Christian Financial Perspectives

By Christian Financial AdvisorsBusiness Religion & Spirituality Christianity Investing

Christian Financial Perspectives episodes

June 19, 2023161 – What’s Your Financial Personality
Click below to listen to Episode 161 – What’s Your Financial Personality
What’s Your Financial Personality

Learn about the four main financial personality types, and figure out which one you are!

More episodes >>

What type of financial personality are you? You can find out in this episode where Bob and Shawn cover the different types of financial personalities out there. They have divided them into four financial categories that seem to cover most types of people. You might be a…
Saver
Spender
Giver
Investor
For most people, one category is usually more dominant. Once you figure out which category you dominate, then you can better understand how to spread your finances out a little more over all of these financial areas and not just one.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
PROVERBS 6:6-8
Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.
PROVERBS 21:20
There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.
2 CORINTHIANS 9:7
Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.
MATTHEW 25:14-30
The Parable Of The Talents

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. So glad that you joined us today. We are gonna be covering a really interesting topic on financial personalities. If you do enjoy financial topics from a Christian perspective, love for you to hit that subscribe button and just get more content like this in your inbox. But it also does help the channel and helps other people who might be looking for this same kind of content. So, today we’re gonna be covering what’s your financial personality, and I’m gonna send it over to Bob to give us a little intro.
Bob:
Okay. I sure will. Shawn, we each have different, like, there’s the different financial temperaments. So, we have the different financial personalities, and I break this down into the Saver, Spender, Giver, and Investor. So first, we’re gonna start off with the Saver. And I have a feeling that every one of you are going to relate to one of these financial personalities. I think a good balanced approach to all of them is the best approach. But I have a tendency to be one of these, and I have a feeling a lot of you will have a tendency to be stronger in one of these financial personalities than the others. So, as we’re going along, just think about it and maybe you’ll relate, see how you relate to this, Shawn.
Shawn:
That’s right. So, the first one we’re gonna cover is the Saver, and Savers are naturally frugal.
Bob:
Yes, they are.
Shawn:
Savers rarely make purchases with credit cards, or if they do, it is definitely paid off within weeks.
Bob:
And they have very little debt. They don’t like debt at all. They don’t like paying interest and they don’t even like it when they’re young, Shawn. I mean, they just don’t like debt.
Shawn:
Savers are not concerned about following the latest trends, as they get more satisfaction from reading the interest on a bank statement than from acquiring something new. Savers are conservative by nature and don’t take big risk with their investments.
Bob:
Hey, Shawn, do we know anybody like this?
Shawn:
No, I don’t. Oh, my wife. Oh, yes. Your daughter.
Bob:
I have to actually tell Jenna sometimes, Jenna, go spend some money. It’s okay.
Shawn:
I’ve had to learn if I don’t buy, if I don’t buy her an actual gift, I have to give her a gift card that has to basically be used on her, you know? If I give her a Visa gift card or just something where you can use on anything, she’ll just use it for groceries or something.
Bob:
Yeah, yeah. The Savers are, they’re big budgeters, and they like to know, Shawn, where every dollar is going.
Shawn:
That’s right.
It’s just a natural thing in them.
And Savers do need to be careful with equating their net worth with their self worth. So, if you’re identifying as the Saver, that’s one of the, I guess the negatives of be careful that you don’t equate those two together. And then the last one, of course, Savers may become overly obsessed with how much money they have, and it’s never quite enough. There’s never quite enough saved.
Bob:
And that can be a negative thing actually, because it’s always just a little bit more than what they need. Now we have a great scripture, and I think this is the scripture that probably most Savers read a lot of, and I have a feeling of that one. It comes from Proverbs 6:6-8, where we talk about the ant, you sluggard. So go ahead.
Shawn:
So I’ll go ahead and read that one. All right. “Go to the ant, you sluggard. Consider its ways and be wise, it has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest. How long will you lie there, you sluggard? When will you get up from your sleep? A little sleep, a little slumber, a little folding of the hands to rest and poverty will come on you like a thief and scarcity like an armed man.” I think I’ve said this before, Bob, but Proverbs need to be more direct.
Bob:
Exactly.
Shawn:
What is it trying to say?
Bob:
It might be my fault that your wife might be so much of a Saver, because we read Proverbs every single day.
Shawn:
Hey, I’d rather her be a Saver than a Spender.
Bob:
Oh, well, that’s true. That’s true. So, next…
Shawn:
Which goes right into the next one. Next we have the Spender.
Bob:
We have the Spender, which is quite the opposite of the Saver. And these are the personality traits of a Spender that I’ve seen. They get great emotional satisfaction from spending and buying on almost anything. And another trait, that’s the second trait I’ve seen, is they actually, Shawn, they get a sense of accomplishment from shopping. Now, how, who would, I don’t know how that one happens, but I’ve seen it. I’ve seen it in people that love to spend, they feel like they’ve accomplished something. Like they’ve worked for something .
Shawn:
Now it could be kind of true, like if you had something like a water heater go out and you did your research and you found the right one, you bought it. I mean, I could see how that’s a sense of accomplishment.
Bob:
But they feel productive.
Shawn:
Yeah, exactly.
Bob:
When they’re spending.
Shawn:
Spenders also have a hard time resisting the urge to buy, even if it’s to buy items they may not really need.
Bob:
So that’s true. And they’re usually aware, Shawn, of their addiction that they have, this spending habit, and they even are concerned about it. I’ve spoken with some of them, they’re like, yeah, they’ll have that credit card debt that can be $10,000 or $15,000. And they don’t like it, but really they need help. They don’t know how to stop that, because they’re getting so much emotional satisfaction from spending.
Shawn:
So the last two traits, I’ll cover those real quick.
Bob:
Which is kind of funny, isn’t it? This next one.
Shawn:
Spenders look for bargains thinking they’re getting a good deal.
Bob:
Yes.
Shawn:
And Spenders do use credit cards spontaneously without regard to how much they’re tracking or racking up in charges or what the balance is.
Bob:
I think they’re very surprised by the balance when it comes in because they got caught up in it. It’s so easy nowadays. The click, click, click on that Amazon, little app. And it’s all all tied together.
Shawn:
We’ve talked about stuff like this before, but with the buy now, more and more, not just Amazon, but more and more companies are having that, where if you have an account, it’s just tap the button and don’t have to think about it, and just goes to your default payment method and shipping and address all that good stuff.
Bob:
I hope we haven’t lost you as a Spender. We want you to stay with us. We don’t mean to be, we’re not trying to put a a guilt trip on you. Not at all. Yeah, we don’t, we want to help you.
Shawn:
Ecclesiastes says there’s a time for everything.
Bob:
That’s right.
Shawn:
There’s a time to spend, there’s a time to save. And we’re gonna…
Bob:
But Proverbs does have anoth a scripture on this. Yeah.
Shawn:
Proverbs 21:20, “There is treasure to be desired and oil in the dwelling of the wise, but a foolish man spends it up.”
Bob:
So, I think there’s a lot of great, I call them ministries out there, like Crown Ministries is really good with helping Spenders and not getting that worth in your life from spending.
Shawn:
So we’re gonna move on now to the next one, the third personality trait, which is the Giver.
Bob:
That’s my favorite.
Shawn:
So the Giver, just some traits to think about. Number one, Givers look at money as a tool to help others. Great way to look at it.
Bob:
They get gratification actually from helping others. That’s a great trait.
Shawn:
That’s right. Givers are caring individuals who usually put others’ needs above their own.
Bob:
And they find joy in being a source of encouragement and a shoulder to lean on.
Shawn:
That’s right. And then the last one, Givers may regularly volunteer their time and energy to help others up. So, we do typically talk about finance, but obviously when you come to the Giver, you have three things that you’re given by the Lord. You have time, talent, and treasure. So, it doesn’t always necessarily relate to finance. So, the Giver may be the person that’s they’re at church all the time to help and volunteer, because that’s one way that they can give back.
Bob:
My wife is a Giver. and right now she’s in the kitchen today, she’s got like five boxes of cake mix, and she’s making all the cake for a friend’s daughter tomorrow that’s having a baby shower. And Rachael just does that. She’s giving, she’s very giving with her her funds. And I think this is such a Christian, Christ-like trait. And it’s one of the greatest traits of all. Christians should strive to have this part of their financial personality. With giving and prayer, that trait could come about. Because, what it does, what does giving do?
Shawn:
Giving releases selfishness. It’s very hard to be selfish and giving at the same time, and as you already said, but giving makes us most like Christ.
Bob:
It does.
Shawn:
When we’re giving, we are emulating Christlike behavior more than probably any other time.
Bob:
My favorite scripture from this is 2 Corinthians 9:7 that, “Each of you should give what you’ve decided in your heart to give, not reluctantly or under compulsion. God loves a cheerful Giver.” And giving is a privilege, and like you say, it’s hard to outgive.
Shawn:
That’s hard to outgive God.
Bob:
That’s right. So now we come, by the way, we’re gonna come to the last one now. And this one is the Investor personality. Now of these four, which one of these do you think I am?
Shawn:
The Investor, which is one we’re gonna cover now.
Bob:
This is exactly right.
Shawn:
For me. I personally exhibit the Spender and the Giver probably the most. I understand the Investor mentality, I understand the Saving mentality, but without constraints, I’m very much Spender and Giver. You’re definitely the Investor.
Bob:
I’m gonna share these because I can relate so much. And by the way, there’s some negative sides of this, too, but I hate spending money on anything unless I know I’m gonna get a return back, Shawn. And that can hurt me in the giving area, but I don’t want to, because I don’t want to give to get.
Shawn:
All right.
Bob:
Exactly. I want to give because it’s just the right thing to do. But I’m always trying to make money on anything that I spend money on. And that’s the Investor side of me. That’s that Investor personality trait. I look into the future. So, I hate buying depreciating items. I can’t stand stand that. Anything I buy, I wanna say, all right, is it gonna be worth more in the future? I’m constantly aware also of the economy and what the markets are doing, and I have that obsession nearly of always trying to figure out which way the economy’s going. And I have a hard time relaxing because I have this Investor trait so much, I’ve really gotta submit this to the Holy Spirit to pull this down to where it’s not so consuming to me. Now, those that listen to us, they’re probably like, well, okay, I want you investing our, I want you being the one that’s managing our investments for us then. Well, yeah, you do with that one. But this trait can also get outta hand.
Shawn:
It can, yeah, it can. And of course the, the last trait for the Investor. Investors are driven by careful decision making processes like a written investment strategy and their investments reflect the need to take a certain amount of risk in pursuit of a financial goal. God definitely made you the Investor personality, Bob. But it’s good because you decided, well, I can’t stop focusing on this stuff, so I guess I may as well do it as a career. So, it suits well, but the scripture for this one, we’re not gonna read the whole thing, but it’s Matthew 25:14-30.
Bob:
About the parable.
Shawn:
Talking about “The Parable of the Talents”.
Bob:
Parable of the Talents.
Shawn:
Don’t be the third servant, be one of the first two where they actually did something with what the master left and made something from it and got a return.
Bob:
And as we always say, we don’t know how long that period was. It wasn’t about day trading. And we speak against day trading here. We speak about long term. So I believe, and it doesn’t say in the scripture how long, so I believe it that it had to have been at least three to five years.
Shawn:
Yeah. Well, because they doubled their money, too.
Bob:
Yeah, exactly.
Shawn:
So depending on how risky exactly the first two servants were. I mean, there’s a minimum amount of time probably that would’ve elapsed.
Bob:
So which financial trait are you? Are you the Giver, the Spender, the Saver or the Investor? And I think the best approach would be a balanced approach to look at all of this. There’s no doubt that all of us are gonna have a tendency to go towards one or the other. Be careful of that and try to have a good balanced approach at it. I think the number one approach that is the best one is the what? The Giver.
Shawn:
The Giver. Yeah, I think so. If you are gonna try to focus on strengthening one in particular, strengthen the Giver. You can’t go wrong with the Giver. You can’t outgive God, and our society could use more people that have the giving financial trait.
Bob:
I absolutely believe that.
Shawn:
Well, that does it for the program, unless you’ve got any other closing thoughts on this?
Bob:
I don’t think so. We’re here to help you with these financial personality traits and if you want to give us a call during business hours or text, you can use the number (830) 609-6986. That’d be up on the screen for you. And/or you can reach us on the web www.christianfinancialadvisors.com. Thank you for listening today.
Shawn:
Thank You and God bless.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
15 min
June 13, 2023 160 – Avoid These Financial Mistakes
Click below to listen to Episode 160 – Avoid These Financial Mistakes
160 – Avoid These Financial Mistakes

Make sure you are avoiding these common financial mistakes.

More episodes >>

Buckle up for this great episode on avoiding some of the top financial mistakes that are commonly seen by Bob and Shawn. They have pulled from their past experiences and from the experiences of clients to create a list that can help you avoid these costly financial mistakes in the future.
These financial mistakes include the error of taking financial and investment advice from anyone other than a financially successful individual or a financial advisor (which both Bob and Shawn have friends and clients to which this has happened), as well as more common ones like avoiding procrastination. Before these happen to you, listen in so you can try and avoid these top financial mistakes!

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. We’re so glad that you joined us today. Whether you’re watching online or you’re listening on one of the podcast directories, we really appreciate it. If you do like this kind of content on financial topics, but from a Christian and Biblical perspective, we’d love for you to hit that subscribe button, like this video, maybe comment, let us know a topic you’d like us to cover in the future. So today we are gonna be covering, “Avoid These Financial Mistakes”. So it’s 10 financial mistakes to avoid, and normally we cover, “Here’s what you should do, here’s the good things you should be looking for.” So today, we’re gonna give you some practical advice on types of things to just avoid. Just don’t do it. And so, Bob, you wanna give us a little intro on this? So where’d you come up with these?
Bob:
Well, I came up with these, Shawn, in about 5 or 10 minutes. It wasn’t hard. I could have come up with more.
Shawn:
So, is that from the years of experience? Either yourself doing it or seeing it with clients?
Bob:
Yes, it is. Both. I gotta admit in my younger years, we’re going cover this first one here in a minute. I did a lot of that in my younger years.
Shawn:
So you haven’t always been wise and gray ?
Bob:
So, I’ve learned from lessons and I want to hopefully teach younger people to learn from these lessons that this older guy has learned from. And this is just something, a really good episode, I think, that if someone’s hearing it to share with some friends.
Shawn:
I think the key…
Bob:
And to share with their family, like if grandparents are hearing it or parents, share this with your children.
Shawn:
Yeah. And I think the key here is even though you can learn from the school of hard knocks, it’s a whole lot less costly to learn from someone else who went to that school so you don’t have to do it yourself.
Bob:
Yeah.
Shawn:
So the first one, avoid buying costly depreciating items too often. Example, probably most people can relate with cars, trucks, but also RVs and boats and for somebody in a different tax bracket than me, airplanes.
Bob:
We’ve had some clients that bought some airplanes, Shawn. And it’s really interesting, I was talking to one of them about three months ago when we were doing a review, and he says, yeah, it’s a lot cheaper to just fly first class. . So he was saying how expensive it was, and it is very expensive, but the one I see a lot of with even my retirees is they buy the RVs, and they easily spend a $100,000 or $150,000 on an RV, then the very next year, it’s worth about 70% of that. That is a depreciating asset. And every one of ’em will come back and say, that was a major mistake. I should not have done that.
Shawn:
Now Bob, if you notice, do RVs tend to depreciate as fast and as much as cars? Or because they’re kind of considered a home as well, that they don’t depreciate as much?
Bob:
No, they actually depreciate faster, I think.
Shawn:
Really?
Bob:
Well, I don’t know if it’s faster, Shawn, but it’s such a large purchase that the percent, you just think about how much money it is. I mean, whatever RV you buy, if it’s a $100,000, you’re probably gonna lose $20,000 on that over the next year. And you’re not getting it back.
Shawn:
So similar, similar to cars, it’s just the fact that there’s such a much larger dollar amount typically associated with them, that the actual dollar amount you lose is just a lot more.
Bob:
Tremendous. Exactly. Well, okay, you think about trucks nowadays, especially here in Texas, you gotta have the King Ranch edition, right. If you’re gonna be somebody, you gotta have the King Ranch edition, which costs about $85,000 or $90,000, and then that truck a year or two from the then end is worth $50,000. So there you go. You’ve lost $40,000 or $50,000.
Shawn:
Yeah. Don’t let the last two or three years fool you, because this has not been a normal car market where it would be the opposite. That $90,000 truck is now worth $100,000 a year later.
Bob:
No, we’re talking normal.
Shawn:
But normal. That will catch up.
Bob:
Shawn. I know some people, they trade out these trucks like this every two or three years. I’m like, you’re just losing money over and over and over the years, how much has this affected your net worth?
Shawn:
A lot. It is far, far better to fix and maintain the vehicle than it is to buy a new one. You’re gonna be a lot better off.
Bob:
9 outta 10 times fixing that, even that $5,000 transmission is gonna be less than what you’re gonna depreciate in a new car. And of course, if you’re gonna finance it, which we recommend not doing you, you’re gonna have the debt as well.
Shawn:
So number two, avoid spending a 100% of what you earn every month, therefore, leaving no room for giving, saving, investing, and taxes. That’s a big one. I mean, you really need to be looking at a budget. I think crown.org has a really good resource. It’s a one page budget worksheet. But what’s great about it, Bob, is that if, for those of you watching or are listening, if you haven’t done one of these before, what it does is it has the taxes and the giving, the tithe, it has that at the very top. So you’ve got your, well, how much are you making? And then the very first questions it’s asking is that, and that’s really how you oshould do it. Because if you wait until everything else has already been taken care of, chances are you’re gonna have very little or possibly nothing that you think you can give to the church or give to God. And it should be your first fruits.
Bob:
And taxes should be up there at the top, too. You wanna make sure the IRS is paid. They’re not very nice if you’re not.
Shawn:
So, I know some people say that the taxes are not constitutional, but please, please don’t try that.
Bob:
Yeah. Don’t.
Shawn:
Just pay the taxes. Give to Caesar what is Caesar’s.
Bob:
I know a Christian brother from years and years ago and he thought that, and he ended up being in jail, so. All right. Number three. You go for number three.
Shawn:
All right. Avoid making large financial decisions that presume upon an unknown future.
Bob:
You know who taught me this one? Ron Blue. I’ve never heard anybody say this before, and it’s so true. None of us really know what the future holds. We don’t know if we’re gonna be here tomorrow.
Shawn:
So can you expand upon that? Give a little bit of example. Cause I feel like presuming upon an unknown future feels very grandiose. So what does that really mean? Practically speaking for us.
Bob:
Practically speaking, it means when you’re going out and you’re taking out a 30 year mortgage loan, are you sure that you’re going to live 30 years?
Shawn:
Mmm. Okay.
Bob:
Are you?
Shawn:
So what are people supposed to do when they’re trying to move somewhere? Should they not, should they not buy a house?
Bob:
I think they should still buy a house, but in this case, buy enough life insurance to cover that mortgage.
Shawn:
Ah, okay.
Bob:
That covers that. Yeah.
Shawn:
Yeah. And even if it’s just term life insurance. So when you buy that home, especially earlier on in that mortgage, get some term life insurance and the sooner you do it, the cheaper it’s gonna be anyway. But get some term life insurance where at least you have enough to completely pay off that house and your surviving spouse isn’t left in a horrible situation. Not only are they mourning your death, but also now, how are they gonna pay for the house?
Bob:
That’s right. So number four, avoid using debt to buy depreciating assets. Kind of goes back to that top one that we talked about.
Shawn:
Back to number one.
Bob:
But avoid using debt. I mean, you think about that, it’s depreciating plus you’ve got debt on it and you’re paying the interest. It’s like a double whammy.
Shawn:
Yeah. So you look at the total cost between the depreciating asset and what you’re losing in that value, and then you also look at the interest that you’re paying as well. And it’s like, man, that’s a, yeah, double whammy
Bob:
Number five. This is what I see a lot is avoid waiting for the perfect time to start saving. It’s never gonna come. I promise you, it’s never gonna come. The perfect time, Shawn, is never gonna come to save. So, you just have to do it.
Shawn:
The best time to start is today.
Bob:
Today. And you say, well, I don’t have anything extra. Well, then don’t go buy. We joked about, I saw this on our other video, we were joking about it. Don’t go by that latte.
Shawn:
Yes. That’s it.
Bob:
Did I say it right? Okay.
Shawn:
Bob, you know how to say the word latte.
Bob:
So, okay. So don’t go by the Starbucks today or the the $3 or the $5 cup of coffee. You can make it at home for pennies on the dollar, and it’s gonna be just as good.
Shawn:
Now if you do want something fancier, I could make a recommendation here.
Bob:
Oh, okay. What is it?
Shawn:
I usually get a cold brew concentrate, but you can get it from your grocery store. And so what’s great about that is it tastes better and it’s a little fancier, but also it’s a whole lot less expensive than going to your Starbucks or local coffee shop. I mean Sure. Support local businesses, but don’t do it every day.
Bob:
. Exactly. All right. Now, Shawn, I’m gonna let you share this next one because we, you and I had a pretty, I can say, heated discussion about this before.
Shawn:
We did a little bit.
Bob:
We did, we did.
Shawn:
We didn’t film that, though, because we needed to get our thoughts in order.
Bob:
Poor Garrett, who was filming this was like, are you guys going to jump on and tackle each other? No, we didn’t. We were nice to each other.
Shawn:
So number six.
Bob:
We had a really good discussion about this, and so go for it.
Shawn:
Number six, avoid carrying a balance on a credit card or adding monthly expenses to the credit card. And I put the disclaimer here. Bob says that according to the statistics, about 85% of people do not have a detailed budget. And so because of that, when you’re adding monthly expenses to your credit card, you end up spending about 10% to 15% more than you would otherwise. And that’s kind of a double danger I would say, because when you’re adding more to the card, what if you add a little bit too much and now you can’t pay that balance off in full. Now, you’re gonna get hit with interest in all that. Which goes back to the most important part, which is don’t carry a balance on the card. Now, if you happen to be that maybe 15% of people that have a detailed budget and you monitor it regularly, my wife and I do that. So Bob told me that I’m weird.
Bob:
Yeah. Well, you’re not weird, but you’re different because Shawn, out of our 450 clients that we have here at the firm, I don’t think, I can’t count more than 10 of ’em that do a budget. And now, so you look at percentage wise. Now they don’t overspend. Because remember when we did the program that budgeting is not all about numbers, it’s also just about not overspending what you get every month.
Shawn:
Right. So, most people that you deal with, Bob from in this, again, getting a little bit of behind the curtains. But Bob’s point in this is that most of the clients that he works with, they do have a, “Well, this is how much we can spend each month,” but they don’t go into the details of the different categories. And how much each category you can allow yourself to spend. And so because of that, that’s where you can get that creep. You can get that extra 10% to 15% you’re putting on a credit card, which can get you in trouble. And so yeah. So, if you happen to be one of the 1 in 10 people approximately that might have a detailed budget that’s watching or listening, you might be okay with the monthly expenses. But I think as a general rule, it’s avoid carrying a balance and avoid putting monthly balances…
Bob:
It’s better using a debit card. I mean, when you overspend that debit card, that bank’s gonna nail you. And you’re gonna see it. You’re gonna know. But the credit card company’s gonna say, “Bring it on, man. Keep on spending.” Because if you can’t pay it off, we’re gonna charge you 25%. All right. Oh this is big one. This next one, we’ve done entire programs on this financial mistake, haven’t we?
Shawn:
Yep. We’ve been putting this one off the whole episode, . Number seven is avoid procrastinating. Things like adequate insurance coverage. So, we kinda mentioned that earlier about term for your mortgage. But health, life, home, and disability insurance in the case of an unforeseen accident or natural disaster, as well as procrastinating to do your estate planning, starting with the saving and investing and your financial planning.
Bob:
Yes. You gotta do financial planning, y’all. You just gotta do it. I know. It doesn’t sound exciting. It is to us, though. I love it.
Shawn:
We do this for a living, though.
Bob:
And I would go back and we did a really good episode on integrative financial planning. And that to me is exciting because it’s just amazing to see how it changes every single day.
Shawn:
Well, and I think the really important part of that, for those of you watching or listening, is that financial planning may not be pretty, or some people might say may not be sexy . But the thing is is what it’s really good for is knowing, “Okay, am I on the right track? Am I on the right? Like, am I doing what I need to be doing?” And so many times we have people that will ask things like on the investment management, “Oh, well what’s the return like?” Well, the return is just one small piece of the equation. What’s more important is assuming an expected average rate of return, assuming all the other things that you’re doing when you retire, are you likely to outlive the money or is the money gonna last longer than you?And that’s what financial planning really, that’s the whole point. That’s what you’re trying to answer, right?
Bob:
You got it. So I wanna share this next one, too. This is a really big one. I just spoke with a sweet lady just last week that told me this one. And I was thinking that is a financial mistake and I’ve seen it over and over. This is the big one. Here it is. Avoid taking financial advice from anyone that is not financially successful. Is that right? So if they’re not financially successful, don’t take advice from ’em.
Shawn:
Don’t take financial advice from ’em. Now they might be able to give you advice on other areas of life.
Bob:
Exactly. Exactly. But not financial advice.
Shawn:
Like your pastor.
Bob:
Yeah. Spiritual advice. Absolutely.
Shawn:
Spiritual advice. Absolutely. But if they don’t have any experience on the financial side of it, they may not be the best person for financial advice.
Bob:
Especially investment advice. And that’s what this lady told me. She was so sweet. She’s about 75, and she said, yeah, I was at Bridge Club and they told me to buy this stock. “You ought to go buy this stock.” And I was like, “What? Are they a financial analyst?” “No. No, they’re not.” And she goes, “I lost all my money in it.” Happens every time. Take that one at heart. Okay, we got two more.
Shawn:
Two more. Number nine, avoid using emotions to make financial decisions. Just don’t. Don’t do it, like buying expensive items too quickly without counting the cost. Again, that goes back, that’s the emotions. You’re buying it on emotion, not thinking it through, not thinking about what the true cost of that’s going to be. And it kind of goes back to number one, I think again you get caught up in, oh, look how good that new car looks or that new truck looks. And I really wanna get one. Just don’t .
Bob:
And the last one, and this is the biggest financial mistake I see with investing, is investing in just one sector of the economy. All right. You gotta be very careful of that. I see this over and over, especially in our area, I see a lot of people, they invest everything in the real estate sector. But you need to diversify. Even Solomon, the wealthiest man that ever lived on the face of the earth. And we quote this a lot around here, Ecclesiastes 11:2, “Give your portions to seven or eight, because you don’t know what disaster may come upon the land.” Don’t put all your eggs in one basket. So, don’t put all of your investment dollars in real estate or just CDs. Cause then you’re losing inflation. You’re losing purchasing power or all stocks or all bonds or, some do gold. And we’ve had a program on that.
Shawn:
Yeah. We won’t cover that here. Go check that up episode out.
Bob:
Another big one? Another big one was my business owners. They put everything they have in their business.I am not, I do not want to be the shoemaker’s son. I do not do that. I diversify in all of these different sectors of the economy. And only a small percentage is in my business. Because I don’t want everything based on one thing. I watched my dad put everything in real estate and at about 64, 65 years old, this was in the mid eighties, the real estate economy just collapsed. I watched him, and I watched many of his friends declare bankruptcy and these men were too old to recover. It was a sad thing. So, I hope that helps you. There’s 10 financial mistakes…
Shawn:
To avoid.
Bob:
To avoid. Don’t do ’em. And share this with some of your friends and share this with your kids and your grandkids because it’s good information.
Shawn:
Yep. Like we said before, if you like this kind of content, we’d love for you to hit that subscribe button for more videos on financial topics from a Christian perspective. Thank you so much for joining us and God bless.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
19 min
June 05, 2023159 – Teaching Kids Good Money Habits
Click below to listen to Episode 159 – Teaching Kids Good Money Habits
Teaching Kids Good Money Habits

We delve into simple ways to help your kids learn about financial responsibility and create good money habits.

More episodes >>

Teaching kids good money habits doesn’t have to begin when they are teenagers, it can start as young as 4 or 5! It all begins with educating your children on 3 simple areas when it comes to finances:
Give
Save
Spend
By breaking down finances into these 3 areas, it allows even the youngest of children to have a better idea of how to manage their money properly at a young age. Throughout this podcast episode, Bob and Shawn delve into the ways of incorporating good money habits into your kids’ lives. Not only are these basic concepts a great introduction for children to establish financial responsibility, but it can also be an excellent beginning point for those who have never incorporated good money habits into their lives before.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
PSALM 24:1
The earth is the Lord’s, and everything in it, the world, and all who live in it;
2 CORINTHIANS 9:7
The earth is the Lord’s, and everything in it, the world, and all who live in it.
MATTHEW 25:14-30
Parable Of The Talents
PROVERBS 13:11
Dishonest money dwindles away, but whoever gathers money little by little makes it grow.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome back to another episode of Christian Financial Perspectives. Thank you so much for joining us. Whether you’re currently listening to one of the many podcast options, or you are watching us on YouTube, we’re so glad that you’ve tuned in today. We have a topic for teaching kids good money habits, and if you like these kinds of videos and topics where we cover financial issues, but from a Christian perspective, we’d love for you to hit that subscribe button so you’ll know whenever we post a new episode and it also helps the algorithm so other people just like yourself who enjoy this content will hopefully find it as well. And today is gonna be kind of fun because I have two young kids, four and one. Bob has already raised three kids that are now adults. And so, we’re gonna be coming at this from the perspective of someone who’s already raised the kids and tried to instill good money habits. And I am looking at how I’m gonna do this myself.
Bob:
Shawn, I would say, my kids are really good with these money habits and especially…
Shawn:
You’ve got to see the fruits of your labor in this respect.
Bob:
I wanna say too, that so much of this I was taught though from Focus on the Family, back then it was Crown Ministries, a guy named Larry Burkett. So many of these principles he taught I remember even buying some of the… you can see here, we got the give, we’ve got the spend, and then we have the save. But we actually had a little bank and it looked like a bank and it had this written on it. And we started teaching Jenna, I mean, she was like four years old, five years old. We were already teaching. She’s like, what are you trying to you could tell, she’s like, what are you teaching me? But we taught this concept. It’s basically live, give, grow, like we’ve talked about. But it’s the saving part, and I think the saving part is really good from the perspective. Where’s the saving? Right here, the saving part, we would we would match them kinda like a 401k in their savings part.
Shawn:
That’s a cool idea.
Bob:
Well.
Shawn:
Well, before we get too much into that.
Bob:
Well, I know we’re gonna get into this because this is fun and I’m excited to go over this because I want to teach people how to teach not only their children, but the grandchildren good money habits. Because those good money habits will be used throughout their life.
Shawn:
That’s right. Okay, let’s go ahead and start with the scripture for today. We have Proverbs 22:6. This is from the King James version, “Train up a child in the way he should go. And when he is old, he will not depart from it.”
Bob:
Don’t you love that? I’ve loved that scripture. That’s so encouraging, and those of you who have taught your children in those ways, and Dr. Dobson used to say, when you have the arrows, when you let go of the arrows, you’re not sure where it’s gonna go. And some of them, they’re not there yet.
Shawn:
Yeah.
Bob:
But you just gotta keep praying and they’ll come back because scripture’s true. And I believe scripture.
Shawn:
And just remember that while you’re training those children up in the way they should go, when they get to their teenage years, it’s not that they’re not listening, but there’s just, there’s a lot going on.
Bob:
I’m not, I don’t mean to laugh.
Shawn:
Bob, I heard something. I thought it was pretty funny. But I was talking one of the guys, another father at church and his kids are older. They’ve already moved out. And he made the comment, the reason why teenagers are always so rebellious is because God needs your teenagers to rebel so you have an incentive to kick them out of the house. So, they’ll go learn to be on their own because if they stayed your sweet young children, which obviously as I’m learning, they’re not always sweet, but in general, if they stayed those sweet children that loved you and always respected you…
Bob:
You just wouldn’t wanna let them go.
Shawn:
You wouldn’t wanna let them go. So, he said that’s God’s way of making sure that they get out of the nest.
Bob:
That’s the truth, isn’t it?
Shawn:
And then, with myself personally, I remember like, oh, my parents, they don’t know what they’re talking about.
Bob:
We better hurry.
Shawn:
I know. All I was gonna say, once I got to college and by the time I was done, I started realizing my parents had a lot of good points and maybe they were onto something. So with that, our first one today is teach and lead by example.
Bob:
Yes.
Shawn:
Your kids are watching you.
Bob:
That’s the truth.
Shawn:
And they’re seeing how you give, how you save, how you spend. And maybe not when they’re really young, but they do start to see how you invest as well, once they kind of understand the concept.
Bob:
Mine definitely did because they grew up in this business. And watching dad, and they even worked, I had them stuffing envelopes when they were five and six years old – using child labor. It just hurt them so bad.
Shawn:
It’s called training.
Bob:
Yeah, exactly. It was, it was training. I’m so proud of the way they’ve come out, with how they manage money. It’s really exciting. But it’s like saving, this was back in the old days where you didn’t set up the automatic draft outta your account for your giving and tithing. So, I would write a check and they would get it, get the opportunity to put the check in the offering. It was coming by. And then we taught them about giving, that giving is so important. But sometimes, they’d open up the check and their eyes would get real big. Wow. to them, that was a lot.
Shawn:
That’s more money than I’ve ever seen.
Bob:
But they’re watching that and they’re saying, okay, that’s the example. And that’s the kind of example as parents that we want to give our children is we really gotta teach and lead by example. This thing of, “Just do as” what is it? “Do as I say, don’t do as I do.”
Shawn:
Yeah.
Bob:
No. That doesn’t work.They’ve got, they’re watching everything you do and you want to be very careful, too, of spoiling a child and getting them into what I call an entitlement mentality. There’s a lot of that going around today. Don and I talked about this before, and Don is my age, and we have children about the same age in their late twenties, early thirties.
Shawn:
Don is one of our, just for those of you, Don’s one of our advisors. He was a CPA for about 20 years before he started working with us.
Bob:
That’s correct. And we were just talking about that, how a lot of what we did was all about entertainment and we did, we spoiled a generation and we have to be very careful about that and getting that generation into an entitlement mentality. So when you’re raising your children, you want to teach them this good money habit. So you want to teach them to give first. That’s scriptural. To save second and then spend, did you notice I didn’t say you’re not gonna, this doesn’t go first. You don’t spend first/
Shawn:
You give first.
Bob:
You give first because giving breaks the bondage of selfishness. Because our selfish nature, when we’re giving, we can’t be selfish. It takes that nature out. And then saving for the future, and there’s so many good scriptures that come with that.
Shawn:
Putting long-term needs ahead of short-term desires.
Bob:
Right. And then they are kids. So yeah. It’s okay to go spend and spend some stuff on. Well, back then we went for candy, we went for bubble gum or whatever.
Shawn:
The important stuff, the essentials.
Bob:
Exactly. Snd I think it’s important, too, to read them some scriptures about giving and saving. Some of the scriptures, y’all heard us mention many scriptures on Christian Financial Perspectives for years now, if you’ve been listening. But my favorite of course is Psalms 24:1, qnd when you teach your kids that, “The earth is the Lords and everything in it” that the dollars that they’re earning or that you’re giving them or for allowance or whatever that may be, it doesn’t belong to them or us. It’s God’s and we’re to honor that and be good stewards.
Shawn:
And it doesn’t matter if it’s $10, a hundred dollars or thousands of dollars. The principles are the same.
Bob:
They are, and they’re the same for us as adults.
Shawn:
Another great verse is 2 Corinthians 9:7 and that’s the one that talks about, “God loves a cheerful giver.” So that’s the other part in teaching your kids. The Bible says that it’s not just that you give because it belongs to the Lord, but that you should be cheerful and joyful in giving.
Bob:
Here’s the saving about Proverbs 13:11, “Saving little by little”, and consider the ant. And it even says you sluggard, it saves in the summer and stores up his provision. So, it’s saving little by little. And then we got this one, we’ve talked a lot about this one in past episodes about saving and investing.
Shawn:
No, you don’t have an investing one . You have giving and savings.
Bob:
But that’s the parable of the talents. Matthew 25, which is a great scripture. I shared that a lot with our children growing up about the parable of the talents and how they gave, God gave, or the master gave to each one according to what they knew they could handle.
Shawn:
Their ability. Could handle.
Bob:
That’s right. That’s correct.
Shawn:
All right. And I think for the investing part that’s really important is that two of the three servants did something well. Like, we don’t really know what they did, but they were able to make it grow. And then you have the last one who buried it in the ground and then he gets scolded for basically if you had just put it in the bank, you could have at least earned interest on it. I feel like that’s kind of the part of, it’s not just the savings like for emergency funds, things like that, but the investment part is a big part of it, too. Because otherwise, it’s doing nothing.
Bob:
I guess I should have had saving and down here written “and investing”.
Shawn:
Yeah, exactly.
Bob:
But I wasn’t thinking about the child investing yet.
Shawn:
Exactly. We’re not quite, it depends on the age.
Bob:
And so when you pay them and there are chores I don’t think that you should pay for. I mean, making your bed, keeping your room clean, helping with the dishes, cleaning up a after you you eat, and things like that should be expected. I don’t think you should pay a child for things that are just normal that they should do. But then there’s those outside things. And as Don and I were talking, we were talking about the outside jobs that we had as children. I remember lawn mowing at seven and eight years old, I could barely push the mower, but I was mowing our yard. And then I started mowing some neighbor’s yards. And I remember I got $5 per yard, for mowing the yard. It took me forever, and I thought I was gonna die because it was so hard. I couldn’t hardly push it. But it taught me the value. And I was making money outside of the home at that point. I remember our girls, they were babysitting. So have them…
Shawn:
I guess to summarize that, then Bob, what we’re saying is have them work for money but don’t pay them for the daily chores. So cleaning up their room, cleaning up after themselves, in the kitchen, folding their clothes, and putting them up. Those are just part of life kind of things that they need to learn responsibility and should not be expected to be paid for that. But you can let them earn an allowance or money for taking out the trash cans to the curb and bringing them back in or the recycling, depending on which day it is. The other thing would be, hey, go out and de weed the flower bed or the lawn, sweeping the porches off, washing the car. And those are things that it’s not really that they’re taking care of themselves, it’s that they’re kind of going outside of their responsibility realm and helping you with stuff that’s needed to be done. Like, that makes sense. You should pay them for that. And that way, they learn the difference between personal responsibility and actually working to earn money. Which kind of takes us into one of the other points that you had here, Bob,
Bob:
Is about paying them.
Shawn:
How you pay them. So pay them in $1 bills, all kinds of different denominations of coins, especially when they’re younger. Pennies, nickels, dimes, quarters. Because then you can help them learn extra math skills without having to use a calculator and knowing how to make change, for example. Like, it’s just good practice for them.
Bob:
It is. And when they go buy something, it is good to teach math where they’re giving them money back. So you say, okay, how much was that? That’s $1.72. Give them two $1 bills. How much should you get back now? 28 cents.
Shawn:
We haven’t gotten Rhonan, because he’s only four, I know we haven’t gotten him yet to the making the change, but we have started to have, give him money when he does certain things. Like he’s helping us around the house and helping us do stuff outside of his own clothes and whatnot. And so, we give him a little bit of money and he can go get a a little $1 Hot Wheels toy car or something like that. And he gets to give the cashier his money and get the car. He’s starting to understand that.
Bob:
It’s so cute when they’re giving that money to the cashier, you see them looking up and giving, and I remember watching my children do that, but they were understanding. Where if it’s just a debit card, if you’re putting money in the account and it’s a debit card, they really don’t understand that. But I think…
Shawn:
Here. I give them this card
Bob:
And they had the physical money and to pay them in the physical money and actually put dollar bills in here and change. And then they pull that out and they realize when they pull that out, now it’s not there anymore.
Shawn:
And that goes into our, I believe this is our last point, so helping them to create a small budget so they have the money that they’re gonna be giving to the church. They have their money that they’re saving. So maybe they’re losing that to save up for a game that they want or certain certain article of clothing. Or maybe they want to go to a movie that’s coming out soon.
Bob:
But it’s the more long term thing. Exactly.
Shawn:
A little bit longer term. And then they have the spend. Now again, that doesn’t necessarily mean they’re spending it that day, but that is going to be something that’s a little more discretionary, you know? And so, helping them understand those budgeting techniques early,.
Bob:
Remember kind of the 10-10-80 rule I call it. 10% here. So outta that dollar 10% of giving, they’re gonna put a dime there. Savings, put a dime there. And then they’re gonna put 80 cents in the spend. So they still get to go spend, but that’s a good way of doing it. And a book I would recommend is, I don’t have this in our notes, Shawn, maybe you’ve never heard of it before, but it’s called “The Richest Man in Babylon”. And it’s a great, it’s an old, old book that my dad had me read two or three times, and it was about saving and how he saved for many, many, many years. But I would encourage you to get that old book, “The Richest Man in Babylon”, because it was all about being wise with what God’s given you. We wanna raise fiscally responsible children, and you want to be the example of you being fiscally responsible as well. So we hope we’ve given you some good tools today. I think it’s a hard subject to cover, actually. because many times we’re not doing it right ourselves.
Shawn:
But I think it’s a good practice because, like you said, maybe we’re not doing it ourselves. So if you’re wanting to try to teach your kids good financial principles…
Bob:
You wanna learn those.
Shawn:
Then you need to start acting them out in your own life.
Bob:
Maybe you just need to do this yourself right now.
Shawn:
Exactly. So, that’s gonna wrap it up for today. And if there’s any other topics that you guys would like to hear us cover, we’d love to hear from you in the comments. Or, you can also if you want to let us know or if you need advice, you can call or text us at (830) 609-6986 or you can visit our website, www.christianfinancialadvisors.com. We’d love to hear from you. God bless. And thank you for joining us.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
18 min
May 30, 2023 158 – Benefits Of Using A High-Tech Financial Advisory Firm
Click below to listen to Episode 158 – Benefits Of Using A High-Tech Financial Advisory Firm
Benefits Of Using A High-Tech Financial Advisory Firm

Whether you live in the same city or you’re thousands of miles away, we can serve you better because of these high tech solutions!

More episodes >>

Just in the past 5 years, technology has changed immensely to allow Christian Financial Advisors to better serve clients all over the United States, not just locally. The Covid-19 pandemic really pushed the ability to serve individuals without having to meet face to face. Through Zoom and other video chatting platforms, Docusign and online document signing programs, and sharing important information all online through secure vaults, Christian Financial Advisors can serve clients no matter where they reside.
It’s so important in today’s day and age to have the ability to access paperwork, documents, and your financial advisor quickly and efficiently. All you need is internet access. Tune in to see how we are better able to serve our clients through the use of modern technology platforms AND why it’s so important to use a high tech financial advisory firm.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

Integrative Financial Planning
Bible Verses In This Episode
1 Peter 4:10
As each has received a gift, use it to serve one another, as good stewards of God’s varied grace.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. As always, we’re so glad that you’ve joined us, whether that’s watching online or listening on one of the many podcast directories. If you do enjoy financial topics, but covered from a Christian Biblical worldview, then we would love for you to hit that subscribe button and maybe like, comment, let us know what topic you’d like us to cover in the future. And today, we are gonna be covering the benefits of using high-tech financial advisory firm or a high-tech financial advisory firm. So Bob, why don’t you give us a little intro on this?
Bob:
Well, you’re the one that’s gonna be really…because you’re the high tech guy around here. Okay.
Shawn:
Well, I try to be.
Bob:
Definitely, but I know I put the outline together and the industry has changed so much now. It’s amazing to me that when I first started 30 years ago, it was all about, your financial advisor in your local neighborhood, and you had to sit across the desk from them to do business. That is all so much changed today, especially for us at Christian Financial Advisors because we serve people nationwide and thank goodness for all this technology. So we’re gonna go through, like you say, the seven benefits. I wrote this very quickly. It’s gonna be a little bit lighthearted today, too. We’ve been covering some pretty deep financial stuff like last week was the different stages.
Shawn:
Of life.
Bob:
Yeah. And so, this’ll be a little bit lighter, but it’s a very good program for you to hear, this subject.
Shawn:
I think it’s good, too, that what we’re covering today should be helpful to you. It is descriptive of how we do business here as a firm, but we did try to present this in a way that would be helpful for people just to think about options that they might have available that, like you said, it’s changed a lot over the years. I mean, even just looking back over the last 10 years, how much things have changed. And so, with that being said, in today’s high tech world, you really no longer need to just settle for an advisory firm that just happens to be in your local neighborhood because they may or may not be able to address your needs and wants.
Bob:
Yeah. You can find whatever financial advisor will perfectly fit your wants and needs. As you know, Shawn, the way people find us is they go on the internet and they search for a “Christian financial advisor”. And that’s why we’re called Christian Financial Advisors. Which is a very, it’s a niche. There’s very few advisors in their local towns, if any, and that’s why we serve so many people nationwide.
Shawn:
Yeah. And it’s been really a blessing, Bob, to see all of the different places that people are coming to us now that the number of geographically nearby clients that we’ve been bringing on over the last year or two alone has been very, very few. Most people, I mean, we’ve been getting people from Montana and Oregon and New York state and Pennsylvania.
Bob:
We just got two last week from Michigan. So they’re coming from all over
Shawn:
Because as you said, these particular clients, they’re looking for a Christian financial advisor.
Bob:
And the technology enables them to do that today, where it used not to. So I know you have a scripture that you came up with that goes with this and share how you came up with that scripture.
Shawn:
Yeah. So I was just thinking of with technology, really, it’s a tool. You know, whether like a hammer, screwdriver or whatever, technology’s just another tool. And I know in particular, Bob, when you first brought me on or back on for those who don’t know, I worked with Bob for a number of years and then I had to go off and work in technology for a while and came back. But one of the things that you had tasked me with when I first came back on Bob said, okay, Shawn, I want you to look at what we have from a technology standpoint and figure out how can we better communicate with our clients. That was one, right. And the other one was, again, is a focus on technology, but how can we make what we do better and more efficient?
Bob:
Yeah, that’s correct.
Shawn:
And all of that really comes back down to is, is that technology isn’t meant to replace people, it’s meant to give people more tools so that we can focus on the things that really matter, like serving our clients and being able to meet with them and help them where they are and provide that advice. So I was trying to find a scripture that I thought might work with this. I found 1 Peter 4:10, “As each has received a gift, use it to serve one another as good stewards of God’s varied grace.” And so I felt like that was a good fit on with this kind of topic is that we’ve been given a gift. We’ve been given a responsibility as advisors to serve others and to help people with what God has graced them with and what God has given them. And so through the tools like technology, we can do that for people. And if someone finds that we’re a good fit for them, they shouldn’t be limited because we don’t happen to live nearby.
Bob:
That’s correct. That’s right. And there are so many benefits to working with any high tech financial advisory firm today. I’m amazed to see that there’s still quite a few that are not high tech. So Shawn, there’s seven benefits that we came up with. I know you expanded on those.
Shawn:
Little bit.
Bob:
So the first one definitely here, go for it.
Shawn:
Communication is effortless any time of the day. Because for us and any other high tech firm, you’ve got options to communicate via phone, text message. You can leave a voicemail if it’s not during business hours. You can do online face-to-face meetings through things like Zoom or go-to meeting. And then of course, good old email, and just expect, though, that this is really true for any firm, but your answers are not gonna be provided outside of normal business hours. That’s just, it’s not really fair. The people who work here, we also have families as well. The same way, if you’re not at work, you probably don’t want your boss contacting you all the time.
Bob:
But we get emails and texts all the time outside of business hours because that’s when they’re off work, they think of something I want to ask. So we get that and we…
Shawn:
Which is great. And then the very next business mornin, we can see that we can help respond to it. And so, that is kind of the nice thing of, oh, well I thought of it outside of business hours. I couldn’t jump on a call. That’s fine. Send us a text.
Bob:
Shawn, when I got in the business, and I’m looking at our list here, there was only one of these. That was the phone. There wasn’t the text, and just actual face-to-face sitting across from each other. But then again, you were limited by your location. Where today, really location doesn’t matter at all.
Shawn:
Yeah, not at all.
Bob:
And that’s just been thrown out the window. Okay.
Shawn:
Now, however.
Bob:
I do still like to meet with people. You know me, I love people. I like meeting across from the table 1 on 1 with you, if that’s possible. But 90% of the time, it’s not possible anymore.
Shawn:
So however, even though during business hours, we might not be able to respond if it’s the middle of the night or on the weekend, you can book an appointment 24/7 with online scheduling.
Bob:
Yeah. That’s nice, too. That’s a nice feature. That was never that way when I first started. Okay. All right.
Shawn:
Which kind of goes into point number two. The online and phone meetings are much easier and less time consuming when compared with traditional in-person meetings. I mean, have you ever gotten stuck in traffic going to a meeting or something like that? Yeah, it happens all of us. I mean, even if you’re only driving 10 minutes, there’s still a chance you’re gonna get stuck in traffic.
Bob:
Well, Shawn, when I first started in the business, that where we are in New Braunfels, Texas, in between Austin and San Antonio, Austin and San Antonio had not grown together as one gigantic big city now. And that Interstate 35 between Austin and San Antonio is as busy as the Los Angeles area. I mean, it’s just bumper to bumper traffic all the time. It’s a parking lot on Interstate 35. Even my clients that always used to come up from San Antonio and it’d be a 25 minute trip, now it’s a 45 minute to an hour long trip. And so, they’re deciding, instead of spending an hour coming down, an hour going back.
Shawn:
Plus the time here for the meeting,
Bob:
Plus the time here. So, you’re talking half a day. Now, I can have a 45 minute meeting through Zoom or a phone.
Shawn:
Exactly. With an online meeting, just jump in the appointment at the start time. And skip all the hassle of traveling to and from an advisor’s office.
Bob:
Which takes us to the third as we’re talking about this technology, is paperwork. Man, we used to use that printer. We barely use it now. Because paperwork is effortless and it’s digital. Now, time stamped, I like that.
Shawn:
Yep. So, all the signatures and initials, everything gets times stamped and dated for the exact day, hour, and minute that you digitally signed. And it can be totally handled through a secure email. So on the top of that, which is something I added for you, Bob, but no more missed signatures or initials or fields causing repeat paperwork. Because if you’ve ever had to do forms, especially paper forms, it happens and then you’re like, oh no, we forgot this one field or this one piece of information. Now, we can’t submit the form. So keep in mind though, just want to say for some of our older watchers and listeners…
Bob:
We can still print the paper.
Shawn:
We can still print the paper. We can do business reply mail. Any advisor you’re working with, especially if they’re not nearby, we wanna make sure that’s a good option because we might do all this stuff digitally, but sometimes we have a client that just really needs to hold it in their hand. And that’s okay.
Bob:
As we’re making this podcast right now, we know we have a client that wants to come in and see me in 20 minutes, they’re gonna be here. Across the table. So that is fine. And if you’re in Michigan or you’re in New York, or you’re in Chicago and you wanna fly down to see us, or you wanna pay for us to come up and see you, cause we are a fee-based advisor. Sure. We’ll come up. I mean, that’s not a problem getting on that plane. I’d probably send you, because I’m not that much into travel anymore, but…
Shawn:
Oh, thanks, Bob.
Bob:
Yeah, sure. I’m volunteering you right now, but that can still be done.
Shawn:
Are you man-a-teering me?
Bob:
But Yeah, exactly. But with Zoom, you’re gonna be able to see myself face-to-face. You face-to-face, our other advisors the same way.
Shawn:
And again, whether this is digital digitally signed or you did the business reply mail, no matter what it is, we always take everything that’s been signed and we scan that and put it into a secure digital vault, so you would have access to it 24/7. And that vault we call, it’s our client portal. We actually had a recent video on that, on how we do our financial planning. But that same tool allows us to also have this single repository. And one of the benefits to that is not only do you have access to signed paperwork from us, but if you have a will, your estate planning trust documents, insurance policies, there’s a lot of information that you can use that and store it in there, and then since we as as an advisory firm have access to it, now you’ve got kind of that extra security of, well what if something happens to you and you can’t find the original copies? Well, at least we could then help your family with finding that information. Or maybe you’re still here and you just can’t remember where that insurance policy was.
Bob:
Well, Shawn, by the time you see this, we’re making this before we go to Europe, but by the time we get back, we’ll have been to Europe, we’re taking our passport and we’re scanning it and putting it in there. So if we lose our passport. So, we have that we can go online and get to that.
Shawn:
So let’s go with number five. Financial planning is done efficiently online with values updated daily to reflect how they affect you in the long term as markets do change over time. So no more complex one-time reports that three months later they’re outdated.
Bob:
That’s right.
Shawn:
And there are still advisors that do that. You’ll pay $3,000 to $5,000 to develop this “financial plan”. Three months later, because values and other information change or you had a kid, like none of it’s relevant anymore.
Bob:
And financial planning like that doesn’t take near as long anymore either. Because it’s done, what I would say ‘on the fly’, I mean, I can have a meeting with you and you can be amazed at just in an hour or two how much we can accomplish. We can nearly do the full financial plan. And right then, it’s in your hands.
Shawn:
And then, all you have to do is you go in and you just change, oh, did your income change or your expenses change or you bought a property. You just kind of confirm, “Okay. Are the details correct?” And if anything’s changed or updated, you update it. Boom.
Bob:
Can we put a quick link and YouTube.
Shawn:
Yeah.
Bob:
The one on integrated financial planning.
Shawn:
We’ll put a link in description and we’ll show that on screen.
Bob:
Okay. Sounds good.
Shawn:
Right over here. Right over here.
Bob:
Okay. All right. Sounds good.
Shawn:
So number six, you have total transparency of the values in your savings, investment, and retirement accounts and their holdings online anytime of the day. Again, kind of going back to that client.
Bob:
I like that. And that creates security just for yourself. I’m doing business with a advisor that’s a thousand miles away from me, but there’s total transparency. So, there’s nothing to hide. And you can see everything that you own.
Shawn:
I would like to interject here, though. We don’t recommend that you look at it every day.
Bob:
Oh no. That’s right.
Shawn:
What we’re investing is we’re investing for multiple years or longer as far as the timeframe. So there’s nothing wrong with looking at it, but I would just say unless you’re doing it for a living, don’t look at it every single day. Cause it can be stressful because no matter what you’re investing in, there’s going to be volatility.
Bob:
And they can fluctuate by 1% to 3% per day. Yeah. So, you are correct with that.
Shawn:
And then number seven, so using online forms, you can efficiently fill out all the important information for transferring an existing account or opening up a brand new account with your advisor. And then a short phone interview can be done if needed, after.
Bob:
I know this is something you’ve been working on a lot.
Shawn:
This is something we’ve been working on. And there, like I said, it’s not just us. There are a lot of different options. So definitely something that when you’re doing your research and you’re looking into an advisory firm, see what kind of options they have. Like, nothing wrong with asking, Hey, what’s the process look like, if they don’t have it already on their site, kind of spelled out of what does that timeline look like? Because as I’m sure those of you watching or listening, there have been times where you’re real excited about something, whatever it is, but you’re really excited about getting started. And then it just feels like, ugh, I’m still having to do paperwork or I’m still having, like, I just want to be done.
Bob:
And it does make it so easy, so easy.
Shawn:
And then for us, once we get all that information in, we double check it for accuracy and then send it out via DocuSign. So just a few quick signatures and initials, and we’re off to the races.
Bob:
Isn’t that, it’s so much easier now, too. Like you say, you don’t have to send the paperwork, you can send it through DocuSign, which is a secure way to do that. And then you get that copy of that that goes right into your vault. So there you have it, there’s the seven benefits of using a high tech financial advisor. And we are that’. We’re all seven of these here at Christian Financial Advisors. You have to be actually, because we serve so many people nationwide.
Shawn:
So, if you are evaluating and your firm of choice doesn’t have all of these, I’d like to throw our hat into the ring. We do have these. So you can reach us at www.christianfinancialadvisors.com or you can call or text us during normal business hours at (830) 609-6986. We’d love the opportunity to serve you and your family. Bob, got any closing remarks?
Bob:
I just love it that location, Shawn, no longer matters. That’s a big deal. Yeah.
Shawn:
Which is great.
Bob:
Yeah, it is.
Shawn:
So come on wherever you’re at. God bless and thank you again for joining us. Bye-Bye.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
18 min
May 23, 2023 157 – Summer Vacation Financial Tips and Tricks
Click below to listen to Episode 157 – Summer Vacation Financial Tips and Tricks
Summer Vacation Financial Tips and Tricks

Check out these ways to help you save money on your next vacation.

More episodes >>

Bob and Shawn break out some of their favorite financial advice when it comes to traveling. Summer is right around the corner, which means a vacation is in the works for most of us. Vacations can end up stressful and take a huge toll on a wallet.
However, if you plan ahead correctly, then it doesn’t have to be as heavy on your finances as you might have expected. From booking a place with a kitchen to staying local, Christian Financial Advisors provides some great and easy ways to help you save money on your next summer vacation – or just any vacation!

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
PROERBS 23:4
Don’t wear yourself out trying to get rich. Be wise enough to know when to quit.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome back to another episode of Christian Financial Perspectives. Thank you so much for joining us. Whether you’re listening on one of the podcast directories or you’re watching us live on YouTube, thank you so much for being here. And if you have not subscribed, which Bob, I don’t know why, but we’re still at 80%,
Bob:
You get onto people about subscribing.
Shawn:
So we would love it if you would hit that subscribe button.
Bob:
I subscribed.
Shawn:
Well, good. Yeah, that’s good. But yeah, we’d love if you’d hit that subscribe button so you can know as soon as we post our next episode. But it really helps both the channel, but also helps other people who are looking for videos on financial related topics from a Christian perspective. So with that, we have a really serious episode for you today. No, I’m just kidding.
Bob:
it’s like…
Shawn:
It’s a little more lighthearted. With us being right in the middle of May now, we thought it would be good to do an episode on summer vacation planning, because people don’t necessarily think of that as financial, but depending on what you’re doing, it definitely might want some planning. And we just thought it’d be a good topic to cover. So, Bob, you wanna give us a little intro?
Bob:
Yeah. I don’t know about you, Shawn, but I’ve spent some big dollars on vacations with my family, especially. So I think this is definitely a financial topic.
Shawn:
And I, myself, I don’t know if there’s any other young parents out there, but I have a four year old and a one year old, and my wife and I are very firmly getting our school of hard knocks on kids can be expensive.
Bob:
That’s the truth.
Shawn:
But you don’t have to spend a ton of money to have a good vacation.
Bob:
That’s right.
Shawn:
You just gotta do a little planning and think about it.
Bob:
A lot of people are thinking vacation. What Vacation? I’m like, I need to work, work, work. Well, you know what, there’s a scripture about that, and working is good. Working’s in the Bible over 500 times, but in Proverbs 23:4, it says, “Don’t wear yourself out trying to get rich, be wise enough to know when to quit” or to take that vacation. It’s smart to take vacations and it’s good for your family and good for you. Or we call it, I like to call it a sabbatical. It’s the same, is another way to call it that. So as we think about the summer family vacation planning in the financial side of it, I think it’s good to decide on what your budget’s gonna be. Right now is that budget gonna be $1,500 or is it gonna be $5,000 and whatever that budget is, Shawn, you take that budget and this is the way I’ve done it for many years.
We take that budget. Let’s say we’re gonna go on a 10 day vacation, pretty long one. And if it’s $5,000, that’s $500 a day. Okay. Or if it’s $2,000, that’s $200 a day. So you divide that by the number of days, and that right there lets you know this is what I can spend per day for accommodations, for food entertainment, whatever you’re gonna spend your money on. Okay. And I think that’s very important, but the one thing is I want people to really understand it. It doesn’t have to have to be an expensive vacation to be a fun one.
Shawn:
That’s right. That’s right. My wife and I went on our babymoon, me and Jenna, we went to Hawaii, which seemed, oh, it’s super expensive. Well, couple things because we planned ahead, we were able to get fairly affordable flights, for one. And then the other thing is that we stayed at places that we had access within the place we were staying, like an Airbnb or something like that, or like a condo that you can rent, that had a full kitchen. So for us, we just went to wherever the the locals went, we went and got some groceries and packed us some lunches and stuff. We went out to the beach if we were gonna be hiking around and it saved a ton. Like, there are definitely ways and the benefit to that is it kept our budget under the dollar amount we wanted to stay at for the day while still being able to go somewhere really fun and nice. So, you don’t have to go out to eat for every single meal. And you don’t have to necessarily go to the really expensive places or hotels like you can still…
Bob:
You don’t have to necessarily go to Hawaii, Shawn, because one of the greatest vacations I can remember in just the last couple of years is when we all went to Garner State Park here in Texas and how beautiful that was. And all the camping. And that was a fun, fun time. And that was a very inexpensive vacation. So vacations are about family. And it’s about being together away from work. And I don’t, I never, you should never go into debt to go on a vacation. That’s just crazy.
Shawn:
Because now whatever benefit you might have gotten from that vacation, now you have the added stress of additional debt to pay that off. And I’m pretty sure when you weigh the pros and cons of that, the debt and the anxiety and the stress from that is not gonna be worth it.
Bob:
I don’t think so. Definitely not. So, one of the things you might wanna think about when it comes to vacation, maybe you have a limited budget. Maybe your budget’s just $200 or $300. Well, maybe you should consider a staycation. That’s what we call a staycation, where you find all kinds of fun things to do within a 1 to 50 mile radius around where you live. I mean, we live in Central Texas in between Austin and San Antonio, and there is so much to do. Within an hour of here, all the stuff in San Antonio, all the Missions, there’s the Six Flags amusement park, if you want to go to that. Right here in our own town, you can go tubing on the rivers.
Shawn:
There’s this really small waterpark that some people know about that, oh, sorry. I believe it’s one of the largest waterparks in the world.
Bob:
In the world. Yeah. It’s called Schlitterbahn.
Shawn:
That’s a huge savings because if you’re staying within that 50 mile radius to find things to do, you can pretty much do something different each day. You still stay at home each night. So, it completely cuts out that extra cost for lodging, and you can have a great time together as a family.
Bob:
That’s exactly right. And there’s so many inexpensive things to do in a local area, or even if you’re going far off. Rachael and I have really come to love hiking and walking nature trails. And around here in Texas, there’s just multiple state parks. But state parks are around the nation.
Shawn:
Oh yeah. Well, and of course there’s national parks, too.
Bob:
Right. Exactly. Overnight camping trips are not very expensive, but even camping out in your own backyard, did you ever do that before?
Shawn:
Yeah, I did that with with some friends when I was younger. But that, yeah, that could actually be really fun. That could be fun, especially if your kids are younger. I know when they’re teenagers, they don’t want anything to do with you. At least, so I’ve been told but when they’re younger, you could definitely do a camping trip in your backyard.
Bob:
Yeah, that’s right.
Shawn:
And the added benefit is once the kids go to sleep, y’all can go sleep inside in the regular bed.
Bob:
Or just going fishing in a local lake or pond, river or bay that might be around you. I mean, that’s very inexpensive. Like I said, water tubing just sitting on the beach enjoying a campfire. You could do even make your own little campfire in your backyard and make…
Shawn:
Follow all your local fire codes.
Bob:
Of course. Of course. We don’t want you burning down a forest. Okay. but in making things like s’mores and barbecuing and having watermelon, that’s a big thing here in Texas. We like to have watermelon during the summer. Maybe that’s a tradition across the nation. I don’t know.
Shawn:
I had watermelon growing up too. So we can’t claim that as a strictly Texan thing.
Bob:
Exactly. So one of the things when you’re planning for that summer vacation is really thinking about those accommodations, like you said, like when y’all went to Hawaii. You might wanna spend a little bit more to get a place with a small kitchen in it.
Shawn:
That’s right.
Bob:
Because you’re gonna save so much money on eating out. Eating out is just so expensive. Plus, you don’t have to mess with the crowds.
Shawn:
Yeah. And then you’re spending more time waiting around for food, too. Whereas for us, we made breakfast at, at the place we were staying right there in the kitchen, and then we would pack some snacks and sandwiches and other stuff to have for lunch as well, which was great because then we got to spend more time out and about not waiting for food. We didn’t have to spend as much on the food. We could actually spend more time enjoying the vacation and not sitting in a restaurant, which you can do anywhere. And then a lot of times, for the evening, we may not want to make something. So, we’ll grab something out and about in at night. But yeah, that definitely makes a big difference.
Bob:
Okay. So we’ve talked about that staycation, we’ve talked about budgeting. So there are the big trips, right?
Shawn:
Like you said, gotta cover the big trips.
Bob:
The Hawaii trips, there’s the trips to Disney for later.
Shawn:
Or insert your local theme park, whether it’s Disney or Six Flags or whatever it is.
Bob:
But budgeting for these times is the most important thing you gotta remember. And you really wanna try to stay away, I’ve noticed this, stay away from weekends. Weekends, especially in the summer, the prices will double around major holidays too.
Shawn:
Well, what do they call that? Surge pricing. Don’t go then.
Bob:
Then we’ve had some vacation properties as you know and we don’t even stay in them, like July 4th. You can nearly get triple what you’re getting normally. So we just, we don’t even go, we’re like, this doesn’t make sense for us to stay in our own place on July the fourth or Memorial Day.
Shawn:
Well, especially if it’s somewhere that gets super crowded. Because even if you have your own place to stay, do you really want to go there to fight the crowds when everyone is trying to go there? It’s just not worth it.
Bob:
We have so many tourists here in New Braunfels, we call them, we end up calling them terrorists in the summertimes . But they’re not terrorists. They’re tourists. They’re great people. They’re sweet people. But it gets so crowded. It just, I mean, we swell in population by over a hundred thousand. And look for those deals, they’re everywhere to be had and on sites like VRBO, Airbnb, Expedia, direct hotel sites. Another thing, a little trick I’ve done, Shawn, is if you look on the VRBO sites or even Airbnb, they have a lot of layered extra costs on there. Well, if you look real, real close, you can find that property, do a little research, and a lot of times the property managers will actually put their properties on the VRBO websites or the Airbnb where they charge all those extra fees. If you go directly to the property manager or directly to the owner, you can bypass those enormous fees. So many times I’ve gone on, like a VRBO website, and it says $200 a night, and by the time I’m done with all the fees, it’s like $375 a night. I’m like, how did that happen. But by doing some research, I was able to find the actual owner or the property manager, go direct.
Shawn:
Even if you can’t find the owner. One of the things that Jenna and I have noticed when we travel, we’ll go to a place that’s technically a bed and breakfast or just a normal Airbnb. Almost always, they will have contact information or they’ll have a card or you get to meet them in person. They’re like, Hey, by the way, here’s my website. Here’s my information. If y’all want to stay here again, contact me directly, it’ll save you 20-30%. And then now that you’ve got that relationship established, well if that’s a place you really like going, you’ve got a great place to stay. You know it’s nice, and you’ll save quite a bit of money on those fees.
Bob:
The BnBs we’ve stayed in, we can actually, they’ll negotiate as well. Especially if you’re staying over two nights or over three nights, maybe one night you’re not gonna get to negotiate, or two. But if you stay, especially three or longer, many times I’ve gotten 10% or 15% off the price.
Shawn:
I’d like to mention one other thing too, Bob. Okay. So if you’re looking at doing a cruise, because I know a lot of people do that. I will say I like to eat. So I definitely like the idea of the cruise because I can eat as much as I want.
Bob:
So you’re the reason the cruises run out of food.
Shawn:
Yeah. I’m that guy. But on the cruise is one thing that I’ve found is really helpful. And if you’re like, oh, I already knew this, then this isn’t for you, but don’t worry about getting that nice ocean view room. You’re not gonna be in there. Because if it’s a fun cruise, you’re basically gonna sleep in the room and change every so often. Or maybe take the kid to the bathroom, whatever. But you’re hardly ever gonna be in there. Don’t waste money that you could have spent on excursions or fun stuff like when you actually get off the boat or even some of the cruises. I mean, it’s crazy. It’s a floating city with the kind of stuff that you can do actually on the cruise. So, save that money for actually doing something fun. Not on a slightly better view.
Bob:
I don’t know. Now, I like that better view, Shawn. But anyway.
Shawn:
Hey, I’m just saying it’s an option.
Bob:
It is. You’ve got an option. If you’re on a budget.
Shawn:
You’ve got a certain budget,
Bob:
You’ve got a certain budget.
Shawn:
You can either spend more on the room or you can spend more on doing other stuff.
Bob:
That’s right. That’s right. Well, there you go. I’m hoping that all of y’all have a great family vacation or staycation. Shawn, some of the happiest people I see is when I go over here to our park here in New Braunfels, Landa Park, which is like a little Garden of Eden with the springs coming out in the beautiful clear lake. You see they’re having such a great time. And many of them, they live right here. And they’re staying right in their own hometown and they’re having the barbecues and I’m thinking they got it right. They got it down.
Shawn:
Well, ultimately it comes down to it’s the people that you’re with. And if you’re taking your family, just focus on having fun and enjoying your family. And don’t worry about whether or not you’re spending enough or you’re getting this dream vacation. Because at the end of the day, especially for your kids, like the stuff I remember growing up, it wasn’t the expensive things. It was when I got to have quality time with my parents, with my family. That’s what sticks with you. So your kids want to spend time with you more than they just wanted something fancy.
Bob:
That’s correct. You got it. Well, I hope this has been insightful. It’s been a little light today. We didn’t want to get too heavy. We do that every week on the financial topics. We got our next topic, by the way, is coming up is gonna be a lot of fun. Either the next one or the following week is gonna be on teaching your kids good money habits. So yeah, that’s gonna be a real good one, kind of a lighthearted topic, but at the same time, one that you wanna definitely listen to if you have children or even grandchildren.
Shawn:
Yep. Well, hey Bob, we gotta teach the meat and potatoes, but every once in a while we’ll do some chips and queso.
Bob:
That’s right. There you go. Everybody knows what that means when you say South Texas chips and queso.
Shawn:
Chips and salsa, guac, or some spinach dip, whatever it is where you’re at.
Bob:
Yeah. Right.
Shawn:
All right. Well, God bless, thank you so much for joining us and hope to see you next time.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
17 min
May 15, 2023 156 – Life’s 6 Financial Stages Part 2
Click below to listen to Episode 156 – Life’s 6 Financial Stages Part 2
Life’s 6 Financial Stages Part 2

In part 2, discover the last 3 life stages and how you can try to accomplish more with your money during this time.

More episodes >>

In part two of two, Bob and Shawn discuss the last 3 of 6 financial life stages based on finances, lifestyle, and age. We have advice and recommendations for each stage of life, especially when it comes to financial planning during this time. Not everyone will fit exactly into these 6 financial life stages, but you will find common factors in most of them! From starting a new family to coming into retirement, there are key takeaways here for everyone.
All of our advice comes from decades of experience with clients at Christian Financial Advisors. For these last 3 life stages, this includes everything from having a trusted power of attorney to investing more conservatively in your older age. Listen in to discover which financial life stage you are currently in and how you can get a better handle on your finances!

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

Life’s 6 Financial Stages Part 1
Bible Verses In This Episode
ECCLESIASTES 3:1-7
There is a time for everything, and a season for every activity under the heavens: a time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. We’re so glad that you joined us. If you’d like financial topics from a Christian perspective, we’d love for you to hit that subscribe button that’ll help us out, but it’ll also help other potential viewers and listeners to find this kind of content. Now, today we’re gonna be covering part 2 of 2for Life’s six financial Stages. And if you haven’t seen the first episode, we covered the first three stages ranging from your twenties to your late fifties. So link is in the description, or you can click the video should be over here on screen. And so with that, let’s get into the next 3 of 6 stages, and Bob over to you for that.
Bob:
Yeah. So here, I’m in this fourth stage that we’re gonna be discussing. We’re gonna discuss stage four, five, and six today. All right. And that fourth stage is from your early sixties or 60 years old. And I turned 60 Yeah last year, from your sixties to your mid seventies. I call this the retirement and traveling years. I wonder why I would call it the traveling years?
Shawn:
Well, let’s not get ahead of ourselves. You wanna read the scripture or you want me?
Bob:
I think the scripture is good to read because this scripture, we read this last week, is because it really talks about life, doesn’t it? So, go ahead, Shawn.
Shawn:
We’re gonna be reading Ecclesiastes 3:1-7, “A Time for Everything”. Verse one. “There is a time for everything and a season for every activity under the heavens. A time to be born and a time to die, a time to plan, and a time to uproot, a time to kill, and a time to heal, a time to tear down and a time to build, a time to weep, and a time to laugh, a time to mourn and a time to dance, a time to scatter stones, and a time to gather them. A time to embrace, and a time to refrain from embracing, a time to search and a time to give up, a time to keep, and a time to throw away, a time to tear and a time to mend. And finally, a time to be silent and a time to speak.”
Bob:
Huh? That scripture says a time to throw away. In this stage four, that could be a time to start throwing away some of that junk you’ve accumulated in those first three stages. Because it’s during this stage where you become a empty nester. Many times, the children are on their own now. At least you hope they are. This is the retirement points during the sixties sometimes, or it may be even in mid seventies now. I’ve decided I’m not gonna retire till I’m 85. So my wife says, no way are you retiring.
Shawn:
Well, you’re not gonna retire in the traditional sense of completely stopping work. Because mainly you would just go, you would get bored outta your mind.
Bob:
I would. Exactly. I love producing stuff, producing this podcast. I love writing. But you talk about the traveling years. Rachael and I are starting to do that. By the time this comes out, we would’ve just gotten back from a Europe, a trip to Europe, which I’ve never been to, and it’s gonna be really fun to go to. I’m looking forward to that. But we are empty nesters, and it’s major traveling years. And it’s not only Europe, but I see the RV happening during this time for my retirees and visiting friends and family. There’s a lot of…
Shawn:
It’s a lot traveling.
Bob:
Yep. This is where the downsizing to probably a smaller home sometime from the sixties to the mid seventies and possibly a retirement community. We got that one between here and San Marcos, which we’re between Austin and San Antonio, called Kissing Tree. It’s gotta be 55 and up to live in there. So on a golf course, it’s got all the pickleball…
Shawn:
Downaizing for something easier to take care of or just hanging out with the other people in that stage of life. You’re gonna get more time with the grandchildren. Hopefully. And at this point if you haven’t already had some health issues, this is usually when those just normal wear and tear health issues, if you will, start popping up. And that’s just part of life, right, BOb?
Bob:
Yep. Exactly. So I have seven financial takeaways on each stage, just like we did last week. We have financial takeaways during the during that stage. So, good financial advice during this point is more important than ever. I mean, this is very important during this point, this stage, because the biggest concern is running out of retirement assets before life ends. And you gotta be very careful about overspending in the beginning years of retirement. There’s that tendency, I’m gonna go travel, travel, travel, I’m gonna buy that RV, and then all of a sudden, what happened to a third of my retirement? I’ve seen this happen from being in the business for years. Debt. It is not to be tampered with at all at this age.
Shawn:
Don’t mess with her. Don’t.
Bob:
Yeah, exactly. Just stay away. Stay away from her. Possibly downsize to a smaller home to lower expenses. Buy the best health supplement plan you can get. I promise you’re gonna be glad you did. I’m brought into a lot of my…when it’s the Medicare, Medicaid, and the supplements, get that best supplement that you can,. Number six.
Shawn:
Update your estate plan for both your spouse and your children’s sake. Because again, you don’t want something to happen and that estate plan to be outdated or non-existent, I mean, hopefully you do have an estate plan, but if you don’t get one now.
Bob:
And that’s amazing. If you don’t have one by now, but hopefully.
Shawn:
It happens, though.
Bob:
I know it does. I see it happening all the time. Number seven, sell off those unneeded assets that cost unneeded money or make low returns. I would really invite you to go back and listen to podcast number 129 if you own rental homes.
Shawn:
That’s right. It’s the one, “Are rental homes a good investment?”
Bob:
And the yield of the rental home after taxes, insurance, and maintenance is no more than about 3% or 4%. You can make that in a CD today. And so I really think that’s a good example of, to unload those assets, if you got several rental homes.
Shawn:
So go back again, that’s episode 129, and then the last financial takeaway, make sure you build a diversified portfolio that can keep up with or overcome inflation, but be sure that you are limiting your risk as much as possible so there, there’s a balance to that.
Bob:
Right? There is. But still, you gotta keep up with inflation. You just can’t go all the way over to the left, super, super conservative. You still have need to have some in a moderate portfolio.
Shawn:
Stage five, the slowing down years.
Bob:
Yeah. Now it’s like, okay, I’ve done my traveling and actually the cost during this retirement stage goes way down. Now it’s gonna go up in that last stage because of health costs, but the health cost goes way down, but the health issues, they just start popping up left and right, and that’s sad. But they do.
Shawn:
So again, stage five, the slowing down years from your mid seventies to your mid eighties, your health issues start popping up. There’s less travel, if any, because it’s just harder, possible loss of a spouse.
Bob:
Happened with my mom. My dad passed away when my mom was 80 years old, actually. My dad was, was 83-84.
Shawn:
The next one you might be selling the last home. Your last home. And primary home.
Bob:
I’m thinking about my mom and she’s 88 now, and she did a couple years ago. She sold her last home.
Shawn:
And moved into assisted living.
Bob:
That’s correct.
Shawn:
Which is also pretty common, especially by mid eighties.
Bob:
By the way, because she’s so social, she’s doing something every day. She has a meal with all of her friends. It’s a great, great place.
Shawn:
Got her bridge club, right?
Bob:
Yes, she does. Exactly. And they play dominoes, and they even have a miniature golf course there.
Shawn:
Mini golf?
Bob:
Oh yeah. It’s nice. It’s amazing. It’s amazing. So financial takeaways, there’s a must have, again, for a trusted financial advisor to help you make those wise decisions during this stage. And the second thing that’s really important is that you need a younger, trusted family member to help with those financial decisions.
Shawn:
Preferably something like limited power of attorney, just in case maybe there’s a health issue to where you’re not able to voice your concern. So having that trusted younger family member being able to be empowered to help you with those decisions. And the other thing, too, that, you know what unfortunately happens, but as you get into this stage, the chances of of memory issues occurring also go up drastically. So that’s again, another part of having that trusted family member, because you might be great, and then next month, all of a sudden, you just can’t remember what’s going on with finances.
Bob:
Yeah. And the financial takeaway, which you talked about, you end up doing anyway, is that you sell that home, and it helps with the financial cost of this, we’re using the sale proceeds from my mom’s home to help offset offset the cost. And we have all her estate planning documents updated, and we’ve got a great power medical power of attorney, financial power of attorney. It’s so important that you have that trusted family member to help you with these items.
Shawn:
Which is our number four of four for these financial takeaways. All your estate planning documents need to be updated. And like we were just saying, a good suggestion is have a medical power of attorney and a financial power of attorney in place with that younger, trusted family member.
Bob:
Now we get to stage six, if you’re lucky enough to make it this far.
Shawn:
If you make it this far. Congrats.
Bob:
Exactly.
Shawn:
You won. You made it to stage six. Not all of us get to this part.
Bob:
Right. Which is the mid eighties to mid nineties and to a hundred. Oh, by the way, I went to see my mom this weekend, and they were having a person there having their 100th birthday. And I just, you wanna sit down with somebody like that and talk to ’em. I mean, you think about that. This is 2023. They were born in 1923. They went through the Great Depression and they’ve seen life change so much. I can’t imagine. Here’s what I say. You’re hanging on, you’re hanging on for dear life at this point.
Shawn:
Well, let’s make sure we cover it. It’s stage six, the no-go or assisted living years. It’s starting The mid eighties to mid nineties, maybe a hundred if you live to a hundred. And like you said, the first one hanging on for dear life.
Bob:
I’m sorry. And I don’t mean to offend any of you, my clients that are in this stage, and I got some clients that are at this age. But they have, they’ve had a few things happen. It’s very close, you know. It’s on the edge. But what’s interesting is, is the few clients that we have they’re actually living with a family member not in assisted living like my mom is.
Shawn:
Typically, it’s gonna be one of these two, though. It’s either assisted living facility at this point of some kind or living with a family member.
Bob:
I actually had a client that was living in assisted living and then the family member built them a really nice little bungalow off the back of the house. All right. Major health issues are very likely at this stage, short-term memory loss may be occurring. And of course, you got a lot of great grandchildren coming along.
Shawn:
Possibly loss of hearing and eyesight.
Bob:
Starting that with me.
Shawn:
That’s okay. You’re not quite into this.
Bob:
Exactly. I’m a long ways from there. So hopefully they’ll have ear replacement by then, you know?
Shawn:
Yeah. May even get a new ear.
Bob:
Put a new ear in. All right. So financial takeaways. If the assets have not run out yet, invest conservatively to moderate at best. You don’t have anything, nothing to do with growth unless those are assets that you’re gonna pass down to the next generation. Now we have some clients that are multimillionaires and they’ve put aside $100,000 or $200,000 for the grandkids, and that is in growth, and they wanna be there.
Shawn:
But if it’s assets that you’re using for yourself to take care of your needs – conservative to moderate. Otherwise, if it’s going to the next generation…
Bob:
Because you may need to reach into that because the health issues can be very costly.
Shawn:
Which is number two, health issues can be costly.
Bob:
That advisor relationship, that financial advisor relationship is very important along with the trusted child or grandchild that’s handling finances. And Shawn, I think it’s very important that that trusted child or grandchild have the relationship with the financial advisor that their parents are using. Does that make sense?
Shawn:
Yes.
Bob:
All right.
Shawn:
Or a grandparent depending on which one it is.
Bob:
Right. And these financial accounts at this point, I feel should be in a trust or definitely have state of beneficiaries payable on death to avoid probate. But I like the trust part because it makes it so much easier to have a trustee, and a trusted child or grandchild needs to have a complete financial power of attorney to act on the behalf during this stage. All right. Whew. So there you go. There you go. So there you have it. We’ve gone through six financial stages of life from the beginning years in the twenties to the growing years in the thirties and forties to the maturing years to the retirement and traveling years, which is stage four. We covered that today. The slowing down years, and then the no-go years. It’s quite a life if you’re blessed with all six stages and each stage has very different issues and needs that is in need of a well qualified, financial advisor that has the experience to guide you through these stages and understands them.
Shawn:
That’s right. So if you have watched this or listened to this and you’re thinking, I like how Bob and Shawn were talking about it, we’d love to hear from you. You can comment. You can also visit our website, www.ChristianFinancialAdvisors.com, and during business hours Monday through Friday, you can call or text us at (830) 609-6986. We’re here to serve. And thank you for joining us. Bob, do you have any final words?
Bob:
No final words. There’s enough there. We’ve had a lot of words these last two.
Shawn:
We have.
Bob:
So, we’ve laid a lot on our listeners and watchers.
Shawn:
Well, that is true. May God bless you. Thank you so much for watching or listening to this and for sticking through it, and have a wonderful day. Bye-Bye.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
17 min
May 08, 2023 155 – Life’s 6 Financial Stages Part 1
Click below to listen to Episode 155 – Life’s 6 Financial Stages Part 1
Life’s 6 Financial Stages Part 1

Discover which financial life stage you are in and how you can try to accomplish more with your money.

More episodes >>

In part one of two, Bob and Shawn discuss the first 3 of 6 financial life stages based on age, finances, and lifestyle. Even though not everyone will fit into these 6 financial life stages, most of us will! Whether you are in the beginning stages of just graduating college or towards the middle with kids that are graduating college themselves, there is definitely something for everyone in this episode.
Within every life stage are key financial takeaways and recommendations that Christian Financial Advisors has been able to extract from each. Some of these include avoiding debt, saving for a new home, and even getting your life insurance in place. Listen in to discover which financial life stage you are currently in and how you can get a better handle on your finances!

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
ECCLESIASTES 3:1-7
There is a time for everything, and a season for every activity under the heavens: a time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial advisors host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. We’re so glad that you joined us today, whether that’s on YouTube or listening to us right now in one of the many podcast directories. If you like content on financial topics of all kinds, but from a Christian or biblical worldview, we’d love for you to hit that subscribe button. Maybe like this video, it’ll bring more content like this to the top of your subscription feed, but also it’ll help other people who might be looking for the same kind of content. Don’t ask me how the algorithm works, I just know that it works. So anyway, today we’re gonna be covering part one of two for a series on life’s financial stages. And gonna go over to Bob for a little bit more of an intro on this.
Bob:
Well, Shawn, we’re gonna go over life’s six financial stages. I’m the old guy here, so I’ve already gone through three of them. I’m starting to head into my fourth. So, I’m over that halfway mark, I guess. I’m starting to come to that reality.
Shawn:
I’m firmly in stage two now.
Bob:
You are. So, yeah. And I think everyone’s going to relate to this, whether you’re in your twenties, thirties, forties, fifties, sixties, seventies, eighties, or even nineties. If you listen to our podcast.
Shawn:
If you’re in your eighties or nineties listening to our podcast, we appreciate you.
Bob:
Yeah, exactly.
Shawn:
You’re still going strong.
Bob:
You’re a high tech grandma.
Shawn:
That’s right.
Bob:
Watching us on YouTube or listening to us on our podcast. But Shawn, we do. We have some clients that are that age and they listen to us. So I gotta be careful about how I speak on this last stage.
Shawn:
It’ll be all in love.
Bob:
Yeah, exactly. That’s correct. And as we were thinking about these financial stages, you know what, some of the scriptures we use, sometimes we use them, a lot of them, over and over, but they apply. And I think the scripture from Ecclesiastes 3:1-7 really does apply through this about how there’s a time for everything.
Shawn:
You want me to go ahead and read that?
Bob:
Yeah. If you’ll read that for us.
Shawn:
So, like Bob said, Ecclesiastes 3:1-7 starting in verse one, “There is a time for everything and a season for every activity under the heavens. A time to be born and a time to die, a time to plant, and a time to uproot, a time to kill, and a time to heal. A time to tear down and a time to build, a time to weep, and a time to laugh, a time to mourn and a time to dance, a time to scatter stones, and a time to gather them. A time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep, and a time to throw away, a time to chair, and a time to mend, and a time to be silent and a time to speak.” Now, obviously, Bob, there’s probably something in there for everybody.
Bob:
There is, that’s right.
Shawn:
One part of that probably speaks to you, but I do know that very last part, probably for you and me, is a little hard sometimes, knowing when to be silent and when to speak.
Bob:
There’s reason we have two ears of one mouth, right?
Shawn:
Yeah. We seem to err on the time to speak probably more than anything else.
Bob:
Exactly. So, let’s get to stage one. What we call stage one in the financial planning process, and we look at this stage, and this is when you’re in your twenties to around your mid thirties.
Shawn:
Stage one, “The Beginning Years”.
Bob:
“The Beginning Years”. That’s the name of the stage that we named it. The beginning years. It’s your lowest earning years. You have very little to any savings or investments during this time.
Shawn:
Right outta high school kind of age up until mid thirties.
Bob:
Yeah. You’re getting outta college too, and you’re finding that spouse and getting married usually between the mid twenties and mid thirties nowadays. Now, Shawn, I know that your generation does everything later than my generation did. Rachael and I, we were having all our children in our mid twenties and down. So, this is very different, but I had to bring this to today. All right? There’s multiple jobs trying to figure out the best path for the career, you know? You see that.
Shawn:
Even if you went to school, sometimes you’re still trying to figure out what actually works.
Bob:
And you may not realize it, but your expenses and income, well you know your income’s low at this point. But you may not realize it, but your expenses are low, too.
Shawn:
Especially life insurance. It’s real, real inexpensive during that period.
Bob:
It sure is. But auto insurance can be a little higher.
Shawn:
It can be.
Bob:
Yeah. And anything that can be invested for retirement, will have many, many years to compound. And that’s the key here of looking at this, because we’re gonna get into each one of these and now we’re gonna get into the financial takeaway.
Shawn:
So for each stage, if this is the one that your ears perk up a little bit because you realize, oh, that’s the stage I’m in right now. We’re gonna have some financial takeaways. So something for you to be thinking about, trying to apply and use within your own life during this stage.
Bob:
Since this is a financial podcast.
Shawn:
Exactly. We figured it’d be good to have this. So the first financial takeaway on stage one, so your twenties to mid thirties, number one is start with a savings account for emergency savings. So what you want is you want at least three months of your expenses saved up. So in case of an emergency, you aren’t having to dip into anything. You might have started saving up for investing.
Bob:
And you don’t have to get in that credit card debt.
Shawn:
Exactly. And you can avoid that debt.
Bob:
It’s easy to get in that.
Shawn:
Now, minimum is three months, but we do recommend six months if you can get to that. And there is kind of an upper limit if you’re getting to where you’ve got 12 months of savings and emergency funds saved up, you’re probably doing overdoing it a little bit.
Bob:
I don’t think anybody’s gonna need to worry about that.
Shawn:
No, not during this stage.
Bob:
Mid twenties and mid thirties.
Shawn:
The second one. This is after you’ve got your emergency savings, not before, you want to start saving up as much as you can in maybe a separate, put it in a separate savings account to maybe use for down payment on a house, or maybe if you decide to go back to school and get your master, whatever it is. But the most common is saving up for a down payment on a house, because that’ll definitely help you in the long run. And then number three, like Bob was mentioning earlier, at this age, there’s a lot of time for that compounding…
Bob:
Compounding to occur.
Shawn:
Exactly. So open a growth mutual fund and add to it monthly, even if it’s $50 to a $100 a month, it’s still is good. Just start with something.
Bob:
Don’t think of it like a $100 a month pay, think of it like $3 a day.
Shawn:
That’s a good way to think of it.
Bob:
And the reason I say that, and I love my old friend Dave Ramsey from Financial Peace. That’s the cost of a, what do y’all call these, lattes?
Shawn:
Yes. You know. Come on. You know the word for lattes.
Bob:
Well, not really. I don’t drink that expensive coffee, but…
Shawn:
I don’t either.
Bob:
It’s a different language. But anyway, you can come up with that. A lot of people don’t think you can come up with $100 a month, but you can. You just have to look, curb your spending, and categorize it to more important things. And you’re gonna be glad you did this. A good rule thumb is to set aside 50% of your savings into a savings account and 50% into that investment account.
Shawn:
Okay. So, maybe for you, maybe when you look at your cash flow, you look at your budget and maybe you’ve got $500 a month max that you can put away, well, you want to put all that $500 to build up your emergency savings. Once you’ve got at least three months of the emergency savings, then you want to split it where you split that 50/50 and you put half of that for saving up for, say, that down payment and you put half of it into the investment account.
Bob:
And you want to avoid the use of debt, please hear me on this. I could say this 50 times, you’ve got to avoid the use of debt because these credit card balances are just such high interest.
Shawn:
Especially credit cards. So it’s not just debt, but avoiding…using a credit card…
Bob:
But right now, do you know the interest rate? I saw it recently. It’s 27%.
Shawn:
It’s up to 27.
Bob:
So, this is crazy. We better get going on these.
Shawn:
Just some clarification, Bob. But on the credit card, the key here is we’re not saying that don’t ever touch a credit card. What we’re saying to be very, very, very careful of is do not spend any more than you know you will be able to pay off in full every month. Because what gets you is carrying that balance over to that next month.
Bob:
I always say, if you can’t afford it now, what makes you think you’re gonna be able to afford it in three weeks.
Shawn:
Exactly. And then the last one for this stage, get your insurances in place. So life insurance, health insurance, disability insurance, all of those are incredibly cheap at this age. So, do it now.
Bob:
Now somebody’s just listening to this, in their twenties to mid thirties, they just went, are you crazy? I don’t have an extra dime. This is where they need financial advice. And you do, you don’t realize, do you think it’s tough now in your mid twenties to mid thirties, you just wait, it’s going to get a lot more expensive.
Shawn:
This is where you establish those good disciplines, and I think the key with that is look at what you’re making and look at what you have to spend money on so you can establish that budget.
Bob:
Okay. So let’s get to stage two and let’s list these off quickly or we’re gonna be here for the next 45 minutes.
Shawn:
We won’t do that to you guys. All right. So, stage two, “The Growing Years”.
Bob:
And that’s between, that’s when you’re in your mid thirties to forties. This is where you are right now, Shawn, and your earnings are increasing. This is normal.
Shawn:
And debt is increasing.
Bob:
And because your friends, you tell me how much your friends are earning and I’m like, yeah, really? But debt is increasing, too, because of housing. You just got the large vehicle, because you’re a growing family. You’re upsizing to those bigger cars to carry the kids and a larger home to house them in. Wait, Shawn, you’re not even there yet, but you’re about to get there. Your kids are gonna start getting involved in all these extracurricular activities. You’ve got a son and a daughter. So you…
Shawn:
There’s gonna be a lot going on.
Bob:
And there’s gonna be a lot. I mean, I got soccer, football, baseball, softball, basketball, music, band, ballet, art, swimming, gymnastics, cheerleading. Have I made your head spin enough here? Because they’re gonna be involved in one or two of those areas. And it is costly. It’s very costly. We called them back then, in my day, we called them suburban moms. I mean we had the big suburban back then, and Rachael was just going around from one to another to another. We had the big band family vacations. That’s all coming down the pipeline. And snow skiing in the mountains, they’re gonna want to go do that. You’ve got the summer vacations, the entertainment parks. That can be really costly. Go for the camping trips. I got camping trips.
Shawn:
Exactly.
Bob:
That’s a lot cheaper.
Shawn:
Well, that’s Jenna and I’s preference anyway. And it’s less expensive. So that was a lot to hit you with. But key here is earnings are going up, but usually the debt and expenses and just the cost of running the family is getting more expensive. Let’s do some financial takeaways.
Bob:
Real quick.
Shawn:
You may need to play some catch up. If you’ve been procrastinating up until this point, and you didn’t hear this podcast before you wer in this stage.
Bob:
If you’ve not done already, build up at least three months of living expenses into a savings account for emergencies only and to prevent dipping into investments accounts.
Shawn:
That’s right. And the third one, continue contributing to a growth fund or open one if you haven’t already. And add to it monthly. Now, the amount needs to be much higher than in that previous stage, stage one, the beginning years, because you don’t have as many years, on average, until retirement.
Bob:
Number four, max out the contributions to your employer sponsored plan to at least their match. Okay? For example, so if your employer is matching up to 3% of your salary into the employer plan, you put at least 3% because you’re getting a double on your investment immediately. If you’re putting in $100 and they’re putting in $100, that’s like free money. You’re making 100% return immediately. Number five.
Shawn:
Number five, continue to avoid the use of debt, especially again, especially carrying a balance on a credit card. What, it’s up 27%, right? But debt for a home purchase is okay. Just be sure that your monthly house payment is no more than 28% of your gross household income.
Bob:
You were asking me about that. And that’s the old school, by the way. That’s the old school. So you take…
Shawn:
Keeps you safe.
Bob:
So you take your monthly and you multiply that times 28%. That should be the max of your house payment. And then the maximum amount of all debt, monthly payments, credit card debt, home home debt, vehicle debt, should be no more than 33%. Now, that’s conservative. I realize that. Conservative. I’ve heard some people say 50%. That is strapping you. That’s way, way too much.
Shawn:
So, key with that Bob, is that’s the goal, right? We understand maybe you can’t get to there right now, but that’s the goal is you want to keep no more than 28% for the house payment and no more than 33% for all debts combined. And then number six, update your insurance policies to reflect current liabilities and income. So again, life, health, disability insurance is still relatively cheap at this age and in this stage of life. Again, with the growing family, there’s a very high chance that you’re gonna need higher coverage, especially for that life insurance and the disability. Because if something happens to you, you wanna make sure the family’s taken care of.
Bob:
And the seventh thing is so important at this age, Shawn, with your family growing and you. This financial takeaway should maybe be number one, having an estate plan in order. Or update it if you haven’t done one. So if you did an estate plan for yourself in your twenties and you had no children, now you have children, you need to update it. You need to update it.
Shawn:
Unless you want everything to go to the government, you know?
Bob:
Right. So let’s get to stage three. And stage three is “The Maturing Years” is what I call it. This is the mid forties to late fifties. And this is by far the most expensive stage of life that I’ve seen. Your earnings, though, are going way up during this time.
Shawn:
And usually start to peak out as well. So this is kind of like, this is gonna be about as good as it gets as far as your earning potential, typically. Kids are becoming teenagers.
Bob:
That’s costly because they’re wanting to drive cars.
Shawn:
So now you gotta have a car. Well, even if it’s a used one, there’s still gonna be insurance.
Bob:
The insurance is as much as the car.
Shawn:
Not gonna be cheap on those kids.
Bob:
Yep. I mean, they got, they’re gonna learn. And that’s a dangerous time.
Shawn:
And then we’ve also got high school graduation going on. Or you’ve got kids starting college and if you’re helping them with that, college ain’t cheap. You’ve got the oldest children might even be getting married at this point or finishing college.
Bob:
You have a daughter now, Shawn, so you’ll be paying for that marriage. So you’re not only gonna pay for the college, pay for the insurance for the vehicle. This is all at the same time, by the way. And then she’s gonna want to get married and you’re probably gonna have to pay for that. I’ve been there. I’ve been there. I understand all this. And on top of that, like what happened to Rachael. Rachael, in her mid fifties, is when that cancer cropped up. So health issues start cropping up about this point.
Shawn:
And unfortunately, these mortal bodies do start to wear out. And in this stage, you might have some health issues start coming up. So let’s get to the financial takeaways to be conscious of our time here. Right, Bob? So number one, max out the annual contributions to your retirement plan at work, not just a match.
Bob:
Yep. No longer the match.
Shawn:
Right. Because for one, at fifty, the amount you can add on that upper limit goes up. So for 2023 instead of $22,500 for fifty and older, you can do $30,000 per year.
Bob:
Yeah. And it was actually about $26,000 $27,000 this last year. So now it’s gone up to $30,000 if you’re above 50.
Shawn:
When you’re in your higher income earning period, that’s the other reason why we’re saying to max it out is say, at 50, most people are probably gonna retire at 65. That’s the goal. So, you’ve still got 15 years and if you’re maxing out that $30,000 a year, if you can…
Bob:
That’s on their side, by the way, that’s not including the match.
Shawn:
Exactly. All right. And so that’s just a huge benefit to help you reduce that taxable income and get more set aside for retirement. So number two.
Bob:
Beware of major risk and liability exposure also during this mid forties to late fifties. Especially a sickness like cancer, those kids driving into an accident. So this is a financial takeaway. Be sure that you have an adequate amount of coverage, insurance coverage, for liability and don’t just, for sure, don’t focus on just the best price for insurance. Focus on the amount of insurance. Going cheap is not the way to go. The way to go is to make sure that you have coverage and you’re gonna be glad you had that coverage when you need it. If you go for the cheap, it’s not gonna be there when you need it. It’s gonna be very little.
Shawn:
Number three, the focus on that is you want to make sure your risk is managed properly, not that you just get the cheapest cost.
Bob:
And that third financial takeaway.
Shawn:
Get out of debt completely and don’t go back into debt.
Bob:
That’s right.
Shawn:
So pay off the house, the cars during this period, and from there forward, pay cash going then on. If you can’t pay cash, don’t buy it yet.
Bob:
That’s because you’re no longer in your twenties and thirties where you have a lot of time to pay things off and recover. This is not the time, especially in your late fifties, it is not the time to go be borrowing money on buying expensive homes and expensive cars. Pay cash for those. I’ve never seen anybody hurt by paying cash.
Shawn:
And now, for the fourth and last one is retirement planning is crucial to know what you can retire on. You may need to wait till you’re mid or late sixties if you procrastinated in your earlier years. But it all depends on how much you want or need to retire on. And so many times, Bob, I know you’ve seen this over the years and even in the short period comparatively I’ve been here, people will talk about, well, what’s the return gonna be? What am I gonna make in the investments? That’s not really the question you need to answer. The question you need to answer is more of assuming certain expected rates of return, what is it that I’m wanting to be able to live on and at the rate I’m going right now, am I gonna meet that or not?
Bob:
The majority of the time, the wealth has not come from returns.
Shawn:
That’s right. It comes from due diligence and wisdom.
Bob:
Consistency. Exactly. So, there’s a lot there. There’s a lot there. I know these are just three of the financial stages. We’re gonna get into the next three financial stages in the next episode that we’re going to do. Every one of these stages, I’ve been through three of them and I’m heading into my fourth one now, and I hope I can do this until I’m 85 years old if my mind is still good, I’m gonna keep continuing to do this because when I’ve been through these, I can coach you through these. I know what you’ve… I’ve gone through them. So as a financial advisor, I can help coach you through that.
Shawn:
And you’ve coached a lot of people through some of those later stages as well. Even though you haven’t gone through those personally, you have been there side by side with people.
Bob:
That’s right. This is why you want a very experienced financial advisor, especially one that is fiduciary based, where you’re paying the advisor. They’re not getting paid on commissions. So we’re here to help.
Shawn:
Exactly. We’re here to help. So, if you wanna reach out to us, you can visit our website, www.christianfinancialadvisors.com. You can also call or text us during business hours at (830) 609-6986. Thank you so much for being here. Bob, any final words?
Bob:
No final words. We’ve had a lot.
Shawn:
Yeah, we have. And we apologize for going a little over. It’s just a lot to cover. So God bless and thank you so much for tuning in.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
2 min
May 01, 2023 154 – Life Events Requiring Financial Advice And Planning Part 2
Click below to listen to Episode 154 – Life Events Requiring Financial Advice And Planning Part 2
Life Events Requiring Financial Advice And Planning Part 2

Are you prepared financially for these 12 life events?

More episodes >>

Bob and Shawn discuss the second 6 of 12 major life events that require advanced financial advice and planning. Many of us have already gone through a huge life change, like the ones mentioned in this episode, and even more of us will be affected in the future by a giant financial life change. Therefore, being fiscally prepared by working with a financial advisor is a giant step towards being successful when one of the unexpected (or even planned) events occurs.
You can’t predict the future in the case of a sudden illness or even death. However, you can prepare for these occurrences appropriately. Learn about the preparatory steps you can take for these 12 major life events by working with a financial planner and financial advisor.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
PROVERBS 21:5
The plans of the diligent lead surely to advantage, But everyone who is hasty comes surely to poverty.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a Biblical worldview. Here’s your Christian Financial advisors host, Bob Barber, and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. We’re so glad that you joined us. If you like financial topics from a Christian perspective, we’d love you to smash that subscribe button and maybe like this video and share it with others. It helps the channel and helps other people find content like this. So today, we are going to be covering part two on 12 life events that require financial advice and planning. We’re going to do, just for those of you who maybe miss the other episode, you can either click that link in the description. or you can go ahead and we’ll give you a quick little recap. So last week we covered the first 6 of the 12. And the verse we wanted to give you guys is, again, Proverbs 21:5, which is, “The plans of the diligent lead surely to advantage. But everyone who is hasty comes surely to poverty.” So Bob, do you want to recap the six from part one last week?
Bob:
I sure do, and this would be just to recap, I really emphasize you go back and that you watch part one, watch part one or listen to it through the podcast, because we get into detail what the reasons are behind each one of these. But this really has to do with life events. And life events require financial advice and financial planning, and they require it before these events occur. Sometimes though, you can’t help it for it to be after. Okay? Like, one of the events we talked about last week was death in the family. That’s an event that that must require financial advice and planning. Another one last week was retirement. Then we talked about divorce. Hopefully, you’ll do that before divorce. You need to look at that. Then another life event is a new marriage. That could be the first marriage, or it could be the death of a spouse and you’re remarrying somebody new. Disability or major illness. And the sixth one was a big one in my book is before any large purchases are done, Shawn, like an RV or a boat or an airplane or that second vacation home.
Shawn:
Or some sort of property.
Bob:
Exactly. So today we’re going to get into detail in part two. Again, we went into a lot of detail in part one, so I’ll invite you to go back and listen or watch that. So another life event that we see, so we’re going to go 7 through 12, is you need to do some financial advice, look for some good financial advice and planning. I always emphasize an experienced advisor. If you’re not going to use us, I’ve got so much experience, it’s crazy. It’s like 30 plus years. is
Shawn:
Is that all?
Bob:
Yeah, that’s all. But I’ve seen so many of these, I’ve seen all of these life events being a financial advisor during my years, but that’s before the sale of any sizable asset, Shawn.
Shawn:
So number one for today, or number seven in our full list. You want to get good financial advice and planning before you sell any sizeable asset.
Bob:
Not after, please don’t. You can come to us afterwards…
Shawn:
It’s too late.
Bob:
We’ll try to help you best we can. But for tax consequences, you gotta do this before, and you gotta do this even before if you’re planning on selling a large piece of real estate, you need to do this before you even enter into a contract for that real estate. Because we may advise doing a charitable remainder trust, as an example, putting that real estate in that and then selling it, especially if it’s a couple million dollar piece of property. But anything that’s up $100,000 plus, you need to get with a financial advisor or planner. And that’s like land. A large stock position is another thing, an investment property, a business. If I sold my business, my basis in this business is zero. It’s going to be all capital gain, Shawn.
Shawn:
So how do you handle that?
Bob:
How do I handle that and what can be done in advance to lower taxes? And so many things can be done, but so many times they call me and they say, “Hey, we’ve got $3 million. We’ve just sold the property. What can we do to lower the taxes?” Well, there’s not a lot.
Shawn:
Not much now.
Bob:
There’s not a lot.
Shawn:
Once the sale’s occurred. So again, that is before the sale of any sizable asset. And we would just say as a general rule, anything about a hundred thousand dollars or more. Make sure you get some advice and planning BEFORE you enter the contractor sale.
Bob:
That’s right.
Shawn:
That’s right. So the next one, a job change.
Bob:
Yeah, exactly.
Shawn:
This is one that I think occurs somewhat frequently on the job.
Bob:
Nowadays. It does.
Shawn:
So how will you manage your old retirement plan? Or do you have, if you have the experience to manage it yourself and a written investment strategy for managing it, maybe you can manage it yourself?
Bob:
Never met one yet….
Shawn:
No.
Bob:
That had an investment strategy.
Shawn:
Unless it’s a financial advisor.
Bob:
Yeah, exactly. Exactly. But yeah, what are you going to do with that old 401k? And you know, that job change could also mean a higher income. What’s that going to look like? Which takes us to our ninth one, which is another major life event.
Shawn:
You get advancement in a job, and so now you’re going to have higher income, which means you want to do a little bit of tax planning. So, and again, similar to when you’re selling that asset, this one is, I guess technically after the job advancement or job change has occurred, but before you’ve already finished the year and you’re about to file your taxes in a couple weeks.
Bob:
That’s not the time to do it.
Shawn:
If you make that change, talk to somebody about the financial planning and the advice and plan for, okay, well what is my estimated annual income going to be compared to last year? How’s that going to affect my situation and what can I do to reduce the overall tax burden?
Bob:
I think also what’s so important about an advancement in a job, where maybe your income goes from $70,000 to a $100,000, you’ve had a huge raise, you’ve gone up $30,000. Does that mean you should go out and spend all that money now?
Shawn:
No.
Bob:
Exactly.
Shawn:
First of all, congrats. But yeah. But second of all, no, don’t spend all of that.
Bob:
We’re not going to say not to raise your standard of living in a little bit with that. I mean, maybe out of a $30,000 raise $10,000 for that, but taxes are going to take another 5k or 6k of that. And then, let’s look at saving the rest, and as you said, because of that advancement, you may be able to completely max out your 401k. Well, you’re not doing that now.
Shawn:
I’m going to give my brother a little bit of praise here first, for an example. He’s a doctor. He’s a primary care physician. And I know when he and his wife, when he was going through med school, they were very frugal, because med school is expensive, for one thing. He was even working at Best Buy for a little while because just for some extra income. And what they did is as soon as he graduated, he was actually starting to get doctor money. They stayed on almost exactly the same budget for an a quite a few years because they were able to accelerate paying off his student loan debt. And so that was one of those things where yeah, his income went up significantly, but instead of all of that just going to a higher standard of living, they said, you know what, let’s save some of this money and let’s use some of this money to pay off our debts.
Bob:
I’m really smiling, Shawn, because I don’t…
Shawn:
He’s a doctor, I’m so proud of him.
Bob:
You need to be proud of him because I don’t hear this very much. I hear, okay, our income went up, especially doctors, I want to congratulate myself now because I’ve been in med school for 10 or 12 years. And now we’re used to living on $50,000 a year. Now, all of a sudden I’m making $250,000 and they just go right up there and spend all of it.
Shawn:
Expenses go all the way up to the top.
Bob:
So, I’m not saying to not congratulate yourself, but if it goes from 50k to 250k, and you are one of these doctors, maybe…
Shawn:
Go to a 100k. That’s still celebrating.
Bob:
Exactly. Or 150k, and save the rest. And like you say…
Shawn:
Or pay off some debt. Do a combination.
Bob:
Get rid of that debt.
Shawn:
As an example.
Bob:
Alright, so number 10 is a major life event that again, you need to get within a financial advisor and do some planning. There’s a new child or grandchild in the family. You gotta look at things like insurance and estate planning. What;s this child going to cost? Maybe a college plan that wants to be set up. I meet with so many of our younger, around your age. They’re getting the new children, the family and the grandparents would like to maybe set aside, start a college fund and you can contact the grandparents.
Shawn:
And if they do say thank you, and then make sure you get on that.
Bob:
There’s a 529 plan you can look at or you could just set up a different account and label that account for it.
Shawn:
Yep. Kind of earmark that. It doesn’t have to be a 529 plan. One of the benefits of of not doing the 529 plan, if you open an account and you earmark it for one of your kids or for the grandkid, but if you earmark it for that, and let’s say when that kid gets a little bit older, they decide to go kind of a non-standard path. Like maybe they’re not going to go to a four year school, but maybe they’re going to study abroad. Maybe they’re going to go into something more vocational…
Bob:
Maybe they’re going to go in the ministry.
Shawn:
Yeah. Maybe they’re going to go into the ministry. And so by not having that 529 plan, you then have the flexibility to help them with whatever that other path is that, like you said, the ministry, if they’re calling them into the ministry, well great, well maybe you can help them with that church plant or whatever it is that they’re wanting to do. So, there’s some option there. But, it’s funny though, as of recording today, my daughter is turning one. And so, my wife and I…
Bob:
And that’s, by the way, y’all, that’s my granddaughter.
Shawn:
That’s my granddaughter. It’s his favorite granddaughter, right?
Bob:
Exactly right.
Shawn:
It’s the only one. But yeah, we’ve been looking at the insurance and the estate planning, just realizing, all right, well, with her being one and my son is four, and like we’re updating our estate planning and making sure that the insurance is enough and making sure that should something happen to us, like how are we going to take care of the kids and who’s first in line.
Bob:
That’s a life event. See?
Shawn:
Well, those are all those things.
Bob:
All right. Now this, these next two are major life events as well, but this next one is a big life event. And we see a lot, we see all these lot. I keep saying a lot, but we do. But this next one is a large inheritance or sudden wealth. I called it, you gotta be careful of that sudden wealth syndrome. And this occurred a lot with where we’re located because we’re just an hour away from what’s called the Eagle Ford Shell, which is oil, big oil. The largest in the world, and I saw this in a big, big way about 10 years ago, that all of a sudden we talk about sudden wealth, it’s this farmer out here has nothing and they’re getting a $2 million check. They need to immediately…
Shawn:
Bob, how many times did you tell me that you would see farmers and ranchers that are making $30,000 to $50,000 a year and all of a sudden they’re making a $100,000 to $200,000 a month?
Bob:
Oh, many times. Many times.
Shawn:
It’s like that. But it doesn’t last either. That oil is real strong at first, and then it starts to slow down.
Bob:
They end up going and buying second homes on the coast. They all want to buy the big boat, the big Ford F-350 King Ranch Edition that cost about $80,000 for the truck. And they’re not thinking about the future. They’re just thinking, okay, I’ve not had this, I want this right now. And it’s amazing how many of – we went through and looked at and they went through that wealth very quickly, and now they have nothing to show for it. They bought depreciating assets. But then we have some that – the old 80/20 rule, 20% said, well, I’m going to be wise with this. I’m not going to get crazy. And now, they’ve got huge amounts of sums, 5-6 million sitting in their accounts, in their retirement accounts. And we did a lot of tax planning there, too, and a large inheritance. Be careful about passing too much wealth down to your children, too, where they can just spend it all right then. Maybe look at some trust planning. So, all this requires good financial advice and planning. And then this takes us down to our last one of the day, which is not very often, I don’t see this much at all.
Shawn:
Yeah. A little less common.
Bob:
But is before you’re thinking about starting or buying a new business. I do see this every once in a while and where are the funds going to come from. Do you have the ability to lose all those funds?
Shawn:
Which is important.
Bob:
We know business in the first couple years, about 85% to 90% of businesses fail. So what type of businesses it is, and we need to plug all that into your financial plan. Again, like we were saying last week, the one that we made about five or six weeks ago that was called integrated financial planning. We can put all that information into our integrative financial planning and it needs to be looked at. So there you go. There there is 12 major life events that require financial planning. And Shawn, I can virtually guarantee you, but a lot of people have never thought about that.
Shawn:
You know what I can guarantee you, Bob?
Bob:
Okay. What can you?
Shawn:
Is that people watching or listening have probably experienced at least one of these in their lifetime. And the longer you live the more likely…
Bob:
You’re going to experience, or I probably experienced three or four of them over my lifetime that definitely was in need of good financial advice and planning. We are here, Shawn and I are here, and our staff. We’ve got a wonderful staff here to serve you. Great advisors. I’m still advising myself. I love doing this. And if you have any of these life events that we’ve talked about over this week and last week, give us a call and/or text us. You can text us and say, I’d like to speak with Bob or Shawn, or you can make an appointment right from our website. So our phone number is (830) 609-6986 and you can text or call that, you can text that 24 7 and we’ll get back to you the next day.
Shawn:
We’ll get back to you during business hours.
Bob:
Or go to our website, check us out at www.christianfinancialadvisors.com. Any last thoughts you want to share, Shawn?
Shawn:
No, I think we kind of covered everything. Like you said, we’ve got a team here. Bob and I aren’t just pretty faces.
Bob:
There’s others behind us, right?
Shawn:
We’ve got other people here, too. We’ve got lots of advisors and we’re here to serve. So, contact us and we’d be happy to help you if you happen to be going through or are about to go through one of these life events.
Bob:
That’s all for today.
Shawn:
God bless and thanks again for joining us.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
17 min
April 24, 2023 153 – Life Events Requiring Financial Advice And Planning Part 1
Click below to listen to Episode 153 – Life Events Requiring Financial Advice And Planning Part 1
Life Events Requiring Financial Advice And Planning Part 1

Are you prepared financially for these 12 life events?

More episodes >>

Bob and Shawn discuss the first 6 of 12 major life events that require advanced financial advice and planning. Saving for the future is not just about retirement planning. There are an assortment of life changes and events for which you need to be financially prepared. Of course, it’s extremely important to start saving for retirement as early as possible, but what about when something unexpected occurs?
You can’t predict the future in the case of a sudden illness or even death. However, you can prepare for these occurrences appropriately. Learn about the preparatory steps you can take for these 12 major life events.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters
Bible Verses In This Episode
PROVERBS 21:5
The plans of the diligent lead surely to advantage, But everyone who is hasty comes surely to poverty.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial Advisors’ host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome to another episode of Christian Financial Perspectives. We’re so glad that you joined us today, whether that’s on video or audio, but if you are checking us out on YouTube right now, we’d love for you to hit that subscribe button and like this video if of course you’d like episodes on financial topics from a Christian perspective. And last time we checked, we’re still at about 80% of viewers haven’t subscribed.
Bob:
You say that a lot, Shawn.
Shawn:
I know. Well, it hasn’t changed. Like I’m hoping for us to hit a 70% or 60% that haven’t subscribed and we’ll work our way down. But yeah, so again, if you like episodes on financial topics, but from a Christian perspective, we’d love for you to hit that subscribe button. It helps us and it also helps other potential viewers to find the content. So today, we have a special program on 12 life events requiring financial advice and planning. And so today we’re gonna just cover part one. It’s gonna be the first six. And Bob, what do you think about this topic?
Bob:
Well, Shawn, what made me come up with this topic is there’s so many different types of life events that happen throughout our lives that many people don’t realize that the first thing they need to do when they’re looking at this life event that’s going to occur is to call an experienced financial advisor for advice and planning. And so that’s where I came up with this list. This list is from over 30 years of experience in seeing this. And many times I will see these life events occur, and financial planning is the last thing that people think of when these life events occur.
Shawn:
Yeah.
Bob:
Where it should be one of the first things that they take up.
Shawn:
That’s right And I think a lot of people, if you’re watching right now, you might be thinking, well, yeah, retirement planning, that’s probably like, what else would you really need financial planning or advice for? But as you’re gonna learn in these two episodes, there are at least 12 major life events that you should be looking at getting some financial advice and planning.
Bob:
And this will not only help you, today’s program, but maybe as somebody you know that’s going through one of these life events. So we do have the first one as re retirement planning. And Shawn, this is not something you should wait until you’re retired to then do the retirement planning. And that’s what I see more times than not: I’m retired now. Now what? Wait a sec. That’s okay. We can do it.
Shawn:
Well, speaking of planning ahead and not waiting to the last minute, we actually, you actually have a…
Bob:
There’s a good scripture for this.
Shawn:
Proverbs 21:5. Do you wanna read that one?
Bob:
Sure. “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.” That’s the importance of pre-planning. So with retirement, this is something that you need to start as early as in your mid 20’s. You need to start thinking about retirement planning.
Shawn:
Well, the sooner you start, the better off you’re gonna be simply because you have more time on your side for the wonderful compounding interest. The, what do we call that? The eighth wonder of the world.
Bob:
Eighth Wonder of the world.
Shawn:
Yep.
Bob:
Exactly. That’s what say it was. It was Benjamin Franklin who said that.
Shawn:
So start as soon as possible, but at the very least, like if you’re in your thirties, you definitely need, if you haven’t started ready, you definitely need to get going.
Bob:
And how much should you save? And that all depends on how much you want to retire on. So this is something I see more times than not, though, now we’re retired and our budget is $80,000 a year and we’ve got $400,000 in retirement. Not gonna happen. You can’t take 20% a year outta your $400,000. So you need to assess this before you ever do retire. Is that gonna work? You gotta look at your age. You gotta look at life expectancy. I will sit down with someone and ask them, how old did your parents live to? It’s genetics. A lot of this is genetics. I’m finding more and more, they’re still alive at 90. So, we need to plan for 90 or 95.
Shawn:
And if you’ve got a bunch of relatives and grandparents and other people who lived to age 100, well.
Bob:
Go to your family graveyard, you’ll see it.
Shawn:
Yeah. You should probably plan for 100 then.
Bob:
I went to my family graveyard. I’ve been on both my mom’s and my dad’s side. And man, we live a long time. We go to 85 or 90.
Shawn:
Just can’t get rid of you. Right, Bob? Y’all just keep on going.
Bob:
My family goes back in Texas to 1830 and we’ve got these, we go back to our grave sight, it’s called Hornsby’s Bend in Austin. And you’ll see these graves from 1850, 1860. It’s amazing. And you’ll see their age and yeah, they lived up there even back then when the life expectancy was low.
Shawn:
Especially back then.
Bob:
Yeah. That was a long, long time. So, how is your pension and all that going to come into play. So, that’s the first life event. The second life event. Go ahead. And you see it listed there.
Shawn:
A death in the family. So something with this is how will the life insurance proceeds be handled? Restructuring family finances? I mean, there’s a lot to think about when there’s a death in the family.
Bob:
You notice one thing I have here under my point, Shawn, is that the amount that you’re getting for life insurance should be kept highly confidential. I’m sorry to say this, but family members, if they know, and I’ve seen this happen, oh, it’s a sad thing too, where I remember one of our ladies that lost her husband in their younger years and there was an over a million dollar life insurance policy and she told a few of her family members and they start coming out of the woodwork about how they need money. And I was like, oh my goodness, so she should not have shared that. That needs to be, keep that confidential, even keep that probably from the children. And then, let’s look at the income that’s needed to, that’s gonna need to be replaced in the absence of possibly the breadwinner, if that was the breadwinner that passed away.
Shawn:
Okay. Now, one thing that you could use as a positive though, is making sure your spouse knows how much life insurance you have, because that’s a good incentive for you to not argue with your spouse and to keep that good relationship. You don’t want it to be tempting or anything.
Bob:
And enough life insurance, more times than not, we see somebody thinks, well, my $250,000 is adequate for what I need or my $500,000 policy, and the breadwinner’s making $100,000 a year. You need a lot more coverage than that. So, we got so many of these to cover and let’s go into the third one.
Shawn:
Sure. So the third one is divorce, whether it’s before a divorce occurs, like maybe you’re in the proceedings for that as well as after the divorce has finalized. There’s a lot of things to think about.
Bob:
We’re working with an individual, and it was from a divorce. And really, I wish so much so that I had been able to meet with her before the divorce because the settlement that she got from the divorce and the lifestyle that she was used to living, there’s no doubt that his attorney took advantage of her, really took advantage of her and now she’s got to really readjust her lifestyle. And and she was married to this man for over 40 years, so are you receiving enough? It’s the bottom line. And enough to replace the lost income and how are you going to handle that settlement? And we’ll definitely work with your attorney and bring the numbers to the screen where you can see them and everybody can see these numbers that this is not gonna work out. There needs to be more here or maybe it’s too much in some cases as well. So, but more times than not, I kind of end up helping the ladies with this. Well, more so than the men.
Shawn:
It’s just like the retirement or the death in the family. That you might think, oh, this is a lot of money, but the reality is that if there’s a certain amount of income you’re needing per year, well how many years potentially are you needing that income? Because that drastically changes that lump sum amount.
Bob:
So it does, it does. All right. This is fourth one.
Shawn:
Number four, new marriage.
Bob:
Yep. And, you know this new marriage. When I say new marriage, it might be the first marriage or it might be a second marriage because of the death of a spouse or a divorce, but now we’ve got to plan for two instead of one. The question “is it the second marriage”, there’s a lot of issues in the second marriage, especially if both have children from the first marriage and how that’s going to be structured. Because there’s always that… if like if Rachael were to pass away and I were to get remarried and we both had children, I wanna make sure that the assets that when Rachael and I were both married that those assets would go to my children, not to the children of the person I would marry.
Shawn:
And vice versa.
Bob:
And vice versa. Exactly.
Shawn:
Yeah. If you were are newly married because your spouse passed away and your new spouse also had children from that.
Bob:
That’s what I meant. Yeah.
Shawn:
Exactly. It’s like, well then they kind of have the same things. Like they have assets, right?
Bob:
Yeah. So that can be structured through an estate planning attorney and we know how to advise you to help you with that. The second thing is financial goals. When you have two people come together, they have different financial goals, and we need to get those goals to where those goals align with each other.
Shawn:
Well, and the other thing too, Bob, is you have people who get remarried and usually each person already has someone that has kind of been there for their financial advisor. And so, when you get married there’s a good chance that you’re gonna fire one advisor and you’re gonna keep the other one. It’s just something to think about, you know? It it’s not like nothing changes. It’s like you said, “Two becoming one.” Well, it doesn’t really make sense to have two separate financial advisors. At the very least, you need one that’s like your primary advisor. Maybe you have another one, you get a second opinion like a doctor.
Bob:
Well, but like I said here, my point that I have, too, Shawn is I’ve seen more times than not, I’ve served the husband and the wife for 20 years. The husband passes away, the wife gets remarried within the next two years and once she gets remarried, that new man, it’s kind of an ego thing here, that man’s like, we’re not gonna use that financial advisor that you and your husband used.
Shawn:
We’re gonna use the one that I’ve picked.
Bob:
I’ve got. Exactly. I see that. So there’s a lot of ego involved there, especially with us men. I’m a man, so I’m gonna say it.
Shawn:
Are you saying we sometimes have an ego problem?
Bob:
Oh yep. We do, especially when it comes to finances. I know how to do it better. So, that needs to, it’s something that’s a life event. That’s a major life event. The fifth life event is a disability or a major illness. And when this comes along, you definitely need to get with your financial advisor or planner look at how this is going to affect it. Is there gonna be a loss of income for a while? You remember when Rachael got cancer, and thank goodness we had very good disability on Rachael and I. I didn’t need to collect any disability because I was not disabled, but she was for a couple of months and that loss of income that she was making, because she was working with the firm then, kicked in. I’m glad that we had the disability and it definitely helped us between that and our health insurance and then Christian Healthcare Ministries covered the deductible. We were out no money, at all.
Shawn:
You know that disability insurance or that for loss of income from maybe even just a temporary illness, like a major illness, that is definitely one of the most common things that we have seen over the years is that people, they’ll have life insurance, but if you’ve got life insurance and you don’t have disability, you’re far more likely during your lifetime to need some sort of disability or like a major illness income replacement insurance than you are life insurance. Because as I’m sure you’re aware, Bob, you only need life insurance once.
Bob:
Yeah.
Shawn:
But you might need the disability insurance more than once. So it’s very important.
Bob:
All right, so this is gonna take us up to our last one for today. So we’re covering six for today. Next week, we’ll cover six more of these major life events that really you need financial advice or planning for. This last one is, and it’s a very important one. We’re ending up probably the last one is the biggest one is before any large purchases are done like a new home, a second home, an investment property, an expensive vehicle. Vehicles today can easily run $50,000 – a boat, a RV, or an airplane. I’ve even seen and had a couple clients purchase airplanes.
Shawn:
And even the small airplanes are expensive.
Bob:
Exactly. So can you afford this? Can your financial plan afford that new boat? Can you afford that second home? What’s gonna be the long term cost of that? And will there be a loss of return on the dollars withdrawn? And Shawn one of them…
Shawn:
The opportunity costs.
Bob:
Yeah. Well one of my things is I never like to put money in anything that’s not gonna be worth more money later. And so if you…
Shawn:
Sometimes you do it, though, but I think you’re…
Bob:
Very seldom do I do that.
Shawn:
You told me a story one time, because I wasn’t here at the time, but you had a client that wanted to take like the whole family, so it’s like themselves, their kids, and the grandkids on this big cruise, right. I think it was $15,000+ dollars. It was a pretty, pretty good amount when you got a whole bunch of people. And what’s really great in a situation like this is, even if it’s something like that, you can plug that information in. Like we use e-money, one of our last, our previous episodes was one on e-money. But basically, you plug that information in, and I believe at the time, just based on how long their life expectancy was to consider already in retirement, that $15,000 was technically a $60,000 opportunity cost.
Bob:
That’s right. That’s correct.
Shawn:
But once you plug the numbers in, they were able to see that, oh, even with that being the $60,000 opportunity cost, they were still well within where they needed to be between now and age 90. So this is just one of those things where even if it isn’t something that is going to be worth more later, at least knowing, hey, is this going to throw us off on our projections and on like, on our targets and our goals?
Bob:
So I would say go back and listen to that podcast we did, what was it about four or five weeks ago, on interactive financial planning and that points to that. So just be very, very careful about taking money outta your financial plan. That’s going to really relate to. You’re gonna have less dollars. It’s gonna be worth a lot less. Now, a second home or an investment is maybe a different story that could be worth more.
Shawn:
That should go up in value.
Bob:
So that’s gonna do it today for the first six life events. Next week, we’ll come back with part two as we cover these 12 life events that require financial advice and planning. If you know anyone that’s about to go through one of these life events that we mentioned today, retirement, death in the family, well, we don’t know that, but if they…
Shawn:
Or this just happened.
Bob:
Yeah. But just happened – divorce, new marriage, disability, or major purchase, feel free to give us a call. Have them give us a call or they can text our number at (830) 609-6986 or visit us on our website at www.christianfinancialadvisors.com. Any last thoughts, Shawn?
Shawn:
No, I think that about does it. God bless, and thank you again as always for joining us. Bye-bye.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
18 min
April 17, 2023 152 – The Math Behind Roth IRAs
Click below to listen to Episode 152 – The Math Behind Roth IRAs
The Math Behind Roth IRAs

Grab a pen and paper to help you decipher the math behind choosing the right retirement option.

More episodes >>

Bob and Shawn delve deep into the math behind putting money into a Roth IRA. This is a super informative episode for anyone wondering if they should be putting their retirement funds into a Roth IRA, go with a Traditional IRA, or even use a combination of both (or other saving means). As we at Christian Financial Advisors mention a lot, it’s just math! This includes the age at which you begin saving money, the age at which you pull money out, and your income at the time.
We highly recommend getting a pen and paper while listening to this episode to make it a little easier to comprehend. There are a lot of numbers and math that are mentioned, and following along while writing down what Bob and Shawn are saying will make this episode simpler to break down and understand.

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Shawn Peters
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
SCHEDULE AN APPOINTMENTDid you enjoy this episode? Sign up for email updates and never miss an episode.
EPISODE TRANSCRIPT

Intro:
Welcome to Christian Financial Perspectives, where you’re invited to gain insight, wisdom, and knowledge about how Christians integrate their faith, life, and finances with a biblical worldview. Here’s your Christian Financial Advisors’ host, Bob Barber and his co-host, Shawn Peters.
Shawn:
Welcome back to another episode of Christian Financial Perspectives. I’m so glad that you joined us today, and if you have not already, hit that subscribe button. If you like content on financial topics from a Christian perspective, well, what are you waiting for? Hit that subscribe button. Still waiting on about 80% of you that watch the videos to hit subscribe. I promise it doesn’t cost anything. Just one quick little click and it will actually help not only our channel, but also helps you because then the algorithm can find other videos, maybe like ours, that you also enjoy. So, do yourself a favor. Do us a favor and everybody else, and hit that subscribe button.
Bob:
Hey, same thing with the podcast.
Shawn:
That’s right. Yeah, that’s right.
Bob:
Absolutely.
Shawn:
Anyway, all right, now the announcement and advertisement’s over, Bob, what do we got for today?
Bob:
Well, we’re gonna discuss Roth IRAs. And I’m telling you, Shawn, this is a very marketed product in the financial market plan.
Shawn:
Yeah, for sure.
Bob:
And a lot of it at the time, it’s marketed as a one size fits all, and it is far from that. So I’m calling today’s topic.
Shawn:
Roth IRA isn’t for every person all the time, under all circumstances?
Bob:
It most certainly is not, but it’s marketed that way. And can you see in my outline. we have here: “Roth IRAs. Are they a good idea?”
Shawn:
Okay.
Bob:
It all depends on the math. You know how I love that. I always says it depends on the math, and do not invest in a Roth IRA until you hear this or you watch this because, and if you’re thinking about it, you definitely need to watch this and tell your friends if they’re thinking about it or family. Because like I say, it’s just marketed over and over and over.
Shawn:
And this isn’t clickbait. Do not invest in a Roth IRA until you watch this. So without further ado.
Bob:
All right. So the question of contributing to a Roth IRA, Shawn or doing a conversion, because that’s really heavily marketed too, should be, like I said, determined base solely on math. So let’s look at the math. Okay. So first let’s assume that you’re wanting to contribute to a Roth IRA about $500 a month. All right. That’s where a lot of people fall, $500 to $600 a month, without giving over or putting too much in the Roth. You can’t go over your limit, but I think it’s very important for you to think about what tax bracket are you in right now. And the question really boils down to, “Do you believe you’re gonna be in a higher tax bracket when you re you retire or the same tax bracket?” Shawn, I’ve noticed that over the years, and I’ve been doing this for over 30 years, that the majority of retirees are in a lower tax bracket when they retire than during their working years.
Shawn:
Makes sense, especially when you’re at the height of your career, you’re probably making more income pre-retirement than you are in retirement, because once you retire, just because you’re not working, I mean, there’s just a lot of things that you would think at that point that you wouldn’t need as much income, therefore the money maybe that you’re taking out of your retirement account. So Yeah, I would make the assumption that a lot of people are going to be at a lower tax bracket during retirement than they are during their peak career years.
Bob:
Well, Shawn, I have to say that I cannot think of a person that’s a client here, in my 30 years, that’s not. They’re all in the lower tax bracket, and I’m gonna use an example today of a normal household, family household income. Okay. And I know a lot of people say, well, that’s not my normal… well, it is, when you look at the family, when you look at both husband and wife working. It’s around 90k to a 100k a year. What that does, and I want to, we’re gonna put up a income tax the different percentages.
Shawn:
The different tiers.
Bob:
The different tiers of income taxes, and if you take a look at this right now, you’ll see for the 2023 tax brackets that you’re in a 12% bracket all the way up to $89,000, and then you enter into a new bracket. So assuming that person’s at a $100,000 income, the household income, the husband’s maybe making $60,000 or $70,000, the wife’s making $30,000 or $40,000 or vice versa , they’re in that a $100,000 income, then everything they’re gonna put into a traditional Roth IRA or a Roth IRA is going to be at that top tax bracket. All right. It’s not the effective tax bracket, it’s a top tax bracket. So, if you’re wanting to put money in a Roth IRA, for every $500, you need to subtract 22% of that.
Shawn:
Because of the…
Bob:
Income tax bracket
Shawn:
Since the Roth is the after tax contribution.
Bob:
That’s correct. That’s correct. So for every $500 that you’re gonna put into that Roth, it’s actually gonna be $390 or if you do wanna put the $500 in, you’ve gotta figure in, take apples to apples, you’d have to add 22% to a traditional, but in this case, so we’re gonna say $390.
Shawn:
So that $500 immediately turns to $390 because a $110 is going income tax?
Bob:
That’s correct.
Shawn:
So the $390 after tax, I noticed, Bob, you’ve got an interesting thing here. $390 after tax growing at an average reasonable rate of return of 8% for 20 years grows to approximately $230,000.
Bob:
Yeah. It’s very reasonable. I think an 8% return over a 20 year period is a very reasonable return in a growth portfolio, growth moderate type portfolio.
Shawn:
Which if you’ve got 20 years of retirement or more that probably would be in something more growth oriented.
Bob:
So, we’re really looking at the math, we’re digging into the math now. So, that $390 would grow to $230, a normal pullout rate is between 4% and 5%. So let’s assume a 4% annual withdrawal.
Shawn:
A little more conservative, say 4% annual withdrawal during retirement. So that gives us $9,200 a year, tax free.
Bob:
That’s correct. All right. Now there’s the flip side of it. The flip side of it is you take $500, all the money, because you don’t have to pay tax on that, and you put that into a traditional.
Shawn:
So pre-tax. Gotcha. All right. So now, we don’t have to pay anything with income tax right now on that contribution. So based on the same rate of return of 8% for 20 years, it would grow to approximately $295,000 or $65,000 more than the Roth?
Bob:
That’s correct. All right. But when you pull the money out, right, you gotta pay tax, right? Where in the Roth, when you pull the money out, you don’t have to pay tax. So the tax free amount from the Roth was $9,200 a year. The tax amount that you’re gonna pull out, if a 4% withdraw, you’re gonna pull out from $295,000 from the traditional IRA is now $11,800 a year. All right. So now you gotta go out and you gotta pay taxes on that amount of money.
Shawn:
So then the question is, and when you’re looking at tax return or you’re looking at the tax rates right now, if you’re under that $89,000 almost $90,000, then you’re gonna be at 12%.
Bob:
That’s correct.
Shawn:
Which is a lot lower than 22%.
Bob:
And lemme tell you how I arrive at that. So let’s say you want to be, you’re gonna be work during the retirement years. You want the same income, but you gotta realize that $30,000, $35,000, $40,000 with a spouse and spousal income, I mean social security spousal benefit, that’s gonna end up being $35,000 or $40,000 of your dollars. Okay. Even if you’re pulling $40,000 or $50,000 from your 401ks or IRAs, you’re not getting anywhere near that tax bracket.
Shawn:
Right. But then with the supplemented income from the social security,
Bob:
Which you’re not having to pay tax on.
Shawn:
Exactly. But then your actual livable income that you can use for expenses is still closer to what you had during your career.
Bob:
That’s correct. Now, in some cases you will have to pay some tax on some of those social security benefits, but in this case we’ve got the social security calculators here that we can put the numbers in and out of that $30,000 or $40,000 you may have to pay tax on a couple thousand dollars of that. All right. So you’re into 12% bracket. So the $11,800 that you’re able to take out of your traditional IRA, after tax is gonna equal $10,384. And you remember the other number with the Roth?
Shawn:
It was $9,200.
Bob:
That was $9,200. So that equals 13% more dollars every single year. So in this case that I’ve just mentioned, it does not make sense for somebody that is a hundred, a hundred plus income, to go do a Roth IRA. The math does not make sense.
Shawn:
When you factor in the income tax that you’re paying now.
Bob:
That’s correct.
Shawn:
And what that total net amount could grow to and that you then take an income off of compared with yes, you’re gonna have to pay tax on the traditional later, but because your tax bracket is so much lower during retirement, you actually end up being ahead.
Bob:
You do. And I’ve seen this over and over and over too, I can say over, I don’t know, infinity times. I see this when people are retired, they’re in a lower tax bracket, their taxes, they’re paying less in taxes and everyone thinks, well, I’m gonna be in a higher tax bracket. No, taxes are going up historically, and I wanna put a chart up there and I’ll get that chart so we can show that as we’re recording this, there’s a chart that shows historical tax rates in the high bracket. We’re actually much lower. And remember, tax rates are gonna compensate for inflation as you make more. So I rarely, like I said, if ever, meet a retiree that’s in a higher tax bracket. So, mathematically the only reason to do a Roth is if you think you’re gonna be making more money during retirement than when you’re working.
Shawn:
I guess I’m just trying to think under what circumstance would someone… I mean, if you’re in one of those situations or actually anticipate being in one of those situations, we’d love for you to throw that in the comments. But right now at least, I mean, what situation would there be that someone would realistically be making more in retirement in taxable income than during their career?
Bob:
Very not, I mean, not much.
Shawn:
Yeah. I guess if your pension and 401K and defined benefit and all this other stuff was just so crazy high that…
Bob:
The one exception, I guess the one exception I can say is I have seen retirees, but then they’re not really retired anymore. They go back into, they’re getting a retirement income and they go back into the marketplace.
Shawn:
I guess I could see that.
Bob:
And it does make sense to do a Roth, I think a younger couple, it makes sense to do a Roth because they’re not in that high tax bracket yet. Does that make sense?
Shawn:
Right, right. So, if currently your income is lower where you’re only in that 10-12% tax bracket, then it might make more sense. So as you progress in your career, well you know what, there’s a chance that you might be in a higher tax bracket than you are right now, but what that would mean though, Bob, is well five years from now or 10 years from now, that same couple may want to stop contributing to a Roth and start contributing to a traditional.
Bob:
Right. Or their 401k, 403b, 457, Thrift Savings Plan, TSA, they’re all the same thing. They all fall under the same category as what we call a qualified plan, but put the money in that.
Shawn:
Yeah.
Bob:
But there are Roth 401ks, and I’m seeing people that are making over $150,000 a year and they’re putting Roth in the 401k. It’s a mistake. It doesn’t make mathematical sense. Now, I can’t say for everybody it’s a mistake until we look at your specific situation.
Shawn:
Okay. Well it sounds like as a general rule, which again, results may vary and yes you should talk to a qualified advisor, but it sounds like the general rule is if you’re in the 10-12% tax bracket and you’re younger and earlier in your career, looks like the math would probably be on your side. It would make sense to do a Roth.
Bob:
It is.
Shawn:
But that doesn’t mean that just because you decided to do a Roth today, that 5 years from now and 10 years from now, that’s still the right option.
Bob:
That’s right. Or a conversion. You always hear these things about conversion. Why would you do a Roth conversion when you’re making $120,000 – $130,000 a year? That doesn’t make any sense. You have to pay all the tax on it as well. So, never trust your instincts when it comes to a Roth IRA. Trust the math, trust the math. I’m always saying it. You gotta trust the math.
Shawn:
You say it all the time, it’s just math.
Bob:
I love it.
Shawn:
But I think it’s good. I think it’s good. The reason why we obviously say “trust the math” so often is because the math helps you take the emotion out of the financial decision. Because many times, I mean we’re emotional creatures.
Bob:
And I rotate right back to where we were at the beginning of the program, Roths are very heavily marketed, they’re marketed in seminars as the one size fits all and they are not. Hopefully, I’m not gonna get a lot of advisors call and go, “Why did you do this program?” But I think the program needed to be made.
Shawn:
Wait, are you worried about the Roth IRA mafia?
Bob:
They could. Exactly. So is a Roth IRA right for you? You need to look at your situation. Give us a call, and let’s look at it. Let’s look at the math and see. And our phone number that you can call or text to is (830) 609-6986. Hey Shawn, I just got a text yesterday from someone in Pennsylvania saying they just heard the podcast and I answered them back, said thank you and they were asking about our fees as a fee based advisor and I’ve directed them to the right place.
Shawn:
Were they able to understand your accent?
Bob:
I hope so. Through the text? Exactly. And by the way, we appreciate all of you that listen across the nation and listening to this South Texas country boy. And hopefully I am just, I just lay it out there. That’s what I want to do. And so that’s the number (830) 609-6986. Call or text us or go to our website. Check it out and you can you can, from our website, you can make an appointment with different advisors here under the staff. And that is ChristianFA.com or christianfinancialadvisors.com. But you can abbreviate financial advisors and just put FA.com
Shawn:
And yeah, we work with people all across the country. As long as you’re not someone who has to sit face to face, we can do a Zoom so you can see our face and we can do phone calls.
Bob:
That was a question. Do you work with people across the country? I said, “With Zoom and email and DocuSign and text and voice. We can do it all.” Location no longer matters.
Shawn:
Well, once again, thank you so much for joining us today. God bless. And until next time, take care.
[CONCLUSION]
That’s all for now.
We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.
[DISCLOSURES]
Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.
18 min

About Christian Financial Perspectives

From the publisher's feed

Biblical wisdom for financial decisions and goals. Conversations about managing money according to Christian principles, featuring expert insights on budgeting, investing, giving, and building wealth…