir.
How can I help? Well, thank you for taking my call. I'm pretty close to 70 years old. I had retired for two years and just went back to work about three or four months ago. Mainly the reason why is my investments have been losing money at a pretty steady rate like everybody else of course and I've been dealing with a fellow at one of the... I don't want to throw any dirt on anybody so it's a big name brokerage house and I've been dealing with him to manage my money and he always told me he'll get me four to six percent.
Well, I've never seen that in the four years I've been with him. It's always been going down. I'm probably down about 30% of my investments now and I've got a friend that works with another fellow that's with the same company that this guy is. Now, my guy is telling me very much like you tell people, stick with the stocks and bonds and the market and all that because there will be a recovery. You don't want to miss out on the recovery but that's always based on if you've got a pretty long timeline and I don't and within the next couple of years I'm going to need to start taking money.
These R&D's are going to start picking up on me and I've got to take the money. So, this friend of mine, his guy is telling him, he calls him once a month. My guy never calls me and I've got to call him constantly but his guy is now telling him that invest in these treasury bonds that are paying five percent and they're guaranteed you won't lose anything and he takes this guy's advice all the time and he's doing a lot better than I am. Have I just gotten stuck with a bad finance guy or what?
Yeah, I mean, obviously I don't know this individual. There's some things that are concerning to me that you said. Number one is you're not getting any communication.
That's not a good sign. Number two, sounds like you were losing money even while the market was kind of going straight up. I mean, this year has been incredibly tough but the 12 years before that have been incredibly good and if you were losing money even during those years, there's a question there as to why you were losing money. This year should have been money you were just giving back part of your profits, not a continual decline for four years or so and obviously when I say you should stick with the market for most people, it's really assuming that you're invested in high quality investments, you're properly diversified according to your age and risk tolerance. Treasury bills or bonds could be good and the yields are more attractive right now but the face value, the price of the bond can lose value as the interest rates continue to head higher and they will.
There will be a point where that kind of rolls over but we're not there yet. Fed is just raising rates again this week. So I think the key is perhaps start looking for an advisor that perhaps would replace advisor where you've not seen good performance even during the good years, where you're not getting the right communication and get a strategy that makes sense but I do think it's still probably in your best interest for you to stay invested in a stock and bond portfolio that probably has at least 30% to 40% in stocks until this recovers and then maybe re-ask the question. But here's the thing, even at age 70, David, you still perhaps have a decades long need for this money and that's where continuing to have a stock component to this makes some sense so that you can offset the effects of inflation and have somewhat of a growth component to it and the good news is that if all you need is that required minimum, that's still a very small percentage and that could come out of the fixed income portion which could be more like bonds and treasury bills, bonds and notes. So you wouldn't have to touch the stocks unless you had a profit that you were taking inside the portfolio but theoretically, you should never have to touch that 30% because it's continuing to grow and replace the money that you're taking out and the ability that you have to step back into work part-time to offset some of this so you don't have to pull anything out during a down market is great.
Now obviously, you won't have that opportunity forever as you continue to age. So where do you go from here? Well, I think you need to start interviewing other advisors to consider a change just given what you've told me and I think I would talk to that advisor about sticking with the right allocation to stocks and bonds until this recovers and I do believe it will, David. Once we know that rates are done rising and we can see the full extent of the recession that may or may not come next year, there's trillions of dollars on the sideline.
This market will recover, I believe, fully and at that point, if you wanted to get more conservative and going to a higher percentage in bonds or even transferring the risk to an insurance company inside an annuity, you could do that but I don't think this is the time. However, I do think it's appropriate to consider a change in advisor. Does that make sense? Yeah, it does and I've got the actual statistics. I've been with him for four years. He told me that over the time that I've been with him, I've lost 16% and year-to-date, now this he gave me about two months ago, year-to-date I've lost 25%. So in that four years that I've lost 16%, I think I'm with you, why didn't I make some money? Yeah, so you're down 16 from the start over the four-year time span or you lost 16 prior to this year? No, it was 16% over the time span I've been with him. Okay, so the question is why didn't you make enough that you could have absorbed that and being down 25% two months ago is not out of the question because the market was tough. We've seen somewhat of a recovery. I bet your portfolio is doing better the last 60 days but nevertheless, I think given all the things you've said, a change is probably appropriate if for nothing else so you get the proper communication and somebody that's regularly checking in with you, maybe not monthly but at least quarterly you're having a sit down or a phone call to talk about the portfolio. So I think for all those reasons, let's see if you can find somebody, perhaps your friend's advisor or somebody else that you would have peace of mind with and then develop a plan to see this recover, figure out what the right allocation is moving forward beyond that and then go from there. Okay?
All right, well there's one quick last thing here. The same guy that I gave my money to, I gave it to him because he was the one handling the 401k where I worked and that's where I would have gone back to work and I went back into the 401k at 15% because that's about what they match every year and he's still running that and I'm just wondering, am I headed for any kind of an issue if I leave him on the personal side? No, you shouldn't at all because he shouldn't be running anything. You should be able to self-direct which investments you want for your 401k. Don't you have a menu of choices to pick from? Yeah, but I've always just let it be whatever they've decided that they were going to back and I've always done pretty good with it. Yeah. No, this shouldn't affect that whatsoever. I mean, he probably won't be excited that you're moving away.
That shouldn't have any bearing on your participation in the 401k and the performance of the investments whether you stay with what you have now or you opt for some of the other investments inside the plan. All right, well thank you very much. I appreciate your time. All the best to you, David and appreciate your calling today. If we can help you further along the way, don't hesitate to give us a call. Roger and Mike, so sorry we didn't get to you today. If you want to stay on the line, our team will get your information and we'll see if we can give you a call tomorrow and get you first in line. I appreciate your patience and I'd love to chat with you again.
You stay right there and we'll get your phone number and try to call you back tomorrow. Folks, thanks for being along with us today. We covered a lot of ground. It's my privilege to join you each afternoon here on Moody Radio to talk about our role as stewards of God's money. Our objective? Faithfulness. Obedience in the same direction for a long, long time and that includes with our finances because the reality is it's not ours at all.
It belongs to God, so we're to reflect the heart of the master as a steward and be found faithful. Hey, let me say thanks to my team on behalf of Tahara Haynes, Clara Segar, Dan Anderson and Jim Henry. I'm Rob West.
Couldn't do it without that amazing team pushing the buttons and doing all the hard work. Thank you for being here as well. Money Wise Live is a partnership between Moody Radio and Money Wise Media. Hope you have a great afternoon and we'll see you tomorrow.
Bye bye. Moody Radio is so thankful for a 2022 filled with biblical programming, impactful messages and relevant discussion. If you'd like to help us start 2023 strong, consider a gift at GiveToMoody.com. That's GiveToMoody.com.
Whisper: medium.en / 2022-12-15 19:16:12 / 2022-12-15 19:33:38 / 17