Christian Financial Perspectives

Christian Financial Perspectives

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Christian Financial Perspectives episodes

  • 131 – How Christians Should Handle Their Money From a Biblical Worldview
    Click below to listen to Episode 131 – How Christians Should Handle Their Money From a Biblical Worldview
    How Christians Should Handle Their Money From a Biblical Worldview

    Check out this discussion on Christians handling money within a Biblical worldview.

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    In this episode, we present several verses on Biblical stewardship, management, and ownership to help better understand how Christians should approach money and wealth with a Biblical worldview. If you are a Christian, does the way you handle wealth line up with your Biblical worldview? Did you know that you could be unintentionally supporting anti-biblical values with your investments and not even know it? Not only that but the way that we view and manage money is so important.

    We are actually the managers of all that God has blessed us with here on earth, and we are to manage His property and wealth wisely. This is also known as stewardship, or being responsible for managing something that belongs to someone else. As Christians, it is important to be good stewards of all that God has blessed us with in His name.

    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;

    HAGGAI 2:8

    ‘The silver is mine and the gold is mine,’ declares the Lord Almighty.

    PHILIPPIANS 4:11-13

    I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do all this through him who gives me strength.

    MATTHEW 25:15-18

    Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. To one he gave five bags of gold, to another two bags, and to another one bag, each according to his ability. Then he went on his journey. The man who had received five bags of gold went at once and put his money to work and gained five bags more. So also, the one with two bags of gold gained two more. But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

    LUKE 16:10-13

    Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property, who will give you property of your own? No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

    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 host, Christian investment advisor, financial planner, and coach, Bob Barber.

    Shawn:

    Welcome to another episode of Christian Financial Perspectives. Thank you so much for joining us. Whether that’s listening to our podcast on one of the many directories, or you happen to be watching us right now on YouTube or whatever works for you.

    Bob:

    Yeah, that’s right.

    Shawn:

    And we’re glad you’re here. So Bob, what do you have for us today?

    Bob:

    Oh, Shawn, this is gonna be a subject that people are not used to hearing. So we’re gonna be talking about how a Christian should handle their money from a Biblical worldview. And that was a real big topic a long time ago, Shawn. I’m gonna say back in the nineties, I remember when The Truth Project came out by Focus On The Family, and it really was about what worldview are you living by? Are you living by a Christian worldview or are you living by a secular worldview? Okay. So there’s these differing worldviews going back and forth, especially when it comes to our finances.

    Shawn:

    So for those of you listening, watching who aren’t familiar with what is a worldview? So I guess an easy way to describe that would be is what is your perspective on the world, how you’re approaching it, to make decisions in your life. And so when we talk about a Biblical worldview, obviously that would mean we are basing how we interact and view the world and make those decisions on Biblical principles, which is important for a Christian.

    Bob:

    That’s right. Exactly. And whether you are a new Christian or somebody that’s been a Christian for 50 years, it’s very important that you think about what your worldview is of finances.

    Shawn:

    Well, let’s start with a couple scriptures. Psalms 24:1, “The Earth is the Lord’s and everything in it, the world and all who live in it.”

    Bob:

    Shawn, this is really the foundation for a Christian worldview when it comes to handling your money because it has to do with ownership. And we’re gonna talk a lot about that in today’s podcast. And the second one is, Haggai 2:8, “The silver is mine and the gold is mine declares the Lord Almighty.” So these two scriptures are really saying that God owns it all.

    Shawn:

    Agreed.

    Bob:

    Okay. And we’re gonna go into what all those things mean, but I think we first needed to describe what is ownership?

    Shawn:

    Well, we have a definition here. Ownership, none of it is ours or belongs to us.

    Bob:

    From a Biblical world view. Okay? We’re managers, so God owns it and we become the manager. So all of it, when I say “it”, we’re gonna describe what the “it” is in here in just a minute. All of it is God’s and it’s to be managed well by us and for His glory or else we would be acting like we’re the owner of it, again. So in the world, it’s hard because we all wanna say, “This is mine, it belongs to me.” So this is a different mindset which that we’re going through.

    Shawn:

    As someone who is a Christian, that’s not true. The Bible is very clear. I mean, we’re not including all of the scriptures by any means on stwardship.

    Bob:

    Oh, there’s hundreds of them.

    Shawn:

    But the Bible has arguably at least 1500 scriptures on money and stewardship in some form or fashion. So since we’re not gonna go through all of those, we paired it down for our listeners and viewers today. But the next one goes into stewardship. And that definition, stewardship, refers to the role or responsibility of managing something for someone else. I always like to think of if someone is asking you to house sit. If you’re house sitting for someone and they came back and you had just destroyed the place, made a bunch of renovations without their approval, would they be happy with your work? Or, would they be a little upset?

    Bob:

    I think they’d be a little upset.

    Shawn:

    I think they’d be a little upset.

    Bob:

    I think it’s important that first, we define what the responsibilities of an owner are and what the responsibilities of a manager are. Now, this could go really, really deep, but for time’s sake, we’re not going to go that deep into it. But I was thinking about this this morning as I was gonna be talking about this. What is an owner? Well, an owner owns the building. I own this building, but then I entrust to the managers to take care of it. An owner, I was thinking of an owner this morning of a heating and air company, let’s say, and you see their vans out. I see those out everywhere. Well, there’s the tools. So the owner is providing the tools to those that are working in the business and the equipment. The owner’s providing what is needed for the manager. And then there’s the manager. And what does the manager do?

    Shawn:

    Well, let’s cover three responsibilities of an owner and three responsibilities of a manager. So for an owner provides the financial needs, tools and equipment, facilities, and we get to manager. The manager uses the finances wisely and in the best interest of the owner, uses the tools wisely and takes good care of them, and uses the facilities and takes care of them.

    Bob:

    Exactly. So now if you do a good job for the owner and you take care of what the owner has given you, the owner may give you more responsibility, right? Okay. So there’s a secular worldview of money and possessions, and the secular worldview is it’s all mine. It’s my…

    Shawn:

    My money and I want it now.

    Bob:

    It’s my bank accounts. It’s my savings accounts. It’s my brokerage accounts. It’s my retirement accounts. It’s my house. You notice there’s a lot of selfishness here. It’s my cars. It’s my boat, or boats. It’s my business. It’s my vacation home. It’s my airplane. I don’t have an airplane.

    Shawn:

    Hypothetically.

    Bob:

    I’m thinking this. So that’s a secular world view, it’s just really all mine.

    Shawn:

    It’s all about me. It’s all about mine.

    Bob:

    Where a Biblical worldview is…

    Shawn:

    A little different. It’s God’s banking and savings accounts. It’s God’s brokerage and retirement accounts. It’s God’s house. It’s God’s cars. It’s God’s boat. It’s God’s business. It’s God’s vacation home. It’s God’s airplane.

    Bob:

    So we should take care of those well, right?

    Shawn:

    Yeah, we should.

    Bob:

    So all we have to ask ourselves is which financial worldview are we living by? Are we all these things, all this stuff that I mentioned, are you thinking of it as yours? Or are you thinking of it as God’s? Because we said in the beginning when we were talking about the scriptures, right? Psalms 24:1, “The Earth is the Lord’s and everything in it.” Now does that mean everything? And I believe it does. I don’t think the Bible is veering away from truth. And the truth is that God owns it all. So those bank accounts, that house, those brokerage accounts, those investment accounts, that airplane you may own, that boat – that belongs to God. It’s not ours. We’re just managers of it. And we should take very good care of it because God has given it to us.

    Shawn:

    So I guess we have to ask ourselves today, which financial worldview are we living by? So Bob, what does a Biblical worldview of money and possessions do to a person?

    Bob:

    Well, they become managers. I think of myself as that. I don’t own anything. God owns it. But I am a manager of it. And therefore, I should take the utmost care of what God has given me to manage.

    Shawn:

    And number three, they use wisdom with money and possessions.

    Bob:

    All possessions. And I’m not gonna associate because God owns it and it’s not mine, I’m not associating my self worth with my net worth. My association of my self worth is with what God did for me, right? That he gave his son, His only begotten son to die for us, to give us eternal life, and to take away our sins.

    Shawn:

    That one reminds me, Bob, of when there was the wealthy man who came to Jesus and he’s like, Teacher, what must I do to inherit eternal life? And Jesus looked at him and he said, “Well follow the,” I know I’m paraphrasing a little bit, “Follow the laws.” And he listed them off. And the rich man was like, “Well, I’ve done all these things all my life.” And Jesus said, “Okay, but this one thing you lack, sell all your possessions and come follow me.” And the guy went away sad. And people think, I feel like that’s gotten taken outta context sometimes where people look at it and say, Oh, well, if I have a lot of wealth, or someone has a lot of wealth, they can’t be a Christian. They can’t follow Jesus. That wasn’t the point. Jesus knew that in his heart, in this man’s heart, his identity was totally wrapped up in him being a wealthy rich man. And so Jesus confronting him with that was not because there was something inherently wrong with the wealth that he had. The problem is that Jesus needed him to understand that he couldn’t serve the money. He couldn’t be wrapped up in that and follow God and serve God. So that phrase of not letting your self worth be associated with your net worth is so powerful because it doesn’t matter how much money you have, just don’t let that net worth be your self worth.

    Bob:

    Another thing that this does to a person when you say, I realize that God’s now the owner of it, think of my fist and I’m holding all my possessions really tight, if I really make my hand tight, my knuckles start getting white. It starts creating stress, where when I open up my hand and I say, “Okay, God, this is yours.” That provides an enormous amount of freedom knowing that God’s got it and it’s His. You know what? There’s nothing that can be taken away from me because God owns it.

    Shawn:

    There you go.

    Bob:

    So these are not my possessions. These are God’s possessions. I’m the manager of them, and it just gives an enormous amount of freedom.

    Shawn:

    That’s true. That’s true. Also, they don’t worry about what the markets are doing and things beyond their control.

    Bob:

    Exactly. Things are gonna happen, right? We’re gonna have times, different times. It says that in Ecclesiastes. There’s a time for everything. There’s a time to plant, there’s a time to uproot. There’s a time to die and a time to be born. I mean, there’s just all these different times. We can’t do anything about the markets. The markets are gonna do what the markets are gonna do. So knowing that God’s got that, that’s why it’s so interesting. I’ll be talking to our clients and they’ll say, I bet you’re getting bombarded right now because we’re in a bear market. And I’m like, no, nobody’s worried about it because they know that God’s got it. And this next thing is we’re investing with Christian principles. If you have a Biblical worldview and you believe God owns it, you invest it with Biblical principles, with Christian principles, and you buy and you sell with wisdom.

    Shawn:

    That’s right.

    Bob:

    God’s wisdom. What God’s word says in the Bible about finance, because there’s over 1500, 1600 scriptures that have to do with how we handle money and stewardship in the Bible.

    Shawn:

    People with a Biblical worldview also understand that gratification doesn’t only come from having more stuff like bigger cars, boats, and houses.

    Bob:

    Their identities are not in that.

    Shawn:

    There’s more to it than that.

    Bob:

    It’s not always, I gotta go get that new home. I’ve gotta get that newer car. I’ve gotta get that bigger boat. It’s not about building bigger. There’s the world’s way of how much is enough. And our world is just a little bit more, It’s always just a little bit more, but not a Biblical worldview of finance.

    Shawn:

    They also figure out how much is enough, since it’s not always just about having a little bit more, and I’ll be happy. The materialism doesn’t bring joy. What kind of car or where you live is not important. Your relationship with Christ and others is what truly matters.

    Bob:

    And they learn to be content. Content in all circumstances. I think of this scripture, we’re gonna read this scripture now. It is from Philippians and it talks about Paul and how he’s learned to be content in all circumstances. So Shawn, if you’ll read this from Philippians 4:11-13.

    Shawn:

    “I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do all of this through him who gives me strength.”

    Bob:

    You think Paul knew who owned it?

    Shawn:

    I think so.

    Bob:

    Yeah. He sure did. He gave up that ownership of being about me and gave it to God.

    Shawn:

    ,Well, it’s pretty obvious.. too, his identity and his joy, his contentment, it had nothing to do with the circumstance he was in, had nothing to do with anything material.

    Bob:

    That’s right. That’s correct. And I think this is a good one to share. There’s a couple more scriptures I wanna share before we’re done for today. And that is the parable of the talents that’s given into us in the 25th chapter of Matthew. And I’m just gonna read a few scriptures because it’s a very long parable, but I’m gonna read a few scriptures and if you’ll follow along with me. “Again, it will be like,” And this is from Matthew 25:15-17. “Again, we’ll be like a man going on a journey who called his servants and entrusted his wealth to them. To one he gave five bags of gold. To another two bags and to another one bag, each according to his ability.” Now I’ve highlighted that part in that scripture. “Then he went on his journey. The man who had received five bags of gold went at once and put his money to work and gained five more. So also the one with two bags of gold gained two more. But the man who received one bag went off, dug a hole in the ground, and hid his master’s money.” Now, we were doing Bible study on this just last week here at Christian Financial Advisors. It’s interesting looking at this, isn’t it?

    Shawn:

    Yeah.

    Bob:

    Some things you pointed out to me.

    Shawn:

    Yeah. So not only does it say in verse 15 “each according to his own ability”, but the thing that is interesting, if you think about this, we don’t know if this was the first time the master had given his servants a chance like this. He had gone away on a journey. But the other thing that’s interesting is whether or not this was first trip, in this case, the man knew his servants well. How else could this man, how else could this master know how to give to each according to his ability if he didn’t already know their capabilities?

    Bob:

    That’s right. That’s correct.

    Shawn:

    So I just thought that was really powerful.

    Bob:

    And another thing is we dug into the scripture is we noticed that it never talked about how long the master went away.

    Shawn:

    Yeah. Was it a year? Was it 10 years? I mean, we don’t know.

    Bob:

    According to the rule of 72’s, if it was 10 years that would’ve been an average return of 7%. So, it would’ve doubled then. Because the one that got the three and the five doubled.

    Shawn:

    So maybe it was 10 years

    Bob:

    And I want to end up on this scripture today. So I think it’s important as we look at this one that we just looked at on the parable of the talents, and then as we look at this next scripture, when God is giving us, when the owner is giving us things to manage, how well are we doing? He’s going to give that according to our talents, according to how well and what kind of ability we have to manage that and how well we’re gonna do with it. And Luke 16:10-13 is another scripture, I believe, that goes very well with Matthew 25:15-17.

    Shawn:

    You want me to read that?

    Bob:

    Yeah. Go ahead.

    Shawn:

    “Whoever can be trusted with very little can also be trusted with much. And whoever is dishonest with very little will also be dishonest with much. So, if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property who will give you property of your own? No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” Which goes right back, like the rich man with Jesus. Again, there’s nothing wrong with the money, but you can’t simultaneously serve God and money.

    Bob:

    So I hope we’ve given you a very different perspective of what you’ve thought about. Because I’m telling you, you’re not gonna hear this, are you? You don’t hear this on the streets. You don’t even hear this a lot in churches. For some reason, churches don’t preach on this one much. Okay? That truly God owns it all. I want to emphasize this today because I want to give you freedom in that. There is freedom in knowing that God owns it all and giving that up. We’re managers and we don’t have to be stressed out about it all.

    Shawn:

    Yeah.

    Bob:

    That’s all for today. I hope we’ve helped you. If we can help you anymore, our phone number is (830) 609-6986 during business hours. You can call that number or text it, or you can reach us on the web www.christianfinancialadvisors.com, just like it’s written here. Or you can do www.christianFA.com.

    Shawn:

    Thank you so much for joining us, and God bless.

    Outro:

    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 Podcasts, Spotify, Stitcher, or Amazon Music to learn more about integrating your faith with your finances. Visit ChristianFinancialAdvisors.com or call (830) 609-6986.

    Disclosures:

    Investment advisory services offered through Christian Investment Advisors, Inc DBA Christian Financial Advisors also known as Christian Financial Advisors Management Group, a registered investment advisor. Comments from today’s show 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 host Bob Barber and his guests. Bob does not provide tax advice and encourages you to seek guidance from a tax professional. While Christian Investment Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

    21 min
  • 130 – 21 Questions To Ask A Financial Advisor
    Click below to listen to Episode 130 – 21 Questions To Ask A Financial Advisor
    21 Questions To Ask A Financial Advisor

    Are you asking these important questions before choosing a Christian financial advisor?

    More episodes >>

    Finding a financial advisor should be treated like a job interview, especially when searching for a Christian financial advisor. You probably don’t want just any investment advisor handling your money, which is essentially your future. In order to try and find the best financial advisor for you and your situation, Bob and Shawn have put together 21 questions that they believe you should ask a financial advisor. This includes questions like:

    • What is your educational background?
    • What kind of safeguards do you have in place to protect my financial information?
    • What if something happened to you, or you were out on vacation or sick leave, who would serve me?

      • All of these and more are addressed in this episode so that you can be as confident as possible in your future when it comes to choosing a financial advisor.

      21 Questions To Ask A Financial Advisor Printable

      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
      1 TIMOTHY 3:1-3

      It is a trustworthy statement: if any man aspires to the office of overseer, it is a fine work he desires to do. An overseer, then, must be above reproach, the husband of one wife, temperate, self-controlled, respectable, hospitable, skillful in teaching, not overindulging in wine, not a bully, but gentle, not contentious, free from the love of money.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. As always, thank you so much for joining us today. Whether that be video, or for those of you that are listening right now to the episode, we’re so glad you you’re here. Bob, what do we got for today?

      Bob:

      We have 21 questions to ask before hiring a Christian financial advisor.

      Shawn:

      All right.

      Bob:

      All the questions.

      Shawn:

      Yeah, it is. We’ll try to not spend more than minute or so in each one, right?

      Bob:

      I hope. Yeah, exactly. We gotta get through this cause there’s a lot of questions, but I know there’s a lot of people out there that are looking, right now, especially cause we’ve been in a bear market. And they start looking around. So I thought this would be a very good program for where we are today.

      Shawn:

      Yeah. No matter who you’re looking at, possibly hiring, we serve clients across the country, but there are a lot of advisors out there. So hopefully this will help you no matter where you’re at.

      Bob:

      That’s correct. The first thing is, before we even start, is I believe that if you’re gonna get advice from anybody, for anything, I’ve always loved the third chapter in First Timothy. Because it talks about the qualifications of an overseer and a deacon in the church. And if you follow this scripture for who you get advice from,

      Shawn:

      Probably be a lot better off.

      Bob:

      That’s right. Yeah.

      Shawn:

      Well, let me go ahead and read that for us then. Let’s do it. So we’ve got 1 Timothy 3:1-3, “It is a trustworthy statement. If any man aspires to the office of overseer, it is a fine work he desires to do. An overseer, then, must be above reproach, the husband of one wife, temperate, self-controlled, respectable, hospitable, skillful in teaching, not overindulging in wine, not a bully but gentle, not contentious, free from the love of money.”

      Bob:

      Isn’t a great scripture?

      Shawn:

      That’s a great scripture. That was from the NASB.

      Bob:

      I picked that version cause I looked at the different versions and that really just laid it out there. So we got 21 questions. So let’s go. So the first question I think that you should ask when you’re looking for a financial advisory firm to help you is how many years of experience does the advisor have or has the firm been in business itself? I think that’s a very good thing. You don’t want somebody that just started yesterday.

      Shawn:

      Yeah. I think for a good example here, like with our team, you have a few more years experience than I do, just few decades, but it’s…

      Bob:

      You’re starting to give away my age here, but quite frankly it’s 38 years.

      Shawn:

      Yeah. So that particular question, the reason why we say how long has the firm been in business, too, is it could be a younger advisor that maybe they specifically don’t have as many years of experience, but if they’re working with an experienced team like we do here, then that’s not necessarily a, “Oh, go ahead and write them off with question number one.”

      Bob:

      Because you have the wisdom of the team behind them.

      Shawn:

      Yeah. If I don’t know something, I go to Bob first.

      Bob:

      I’ve got 38 years and you’ve got 7 now.

      Shawn:

      Almost 8.

      Bob:

      Almost 8 combined. So, right there, when you add that together, we’re 46.

      Shawn:

      Yep.

      Bob:

      And then, you know we have Teresa that works with the firm and she, I don’t know how long Teresa, I think she’s been close to 20 years. So, you start adding all those years together. There’s a lot of wisdom that.

      Shawn:

      Firm that you’re looking at that would be kinda the same thing to think about is it’s like, well, I’ve got this advisor I’m looking at and he’s got a mentor at the firm that he’s working with and the firm’s got experience.

      Bob:

      We bounce off each other. And by the way, that wisdom doesn’t always come from having the perfect answers. I mean, I got some of this gray hair and the reason I got it is because I’ve made mistakes. I mean, everybody will make some mistakes and you learn from those mistakes, though.

      Shawn:

      Absolutely. Okay. All right. So number two, what is your educational background?

      Bob:

      Yeah. And I think that’s a good question to ask of somebody that you’re wanting to give you financial advice. Hopefully, it’s gonna be in a background in finance or business. If it’s a background in say Phys ed, I don’t know about you…

      Shawn:

      Or the other part could be maybe originally they did get a college degree, but it wasn’t necessarily in finance. And since then, they’ve been working in the industry and they’ve gone through, maybe they’re a Certified Financial Planners, CFP. There’s a bunch of other designations that’s just one of the most popular. So that educational background, I think, could also apply to what have they been doing, what additional ones.

      Bob:

      Yeah. It’s not just a degree, but do they have a financial background?

      Shawn:

      Okay. So number three, what is your financial advice based on?

      Bob:

      So I will tell you right here, our financial advice is based on what God’s word says about money. Some will say 1500; others will say 2000. I haven’t gone to see exactly.

      Shawn:

      We haven’t counted every single one, but we could say at least 1500.

      Bob:

      Scriptures they have to do with stewardship. And so our financial advice is gonna be based on proven, long-term principles found in God’s word.

      Shawn:

      That’s right.

      Bob:

      And especially, I’m a Proverbs nut, you know that. I’ve always been crazy about the book of Proverbs. I love Proverbs. I love Ecclesiastes also because it really talks about how Solomon tried everything and he didn’t find happiness in that. And I always have the question, how much is enough? And some people, it’s just a little bit more. Well, you’re never going to get there then. So our financial advice here is truly based on what God’s word says about money.

      Shawn:

      That’s right.

      Bob:

      We’re about to go through the Bible study that I’ve written called Biblical Viewpoints of Money and Wealth. That’s a great Bible study if somebody would wanna get a copy of that. And let us know, and we can get you in touch with how to do that.

      Shawn:

      Okay. So let’s go into number four. How are you paid? Fee, commission, or both. Now I’m saying these, obviously if you’re asking the advisor directly, how are you paid? Fee, commission, or both. So Bob, why don’t you explain that a little bit.

      Bob:

      Well, okay, so a fee is going to be where you pay the advisor a fee. A commission is going to be, maybe, where the advisor is going to put you in a product like an annuity or even maybe a mutual fund that has a sales load on it and they’re gonna get paid a commission for putting you into that. And then you have hybrid advisors that do both. The main thing is that you know…

      Shawn:

      How they’re being paid.

      Bob:

      That’s right.

      Shawn:

      That’s very important. And I will say, typically for advisors that are a registered representative with a broker dealer, that it’s more common that you’ll see either they’re paid on commission or it might be a hybrid because certain investment products or options they offer you are paid a commission, whereas others might not be. And so that’s just something to be aware of.

      Bob:

      And I used to be, I used to sell commission based products. We no longer do that here. We are totally fee based.

      Shawn:

      And you were hybrid for a while as well.

      Bob:

      I was. I was a hybrid, but we wanted to be fiduciary based where the client’s best interest is always served. So we just did away, we don’t offer anything with commissions at all.

      Shawn:

      So if your advisor says they’re a fiduciary and they’re fee only, typically what that’s gonna mean is similar to our firm, that the advisor is going to be paid, say a certain percentage. It could be even be a certain dollar amount per year.

      Bob:

      To manage for you or charge for a financial plan.

      Shawn:

      That’s right.

      Bob:

      Number five. How much do you charge on an annual basis to manage an investment portfolio? That’s a good question to ask. I mean, you need to ask them right up front. I can tell you the going rate from being in this business for so long right now is between 1% or can go as low as 0.5%.

      Shawn:

      Used to be like 2%, but it…

      Bob:

      Used to be 2.5%. I remember when fee-based advice first started getting popular, and I couldn’t believe it was 2-2.5%. And those numbers continue to go down, but that’s okay because everything’s getting much more efficient.

      Shawn:

      That’s right. So number six, how much do you charge to do a financial plan? Or is it included with managing my investments? That’s a good one too.

      Bob:

      And many firms do both. They charge for the financial plan, and they charge for managing investments. We kind of do both, but once you get to a certain point of investment dollars under management – starts at $300,000 and up – the financial planning is included in that. And we have that right on our website, how much financial planning is included. If you’re 300k to 500k, you get a certain amount. If you’re 500k to a million, you get a certain amount. If you’re a million and up or you’re 5 million. So you get more financial planning,the more you have under management, and that it makes sense.

      Shawn:

      And if you are a client of ours, but you’re under that $300,000 threshold for the household, then we do offer it as just by the hour. So, it just depends on how much you need. So a lot of times, families they might only need a one time and they don’t need anything for a while.

      Bob:

      So seven to eight are kind of like our beginning questions, but I think it’s good to point blank ask the question, do you have any potential conflicts of interest when giving me advice?

      Shawn:

      Gotcha. So that one would tie kind of back into if someone is paid a commission, so do they have sales incentives or goals to put you into a specific investment product that may not necessarily be the best fit for you, but the reason for it is they want to get that 10% commission.

      Bob:

      Or a lot of times there’s been incentives in our industry, unfortunately, you’ll get a free trip if you sell this certain annuity or whatever.

      Shawn:

      So this instead of this and then you get free stuff.

      Bob:

      And that’s the same thing. Are you paid a commission for putting my money into anything whatsoever? Anything.

      Shawn:

      And just to put a little footnote on that, just because an investment option has a commission doesn’t mean it is a bad option. It’s just something to be aware of that when you’re talking to that advisor who is recommending it to make sure, is there a conflict of interest as to why they might be recommending it.

      Bob:

      And they need to disclose what the commission is and exactly what those calls are. All right. Number nine is a very, very important one here. Okay, go ahead.

      Shawn:

      Number nine, what kind of support team and staff do you have for servicing me? I know you mentioned Teresa earlier. So for our firm here, we have a team mentality here. We have advisors, we have support staff. We have marketing people. My wife does a lot of the marketing social media, things like that. So for that support team, who is supporting you as a potential client?

      Bob:

      Yeah. I mean, if I’m your advisor and if I’m happen to be on vacation or I’m out sick or something…

      Shawn:

      Is the office just closed if you’re gone or not?

      Bob:

      No, it’s not.

      Shawn:

      For here. Yeah.

      Bob:

      We have the support team, so that’s real important that they show you, whatever advisor you’re talking to, that they actually show you. And it should be on the website, their team. And that team, it’s not all about just their clients. Here, we don’t have individual clients. All our clients belong to the team.

      Shawn:

      Exactly.

      Bob:

      Yep. All right. Number 10 is how do you manage investments and what is your written and on ongoing strategy? This is a very – all these are important questions – but this is very important that the advisor tell you, this is how we’re managing, this is our strategy, and show you the strategy strategy in writing. We’ve got our strategy in writing right on our website. It’s seven different strategies. And under each strategies, there’s a lot of points that are in those strategies. And under that question, that next question is, can you assure me, because if you’re looking for a Christian financial advisor, can you assure me I’m not gonna be investing in companies, you’re not gonna invest me in any companies that support immoral activities. And what is your strategy for doing that? And there’s a strategy. I mean, I’ve done this for years.

      Shawn:

      That’s also on our website.

      Bob:

      Yeah. I mean, we use several different programs. We use the eVALUEator, we use Inspire. We also do just do our own research to make sure that what we’re investing God’s money in is not supporting companies that support immoral immorality. And there’s a lot of them out there today.

      Shawn:

      That’s right. That’s right. And again, like for us, it’s on our website, so you can see exactly what we’re talking about and whatever advisor you’re talking with, they should already have something written down. And if they say, “Oh, well, we don’t have anything written down, though,” that’s probably not a good sign. So number 11 can you, Oh, sorry. Say number 12, what if something happened to you or you were out on vacation or sick leave, would you serve me? So we kinda mentioned that a little earlier.

      Bob:

      We did, but I think it’s important that you understand, also, a plan like what if I got killed in an accident?

      Shawn:

      Yeah. Or what if you had an accident and you were disabled or in some capacity, you were still here but you couldn’t work.

      Bob:

      So who’s gonna take over?

      Shawn:

      Exactly.

      Bob:

      All right. So that’s a very important thing.

      Shawn:

      That would be your, I guess the, what is the advisor’s succession plan, I guess. if something were to happen to them, do they have someone on the team? Is there like maybe a partner or brother firm kind of a thing that, hey, we have someone that we trust that we know that they’ll take care of you in that transition process. So what’s that plan?

      Bob:

      Just so you know, this is my succession plan right here. So he is vice president of the firm and he’s younger than I am, a lot younger.

      Shawn:

      We have some other resources as well too. So you know, if something were to happen, I’m not quite there yet, but we’re getting there.

      Bob:

      Well, I hit the big 6-0 this year. I’m hoping to do this another 20 years, but with banker’s hours.

      Shawn:

      Right, right. Of course.

      Bob:

      Coming a little later and leaving a little earlier.

      Shawn:

      All right. So number 13. How much money do you manage on behalf of your clients? I think that’s another good one too.

      Bob:

      Good one for the firm, I mean, especially depending if you have a lot to manage. You wanna know that the team is capable of managing those higher dollars. Do you have a minimum for new clients? This is a really good one to ask the single advisor. Do you have a minimum for new clients or you take on anyone regardless of their financial situation? There’s capacity.

      Shawn:

      Right, Right.

      Bob:

      And you know, I’m at my capacity, so what I’ve done is I’ve bought a team and it could help me with this capacity.

      Shawn:

      Exactly.

      Bob:

      Okay.

      Shawn:

      So in our case for our firm, Bob has a higher minimum now at this point than the firm as a whole, simply because there’s only so many hours in day. There’s only so many clients that you can really effectively serve on an individual basis. But our team, obviously, with more support staff and more advisors, we can serve a larger number of clients.

      Bob:

      It is to tell you, let’s talk about those minimums just a minute. My minimum is around $500,000 to start. And yours is gonna be around 300k. It already is. And then we have other advisors that can serve below 300k. And we have a new program that we’re coming out with. It hasn’t come out yet, but it’s under a hundred thousand, right?

      Shawn:

      Exactly. And so it’s a little bit different of a model. We’ll have information on our site probably by the time this is released, but…

      Bob:

      Well, I’m excited about it cause I know that you’re working on that because our minimum for the firm right now is $100,000 and there’s a lot of people that are just starting. So we’re going to be able to take, it’s gonna start at $5,000?

      Shawn:

      $5,000, Yeah. $5,000. I feel like that’s a fairly reasonable amount if you save up for a year, worst case scenario, or something like that. And you know, we really wanted to find a way to offer that. And so effectively, if you have $100,000 or more, it would be considered more of our, like, full service model. And then we have a little bit more of a, I guess kind of a self-serve, self onboard for the under $100,000, but you still get access to the same investment management, investment management philosophy that’s for all of our clients.

      Bob:

      That’s Biblically responsible. And very actively managed.

      Shawn:

      And then of course, there is more of like a by the hour that if there is some additional one-on-one support or things like that you need and you’re under a $100,000, we do still offer that. It’s just we have a little bit more of a hybrid. Exactly.

      Bob:

      This question here is a very good one. Just do you give advice on how to lower income taxes? I don’t think anybody likes paying taxes. I don’t care how much you pay, how little you pay.

      Shawn:

      Hey, give to Caesar what is Caesars? But give as little as you have to Caesar .

      Bob:

      That’s right. Yeah. I think it’s a good question to ask the advisor while we were talking about how many do you take on, how many actual clients do you personally serve yourself? Will you work directly with my CPA to coordinate financial information as needed on an annual basis? That’s important. And we will here. How easily accessible are you when I have a financial question Shawn, I get questions all over the board every day. I mean, we want to buy this new car, we want to do this remodel, or we want to go on this big vacation, take all our family. Do we have the financial means to do that? And I received that. I mean, the team’s watching out for if it comes in through a text, comes in through an email, and people are – I think they’re surprised at how easily accessible I still am. And that’s because I guard my time to make sure it is there for our clients.

      Shawn:

      And sometimes, you might get lucky and catch Bob at the perfect time, right in between some meetings or something like that. We can quickly handle it, but even if we’re not available right then, typically what it’s like is, “Okay, great, well, hey, we’ve got time at this time, like this afternoon, or do you have time tomorrow?” So it’s not like, “Oh, a week from now, two weeks from now.” It’s, we’re available.

      Bob:

      In the world of texting, we monitor those texts, too, coming in. Shawn, I think this is a good one for you to answer.

      Shawn:

      Sure. So number 19, what kind of safeguards do you have in place to protect my financial information? Very important one. We take that very serious here. We have a lot of different technologies in place, systems and procedures to make sure that if there is a data breach that we can resolve that. You know, where information is stored – it’s always stored with bank level encryption. For those of you who wanna get really technical, it’s the 256 bit encryption and all that fun stuff. I won’t go into the details of that part. But yeah, we take that very serious and we do have a plan in place. We also do what’s known as like fishing tests and penetration testing to make sure that what we do have in place, there’s someone who knows what they’re doing that purposely is, you know, randomly throughout the year, they’ll try to like, get into our systems. And if they can’t, check marks. If they can, they tell us where the vulnerabilities are and then that way we can fix those.

      Bob:

      Right. Good deal. Good deal. All right. We’re down to just the last couple of them. Number 20 and 21. Will I have complete transparency to see my accounts and their holdings online at any time? And the answer here is Yes. You want to hear an a Yes answer to that, and you want to be in publicly traded stocks and bonds and mutual funds and ETFs so that you have complete transparency and you can see that. Be careful of any statements that would be self-generated by the firm. That is a no-no. Totally.

      Shawn:

      So like when, for example, for us with right now, TD Ameritrade, the statements and all those, all that information is generated by TD Ameritrade. We also have a third party that we use to generate if a client has a question, they wanna see a performance report or something like that. We’re not hand generating any of these things. It’s pulled directly from the information that’s available from the custodian. So, make sure you see reports if anything is shared or statements that are like that. Like you said, you don’t want it to be something that, looks like a Word document that you typed up.

      Bob:

      Aways be aware. While I’m thinking about this, about transparency, be aware of anyone that says, Oh, I’m gonna give you a guaranteed 10% return a year. And if they’re showing you a guaranteed 10% a year, something’s up.

      Shawn:

      Be very careful.

      Bob:

      If it sounds too good to be true, it is. Don’t let greed get in there. And number 21, I think this is a good one to end on.

      Shawn:

      Number 21, how often do you meet with your clients to go over their investment portfolio and update their financial plan?

      Bob:

      Yeah. Some people wanna meet once a quarter, some wanna meet every every six months. I find the majority of people wanna meet about once a year.

      Shawn:

      And that’s our recommended. But similar to like when we talked earlier about the different minimums, we have what we call different tiers, different levels. And so the more you have with us, the more often that we are available if you’d like to meet. But regardless of what level, we do recommend at least that once a year that we reach out and make sure, has anything changed? You know, have there been changes in the family, similar to our estate planning episode that we did. There’s those different questions where if things change in the family or financial situation or income that might necessitate, we need to make changes here or whatever advisory you’re working with that they need to make changes in how they’re managing your assets. The most common example would be, well we’re 10 years from retirement. Well then all of a sudden you’re like, Oh, I’m gonna retire five years early. Okay, well if you’re retiring now versus 5 or 10 years from now…

      Bob:

      We don’t need to wait that year. Also, I will mention, too, that when we bring aboard a new client, and you’ll want to ask the same thing of an advisor if you’re looking at someone else, is that there’s a pretty strong onboarding process that in the first two or three or four months, we’re meeting often until we get everything up and running. We get everything online where you can see everything. We’ve got the financial plan, because our financial plans are all online and they’re updated daily with all the numbers so that you can go in and see how your retirement plan looks or how your college plan looks, your cash flow, et cetera. So I think that’s enough questions for today.

      Shawn:

      I think that’s it.

      Bob:

      And if you’d like a copy of these questions, could we put up a copy of these questions?

      Shawn:

      Yep. It’ll be in the episode descriptions, so you should be able to click that link there. If you’re directly on our website, it’ll be there as well. And yeah, that’s all we have.

      Bob:

      And we’d love you to consider us if you’re looking for a financial advisor. We don’t mind these 21 questions at all. And you can reach us during business hours. You can give us a call at (830) 609-6986 or you can text us at that same number during business hours. Or you can go to our website at ChristianFinancialAdvisors, just like it’s written there, ChristianFinancialAdvisors.com.

      Shawn:

      So always, thank you so much for joining us and God bless. 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.

      24 min
    • 129 – Are Rental Homes A Good Investment For Income
      Click below to listen to Episode 129 – Are Rental Homes A Good Investment For Income
      Are Rental Homes A Good Investment For Income

      Find out why rental homes as an income investment may not be all that its chalked up to be.

      More episodes >>

      Having a rental home may seem like an easy way to create a secondary income source, but you might just be surprised at the minimal dollars you’ll take home after all is said and done. Bob and Shawn go into the not-so-glorious side of having a rental home as an income source. Many renters don’t consider all of the work, time, and money that goes into being a landlord. This includes repairs, insurance payments, taxes, and just general wear and tear on a rental house. The takeaway? A rental home as investment income may not be worth the hassle because of the minimal amount of finances you may earn from it and the huge amount of money you’ll probably be pouring in.

      Rental Home Yield Worksheet

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. As always, thank you so much for joining us, whether that’s on video or listening to us on all the wonderful podcast directories.

      Bob:

      And you need to tell everybody we prayed for the Lord’s protection today, from realtors.

      Shawn:

      From the realtor mafia that.

      Bob:

      We love realtors. They’re great people. I got some good friends that are realtors. We rent to a real estate firm here in our office, so we’re just playing. But today is gonna be “Are Rental Homes A Good Investment For Income?” What’s the conclusion? You wanna tell everybody. The short answer is no, but we’re gonna tell you why today because I’m always getting this question, Shawn. I bet I get this question nearly once a week from someone that says, Should I take my money out of a moderate balanced portfolio and go buy a rental home? Cause we’re looking at some rental homes for income.

      Shawn:

      And what’s that one thing that people always lead with, too, is they say, Well man, in this area I could rent it out for $2,500 a month or $2000 a month. And they’re looking at what they have on their home, because maybe they already have a home in the area. But they’ve had it for a while and they’re paying $900 a month, so they’re doing the math like, well that’s pretty good. It’s like, Okay, but hold on.

      Bob:

      Yeah, it computes, if you think about it. I did some research for about a $400,000 home in our area and just so all of you know, a lot of you I know are not in our area. Our area is between Austin and San Antonio, and I know it is a pretty hot real estate area, but a home that will rent for about $2000 a month and actually we’re gonna use…

      Shawn:

      Maybe $2100.

      Bob:

      That’s the actual example because I went and looked online and what the homes and just in a certain area were renting for per month, and it was an average of $2100 and the average sales price was $4,000. I mean, $400,000.

      Shawn:

      Gotcha.

      Bob:

      Not $4,000. $400,000.

      Shawn:

      So an average of $400,000 rental home and an average of about $2100 per month for the gross rental income.

      Bob:

      So it sounds good, right. Because you got $25,000 that you could make on $400,000 a year. Multiply the that out. I mean, that’s more than a 6% return. It looks pretty good.

      Shawn:

      The initial start, that looks pretty good. But what are the things that you’re gonna hit us with that we need to be aware of that you gotta start deducting those from that gross income.

      Bob:

      All right. So, so I asked Garrett, who helps us with our recording, to put up on the screen here a worksheet, and if you want a copy of this worksheet, give us a call.

      Shawn:

      Actually, we’ll just put a link to it. We’ll put a link in.

      Bob:

      Can we do that?

      Shawn:

      Yeah. We’ll put a link in the description and if you’re watching us on our website directly, it’ll be on the page.

      Bob:

      Okay. So this is a really good reason why our podcast listeners need to watch the video. By the way, like us on on YouTube. We need likes.

      Shawn:

      And subscribe. All the good things. Comment.

      Bob:

      All the good things. All right. So what we did was I took the annual gross revenue, and this is in our own town, but I think it’s very typical of the central Texas region as well. $25,200. So, that’s your gross per year. But then you need to subtract from that and that’s what’s going to get our yield actually below 3%. So the expenses that need to be subtracted. For one, you gotta think about average maintenance costs on an annual basis. And I put $2,500 in here. As you know, I’m taking about 10% of the rent. Now, that may not happen every single year, but when you have that deductible on a roof, because we have a hail storm come through.

      Shawn:

      Which for us, when we were at the time recording this, it was earlier this year. There’s a hail storm this year and there’s a lot of people…

      Bob:

      There’s a lot of hailstorm in the springtime in this area. Another thing would be a lot of air conditioners were breaking this summer because we had such a hot summer.

      Shawn:

      Well that reminds me, too, of like painting that sometimes you have to repaint. I know even for this building that we have here that our office building, we had to repaint and you know, obviously for a larger office building, it’s gonna be a little more expensive than the average rental home, but that can get expensive.

      Bob:

      It can. So, so why you may not have that $2,500 every year, you think of it. Well, every four years there may be a $10,000 event. Or every three years there may be a $7,500 event.

      Shawn:

      Kinda budgeting for that. You may not have seen that come out of the checking account this year. But it’s more of, you need to earmark that each year to make sure that when something comes up, whether it’s four years or six years or whatever it is, that you have it available and you’re not gonna hold the bag.

      Bob:

      And that’s gonna directly affect your yield because that’s coming off of the $25,200 per year. So you have to subtract that. A second thing I have in there, I think that is smart for everyone to have, is they need liability coverage. They need to have an umbrella policy that goes over that. Not only that, I believe it’s very important if you own rental homes, that you need to have each rental home in a limited partnership. Not one limited partnership that owns multi – that owns a lot of homes. But each individual home needs to be an individual limited partnership. The reason I say that is because if there were to be a slip and fall or somebody were to hurt themselves, they can’t get ahold of – if you had three rental homes, they couldn’t get ahold of ’em. Three of them. So, it’s very important that you break that liability up per home. Alright. So I’ve got an average cost in there of just a couple hundred dollars. I think that’s very, very reasonable. Here’s the big one, especially in Texas, and I think a lot of Californians that are moving here are being surprised. They don’t realize that our property taxes are so high here. We may not have an income tax in the state of Texas, but they make it up on the property taxes. So, you gotta figure about $2, right at $2 per, I think it’s per thousand. So it computes out here on a $400,000 house at around $7,500 to $8,000 per year. that comes directly outta that $25,200 again.

      Shawn:

      Right. Because try not paying your property taxes and see how long you keep that rental home.

      Bob:

      Try not paying it even on your own home.

      Shawn:

      And to clarify, I say don’t do that. Make sure you pay the tax.

      Bob:

      That’s why I say you never really own your home in Texas, I mean, or some of the other states that have…

      Shawn:

      You just pay off the primary loan at some point and then you’ll pay your minimum rent from the government.

      Bob:

      Exactly. Yeah. That’s right. So that has to come out of there. Then we have the annual cost of property and casualty insurance. I’ve verified this with a few sources. It’s gonna be about $1,800 a year. Then we have what’s called annual loss of rental income. Now somebody says, well wait a second, what if I have a year lease or a two year lease? Well, yeah, you don’t have to figure that in there, but every year or two you are going to have a renter to leave and a renter come on. And during that time, you’re gonna have to go in, maybe do some paintings, some fixing up, and you might lose as much as one to two months of rent during that time. So you’ve got to figure that into the equation.

      Shawn:

      Yeah. And again, that’s one of those where it’s not so much that you lost $100 that year, it’s more so of, okay, let’s say you did have a tenant who was on a 24 month lease and then they decide to move somewhere else, you know? I mean, they decide they’re gonna buy a home. Well, either way you’ve lost that tenant after that 24 months. So budgeting for that, earmarking that 2100 a month in this case, is good. So when you take two or three months to get that new tenant…

      Bob:

      And you may not, you may get one in a month, but still you’re gonna have a month lag time. I guarantee you’re gonna have at least a month lag time between. Usually when a tenant comes out, you gotta go in and clean up. You might wanna do a paint job, spruce it up again for the next tenant. Annual marketing costs, that’s not a lot. I put just a couple hundred dollars in there, but if a property manager were to bring you a tenant, they may charge a commission to do that. But I also have in here the cost of a property manager and I talked to a well known realtor here in town and he said about 6% to 10% a year, 10% if you just have one home. It can go down if multiple homes.

      Shawn:

      So if you have multiple rental properties, it could be a little less expensive.

      Bob:

      But then somebody might say, I’m not gonna hire property manager. I’m just gonna do it myself. Correct? You still gotta think about what your time’s worth.

      Shawn:

      That’s a good point. Yeah.

      Bob:

      You’re going to spend at least couple hours every month maybe collecting the rent, checking on the renters, especially if you have to go over and fix a dishwasher or something like that. So you’ve gotta figure that in at a couple hundred dollars a month.

      Shawn:

      Gotcha. So that’s total, you have that at about $2,500 per year.

      Bob:

      That’s correct. Now you notice on my chart here, what I did was I put an annual cost of mortgage. That’s if you were to finance it, but in this case, I don’t have financing this home at all.

      Shawn:

      So this is assuming your best case scenario where maybe you had cash and could buy the home outright and not not having the mortgage. So obviously, all these numbers that we’re looking at, if you also have to add in the cost of the mortgage…

      Bob:

      You’re gonna be negative cash flow.

      Shawn:

      You’re gonna be negative. Yeah.

      Bob:

      You’re gonna be negative cash flowing every single year. Now, remember what we’re talking about is, are rental homes a good, are they good for income?

      Shawn:

      Right. Are they a good investment for in generating income?

      Bob:

      I’m not including appreciation in this, and especially right now, because things are so overvalued. But normal appreciation on real estate if you get back to the norm…

      Shawn:

      Not the last couple years.

      Bob:

      No, the norm for the last 80 years is gonna be 3%, 4% a year.

      Shawn:

      Gotcha. All right.

      Bob:

      So, but just as far as just yield and income when you total all of this up, we’re at $16,800 that has to come away from the $25,200.

      Shawn:

      So we’re left with $8,400 as our net profit after expenses.

      Bob:

      That’s right.

      Shawn:

      Or the earmarked expenses?

      Bob:

      Right. That’s correct. Those expenses are gonna be there. All of these expenses are gonna eventually be there. This is going to be, I feel very confident about this and one of the reasons is I came from a family, a dad that was in the business for 45 years. He owned a lot of rental homes, and I never could figure it out why.

      Shawn:

      And you built homes too.

      Bob:

      Back in the ’80’s I did.

      Shawn:

      You’ve been involved in various aspects of that.

      Bob:

      So I have a family that was from the building business and real estate business. So, the bottom line is, is your yield comes out in this case scenario on a $375,000 to $400,000 home. And by the way, this area I looked in, that was the low, there were some homes that were $450,000 to $500,000. So, I’m really being conservative on these numbers. That annual yield came out to be 2.10% to 2.24%. That’s if you do not have a mortgage on the property.

      Shawn:

      Gotcha. And Bob, really, I guess for those watching or listening that 2.1% to 2.4%, you would be basing that on, okay, you’re gonna have this property for at least, say, four years, maybe four, maybe five years. And so it’s kind of like what that ends up averaging. So like if you were lucky and you had a tenant that you got in there real quick and you had ’em for 24 months and you didn’t have anything break, you didn’t have to repaint, there’s a lot of things that could go your way where that yield could be a little higher in the first couple years.

      Bob:

      It could be.

      Shawn:

      But if you’ve got it for four to five years, which really what you should be looking at anyways. It’s not a one to two year time period, then you’re probably gonna end up averaging in that 2.1% to 2.4% if you don’t have a mortgage .

      Bob:

      Now, Shawn, I look at that and I think about this and you see what I’ve got there on the bottom of my worksheet. That’s one home, one location, one renter. You’re very much lacking diversification. You have liability, you’re responsible for the taxes, insurance maintenance, like a leaky roof. You’ve got the broken water heater that happens in the middle of the night, or the broken pipe, the cracked foundation. That’s a possibility. And I’m telling you, Shawn, the list goes on and on.

      Shawn:

      All the fun things of home ownership.

      Bob:

      I cannot figure out why anybody would want to do this because you can buy a good balanced mutual fund that’s a dividend paying fund and get that in dividends and have the diversifications, and you still have the possibility of appreciation. I mean, here, I know you say there’s the yield, but a what about appreciation? You have the same thing in a good balance portfolio that’s going to yield the same thing. Why? Why would you not be?

      Shawn:

      But the added benefit, though, is when you’re in a balanced portfolio is that it’s a liquid investment.

      Bob:

      It is. That’s true. It’s very liquid. You don’t have to put it on the market. You don’t have to pay real estate commissions, you don’t have to pay all the title fees. Just to get rid of the thing, it’ll run you 7-10%. So you have to make up for all that.

      Shawn:

      So it sounds like the, again, as we said at the beginning, the answer to the question that is buying a rental home as an investment good for generating income. The answer is no.

      Bob:

      It’s not. I’m sorry to tell you, but it’s not.

      Shawn:

      Even in the best circumstance, it’s really not.

      Bob:

      Based on, and I can back this up, it’s based on history. I got the worksheet right here. Like you said, you’re gonna put a download link where they can just pop on that. Good deal.

      Shawn:

      So we should be able to have it on the podcast episodes as well. So if you are listening when it’s on your phone, you’re on the computer, you should be able to click on the episode and click that link from there.

      Bob:

      So now anytime – this phone call we get once a week. We made the one on gold, now we have this one. They’re like, what is a good investment? Okay. We’ll tell you. Thank you for listening today. If you would like good financial advice that’s based on a fiduciary

      Shawn:

      Advisor.

      Bob:

      Exactly.

      Shawn:

      Sorry.

      Bob:

      Based on fiduciary advisors where it’s about you. We’re not gonna put you in anything commission based. So, you’re the one that pays us and we don’t have any conflict of interest here.

      Shawn:

      Right

      Bob:

      Okay. So give us a call at (830) 609-6986 during business hours, or you can text that number as well during business hours, or visit us on our website at ChristianFinancialAdvisors.com.

      Shawn:

      Thank you again for joining us. God bless. And until 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
    • 128 – 7 Steps Before Big Financial Decisions
      Click below to listen to Episode 128 – 7 Steps Before Big Financial Decisions
      7 Steps Before Big Financial Decisions

      Are you taking these important 7 steps before making a large financial purchase?

      More episodes >>

      It has happened to the best of us. We have a big financial decision, and we jump the gun to make a large purchase before we ask for advice or really think things through, leaving us financially vulnerable afterward. Since making big financial decisions is something that we all face eventually, Bob and Shawn have put together seven recommended steps you should take before making a large purchase.

      These steps can be used for anything, such as buying a new car, your first house, or even new appliances. Gaining advice and insight through using these seven steps can help take away the stress and fear of the unknown when it comes to your finances. Knowing you have the monetary means to confidently make a large purchase can offer an indescribable feeling of financial freedom.

      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
      JAMES 1:5

      If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.

      Luke 16:10-13

      Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property, who will give you property of your own? “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

      Galatians 5:22-23

      But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, 23 gentleness, self-control; against such things there is no law.

      Luke 14:28

      For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?

      Job 12:12

      Is not wisdom found among the aged? Does not long life bring understanding?

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. Once again, thank you so much for either watching or listening to our episode today. We’re so glad you chose to join us. Bob, what do we got for today?

      Bob:

      Well, Shawn, I built this program because I know you and Jenna are thinking about buying a new car.

      Shawn:

      Have been for about a year and a half or so. It has not been a quick, knee jerk decision by any means.

      Bob:

      So today is a very important subject for that or if you’re about to buy a new home or any big financial decision, and I’m calling it “7 Steps Before Making Big Financial Decisions”. I consider a large financial decision, take your income, your annual income, multiply that by 2% to 5% and I consider that to be a large financial decision.

      Shawn:

      Yeah. I think that’s fair.

      Bob:

      So a hundred, if you have $100,000 income, $5,000 decision, anything larger than that is considered a family big decision. So these are seven steps I think are especially important for a Christian to think about before making. Because as you know, I believe God owns it all. And I believe that all financial decisions are spiritual decisions as well.

      Shawn:

      Hence why our name is Christian Financial Advisors. We have Christian first because it should be part of all financial decisions.

      Bob:

      That’s right. So there’s seven steps.

      Shawn:

      Let’s go step number one.

      Bob:

      And you can see where I am on this.

      Shawn:

      Pray about it. This one is very important. We’re gonna go to James 1:5, “If any of you lacks wisdom, you should ask God who gives generously to all without finding fault and it will be given to you.”

      Bob:

      And again, like I said, for a Christian, all major financial decisions are spiritual ones, especially if it’s a large one that’s gonna affect your giving.

      Shawn:

      That’s true. And also remember that God is the owner, and we are the managers.

      Bob:

      That’s right.

      Shawn:

      Or the stewards.

      Bob:

      That’s correct.

      Shawn:

      Bob, do you wanna go to number two?

      Bob:

      Step number two is turning to God’s word. I believe it’s over 2000 scriptures that have to do with stewardship and how we handle what God has given us. I especially like the book of Proverbs and Ecclesiastes. And in all these different scriptures, God has given us resources to look at this. I like the parable of a good steward and a bad steward. I think that Luke 16:10, I mean Luke 16:10-13. So 16th chapter ,10 through the 13th verse really sum up the parable of a good and a bad steward. So Shawn, if you’ll read that for us.

      Shawn:

      Sure thing. So again, that’s Luke 16:10-13, “Whoever can be trusted with very little can also be trusted with much. And whoever is dishonest with very little will also be dishonest with much. So if you’ve not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property, who will give you property of your own? No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”

      Bob:

      This parable, to me, if you bring it to real life, which it is real life, is that it’s really saying how are you doing with the small things before I give you more? And I always think of this with a child. If I give a child $10 and they do very well with that, maybe I’m more apt to give them $12 or $15. And they do well with that, maybe I can give them $20 now. So I think that God is looking at what he’s given us and seeing how do we handle that before he gives us more to handle. Are we being a good steward with it and, you know, being just good mathematically as well with that.

      Shawn:

      But also it kind of goes back to that serving two masters, you can’t do it. You have to serve one or the other. So, when you’re looking at a big financial decision and what to do with this money that’s been entrusted to you, are you either serving God and seeking his wisdom from his word on what you should do. Or, are you serving money, i.e. yourself and what you want to do, not what God wants you to do with it.

      Bob:

      We have the throne. And are ourselves on the throne or is Christ on the throne. I got that from the four spiritual laws from a long time ago, and I remember that from Campus Crusade and we would give out the little tracks and it had that in there. I still remember that. And it’s very powerful. So, step three.

      Shawn:

      Step number three, be patient.

      Bob:

      Be patient, be patient.

      Shawn:

      I’ve been feeling this one because with Jenna and I having two kids now, there’s been many a times where we really wanted someone to ride with us or give someone a ride from church or whatever it is. And it’s kind of hard when you’ve got two parents, two kids with car seats, and both of your vehicles have five seats. There’s really not room for anybody, and we’ve been waiting and waiting and the car market has been crazy.

      Bob:

      It has been.

      Shawn:

      And as much as we wanted to get something, it hasn’t felt like the right time. And now it feels like things have aligned somewhat. They’re like, okay, well maybe before the end of the year. But I can definitely tell you it is much easier said than done to be patient.

      Bob:

      And it’s such a large decision today.

      Shawn:

      Yes. But it’s important.

      Bob:

      Oh, very.

      Shawn:

      So, be patient. Galatians 5:22-23, “But the fruit of the spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control. Against such things, there is no law.”

      Bob:

      No law against that. Be patient. And I say that because 98% of the time, whatever you’re purchasing, there’s more of it coming from somewhere. And it’s really interesting because I bought a new car, and I was patient, but they were trying to get me – to push you to buy it because there’s not gonna be any more coming. Well, what’s interesting, when I went to pick it up the very next day, they were delivering some cars just like it. Okay. All right. So Yeah. Don’t buy into, it’s only on sale this one time. There’s always gonna be other options, but boy, people can get caught up into that.

      Shawn:

      And while being patient, while exercising that patience, use the time for research. Is there a viable alternative that is less money?

      Bob:

      Yeah. That’s right.

      Shawn:

      If you’re going to make a large purchase, research the cost of the item extensively, like when you’re looking at a home or you’re looking at that car, it’s not just the purchase price, but it’s the ongoing maintenance and the cost of actually owning and operating it. Sometimes people say, Oh, I can get this nicer item for for a good price, but then they don’t realize the actual cost of ownership is quite a bit higher than they expect. And then they get into a bind later.

      Bob:

      And that takes us into our fourth step, which is duh, use math. Use math. Do a complete financial analysis of the possible purchase. Especially if this has to do with real estate and say a second property, look at what that’s going to cost you. Luke 14:28, “For which one of you, when he wants to build a tower does not first sit down and calculate the cost to see if he has enough to complete it.”

      Shawn:

      That’s a good one. It’s almost like there’s a lot of scriptures on making wise decisions and finance and stewardship.

      Bob:

      Yep. Now you’re gonna love this first one right here.

      Shawn:

      So what will the major purchase be worth in three to 10 years? What would investing those same funds in a growth or balanced portfolio be worth in three to 10 years?

      Bob:

      You could be going opposite directions, right? Because we do know you take money out for a car, in 10 years, that car’s gonna be worth about 20% of what it was worth. And if you had kept that money in a balance fund, it’s gonna be worth possibly -there’s no guarantees – Okay. We always have to say that…

      Shawn:

      But it should be worth more.

      Bob:

      Future performance is no guarantee there, but based on history, it could be worth double. So you take $50,000 out for a car that’s gonna be worth $15,000 in 10 years and you take that $50,000 could be worth a$100,000. So what, I don’t know. I mean, but I’m just telling you, you really need to think about that and put the math behind it where it’s logic.

      Shawn:

      Always makes me think of when, I know you had a client one time, they wanted to take everybody on, the extended family, on a cruise and well the cost of it is X amount today. Okay. Well, how many years do you have left in retirement? So what is the future value of that same amount 10 years from now, 15 years from now? And just because the value of leaving it invested typically is gonna be more doesn’t mean that it’s a bad decision, but it’s just something to take into account.

      Bob:

      That’s right. We had those decisions all the time, and we put them into our calculations and it’s okay to take that big vacation with your family, of course. That’s okay. And many times I look at it and say, Yeah, you’re fine. You’re good there. Or, if you wanna do a major remodel or you wanna buy that second home, we’re not saying you can’t do these big financial decisions. I’m just saying there’s a lot of things that go into it, like these steps that we’re talking about.

      Shawn:

      Exactly.

      Bob:

      And you need to understand, too, if you’re gonna have to borrow the funds to buy that car or to buy that home or to buy that boat, you are really presuming upon a future that you have no idea about. There’s no certainty. None of us know if we’re gonna be here tomorrow. Okay.

      Shawn:

      So then that ongoing cost like you mentioned a little bit ago. What is the major purchase’s monthly and ongoing annual cost. Because again, any kind of asset that, especially a major financial purchase, there’s going to be ongoing cost.

      Bob:

      That’s right.

      Shawn:

      You need to make sure that that is not prohibitive enough where it’s not worth it.

      Bob:

      So this next one is one I’m always saying around here a lot, right?

      Shawn:

      Yep. Step five, keep emotions out of it.

      Bob:

      Emotions should never be involved in a financial decision. I know that’s hard. You really have to be disciplined with that. And to get those emotions out of the way because I always say this, emotions and finances mix together like oil in water. They don’t. They don’t, and they never should.

      Shawn:

      Kind of makes me think of the previous ones about being patient and using the math. That patience and waiting a little bit. Don’t make that quick decision. And then looking at the math kind of helps you with step five to keep the emotions out.

      Bob:

      It does.

      Shawn:

      Because otherwise, we are emotional creatures. It’s hard to keep out if we don’t have something to provide those guardrails.

      Bob:

      And how about this next one under emotions? Who would’ve thunk it, right?

      Shawn:

      Right. Is it a need or a want?

      Bob:

      Exactly.

      Shawn:

      A want is okay if you can easily afford it, but not if you can’t.

      Bob:

      And we can run those calculations, we do it every day here. And it is nothing, like I’m saying, there’s nothing wrong with that new car. If you can afford that second home that you want to buy or that boat, as long as it doesn’t affect your giving. Think about that. Step number six.

      Shawn:

      Seek experienced financial advice. Job 12:12, “Is not wisdom found among the aged? Does not life bring understanding?

      Bob:

      Long life.

      Shawn:

      Yes. Long life.

      Bob:

      “Does not long life bringing understanding?”

      Shawn:

      “Does not long life bring understanding?”

      Bob:

      Okay. So this gray, it’s not bad. Okay. It’s not bad to go to somebody that has a little bit of gray in their hair and ask them. At first, I feel like you should always discuss the purchase with your spouse. Okay guys, I’m telling you. Make sure mom’s happy. Are you both in agreement about this? And the next thing is ask an experienced financial advisor as well as an older parent, grandparent, or older friend who is…

      Shawn:

      Financially successful.

      Bob:

      That’s right. You want to get your advice from the eagles, not the turkeys. Okay. So if they’ve been financially successful, that’s a good person to go ask advice from. If they haven’t, they may be a great person, but I don’t think you should get financial advice from somebody that is not financially successful.

      Shawn:

      Well, plans fail for lack of counsel, but with many advisors they succeed. So you may have someone who’s a great spiritual advisor but may not be as good of a financial advisor.

      Bob:

      That’s right, but hopefully they are.

      Shawn:

      Hopefully they’re both.

      Bob:

      Because they need to be reading Proverbs and Ecclesiastes, too. Okay. And the last step of all this is apply what we call the live, give, owe, grow method. Okay. Money can only be spent four ways. It’s that simple – live, give, owe, and grow. And one of those categories is going to be affected when you make a large purchasing decision.

      Shawn:

      So kind of think of it as like you’ve got the pie chart, you’ve got the live category. You’ve got the give – charity donations. You’ve got owe, whether that’s taxes or debt. And then you have grow. So in that pie chart, if one of them gets a little bigger…

      Bob:

      The other’s gotta come down.

      Shawn:

      One or more of the others will have to go smaller.

      Bob:

      And Live is just your budget, That’s your overall budget. And then giving, of course, is the charities and your tithe. And owe, we’re always gonna owe even when we’re debt free, we’re still gonna owe the government. I mean, and even like property tax, I feel like I’m renting from the government in my own house. All right. And then grow has to do with growing your assets in the future. So if you’re spending too much, you’re not gonna be able to grow assets for the future. And you’re not gonna be able to give as much. They’re all interconnected and money, it has to come from somewhere. What’s the old saying?

      Shawn:

      It doesn’t grow on trees, it doesn’t grow on trees. But if you find one, please send us some of the seeds or something. That’d be great.

      Bob:

      That’d would be great, wouldn’t it? And you know, I have a caution in here at the very end of today’s program, too, that many small purchases on a monthly basis can actually equal a large purchase. You think about that. If you did have to finance a large purchase, the small purchase is going to add up to the same monthly payments. So this is an easy trap to fall into. It shows the importance that we have to have a good monthly budget and stick to it.

      Shawn:

      Because it may not be a $5,000 budget, for example, like we were talking about earlier, but what if you just have multiple things over a couple months that are a thousand dollars or $1500. You’re like, Oh sure, let’s buy the new appliances. We don’t actually need them because everything’s working fine, but let’s just go ahead and buy the new appliances.

      Bob:

      Or just watch those Amazon trucks nowadays, because it sure is easy to just say, I want that dress. I want that shirt. I want those pants. I want this, I want that.

      Shawn:

      And oh, there’s 600 bucks.

      Bob:

      Just like that. Okay. So making big financial decisions is okay. Okay. It’s not bad. As long as it’s done with wisdom.

      Shawn:

      Insight.

      Bob:

      It doesn’t affect your present or future giving.

      Shawn:

      It doesn’t affect your present or future savings.

      Bob:

      You have a really good understanding of all the cost involved.

      Shawn:

      You can afford it and…

      Bob:

      Hopefully it will appreciate in value so you’re not just throwing money away or will at least retain some of its value over the years. We hope this episode has helped you in your future large decisions. And if you need a good financial advisor, we’d like to be that one and help you through all of life’s major financial decisions. Give us a call or text…

      Shawn:

      At (830) 609-6986 anytime during our regular business hours. You can also visit us on the web www.christianfinancialadvisors.com. Once again, thank you so much for joining us today. God bless. And until next time.

      [CONCLUSION]

      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
    • 127 – Annuities 101: The Good, The Bad, And The Ugly
      Click below to listen to Episode 127 – Annuities 101: The Good, The Bad, And The Ugly
      Annuities 101: The Good, The Bad, And The Ugly

      Learn about the pros and cons of annuities.

      More episodes >>

      Bob and Shawn discuss the pros and cons of an annuity, i.e. the good, the bad, and the ugly. What exactly is an annuity? It is an insurance contract issued and distributed by financial institutions with the intention of paying out invested funds in a fixed income stream in the future. We discuss the types of annuities – variable annuities, fixed annuities, and fixed indexed annuities.

      Did you know many annuities don’t require you to be a financial advisor to sell them? This is why it is so important to always go through a fiduciary-based investment advisor when dealing with annuities and other investment products. For example, fixed and fixed indexed annuities are the MOST sold annuities but are NOT regulated by the SEC or FINRA, which can lead to abusive selling practices. This, along with several other issues, may lead to severe complications in the future for investors. There are some good qualities as well, which are also touched upon in this episode, but we want you to get the full story.

      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 1:3-7

      To receive instruction in wise dealing, in righteousness, justice, and equity; to give prudence to the simple, knowledge and discretion to the youth — Let the wise hear and increase in learning, and the one who understands obtain guidance, to understand a proverb and a saying, the words of the wise and their riddles. The fear of the Lord is the beginning of knowledge; fools despise wisdom and instruction.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. As always, we’re so glad that you are watching or listening, depending on if you’re online or if someone is listening to one of our podcast directories. Anyway, today we have an interesting topic.

      Bob:

      Right before we started, we were cutting up a lot.

      Shawn:

      We were a little bit, Yeah. So Bob, have you ever gotten, or for those of you watching listening, have you ever gotten one of those big colorful postcards that have a nice juicy steak on the front?

      Bob:

      You mean like this?

      Shawn:

      So you have one with you? Well, funny enough, I also have one with me. Totally not planned.

      Bob:

      They’re appealing. Look at that. Isn’t that a pretty steak?

      Shawn:

      Yeah. Mine’s got a slightly different steak, but yeah, they both have this real beautiful steak.

      Bob:

      Yeah. I opened this up and I’m gonna learn all this stuff like how to reduce my social security taxes and ways to reduce my volatility in the markets and my increase my benefits. Hmm. Looks very educational.

      Shawn:

      All these great and positives. No negatives whatsoever.

      Bob:

      Look on the back and I can’t show you the back cuz it’s got the picture of the people that send it out. But right at the very bottom in little bitty print guarantees an insurance annuity products. So that’s how this guy, or they’re sending out, let’s see, about 10,000 of these…

      Shawn:

      At about a dollar, $1.50 a piece. Let’s say a dollar. So $10,000 just in the printing cost.

      Bob:

      So now I got $15,000 in this workshop, I’m gonna feed you a free steak. That’s not including the free steak.

      Shawn:

      That’s not including the actual dinner itself.

      Bob:

      Another 35 or 50 bucks.

      Shawn:

      Exactly.

      Bob:

      Okay. So I get 25 or 30 people there. So each person that’s come has cost me about $400, $500. How am I gonna make up for that?

      Shawn:

      Hmm. Do you think the annuity commission might be part of it?

      Bob:

      Yeah. I just gotta sell one or two annuities and I make up for it. So today…

      Shawn:

      Today “Annuities 101: The Good, The Bad, And The Ugly”. Technically, we could group bad and ugly together, but we just thought it’d be more fun.

      Bob:

      Well, that’s from, I was a big Clint Eastwood fan with all the spaghetti westerns and I always talk about the good, the bad and the ugly. It’s one of my favorite movies. It’s so funny.

      Shawn:

      Well, we wanna start today’s episode, though. All fun and joking aside, we wanna start today’s episode with a statement that annuities are not all bad, but they have a tendency to be used to take advantage of investors due to their potential for high, one time commissions. And we are gonna go into a little bit of what is an annuity, the types of annuities, because not all annuities and depending on who’s selling it, necessarily carry a high commission. But that’s just what they tend to be used for.

      Bob:

      Some carry no commission at all. And we’re gonna go into that. Shawn, when I was developing the program, I said, Shawn, can you think of – we’re Christian Financial Advisors – can you think of a scripture that kind of goes with this. So share the scripture that you came up with.

      Shawn:

      So we’ve got Proverbs 1:3-7 which says, “To receive instruction and wise dealing in righteousness, justice, and equity. To give prudence to the simple knowledge and discretion to the youth. Let the wise hear and increase in learning. And the one who understands obtain guidance. To understand a proverb and a saying, the words of the wise and the riddles. The fear of the Lord is the beginning of knowledge. Fools despise wisdom and instruction.”

      Bob:

      Really today is about wisdom. isn’t it?

      Shawn:

      It is. Just about helping to educate. I mean, it’s really what this entire program is for in the first place is to try to help educate and provide wisdom. The next time you get one of these, you know what to do.

      Bob:

      And we wanna explain what an annuity is. So let’s go to the definition of what an annuity is. And Garrett, if you’ll put this definition up while I read this. The term annuity refers to an insurance contract issued and distributed by financial institutions with the intention of paying out invested funds in a fixed income stream in the future. Investors invest in or purchase annuities with monthly premiums. It’s what they call premiums. Instead of contributions, it’s called premiums in the insurance world, or lump sum payments.

      Shawn:

      Okay. So maybe you have a large lump sum that you just put in one time.

      Bob:

      And I also wanna mention that there are qualified and nonqualified annuities. A qualified annuity will be considered like an IRA.

      Shawn:

      Right. So there’s a tax advantage to it.

      Bob:

      Right. And the nonqualified has a tax advantage to it too, but the qualified annuities, you’ve gotta take the money out by 72 because of the RMD rules.

      Shawn:

      So required minimum distributions for those who aren’t up on their acronyms.

      Bob:

      Okay. And so there’s basically three types of annuities that you need to know about and be aware of. First one.

      Shawn:

      Well, let’s go ahead and list all three and then we’ll do a quick definition of each one. So there are variable annuities, there are fixed annuities, and there are fixed indexed annuities. And so the first one we’re gonna cover is variable annuities.

      Bob:

      And these are very highly regulated by FINRA and the SEC. This is put into…

      Shawn:

      Because it’s a type of security product. That’s what it’s considered.

      Bob:

      So it’s really in a different league.

      Shawn:

      Right.

      Bob:

      And most of these that you go to…

      Shawn:

      Are not variables.

      Bob:

      They’re not variable.

      Shawn:

      No. They’re typically gonna be a fixed annuity or a fixed index annuity.

      Bob:

      Typically gonna be fixed index.

      Shawn:

      Okay. So VAs offer many different types of managed subaccounts to choose from, similar to mutual funds. You kind of think of in a variable annuity, a subaccount, would be very similar to the mutual fund or ETF or the individual stock that you’re holding within an investment account. But in this case they call it subaccounts.

      Bob:

      And you can’t hold an individual stock in a variable annuity.

      Shawn:

      Exactly. It depends on the annuity, what specific subaccounts are actually available. So, in that sense, Bob, I think it’s probably more similar, for those watching and listening, it’s probably a little more similar to if you have like a 401K or something at work, it doesn’t mean you can invest in anything. Well, depends on what that plan has available.

      Bob:

      You’re right.

      Shawn:

      Depends on what you can actually invest in.

      Bob:

      But you have a lot of choices. I mean, many of these variable annuities, I’ve seen them with 100 or even 200 choices. So there’s a lot to choose from. Everything from small cap value to large cap growth to international, even sector funds like energy funds, things like that. So you’ve got a lot of choices in these variable annuities.

      Shawn:

      And then the second one that we had mentioned is fixed annuities. Now these are very simple. Pretty straightforward, but it’s just a fixed interest rate for a certain period of time and they adjust every one to five years.

      Bob:

      Very much like a CD. A Bank CD. But the CD’s backed up by the bank and the FDIC and the annuities backed up by the annuity insurance company.

      Shawn:

      So definitely, that’s kind of the important part is making sure that if you did get a fixed annuity, you don’t want the fixed annuity with some, who is this company and are they actually strong?

      Bob:

      You wanna make sure they’re A rated, a very highly rated company.

      Shawn:

      Because if they don’t do well, all of a sudden you don’t have anything left.

      Bob:

      Right. Exactly. And then we have the fixed index annuity.

      Shawn:

      Number 3.

      Bob:

      And this is the most sold type of annuity out there.

      Shawn:

      Specifically, the most abused type of annuity. Because again, really all three of these types of annuities, again, it’s not that they are inherently bad. It’s just in the case we’ll talk a little bit about fixed index annuity, but it’s the way they are used and the way they’re sold, and the fixed index annuity is the one that typically ends up being the most abused because it’s very complicated. Like for most investors, it’s hard to wrap your head around how it actually works. And the people selling it tend to not actually fully explain that. I know we’ll talk about that a little bit later.

      Bob:

      We’re talking about cap rates. There’s all these cap rates and things like that. So usually in a fixed index annuity, what they’re giving you is, and it says indexed, okay. So they’re giving you a choice to invest in one, two, or three or in maybe even five or six different indexes. Like the S and P 500, the Dow Jones, the NASDAQ Index. International.

      Shawn:

      Right.

      Bob:

      The different indexes. Okay. Now the thing about the fixed and the fixed indexed annuity is it doesn’t require a security’s license to sell it.

      Shawn:

      Unlike the variable annuity.

      Bob:

      Right. And so you’re not regulated under FINRA and the SEC like you are in a variable annuity that’s so much more highly regulated. And so these fixed and fixed index annuities have very little oversight.

      Shawn:

      On top of that, too, is the other issue isn’t, again we’ve talked about this before, seeking wise counsel. And so when you are being sold a fixed annuity or fixed index annuity, you might be talking to someone who is a licensed advisor, but most of the time those are sold by an insurance agent. I mean, or they may not say they’re an insurance agent, but that’s really the only thing was they passed an insurance exam to get their license, and that was it. There’s no oversight or regulation from something like FINRA or the SEC.

      Bob:

      You’re supposed to be by the insurance board, but it’s not a whole lot.

      Shawn:

      What do they call that? It’s like the wolf watching the sheep.

      Bob:

      So let’s go into the good side first. Remember, we’re gonna cover the good, the bad, and the ugly. I’m gonna go over the good side and I’m not throwing all annuities out. It’s like don’t throw the baby out with the bath water, they say, right? So there are good sides of annuities and annuities can play a part in an investment portfolio. Not all, but it can play a part. So number one and I like is…

      Shawn:

      Tax deferral of gains until income is needed. And this is for the nonqualified type of annuity.

      Bob:

      Yeah. Because when I say that, because a nonqualified, you’ve got to start taking in a qualified annuity. You’ve gotta start taking money out at 72 cause the require minimum distribution rules of IRAs.

      Shawn:

      But for non-qualified,

      Bob:

      No, you don’t have to.

      Shawn:

      If you were anticipating not needing it till 75 or 80, I mean, you can defer if you want.

      Bob:

      So you can defer all those gains and there’s no taxes doing it. The other good side of an annuity, but there’s costs that come with this is the optional guaranteed income benefit. That is a real plus, especially on variable annuities that are gonna go up and down with the markets depending on what you pick. So in the event of a major market downturn, you’ve got a guaranteed income. And I’m telling you, Shawn, I saw in ’08, a lot of these annuities were sold in ’07, in ’08, and they saved people with their retirement income.

      Shawn:

      Right. Especially for those who were much closer at that time, were much closer to retirement. Now, if you still had 5 to 10 years left, not as big of a deal when you have a market downturn. But in the case of someone who’s in one of those and they were a year or two from retirement, that can be very helpful to make sure that income stream is protected.

      Bob:

      And the main thing that you need to know is with these optional guarantees that you can put on one of these annuities, is there are fees involved. So you need to understand the fees and make sure that that’s disclosed to you. So that’s gonna affect your overall returns.

      Shawn:

      It is.

      Bob:

      All right. Number three.

      Shawn:

      Avoids probate at death as long as all beneficiaries are alive.

      Bob:

      Yeah. That’s important. I mean, if you have an annuity that you took out 15 years ago and you’ve had one of the beneficiaries, maybe three children or your spouse has passed away and that beneficiary, that needs to be updated. Because if that beneficiary is not alive, that part may have to go through probate.

      Shawn:

      That’s right.

      Bob:

      And you don’t want to have to do that, but it does avoid probate. Otherwise, you have the proper beneficiaries and they’re all updated and they’re all still alive, completely avoids probate. That’s a really good side of an annuity.

      Shawn:

      Yeah. And that’s, I guess, your investing 101 or wealth management 101 tip is regardless whether it’s annuity or not, make sure your investment accounts have up to date beneficiaries.

      Bob:

      All of them. All of them. Okay. Number four.

      Shawn:

      Can provide some liability protection in certain states.

      Bob:

      You want me to tell you something funny here?

      Shawn:

      Sure.

      Bob:

      You remember OJ?

      Shawn:

      Yes.

      Bob:

      Okay. Remember how all the stuff he was involved in? He had annuities in the state of Florida and all his money was protected. Okay.

      Shawn:

      Okay.

      Bob:

      So, it can provide liability protection in certain states. Florida and Texas where we are here is a state, so when I say liability protection, it’s very protected from creditors and lawsuits.

      Shawn:

      Alright.

      Bob:

      Okay. That’s a big plus.

      Shawn:

      So something happens, somebody sues you. if the annuity is in one of those states like Texas and Florida, for example, then the annuity assets couldn’t be touched.

      Bob:

      And I say some liability protection. I’m sure there’s a lawyer out there that’s smart enough that can get through that. So, I’m not gonna make the statement that it’s all protected.

      Shawn:

      Please consult your legal professional before that. We’re just saying that it can help provide some liability protection, depending on the state and the circumstance.

      Bob:

      That’s right. Okay. Number five.

      Shawn:

      Variable annuities can offer literally hundreds of investment choices that can be switched around without concerns of taxes until funds are actually withdrawn.

      Bob:

      That’s a nice feature, isn’t it?

      Shawn:

      And that’s true for both qualified and non-qualified annuities.

      Bob:

      Absolutely. You got it. So as you know, when the markets were way up last year and we took some profits, you gotta pay tax on that. Well, in an annuity, you take that profit, you don’t have to pay tax on it. Now, you do have to eventually. And a thing that’s really important to understand, too, is with annuities, you pay income tax, you don’t pay the favorable long term gain tax. So, the long term gain tax could be much lower. It’s many times much lower than the income tax.

      Shawn:

      Which is why we said earlier that annuities can play a part, but it’s not necessarily that we recommend that it’s all of your investments are an annuity, for one of those reasons right there.

      Bob:

      And the sixth good side of annuities is actually there are annuities now that are commission free. How about that?

      Shawn:

      And surrender free.

      Bob:

      Completely surrender free. Now these are fee based annuities offered through registered investment advisors. You’re not gonna see, when we were talking about the steak dinner earlier, they’re not gonna sell those kind of annuities. Let me give you an example why, okay? You put a hundred thousand dollars into one of these annuities, many of these fixed index annuities will have a 8-10% commission. So Shawn, you make $8,000 day one.

      Shawn:

      Wow.

      Bob:

      Where if you’re charging a fee to manage that of 1% a year.

      Shawn:

      Which is what we would typically charge, and it’s typical in the industry.

      Bob:

      It’s typical. That’s $250 in the first quarter for managing it. Okay. You can get $8,000 up front or $250 for a fee to manage it. So, do you see the tendency of greed here?

      Shawn:

      Yeah. And that’s why look at it in years. For our firm selling an annuity for someone as part of their investment strategy, if it makes sense, we’re gonna earn 1% a year. Well, compared to the free steak dinner, that’s gonna take us 8 to 10 years to make about the same in advisory fees as what that insurance agent made day one.

      Bob:

      And the insurance agent, many times, gets paid one time up front. So, what motivation do they have for staying with you through those years?

      Shawn:

      And they usually carry, which we’ll cover, but the surrender penalties, because that 8-10% that was paid, if you decide, oh, this isn’t right for me and you wanna take the money out sooner, well guess what? There’s anywhere from an 8-10%, depending when you pulled it out, penalty because you surrendered it early.

      Bob:

      So now we’re gonna get to the bad side and the ugly. So we’ve gone over the goods, so now we still have the bad and the ugly. All right.

      Shawn:

      So number one. Many, but not all, annuities have very high ongoing annual expenses that can be changed to go even higher by the annuity company while you have the annuity.

      Bob:

      Boy that’s…

      Shawn:

      Basically changing, moving…

      Bob:

      I’ve seen this before.

      Shawn:

      Moving goalpost, like changing the fees after you’ve already gotten into it.

      Bob:

      After you are in and you can’t get out, they can raise the fees on you. How about that? Let’s get you trapped. Let’s get the handcuffs around you.

      Shawn:

      That’s fun, right?

      Bob:

      And then we can go up on the fees. The second thing, participation in the upside of the markets in fixed annuities can be very limited.

      Shawn:

      Okay. So, that’s interesting. Bob, can you give us an example?

      Bob:

      An example? I will. Okay. So, let’s say like, we know in the last couple of years, not this year, we know in the last couple years where the S&P 500 has gone up 15-20%. And these fixed index annuities, you got three or four, okay? That’s it. Cause that was the cap rate.

      Shawn:

      Right. Cause there’s a cap. You participate in the upside of the market up to a certain percentage, right?

      Bob:

      Right. Okay. Now there’s other annuities that don’t have a cap rate, but guess what their ongoing fee is? It’s like 4% or 5%. So, the annuity goes up, I mean The S&P goes up 15%, you get 10%, they’ve gotten five%.

      Shawn:

      Right.

      Bob:

      I mean that is enormous fees. Enormous. Okay.

      Shawn:

      Okay. So number two. Oh, we just did number two.

      Bob:

      We kind of covered number two.

      Shawn:

      We kind of did. Participation in the upside of the markets in fixed index annuities can be very limited.

      Bob:

      Yeah. We explained that.

      Shawn:

      So number three, fixed index and variable annuities keep any stock dividends instead of adding them back into your investment.

      Bob:

      How about that one?

      Shawn:

      That’s an interesting one.

      Bob:

      Most people don’t realize that. And the dividends, just even outta the S&P 500 can be, right now with it low, can be 3%. You’re not getting that. The insurance company is getting that instead. So you think about that, just add that fee right there of 3%. Or in a fee based account outside of an annuity, you’re gonna get that.

      Shawn:

      So it’s that opportunity cost. It’s not necessarily a direct fee, it’s just because of the way they’re structured. So number four, commission based annuities can carry very high surrender penalties depending on the amount of commission paid to the salesperson that can last for many years, locking your money up.

      Bob:

      Yeah. So there’s kind of a formula here, like you were mentioning. If you have a 10 year surrender penalty on that annuity, pretty much the commission was 8-10%. If you have a five year surrender on that annuity, it was gonna be 4% or 5%, maybe even 6%.

      Shawn:

      Usually the number of years somewhat corresponds to about one percentage per year of the surrender penalty.

      Bob:

      That’s correct.

      Shawn:

      Or the surrender period.

      Bob:

      Correct. Yeah. So the higher the surrender penalty and fee, the higher the commission. Okay. And remember, fee based annuities have no surrender penalties at all. No surrender penalties.

      Shawn:

      So really, on those, you move in and six months later you have buyers remorse or whatever, and you can move back out. There’s no huge penalty for doing so.

      Bob:

      Now if you take out one of these annuities before age 59.5, even if it’s nonqualified and you have gains in it, those gains before 59.5 will be taxed at a regular tax rate if you take it out, plus a 10% penalty.

      Shawn:

      Gotcha. So, that’s the one other part, I guess to look into is that if you move into one of those and you are under that age, yes you can technically take the money back out, but you want to avoid that potential extra tax and penalty tax.

      Bob:

      Yeah. Which you’re gonna have to do if you take it out. Okay. So now we’ve had the good, the bad. Now, let’s get to the ugly.

      Shawn:

      So the ugly side of annuities mostly applies to the fixed and fixed index annuities. So number one, accountability of the industry that seems nearly non-existent with some shady business practices. Now, Bob, can you shed a little light on that?

      Bob:

      No, that’s all I’m gonna need to say. I think we said it right there. Okay. Number two, there are big incentives to salespeople to even push these certain types of fixed and fixed indexed annuities that are making high commissions. An example. They’ll push, like the company will say, if you sell a lot of this one annuity, we’re gonna give you a free vacation to this exotic getaway, big cash bonuses at the end of the year, and even contests and recognition rallies. I mean, they’re all patting each other on the back and. It’s kind of like – so you see behind the doors the salesman giving each other high fives, “Boy, you got that one!” I mean, that’s sad, but.

      Shawn:

      So basically, it’s another incident of a conflict of interest?

      Bob:

      Yes.

      Shawn:

      Where it’s not just that there’s maybe a commission, but there’s also, Hey, if I sell X amount more to these people, whether it’s a good fit for them or not, then I’m gonna get a cash bonus or I’m gonna get this. I’m gonna win this contest, or I’m gonna get to go on this really great paid vacation. And the problem with that then is that is a conflict of interest on what is best for the investor.

      Bob:

      And wait till you hear this. They even get – you know how best time to buy a car is like on the last day of the month. Okay. So they’ll even have times…

      Shawn:

      Well usually, I mean, right now it seems like it’s crazy no matter what time of the month.

      Bob:

      I know that. But typically, you wanna buy on the last day of the month. And why is that? Cause they get a bonus. They sell a certain amount of cars that month.

      Shawn:

      By the end of the month.

      Bob:

      Yeah. They actually have that with annuities. They’ll have like a contest, and it’ll go for this three month period. So can you see as you’re getting towards the end of the three months, I’m nearly here, I’m nearly here, I just need to sell a few more of these. Just gotta sell it, right? Oh isn’t that…

      Shawn:

      That’s just…but that’s not the way investing and advisors should operate.

      Bob:

      No, it’s not.

      Shawn:

      Because that is not fiduciary. That’s not putting the client’s interest first or at least aligning your interest with what’s best for the client.

      Bob:

      So you covered that third one, which is the conflict of interest. Number four, the manipulative sales tactics, like this right here. This is manipulation, y’all. I’m sorry, but I really believe it. Look at this postcard. It’s not even appealing to the financial side. It’s appealing to the emotional side of big steak dinner.

      Shawn:

      Well, it’s got this beautiful looking meal. Sure looks fancy. So it’s got this fancy looking steak.

      Bob:

      Cause I like mine a little bit like that versus other.

      Shawn:

      And this is supposedly an educational seminar, but what’s the first thing you see? A big juicy steak. And then you open it up, and it’s interesting between the two. This one that I got, it’s got “worried about your nest egg getting crushed”, and it’s got a tank running over a car. So it’s like accommodate, and then yours had a little bit more of like, look at all these great features and benefits and you haven’t even said a word about what is it you’re even talking about? And I’m like, that’s just…that is just wrong.

      Bob:

      It’s a manipulative sell. And number five of the ugliest, the lack of disclosure that I see of all the costs associated with fixed and fixed index annuities. They’re rarely discussed with the client, all the costs associated with that.

      Shawn:

      And the requirements. So again, those surrender penalties and the time period, that is usually glossed over as much as possible because if you get all of the details and you realize, wait, if I invest in this, I can only get a maximum of 4% in, say, a fixed index annuity and I’m not participating in the downside, but also I can’t take any of it out for 10 years.

      Bob:

      Well, you can, but maybe…

      Shawn:

      Or I lose a percentage of it. But that’s the kind of things that if that was fully disclosed, there’s a lot of investors that might say I don’t think this is the right fit for me. This doesn’t sound as good, though.

      Bob:

      They go into these things just not knowing, Shawn. This is huge. This one. I wanna tell y’all, and I really wanna look at you in the eye on this one, is the false bonuses that these annuities promise to. I’ve seen them, Shawn, where they’ll say, I’m going to give you a 10% or 15% bonus for putting your money in this annuity. So here’s an example. You put the $100,000 in and I’m now it’s worth $110,000. It’s only on paper. Okay. It’s only on paper. It’s not reality. Tell them to send you the money. Say, I wanna surrender this, so send me my $110,000 that you’re showing me. It’s just strictly on paper.

      Shawn:

      It’s to make you feel good about having just invested in it.

      Bob:

      I mean, anybody can type a number on paper, okay? But tell them that I want to put that in my bank account, it’s not going to happen. And that is the ugly side of these bonuses that are supposedly bonuses. They’ll get you in and then the very next year they’ll leave you hanging like, “Yeah, but I’m getting 10% up front.” They’ll do it as an interest. I’m getting 10% interest. Well then the next year, they’re gonna pay you 1% for the next 10 years. Now you divide that out, you’re getting 2% a year. I mean, just look at the math.

      Shawn:

      So number seven on the ugly, it is common to talk about free withdrawals of your own money in 4% to 6% increments as an interest rate the annuity is paying when it’s not.

      Bob:

      Isn’t that crazy?

      Shawn:

      Wow.

      Bob:

      That’s crazy. So, I’ve seen this over, it’s paying me 4-6%. It’s giving you 4-6% withdrawals of your own money. That’s not the interest it’s paying.

      Shawn:

      Yeah. It didn’t actually increase the value.

      Bob:

      Yeah.

      Shawn:

      So number eight.

      Bob:

      This is the ugly side. I’m telling you, these are the ugly.

      Shawn:

      Why don’t you cover this one?

      Bob:

      Okay. Bait and switch. Annuity companies can change the rules of the annuity contract once you’re in it. How about that? And raising the expenses after you’ve invested all your money, then you can’t get your investment out without huge surrender penalties. There you go.

      Shawn:

      So, they locked you in. They get you in and then they decide we’re gonna change the game. We’re gonna change the fees. Oh, you don’t like it, you want to take the money out. Okay. Well, there’s a surrender penalty. So no matter what you do, you’re not in a good spot.

      Bob:

      So there you go. It’s the good, the bad, and the ugly. Okay, I wanna say this, I really do. In conclusion, not all annuities are bad. Okay. They may have a part for some of your investments. And in today’s climate, you do not have to buy an annuity with surrender penalties.

      Shawn:

      And high commissions.

      Bob:

      Yeah. Right. There are fee based annuities out there that are available. But I’m telling you, for something like we started with today, that’s gonna cost $15,000 or $20,000 up front, it does not make sense for an advisor to sell fee based annuities. You’d be losing money. But with the high commissions, they can do that. So, be leery of the free steak dinner that you get in the mail. I see ’em all the time.

      Shawn:

      So, what you wanna do is when you get one of these, you take it and you go stick it in the trash can, and then you’re done.

      Bob:

      Yeah, that’s right. You got it. So, that’s all for today and I hope we’ve helped you with understanding annuities. There is the good, but there’s also the bad and the ugly. We’re here to help you through all these minefields. You can get ahold of us by phone or text during business hours, www.Christianfinancialadvisors.com on the web, or (830) 609-6986.

      Shawn:

      Thank you so much for being here. and just remember if something sounds too good to be true, it probably is.

      Bob:

      Probably is.

      Shawn:

      God bless you. And until 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.

      29 min
    • 126 – 10 Flaws Of DIY Investing
      Click below to listen to Episode 126 – 10 Flaws Of DIY Investing
      10 Flaws Of DIY Investing

      If you don’t have an investment strategy, then you are not a DIY investor.

      More episodes >>

      Bob and Shawn delve into the investing realm to discuss why investing isn’t something that you should just DIY. This episode is super important for anyone who has ever thought about investing on their own. Investing correctly involves time, tools, and expertise. You really might be surprised at the flaws of DIY investing, and why it is not something that we recommend you do solo!

      Christian Financial Advisors has the tools to help you with an investment portfolio, and these tools come at a price of both money and time. Think of how many things in your life you normally wouldn’t attempt to do-it-yourself: fixing household appliances, car maintenance, roofing, etc. You call a professional! These same conditions also apply to investing. Find out why you should stick to a professional, fiduciary based financial advisor when it comes to your investment portfolio.

      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 15:22

      Plans fail for lack of counsel, but with many advisers they succeed.

      ECCLESIASTES 4:10

      If either of them falls down, one can help the other up. But pity anyone who falls and has no one to help them up.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. We’re so glad you joined us today. Whether you’re watching this video online or you’re listening in on one of the many podcast directories, we’re so glad you’ve decided to join us. And Bob, what do we have for today?

      Bob:

      Well, today, Shawn, we have do it yourself investing and the “10 Flaws Of Do It Yourself Investing”. I speak with people every day. They’ve been trying to do it themselves, but they’ve not been very successful at it. And so I think it’s important to, in today’s climate, especially the way that you hear the advertising on YouTube or regular TV or social media, that you don’t need anybody. You can just do it all yourself.

      Shawn:

      All just DIY.

      Bob:

      Yes, it is. So I think there’s some flaws behind that, and we’re gonna talk about the 10 flaws. And I think once you hear these flaws, you will have your eyes opened because no one talks about them. They really don’t.

      Shawn:

      Well, let’s go ahead and start with a couple scriptures. First, I’m gonna be reading Proverbs 15:22, “Plans Fail for Lack of counsel, but with many advisors, they succeed.” It’s one of our favorite verses here.

      Bob:

      It is. We quoted it a lot around here, but I think it’s a very good one, especially for today about doing things yourself and all alone.

      Shawn:

      And that doesn’t apply just to investing either. That scripture is great for really anything in life that you should always seek wise counsel, whether it’s investments, legal, tax, something not related to finance at all. But yeah, seek wise counsel. And then the second, second scripture is Ecclesiastes 4:10 which states, “If either of them falls down, one can help the other up, but pity anyone who falls and has no one to help them up.”

      Bob:

      And I like a little bit of the rest of that scripture that talks about two or better than one. I do believe that, and it’s interesting. I don’t believe one plus one equals two. I believe one plus one equals three in this way of talking. I mean, I know math is one and one is two. But when you get two minds together, or even three minds together, it’s like having five minds because you’re bouncing off each other.

      Shawn:

      The synergy of having multiple people working together is greater than the the parts.

      Bob:

      So, let’s get into the the first flaw of the, of the Tim flaws is a lack of long term, everyday experience.

      Shawn:

      That’s a good one.

      Bob:

      Experience really comes with investing and financial planning. And it takes a long time. Shawn, I’ve been doing this for 38 years and I’m still learning. After all that time.

      Shawn:

      Believe it or not, after eight years, I’m still learning too…But yeah, that’s definitely a good one. Just having that experience of doing it as a career, as a job. Is, I mean, like you said, there’s still so much to learn, but you also learn a lot doing that all the time.

      Bob:

      Over and over. The repetition

      Shawn:

      For most people, I mean, the average investor, that’s DIY, it’s not something that you’re doing every day. It’s something that as an investor, you’re maybe once a day or once a week. I mean, it depends on the person how often they look look, but…

      Bob:

      I just can’t stand these commercials where it shows somebody doing trades while they’re at their workplace or during a lunch break. I mean, come on, this is God’s money. It belongs to him, and he’s looking at us to be good managers. How can you be a good manager playing it like that?

      Shawn:

      Yeah. Well, I think the biggest distinction with that is for those of you, who hopefully we’ve got your interest now on DIY investing, but there’s a big difference between investing and trading. You see these commercials that talk about showing how easy it is. Oh, just do it on your lunch break. Absolutely. You can trade, you can make trades very quickly and many times within a couple minutes, but that’s not the same as investing. That’s not the same as you are focusing on investing for the long term or for retirement. That’s trading. So the investing part is what should you be trading? When should you be making those trades? Into what? Like, that’s the hard part of investing, not the trading part. That’s just technology.

      Bob:

      And so when they talk about investors today, or investors this hour, they’re not talking about investors. They’re talking about traders. Or like I always say it, it’s T-R-A-I-T-O-R .Okay. The second flaw of doing-it-yourself investing is actually, most people don’t realize this, is lower long term returns. The average returns are actually much lower. Now, I want to have Garrett put up a chart right here that you can see right here. And you will notice that over every time period, 12 months, 3 years, 5 years, 10 years, 20 years, the returns are lower for the everyday–

      Shawn:

      The average investor.

      Bob:

      The average investor.

      Shawn:

      Yeah. And that’s compared with just a simple buying hold strategy for the S and P 500, that the average investor underperforms a simple buying whole strategy consistently. So when you look at that and say, Well, I don’t wanna hire an advisor because I don’t wanna pay a fee. Okay, Well, at the very least, then don’t try to do it yourself. You should do a buying hold strategy.

      Bob:

      Like I’ve said, Shawn, many times you’ll hear me say this today, we should have had a degree not just in finance, but in psychology as well.

      Shawn:

      Amen.

      Bob:

      Which leads to the third flaw of doing-it-yourself. And that is emotional decision making. Making those decisions on emotions. And if you’ve listened to the podcast very long, you know that I’m always saying emotions and finance mixed together like oil and water. You just shouldn’t do it.

      Shawn:

      So they don’t mix.

      Bob:

      They do not mix.

      Shawn:

      They don’t mix. And we’re gonna put a chart on screen that shows the the emotional investor chart or like the market.

      Bob:

      That’s a good idea to

      Shawn:

      Put that up there. Cause I think it’s good. You look at this chart and you see as people are getting more and more excited and you’re getting almost buy euphoria, and everybody wants to buy bye, buy, buy. Well, that’s typically the point where it’s increasing the chances that markets are probably about to have a pullback of some kind. Some sort of correction. And then again, average investor – doesn’t necessarily mean everybody – but the average investor, when you get towards the bottom of the emotional cycle where everybody is panicking, there’s the depression and just get me out. That’s usually a good time, especially for institutional investors or professional investors. They think, Okay, if the investor sentiment is showing nobody wants it, probably a good time for me to buy in. And so it just kind of goes to show that for the average investor, that emotional aspect of making those decisions, it hurts you in the long run because you end up, most of the time you buy high and you sell low, which is the opposite of what —

      Bob:

      You should be doing.

      Shawn:

      Of what you’re supposed to be doing. Or you buy low and you sell high.

      Bob:

      And you know, I love that chart.

      Shawn:

      You do.

      Bob:

      I mean, I’ve got that chart on my desk under the glass part where everyone can see it when they come into my office.

      Shawn:

      It reminds me of that phrase you say many, many times where things have been going really well, you want to take the strategy of go ahead and pull some of that profit off. Go ahead and pull some of that growth that you’ve had off the table. You move it somewhere else.

      Bob:

      It goes against human nature.

      Shawn:

      It does, but the pigs get fat and the hogs get slaughtered.

      Bob:

      So where’d you get that saying from?

      Shawn:

      You.

      Bob:

      That’s a country boy saying. The pigs get fat and the hogs get slaughtered..

      Shawn:

      But my dad owns a farm. Does that count?

      Bob:

      Yes, he does. He owns a lot of farms. So, yes.

      Shawn:

      All right. So number four. Okay, let’s go into that one. No personal team to help with major financial decisions. So this is the part, Bob, that really gets into point number two, right? That was talking about the returns and the performance. That’s really one part of the investment process. And ultimately the point. I mean, how many people do we work with that come into the office and all it is is they just wanna get a certain return. That’s never actually what the focus is.

      Bob:

      No, it’s not.

      Shawn:

      And even if someone is concerned about returns, what is it they’re really asking? Am I on track to actually be able to retire or not? I mean, that’s usually what people are asking. And whether that’s they have certain amount of money that they wanna fund charities or it’s money to take care of themselves – no matter what it is. But ultimately, it comes down to I’m trying to make these major financial decisions, whether it’s retirement or between now and retirement, and when you’re doing-it-yourself, who are you gonna talk to about that?

      Bob:

      I’m talking about major financial decisions that I deal with every day from clients that give me a call, too. Should I sell this home? Should I buy this home? What about buying this car? What about taking this big vacation?

      Shawn:

      And how is that gonna affect your portfolio?

      Bob:

      Yeah. And when you’re doing-it-yourself, who are you bouncing that off of? Maybe your spouse, but your spouse doesn’t have the experience in that. I’m not saying that a do-it-yourself investor, if they’re 70 years old, maybe they could, but usually it’s interesting. As they get older, they realize they need help. It’s the younger that doesn’t realize that.

      Shawn:

      Well, back to number three, Bob, not having a team to talk to – that emotional aspect of it can also tie into you’re trying to make this decision of, should you go on that cruise? Should you buy the new car? You’re emotionally invested in that decision. When you’re talking to a third party, when you’re asking a trusted advisor, they’re not emotionally invested in whether or not you should go on the cruise or the car because it’s not gonna affect them. What an advisor, in that case, is doing is trying to help you determine from a mathematical perspective and for your long term goals, is this going to hurt it or is it something that you can manage? That’s where the decision is being made. So , yeah. Your spouse usually is a great person. You should always talk to your spouse. But when you and your spouse are making a decision that directly affects you both, it’s very difficult to actually remove yourself emotionally from that decision.

      Bob:

      That’s a good point. That’s a very good point. And we’re gonna get into talking on one of the lower points about making those decisions how we use mathematical tools to do that.

      Shawn:

      Why don’t you get number five.

      Bob:

      Okay. Number five is lack of an investment strategy. Boy, I see this one a lot. Shawn, I ask all the time, I’m investing myself. Right? And I say, What’s your investment strategy? And I get this deer in the headlights look. Okay.

      Shawn:

      Wait. Strategy?

      Bob:

      Yep. Investment strategy. What do you mean? Do you have a written investment strategy as to what you’re gonna do during this market or what you’re gonna do during a down market or an upmarket. What’s your investment strategy? Now, on our website for Christianfinancialadvisors.com, you can look under investments and it will tell you our investment strategy. We have seven points, and there’s a lot of strategies under all seven of those points. We abide by those seven points.

      Shawn:

      That’s right.

      Bob:

      And we stick by those so that we don’t get off track.

      Shawn:

      That’s right. And it covers it covers our mentality of not allowing emotions to dictate decisions, not allowing whatever happens to be said in the news today for entertainment purposes, not allowing doomsayers. Those kinds of things – we don’t allow that to affect it. But then it also covers both our faith based, biblically responsible investing. It covers our strategy for that. And how are we actually doing that? It also covers financial fundamentals and the stuff that even someone who isn’t a faith-based advisor should be doing, if they’re an advisor.

      Bob:

      Looking at the financials of the company. Are they profitable or not? What’s their price to earning ratio? What are the analysts saying about them?

      Shawn:

      Exactly. Okay. So we go through all those things, like Bob said, you can see it on our website. And if you don’t have an investment strategy, then you are not a DIY investor. You’re a DIY trader. Because that’s one of the big differences. If you have a strategy or not determines investment versus trades.

      Bob:

      I gotta say that I’ve never met a DIY investor, the head of investment strategy, not one time.

      Shawn:

      Lots of traders, lots of traders.

      Bob:

      Not one time. Isn’t that amazing? Okay. Number six. Shawn, I’m gonna have you do that. And now I really wanna comment on this one. Cause you know I can.

      Shawn:

      Well, I’ll set it up and you can swing it.

      Bob:

      Okay. All right.

      Shawn:

      So number six, the time it takes to manage it correctly, you need to be laser focused on financial global events 24/7, 365, and love doing it.

      Bob:

      Okay Shawn, so make a comment about me on this one.

      Shawn:

      You fit that very much.

      Bob:

      I do, don’t I?

      Shawn:

      To a T.

      Bob:

      In a way it can be sad because I don’t have any idea of what else is going on.

      Shawn:

      Don’t ask him about any particular movies or actors, unless it’s a show that was filmed and displayed in black and white or TV shows in black and white, Bob’s not gonna know what the movie is.

      Bob:

      Because I’m very focused on the global events, and yes, I love doing it. I know I’m a little bit weird. I’m kind of strange, but I’m literally focused on financial events every day, and I love doing it. And if you’re gonna be managing money yourself, you need to love doing this. I mean, every waking hour that you can think of, you need to be focused on it because things are changing financially, constantly in the world and how to respond to that and knowing that your response should not just be instant, but how does this fit in the long term? How does this fit with experience?

      Shawn:

      I mean, speaking of that, I can speak personally that even though I’ve only been an advisor eight years and I have been working very hard to learn everything that I can and to more or less train myself to be doing this 24/7/365, I hope in another 10 or 15 years that I could be a little closer to where Bob’s at now. I mean, there are times where we talk and thinking this is just like habit, second nature, almost like instinct.

      Bob:

      It becomes muscle memory.

      Shawn:

      Yeah. Thank you. That’s what I was trying to think of. It’s almost like a muscle memory because you’ve been doing it so long that it’s just part of every day. It’s just part of how you operate.

      Bob:

      It doesn’t shake me. I’ve seen it.

      Shawn:

      But it takes time to do that. And it takes consistency in doing that before you can get to that point.

      Bob:

      I gotta admit, it does, and I’m still learning. Like I said, I’ve been doing this for 38 years and I’m still learning a lot. Okay. So the second, I mean the seventh flaw, the seventh flaw of DIY investing is lack of professional planning tools, and I’m talking things like we use – Advisys, we use eMoney. We use —

      Shawn:

      Y-Charts.

      Bob:

      YCharts.

      Shawn:

      Riskalyze.

      Bob:

      All these different tools, and just think of it this way. Okay, Shawn. I was thinking about this when I was putting this together. A guy that trims out a home, Okay? He’s got all his tools. He’s got his nail gun, the PROPER nail gun. Not just any nail gun, cause you use a different nail gun for framing than you do for trimming. He’s got the saw, and he understands how to work all those tools. These tools, as you know, take a lot of time.

      Shawn:

      Yeah. They’re expensive.

      Bob:

      Very.

      Shawn:

      They take a while to get proficient at them. And you have to keep using them to make sure you retain those skills. And so it’s, again, it kind of goes back to that 24/7/365. There are these tools that we have to use as tools of the trade. Just like you were talking about with the trim carpenter, whatever. And the other part of it is that training and that practice in knowing how to use them properly. I could go to Lowes or Home Depot or McCoy’s down the road, and I could go buy a bunch of these tools and spend a whole lot of money, but that doesn’t all of a sudden make me a skilled trimmer or a carpenter. But that’s kind of the other aspect of this.

      Bob:

      Yeah. Well, you’ve watched me on some of these and it’s like muscle memory. In eMoney how I’m just flipping around the charts and putting the different scenarios in. And I don’t even know how I do it. I mean, I’ve been doing it for so long, it just is so fast. And like, “How do you handle this?” It’s just part of it. Been doing it for so long. All right. What’s the eighth flaw?

      Shawn:

      Eighth one is proper asset allocation model construction and how to utilize different models for different goals. Because over time, things change.

      Bob:

      I’ve never seen a DIY investor. They don’t even know how to put together an asset allocation model. Maybe they know how to invest in one already. But how to put together the proper asset allocation and then to realize you need the different models for different goals that you have in life. They’ve never thought of that.

      Shawn:

      That’s right.

      Bob:

      That’s a major flaw of not doing that.

      Shawn:

      Why is that? It’s because usually DIY traders don’t have an investment philosophy. They don’t have an investment strategy. That’s the first part. Once you have the strategy, the next part is the ongoing implementation of that. So when it comes to that allocation, that model construction and what are you going into, what percentage are you going into it and when to make adjustments and changes as the economy changes. As you know, options change. Politics change, both local and abroad. I mean, there’s all these factors that go into it. You have your strategy. You have your investment philosophy, but when and what do you change it to throughout the year?

      Bob:

      And these models are breathing and living. They’re like living, breathing models. And you don’t just go all or nothing. You massage those models. And that takes us into the ninth flaw that I see.

      Shawn:

      Which is understanding how risk and reward work together and what to expect in normal fluctuations during different investment cycles.

      Bob:

      We’re in a down cycle this year. We’ve been in one and the volatility–

      Shawn:

      But is it way out of the norm? Is it in the norm? Is it not as bad? I mean, those are the questions where understanding what those different investment cycles look like. That’s the importance of it.

      Bob:

      That takes time, Shawn.

      Shawn:

      Exactly.

      Bob:

      And that takes a tremendous amount of time. I’ve been through ’87 and you know, the huge downturn in 1987, that’s how far back I go. I’ve been through ’90. I’ve been through the ’99, 2000, 2001 internet bubble. I’ve been through 2008. I’ve been through COVID of course, recently. And now this. I’m not surprised by any of them. And you will see so many things, identical things, happening during these markets.

      Shawn:

      Well put a chart on screen. There’s that really interesting chart that we saw. I think it was from Putnam Investments, but it actually shows over the last 73 years, I believe it’s updated through the end of 2021, but it shows the duration and the percentage change in bull and bear markets from the last 73 years. It is a really interesting chart to see that it’s not IF we have a bear market, it’s WHEN we have a bear market and what to expect, what’s normal.

      Bob:

      So let’s get to our last flaw.

      Shawn:

      Which is lack of understanding and applying all the different tax strategies.

      Bob:

      There’s a lot of tax strategies that can be applied during investing. We used one just recently. The markets have been down. There’s a lot of unrealized losses in the market. So we reached in, and we took those losses. But the way to do that is you have to take your losses and immediately get back into the markets. Today is an example. I mean, I know this program’s not gonna come out for probably five or six weeks, but today is an example and yesterday too about how using this kind of strategy and the importance of you’ve gotta go out of one door and right back into the next door. And the reason I say that is cause the market was down, as you know, last week 3% or 4%. And then the last two days, if you add the two, it’s up 5%. So, you can’t be out of the market. But we took those losses for 31 days, and we have to go by the wash rules. We can’t go back into that same portfolio. It’s complicated, and I’m not gonna go through all of it here, but that’s using the different tax strategies. And nobody likes paying taxes, Shawn. I’ve never met anybody. No matter how little they pay, they pay.

      Shawn:

      Jesus said, “Give to Caesar what is Caesar’s.”

      Bob:

      Yes, he did.

      Shawn:

      But don’t give Caesar 1 cent more than you have to. Give exactly what you owe and no more.

      Bob:

      So that does it today for our “10 Flaws of DIY or Do-It-Yourself Investing”. Okay. And after hearing this, you may think I think I want to hire a fiduciary based advisor. Don’t hire a commission based advisor. Whatever you do, hire a fiduciary based advisor where you’re paying them. They’re not getting paid by what they put you in. So be very careful of that. And we would be glad to talk to you about coming alongside you and becoming a partner with you. That’s the way it basically works. We’re not getting paid by what we put you in. There’s no commissions here at all.

      Shawn:

      That’s right. We get paid a flat percentage per year. And whether we make one trade or we make a hundred trades, and it doesn’t matter what particular investments we choose, it doesn’t change what we are compensated. That’s ultimately what a fiduciary advisor is. They don’t have a conflict of interest with, “Oh, I wanna recommend this product to you cause I get paid more.” What they recommend shouldn’t change what they get paid.

      Bob:

      We do well when you do well and when you don’t do well, we don’t do well. So we have a vested interest in how all of our clients do. So here’s our phone number to give us a call. You can call us or you can text us during business hours. It’s (830) 609-6986. And we serve nationwide customers nationwide. And you can go to our website, you can spell out ChristianFinancialAdvisors.com or you can abbreviate and just go ChristianFA.com and that’ll get you to our website. Well, that’s gonna do it for today.

      Shawn:

      That’s all. Thank you so much for joining us. God bless and until 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.

      24 min
    • 125 – The Basics of Estate Planning
      Click below to listen to Episode 125 – The Basics of Estate Planning
      The Basics of Estate Planning

      When was the last time you updated your estate plan?

      More episodes >>

      We discuss the basics of an estate plan, documents that should be included, and the importance of a financial power of attorney. How long has it been since you last updated your estate plan, or do you even have one? There are obvious considerations, like having a new child, and not-so-obvious reasons like your child just became a legal adult.

      No matter your rationale, it is crucial to keep your estate plan as up-to-date as possible, usually every 3-4 years. These topics and more are broken down into an easy-to-follow conversation to help you better understand the importance of updating and creating an estate plan.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Shawn:

      Welcome to another episode of Christian Financial Perspectives. Whether you’re joining us right now online, on one of our videos, or if you’re listening to us on one of the many podcast sites, thank you so much. We know you could choose to do other things with your time, so we’re glad you’re here virtually with us. Bob, what do we got for today?

      Bob:

      Well, Shawn, we have a subject that’s really important to me because I’ve seen people’s lack of it and we’re gonna be talking about estate planning. And so before we even start today, I have 14 questions and if we’re gonna get through the day, we’ve gotta go through these questions just really quick, one after another, but before you tune out thinking, estate planning, I don’t need any estate planning. I just updated my will three or four years ago, we’re gonna have some good questions for you. So we’re gonna start off right into that and we’re gonna get pretty deep into this subject. But I will tell you, I’ve seen people pass away without an estate plan many times in my career of over 35 years, 38 years, whatever it is now. It’s a lot. And it’s a tragic thing when someone doesn’t have their estate plan in order.

      Shawn:

      Now, Bob, this is something really doesn’t matter till you’re in your fifties, right?

      Bob:

      Yeah, no. You need it right now. Especially you, Shawn, with a couple young children that are minors. You’ve gotta think about all those things.

      Shawn:

      So for those listening or watching, the point in that is that just because you’re not in your fifties or sixties does not mean this doesn’t apply to you. And really, I would say if you’re married, if you’re married with kids, no matter what age you are, this is something very important to look at. So please don’t tune out.

      Bob:

      That’s right. So, in each one of these, we’re actually gonna say in the last three to five years, because I just want you to really think about that, Shawn. In the matter of time, I’m gonna do one and you do one. So we’ll just go back and forth. So, in the last three to five years, have you had any new children or grandchildren in your family?

      Shawn:

      Yes. Yes, I have. In the last three to five years, do you have any new family members through marriage? Like a son-in-law or a new daughter-in-law?

      Bob:

      In the last three years, have any of your children become legal adults now?

      Shawn:

      Yeah, it definitely makes a little bit of a change. In the last three to five years, did you obtain new assets or did you sell any?

      Bob:

      In the last three to five years, have there been any major health changes with anyone in your family?

      Shawn:

      That’s a good one. In the last three to five years, have there been any deaths or disabilities in the family?

      Bob:

      Number seven. So we’re nearly halfway through. In the last three to five years, has there been a death or divorce of a spouse in the family?

      Shawn:

      Number eight. In the last three to five years, have you remarried or both of you have children from your first marriage?

      Bob:

      That is a really important one. We’ll discuss that later. In the last three to five years, have you relocated to a different state? Think about that here in Texas when about half of everybody that lives here now is from California.

      Shawn:

      Number 10. In the last three to five years, have you bought any new real estate, especially out of your state?

      Bob:

      That’s correct. So you are under the probate laws of that state? So as an example, you know I love Colorado. If I were to buy a second home in Colorado, I’m under those laws up there.

      Shawn:

      Gotcha. There’s also that one about if you’ve moved to a new state, it’s important, too, because the laws there may be a little different.

      Bob:

      That’s correct. We’re in number 11 now, right? Okay, go ahead.

      Shawn:

      In the last three to five years, have you had any major financial changes like an inheritance or a good investment paid off?

      Bob:

      Number 12. In the last three to five years, have you started any new businesses?

      Shawn:

      Number 13, in the last three to five years, have you taken out a large life insurance policy?

      Bob:

      That creates an estate right there? I mean, a million dollar policy for somebody your age is, what, $25 a month or something? I don’t know. It’s cheap. And then the last question, in the last three to five years, has any oil or gas been discovered on land you own or any mineral rights that you might own as well? You may not still own the land, but you may own the mineral rights. So, there’s 14 really good questions, and hopefully as I was saying that, Garrett, I want you to make sure that each one of those questions goes up as we’re doing that so people see that. Because I will bet you that just about everyone would say, Yeah, in the last three to five years, one of those things has happened.

      Shawn:

      Probably one of those. And if you answered yes to any of those 14 questions, then you need to listen to the rest of today’s episode, and update your estate plan as soon as possible.

      Bob:

      So we’re gonna go into what an estate consists of, and basically it’s everything you can think of that you have control over. It’s gonna be your bank and savings accounts.

      Shawn:

      Retirement accounts.

      Bob:

      Brokerage accounts.

      Shawn:

      Annuities.

      Bob:

      Real estate homes, vacation homes, investment properties, any kind of land, farm, or ranch. Just think of anything else you can think of that comes up into real estate.

      Shawn:

      Life insurance benefits. So like that policy.

      Bob:

      Right. Other assets like art, antiques, collectibles, automobiles, boats, precious metals, business interests. Some of the boats I see down in Rockport are like a hundred thousand dollars boats. So, that’s a big asset right there.

      Shawn:

      Maybe we could throw in cryptocurrency and what’s the the other fungible tokens? What do do they call those again?

      Bob:

      I can’t remember them right now.

      Shawn:

      And then you’ve got NFTs. Thank you. And then you’ve got royalties from oil and gas, water, et cetera.

      Bob:

      And that’s all included in your estate as well. And that is something like, we wanna do some really good estate planning to get those oil and gas interests or royalty interests, things like that. Get that out of the estate and put that over in a partnership of some sort.

      Shawn:

      So the next part that you want to be thinking about is documents that should be part of an estate plan are number one, a will. Most people probably think of that. It must be probated, and the public can see it.

      Bob:

      That’s true. And I don’t like that.

      Shawn:

      A probate court decides the legal validity of the deceased person’s will and grants its approval, also known as granting probate to the executor.

      Bob:

      So I’ve seen some really sad cases here where wills have been contested. We had a client that had a lot of oil and gas interest, and the will was contested and it went on for 18 months, Shawn. And it just raked the family through the coals, as the old saying goes. It was really sad.

      Shawn:

      So not only that, but all the extra cost too. When it’s not taken care of ahead of time, now you have these assets of either your beneficiaries, your family, or from the estate itself just being wasted.

      Bob:

      But the will was contested, because it can be. So this is what I like about the second thing that we talk here. Now, a lot of wills have a trust built into them, but another document that needs to be a part of a estate plan is a trust. And you can go ahead and form that trust now. Have like a living trust. Why is that helpful, Bob? Because it makes your assets private. They don’t go through probate.

      Shawn:

      Gotcha.

      Bob:

      So when you put them in trusts, it’s a living document that doesn’t die when you die. So it’s completely private, and doesn’t have to be probated. And there’s two different kinds of trust. There’s a revocable trust, and there’s a irrevocable trust. Now, think of that revocable, irrevocable. When you think of revocable and irrevocable, what does revocable thing say to you?

      Shawn:

      Well, here’s my glass of water. Now, I’m gonna take it back.

      Bob:

      Exactly. That’s exactly right. But if it’s irrevocable, you can’t take it back. So why would you do an irrevocable trust? One of the things that life insurance is an example of that – to get it completely out of your estate and away from there. So number three of the documents that you need is…

      Shawn:

      A healthcare durable power of attorney allows another person to make healthcare decisions for you if you’re unable to do so.

      Bob:

      That’s right. And boy, that’s somebody you really wanna trust.

      Shawn:

      Right. Yes.

      Bob:

      And then along with that comes a living will that’s also known as a directive to physicians. We had to use this with my dad who had a stroke, and I knew that he was just gonna be a vegetable, and we let him go be with the Lord because I knew where he was going.

      Shawn:

      Now Bob, how’s that? Can you explain to our viewers and listeners a little bit of how is that different than from the healthcare durable power of attorneys? Is that, from my understanding…

      Bob:

      It just goes deeper. It goes deeper. It could be the healthcare power of attorney cannot be life ending like a living will can. So, the living will, like I have here, provides guidance for medical treatment to be withheld, like in the case of being brain dead.

      Shawn:

      So like if, for example, your further on in years and at your age, the resuscitation process may not really be worth it because of all the broken ribs and bruising and your quality of life may not…

      Bob:

      Well, I really think if brain dead or in a coma, those two things. There’s been a lot of news about that. I remember about 15, 20 years ago, there was a big, big case that was well known in the media about that because the person had been in a coma for three or four years, and they wanted to let them go, but they didn’t have a living will.

      Shawn:

      Gotcha. So, that living will allows you in your estate planning to dictate what are the certain conditions -like if you’re in a coma, you’re brain dead, to basically say you can let me go.

      Bob:

      That’s right. So I’ve given that, as you can imagine, in my own life, I gave that to Rachael. She can make that decision, and I can make that decision for her if there’s a prolonged coma, no more oxygen to the brain, completely brain dead.

      Shawn:

      And this is a really fun topic today.

      Bob:

      Yeah, it is. It really is.

      Shawn:

      But very important.

      Bob:

      Yeah, it is. And the last one of those estate planning documents that we mentioned…

      Shawn:

      Is the financial durable power of attorney. Now, this one allows another person to make financial decisions if you are unable to do so. So for you, think today, who can make financial decisions in your best interest in your absence?

      Bob:

      That’s right. So again, Rachael and I have each other for that. And then next in line actually we’ve got your wife, our daughter, Jenna, that can make those decisions. And you’re a part of that too. If we were in a major accident and we went into a coma and financially, things need to keep going. So, you can help us with those financial decisions and even pay bills for us.

      Shawn:

      Really think about that, for those of you listening, that it doesn’t necessarily need to be your oldest child. It doesn’t necessarily have to be one of your children.

      Bob:

      No, it doesn’t. Not at all.

      Shawn:

      Like in my family’s case, my brother is a doctor, a medical doctor, very smart guy. But considering I’m a financial advisor, my dad has me set as the one with the financial power of attorney and the executor of the will because that’s my background. That’s what I kno,. And so my brothers as the oldest, he’s like, Well, yeah, that makes sense.

      Bob:

      Well, and if you have three or four children, you’re gonna wanna pick the one that is the best with finances.

      Shawn:

      Find the one that’s frugal and will stick to what you want, and they’re gonna make good decisions.

      Bob:

      So, before we end today, we’ve given you a lot of information very quickly. So before we end today, there’s some more questions I want to ask. And then you’re probably thinking by now I need to update my estate planning, and if you’re thinking that, it’s probably true. If it’s been three to five years. I’m about to update mine, and it’s been about four years since I updated mine, but a lot of things have happened in the last four years. I mean the new grandchildren and we’ve had some assets that we’ve sold that were major assets in the form of real estate. So, who do you want to inherit your property? These are some things to think about as you’re putting this estate plan together, and what percentages do you want each heir to receive? It’s not just equal across the board. It has to do with how well they can handle it as well.

      Shawn:

      Yeah, yeah. I mean, just like when Jesus told the parable of the different servants when the master was going away and they didn’t all get exactly the same.

      Bob:

      And now, that’s funny you mentioned that because I believe in what’s called a pre inheritance experience, and that’s where you give say $5,000 to your three children. In our case we have three, but maybe or four if you give them each $10,000 or $5,000 and go back six months and see what they did with it. So that’s a pre inheritance experience to see did one just go spend it on junk and then another go invest it and maybe one invested half and went and spent the rest of it. You have three children, four children they’re all gonna operate differently when it comes to finances.

      Shawn:

      Yeah, yeah. And the second one is legal guardians. If you still have children under 18, who do you want to take care of them if both parents died at the same time?

      Bob:

      That’s a tough one.

      Shawn:

      Very important.

      Bob:

      How do you want your assets distributed? Do you want them distributed right away or slowly over time? Shawn, in my estate plan, even the one I have now but I’m about to update, it’s still that same way. We’re only actually gonna distribute 3% of our estate per year. So it’s gonna be distributed very, very slow. It would take 33 years if estate didn’t grow at all to distribute that estate out.

      Shawn:

      So basically, you want it to last longer. You don’t want it to just necessarily all go at once. And that’s also really important, too, like if say you did that pre inheritance or pre estate planning type test with your children, and one of them did very well, they were very responsible with it and the other two not so much. Well, having it set up to where your estate is distributed solely over time is actually to the benefit of the children who wouldn’t handle it as well. They don’t just spend it all and then it’s gone.

      Bob:

      We’ve made podcasts right here, remember we called it sudden wealth syndrome. So sudden wealth syndrome can really happen quickly, and this is why we see about 80% of inheritances spent the first three to five years what took mom and dad 35 years, 40 years to save up. So think about the maturity of your heirs, as well as the financial ability of each one. And I’ve mentioned that again, most estates are spent in two to three years.

      Shawn:

      And the next one, number four is, is professional asset management needed for your assets at your demise?

      Bob:

      This is where you bring in a corporate trustee, and this takes the pressure off. Maybe you have four children or you have even two and one is really good with finance, but the other one’s not. By having a corporate trustee, it takes the pressure off that child. And a corporate trustee has to go by the way the documents are written. How are your present assets held? Individually, joint tendency, the limited partnerships are set, et cetera. And this is real important for estate planning.

      Shawn:

      Number six, for retirement accounts, your IRAs, 401ks, TSP, 403b, there’s a lot of different ones. Have all beneficiaries been updated recently? And we say recently, again, within the last few years.

      Bob:

      We see this all the time. All the time. I mean this is such a simple thing, but people forget to do that. So who will be the executor or trustee of your estate? This is somebody you’ve really gotta trust a lot. And like I say, it doesn’t necessarily have to be a child. It could be somebody that’s really good with finances.

      Shawn:

      And then the eighth one, which is next to last, who will be the trustee and co-trustee in your absence if you have a trust? There are many advantages to having a corporate trustee like we mentioned earlier.

      Bob:

      And last, would you like a charity or charities to receive a percentage of your estate after you’re gone? We’ve set ours up where 20% of our estate is gonna go to a donor advised fund, and then that can be distributed out how the children want it. But we set it up for Christian charities or ministries, and we set it up with a Christian organization so that it can’t go to support something like Planned Parenthood that we do not believe in. So just think about the church you’ve attended for many years or a ministry that you love and support. Like my wife and I, we love Focus On The Family. We love Compassion International, and those are things that we want to continue to have support. So it all boils down to this, and we’ve given you a lot of information today, Is it…

      Shawn:

      Time to update your estate plan?

      Bob:

      Yes, and I have a feeling it is for most people. You need to update that every three to five years. If the answer is yes to that, we want you to give us a call at (830) 609-6986 or visit us on our website www.christianfinancialadvisors.com to see how our team here may be able to help you and get you in contact with a local Christian attorney that can help you out and that’s through our affiliation with Kingdom Advisors. We did a whole program on Kingdom Advisors, and we know a lot of Christian attorneys and we have an attorney that we work with directly that’s also a financial representative with our company that can help you if you’re in the state of Texas or California. I know he’s licensed there, too.

      Shawn:

      That’s right. Thank you so much for being here with us today. God bless. And until 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.

      20 min
    • 124 – 10 Keys to Retiring Well
      Click below to listen to Episode 124 – 10 Keys to Retiring Well
      10 Keys to Retiring Well

      A follow up episode on retirement and retiring well.

      More episodes >>

      Last episode, we covered “10 Pitfalls To Retiring Well”. In this episode, Bob and Shawn go a little more positive in discussing “10 Keys To Retiring Well”. Whether you are 20 years away from retiring or thinking about making this life transition within the next couple of years, this is advice for everyone of every age and life stage within this episode’s unique discussion.

      Retiring can be daunting, and while it may seem like there are one or two keys missing, it’s okay to feel that way! However, Christian Financial Advisors wants to take as much fear out as possible by helping you prepare for this life’s transition. So sit back and listen to discover some key takeaways you can obtain from this episode on “10 Keys To Retiring Well”.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Bob:

      Morning, Shawn.

      Shawn:

      Morning, Bob.

      Bob:

      Well, here we are, another week later, and last week was kind of tough as we talked about the 10 Pitfalls of Retiring Well.

      Shawn:

      And hopefully our listeners viewers came back for the positive side of that. 10 Keys To Retiring Well, but we did promise we would come out with this next week.

      Bob:

      If you’ve not listened to last week’s episode, we would invite you to go back and listen.

      Shawn:

      We’ll link somewhere up here.

      Bob:

      I don’t know where he does it.

      Shawn:

      You’ll click on that and you can go check out 10 Pitfalls to Retiring Well.

      Bob:

      That was kind of hard to make. So this is gonna be a lot more fun as we talk about the 10 Keys to Retiring Well, and so I wanna go back in for those that didn’t hear last week’s. And it’s just a good reminder of the scripture, the one scripture in the entire Bible, one,

      Shawn:

      That mentions retire.

      Bob:

      That mentions retire, and work is over 550 times in the Bible. So, there’s so much more emphasis put on work than retire. I look at retirement as something that was made up. It’s an American thing. It was made up by FDR during the Great Depression to get people out of the workplace so we would have more places for the younger crowd.

      Shawn:

      Okay. Well, let’s let’s start with Numbers 8:24-26, “This applies to the Levites. Men 25 years old or more shall come to take part in the work at the tent of meeting. But at the age of 50, they must retire from their regular service and work no longer. They may assist their brothers in performing their duties at the tent of meeting, but they themselves must not do the work. This then is how you are to assign the responsibilities of the Levites.”

      Bob:

      And that’s the key part I think, in there is says they may assist and like I said last week, and I say it again this week that this is looking at like a man that’s over 50. Now, he can become a mentor to the younger generation.

      Shawn:

      Whereas I remember you said not do the heavy lifting.

      Bob:

      Yeah. Which is true when you come over. By the way, Shawn’s my son-in-law, just so y’all know. So when he comes over to the house…

      Shawn:

      Bob has a list of here’s all the things I need you to carry and move. And of course, Rachael might have some stuff too.

      Bob:

      And I tried to do some of that heavy stuff the other day and nearly hurt myself.

      Shawn:

      That’s okay. He feeds me.

      Bob:

      We do feed you well. Okay. So I think it’s important, too, to go over just a little bit of the stats that we went over last week again, and that is that the average retirement age in the US is now 63. Most people don’t realize that that. For the longest time it was 65. It’s gotten younger. 50% of adults that are aged 55 or older are retired. And I didn’t know that. I mean, that’s a big number.

      Shawn:

      For 55 and older, I would’ve thought it’d be lower.

      Bob:

      Again, like I said last week, people in my graduating class, 1980, I know that’s way back there, but…

      Shawn:

      How many years?

      Bob:

      We don’t want to go there, do we? But I know a lot of them are retired. And the average life expectancy for men is 76.1 years. I thought it was higher. Being 60 now, I’m like, well.

      Shawn:

      That’s just average.

      Bob:

      This is why I like to go to our family cemeteries and see all the men. They all lived into their nineties, nearly. So, I feel good. I got it in my genes.

      Shawn:

      This probably didn’t take into account all that good Texas barbecue that keeps you young.

      Bob:

      And Mexican food. And sweet tea.

      Shawn:

      That’s right. Those are the secrets to a long life. At the very least, it’s a very enjoyable life, even if it doesn’t last long.

      Bob:

      The average life expectancy for women is 81 years now. I can see that because there are so many that live longer than that today. 50% of adults. So, this kind of looks at it. And I looked at this and said, well, that means that 50% of the adults that retire today at around 55, Shawn, based on even just these life expectancies, have more than 20 years of retirement.

      Shawn:

      Some of them, 30 to 35 years.

      Bob:

      Which are many. I meet some. So, what we’re gonna do with all that time, I believe, really matters. So, let’s look at the 10 Keys To Retiring Well.

      Shawn:

      And 80% are not financial.

      Bob:

      That’s true. That’s true. True.

      Shawn:

      Number one, keep God at the center of your retirement. We’ve got a scripture here. Matthew 6:33.

      Bob:

      Oh, that’s a well known one.

      Shawn:

      Yep. Well for those who might not know it or have it memorized. “But seek first his kingdom and his righteousness and all of these things will be given to you as well.”

      Bob:

      This is Christian financial advisors. Christian Financial Perspectives. I believe it’s very important that when you retire, God has got to be at the center of that. And you’ve got more time now maybe to read his Word and to be a mentor to others. That is so important to keep God at the center, and not let ourself be on the throne, but put God on the throne. Okay. Number two I think is very important for a key to retiring well is having a written plan. We’ve gone over goal setting here. Having a written plan of your day, weeks, and months in advance of retirement, like a blueprint.

      Shawn:

      Yeah. Well, people talk a lot about their 3 year, 5 year, 10 year goals. Almost always it’s about planning for your family. It’s your career. Like, well, where do you see yourself in five years? What do you see? But the same is true for when you retire that you should have a plan. Like, where do you want to be in the next five years? In the next 10 years? What is the goal? Because if you don’t have a plan… I don’t know.

      Bob:

      Shawn, as I was writing this, it was when I was on vacation in Colorado back in August, and so many of these came to me as I had some extra time to be thinking about, okay, what am I doing with this? And that third one to retiring well, a good key is finding something of significance to do that helps others where it’s just not all about you.

      Shawn:

      Church. Your church, ministry, nonprofit. I think you got an example for us.

      Bob:

      Well, just Habitat for Humanity, because I’m such a handyman. I love doing handyman things, or mentoring a grandchild. We’ve got some grandchildren.

      Shawn:

      Good luck with my son.

      Bob:

      I love your son. He’s all over the place, though. He’s got a lot of energy. Or, mentoring a young person without a parent. That is a lot today. Romans 12:5-8, if you’ll read that for us.

      Shawn:

      Sure. “So in Christ we,, though many form one body and each member belongs to all the others. We have different gifts according to the grace given to each of us. If your gift is prophesying, then prophesy in accordance with your faith. If it is serving, then serve. If it is teaching, then teach. If it is to encourage, then give encouragement. If it is giving, then give generously. If it is to lead, do it diligently. If it is to show mercy, do it cheerfully.”

      Bob:

      That’s a great scripture that goes with that. Something of significance.

      Shawn:

      We all have gifts.

      Bob:

      We do. And they’re different. Not all of us are gonna be teachers. Not all of us are going to be back in the kitchen cooking.

      Shawn:

      Well, it kind of reminds me that other part…

      Bob:

      Rachael will be, my wife and that’s what she does. She loves cooking for people.

      Shawn:

      And she blesses people through that too.

      Bob:

      Yeah, she does. So we just gotta find what that significant thing is that we feel that God wants us to do and to pray about that and to go to his Word and look at his Word and let his Word show us. Oh, next one. I know that’s important with you, Mr. Crossfit. Okay.

      Shawn:

      Exercise daily. But again, I think we talked about this last week. That if all of a sudden I had no job because I’m retired and I didn’t have a plan, like we were just talking about it, it’d be a lot more difficult I feel like for me to keep exercising. Like now, I have to get up at a certain time because I know if I don’t exercise, I’m not gonna be able to keep up as much at my job. I’m not gonna be able to keep up with my kids. So whether it’s walking, jogging, any kind of aerobic activity that just keeps your heart going. You could do strength training, yoga, golf, tennis, pickleball seems to be pretty popular now.

      Bob:

      Pickleball is very popular. Golf of course with a lot of guys my age is popular. Okay. So yeah, just get out and go. Cause we saw that was one of the pitfalls to retirement is a sedentary lifestyle.

      Shawn:

      That’s right.

      Bob:

      Don’t you love this one, number five.

      Shawn:

      Don’t go it alone. Have a meaningful daily interaction with other people. Don’t become a hermit.

      Bob:

      Get out of that house.

      Shawn:

      We are social creatures, even the introverts. Like I know my wife is more of an introvert, but there is still a minimal need. Maybe her tank doesn’t need as much to fill when it comes to other people, but there is still that part of her.

      Bob:

      Well, and she’s a chip off the old block of her mom. So mom’s the same way. But she has that wonderful group of ladies that they just do life together. Number six, take a part-time position somewhere, maybe using those skills that you’ve learned over your lifetime. I see this with a lot of people I know when they’ve retired. They’ll go back. Like I say, I’m not gonna retire from this. I love doing this, but you know where I’d be working part-time if it wasn’t for this.

      Shawn:

      McCoys or Lowe’s.

      Bob:

      Lowe’s or Home Depot, one of those places. So, I think that keeps you engaged, too. And that’s a really good key to retiring well. Number seven.

      Shawn:

      Number seven is learn new skills. You’re never too old to quit learning.

      Bob:

      That’s right. Number eight. Don’t check out of living just because you’ve checked out of making a living.

      Shawn:

      That’s a good one. Yeah. And the next one have a good financial plan that covers everything possible that could and will happen.

      Bob:

      It will. So it’s maybe not happening right now, but it will. And you need to have a good plan, a blueprint, in place. And number 10 is you also need a good investment plan in place to get you through inflation like we’re experiencing right now like nothing I’ve seen in 30 years. Those volatile up and down markets and unexpected withdrawals you need to take. So, you need to really have a good – that’s the financial part of it. 80% is non-financial, but 20% is financial when it comes to the keys to retiring well. Yeah. And that’s why it’s so important that you have somebody to help you along that journey as we always say. In Ecclesiastes, “Two are better than one.” And, “Plans fail for lack of counsel,”

      Shawn:

      “But with many advisors, they succeed.”

      Bob:

      That’s right. that’s one of my favorites. So just because you retire doesn’t mean that you need to check out from life, and God offers you a life of abundance and he wants that for your life, even when you’re retired. The main thing I want you to take away from this too, is that don’t think of retirement as a self consumptive lifestyle, but instead think of it as, how can I serve others like Christ has called us to do.

      Shawn:

      And I love that, Bob, because if you think of retirement as well, what am I gonna do for myself, it’s just all focused on yourself. That’s not what God created us to be. But if anything, look at it as you have now earned the reward of having the time to do the things that maybe you couldn’t make a career out of it, but now this is something where you can give back to people. And if you’ve planned well for that retirement, from the financial side, now you can do something that maybe doesn’t pay you anything.

      Bob:

      That’s right.

      Shawn:

      It is something needed. It’s something of value and giving back to the next generation. Help others.

      Bob:

      That’s a key.

      Shawn:

      That’s what Christ would do.

      Bob:

      That’s a key to retiring well. We want to help you retire well. We wanna help you end that financial part of it, and take a holistic part and add all the rest of this into that. If you want, give us a call at (830) 609-6986, or you can text during business hours. And you can also find us on the web at Christian Financial Advisors, just like what you see written here, www.christianfinancialadvisors.com, and we would love to help you during your retirement years.

      Shawn:

      Thanks for joining us today. 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
    • 123 – 10 Pitfalls To Retiring Well
      Click below to listen to Episode 123 – 10 Pitfalls To Retiring Well
      10 Pitfalls To Retiring Well

      Watch for these pitfalls when you are ready to retire.

      More episodes >>

      In this episode, Bob and Shawn introduce some of the common pitfalls that occur that may keep you from retiring well. Many of us look forward to retirement, but when the time actually comes, we don’t know what to do with all of the extra hours in the day. It can be hard to face retirement, especially when it comes too early, and we have wrapped our entire identity around our career.

      Here are 10 pitfalls to watch out for when it comes to retiring, including factors like retiring too early and lack of purpose. So, tune in to learn about the “10 Pitfalls to Retiring Well”.

      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

      [INTRODUCTION]

      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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

      [EPISODE]

      Bob:

      Well, Shawn, this is going to be a interesting program. As I was putting it together, one of the reasons I did is because I was talking to a client that’s retired and he has found a ministry and his ministry is to retired people. And, he told me many things about retirees and the pitfalls of retirement. So today’s program is going to be called the pitfalls of retirement. And next week we’re gonna go over the keys to a successful retirement.

      Shawn:

      All right. So sounds like a good two parts.

      Bob:

      Today’s gonna be kind of a little bit rough because we’re gonna go into all the pitfalls of retiring well, and I want people to understand that retirement’s not all it’s cracked up to be. And I speak with a lot of retirees that have told me these very things, and there’s gonna be 10 things that we’re gonna go over, but nine of them don’t have anything to do with finance. So I think that those that are about to retire – maybe if someone’s younger and your parents are about to retire – this is something they ought to listen to because there’s a lot of good materials that are in here. I wrote this as I was in the mountains of Colorado on vacation for a couple weeks and really soul searched as I wrote this program. So there’s a scripture about retirement in the Bible. There’s one scripture about retirement, only one in the entire Bible. Yet, when it comes to work, there’s over 500 scriptures. So I think God emphasizes work a lot more than retirement.

      Shawn:

      It does. I mean, just based on the math. One time for retirement, 550 times for work, according to the NIV.

      Bob:

      And other versions too. Yeah. And as you read this, I think it’s important for people to understand the context of this. And I will explain a little bit about that after you read this. Go ahead.

      Shawn:

      All right. So we’re gonna be reading Numbers 8:24-26. “This applies to the Levites. Men, 25 years old or more shall come to take part in the work at the tent of meeting. But at the age of 50 , they must retire from their regular service and work no longer. They may assist their brothers in performing their duties at the tent of meeting, but they themselves must not do the work. This then is how you are to assign the responsibilities of the Levites.”

      Bob:

      The context that this is in is that you’ve gotten older and you’re not gonna be doing the heavy lifting anymore. But you’re still going to be assisting and being a mentor to the younger generation.

      Shawn:

      So you still have a purpose, a duty. You still have a duty, just not the same type of roles or responsibility.

      Bob:

      And Garrett, if you’ll pop that scripture up one more time for me and see where it says performing their duties. So that’s important that they’re performing their duties at the tent of the meeting. So Shawn, I looked up and did a lot of statistics on this. And what do you see that the average retirement age is in the US now?

      Shawn:

      It’s now 63. Not 65. It’s now 63.

      Bob:

      That’s interesting. Now I turned 60 this year in June, but Shawn, don’t worry. Audience, don’t worry. I don’t plan on retiring. My wife says no way anyway.

      Shawn:

      Oh yeah. I’ve known you long enough now to know you would never retire, at least not in the traditional sense. I mean, you might, like the Levites, you might shift your focus a little bit. But I could never see you just playing golf or something all the time.

      Bob:

      Yeah. Go ahead and read those other two there.

      Shawn:

      According to a pew research center analysis of the most recent official labor force data, as of the third quarter 202. It’s a mouthful. 50.3% of US adults aged 55 and older said they were out of the labor force due to retirement.

      Bob:

      Did you know it was that high?

      Shawn:

      No.

      Bob:

      Would’ve never figured it was that high either.

      Shawn:

      Not for 55 and older. I mean, I could have seen closer to 65 and all.

      Bob:

      But Shawn, I’m 60 and so all my high school graduates, I’m seeing a lot of those that graduated from high school. They have been retired a couple years now.

      Shawn:

      Hmm. Interesting. You want me to read the next one?

      Bob:

      You got it.

      Shawn:

      All right. The next one is the average life expectancy for men today is 76.1 years, women 81.1 years, for 50% of adults that retire around 55. That’s more than 20 years in retirement. And many of those will live even longer another 30 to 35 years into retirement. What we do with all that time matters.

      Shawn:

      It sure does. What are you gonna do? I mean, you don’t wanna retire from life. So here’s the 10 Pitfalls To Retiring Well. And again, a lot of this stems from talking to an individual that that is his ministry and he really helped explain this, too. And number one is loss of a daily routine – going from everyday activity to a more sedentary lifestyle. Getting up in the morning, getting in your car, going to work, seeing people, that routine is gone. He described one thing to me and we live in a military area, right. San Antonio has all these military bases and he described something to me that he’s actually heard a general tell him. He said, I went from one day – and Colonel or Lieutenant Colonel, whatever you may be in the military – I went from one day having a staff under me and having a purpose to the very next day, the most important thing was taking my dog out for a walk and picking up behind it. I didn’t wanna it at first.

      Shawn:

      No, no, no. I think we all understand what you were saying.

      Bob:

      So you think about that. You go from leadership, all of a sudden, to what’s my purpose. And after a couple weeks of that, your purpose starts to move down. You start, like, I gotta do something.

      Shawn:

      That makes a lot of sense. I mean, whether you’re working somewhere where you have to commute or even people – because a lot has changed – there’s a lot of people that work at home. I mean, my wife and I’s new neighbors, the guy works from home because he’s a tech for a financial institution and just not having that anymore. Like, well, why do I need to get up at the normal time? I mean, what am I gonna do today? I can definitely see that.

      Bob:

      Which goes to that second one.

      Shawn:

      So the second one, lack of physical activity. I see that too. Like for, I had to switch recently to working out early in the – well, somebody you may laugh when I say early at 5:50. Like, “I’ve been up for two hours at that point.” But for me, I had to switch due to just some stuff with my son and so I would not get up to work at 5:50 AM if I didn’t have to be at work at 8.

      Bob:

      So, one of those things that you gotta be careful of is just a sedentary lifestyle. That third one is a lack of mental stimulation.

      Shawn:

      I could definitely see that too. I mean, we’re constantly learning in this industry, and we’re not alone. Obviously, there’s a lot of industries you have to keep learning, but that purpose of while I’m at work and I wanna learn, I want to grow. We’re trying to be better at my job, trying to do better at what we’re doing for our clients, that kind of builds in that mental stimulation. All of a sudden you remove the work and well, I mean, maybe I can do Sudoku. I don’t know, but…

      Bob:

      Now, this fourth one is interesting. This is one of the ones that my friend told me that, maybe it’s number one, is possible boredom. Just not knowing what to do. Now, next week, remember, we’re gonna talk about the 10 keys to a successful retirement.

      Shawn:

      So there’s a positive side to this.

      Bob:

      There’s a positive side.

      Shawn:

      We’re covering the pitfalls right now. And stay tuned for next week.

      Bob:

      Yes, exactly. Number five. Oh, can you see that one?

      Shawn:

      Lack of self identity. I know a lot of guys right now that if they didn’t have their job, I don’t think they would know who they are.

      Bob:

      And you know what’s interesting. You said a lot of guys I’ve noticed that this maybe applies more to men than women. Yeah, it does. Because I know a lot of women, when they’re older, they get more involved with other women. Just like Rachael, my wife, she’s got her group of women and they go do things everywhere. They’re going all the time.

      Shawn:

      Well and a lot of it’s just been kind of our culture. I think that, especially for men, your identity can so easily get wrapped up in your career, your job, it’s like, well, if you’re successful in your career, like you don’t say, oh, I’m a father of two and I’m involved in my church. Like what do you do? Oh, I’m a lawyer.

      Bob:

      That’s exactly right. Men. We used to say that. I was involved in the Family Life Ministry for a long time, and that’s what guys always do. The guys go, what do you do?

      Shawn:

      Right. Not who are you? What do you do?

      Bob:

      What do you do? And it comes back to work. So when you retire, you don’t have that identity anymore. So, that lack of self identity. Number six is the lack of social interaction with other people. You’ve gotta get out, and be careful of that. You can become lonely.

      Shawn:

      Well, that goes even to right now with people working from home, that’s also the big thing that, yeah, there may be a lot of advantages to employees and to employers, but just like in retirement, you’ve gotta be careful. If you’re all of a sudden going from being in an office five days a week, 8-5, and now you’re working from home and you have almost no social interaction, you can be lonely now. Not just in retirement.

      Bob:

      Yeah, exactly. Well, I think that’s why we’re returning back. Not all the way to the office, but like with me, yeah. I do a lot of reviews and things from home through Zoom, but then I come to the office a lot, too.

      Shawn:

      I agree.

      Bob:

      Number seven.

      Shawn:

      Trying to find happiness and self-indulgence.

      Bob:

      We see a lot of that in retirees. And this is something that I really did a lot of soul searching on and found out that they’re trying to find happiness through traveling everywhere or through golf or through materialism and buying more things. And that’s not going to create happiness. The fruits of the spirit love, joy, peace, patience. Say it – just joy. There’s a difference between joy and happiness.

      Shawn:

      Right. Happiness is more of the feeling that you have in the moment. And joy is something that will, for one, it comes from God, it’s an attribute of God himself.

      Bob:

      So I’m gonna give you the one key. I’m not gonna give you all ten. I’m gonna give you one key until next week. And that number one key is being in God’s plan. Okay. All right. Number eight is a lack of meaningfulness tied to a real purpose in life. Like, why am I here now? This heads into number nine, that lack of purpose is depression. Did you know that? Did you know that retirees, almost one third of retirees from our research, are depressed.

      Shawn:

      I didn’t know the statistics, but that also does not surprise me at all. I mean, with all the things that we’ve already covered, I would be surprised if we didn’t see a lot of that. I mean, frankly, the fact there’s a third, that actually kind of surprises me that it’s not higher.

      Bob:

      Did it? Really? Because I even thought, wow, a third is a lot. That’s a lot of retirees that are having symptoms of depression and that’s dangerous. I wanna emphasize…

      Shawn:

      I would think, if anything, it’s probably a third that they’re estimating, but it’s also because of how many people actually seek help and recognize it.

      Bob:

      So it could be.

      Shawn:

      Cause there’s a lot of people I think that suffer from depression that don’t realize that’s what the issue is. It’s like, oh, I just need to focus on more positive things, but yeah.

      Bob:

      I have in here, it’s very important to seek help immediately if you think this is going on.

      Shawn:

      Or if you have a loved one that is exhibiting those signs. Like get help for them. That’s not something joke around with now.

      Bob:

      We’ve mentioned nine things so far that are non-financial.

      Shawn:

      We gotta have at least one though.

      Bob:

      We gotta have one. And so, that is lack of retirement funds to withstand inflation, market fluctuations, and major unexpected expenses. So, not having a good financial and investment plan that updates automatically is one of the reasons, a pitfall of retirement.

      Shawn:

      When you say updates automatically, what do you mean by that?

      Bob:

      Well, a system that is looking at your assets every single day and recalculating to where are you now? And we’ve just gone through a bear market, as we know. And so far, knock on wood, I’ve not had a single client that this bear market has affected their long term retirement, but some people it could.

      Shawn:

      Well, a big part of that would be people who are panicking in the middle of that bear market and say, oh, I’m gonna move into cash or I’m gonna move into precious metals of some kind, something like that. And then they miss out on when the markets do start to recover. By the time they move back into the markets, they already lost most of that opportunity.

      Bob:

      And they didn’t go to a financial planner advisor before, too. So they didn’t really count the cost and understand what they do need for retirement going into retirement. That’s a major pitfall for the financial side of it. What do I have from Luke 14:28 there.

      Shawn:

      “So suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it.”

      Bob:

      Amen. Amen.

      Shawn:

      That’s a good retirement verse.

      Bob:

      So the takeaway here is to properly plan to fund your retirement for years and find something meaningful to give you a purpose during retirement. It could be working with a non-profit. I love Habitat for Humanity. You can guess why, because I love building. Or perhaps something you’re passionate about that you can help train the next generation, like we mentioned in the beginning in Leviticus. So, just don’t fall into that trap of thinking you’re gonna be on vacation every day. That’s that’s a trap that leads to nowhere.

      Shawn:

      I mean, there’s nothing wrong with traveling and vacationing, but just don’t don’t let that be the primary thing that you do, your purpose, for all of the reasons we mentioned.

      Bob:

      Yeah, exactly. So we this 10 pitfalls of retirement has helped you. Of course, next week, we’re gonna have the 10 keys to overcoming that. I think it’s important that you watch both of these together. So, if you see this week and it’s coming out, wait. You gotta see the next one that we’re gonna be doing called the 10 keys to overcoming the 10 pitfalls of retirement and retiring well.

      Shawn:

      So, this is our cliffhanger episode.

      Bob:

      It is, kind of.

      Shawn:

      You gotta come back next week to find out how it ends.

      Bob:

      So next week is gonna be 100% positive about those 10 Keys To Retiring Well. So, we invite you to come back next week. If you have any questions about today, or you’re looking for a Christian financial advisor, please give us a call at (830) 609-6986 or visit us on the web www.christianfinancialadvisors.com. Thanks for listening.

      Shawn:

      Thanks and have a great day.

      [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
    • 122 – Gold Fever. Is It Worth It?
      Click below to listen to Episode 122 – Gold Fever. Is It Worth It?
      Gold Fever. Is It Worth It?

      Short summary about the guest or topic.

      More episodes >>

      What comes to mind when you hear the word “gold”? For most of us, it creates a sense of wealth, stability, and purchase power. Gold was once considered a source of wealth and currency in the pre-global/pre-digital world economy (The Roman Empire and Biblical times) when it was readily accepted as a form of payment. However, times have changed, and the amount that gold is really worth – especially compared to the irreparable damage gold mines cause – just doesn’t seem to be worth it.

      While gold might have been a good investment in the past, it is actually not great for long-term investments. Why? Bob and Shawn cover seven reasons why gold might not be a wise investment. This includes:

      1. It’s no longer used as a currency
      2. It has historically low returns
      3. It produces nothing nor pays any interest or dividends
      4. It is very environmentally hard on God’s creation
      5. It is expensive to buy and sell because of high commissions
      6. There are high taxes on gains
      7. It can’t compare to the long-term returns of a well-diversified portfolio of stocks and bonds

        8. 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

        [INTRODUCTION]

        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 host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

        [EPISODE]

        Shawn:

        Welcome to another episode of Christian Financial Perspectives. Bob, we’re at episode 122 now. I can’t believe it.

        Bob:

        We’re getting up there in the numbers. Definitely.

        Shawn:

        Yeah, for sure. As of now we are recording gold fever. Is it worth it? It’ll be a fun topic, right, Bob?

        Bob:

        Well, I came up with the outline for this because you are telling me all the time, Shawn, that you get these phone calls about gold constantly, and should I buy gold or not And so I have some opinions on that.

        Shawn:

        Yes, you do.

        Bob:

        And I thought, yeah, a great title for today’s podcast would be “Gold Fever. Is it Worth It”? And so we got a lot to talk about in regards to gold. And I think that you’re gonna find this very informative, and should you buy gold or not? Is it a good investment?

        Shawn:

        It would be very helpful when I get those calls, and instead of having to pretty much answer the same thing repeatedly, I can say, well, I could explain it to you, but Bob and I actually recorded a full length episode on gold. Is it worth it?

        Bob:

        So I think it’s important first to look at the history of gold because gold has quite a history.

        Shawn:

        It’s been around for a while.

        Bob:

        It has, I mean, you go all the way back to the Roman days and biblical days. I did some searching this morning on my Google search and with the Bible Gateway. I love that website and have loved it for years. You can put in the word “gold” and you’re gonna come up with more than 440 scriptures, depending on which version, but it all is around that that many times where gold appears in a scripture. Gold’s been around a long time. It’s mentioned in the Bible many, many times. I was looking, we’ve got some scriptures to share here.

        Shawn:

        Well, before we share those scriptures, just to kind of summarize the history, gold was once considered a source of wealth and currency in the pre-global/pre-digital world economy, the Roman empire and biblical times, like you already mentioned, and at that time it was readily accepted as a form of payment.

        Bob:

        That’s right. You had gold coins and silver coins. Yeah. It was the currency of that day.

        Shawn:

        And for a long time it was. So, 440 times, Bob. Now, are we gonna cover all of those today or did you select?

        Bob:

        I just picked a few. I picked a few. Why don’t you go over those first two I have there.

        Shawn:

        Sure. Genesis 13:2, “Abram had become very wealthy in livestock and in silver and gold.”

        Bob:

        Didn’t mention money, did it? It mentioned silver and gold.

        Shawn:

        Exodus 25:28, “Make the poles of Acacia wood, overlay them with gold and carry the table with them.”

        Bob:

        That was for the Ark.

        Shawn:

        I guess to make it beautiful and add more value to it.

        Bob:

        And Solomon accepted. I mean, he had more gold than anybody. And Solomon, who was considered one of the wealthiest men in the whole entire Bible, if not the wealthiest man to ever live on the face of the earth.

        Shawn:

        Right. He was up there.

        Bob:

        The weight of the gold Solomon received yearly was 666 talents.

        Shawn:

        That was 1 Kings 10:14.

        Bob:

        It’s interesting. They got 666.

        Shawn:

        How much does the talent – that almost seems like it’s not how many pieces, but the weight or the size of it. I mean, do you have any idea?

        Bob:

        With inflation, I’m not sure, but I’ve heard a talent, in biblical times, could be worth as much in today’s dollars as much as 25,000 to 30,000 to 100,000. 1 King’s 10, “The weight of the gold”… Okay, we already read that one. So 2 Chronicles 1:15, “The king made gold and silver as common in Jerusalem as stones.” You think about that. If it’s as common as rocks back then, it was everywhere. “And Cedar as plentiful as Sycamore Fig trees in the foothills.”

        Shawn:

        No, I think that one is technically more of a literary device, I guess, if you will. That it wasn’t obviously as common as stone. It was just talking about how wealthy Jerusalem had become.

        Bob:

        Yes. And how it was used as a currency – media in an exchange.

        Shawn:

        Psalm 115:3-4, “Our God is in heaven. He does whatever pleases him, but their idols are silver and gold made by human hands.”

        Bob:

        Isn’t that interesting? You think about the golden calf, King Neb, Nebuh…

        Shawn:

        Nebuchadnezzar. It also helps if you say it fast.

        Bob:

        These long words get tongue twisted. He made images of gold, 60 cubits high, 60 cubits wide. here was a great song by a famous singer from way back. You may not have remembered him, but my wife and I loved him. His name was Russ Taff. It was a song,” I’m not gonna worship your idols,” you know? 60 feet. I mean, he talked about that. How wide and how high it was.

        Shawn:

        Gold. There’s an infatuation with gold.

        Bob:

        There really is.

        Shawn:

        It was considered wealth in the Bible. Like you already mentioned, there were items built of gold to worship. Then in modern times, right here in America. We had the gold rush. Which is a little bit kind of where the title comes from for today. We had entire towns built overnight looking for it. Gold created unbelievable greed to get it, destroying whatever and whoever was in its path. More lives were destroyed by it than those very few that benefited from it.

        Bob:

        Yes, absolutely. It was. And Rachael and I, we’re going to Colorado next week. Of course, by the time this comes out, we’re already back, but we’ve visited all the different gold mines in Colorado. They’re kind of fascinating and fun to see, and you can see all the gold towns, but they’re not there anymore. None of ’em are there.

        Shawn:

        There’s maybe a few of them that actually turned into towns or cities today, but most of ’em are deserted.

        Bob:

        And the destruction and the path that they’ve left is sad because it just has destroyed God’s creation, and it’s still destroyed. All these years later, you can see the devastation it did to the landscape and I always say, if you love the Creator, take care of the creation. Gold definitely doesn’t do it, and it still doesn’t do it today. So, another thing. You saw the last point I wanted to make today about the gold before we really get into is how’s it used today and is it a good investment? The stuff is so plentiful in heaven, it’s used the same as asphalt is here, right? I mean, the streets are made of gold in heaven is what it says in the Bible.

        Shawn:

        Shows how much God really values it.

        Bob:

        And the danger of it because of the greed it can create.

        Shawn:

        So today, it is no longer used as a currency.

        Bob:

        It’s not, is it?

        Shawn:

        Nope.

        Bob:

        Today we live in that global economy and it’s not based on gold anymore. Now, is that a good thing or a bad thing? You’ll have different arguments behind that.

        Shawn:

        There’s pros and cons, for sure, but it was kind of an inevitable thing, I would think, because with the way our population has grown and just you have your modern fiscal policy. Again, pros and cons,

        Bob:

        The weight of it, carrying it in your pocket.

        Shawn:

        But it was kind of an inevitable thing that at some point we would grow past even needing to base the currency in gold. Love it or hate it, but that’s where we are.

        Bob:

        And to get it to convert gold to a currency that you can use, there’s very high transaction cost to do that.

        Shawn:

        That is very true. If you’re actually wanting to go back to gold, like trade, buy physical gold.

        Bob:

        And the gold standard – Britain stopped using it back in 1931, the US followed that just a few years later in 1933. And we abandoned the complete system of using it in 1973. So, it’s been many years that gold has not been used as a currency. And the only way to use it as a currency is you have to convert it to a currency.

        Shawn:

        Which carry those high transaction costs, whether you’re buying it or selling it.

        Bob:

        That’s right. So, let’s talk about the returns of gold. I think people will be surprised to find that.

        Shawn:

        So the returns aren’t high?

        Bob:

        That’s nearly a joke.

        Shawn:

        The point is that it has historically low returns.

        Bob:

        It does.

        Shawn:

        You can look at it yourself. There’s a a hundred year chart for historical gold prices from macrotrends.net. But the long term returns for gold are minuscule at best, with less than a 1% annual average return for those that have held it over the last 10 to 20 years. In 1980, gold was selling around $2,500 an ounce. 10 years ago, it was around $1,700.

        Bob:

        So stop right there. No, wait a second. Did you just read that? 1980…

        Shawn:

        $2,500 an ounce.

        Bob:

        And 10 years ago?

        Shawn:

        $1,700 an ounce.

        Bob:

        What does that sound like?

        Shawn:

        Deflation.

        Bob:

        It sure does.

        Shawn:

        As far as the value of the gold itself. As of the time of making this episode, gold is around $1775 an ounce. Still not back up to the $2,500 ounce like it was in 1980.

        Bob:

        And if you go back 10 years and you look at the difference between what it was 10 years ago and even today, the total return, this is not an annual return, okay. This is the total return. It’s 4.5%.

        Shawn:

        Wow. So in other words, 0.45% annually, which is terrible.

        Bob:

        If you’d have bought it 10 years ago. So the return of gold has not been good at all over the long run. Maybe the short run, but not the long run. Also, go ahead.

        Shawn:

        Gold produces nothing, nor pays any interest or dividends.

        Bob:

        Can I say that again? Gold produces nothing! It doesn’t pay any dividends. It doesn’t pay any interest.

        Shawn:

        And unlike stocks and bonds, a purchase of gold is not an investment in any company’s income or growth. Gold, as we said, doesn’t pay any dividends or interest.

        Bob:

        Completely. Just, I don’t understand that, but, I mean, I do understand it. It’s just metal is all it is. It’s very environmentally hard on God’s creation. Gold is, without that, one of the world’s dirtiest industries. As I researched this, I was amazed at what I found. Gold miners use cyanide and generate massive amounts of waste and leave long lasting scars on landscapes and communities. And it’s been linked in other countries to social injustice and human rights violations.

        Shawn:

        Man, just go to Colorado or anywhere that there were old gold mining areas and you can see what we mean by all these scars that they leave on the landscape. There’s a website, earthworks.org, they have information on dirty gold, and then there’s also theworldcounts.com. They have information on environmental effects of gold mining.

        Bob:

        Yeah. It really gets into detail about all the areas and what they use. And it was amazing. Here’s my gold wedding ring and just to make that, how much waste was produced to make that? Waste that now has toxins in the soil. And again, this is God’s creation.

        Shawn:

        And it’s sad too, Bob, because it’s not so much that the practices have changed. It’s just gotten larger and for the most part, moved away from say the United States to other less developed countries, which makes it even worse because it takes advantage of the local governments and the people even more.

        Bob:

        Next, gold is expensive to buy and sell because of high commissions. In my research, I found the lowest, lowest commission was around 1% to 2% with an average around 5% to 6%. There’s the professional…say that word.

        Shawn:

        I’m not even sure how to say this, but I’ll try it. Professional numismatic.

        Bob:

        Numismatic guide. And the average commission for one ounce American Eagle or Maple Leaf Coin is about 5% to 6%. Now, remember we went back the last 10 years. What did we see the rate, the total return?

        Shawn:

        4.5% for 10 years or little less than 0.5% a year.

        Bob:

        But think about the 4.5%. If the average cost to buy and sell was 5-6%, if you own it for 10 years…

        Shawn:

        You still haven’t even made your money back.

        Bob:

        You haven’t made any because of buying and selling it. So, it’s the high expense of it. What’s this next one, Shawn?

        Shawn:

        Higher taxes on gains.

        Bob:

        How about that one?

        Shawn:

        I actually didn’t know this one.

        Bob:

        I did. I’ve heard this many times, but go ahead.

        Shawn:

        The US Internal Revenue Service, IRS, categorizes gold and other precious metals as collectibles, which are taxed at a 28% long term capital gains rate. Wow. Gains on most other assets, for comparison, held for more than one year are subject to 15 to 20% long term capital gain tax rates. So not only is the return abysmally low at 4.5%, in total, over a 10 year period. And there’s a 5% to 6% commission each way, buying it and selling it. On top of that, you’re paying 28% long term capital gains rates.

        Bob:

        If you have any gains. Of course, the odds you’re gonna have gains.

        Shawn:

        If you have any gains. That’s a good point.

        Bob:

        The odds of having any gains is not very high. So the last point I want to make today is it can’t compare to the long term return, long term returns. Let me start over on that. It cannot compare to the long term returns of a well diversified portfolio of stocks and bonds. The historical rate of return is nowhere near that. And I’m talking about a well diversified, not in one stock, not in one bond, but a well diversified portfolio of publicly traded stocks, large and small mid-size companies across the globe. And the ease of buying stocks and bonds today is so easy and the transaction cost is so low.

        Shawn:

        Yes. Practically zero cost.

        Bob:

        In many cases, it is. And you’ve got your publicly traded stocks. You’ve got bonds, you’ve got ETFs, you’ve got mutual funds, and they all represent the production. I like this. They represent the production of goods and services.

        Shawn:

        That we actually use, as human beings.

        Bob:

        Gold doesn’t produce anything.

        Shawn:

        Well, and these all pay, or many of them, pay dividends or interest, and because of the low transaction cost and type of marketplace that they’re in, they can also be quickly and efficiently converted to cash with little to no cost. Gold doesn’t do any of these things.

        Bob:

        So here’s a conclusion. Okay. So, before we go through all this, I’m gonna go over all seven of these real quick again. All right. 1. Gold is no longer used as a currency. 2. It has historically low returns. 3. It produces nothing. It doesn’t pay any interest or dividends. 4. It’s environmentally hard on God’s creation. You go on 5, 6, and 7.

        Shawn:

        5. Expensive to buy and sell because of high commissions. 6. There are high taxes on gains, if you have gains, at a 28% rate compared to 15% to 20% rate for other assets that you’ve held for a year or longer. And number 7. All things considered, it just cannot compare to the long term returns of a well diversified portfolio of stocks and bonds.

        Bob:

        Therefore, as a fiduciary based financial advisor. We’re fiduciary based, in what’s the best interest of the client. We believe gold should be avoided as an investment. I know that’s a big deal to say that.

        Shawn:

        I know people don’t like to hear that, but facts are facts.

        Bob:

        And there’s a couple scriptures we’ll end on. Deuteronomy 7:25, “The images of their gods you are to burn in the fire. Do not covet the silver and gold on them and do not take it for yourselves, or you’ll be ensnared by it, for it is detestable to the Lord your God.” You gotta be careful because of the greed associated with it. Of course, there’s greed associated with stocks and bonds.

        Shawn:

        Sure. Deuteronomy 29:17, “You saw among them their detestable images and idols of wood and stone of silver and gold.”

        Bob:

        So it’s been used to for idol worship.

        Shawn:

        That too.

        Bob:

        So as always, we’re here for your comments or questions. I have a feeling we might get some questions about this.

        Shawn:

        As long as the question is not, “Should I buy gold?” Cause I feel like we’ve covered that one pretty good at this place.

        Bob:

        I think we have, but if you have questions about financial advice, planning, and investment management, feel free to give us a call. We can be reached during business hours by phone or text at (830) 609-6986, or visit us on the web www.christianfinancialadvisors.com.

        Shawn:

        Thank you for joining us and have a blessed day.

        [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.

        20 min

      About Christian Financial Perspectives

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      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…

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