Impact Bonds to Build the Kingdom

The following episode of Faith in Finance Live is prerecorded, so please don't call in. It's been said that investing in bonds is a negative art of exclusion rather than of search and acceptance. But is that really true?

Hi, I'm Rob West. Many investors look at bonds as a passive way to store money they'd rather not risk. But bonds are actually the means for getting things done. I'll talk with Benjamin Bailey today about impact bonds. Then we have some great questions lined up for you.

But don't call in today because we're prerecorded. This is Faith in Finance Live, biblical wisdom for your financial decisions. Well, it's always a pleasure to have Benjamin Bailey with us.

He's vice president of investments and senior fixed income manager at Praxis Mutual Funds and underwriter of this program. Great to have you back with us. It's great to be with you again. We're going to talk about impact bonds, bonds that actually help to build God's kingdom. And I'm really excited about our conversation today. But before we dive in, I'd love to get your take on what's been happening in the markets these past several weeks and particularly with the banking system.

Yeah, sure. So, you know, with all major issues like this, there's certainly multiple factors that can lead to some of these problems. You know, the cryptocurrency space and some of the falling prices over the last year was really a major factor in two of those bank issues. And then you had Silicon Valley Bank and its crisis of confidence with its uninsured deposit holders. And there were a lot of those.

And these situations just seemed to move pretty quick. But another big factor that we had for last year, especially was that interest rates moved up so quickly, whether you think short term or long term and adjustments just need to be made. But I think two really important things to remember is first, these banks are really outliers among the mass of other banks, because most banks are really managing their risks well and in a much more prudent manner.

And second, that the government really stepped in and played that role that we need them to play. They calmed things down and made sure all the depositors in those banks had access to their money. Yeah, you've certainly had a front row seat to all of this as a bond manager. And it seems like Silicon Valley Bank was just really the perfect storm, given that they had a high concentration and a high growth sector of the economy with lots of need for cash on top of the fact that they really mismanaged their portfolio. Is that right? Yeah, there was some definite mismanagement that did occur. Interesting. All right.

Well, that's helpful. Markets, of course, go up and down, and that's to be expected. But, Benjamin, in your view, why was 2022 such a difficult year for investors?

Well, when you think about that, most investors, they're going to have a mix of stocks and bonds in their portfolio. And so last year was really difficult for those folks. You know, if you think about a 60-40 portfolio and viewed with after inflation returns, it had its most difficult 12-month period since September of 1974. If you go before that, it was June of 1932, and that was even a worse year. But I really doubt most of your listeners were investing in the market at that point.

But there really was just no place to hide, right? So normally you have bond returns that are positive when stock returns are negative. And that makes sense because people are fearful of the future. They're going to want to rush into something that's viewed as safe. But in 2022, interest rates, they were starting off low, and then they moved higher really quickly. And so stocks actually moved lower in 2022 because the stock valuations were based off of those kind of 0% interest rates. So again, adjustments needed to be made. Yeah.

We have just about a minute left before our first break. Any thoughts for folks thinking about adjustments moving forward in 2023? Well, when you think about the adjustments that needed to occur, I do think it's important to look back in 2022. And so if you use this analogy of a roller coaster and you think about the ups and downs that occur, and certainly if you can't see the next move, it can be disorienting. Now, I think also clients generally work with advisors and fill out this client risk questionnaire and they say, what would you do if markets were down? And most times people are like, oh, if they're down, they're cheap. It's like buying something at Kohl's on sale, right? But when you're in that moment, you really are thinking, okay, I'm just going to sell a little bit, wait until things settle down, and then I'm going to get back into the market. That's just the feeling that occurred.

I know it is because I've heard it for many, many people, right? But the issue is markets are going down for that reason in the first place is that people are saying, I'm just going to get out. I'm just going to pause for a little bit and then wait until I can kind of see that it's going to turn back up. So that's what's happening with the entire market, kind of buildup of all these people making these decisions. But instead, what we recommend is to learn from what happened, work with your trusted advisor and understand your true risk tolerance.

That's great advice in any market and certainly now more than ever. We're talking with Benjamin Bailey today. He's vice president of investments and senior fixed income manager at Praxis Mutual Funds. When we come back, what are impact bonds and how are they making a difference in people's lives and for investors? That just around the corner.

So don't go anywhere. Even though we're away from the studio today and you shouldn't call in, there's much more ahead on the program, so please stay tuned. Great to have you with us today on Faith and Finance Live.

I'm Rob West. With me today, Benjamin Bailey. He's vice president of investments and senior fixed income manager at Praxis Mutual Funds, an underwriter of this program. We're talking today about a particular investment you may not be familiar with.

It's compelling and it's also making a real difference in people's lives all over the globe. I'm talking about impact bonds and that's where I want to go next, Benji. Let's transition to this idea of impact bonds. Praxis, of course, has been a leader in investing in positive impact bonds for over a decade. So would you perhaps start by reminding us what are positive impact bonds?

Sure. So in general, when a new issue comes to the debt market, they're just going to tell you a corporation or something is just going to tell you this goes for general corporate purposes or maybe recently maturing debt, so to pay off something. But over the past decade, this market for positive impact bonds has really taken off. So in these cases, the issuer is actually going to tell you what areas the money will be going into and that it's going to be used for a positive benefit to creation or communities. And so that's what we call a positive impact bond against something that has that positive specific benefit to creation or to communities. And most of the time, we really even know which specific projects that money is going to be used for or has been used for.

Yeah, it's really exciting. So what types of impact bonds are out there? Okay, so there's a couple different kind of major categories in that. And again, we would talk about this as kind of having an impact on creation or on the environment or on communities. So there's green bonds, there's social bonds, and there's sustainability bonds. And that sustainability bond means that it has a mix of some of those green and the social aspects. But so there's impacts also on the domestic side in the United States or on the international side. And there's needs in all places, right?

There's needs in Africa and Southeast Asia or in the United States. And really from a portfolio management perspective, we want to think about diversification not just from an impact perspective, but also from a risk and kind of that risk reward that you'd expect on the return side. And we know that some people don't necessarily resonate with environmental investing, but we really think it's important to think about this as creation care. And it's a part of following Christ, we believe. And I really appreciate what the National Association of Evangelicals says in their website about creation care. And I quote, as followers of Jesus, we embrace and act responsibly to care for God's earth while we reaffirm the important truth that we worship only the creator and not the creation. So Christians acknowledge creation care as an act of discipleship. We are stewards of the earth summoned by God to work it and take care of it. And our uses of the earth must be designed to conserve and renew it rather than to deplete or destroy it. And we pay special attention. And I really think this is so important here to protecting human health and protecting the most vulnerable and really this understanding. So that's the end quote there. So in this understanding of this with the National Association of Evangelicals, it's really just matches up perfectly with what we call our stewardship investing core views.

Yeah, that's really helpful. And of course, you mentioned protecting the most vulnerable. And that's certainly what Christ has called us to do, right?

Most definitely. And it really, from our perspective, it compels us to make sure that we're taking care of people in multiple different areas. And one of that is in the environmental side in this changing climate, no matter what your view on that is, if it's going to have this change, then it's going to be hurting the vulnerable and the poor much more because they're not going to be able to adapt as well. And so that's one reason why we want to support affordable housing projects because offering shelter and people is really this basic need that they have. And if you look back in Matthew and you look at that story of the sheep and the goats and the king says, I was a stranger and you invited me into your home and the righteous ones answered, Lord, when did we see you hungry and feed you thirsty and give you something to drink or a stranger and show you hospitality? And the king will say, I tell you the truth when you did it to one of the least of these, my brothers and sisters, you were doing it for me. So our view based upon that, helping the poor with affordable shelter is really specifically answering Christ's call.

Yeah, I love that. What other examples Benji do you have of specific projects where you've purchased impact bonds? Yeah, so Freddie Mac, which many of your listeners would know kind of alongside of Fannie Mae, helped support home ownership all across the United States and they issued a social bond. So again, that's kind of an impact on communities and it was in the United States and this was for rental homes across 38 different states for individuals with intellectual and developmental disabilities. So there's a significant shortage of community based homes critical to the de-institutionalization of care for individuals with disabilities. And this bond itself was bringing, providing 4,462 beds for people and about 90% of that was being affordable for people with very low income. So that would be people making 50% or less of the median income and it allows individuals with disabilities to live and work in their communities.

So that's one example. Another recent purchase that we made was for the US Development Finance Corp. So the DFC, it's an agency of the US federal government and this specific bond was a loan to Water Equities Global Access Fund. So this entire deal, there were four different bonds that were put together and it raised over $100 million and that money was used for clean water and water sanitation microloans in emerging countries across Africa and Southeast Asia. So it's going to affect 5 million people and give them access to clean water and better sanitation. So talk about Kingdom Impact and really bringing water to those who are thirsty.

It just clearly relates to Christ's call. Absolutely. So I think the exciting part of this though is that, you know, through some of these carefully chosen impact bonds, people can invest in these projects with the money. They're already safely investing in their fixed income portfolio, right? This doesn't have to be just part of some small charity portfolio off to the side and certainly no doubt I encourage that too, right? But investing for Kingdom values through impact bonds can just be a part of your core retirement investments. So that's why we think it's just so exciting. It really is Benji, because as you said, you know, so often we think about making a difference in the name of Jesus in people's lives as being reserved for our giving dollars. And yet through the deployment of capital, we can have an equally as compelling an impact in people's lives, right?

Yeah, no, you definitely can. And that's why we think it's just so exciting to be able to do both of these things at once. Yeah. Now, clearly, these are bonds. So in our remaining moments, perhaps you can share how should folks think about impact bonds in terms of the risk level that they're assuming vis-a-vis other bonds that they might consider and the returns that might be associated with these bonds?

Certainly. So these impact bonds at this point are 37% of the mutual fund that we're managing. So we think that it's a very, we know that it's a very important part of what we're doing, but we also think that you need to have balance in each of these things. So many of these impact bonds have a certain level of risk, right? They might be relatively risky, but then you're probably going to be getting a higher return.

Some of them might be relatively safe, so maybe your return won't be quite as high. So at this point, having a little over a third of the portfolio, we think adds a good balance to the overall fund so that we can do things that are going to help people to retire, you know, get the returns that they desire. But with a large portion of the portfolio also make these deep impacts. And that's why you have active management of this portfolio.

So you can really manage the risk across the entire portfolio. Is that right? Yes, most definitely.

Awesome. Well, Benji, you've given us a whole new look at bond investing today. And what an exciting part of our investment portfolios as we think about the possibility of impact bonds. Thanks for being with us, my friend.

It was great to be with you. That's Benjamin Bailey of Praxis Mutual Funds. You can learn more at praxismutualfunds.com. That's praxismutualfunds.com. Well, folks, before we head to this break, let me remind you, if you haven't checked out faithfi.com, that's faithfi.com, I'd love for you to do that. You'll find the best content in biblical finance there for you to grow in your understanding of managing money God's way. You'll find our community and the money management system.

It's all there at faithfi.com. Now, again, a reminder, we're not here today, but more of your questions that we lined up after the break. Great to have you with us on Faith and Finance Live. I'm Rob West. Let me remind you that we're not live today, so don't call in, but we have great information lined up ahead in the program coming your way. All right, let's head back to the phones to Louisiana.

Hi, Charlie. Go right ahead. Hey, thanks for taking my call. I'm on my way today to sit with a financial advisor that my father, who is 85 years old, has been using for a number of years, and they had convinced him to sign into a single premium deferred annuity for a million dollars that he had in cash at 85 years old. And this makes no sense to me.

How do I get him out of this? Is there any advantage to him, to what he has done, because he is convinced that this was a good thing? Yeah, yeah. Well, how long has it been? I mean, you generally have only 10 days to reconsider and back out with an annuity contract. He signed into this December 27th.

Okay, yeah. So that time has passed, and there's going to be some significant surrender charges for him to be able to get out of this. What was the objective? Is he looking for an income stream or what was the objective in the advisor selling him this? In his mind, he simply thought that he was moving out of stocks and that he was going to have a guaranteed rate of return on his money. What he doesn't understand is he surrendered that money, and now he doesn't have liquidity. He thought it was an investment when he bought a product. And I asked him, how did you get educated on this?

He made this decision over a phone call with his advisor. Yeah, that's really disheartening. You know, you and I know that this probably was not what your dad realized he was getting into. I mean, the disadvantages of this immediate annuity is, obviously, they typically have very little interest, so it may or may not keep up with inflation. You lose control of your money when you purchase an immediate annuity, and that may be the big one that your dad didn't understand. There's often no liquidity, so you can't get to the money without significant surrender penalties. And then many of them don't even have a death benefit, so you don't have anything to pass on to your heirs when you pass away. So why would anybody buy one? Well, if you want basically an income stream for life that's guaranteed with a floor to ensure that you don't lose money, you don't have fluctuations in the sense that you know, okay, at least I have this amount coming in for the rest of my life, and that's going to allow me to meet my obligations. But what am I giving up in exchange for that?

And that's just immense. If you feel like there was, you know, obviously he was manipulated or he was misled in some way, there wasn't proper disclosures, obviously you could pursue that. But if this was just your dad, you know, having full knowledge and being a little older and not understanding quite what he was getting into, but going ahead and signing off on it, there's probably little recourse other than just to let this advisor know that, you know, your dad didn't end up with what he expected and, you know, you're going to have to work through that. It's a terrible, unfortunate situation if he in some way took advantage of him. And the reality with annuities is they are in just about every case sold and not bought. And what I mean by that people don't go in saying, I think I want an annuity, you know, they're talked into it in many cases, when it's not maybe the best option, not saying there's never the right time for an annuity. In some cases, there is. But the key is, did he understand what he was getting into?

And what I'm hearing from you is, doesn't sound like he did. Is that right? Right.

Yeah, yeah. So sitting with this advisor today, if I were to ask him three questions, what would those three questions I should ask? Yeah, well, I think the first thing is talking to your dad and just understanding what he believes he purchased. Does he understand that he gave up control of the money when he purchased this immediate annuity? No, he does not. Okay. And so I think that's the first question is, my dad was is not under the impression and is not aware of the fact that in purchasing this annuity, he gave up access to his money.

Why is that? Because it doesn't sound like there was a whole lot of education there. I think secondly, what are our options at this point, if my dad, you know, doesn't want this? And, you know, he wants to be able to get control of this money. And then thirdly is, what did we actually buy? You know, what are the, what is the guaranteed return on it? Is there a death benefit? You know, how do we access the funds?

You know, what happens, you know, if my dad passes away next year, what happens to the money? I mean, you know, you're going to want to understand the inner workings of this particular policy itself. But then beyond that, I think, you know, if there's a misalignment between what was bought and what the understanding was of what was bought, why is that?

And how can we rectify the situation? So there's really no easy way out here, obviously. No, there's not, because I suspect, I mean, unless there wasn't proper disclosures, but I'm sure there was. I'm sure your dad, you know, signed all the documents disclosing exactly what he was getting into. He just may not have fully understood what that meant. But as long as, you know, that was all done in order, you know, he's stuck with this product. And you know, without, you know, the surrender charges that are going to be imposed with him trying to get out of it.

One last question. Why would a so-called financial advisor ever do this? I mean, obviously, it must be a very high commission product sale for him.

Oh, absolutely. It's a very high, you know, a million dollar median annuity is going to pay significant fees. Now, if we, you know, say that this guy had your dad's best interest in heart, he may or may not have. If he did, he was trying to provide him a guaranteed income stream, which can give retirees peace of mind to know that, you know, they've got this money for the rest of their lives. But that's a significant chunk of money. And to lock that up and lose control over it, I just don't understand how that could be the best in the best interest of the client.

So from that standpoint, you'd have to default to, well, if it wasn't the right product for him, then the only reason he would have done it is because there is a significant commission being paid. Right. Right. Well, I really appreciate you taking my call. Absolutely, Charlie. Hey, let us know how it turns out. We'll ask the Lord to give you some wisdom here as you navigate that conversation. God bless you. All right, we're going to head to a break, so don't go anywhere. Still a lot more to come, even though we're away from the studio today and you shouldn't call in. We have some great questions that you're really going to enjoy as we continue to apply God's wisdom to your financial decisions. We'll be right back. Thanks for joining us today on Faith and Finance Live. Again, we're not here today. Our team is away from the studio, so don't call in. But we've got some great questions coming up. In fact, let's go to one of those right now to Arkansas. Hi, Victoria. You're next on the program. Go ahead. Thanks for having me. So I'm a single mom of two kids.

I'm a server and I make around $700 to a little over $1,000 a week, depending on the season. I have bad credit, like a five something, because I have like a little over $1,000 in credit card debt. And so I'm guessing I just gave my heart back to the Lord not long ago, and I started tithing 10% a week. And so I guess my next question is, where do I go after that to help my credit? Yeah, so well, first of all, I'm delighted to hear that you recommitted your life to Jesus, and that's the best decision you can ever make, Victoria.

So I'm thrilled to hear you share that and give testimony to that fact today. What is your credit score? Have you pulled your credit score recently? Credit Karma says it's around a $600, but whenever I applied for a bank credit card, it said it was like a $540.

Okay. What is pulling it down? Is it a lack of credit? Or did you say that there was late payments or negative information? So there's like a loan from a couple years ago, I stopped paying on for like $1,000 through one of those little loan places, you know, yeah. And I've got about three credit cards that are maxed out.

They were only $300 apiece. So they're sitting about four to 600 right now because the interest Got it. Okay, let's do this. I'm going to give you a rundown of kind of your next steps based on how the scoring algorithm works. You have to I think, start with what makes up the credit score, the biggest portion of your credit score is based on your payment history and something called credit utilization, which is just the available credit versus the balances that you have. And that combined with this negative information that you've had in the past, a lack of credit currently, high credit utilization, you know, all of that's hurting you.

So we need to take steps to kind of move beyond that. Let's start with the credit utilization piece. So do you have open credit cards right now that are active? I have one open credit card for a $300 limit that's active. The other three, I never finished paying on and they charged off.

So they're sitting in there just waiting for me to pay them. Got it. And what's the balance across those accounts that have been charged off?

A little over 1000 because they were only $300 apiece. Got it. Okay. And do you have a surplus right now when you look at your monthly budget? Do you have something beyond the minimum on the open credit card that you could apply to debt reduction? Yeah, what I've been doing is I've been just using my credit card to pay for stuff and then I go and pay it off in full.

Like the next week. That's great. Do you have a spending plan?

Have you taken the time to kind of write out all of your expenses, both fixed and discretionary? Nothing. I kind of was just inspired by you to start. Yeah. Okay, that's great. Well, I think that's the next step is really to get that spending plan in place. So we need to take to start with the first 30 days. So, you know, maybe you carry a little journal around with you or download the Faithfi app at our website, faithfi.com.

However you'd like to do it, whether it's smartphone or paper doesn't matter. But the key is we need to capture all of your expenses, both those things you get a bill for and those things you don't. So, you know, utilities, you get a bill in the mail every month, eating out or, you know, groceries or clothes or entertainment, you don't. But we need to get all that in one place. And then we need to make some hard decisions on where can we cut back so we can free up margin. Because the first thing we need is to be able to live on a budget and have a surplus left over because that's the only way you're going to accomplish your longer term goals. Secondly, we need an emergency fund until you get all these credit cards paid off. You know, I'd love for you to have, you know, somewhere between 500 and 1000 in your emergency fund. And then let's just stick with that while you're focused on the credit cards, that's going to break the cycle. If something comes out of left field, that's unexpected of you having to run back to those credit cards.

And I realize there's only one active right now and it has a very small limit. So you're, you're not going to go crazy with that you won't be able to but nevertheless, I want you to have something to fall back on when the unexpected comes. So do you have any liquid savings right now beyond just the money that's flowing through your checking account paycheck to paycheck?

No, not right now, but I'm about to do it. Good. So let's target 500 to $1,000. Let's put that in a separate savings account, maybe open that at, you know, Marcus or Capital One 360, link it to your checking account, but let's get it out of the checking account so it doesn't get used. And once you get to either 500 or 1000, you decide, now we're going to focus on the credit cards. At that point, now that we've generated a surplus because you're living on this balanced budget, we need to really do two things. Number one is we need to try to get that open account down and paid off so that it's only being used for budgeted items and it's paid in full.

And that's key. And then the second thing we want to do is build up a little bit of a nest egg so that we can go to each of those charge off accounts and negotiate a settlement. Because we want that to show on your credit report as a zero balance settled in full. And that's going to mean you contact them, you say, Listen, I want to pay this off, I realize it's been charged off, but I want to, you know, pay it in full.

And you know, you could probably do that at 40 cents on the dollar, you're going to want to get that in writing. But then once you do, you'll pay it and then we want to follow up with a new credit report at annual credit report calm and make sure that they mark that down to zero. At that point, the key will be to keep your credit utilization low moving forward. So if you've only got a $300 limit on that credit card, you don't want to charge it up to $300 every month, because that's going to even though you're paying it off, it's going to be reported to the bureau that you're right up to the limit. And that's going to get up well above that 30% target for the credit utilization. So what you probably want to do is start paying for things with a debit card, again, only budgeted items, but only have maybe one small recurring charge hit that credit card every month, maybe it's a $12, you know, monthly subscription that you've already budgeted for you plan for it, you pay it off in full every month. And that way, the balance on that open account is going to be just a very small percentage of the limit. And that's really going to help you. And if you get those old accounts paid off, and we get this new credit card showing a very low credit utilization, you know, that's going to start to rebuild your credit. And then from there, maybe you open, you know, another account, you know, a secured credit card, you know, that you put a second charge on a budgeted item. But you know, I think the key is for you to show on time payment history with zero balances on those old delinquent accounts. Does that make sense?

It does. And you know, praise God, I just needed somebody to tell me what to do in the beginning. And I just got so much from you.

So I'm really excited about this. Well, I'm delighted to hear that we want to walk alongside you and help you here, Victoria. So if you have other questions, I'm going to have my team get your information. And we've got coaches that would be happy to help you here. You know, as you're trying to navigate this, I want to get somebody that can on a volunteer basis, just walk alongside you and be a sounding board as you try to put all of this together. So you stay on the line, we'll get your information, I'll have one of our coaches reach out to you. And just see if that person can just help you navigate this as you take some steps forward from here.

But listen, you can do this. The Lord is your provider, he can be trusted, we're going to get this all cleaned up. And you're going to live with a lot more peace of mind and really just I think joy without this all hanging over you.

And I know how much of a weight that can be. And so I'm delighted to hear that that is starting to lift for you, Victoria. And I don't think it's by accident that you heard the broadcast today. So listen, God bless you. And you stay on the line, we'll get your information.

We appreciate you being a part of the program. Well, you know, that's what it's all about, folks. We make mistakes, we all do. We're sinners saved by the grace of Jesus. But at that point, once we surrender our lives to him, it's about stewardship. How are we faithful with what he entrusts to us? Our time with truth, with our relationships, with our talents, but yes, with our treasure as well with the resources that pass through our hands. And we want to be faithful over a long time as we handle God's money and we can do that together.

That's what this program is all about. Hey folks, we're going to pause now for a brief break, but we'll be back with much more on today's Faith and Finance Live. We're Faith and Finance Live, and we talk about our telephone number often because we usually are live.

But today the program is prerecorded. So if you hear a mention of the phone number, please don't call us, but you can find us online at faithfi.com. Thanks so much for joining us today on Faith and Finance Live.

I'm Rob West, your host. You know, in an earlier segment today we were talking with Charlie about his dad who's 85, and his dad purchased at the request of a phone call with an advisor a million dollar immediate annuity. He didn't realize what he was getting, that he was surrendering control over the money, even though he's getting a guaranteed income stream for life. He now has lost access to that million dollars, and unfortunately a product like that used without, you know, a full view of someone's financial life and where an annuity potentially fits can be really harmful because if you don't have access to your money, you're getting a return that doesn't keep up with inflation, obviously it could be something that, you know, is not really in your best interest. Often though that can be confused with something we talk a lot about here on this program and that is the benefits of a charitable gift annuity. And I want to just draw the distinction there for a moment because, you know, I think charitable gift annuities can be a great tool for you to not only generate an income stream but to bless a ministry with a significant gift at your death. Basically a charitable gift annuity provides an income stream for life which is the same as that immediate annuity we were talking about, but there's a lot of additional benefits. Number one, you get an immediate tax deduction, in most cases it's a partial deduction, it's based on your life expectancy and anticipated income stream, so there's a tax benefit, there's a potential for a portion of the income stream to be tax free. Another benefit, you have the ability to put in multiple asset classes, so not only cash but securities or even personal property into the charitable gift annuity. You have either reduced or eliminated capital gains and you can support an organization you love and care about. Now it is irrevocable, just like that immediate annuity, so it's got to be done within the context of a financial plan to make sure that it makes sense for you.

But if you have other assets you can tap in the event that you need them and you're trying to solve for an income stream but also the ability to support a particular charity that's on your heart so that at your death they get the proceeds of that annuity, it can be a wonderful tool for you. So I would encourage you to check it out, in fact both Faithfi and Moody Radio are set up so that you can easily include either ministry or both in your estate plan. For more information about how to give to Faithfi, visit Faithfi.com and click give. And if you want to find out more about planned giving to Moody, visit MoodyLegacy.org.

All right, back to the phones we go. Lynn is in Oregon. Lynn, how can I help you? I was just asked to be a personal representative of somebody in their last will and testament. The document is calling me a personal representative. It's under the article nomination of fiduciaries. Is that anything to be concerned with or I mean I want to help but I don't want to get into trouble either.

Yeah, no I wouldn't be concerned about it. Basically you're going to just ensure that the estate is handled in a manner that's consistent with the wishes of the decedent, so the person that passes away. So you are what's called a fiduciary which means you have to act in the best interests of the executor or excuse me the individual who's putting this estate in place who would be the decedent and you would be referred to as either a PR, a personal representative or an executor. And then basically at that point, at that person's death, you would help to settle and distribute the estate as efficiently as you can and according to the directions that are outlined in the will and according to the probate laws of the state where the estate is being administered. So you know it's an important job. It's one where it's helpful if you have a good relationship and you know the person so you can act in a manner that's consistent with their wishes and you may want to talk through that. Obviously the will is going to be your guide in this regard so you know you will act based on you know the what's outlined in the will and you know your only liability is if you fail to adhere to the duties and responsibilities you know that are outlined in the will in terms of distributing the estate. But generally speaking it's you know something where you're going to collect the assets, you're going to prepare an inventory of the property, you're going to pay the various expenses, and claims against the estate and then you'll eventually distribute the property to the appropriate beneficiaries.

So you know it's not anything I would be concerned about but I think you're wise to kind of go into it knowing what's expected of you so that you're ready to fulfill that responsibility. Does that make sense? Yeah it does. As I read this I don't, other than paying off bills and taking care of any financial deaths or perhaps, I don't see where any other anything that's left over where it dictates. I know where he wants it to go but it doesn't specify. Okay yeah so it doesn't say who is to receive the property upon his death?

Not that I can read. Okay yeah so I think you know that would be a conversation to have with him and or his attorney that prepared it so that you have clarity about how you can administer the estate and distribute the property and to you know to get that to the appropriate beneficiary which should be named in the will. That would be a you know very you know important part of the will for that those individuals or individual to be named. So I would clarify that and perhaps you know that may be a phone call with or a visit to with your you know the person who's put the will together and you're acting on their behalf with the estate attorney who drafted the will just so you can ask some questions and get clarity around that. Okay I think it was a paralegal that prepared it. Okay all right that shouldn't be a problem I think you know I mean this is very straightforward and this would be something that they would do every day so I think you know you just having an opportunity to be able to ask some questions and get some clarity just so you're prepared to carry out your responsibilities would make a lot of sense and it'd be something they would be very willing to do.

Okay all right thank you so much. All right you're welcome Lynn thanks for calling today we appreciate it. Well folks we've covered a lot of ground today you know as we think about our role in handling God's money it's a high calling and you know it's one not to be taken lightly but we also don't have to act in fear. You know we can get caught up in the the what-if game and this doesn't reply what I'm sharing now to any particular caller today but I'm just saying you know often financial management can be confusing and overwhelming and it can come with it a lot of you know regrets about the past and a lot of concern about the future and as God's people I think we need to think about not only money being a tool but money being a testimony and how we handle it how we trust God in that and not getting caught up in the what-if game which really is a spiritual trap because it has us focused on the future which we don't know only the Lord knows and it takes our eyes off trusting in him and and places it on worry and the Bible speaks very clearly and plainly to being on our guard against getting caught up in that trap of worry. So I think the opportunity for us today is to just consistently and this applies to every area of our lives renew our minds around the things of the Lord to recenter our attention on his promises which are true and can be trusted to accept our role as stewards or managers of everything God has given to us and then to familiarize ourselves with the the principles that we find in his word about how we should manage his money and when we do that and we understand the heart of God that the messages of this world around materialism and greed and fear are not the way of the Lord instead we find our identity rooted in Christ we see money is now a tool not an end but a means to an end to accomplish God's purposes including providing for ourselves and our loved ones but also meeting the needs of others through our generosity and that it can help us to focus not on the temporal but the eternal as we invest in the kingdom of God that's a proper perspective and ultimately even in the midst of the uncertainty like we see all around us today we can know that God is on the throne he can be trusted and we don't have to worry because we know ultimately where our home is we know ultimately where our destiny is and that's with the father once we've surrendered surrendered our lives to him and this life it's but a vapor but he has a high calling on our lives right now if we're still here he's not done with us yet so the question is how can we live for him and make a difference in the lives of people around us and how can we use money as a tool to accomplish that and that's ultimately I think what we need to be focused on not getting caught up in the things of this world but really being invested in eternity how do we do that well and namely through our generosity and that's one of the privileges that God gives us to be a part of his activity to be participants in the work of the Lord so today perhaps if money has a grip over your life and you're living in fear maybe ought to loosen that grip a little bit maybe just start to give a little bit away ever so slowly and see if that grip doesn't begin to fall away and as we trust God and see him faithful over and over and over again it allows us to be confident in the future and in the hope of Jesus Christ that we all enjoy that's my prayer and my desire for you today if we can do anything to serve you don't hesitate to check out our website at faithfi.com you can jump into our community there and post a question or a comment get feedback from others on their stewardship journey you can download the faithfi app and you can even support the ministry when you click give I'm so thankful for my team on behalf of Amy Rios and Tahira Haynes our call screeners and Jim Henry we couldn't do this without him but we also couldn't do it without you so thanks for stopping by today telling us your stories asking your questions even sharing your testimonies we always love to hear what God is doing in your financial life. Faith and Finance Live is a partnership between Moody Radio and Faithfi hope you enjoy the rest of your day and come back and join us next time on Faith and Finance Live.