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October 28, 2021 102 – High Investment Returns And Wealth
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High Investment Returns And Wealth

Do you have the following traits that may help with long term wealth?

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When it comes to high investment returns and wealth, there are common traits, attributes, and characteristics that we see in those with millions in their investment accounts. Many people believe high investment returns are the only way to wealth, but that usually is not the case. For the majority of us, most of our wealth growth has to deal with circumstances outside of returns.
Therefore, Shawn and Bob present 15 commonly seen traits in millionaires that Bob has personally seen in his own clients over the past 37 years, as well as covering some myths on chasing investment returns. Not all millionaires have these traits, but a majority of them do! This includes being hard workers/not lazy; frugal with their money; and strong roots and connections within their communities, to name just a few. So tune in to find out all 15 traits and if you are already on the right track.

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

Christian Financial Advisors
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Bob Barber, CWS®, CKA®

Shawn Peters

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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:
Welcome to our 102nd podcast for Christian Financial Perspectives. Today, we’re going to be talking about high investment returns and wealth. I picked this subject because we are finding many people call us and they actually believe that high investment returns are one of the only ways to wealth. And it is for a small minority, but not for the majority of us. For 99% of us, high investment returns have little to do with obtaining wealth. And that’s just something we’re really going to get deep into today. What are the traits of wealthy people? From my 37 years in business, when I started thinking about this, I just started thinking about the traits of people that I know that are millionaires, either one, two, or even three or even $5 million. And what are these traits that I’ve seen over 37 years? I came up with 15 traits that we’re going to go through of millionaires. Now, there are a few million millionaires that don’t have all these traits. There are a few out there, but do you know, they’re in the minority. The majority do have these traits.
Shawn:
There’s always exceptions to the rule. So we’ve got that disclosure out of the way, but wow, 37 years. So you’ve seen a few millionaires over that time.
Bob:
Just quite a few as a matter of fact, but you know what, they’re not like you think. They drive up in this parking lot out here. And some of them are just old ranchers and driving seven and eight year old trucks. And they’re just what I call good old boys. I’m pretty country, and their wives are just wonderful women in the Lord and love the Lord. And I tell you that’s trait number one, the first trait of these 15 traits is they have a strong foundation in God. They have a strong foundation in their families, and they really believe in long-term relationships. I believe these strong foundations is what keeps them from swaying with which way the wind happens to be blowing at the time. When I think about those strong foundations, I think of Matthew 7:24-25. And by the way, on all of these traits, God’s word just came to me about there’s a scriptural passage for every one of these traits. And in this first trait of building that strong foundation in God is from Matthew 7:24-25. “Therefore, everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house, yet it did not fall because it had its foundation on the rock.” So trait number one is having a strong foundation.
Shawn:
That’s a great scripture to go along with that first trait. Everything we do, not just in this podcast, but really everything we do in life, we should always look to scripture to find some sort of basis for that. Now you’re not going to see things about what you should or shouldn’t do on Facebook in the Bible, but more of the principles that may apply to how you conduct yourself online.
Bob:
I want to correct you a little bit there because you think about it, it may say something about Facebook. We’re not to gossip about others, right?
Shawn:
So the principle is there, although of course the technology may or may not have existed at that time. So that’s going to trait number two. They live a self disciplined lifestyle. So to me, this comes out as kind of an obvious one. They aren’t going all over the place. They aren’t changing their mind. They’re very consistent, kind of goes right with the strong foundation like you said in trait number one. It’s that they’re disciplined in whatever it is that they’re doing, whether it’s their walk with the Lord, whether it’s their relationships that they have within their company or the company they work with and they don’t treat it as, oh, we’ll figure it out. They work hard.
Bob:
They have a disciplined approach.
Shawn:
Exactly. So there’s actually two scriptures that we have for this one. The first one is 2 Timothy 1:7, “For the spirit God gave us does not make us timid, but gives us power, love, and self-discipline.”
Bob:
Put that discipline in there, doesn’t it?
Shawn:
Yeah. And then Proverbs 12:1, “Whoever loves discipline loves knowledge, but whoever hates correction is stupid.”
Bob:
That’s pretty clear. Yeah. I mean, you’ve got the word stupid and that’s not a very nice thing to say, but I mean, it’s like when it says it, whoever loves discipline loves knowledge, whoever hates correction is stupid. That’s saying that correcting somebody, don’t always take that wrong. They care about you. They’re trying to help you.
Shawn:
Exactly. And I think we’ve said this before on one of our other episodes, but Proverbs doesn’t tend to hold back. And if anything, I found like if you pull up The Message or one of the other translations where it’s a little more literal, maybe not necessarily the exact word for word translation, it gets more just kind of in your face, to where maybe it says is a moron.
Bob:
Yeah. It just lays it out. That’s what I like about scripture. It’s clear. Trait number three, this is interesting. isn’t it? They’re hard workers.
Shawn:
So surprising.
Bob:
Those that are wealthy are hard workers, and they’re not lazy. The scripture I thought of this came right to me. By the way, work appears in the Bible over 400, I think it’s 450 times or more. I think it was 455, maybe, to be exact. You pull it up. I mean, you pull up your Bible app and put in work and see how many times it appears. But it’s in there a lot, where retire is in there one time. So it’s there, and Genesis 2:15, “The Lord God took the man, put them in the garden of Eden.” And what does it say, “to work it and take care of it.” So, they’re hard workers and there’s a scriptural basis behind that because work as if you’re working for the Lord, because it is God ordained.
Shawn:
No matter what you’re doing, no matter what your position, no matter whether you’re wealthy or not, your work is really part of your worship. It’s honoring the Lord. I know at our church, we always talk about how we turn an everyday space into a sacred place. And Brent, I’m sorry. I may have gotten place and space mixed up, but you get the point.
Bob:
And your church is doing so well. It’s batting cages the rest of the week, right?
Shawn:
Yeah. But no matter where you are, no matter what you’re doing. And when it comes to work, that is a way for you to actually worship and show honor to God. Because whether someone sees you or not in your discipline and in your character, your honesty, that work is a way to praise God.
Bob:
We’re just at trait number four and so far, we haven’t even mentioned higher returns in wealth yet, have we? But we will eventually. We will.
Shawn:
Yeah. So trait number four, they’re consistent savers and grow their wealth over time by investing wisely. I actually like this one because this kind of reminds me, I think it was our last episode, we talked about how investing won’t save you from saving. And so in this one right here, they’re consistently saving and investing, not just one. So, the verse for this one is Ecclesiastes 11:2, “Invest in seven ventures. Yes. In eight. You do not know what disaster may come upon the land.”
Bob:
And it’s interesting in all the years that I’ve been managing and helping wealthy people manage their wealth. This is so true. Very few, and I know that real estate is really big, and you and I know that, but out of the 370 households that we serve here, there’s only like two that have made the wealth in real estate. Only two. The majority make it by investing across many different sectors in a diversified portfolio, which actually it goes so well with this scripture from Ecclesiastes 11:2.
Shawn:
And in addition, those same households also have something in common, which is some of the other we’ve already covered, where it’s from working hard, it’s from saving diligently. So yes, they are investing and they’re dividing it through diversification. But it’s not just here’s this money one time, and it’s magically going to be enough for retirement 30, 40 years from now. No, it was little by little over time.
Bob:
And in a lot of different areas, not just one stock, right? I mean, we have a few, but it’s not the majority, because there’s always an exception. There’s always an exception to the rule. So trait number five. I didn’t think we would ever be saying this one. They’re frugal. They’re very frugal with how they spend money. And they look at everything, and I think they look at it through the eyes of this particular scriptural verse that I’m going to give Luke 14:28-29, “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost?” That’s right. That’s the main part. Estimate the cost to see if you have enough money to complete it, “For if you lay the foundation and you’re not able to finish it, every one who sees it will ridicule you.”
Shawn:
Wow. That is a great one. If you ever wondered if budgets are only for poor people, the answer is no, it doesn’t matter what your income is. It doesn’t matter how much wealth you have. Those who are wealthy tend to stay wealthy because of following this principle.
Bob:
They’re frugal. Yeah.
Shawn:
It doesn’t mean they don’t spend money. Maybe they do buy a nice car. Maybe they do buy a vacation home, but they don’t just make these quick decisions, and just say, oh, well in my portfolio, I have $2.5 million. I’ve got enough to buy this million dollar house. No, no. They look at what is the actual cost going to be, because now they may have gone from retiring on a certain income that they were expecting per year to retiring on maybe half that.
Bob:
Yeah. They gotta learn. They gotta learn to live on it. I’m always looking at financial stuff on the internet. I probably send you and Theresa at least two or three articles a day of stuff I find.
Shawn:
And I try to read on, especially like CNBC and other stuff, I try to read as much as I can in the morning so I can at least say yes, Bob. I looked at it.
Bob:
Well, I was just noticing one the other day and it was talking about athletes and how athletes make all this money. Yet, the average athlete, just 5 to 10 years later, doesn’t have anything. And they had the chance to be millionaires the rest of their lives. But they weren’t frugal with them.
Shawn:
They are a classic example of sudden wealth syndrome, just like lottery winners and people striking gold. And it’s really sad because these athletes, a lot of times, I mean they’re kids, even if they were considered middle-class. I mean, the types of salaries that professional athletes pull in to all of a sudden go from, I don’t know, maybe your household made $50,000 or $60,000 a year, and now you’re effectively making $50-60,000 a month. They just don’t know how to handle it and they don’t realize that all of these cars and houses and boats and trips they’re going on, that if they get injured or whenever they do finally retire, if they haven’t planned accordingly, it’s going to either be already gone or they’re going to run out really quick. But this actually goes into trait number…
Bob:
Number six.
Shawn:
Yeah. So trait number six, they believe in giving back a portion of their income to charities and helping others, which reminds me of the fact that no matter what you have, whether it’s a little or a lot, it belongs to God in the first place. So this trade of giving back, to helping others, to charities, to church, it makes sense. Like, God asks us to do that. We need to support those who need it. So giving back, it’s a very Christian thing to do
Bob:
Well. And also, it released selfishness. Yeah. When you’re not giving, it’s all about me and that selfishness takes place. And when you become selfish, then that can create financial disaster. Yeah.
Shawn:
In my opinion, there’s a big difference between being frugal and being selfish. Frugal is you’re careful with what you spend, not that you are hoarding it for yourself.
Bob:
So I think it’s interesting. We talk about being frugal and then the very next thing is giving.
Shawn:
So 2 Corinthians 9:6-7 is our trait number six verse, “Remember this, whoever sows sparingly will also reap sparingly and whoever sows generously will also reap generously. Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”
Bob:
I always use this scripture, by the way, when I was in a smaller church and I was always the one that got to, when it came time for the offering, they’d asked me to pray and I’d always say, I want to see y’all smiling when the plate comes by.
Shawn:
All right, you want to take number seven, Bob?
Bob:
Trait number seven of the wealthy is they have a good reputation in their communities. And the scripture that goes with this is from Proverbs 22:1, “A good name is more desirable than great riches, to be esteemed is better than silver or gold.” So that reputation, how do you get a good reputation? You get a good reputation by treating people fairly. Yeah.
Shawn:
Whether that’s your employees, your vendors, your customers you work with, getting back to the previous trait, giving back to the community, giving to others. That’s part of it. Not that you give just to get credit or to get recognition, but you should do it.
Bob:
Right. It’s helping your community. They’re forthright. They’re honest. They that’s how you get a good reputation, from doing things that give you a good reputation. That’s pretty simple. Yeah.
Shawn:
Yeah. I don’t know how else to explain that one. Yeah. So trait number eight, they’ve been married to the same spouse for many years and very few have ever been divorced.
Bob:
Yeah. And this was a hard one for me to actually put in here. I am not going to pass judgment.
Shawn:
Right, right. That’s not what we mean here.
Bob:
Not at all, not at all. I’m just saying that divorce fragments wealth, and not only that, but it gets into all the other areas too, with your children and your reputation in the community.
Shawn:
And it’s hard.
Bob:
It is. It’s very hard, and my heart goes out to anyone that’s had to go through that. It’s not a good thing.
Shawn:
And keep in mind, too, because again these traits that we’re covering, it’s the commonality that Bob is seeing. You’ve seen Bob over the last 37 years. Again, there are exceptions. It does not mean that if you’ve, unfortunately, you’ve gone through a divorce. It does not mean that you can’t be wealthy, that you can’t do things in a way that glorifies God to build wealth. It’s just, it’s a lot less likely that someone would be wealthy who has gone through a divorce.
Bob:
Right. And we do, we have several clients that have been through a divorce, and they’ve picked it up. And they’re doing well because they followed all these and this was no fault of their own.
Shawn:
Well, I would say it is kind of like, just think of it as a simple math problem. If you’ve been married even a shorter period of time, like 5, 10 years, and it was during a really hardworking part of your career and you and your spouse, you’ve been building your assets. And then I would say, it’s pretty typical that stuff gets split 50/50, right? Well, all of a sudden you’ve had, say, 10 years of your life got cut in half. And when you look at investment returns with saving like, well, time is a fantastic tool as far as building for retirement and building wealth. And if you lose half of what you gained during that time, that’s hard to overcome.
Bob:
It very much is. And I would say this is a trait because I can nearly guarantee you that of all those that we serve, the divorce rate is less than 2%, 2-3%. I know those that have been through it. And my heart goes out to them. And here at Christian Financial Advisors, we are going to be compassionate. We are not going to pass judgment. We’re going to help you pick up the pieces and go forward.
Shawn:
Well, I almost forgot the verse, Ephesians 5:31, “For this reason, a man will leave his father and mother and be united to his wife, and the two will become one flesh.”
Bob:
I heard a pastor say one time. She said, remember the old thick construction paper we used to work with when we were kids. And I remember they used to give us Elmer’s glue. Maybe that dates me.
Shawn:
We still use it.
Bob:
We would put that paper together. And once that paper has come together, you have a red piece and a blue piece, as an example. Once that paper comes together, if you try to rip that paper apart, there’s pieces of it on each part. You can’t pull it apart after it’s had some time together. Yeah. Okay. So trait number nine, they have strong roots in their communities and local churches, kind of like some of those at the beginning. Hebrews 10:24-25 says, “And let us consider how we may spur one another on toward love and good deeds, not giving up meeting together as some are in the habit of doing, but encouraging one another, and all the more as you see the day approaching.” They have that support group that the church gives you.
Shawn:
Well trait number 10, they do not chase foolish fantasies, trying to find perfection and utopia.
Bob:
I see a lot of that today.
Shawn:
You want to give an example of that one?
Bob:
Well, no, I don’t. I just see more and more of it, unfortunately, in younger generations. Finally, they find out by the time they hit about 30 or 35, I’m not going to find utopia. I’m not going to find perfection. Life is not that way.
Shawn:
And so is that more of the the idea that you’re looking for, Oh there’s like the perfect place to live or there’s the perfect job that’ll somehow be everything that I’m looking for. And the reality is you can make it, you can make a life and you can have joy almost anywhere. But the thing is, is if you’re constantly chasing this perfect place to live, this perfect job, this perfect group of friends, or whatever it is you’re looking for, you’re going to spend all of your life looking. You’re never going to find it.
Bob:
Yeah, that’s true. That’s exactly right. And we got the scripture goes with that, go for it.
Shawn:
All right. Ecclesiastes 4:4-6, “And I saw that all toil and all achievement spring from one person’s envy of another, this too is meaningless, a chasing after the wind. Fools fold their hands and ruin themselves. Better one handful with tranquility than two handfuls with toil and chasing after the wind.”
Bob:
It reminds me what Paul was saying, and I’ve learned to be content in all things. Yeah. Whether I’m wealthy or whether I’m poor, whether I’m well fed or whether I’m hungry, I’ve learned to find contentment. And that contentment is Christ and trying to find perfection and utopia here on earth. I’m sorry. It’s just never going to happen. Trait number 11. They’re very honest and forthright in their dealings with others. This is one of them. The scripture I’ve used many times in Christian Financial Perspectives, Luke 16:10, “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. There’s a real scriptural principle in here, isn’t there. It’s kind of comes back to the parable of the talents, too.
Shawn:
It does. That’s what I was thinking.
Bob:
Because if you’ve been trustworthy in handling those little things, then maybe I can give you a little bit more to handle and then a little bit more.
Shawn:
Kind of like the idea of if you have a career path and you show yourself to be someone who was honest, no matter who they’re dealing with, that you’re honest and you have integrity and you can be trusted with projects you’re given or tasks that your supervisor gives you. Well, those people are far more likely to be promoted and to be given more responsibility because those that they’re working with and those are working for, they know they can trust them. And if you sit on your hands or, fold your hands, as we talked about in that previous verse, you’re not going to go much further.
Bob:
Trait number 12.
Shawn:
Trait number 12, they are careful about getting into too much debt and many are completely debt-free and have been for years.
Bob:
Yeah. I just notice this with those that are wealthy and have the million or multi-millions, they are really careful about debt. Yeah. The majority of them are actually debt free. I mean, zero debt at all, and I’m not going to go down that path of saying you can’t go buy a home. I mean, because my dad used to say whether you rent or whether you buy, you pay for the place you occupy. So I can see that, but it’s about being wise with debt.
Shawn:
Yeah. Well, I think maybe the better example for people listening is it’s not about whether or not you have a mortgage on a home. It’s going to be very rare if someone, especially earlier in their career and in their life to be debt free on their home, but a good example would be, do you have debt beyond say a mortgage or maybe even at most two car loans, because if you’ve got a credit card that you have a running balance on, if you have multiple credit cards or you have other, short term vacation loans or whatever that list is, that’s not going to help you in the long run.
Bob:
And that right there is Proverbs 22:7 which says, “The rich will rule over the poor,” right?
Shawn:
Yeah. The rich will rule over the poor and the borrower is a slave to the lender.
Bob:
That’s why the rich are the banks. I guess they’re the ones who ruling over the poor, and the borrower is slave to the banks. Okay. Trait number 13, their identity and self-worth is not based on things. Okay. Hear me out on this. Whereas like the ole millionaire coming up and he’s driving a six-year old truck. It’s not based on things like what kind of car or big truck you drive. Now here in Texas, everybody’s got to have the King Ranch Edition. Have you seen what those things cost?
Shawn:
Even aftermarket, they’re a little pricey. It’s crazy.
Bob:
And how large their home is. It’s not based on that and millionaires, that’s not where their identity’s based. Now, I will say this. Many do drive nice vehicles and they do live in nice homes, but it’s not what they emphasize in life. Many millionaires I know drive 6 to 10 year old cars that they take very good care of. They live in your every day, average type neighborhood, like right here behind the office that we have. This is where they live. The neighborhoods, many times, with the million dollar plus homes have the million dollar plus loans, too.
Shawn:
Okay. It makes me think of the point is not whether or not it’s a new car. I think the more important thing is that people who are wealthy, they typically don’t have their identity tied up in the car. One person I think of is my own dad. And he definitely could buy a really nice car for himself. He’s always wanted, I think, it’s a BMW X6 or something. It’s just like SUV that he likes, but he’s usually going down to the farm or going to the mine. And if you drove up in one of those things. Yeah. Probably could drive through, but he’d ruin the car and everybody would kind of laugh at him like, Steve, what are you doing driving that? He almost always has a more simple, basic F150. He’s got a truck bed, it’s got 4×4 so we can get through stuff, and that’s it. And he just trades it out a little more frequently, but he doesn’t spend a lot of money on it.
Bob:
I was thinking about this while you were saying that. I kind of brag about myself now cause I’m driving an old car. Isn’t that weird? I mean, I’ve gotten to this point that we’re talking about, and now when I could go buy any kind of car I wanted, I mean, if I wanted to go buy $200,000 Mercedes, whatever, I could go buy it.
Shawn:
I remember you said something to me recently, you were talking about looking at some other SUV’s or even just getting a new Ford Explorer, and you did what most people should do, especially if you’re following these traits, you’ve looked at the cost. You looked at how is this going to affect things? And you realized there’s really no benefit to getting the newer car other than just to say that you had the newer one.
Bob:
Yeah. The new car smell.
Shawn:
Yeah. Just go get it detailed, and you’re good.
Bob:
You’re good. I have been taking good care of it. You’re driving all the time and there’s really no scratches on the car. The leather seats look great. It’s great. So I’m at six years, maybe I can go four more, five more. Like I said, just put new brakes and I put new belts on it. I put new tires. I’m good, man. I spent a couple thousand dollars doing that. Not 50. The point of buying a new car. All right. Trait number 14.
Shawn:
We should probably read the scripture. Luke 12:15, “Then Jesus said to them all, watch yourselves, keep from wanting all kinds of things you should not have. A man’s life is not made up of things even if he has many riches.”
Bob:
I like that word “things”.
Shawn:
Yeah. So trait number 14, they strive to do things right and are just good people.
Bob:
That’s the country boy. I mean, they do things right and they’re good people.
Shawn:
We have two scriptures for this one, Psalm 34:12-14, “Whoever of you loves life and desires to see many good days, keep your tongues from evil and your lips from telling lies, turn from evil and do good, seek peace and pursue it.” And then we also have Isaiah 1:17, “Learn to do right. Seek justice. Defend the oppressed. Take up the cause of the fatherless. Plead the case of the widow.” Yeah. Bob, you want to give us number 15.
Bob:
Number 15. We’re at the end of that. So, okay. The majority of wealthy people make it slowly and systematically over many years, not quickly and recklessly over just a few. Here’s a scripture again. You’ve heard me say it. You probably got it memorized if you’ve been listening to me. “Dishonest money dwindles away.” But here’s the second part that matters so much. “But whoever gathers money little by little makes it grow.”
Shawn:
That’s Proverbs 13:11.
Bob:
In all 15 of these traits, did you ever hear me mention high investment returns one time?
Shawn:
No. I think I technically mentioned it, but in a different context.
Bob:
That’s because investment returns do play a part in obtaining wealth, but it’s not what makes the average everyday person wealthy and how they keep it. It’s the simple things like consistently saving, living a disciplined lifestyle, hard work, doing what’s right. Being honest over many years, that’s what leads to lasting wealth.
Shawn:
So what about high investment returns then? I mean, while they are important, there is a flawed logic behind chasing investment returns. Now that’s because there will always be someone who did better than you did, someone who did worse when it comes to investment returns, chasing investment returns from year to year and moving from advisor to advisor is like getting stuck in a traffic jam, believing you’re going to beat everyone else by switching lanes enough or even exiting the freeway onto the side road or the access road only to find you didn’t get to your destination any faster, partly because guess what? Everybody else, a bunch of other people also try to go on that feeder road. A bunch of other people also were switching lanes.
Bob:
I’ve learned this from experience, by the way. When I put this example in there, I was thinking, yeah, I’ve seen myself and you look up ahead. And I was like, why did I exit off on the feeder road? Why didn’t I just stay where I was? Cause now they’re just starting to move quicker and I’m stuck at the stop sign and I have to get back up on the interstate.
Shawn:
I guess you could use that example is you’re heading in the right direction. So, even though you may not think you’re going as fast as you should. Cause you need to change lanes. Point is you still are heading in the right direction.
Bob:
That’s right. So, we had those 15 character traits of the average, everyday millionaire that we talked about just like that. I’ve seen six traits that also lead to chasing investment returns. And what stemmed this subject was when we get those calls and it’s all about the investment returns. It’s not about anything else. And that’s where I know somebody is in a chase for the investment return. And these are six traits that I’ve noticed. That first trait is they overly trade stocks, ETFs, and mutual funds that can lead to even gambling type of habits and behaviors. And it really starts with these online brokerage firms. Man, I tell you, when I see these things on TV, they’re persuasive, they use manipulative advertising tactics, convincing novice investors that they can beat experienced, well-known money managers and professionals of Wall Street that have been in the financial business for decades. And every time I see that, that would be like me thinking, there’s no way that I could get on the same field with the Dallas Cowboys or the Houston Texans and compete against them. That would not be good.
Shawn:
Rhonan needs his grandpa around for a little longer.
Bob:
It just can’t be done 99.9% of the time. I mean, not for the long run. You may win for a season, and let me tell you, you notice I put in my notes here about the monkey experiment. Maybe you’ve not heard of that, but have you ever heard me talk about this before?
Shawn:
Still go over it.
Bob:
In the 1990s, they did a monkey experiment and they put a Rolodex in front of them with a bunch of stocks and he…
Shawn:
There are some of our younger listeners, that’s a paper thing that you would flip through to have information.
Bob:
Alright. And so he just went in and the monkey just kind of picked them out, and he picked out those stocks. And this was during the 1990s during the incredible bull market boom, kind of like what we’ve had in the last year.
Shawn:
We’ve had a little bit of a bull market in the last 10 years.
Bob:
Yeah, exactly. I mean, COVID took us out a little while, but we’ve had that back, and the monkey did as well as some money managers back then until we had a bear market drop.
Shawn:
We had a little bit of a market drop.
Bob:
So you can win for a season playing that online game like these online firms that are advertising to you, but you’re not going to beat the pros in the long term. This is going to be for a season.
Shawn:
Think of all those, like, you see CDs all the time, maybe it’s a trading seminar or it’s this, all of a sudden like, oh, here’s this technology that is only five equal payments of $99.95 or it’s a subscription or like it’s only $5,000 and you can get this, and you can make $600, $1200, even $2,500 in a single trade. And what always gets me is it’s really convincing. But here’s my question. If that was actually true that they could consistently do that over time, not just get lucky for a little while. Why are they wasting their time selling it to people when they could have already made millions and millions of dollars at this point? And the answer is simply that it doesn’t work longterm. There’s not a magic bullet that takes a novice investor to all of a sudden be able to beat the market and beat all of these other pros and everything going on. It just doesn’t happen. Not in the long run.
Bob:
Trait number two of chasing investment returns.
Shawn:
It can lead to an emotional rollercoaster. It’s tied to only how well the markets do from day to day. Yeah. And I know from working here with you, Bob, like we have some clients that, maybe when they’re first getting to know us, I feel like it’s understandable that they’re kind of figuring out can they actually trust our team, but they’re looking at the markets every day and…
Bob:
And it becomes an emotional roller coaster.
Shawn:
Because sometimes, it’s up. Sometimes, it’s down. Sometimes, it’s sideways. But at the end of the day, usually what happens is, is at some point they realize the methodologies and the management practices that we’re using here. It’s not meant for from today to tomorrow. We’re looking at larger cycles than that because we’re investing wisely. And obviously, yes, we’re changing depending on how the markets change, but this isn’t a day trading. And so, the only thing that looking at it from one day to the next, every single day, and even during the day does is cause your emotions to go all over the place.
Bob:
And I’m telling you, you’ll start doubting yourself. You get panicky. It keeps you awake at night.
Shawn:
In that case, your emotions are great as long as things are going up and doing well, but then the markets change and you start doubting yourself, you panic, you lose sleep. Like you were saying, you even sell good investments at a low point when there wasn’t necessarily a reason to sell them. And bottom line, don’t allow your emotions to guide your investment decisions.
Bob:
Trait number three is chasing investment returns can really reduce your long-term performance trying to time the markets. I’ve seen this over and over and over. There’s the old phrase, buy low and sell high. Chasing returns ends up being just the opposite. You end up buying high and selling low.
Shawn:
That’s right. So trait number four, chasing investment returns can lead to a misunderstanding of the relationship between risk and reward and understanding how they’re tied to each other. Greater risk does not always lead to greater rewards and returns.
Bob:
Sure doesn’t. You would think that it’s supposed to, but it doesn’t always. Trait number five is chasing investment returns can lead to creating symptoms similar to sudden wealth syndrome. We did a whole podcast on sudden wealth syndrome, or it’s even referred to as SWS, actually, in the psychology world. People who get sudden wealth syndrome.
Shawn:
They get this huge confidence boost that they’re thinking like, oh yeah, I’ve totally got this. No qualification whatsoever other than all of a sudden they have money. And suddenly, that means I know what to do with it.
Bob:
It’s truly a sudden wealth syndrome characteristic that all of a sudden you start feeling smarter than everyone else when you’ve hit it big and get a windfall money from maybe a lucky stock pick or trade or winning a lottery ticket, striking an oil well, or getting a large inheritance. We’ve seen that too. Just because you have some money, you shouldn’t start believing you can be experienced asset managers and advisors. And you may, though, for season in a strong bull market, but that’s only for a season, like we were talking about. How are you going to do in the long run?
Shawn:
That’s right. And the last trait we have of chasing investment returns, trait number six, thinking the grass is always greener on the other side. This could be the case, but most of the time, it’s not. Kind of like we were talking about changing lanes. Advisors, mutual funds, ETFs, and even stocks, contrary to popular opinion, do not control the economy in normal economic cycles. They merely reflect it and at times may even react in seemingly opposition to the economy. What’s that thing, I think you’ve said it before, Bob, that the markets can remain irrational longer than you can remain rational.
Bob:
You mean to tell me really advisors and mutual funds and ETS and stocks that they don’t control the economy. Hmm. Okay. All right. So let’s sum up this. Now, we have really gone deep into this. So we’re going to sum up today’s podcast, high investment returns and wealth. So number one, lasting wealth is obtained slowly and systematically over a long period of time using a disciplined approach, not quickly and recklessly. Number two, high investment returns are always hindsight. Just because you made a good bet three or four times in the past doesn’t mean you can do the same thing in the future. Number three, be aware when you only hear about the good investments that people make, cause that’s what’s going to get in the news. That’s what’s going to be on the social event. That’s going to be the guy talking at the party. Very seldom does anyone talk about the investment that they lost money on.
Shawn:
Number four, higher returns normally equal a greater risk of losing part or all of your principle and are on a longer-term commitment to be able to ride out that volatility. Number five, don’t believe the lie of it’s so easy, a baby could do it.
Bob:
That’s an old commercial from a long time ago.
Shawn:
And unless you happen to be just in the right timing of the market, where literally a monkey could do it just as well, but you never really know if it’s that period of time and when that’s going to end. Number six, the majority of people do not invest their way to wealth. They save their way to it.
Bob:
That’s the saying of Shawn Peters.
Shawn:
Investing will not save you from saving. That’s how I put it. And number seven, lottery winners, oil strikes, and inheritances are far and few between.
Bob:
So there you have our thoughts on high investment returns and wealth. And I hope this has helped you. And I want you to know, this is not to say in any way whatsoever that good investment returns do not play a part in creating wealth, but for 99% or more of us, it’s only a part. So they play a part, but it’s only a part in creating wealth – lasting wealth. You’re only looking at one side of the coin. So, it’s the 15 traits that we talked about today that will get you there, not investment returns alone. And remember, investment returns can be like the wind, which is here one day and gone the next.
Shawn:
All 15 of the traits of millionaires we discussed today will posted on our podcast website christianfinancialadvisors.com/podcast. You can also call 830-609-6986 during business hours for Christian financial advice.
[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.
44 min
October 07, 2021 101 – Preparing for the Next Economic Winter
Click below to listen to Episode 101 – Preparing for the Next Economic Winter
Preparing for the Next Economic Winter

Learn how you can prepare for an economic winter.

More episodes >>

In our last episode, Bob and Shawn spoke about 4 different economic booms and busts. This time, they discuss how to prepare for the bad financial times during the good financial times. How can we prepare for an economic bust, or what Bob and Shawn are calling an “economic winter”? Bob points to several passages in the Bible that discuss preparedness and anticipation.
According to Proverbs 6:6-8, we should look to the ant, who stores up for winter. We also take a deep look into Joseph and his interpretation of a dream for Pharaoh involving 7 years of abundance followed by 7 years of famine. So, how can we translate these biblical passages into modern times? Listen to the episode to find out!

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

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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:
Welcome everyone. Welcome to our 101st podcast for Christian Financial Perspectives. In our last podcast, we went into a detailed history lesson of major economic booms and busts and what caused them. We started with the rise and fall of the Roman empire over a thousand years ago. And then we looked at four other examples of economic booms and busts that have happened in just the last 4 years. So, Shawn, would you go over those four examples again, not in the detail that we did last week, of course, but some of those four examples that we talked about last week.
Shawn:
Yeah. So as Bob just said, the economic booms and busts that occurred in the last four years, what we meant was the last 100 years.
Bob:
Oh, did I say that? Yeah, that’s right. Okay.
Shawn:
So the first, additional one we looked at was the roaring 1920s here in America, followed by the Great Depression of the 1930s. Then we covered Japan’s massive economic boom during the 1980s, followed by a huge bust in their economy during the 1990s. Then we covered our own stock market for the internet bubble leading up to the summer of the year of 2000, just 21 years ago, followed by a major crash in the markets from March of 2000 until 2003. And lastly, just 13 years ago, the 2008 real estate and stock market bubble followed by a major crash in the markets that did not recoup fully until 2013.
Bob:
You say “The” because that was your first year in the financial business.
Shawn:
It was. I remember that one very clearly as a welcome to investing 101.
Bob:
It’s interesting when we said just 13 years ago, speaking of the year 2013, I’m going to tell you something that most people don’t realize that the S&P 500, the Fortune 500, did you realize that it only gained 3% to 4% in total price appreciation from March of 2000 when the internet, right at the peak of the internet bubble, it only gained 3-4% in total price appreciation from March of 2000 through March of 2013, 13 years.
Shawn:
13 years with a total price difference of 3% to 4%.
Bob:
Wow. Yeah. Most people I think, well, wait a second. Don’t you average 10% in the stock market. Cause you’ve heard that by certain very well-known people say, well, you’re going to make 10% on average if you stay in the market, but during those 13 years, if you had to put money in in just March of 2000 and then 13 years later, you’d only be up 3% or 4% if it was just the S&P 500 index. Yeah. But get this? Since March of 2013 until August the end of August in 2021, the S&P 500 has increased 200%. So you’ve got eight years that increased 200%, 13 years only to did 3-4%. So you think it might be time for a little breather?
Shawn:
I would say so. That brings us to today’s podcast where we’re going to talk about preparing for the next economic winter. Bob, I believe you have a disclaimer for.
Bob:
I do have a disclaimer, because while we’re talking about preparing for the next economic winter, I want to make it clear that we’re not saying that a major economic winter is coming tomorrow or even next year, because no one can really pinpoint the next economic winter that’s going to come about. But I do say this. Economic winters are normal and they come every so often, but so many people, they become forgetful.
Shawn:
Yes, sir. So Bob, it’s been a long time since we had a real recession, like the 2008 real estate bust, the 2000 internet bubble bust, or even the 1920s economic bust. The market downturn we had, for example, from COVID 19 pandemic last year, only lasted about three to four months before it recovered back to previous levels. So we’re not counting it for today’s podcast because I mean, I dunno if I’d really call that a winter as much as I call it as a temporary snowstorm.
Bob:
They say it’s the shortest economic downturn we’ve ever had because it was so short lived.
Shawn:
Nearly every time there are economic booms, they are followed by economic winters because markets follow cycles.
Bob:
Exactly. It’s very normal, Shawn. And it’s to be expected that the longer you have an economic boom, also the more out of touch people become with an economic winter. And it’s because people enjoy the good times and believe me, I like them too. But now that the markets have been up for more than eight years from the rebound 2013, or 12 years since the market bottomed out, I just think we could be due for another one.
Shawn:
Yeah. So you think people get out of touch? Is it, would you call it, complacency or would we say it’s just more of, we just tend towards, well, if this is the way it’s been going, why wouldn’t it continue?
Bob:
I think it’s a combination of the two. You get complacent and you just think, wait a second. Why wouldn’t this continue?
Shawn:
So essentially the longer a bull market lasts, the less concern most people get about a market pull back.
Bob:
That’s exactly right. Yeah. And it’s been a long time now. I mean, it’s been 13 years where the normal time that something would have that downturn would be every seven or eight. So it’s been a long time. And like I say, it’s just human nature, at no fault of anyone, that you want the good times to keep on going and going. I mean, I know I do.
Shawn:
Me too.
Bob:
Yeah, exactly. So what we’re going to do in preparing for the economic winter, I thought today, we’re going to be bringing in several biblical examples and we’re going to use scripture because this is Christian Financial Perspectives. And we’re going to start off first with the sixth chapter of Proverbs. And I love Proverbs. And we’ve talked about some of these scriptures, but we’re going to bring them in into looking at these, about using these scriptures to prepare for that economic winter. So we’ve got the sixth chapter of Proverbs and there’s verses six through 11. It’s about ants.
Shawn:
Not aunts and uncles. Bob’s talking about the pesky little things that show up at our picnics and campsite.
Bob:
Exactly. Exactly. So Shawn, if you wouldn’t mind, open up God’s word there and let’s look at 6 through 11 of Proverbs 6.
Shawn:
So starting with verse six, “Go to the ant you sluggard, consider its ways and be wise. It has no commander, no overseer or ruler. Yet it stores its provisions in summer and gathers its food at harvest. How long will you lie there, you sluggard? When will you get up from your sleep? A little sleep, a little slumber, a little folding of the hands to rest and poverty will come at you like a thief and scarcity like an armed man.”
Bob:
Those scriptures are pretty tough, aren’t they? It’s got “you sluggard” written in there. It’s like, how long are you going to lie there? Get up. Do something with your life. I mean, a little slumber, poverty is going to come on you. It’s a pretty tough scripture.
Shawn:
Proverbs hits you pretty hard sometimes. It doesn’t pull any punches.
Bob:
Shawn, what do you think, in this example, what is the ant doing during the summer months and those good economic times. Let’s think of it that way. Like we’ve had over the last seven to eight years, what’s that ant been doing in this example?
Shawn:
Well, it’s saving up for the possible economic winter ahead because it knows the provisions during the good times may not be there in the bad times.
Bob:
Exactly. That’s exactly right. So, how can we know? There’s always going to be good times, but there’s always gonna be bad times, too. I mean, how do we know that? It was a scripture we went over last week, and I think it would be good to bring that scripture back.
Shawn:
Once again, scripture has an answer for it. In Ecclesiastes 3:1-8, “There is a special time for everything. There is a time for everything that happens under heaven. There’s a time to be born and a time to die, a time to plant and a time to pick what is planted. There’s a time to kill and a time to heal. A time to break down at a time to build up. There’s a time to cry and a time to laugh. A time to have sorrow and a time to dance. There’s a time to throw stones and a time to gather stones. A time to kiss, a time to turn from kissing. There is a time to try to find and a time to lose. A time to keep and a time to throw away. There is a time to tear apart and a time to sew together, a time to be quiet and a time to speak. And finally, there is a time to love and a time to hate. A time for war and a time for peace.”
Bob:
It never gets old reading that scripture because God’s word never gets old because it applies to everything. And I like what these scriptures say, because they really point out that there is natural peaks and valleys in life. Naturally, there’s going to be good times and bad times. There’s going to be good economic times and there’s going to be those economic winters, which is what we’re talking about today. I love going to birthday parties. And when I was a kid, I always loved balloons. And I’d blow in those balloons and I think, okay, that makes that balloon come to life, right? When you have that little bitty balloon and you blow into it and it comes to life. It can be really pretty. I just thought, wow, these are all these neat colors when I was a kid. But if you keep putting air into the balloon without any constraints, what’s it eventually going to do? It’s going to pop. It’s going to blow up, and it’s going to blow up into tiny pieces, you know? And there’s some good wisdom in that.
Shawn:
Yes, there is Bob. Wisdom is enjoying the good times, but also preparing for the bad ones that will eventually come to fruition.
Bob:
That is wisdom. I want them to enjoy the good times. We should all enjoy the good times, but don’t forget about the second part of that. Right? What you said there was preparing for the bad times as well. Proverbs 1:2-7 talks about wisdom, “For gaining wisdom and instruction, for understanding words of insight, for receiving instruction and prudent behavior, for doing what is right and just and fair, for giving prudence again to those who are simple, knowledge and discretion to the young, let the wise listen and add to their learning and let the discerning guidance for understanding Proverbs and parables, the sayings and riddles of the wise, the fear of the Lord is the beginning of knowledge, but fools despise wisdom and instruction.” And we’re really talking about wisdom today.
Shawn:
Proverbs 1:7. That is definitely one of my favorite verses if I can say that again, “The fear of the Lord is the beginning of knowledge, but fools despise wisdom and instruction.” Yeah. So we’ve looked at several examples of wisely preparing from the ants in Proverbs six for preparing for an economic winter. So there’s a time for everything in the third chapter of Ecclesiastes, and from these scriptures we can be assured that there will always be economic winters, just like there will always be economic good times or summers.
Bob:
So there’s another scripture we’re going to look at. And this is a pretty long scripture. It’s one of the greatest stories I know about what to do during good economic times like we’ve been having, and how to prepare for those economic downturns and winters, which according to scripture, we’re always going to have, right? And so we’re going to look at the 41st chapter of Genesis, but I want to give you some background first. What we’re going to look at in Genesis is the story of Pharaoh and Joseph in the Old Testament. I don’t want you to confuse that with the Joseph of the New Testament, husband of Mary, mother of Jesus. Joseph in the Old Testament, he was thrown into jail for falsely being accused of fooling around with his master’s wife. But while Joseph was in jail, they found that he could interpret dreams of those he was under. So let’s look at the story and pick it up from there, knowing that Joseph can interpret dreams.
Shawn:
I’m glad we’re covering this one because every time we talk about market cycles and our last episode, we talked about the cycle of the markets and how you don’t just go straight up a hill or straight down a hill. Whether you’re going up, whether you’re going down, we go through these cycles. We go through some ups and downs. And every time when I think of that, I think of what happened here in this story with Joseph and how God used Joseph to be able to prepare not just Egypt at the time, but all of the surrounding countries that because of Egypt preparation, that other countries were actually able to survive the famine that inevitably came. So starting with Genesis 41:1, “When two full years had passed, Pharaoh had a dream. He was standing by the Nile, when out of the river there came up seven cows, sleek and fat. And they grazed among the reeds. After them, seven other cows, ugly and gaunt, came up out of the Nile and stood beside those on the riverbank and the cows that were ugly and gaunt ate up the seven sleek fat cows. Then Pharaoh woke up. He then fell asleep again and had a second dream, seven heads of grain, healthy and good, were growing on a single stock. After them, seven other heads of grains, sprouted thin and scorched by the east wind. The thin heads of grain swallowed up the seven healthy, full heads. Then Pharaoh woke up. It had been a dream. In the morning, his mind was troubled. So he sent for all the magicians and wise men of Egypt. Pharaoh told them his dreams, but no one could interpret them for him.”
Bob:
“Then the chief cup bearer said to Pharoah, ‘Today I’m reminded of my shortcomings. Pharaoh was once angry with the servants and he imprisoned me and the chief baker in the house of the captain of the guard. Each of us had a dream the same night and each dream had a meaning of its own. Now a young Hebrew….'” And that was Joseph, “‘Was there with us, a servant of the captain of the guard. We told him our dreams and Joseph interpreted them for us, giving each man the interpretation of his dreams and things turned out exactly as he interpreted them to us. I was restored to my position and the other man was impaled.’ So Pharoah sent for Joseph, and he quickly brought him from the dungeon. When he had shaved and changed his clothes, he came before Pharaoh.”
Shawn:
“Pharaoh said to Joseph, ‘I had a dream and no one can interpret it, but I have heard it said of you that when you hear dreams, you can interpret it.’ ‘I cannot do it,’ Joseph replied to Pharaoh, ‘but God will give Pharaoh the answer he desires.’ Then Pharaoh said to Joseph, ‘In my dream, I was standing on the bank of the Nile, when out of the river there came up seven cows, fat and sleek and they grazed among the reeds. After them, seven other cows came up, scrawny and very ugly and lean. I had never seen such ugly cows in all the land of Egypt. The lean ugly cows ate up the seven fat cows that came up first. But even after they ate them, no one could tell that they had done so. They looked just as ugly as before. Then, I woke up. In my dream, I saw seven heads of grain, full and good, growing on a single stock. After them, seven other heads sprouted, withered and thin and scorched by the east wind. The thin heads of grain swallowed up the seven good heads. I told this to the magicians, but none of them could explain it to me.'”
Bob:
All right. So here comes verse 25. This is when Joseph is going to tell what’s going on.
Shawn:
Through God’s power, Joseph’s about to drop the mic.
Bob:
“‘The dreams are one in the same. God has revealed to Pharaoh what he is about to do. The seven good cows are seven years and the seven good heads of grain are seven years. It is one in the same dream. The seven lean ugly cows that came up afterwards are seven years and so are the seven worthless heads of grain scorched by the east wind. They are seven years of famine. It is just as I said to Pharaoh, God has shown for what is about to do. Seven years of great abundance are coming to the land of Egypt, but seven years of famine will follow. Then all the abundance in Egypt will be forgotten and the famine will ravage the land. The abundance in the land will not be remembered because the famine that follows it will be so severe. The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God and God will do it soon. And let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt.'”
Shawn:
“‘Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh to be kept in the cities for food. This food should be held in reserve for the country to be used during the seven years of famine that will come upon Egypt so that the country may not be ruined by the famine.'”
Bob:
That last part was the most important part.
Shawn:
It is one of the most powerful scriptures about economic booms and busts.
Bob:
It really is. And so what happened was Pharaoh was told to save up one fifth of the harvest, and one fifth is 20%. And to do that for up to seven years and to store it for the bad times, or economic winter, that’s to follow. So using this biblical example that we’ve just looked at and applying math to it, here are four examples of what you should be saving during the good times when the markets and economy are booming based on your household income. So we’re going to give a real simple example first, and then we’re going to try to put yourself somewhere in these categories.
Shawn:
For every $10,000 of annual income your household is making during the good times, you should be saving $2,000 per year
Bob:
Because that’s 20% of 10,000. That’s right.
Shawn:
So for a $100,000 annual household income, that’s $20,000 per year for seven years, which equals $140,000 for cash reserves by using this biblical example.
Bob:
Just stop right there. I want to let that sink in. So if you’re making $100,000 income based on this example that we’ve just looked at in scripture, you should be saving $20,000 per year for up to seven years, which equals $140,000. Now you may be thinking I’m crazy, but this is the biblical example that we’re looking at here. It’s the Bible. Don’t look at me if you’re thinking that. What about a $200,000 income?
Shawn:
Well, for $200,000, that’s a savings of $40,000 a year, which adds up to $280,000 of cash reserves after seven years. I’ll do two more examples to help us wrap our head around this. For a $400,000 income, you’d be saving $80,000 per year, which brings you up to $560,000 in cash reserves at the end of the seven years. And finally, for a $500,000 income, that is a $100,000 a year savings or $700,000 in cash reserves after seven years.
Bob:
Do you find yourself fitting anywhere in there and thinking, wait a second, I have never heard this before. Maybe you and your spouse have a great income, and you’re making a hundred or $200,000 a year. Are you putting that kind of money away? 20% of that, even on up to seven years for those seven – the good years, we’re talking about during the good years – that is this biblical example. I just don’t think, Shawn, most people never realize from scripture what you need to have in cash reserves, but it’s very clear to us right here in Genesis 41. Isn’t this a great example that we should follow?
Shawn:
Absolutely.
Bob:
I think that it is. I mean, I look at it like this because we’ve had such a good 7, 8, 9 years of an economic prosperity and things going great. Good times are not just about buying new cars and trucks and boats and second homes and more stuff, but it’s also using and applying God’s wisdom to prepare for economic winters that naturally follow boom times and bull markets like we’ve been in because scripture says it.
Shawn:
I like how this next scripture really speaks into all the new stuff you may be seeing people getting today when the economy is doing so well. So Proverbs 13:7, “One person pretends to be rich, yet has nothing. Another pretends to be poor, yet has great wealth.”
Bob:
And I’ve seen this many times. All those new cars and trucks and boats and toys and second homes and stuff you might be seeing someone else getting, it could just be a big facade with nothing to really back it up.
Shawn:
Yeah. Yes, absolutely. And the thing that I’ve seen just in my time, and I know I haven’t been around 30 years like you have Bob doing this, but just in the time that I’ve been an advisor and seeing people over and over not saving enough that they they’re investing, but no matter how good your money manager might be, they can’t save you from saving. And when you look at the look at these scriptures, it supports it. You need to be both saving and investing together and spending everything that you earn, whether you’re earning a $100,000 or $500,000 a year, if you aren’t putting some of that aside, it’s going to be a sticker shock when you try to retire and you can’t live on even a fraction of what you’ve been used to.
Bob:
And all those boats and toys and things during those good times, you gotta be real careful that it’s not being all bought on debt as well without cash reserves to back it up. Proverbs 22 tells us, “The rich rule over the poor, but the borrower is slave to the lender.”
Shawn:
So there you have it. We’ve given many scriptural examples today for our podcast preparing for the next economic winter. It’s not a matter of if an economic winter will happen, but when will it happen? And those that do not learn from history are likely to repeat it.
Bob:
I know that’s one of your favorite sayings. We want to say this. No one of us can really accurately predict when the next economic winter is going to hit us. But I can tell you this, there are many indicators that an economic winter could arrive sooner than later. So be prepared and watch out for many of the human behaviors that are always exhibited before a major burst hits. We talked about this last week, and I’ve got to again today, the chart that we’ve been using for many years called the “cycle of human emotions”. I mentioned it in our last podcast. I want to mention it again today. When people are buying, buying, buying in reckless abandonment of using wise principles no matter what the price is and they just want in. That’s happening a lot. I see it with real estate. You need to see this chart because many times that’s when we’re at the peak just about to go down. So in finishing today’s podcast, just be prepared.
Shawn:
And if you haven’t started saving yet for the economic winter that’s eventually coming, why not start now and get as far as you can before the next one hits. If we can make any recommendation, maybe you can’t do the 20% right now, but what you should do as quickly as possible before you even consider additional investments is you should be building up your cash reserves for your six months of expenses.
Bob:
Absolutely. That’s kind of the norm. And then with today’s scripture, we talked about quite a bit more than that. I want you to remember something, too. The markets can be irrational a whole lot longer than you would ever think, and they could keep going up and rise way beyond what is mathematically feasible or logical before it bursts.
Shawn:
Thank you, Bob. Well, that’s all for today’s podcast. If you would like to learn more about getting Christian financial advice, then please visit Christianfinancialadvisors.com on the web. Or you can call us at (830) 609-6986. We’re available Monday through Friday from 8:00 AM to 5:00 PM Central Standard 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
September 21, 2021 100 – The History of Economic Booms and Busts
Click below to listen to Episode 100 – The History of Economic Booms and Busts
The History of Economic Booms and Busts

Welcome to our 100th podcast on economic booms and busts.

More episodes >>

Welcome to our 100th podcast!!! We’ve taken quite a long break from recording over the summer, but we are back at it with Christian Financial Perspectives Podcast. In this episode, Bob and Shawn discuss the history of economic booms and busts, from the rise of the Roman Empire all the way up to the recent 2008 Real Estate Bubble that Burst and where we are today. HISTORY repeats itself over and over with nearly the exact same mistakes. Will it be any different this time? Listen to find out!
With this being our 100th Podcast, we also reflected on the top 10 up to this point:
10) Episode 66 – 20 Money Principles for 2020
9) Episode 79 – Creating a Family Legacy
8) Episode 05 – The 10 Uses of Money
7) Episode 74 – Dealing With Fear and Uncertainty During Covid-19
6) Episode 92- 21 Financial Scriptures to Live By in 2021
5) Episode 78 – Husband/Wife Communication With Finances
4) Episode 82 – Are Rental Homes A Good Investment
3) Episode 83 – The Life Stages of Financial Planning
2) Episode 1 – What God’s Word Says About Money
1) Episode 80 – 7 Keys to Significance and Finishing 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

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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:
Welcome, everyone. Welcome to the 100th Christian Financial Perspectives podcast. I finally made it, Shawn. 100. I can’t believe that. There’s a lot of work in those first 99 podcasts, a whole lot of work, hours and hours. And I realize that I’m going to get back in the saddle again. And I apologize to all my podcasts listeners. I know we’ve pretty much been off all summer, but as I was building the podcast, this one that we’re going to be doing today, Shawn, I didn’t realize how many hours I put into these things – for this 30 or 40 minutes. It’s like 10 hours that goes into that. So I’m going to have to get back in that mode again, it’s kind of like an artist painting a brand new piece of art on a piece of canvas and you’ve got to get into that mindset of creating. Make sense?
Shawn:
It makes sense. We’re just going to jump back on that bike. I’m sure we’ll get the balance back, figure out the steering, hopefully only crash a couple of times, but we’ll get there.
Bob:
And I’m excited, now hopefully in a couple of years, we’ll be saying welcome to our 200th podcast, but we had so many good ones in the first 99. And during this time, Mary Jo Lyons started with me and then she retired, and I know her and Mike are having a great retirement down in Rockport, and Bailey came in and helped me for a while. And I miss her. She did a great job on the podcast, but things always get better. So I’m looking forward to you doing this with me, but in those first 99 podcasts, there were some really good ones in there.
Shawn:
There were. So Jenna went through and came up with our top 10 podcasts based on number of downloads and watches. So if anyone wants to be able to go back and listen to them, I’m going to be listing them here for you. We’re also going to post this list on our website for the podcast, christianfinancialpodcast.com. So here they are in no particular order though, podcast number 66, which is our 20 money principles for 2020. I think it still applies for other years as well.
Bob:
Yeah, by the way, this is in the order of the most listened to is what Jenna told me.
Shawn:
Yeah. Well just kidding then. So the next one, podcast number 79, creating a family legacy; podcast number 5 oldie, but a goodie, the 10 uses of money; podcast number 74, dealing with fear and uncertainty during COVID-19, which I do think would be very applicable for any time there’s something going on, whether it’s COVID-19 or not. Podcast number 21, financial scriptures to live by; podcast number 78, husband and wife communication with finances. That’s a good one. Podcast number 82, are rental homes a good investment.
Bob:
I thought that was going to be our number one podcast. But when she looked at the downloads, it wasn’t. It was in the top 10.
Shawn:
Almost made top three.
Bob:
A lot of good information in there. I think my realtors really loved that one, are rental homes a good investment, because it’s really not.
Shawn:
Hey, we didn’t say real estate in general, you’re really mostly talking about rental homes. There’s a lot of variation in real estate as an investment.
Bob:
I remember getting into all the cost of owning a rental home and that’s after all the taxes, insurance, maintenance.
Shawn:
We might have to circle back on that one. I think you’ve had a little bit of personal experience on how fun.
Bob:
Yeah. Yeah I have. But anyway, I’m kind of a glutton for punishment when it comes to vacation homes. So I don’t have one right now though.
Shawn:
All right. Well, our top three, if you will, podcast number 83, the life stages of financial planning; podcast number one, what God’s word says about money. It’s always nice to see your first one is still in the top three.
Bob:
I think that’s because Christians want to know what God’s word says about money and they don’t realize there’s over 2000 scriptures that talk about stewardship and how to handle it. So there’s a few scriptures. Now, we don’t cover all 2000 in that one. We cover like the top 50. Yeah.
Shawn:
That’s good. Good to know. So you guys don’t have to go through all 2000. All right. And then our number one, as of this recording, podcast number 87, 7 keys to significance and finishing well.
Bob:
So there you go. Those are our top 10 podcasts. And so Shawn, it’s time to start the 100th podcast.
Shawn:
Let’s try to make this one in the top 10, Bob.
Bob:
I think it will be because it has so much to do with where we are now, but where you are now, you’ve got to look back. So today is going to be a history lesson on economic booms and bust. Does that make sense? So things that rise and things that go back down, and I think this is very timely for all the different markets that we’re seeing right now and what is happening, especially in real estate. Our listeners are all over the nation, but Rachael was telling me the other day she was reading an article up in Idaho where real estate prices have risen something like 70% or 80% in the last year. Yeah.
Shawn:
I think it was Idaho
Bob:
But anyway, yeah, it’s crazy.
Shawn:
It wasn’t necessarily the state you would think as having a huge boom.
Bob:
But again, it’s California. I don’t know that they must’ve piled everybody up in California though. Now they’re moving back.
Shawn:
Well, not even just California, but a lot of states have been seeing influxes of people. And I think a big part of it, as you can look at it as positive or negative, depending on which side of it you are, but with COVID and the pandemic, then more and more people working from home. And so that’s basically opened it up for if you have a job that is still going to be work from home as an option, then it kind of opens up where you live. You don’t necessarily have to live within driving distance to the office.
Bob:
You can live wherever you want to. Yeah.
Shawn:
You just gotta have good internet.
Bob:
But gosh, we’ve had such a boom in real estate. And of course stocks, the same thing. And it just seems like all the different asset classes are becoming overinflated, meaning that we could be approaching a bubble. I’m not saying we’re in one, but we could be, and boy when they burst, it’s not a pretty picture. But Shawn, I know there’s a scripture I love. And I’m going to have you go over this with us that really has to do with booms and busts and it’s not always going to be bad. It’s not always going to be good. We’re going to go back and forth.
Shawn:
Yeah. It was one of my favorite passages, actually. There’s a time for everything. So this is Ecclesiastes 3:1-7. “There is a time for everything and a season for every activity under the heavens, a time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak.”
Bob:
And a time for this scripture right now to be over. What’s so interesting is I was using this exact same scripture last year when everything was down so much, and now everything is up so much. It’s another good scripture to go back and look at it because life is so full of ups and downs, and nothing is going to continue to go straight up without eventually taking a breather and resetting just like when it’s down, you got to look up, but when you’re way up on the peak, you kind of need to look down and say, okay, how high have I gotten up? Am I getting in a danger zone?
Shawn:
And even if we’re not in a bubble, a true bubble that might burst, the thing that you can see looking back in history and looking back at the prices, not just in the stock market, but in many asset classes, is that there are normal market cycles. So if you hear someone say, well, there’s no way it’s going to go down and things are going to continue to go up. It just shows a clear misunderstanding of how markets actually work. There are always periods of growth, periods of pullback. Sometimes, which we’re going to be documenting in this podcast. But sometimes, you have a lot of unsupported growth and depending on the situation, that’s what can really turn into a true bubble and a bust.
Bob:
I know you have a favorite saying I hear you say around here about history.
Shawn:
Yeah. The old saying that those that do not learn from history are doomed to repeat it. But from my experience, it seems a more accurate phrase might be for us is what we learned from history is that most people do not learn from history.
Bob:
So they think it’s different this time, right? Yeah.
Shawn:
Everybody, well, not everybody in general. People seem to think, well, this is different. How? We already know that if you don’t learn from history, you’re going to repeat it.
Bob:
Exactly. So you need to learn from and Shawn, I have a saying right now with the way the real estate market is just so high up. And it’s gone up so much in the markets. And you’ve heard me say this around here. You’ll hear people saying, well, man, this kind of thing has to take a breather. I’ll say, listen, you’re going to need to understand something. So here’s my quote. “Markets can stay irrational a lot longer than a rational person can stay rational.” It will go way beyond what a rational person would ever think it would go beyond. So even if you do you think, gosh, we got to take a breather. I mean, real estate in some areas of the country are 80%. Other areas up over 30. I mean, as an average, it’s up over 20. It’s got to take a breather, but not necessarily. It may go like this for another year or two. Who knows. And a lot of it has so much to do with interest rates, and I was looking at these mathematical formulas and in looking at a $400,000 home today, if you finance it at 3%, if interest rates just go up 2% and you were to have to finance it at 5% to equal that same payment, you’d get at 3% for 400,000, you’ve got to lower the price to $314,000. You’d have to lower that price from $400,000 all the way down to the $314,000 if interest rates went up just by 2% to give the same payment and people don’t buy homes today with cash, they buy them based on payment.
Shawn:
Especially when you’re talking about individual family homes, most people are not in a situation where they can buy cash. So you’re absolutely right that it’ll affect the buying power of the market if interest rates change even just that much.
Bob:
So what we’re going to do today is we’re going to look at five examples of historical booms and busts. And we’re going to start way back, though. I mean, we’re going to go back thousands of years. I’m going to look at the Roman empire and I want to see what can we learn from the rise and fall of the Roman empire? We all know about that from our history books. And what were the causes? So what caused Rome to rise and then what caused it to fall? This is going to be a little bit different than our present day examples though, but still, a lot of the same things fall along the same lines.
Shawn:
Bob said we’ll start with the rise and fall of Rome. There were technological advances that helped the rise of Rome. Number one were roads. Roman roads were the most advanced roads in the ancient world at that time. It enabled the Roman empire to expand over 1.7 million square miles at the pinnacle of its power to stay connected. They included such modern seeming inventions as mile markers and drainage. Over 50,000 miles of road were built by 200 BC. And several are still in use today.
Bob:
That’s amazing that they’ve been around that long. So that was a new technology back then. So that would come along with the technological advancement, building roads the proper way. And they were all weather roads, as I was doing this research, that that was a big deal yeah that they weren’t getting bogged down in just mud.
Shawn:
Yeah. And it drastically increased the travel capacity of those roads, because if you have a dirt road, I mean, anyone out there who, even in our modern cars, if you’re driving on a really nicely paved, like brand new stretch of road, and you turn off onto that dirt road to go see your friend in the country, has anyone else noticed a difference that it’s a little bit rougher and you got to go a little bit slower on that dirt road.
Bob:
So, the other huge technological advancement that helped with the rise of Rome.
Shawn:
It was the concrete. So Roman cement and concrete are a big part of the reason ancient buildings like Colosseum and the Roman forum are still standing strong today.
Bob:
We tried to go see that last year and we had all these reservations to go across, and then covid came along and Rachael was not happy.
Shawn:
No, no, she was not. But Rachael, if you’re listening to the episode right now, it’s been there for a while and it’ll still be there.
Bob:
Exactly.
Shawn:
So another technological advancement was in water. So Roman aqueducts first developed in 312 BC enabled the rise of cities by transporting water to urban areas, improving public health and sanitation. Some Roman aqueducts transported water as much as 60 miles from their original source.
Bob:
This enabled that city to really grow to grow in size. And when you pull that many people together, you have a lot of commerce going on.
Shawn:
Yeah. An interesting parallel with that is Los Angeles. There’s not enough water for that city. And they actually have water coming from far away, hundreds of miles away, but the Romans did it first, as far as doing it well. So another one is in architecture, Roman arches or segmented arches improved upon earlier arches to build stronger bridges and buildings, evenly distributing the weight throughout the structure, which you should definitely Google that. There’s some really cool videos on the arches and how that changed. And of course, the last one, strong military. Rome’s military conquest led directly to its cultural growth as a society, as the Romans benefited greatly from contact with such advanced cultures as the Greeks.
Bob:
There was so much of that that played into the rise of Rome. Then along came the fall. We’ve all heard about the fall of Rome. And when I was doing my research, these are some of the reasons I found that happened and caused that fall. And as you’re listening to this, think about where we are today in America. Do you see some of this? Number one was big government and overspending. They got too big for their britches. Bottom line is they just got too big and because of that, oppressive taxation of the wealthy. Sound a little bit like today?
Shawn:
So far two for two, I think.
Bob:
But they got so oppressive it caused people to leave the country. Overexpansion. Just getting too big. Government corruption. Hmm.
Shawn:
Okay. We don’t have any of that.
Bob:
Yeah. Not at all. Political instability. Look at the fragmentation we have in our country today, the disregard for human life, just the coliseums and…
Shawn:
Gladiators. You had the slave trade.
Bob:
Yeah, that’s a lot. And then what played into that was immorality, sexual immorality. And this is interesting. When not when I found this one, I said, gosh, that sounds a lot like today, a mass migration of people into the country from other countries, into the empire from other countries. And they had a weakened military. The military started becoming weak. So I don’t know, Shawn, does this sound at all a little bit like today. Now we’re not saying the fall of America is coming next year. No, not at all.
Shawn:
There’s just a lot of similarities.
Bob:
I see a lot of similarities in there. And so, that’s really looking back a long way back in history, but it was the technology that helped them to grow so much because that technology was not there yet. This has come all the way forward and let’s look now at just the last hundred.
Shawn:
One thing though, Bob, just one point I wanted to make on that. It’s really interesting, though, with all of the technological advancements and advantages that Rome that contributed to its original rise. And yet the fall of it, when you look at pretty much everything you mentioned, it’s really all from within, at its core. It wasn’t that, oh, this just one country rose up and was able to completely demolish Rome or there was some catastrophe. It was mostly a fall from within.
Bob:
Yeah, it was. And I think it’s natural though. We go back to there’s a time for everything. The time to grow up and then a time to rebuild. So that’s gonna bring us to the last hundred years and we’re going to look at some examples that have been very recent, but we’re going to look at a hundred years ago exactly.
Shawn:
So the roaring twenties and yeah, it is very interesting that we’re talking about this effectively exactly 100 years later. So in the roaring twenties, we had technological progress. Again, technology. We had the assembly line, mass production of goods, the start of automation. We had the electrification of America going from candle light only and gas to most homes and businesses in America having access to electricity
Bob:
And industry.
Shawn:
The rise of the automobile, making us much more mobile and efficient, kind of like the work from home idea. The size and growth of cities in the job force when everyone’s commuting by walking or by carriage, there’s only so far and so much growth that you can have, and you introduce the automobile, that changes things.
Bob:
Yeah. And that really caused the rise in the twenties. And when I was doing my research. People could live 30 miles outside the city and go to work.
Shawn:
Which would have been unrealistic.
Bob:
It wouldn’t have been possible before then.
Shawn:
New mass marketing techniques that got people to buy more products and services, basically the rise of modern consumerism. Cheap credit by the banking system with unwise and fearless lending.
Bob:
Yeah. They went crazy. Here’s the money. Go do it. Hmm. Yeah. Sound at all like today?
Shawn:
No, it doesn’t sound like today at all. So another one, a major stock market boom full of speculation. And last one, a major rise in gambling and corruption.
Bob:
Yeah. So these were so many things that played into it in the roaring 20’s, and as we know, it was thought of as so great that it was called that, the roaring twenties, and really no one ever thought this would come to an end, but that reckless spending and borrowing and speculation, eventually that bubble did burst. And it nearly did it overnight. And then we know what came after that. It was the roaring twenties, and then it was the Great Depression, the 1930’s. So again, if this sounds like today, maybe it does, but remember, like I said in the beginning, this thing can go a whole lot longer before this bubble breaks. I mean, it could go another 50 years.. But we’re not going to go another 50 years before we have some pull back into the markets and stuff. But I just don’t want people thinking, oh no, Bob’s preaching doom’s day. No, I’m not, but I’m showing you history. And just like the 1920s where they had all this technological progress. We’ve had that same thing. We’ve had enormous technological progress in the last 10 years. And remember you were pointing out that new mass marketing techniques and back then it was magazines and newspapers and billboards coming out. We’ve had that same thing happen in the last 10 and 15 years. We’ve had major mass marketing thrown at us through the form of social media, the internet, entertainment, Netflix, TV. I mean, you notice now you’ll watch a movie and they’re advertising a product. Yeah. They pay to have that done.
Shawn:
The advertising has become part of the medium itself, the movie you’re watching or the TV show you’re watching and many times it just seems so natural. You don’t even think about it, but like people would see a movie or something. And like, oh, there was a Coca-Cola sitting on the desk or there was an apple or a Dell computer or certain kind of car. They’re not even advertising it, but it’s like, you have that psychology of people seeing.
Bob:
They actually are advertising it.
Shawn:
But it’s not overt is what I mean.
Bob:
Exactly. And in the 1920s, you were talking about cheap credit. Well, today we’ve got artificially low interest rates to stimulate the economy, and they’re artificially low. They cannot continue. It’s like candy, you can’t eat everything. Your kids can’t cannot continually eat candy. You gotta have some substance. And in huge amounts of consumers that have been given money by our government to buy goods and services, and even stocks, you hear these stimulus checks are going into buying stocks, pushing that market up. So yeah. So, that’s the 1920s. Now let’s get to some more recent examples. We went a thousand years ago.
Bob:
And then we’re going to bring it right up to the last 10 years or so.
Shawn:
And for this one, we’re going to go to another country. So we had Rome and the United States. So now we’re going to jump over to Japan in the 1980s. So Japan had a huge industrial expansion. In the eighties, Japanese automobiles virtually took over the world.
Bob:
I remember we wanted a Honda accord really bad. And so, you had to wait, you would go order it and you would have to wait like 12 weeks. And we did, we wanted one. So we went and ordered and we waited and waited and it finally came in. And I mean, it was just a huge rise in the eighties. And that was a really good thing for Japan. I mean, it was pushing them there.
Shawn:
They were exporting goods. They weren’t just importing. They weren’t just consuming. So another one was easy credit by the banking system. Just like in the 1920s in America, which made for enormous expansion. A large financial speculation by businesses and investors. I feel like every time we start going through these, there’s so many, they sound like, wait, did I jump to the wrong spot and talking about Rome now? We’re talking about America in the twenties.
Bob:
No, it’s the same thing over and over.
Shawn:
Another one, a roaring Japanese stock market went to all time highs, and the final one, a real estate boom of such magnitude in housing that Japanese families were taking out multi-generational mortgage loans to pay for housing.
Bob:
Now, is that insane? That’s crazy. See, that’s why this real estate might keep going. I mean, we could get to the point that homes are so high, we do like Japan and we start doing multi-generational mortgage loans.
Shawn:
Which just sounds insane.
Bob:
It is. But then what happened? It all busted again. Does this sound anything like what could be happening today, except we’ve not burst yet. And I don’t want us to, believe me. I do not want that to happen. But things like easy credit, large amounts of speculation, and a roaring stock market at all time highs, it’s just, you see this stuff over and over.
Shawn:
Well, we’ve essentially been in a quantitative easing phase for so long and continuing to lower interest rates, continuing to just make things easier. But really, what we need is we need some quantitative tightening. We need to take control before it goes to 20 plus percent inflation.
Bob:
Yeah. Yep. Exactly. And we heard a couple of weeks ago, inflation is only 2%. I’m like, what world are you living in? But then this morning it just came out that it’s actually 8% or 9%. Hmm. Wow.
Shawn:
If I’m doing my math, right, Bob, maybe you can double check it for me. But 8% is more than 2%, right?
Bob:
About 400% more. And all of us know, you just go fill up your gas tank at the car or you go to the grocery store. I’ve been here. A lot of our clients are retired, and they’re on a fixed income. And they’re just like, I cannot believe how much food is going up.
Shawn:
And gas too. Like, I don’t know about – depending on where our listeners are from, but at least here in central Texas, we’ve had pretty much even premium. Like the 93 level octane for the fuel was at most maybe $3 or under, and it’s been that way for a while. And now you’re seeing the only gas you can get that’s under $3 a gallon and still pretty close to it is the cheapo stuff, the 89.
Bob:
Yeah. I know. But Rachael’s car is a German car. We gotta put the good stuff on it.
Shawn:
It’s just something for even the most casual person you kind of see, I remember that was cheaper not that long ago.
Bob:
Yep. So now we’re getting to basically the last 20 years and let’s look at the late 1990s and that was called the internet bubble. And this was where we had the growth of the internet and it just created this huge buzz among investors that poured billions of dollars into internet startup. Think of startup.
Shawn:
Yeah. Hmm. And by the way, not all of them made it. I mean, there were some, I don’t know if anyone’s ever heard of Google, haha, but they’re still around.
Bob:
But any buzz like that today? Could it be so-and-so called Bitcoin?
Shawn:
So, what are we up to 4,000 somewhere? However many different cryptocurrencies?
Bob:
It’s crazy. But in back then these companies were able to raise enough money to go public, and they had no business plan. Really didn’t have much of a product or a track record of any profit. There was enormous speculation that every new tech company, okay. We say every new Bitcoin today – that every tech company would eventually make money, regardless of experience, net earnings, or real profits. And when all this capital dried up, many of these companies just completely folded and burst.
Shawn:
Yeah, yeah. You’re absolutely right. I think that’s a great comparison to compare it to the cryptocurrencies but Bitcoin, of course, is the most popular. I believe it was the first or at least it was the first one to really become a household name. But it just seems like there’s a new cryptocurrency every week.
Bob:
We were just talking about it yesterday.
Shawn:
Yeah. Yeah. And guess what, just based on the laws of averages and statistics, I have a feeling most of them won’t be around 10 years from now.
Bob:
The cryptocurrency, I think, is here to stay.
Shawn:
Oh, absolutely. Yeah, but not all of them are necessarily going to be.
Bob:
Just like the internet was here to stay. So, now we go to our most recent example of a bubble and a burst. And by the way, that burst from 1999, 2000, that burst took us six or seven years to recover. Just to get back to where we were, and then we had this happen, the 2008….
Shawn:
Real estate and stock market bubble. Oh man, this is this is hitting a little closer to home, Bob. This wasn’t that long ago.
Bob:
Did you come over in 2008?
Shawn:
My first year with you was 2008. So that was, for those who can’t see me, I’m using air quotes, fun time to get started in investment management. It was a little crazy.
Bob:
And just like today, what caused that?
Shawn:
Well, loose credit for anyone wanting to buy a home, regardless of having an income or job, and the idea that it is everyone’s right to be able to own a home, and as much as I would love for everyone to own a home, there’s responsibility that comes with that. You need to be able to actually afford the home.
Bob:
Oh, that was what was so unique about that. You do have to have a job and income. It’s just that the credit, again, we’re back to the same thing because it’s so cheap. Yeah. And we just had unprecedented growth in the subprime mortgage market.
Shawn:
Yup. And then we also had the US government sponsored mortgage lenders, like Fannie Mae and Freddie Mac to make home loans accessible to borrow with no or low credit scores, resulting in higher risk of defaulting on these loans. We also had financial firms selling subprime loans to large commercial investors in pools of mortgages known as mortgage backed securities, or MBS, on wall street.
Bob:
That’s what pushed the markets up so much. Yep.
Shawn:
And then the final one was banks lending loosely to developers and home builders to develop massive subdivisions and build homes for thousands of borrowers that can never afford to make even one to two mortgage payments. Which the tech boom, the internet boom, kind of the same thing. It’s like, well, we’re going to invest in this cause it’ll come like, well, what’s the business plan? Who is actually going to buy this? Oh no, we’ll figure that out later.
Bob:
And then we were all caught by surprise with what happened.
Shawn:
And then for those who aren’t aware. 2008 we had a fairly significant crash in the markets, both housing and real estate and stocks.
Bob:
It took five years for the market to rebound back to where it was. Wow. Five years. Now, remember the market was where it was in 2000. It dropped and then it came back to where it was in 2000 and about 2007 to 2008. It was just back to where it was in 2000. Then it dropped again, and didn’t come back to where it was in 2008 and year 2000 until 2013. People don’t realize, because they forget, that if you just invested in the S&P 500 minus dividends, you’d have basically had the same price for 13 years, which is when you think that you’re making 10% on average a year. No, you were not, not during that time. And so now, it takes us to today. We’re at 13 years now past that 2008 bubble. And so many of these bubbles that we were pointing out over the last hundred years, they were based around loose credit and over speculation. Remember those two words – loose credit and over speculation. And COVID, it’s just been such a bad thing, but it’s created a huge pent up demand for almost everything. We’ve never seen people respond like this. And these artificially low interest rates are causing, like I said, in the very beginning of the podcast, an abnormal rise in home prices. In some places as much as 80% over the last year, but the norm is 20% plus, and that’s not normal. Real estate will normally just stay with inflation. So it’s way, way beyond inflation.
Shawn:
And then the other one, of course, is the stock markets speculation. We’re at all time highs with thousands, if not millions, of inexperienced buyers, purchasing companies with no real net earnings. Take, for example, the rise of Robin Hood as a trading app. And they’re not the only one. We’re not picking on Robin Hood, but when all of a sudden your technology changes and you have people who are working from home, people who are maybe unemployed, but they’re receiving payments, and they’re bored. And they’re like, well, I’ll play this. I some play money, a thousand dollars here, a thousand dollars there, and I’ll just buy whatever the app told me I might need to buy.
Bob:
And they’re speculating on companies that have no real net earnings and they’ve never seen a downturn. That’s the scary part of it.
Shawn:
Another one that’s consumerism, which again, I think we’ve talked about that multiple times. Consumerism were at all time highs because for many it’s a temporary fix to raise their self-esteem after being just so down and shut in from COVID, and we’ve also seen a rise in people reaching out for counseling, people suffering from depression, like medication, and I mean, it makes sense. People have been hurting, but for many they’re turning to consumerism.
Bob:
Just seems like there’s all this COVID and all this government giving unemployment. And I mean, I was just with a business owner yesterday. He says, I can’t hire people because I can’t compete. I heard not just from him yesterday, but I heard the same thing with a big lumber company that is down the road from us that has multiple locations across Texas saying that kind of the breakeven point is around $18 an hour to compete against what unemployment’s been giving. So this has really created a buying frenzy for almost everything from new cars to buying stocks online, to new homes, to new second homes with all the artificially low interest rates. Online shopping has become that new high because the apps make it so easy to just spend it, spend it, spend it, and Shawn, it’s just getting crazy. I don’t know how long this can continue. Like I said, a whole lot longer than a rational person can stay rational.
Shawn:
Well, Bob, at this point we’ve covered a lot. So I guess there’s really only one thing for me to ask you. So Bob, are we in a stock market and housing bubble, in your opinion, that is about to burst?
Bob:
Well, I’m not going to give you that true opinion over a podcast. Okay. Cause there’s many opinions about being at the top of markets as well as at the bottom, and honestly, Shawn, no one really knows. Really, no one knows. I know that the programs like CNBC, they’ve got their bear market guys and they got their bull market guys. And when it gets real bad for a few days, they go grab the bear market guys and pull them on because they’re media.
Shawn:
You’re just saying the entertainment companies that pretend to be news don’t necessarily know for sure what will happen?
Bob:
And no one does knows that. I just know this. There’s always, and I want y’all to really hear me on this, there’s always a common mentality level during every bubble that I’ve ever seen that is different this time, this thing is not going to break. It’s going to keep going. And from my years of experience, people are going to continue to buy and buy and buy into a bubble until it finally bursts. So it has to take that. This thing could go a whole lot longer. I have a great chart I’ve been referring to for many years, though. And you know I’m always talking about that. It’s called the emotions and cycles chart. We’re going to put this on our website for Christian financial podcast so you can see this. I’ll have Jenna put this up. You’ve heard me refer to it. If you’ve listened to a lot of my podcasts, you’ve heard me refer to this many times over and over, and I can tell you, if you look at that chart, we were at the buy, buy, buy right now. It’s a frenzy. It’s like, no matter what the price is. And I’m really seeing that in real estate, but it’s an interesting chart.
Shawn:
That’s very interesting. And as Bob said, we’re definitely going to make sure that we put this, it’ll be on the episode webpage. So, the page on our website, just for this episode. So you’ll be able to listen, read the transcript, as well as you can access this chart. And I would definitely encourage you to look at it, which kind of reminds me, Bob, for people in general, they’ll continue to buy all the way until actually a bubble bursts, but what I always love, and you’ve said this before, as a very contrarian investor, you buy when no one else wants to touch it, you sell and move more to cash when everybody wants it. And probably the most famously known person for that is Warren Buffet. It’s almost like a, here’s your insight, maybe an insider tip for lack of a better term. But when you hear Warren Buffett is buying such and such industry, maybe we’re starting to turn around. Like there’s no guarantee, but like maybe he’s seeing something
Bob:
What’s so interesting to me is always on these programs, and you’ve heard me say this around here. Do you ever notice that when we have a bust, all of a sudden they go find the people that have money, and they’re great investors, like the Warren Buffetts, he always has money to put in. And I’m like, okay, so when did he get all this money? Could he have been selling silently when everybody’s buying? So the good investors like that who are the trillion investors, they’re selling at the very top. They’re not voicing it. They’re not telling everybody about it. And then when the bottoms come along or when these markets really drop, they have the money to do it. Shawn, as we talk about these market bubbles and bursts and we look at history though, I want to tell you the true answer to all this. And we’re going to go into this next week is what the Bible says and how to handle these booms and bursts. I call them bulls and bears as well. And we started today’s podcast with that scripture from Ecclesiastes. There’s a time for everything. And I believe we should enjoy these good times and also be ready and wise for the difficult ones. And from experience, I’ve seen in either the good or bad times. It’s hard for many people to realize that that neither the good or the bad times are going to last forever. And there’s many biblical guidelines for all this. So on our next podcast, it’s going to be called biblical guidelines for booms and busts. And in the meantime, I would invite everybody to stay alert and cautious as a fox. We live out in the country. We have these foxes come up and you’ve got to see them. They’re looking around. They’re staying cautious, and a fox in the wilderness doesn’t want to get taken out. He’s looking for something else to take out. So, I just really invite all of you, until we do our next podcast, get into God’s word. It says so much about that and read that scripture about a time for everything.
Shawn:
Or maybe a different way to look at it. If you’re going to be anything, be cautiously optimistic. It doesn’t mean you have to be all doom and gloom, but don’t look at this as, “Oh, this time it’s going to be different. This time it’s going to keep going,” because it probably won’t, if we’ve learned anything from history. So as always, if you have any questions, feel free to call us at (830) 609-6986, or you can visit us on the web at christianfinancialadvisors.com and Christianfinancialpodcast.com.
Bob:
Well, that was fun today, Shawn. Back in the saddle again. So the podcast will be coming out. I’ve already got my next 10 or 11 lined up, ready to come out.
Shawn:
All right, we’ll see you guys next time on podcast 101.
[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.
44 min
July 09, 2021 99 – The History of Faith Based Investing
Click below to listen to Episode 99 – The History of Faith Based Investing
The History of Faith Based Investing

Learn about how the faith based investing movement began.

More episodes >>

In every movement, there are pioneers and those who pave the way – those who step out in faith towards a great unknown. In this episode, Bob and Shawn talk about the pioneers of the faith based investing movement. For many years, people were unable to choose who and what their investments were supporting because there just wasn’t information readily available in order to make faith based decisions when it came to choosing where your money went.
However, that all changed in the mid 90’s when companies like “The Timothy Plan” stepped up in the investing world and trudged forward to create a way for Christians to invest in companies that they could be proud of – companies that aligned with the Christian faith. Thus, faith based investing was born and began to grow and take shape.
Christians are now able to line up their beliefs and moral convictions with their investments through faith based investing. You no longer have to stand idly by while supporting anti Christian agendas just so you can make money in order to retire. You have choices, and today, the faith based investing choices are greater than ever!

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Shawn Peters

The Timothy Plan
Website

Kingdom Advisors
Website

NACFC
Website

Inspire ETF
Website

Ave Maria Funds
Website

Guidestone Funds
Website

Eventide Funds
Website

Biblical Viewpoints of Money and Wealth

Biblically Responsible Investing

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
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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:
Welcome to our 99th podcast. I mean, we are just one away now from number 100. And for those of you that listened to my podcast regularly, you’re probably thinking, where has Bob been? Maybe that’s wishful thinking, thinking that you missed me, but I will say this, our last podcast came out around the 4th of May. And then we just had a lot of things happening in the firm, with Christian Financial Advisors, and Bailey – y’all were used to hearing Bailey on the program with me and she decided to move on to another area of life. So she’s no longer going to be doing the podcast, but I have a really good replacement and I think y’all are gonna enjoy having Shawn Peters, happens to be my son-in-law, by the way, I think you’re gonna enjoy having Shawn on the program with me. Shawn’s a sharp cookie. Of course he is cause he married my daughter, Jenna. So the guy’s smart already.
Shawn:
You’re not biased at all on that, are you Bob?
Bob:
No. No, not at all. Shawn, tell our listeners – they’re not going to know you – tell them a little bit about yourself, and how you and I met.
Shawn:
Yeah, Jenna and I, Bob’s daughter, my wife, we met at Liberty University. We’re both going to school there. And from that relationship I had met Bob and he was, as many of you probably already know, was an investment advisor and still is. I actually had the opportunity to work with Bob right after school for something I thought was going to be maybe an internship to just kind of learn a little bit more about this industry and that very quickly turned into a job. And then Jenna and I got married about a year or so later.
Bob:
And what year was that, Shawn?
Shawn:
2008 was when I came out here and Jenna and I got married in 2009 and worked here from 2008 to 2013. At that time, I felt the Lord was calling me in a little bit different directions. So for about seven years, I ended up working in digital marketing website development area, just learned a lot of interesting things. And in early 2020, God changed the direction again and made it really, really clear that I needed to come back. And it’s a little bit different this time around, I’m a little bit older, hopefully a little bit wiser, I think.
Bob:
Everybody knows me as this ole country boy and especially those that have been listening a while. It’s so funny when our listeners call and they say, yeah, I’ve been listening to you. I know all about your family and everything. And I’m always teasing Shawn. Cause y’all, this is the real country boy in me. I’ll say you ever watched these cows and they’re always trying to eat the grass on the other side of the fence. And I know, Shawn, I’m just playing with you. You thought it was greener over there and I’m glad you came back.
Shawn:
I see it as the Lord had things he needed to teach me. And there was some skill sets that I needed to acquire. And now, I feel like I’m a little bit better of a more rounded individual to be working here and helping people as an advisor.
Bob:
Amen to that. Amen to that. And Shawn’s got a degree in finance from Liberty University. And you talk about an ace when it comes to Excel spreadsheets. I’ve never seen anybody work an Excel spreadsheet like you, brother. I mean, I’ve watched you on some of these and how you come up with all these formulas and you know them all. It’s amazing. Is this just something you were doing like when you were in grade school or something?
Shawn:
Actually, funny enough story. I don’t get to share this as often, but starting in either eighth grade or ninth grade, I don’t remember which year it was. My dad had an old laptop at the time. It was a Toshiba something and I started taking it to school to take notes. At the time, I’ve gotten a little bit better at it, but I was a little bit OCD on how I would write using just pen and paper and pencil. And it was bad to where I would constantly like go over my letters. And because of that, I was very slow at note-taking, but I really wanted to be able to listen. And so I had asked my dad if I could take the laptop to take notes. So I got really good at typing. That was kinda my first like getting into the computers and really ever since then, I just, it was just more and more and more just with computer stuff and I’ve never really been like a professional IT person, but I’ve just kind of always been fascinated in kind of gravitating towards technology, and funny enough that eighth grade, ninth grade time period with that laptop was one of my first entrepreneurial projects because of the 30 kids that were typically in some of my classes for note taking, I ended up selling my notes, typically $5 to $10 a piece. So all the other kids could just listen and didn’t have to write anything down. And then I would just print copies at the school. So I didn’t even pay anything for the materials. I got paid to print copies of my notes.
Bob:
So were you using Excel spreadsheets back then?
Shawn:
I think the first time I really started using anything like Excel spreadsheets was like my sophomore year. That was back in 2003? Yeah, I guess 2002, something like that. So yeah, I’ve had some years of experience. I grew up with it.
Bob:
Hey, I can do a better one on you than that. You ever heard of the Commodore 64?
Shawn:
I’ve heard of it. I’ve never owned one.
Bob:
That’s going way back there, brother. There was a Commodore 64, then the 128, then the 356, and we’ve come a long way since then. Well, we better get on with today’s podcast, but you’ll get to know Shawn over the following podcasts. And of course, you know me and for those of you that are just joining us, welcome by the way to our 99th podcast. The next podcast, which is going to be 100, we’re going to be sharing a lot of the history of the first 99 podcasts we made. And we’re going to be talking about those ones that are our most popular podcasts, but I thought today, something that Shawn’s watched his father-in-law get very involved in is what we call faith based investing. And by the way, this is probably the fourth or fifth way to call biblically responsible investing or morally responsible investing or values-based investing. Now, it’s called faith based investing. So today, I thought we would have a program on the history of faith based investing. That’s kind of the term being used today is faith-based investing, but it’s gone through a lot of changes and it’s an old movement now that’s been around quite a while.
Shawn:
Yeah. It’s very interesting. The concept of faith based investing, whether it’s, faith-based, biblically responsible, faith driven, socially responsible, all of these really you could group them together under values based investing. So, whatever those values might be, they’re all really just different terms or some of them are slightly different focuses of values-based investing. So what I’d like to know on behalf of our listeners, Bob, how did you first hear about the concept of values-based investing?
Bob:
How did I first hear about it? There was a part of it before before I even heard about faith based investing or values-based, morally responsible. Well whatever you wanna call it. It came back to being a Christian and when I was first getting into the financial services businesses, that’s basically what it was back then. Today, it’s called the financial advisory business, but back then it was called the financial services business or industry, and Shawn being that I love the Lord. I came to the Lord back in 84. So, I’ve been a Christian a long time when this idea came about that I wanted my business to glorify God in all it did and everything it does. So I started thinking, how does this apply to finance? And those that have listened to the podcast have heard me say many times, I’m a Proverbs, nut when it comes to the Bible. I love the book of Proverbs and it talks so much about handling money in Proverbs. If you want to be successful in handling money, just go to Proverbs. But around ’95, 96, 97, right in that era right in there, I started thinking in asking myself, who am I investing in? What companies are we investing in? Stocks, the stock exchange. And then along came this boycott, and those that know me know I’m Baptist. I was going to a Baptist church and the Southern Baptist Convention came out and they said there is a certain company that has decided to dedicate a day out of the year, and this was Disney back then, to honor the LGBT and the Southern Baptist convention were offended by that by taking a special day just to honor that group and the Southern Baptist Convention back then called for a boycott of Disney. Do you remember this, Shawn? Or were you old enough? I mean, you were about six or seven years old during that time.
Shawn:
Yeah, I don’t remember too much about that. Unfortunately, I have to date myself. Apparently, you became a believer about two years before I existed. I was born in late 86, and I don’t remember the boycott from my childhood. I just remember it since then, because of talking to you and other people telling me of when it happened.
Bob:
So what they really called it back then was Disney called it gay day. It wasn’t called the LGBT back then because the LGBTs came along later with that term. So, I started wondering just from that, what could born again, Bible believing Christians, if they’re investing in companies like Disney, could there be other companies that might be involved in agendas that would violate biblical principles? So I started digging and looking at companies and what they might be up to. Somehow somebody got me connected to a guy named Scott Fehrenbacher back then. And I Googled Scott just today, before we got onto the podcast, and he’s still around and back then he was putting together a spreadsheet of all the companies that may be involved in promoting the anti-family agenda, like the gay lifestyle or promoting giving money to Planned Parenthood, promoting pornography, abortion – companies that were in the abortion industry.
Bob:
And so he started coming up with this list that he was putting together and then starting to add the computer to it to where you could look up these companies. And then he put me in touch with The Timothy Plan. Now you’ve heard me mention The Timothy Plan many times. I was one of the very beginning investors with The Timothy Plan mutual funds. And if you go to The Timothy Plan today, you’ll see, they’re one of the founding companies of what was called morally responsible investing. That was the beginning term for it. And then Art Ally from that, and he’s been on my podcast also, he realized that morals can be defined differently, but not when you use the Bible. So he changed it from morally responsible when investing into the term biblically responsible investing. And this is where the terms have kind of changed throughout the year to make this clearer to the audience.
Shawn:
At the time of the morally responsible investing and then before Timothy Plan started using biblically responsible investing. It was a little more common of the idea of, I believe it was the ESG environmental, social, governance as the idea of the moral or morally responsible. That was kind of one of the first ideas for that, right? It wasn’t necessarily Christian.
Bob:
Right, right. And actually, when you look at it from the socially responsible investing compared to morally responsible, the difference is the same difference between conservative and liberal or Democrat and Republican. Okay. It’s that big a difference, back then it was. So, maybe they’ve come to align together a little bit, but really there is still a big difference today. So, if you’re thinking you’re morally responsible by being socially responsible, in many ways, you’re not at all.
Shawn:
Got it. Okay. Yeah. That makes sense. So, hearing a little bit about your first introduction or that first part of maybe I should be thinking about this differently. What were some of the challenges that you faced during those early days in trying to pursue this?
Bob:
There were lots of challenges, Shawn, there were a lot. First of all, there was just a handful of us in the beginning. And quite frankly, we were thought of as nuts. You guys are crazy. I mean, investing is investing? And you really think you’re going to make a difference by not investing in and staying away from companies that are involved in some of these agendas. And also, the big challenge was very limited mutual funds to pick from. The ETFs had not even come out there or if they had, they were just in the beginning stages in the secular market. So that was not even remotely thought of. And I remember when The Timothy Plan came out, their first mutual fund was a small cap value fund. And small cap value is a good asset class to be invested in, but it was not a great asset class in the beginning because the dotcom bubble was coming along. And it was invest in companies no matter what the price to earnings ratio was. And just bet on all these internet companies and values-based investing was not into that. I mean they’re looking into companies that are trading at a value, so that was not a popular fund back back then. So, the early adopters faced many challenges of diversification, a portfolio of diversified investments, that would be morally biblically responsible, and it was a challenge to our clients. And the people that came along beside and said, I want to be biblically responsible regardless of what the returns are, because I feel God owns it all and I want to honor him with it. So, lots and lots of challenges in the beginning days. Definitely. And just like you said, not being accepted in the overall industry, even amongst Christians.
Shawn:
So it sounds a little bit like the big challenges were being able to find investment options that would align with your values with the way you were trying to invest on behalf of clients that would also allow you to be properly diversified because obviously the goal is not only to be, in those early days, biblically responsible, but you do still need to adhere to sound financial principles and portfolio theory and diversification and all of that science. And then I guess the added challenge, it sounds like that unlike maybe today where where it’s becoming more commonplace that people know to even look for something like this as an option. We’re having to educate people from the very beginning of when they talk to you and explaining this concept and talking about that God does own it all. This is why we’re trying to do it, because most of those I’m assuming at the time before talking to you, maybe had never even heard of the idea.
Bob:
Absolutely. And it was it was not mainstream. It was in the beginning years, it was the pioneers. And I think of it like that, I think of some friends of mine that maybe a lot of people have never heard of, but Art Ally, Steve Ally, who has gone to be with the Lord now, have Timothy plan. I think of Mark Manila, a great friend of mine for many years with integrity investors. I think of Dave Hart, Dwight Schwart, and if these guys hear this podcast, they’re going to be honored that I mentioned their name. They were out there. And and then from this, there was an organization started, it was called the National Association of Christian Financial Consultants. And that organization never did grow to a huge organization because it was truly about being biblically responsible. And this is the way you’re going to do it. And if you’re not going to do it this way, just don’t be involved because this is what we’re about. In the later years came along a wonderful organization today called Kingdom Advisors. And a lot of people who will hear me talk about that, but there’s a lot of people in Kingdom Advisors that are still not subscribing to being biblically responsible, but they do integrate Christian principles in all the other areas of financial planning. But it’s still mind boggling to me that anybody would not integrate and not believe in biblically responsible investing because it’s such a part of like your core when it comes to financial advice and planning, because it’s investing is what we do. And once you get into biblically responsible investing, it kind of takes you along the path of opening all the other areas of your life up to God’s ownership of everything. I don’t know if that makes sense, but I hope it does.
Shawn:
Absolutely makes sense. Hopefully it makes sense for the listeners. I was going to ask you who some of your first partners or companies that you started working with in the movement. I think we covered those pretty well. Were there any others, besides the ones you already mentioned, were there any others that you had had found or partnered or had started working with kind of in the early days of that movement?
Bob:
Yeah. And they’ve been involved a long time, but I remember it was Ave Maria funds. They were Catholic funds, very, very pro-life later that came along was the Eventide Funds. And now of course I’m very, very close friends with Robert Netzly of Inspire ETFs, and man that brother caught the movement and just went on fire all the way. And he’s got a lot more energy than me cause he’s younger and I’m just really excited about him. We’ll talk about Robert here a little bit later.
Shawn:
That’s great. So one question that kind of comes to mind, can you explain for our listeners is the difference between the types of investing people have been hearing more about today? Because for example, people might hear about faith-based, faith driven, morally responsible, as we’ve already mentioned, and biblically responsible. And then there’s quite a few others that are probably out there that people have heard, but maybe you could talk a little bit about what are the differences between those, if there really are.
Bob:
Yeah. There’s not a lot of difference. And it’s interesting though, as I’ve watched this over the years grow where for some reason there’s been different names that have been more accepted. So, in the beginning was morally responsible then biblically responsible and then it changed to values based. And now it’s more called faith based, and I’m not sure, but for some reason along the lines and things change, but now it’s much more accepted with that term of faith based investing, even though basically at the core, it’s the exact same thing. So, I guess having the right name is that important. I’m not sure why that made it more mainstream, but it did, maybe because it was inclusion of all faiths, but it’s still Christian based. It’s still based on the word of God. Now, there are different ways that some of the companies handle faith based investing. Some companies will say, well, we’re not going to invest in a company that is involved in that industry. Okay. So, as an example, one of the major well-known funds that only used to be available to Baptists is Guidestone Funds. Guidestone is not going to invest in a company that is producing pornography. Okay. But they may invest in a company like Netflix or maybe Apple or Google that they’re not making pornography, but they show pornography through their networks, but Guidestone said, well, they’re not making it. So, we’re okay investing in that where there’s others that will say, if they’re giving that as a choice, we’re not going to invest in them. Does that make sense?
Shawn:
Yes.
Bob:
Let me give you another example that’s really clear. Maybe it’s a pharmaceutical company and maybe they’re using fetal tissue research, so we don’t want to invest in them, but there could be another company that’s not involved in fetal tissue research, but they’re giving money to Planned Parenthood, which is one of the largest abortion providers in the United States. So see, there’s the two differences there. The thing is, I don’t think we need to be beating each other up over exactly how it’s going to be done, but there is avoidance, but there’s also which I like about Eventide Funds that came along and said, okay, it’s not just about employment, but it’s also about inclusion and looking at the good side of companies. And this is where we have our seven investment management principles. And so, you look for companies that have pro-life values and companies that produces the things that we need and treats their employees well with fair pay and good benefits, good health insurance, retirement plans, provides a safe working environment and actually treats the environment good. Because if you love the Creator, take care of the creation. So do you see the different sides of this? In the beginning, it was all about avoidance. It’s still about avoidance, but they say, well, wait, let’s also look for companies that are doing good, not just avoid companies that are doing bad. And that’s where really the history of faith-based investing and where it’s come to today. And I’m excited about that because you don’t just always want to say, I’m doing well. I’m avoiding the bad. Well, let’s look for the good.
Shawn:
Makes sense. Yeah. So, the idea of looking for companies that they may not necessarily be Christian. Like obviously, our firm is very unapologetically Christian. We are Christian financial advisors, but not all companies that are good options that are making a positive impact are Christian, but there are a lot of companies that make a positive impact on their community, whether that be their employees, whether it’s their stakeholders, whether it be the customers that they serve or the actual community that they are located in. So yeah, that’s great. And I think that’s actually really encouraging, especially today, in my experience over the last 12 years of knowing about this, and seeing where we’re at now compared to hearing of when you first started. We really have that more holistic picture of avoiding certain negative issues, but also finding companies that should be celebrated for the positive impact that they’re having.
Bob:
We had the early adopters and then kind of the midstream adopters and then the later adopters. And in that midstream adopters, like in the last 5-7 years, not 20 years ago, but in the last 5-7 years, we’ve had some of the younger generation that I’m so excited about this come along. And this is where we get to mention Inspire Funds. I just love this brother, and he’s got that program called Inspire Insight and he’s working with Biola University to put this information together to where you can go put in any company and you can see the good and the bad, and then they come up with a score and what you’re looking for is a positive score on the company.
Shawn:
Yep. And also, I appreciate that Inspire is looking for both the avoidance on the negative and also looking for the companies that are on the positive side, like making that beneficial impact on their community and what they offer. I think that’s great just to see you that have Timothy Plan and Eventide and Inspire. And really, all of them have gotten to that point. Now, it’s kind of like the maturity of the sector or offerings have gotten so much better. And to me, it really speaks to difficult principles anyway, of just this holistic that when you’re held accountable and God owns all of this, it’s not just about what you’re not supposed to do, but it’s about what you should be doing. Like someone who avoids sin, but doesn’t reach out and help the elderly, doesn’t help those in need, doesn’t donate their time, doesn’t feed and clothe and visit people in prison. Not doing those doesn’t mean that you’re a bad person, but there’s more to it than just not doing the bad stuff. It’s about doing the positive things.
Bob:
The scripture faith without works is dead. And so looking for the good, and this has really taken us up is that where we are today is we’ve gone from, I remember in the beginning, I was there with the first $10,000, $20,000 getting into this movement. And now, this movement is close to a trillion. It’s gotten that big. Just praise God to watch this movement because now, really there’s no excuse for a Christian not to be biblically responsible, values-based, faith-based, whatever you want to call it. It’s all the same thing. Because in the essentials, it’s what matters. And you can invest in international. You can invest small cap growth, small cap value, large cap growth, large cap value, mid cap bonds, intermediate bonds, long-term bonds, short-term bonds, high yield bonds. You can invest in all the different asset classes amongst all the different categories and get a very well-diversified portfolio today and stay within being 100% biblically responsible. This is more exciting today than I’ve ever seen it. And that’s showing that this movement is going to continue to grow. And what excites me, too, in telling my fellow brothers and sisters in Christ, is it doesn’t make sense for you to go out and vote right and vote for conservative values and then go invest left. Cause you don’t need to be investing left. You can vote right and you can invest right as well.
Shawn:
Yeah. Well, I have one question for you, Bob, for us to wrap up. Do you have any reading recommendations or other resources maybe for our listeners that would like to learn more about what is now commonly known more faith-based investing?
Bob:
I do, Shawn, and I’m kind of a little bit biased because I wrote this Bible study, but I really believe it begins with the word of God and prayer. I had another client in the office with me the other day and they’ve got half of their investments biblically responsible and the other half is not. And I asked him, would you like the other half to be? And they go, well, we need to think about that and pray about that. And I said, well, here’s a copy of the Bible study, Biblical Viewpoints of Money and Wealth that I’d like to give you. Allow the word of God and the Holy Spirit to get ahold of your heart and see where that takes you. Because God’s not going to answer against his word. And if you need to pray about being biblically responsible when you know about it, you need to go seek the word of God. I have a hard time believing that God would not want all Christians to be biblically responsible with their investments. Robert Netzly from Inspire wrote “Biblically Responsible Investing”, another really good book. Timothy Plan just came out with one recently as well. And if you’ll go to their website, you’ll see it. It’s call “Investing With Purpose” and that’s by Art Ally. I would recommend those three to start with. And there are others, but I’m not going to overwhelm somebody.
Shawn:
That’s great. Just to recap, the name of the Bible study?
Bob:
It’s called “Biblical Viewpoints of Money and Wealth”. It’s seven sessions, but I’ll open it right up here really quick, and I’ll just give you an idea about what these sessions are, and we call them viewpoints. And the reason they’re viewpoints is because the first viewpoint is a biblical versus a secular worldview. And that’s what you’ve got to come down to, too, because biblically responsible, faith based investing is a biblical worldview. And then that second is who’s the owner? Who owns it all, and who’s the manager? And there’s a scriptural basis in there. Psalms 24:1 says, “The earth is the Lord’s and everything in it.” So, we have to come to that conclusion that God owns it all. It’s not us. And then the viewpoint of working in retirement, secular and biblical counsel, money and wealth, giving and blessings, and inheritance and legacy. It goes through those. And then, the other two books I mentioned by Robert Netzly and Art Ally, I would suggest those two.
Shawn:
I will warn our listeners, the Bible study that Bob mentioned is very Bible heavy. So make sure you have your Bible or your Bible app, because there there’s not a lot of words already pre-written for you. It is a lot of directed, “Go read this scripture. Now go read this scripture. Now read this scripture.”
Bob:
I don’t want to speak to someone. I want it to be the word of God speaking to their heart. Yeah. Shawn, thank you. Wasn’t this fun?
Shawn:
Great. I hope our listeners don’t don’t riot and will allow me to come back for the next one.
Bob:
Next one. All right. Well, that’s going to do it today. By the way, if you want some help, you can always go to Christianfinancialadvisors.com, ChristianFA.com. You can abbreviate the financial advisors if you don’t want to spell out financial advisors. You can just go ChristianFA.com. Our phone number is (830) 609-6986. We serve our brothers and sisters nationwide and would love to help you get a biblically responsible, faith based investing as part of your life and bring that to fruition. Thank you for sticking with us this long. That’s all for today.
[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 Podcasts, Spotify, Amazon Music, 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.
38 min
May 04, 2021 98 – Insurance Do’s and Don’ts
Click below to listen to Episode 98 – Insurance Do’s and Don’ts
Insurance Do’s and Don’ts

Learn about the the do’s and don’ts of insurance coverage.

More episodes >>

Bob is joined by Ron First of Christian Insurance Services to discuss the do’s and don’ts of the insurance business. Insurance is more than just a requirement. Instead, we need to look at insurance with the entire picture in mind as part of your entire financial plan. Ron covers the most common insurance coverages, like health and auto, while also delving into rarely mentioned areas, like disability.
It’s time to start seeing insurance as future protection for you and your family. There is so much more that goes into insurance than just the best quote that you hear from a cute mascot in a commercial. Yes, paying a good price is always important, but it is even more important that you have a plan that protects you and your family if or when the time comes.

GUESTS: Ron First of Christian Insurance Services
HOSTED BY: Bob Barber, CWS®, CKA®
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Ron First

Christian Insurance Services
Website

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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:
So welcome to today’s podcast. I am so excited to have my Christian brother here. I hear him singing all the time up and down the halls here at our office complex. He is just so fun. Ron First from Christian Insurance Services. Welcome to the podcast, Ron.
Ron:
Thanks so much, Bob, for having me here. I just love teaching. I’m a retired educator. I was a teacher and a principal for 30 years, and that’s like one of the gifts that I have. I know it’s my gift, that and evangelism. So I just love to share and teach.
Bob:
Well, I love your singing.
Ron:
I’m sorry to hear that, Bob.
Bob:
You heard me sing one time. You’re like, okay. I know why you didn’t go into that profession. So, Ron is with Christian Insurance Services. He’s the president and founder of Christian Insurance Services. And Ron, how many years ago has it been now that you started Christian Insurance Services?
Ron:
Wow. We started under the offices of CFAA. Then after that, I guess now solo as an entity on its own. We’re going on the 11th year. It’s unbelievable. Solomon says that that life is a vapor. Literally, it’s gone. It comes and goes.
Bob:
Yeah, exactly. A lot of our folks that listen may not have ever heard of CFAA, and that was what we referred to as the Christian Financial Association of America. We were attempting to start a USAA type of movement movement for Christians, but the Lord has something else in mind. Right?
Ron:
Absolutely. Everything works out.
Bob:
Today we’re going to talk about insurance do’s and don’ts. Ron, I got to admit, all these commercials that I see on TV that these insurance companies do, these guys are very innovative. And I remember the caveman commercial. It’s so easy a caveman could do it. I still remember that from Geico, and you’ve got all these different insurance companies and what’s so funny is there’s so many that don’t really have to do with insurance. A lot of them, they get you in on some kind of crazy scene, but then they say give us a call, 15 minutes will save you 15%. And it seemed like to me, that insurance is just so much sold on price versus coverage. And you’ve talked to me a lot about this that we need to be very, very careful about purchasing any insurance in isolation. And so what do you mean by that by purchasing insurance in isolation? I don’t think that means that you should be all alone when you purchase your insurance in your house. You know what I mean? Isolation. What does that mean?
Ron:
One of my favorite scriptures is Luke 14:28. Jesus said, “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, for if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you saying the person began to build and wasn’t able to finish.” When you purchase insurance, you have to see what is the end goal? What are you trying to do? What is the why of why you’re buying insurance? What do you want to accomplish? And for most of us, our goals financially is to possibly retire and to get to that, get to the 30-40 years, you have to build your nest egg. So anything you buy insurance wise is going to impact your ability to develop that nest egg.
Bob:
I have never thought of it that way. I think most people just think of buying insurance as well, this is something I’ve got to do. To drive a car, I gotta have insurance. That’s the law, and just get me whatever coverage will obey the law and be within the confines of that. Have the amount of liability coverage that I need to satisfy that and just give it to me for as cheap as I can. But you just mentioned that it could affect your retirement and affect long-term. That’s interesting. What do you mean by that?
Ron:
Well, look, you mentioned automobile insurance. When you buy automobile insurance and by the way, those commercials are a hoot. I laugh at them. They’re so funny. And they’re designed to get your attention to say that this company X exists, this lizard represents a certain company, but the reality is they don’t teach much. They just get you in there to buy a product, and insurance has become commoditized. When you go to Walmart or HEB or your favorite grocery store to buy something, you’re buying beans and rice. They serve a purpose, but they’re not impacting your longterm goals to build that nest egg.
Bob:
So you purchase insurance as an integral part of a big financial plan then? Is that what you’re saying? It should play all into, I mean, even your auto insurance or your home insurance, life insurance, all that should be part of a financial plan?
Ron:
Absolutely. Let me share a little detail. So your automobile policy has basically four parts. The first part is liability. That protects the third person or the person you injure when you’re negligent. The state requires you to have $30,000-60,000, meaning it’ll pay $30,000 for each individual you hurt and $60,000 for the total accident or aggregate. So, if you’re buying on price and you get the cheapest insurance and you have X amount of assets that you’ve already saved in your IRA or wherever your savings account, right. You hurt someone beyond $30,000 and they have doctor bills that are gonna last for years, therapy, surgeries, et cetera.
Bob:
They’re going to come after all those assets, aren’t they?
Ron:
Now they may not be able to get the assets while they are protected under the qualified retirement plan. But once it comes out of the retirement plan, they can sue for a judgment. And once it comes out, that’s income and that could be garnered
Bob:
Well, but a lot of people don’t have their money necessarily sitting in a retirement plan. I mean, they’ve got some sitting in a retirement plan, but they have a substantial amount sitting outside of a retirement plan. We’ve got a lot of clients that they own a one or two rental homes. So could they even go after those rental homes?
Ron:
Unless those rental homes are constructed and put in a trust, and from a legal perspective, that’s subject to suit. They can’t take your home if it’s homesteaded while you’re living in it. Of course, when you pass away and your assets transfer, if it’s not constructed right by an attorney, that becomes also subject to judgment as well. It can be taken.
Bob:
So truly insurance should be purchased with a full financial plan in mind is what you’re saying.
Ron:
At the end in mind, what is your plan? When Jesus was talking about the person that builds a tower or a house, you have to know what you want it to look like, and to know what it looks like, you’re going to have the cost of labor, materials, and the same thing goes with building a financial house. The insurance is your foundation for the house.
Bob:
So really, your insurance advisor should be working directly with a financial planner.
Ron:
Oh, that’s the ultimate if you do that.
Bob:
I don’t know many people that do that.
Ron:
No, because they’ve been conditioned by the insurance industry, especially when it comes to automobile insurance to buy insurance as a commodity.
Bob:
In isolation.
Ron:
In isolation. Exactly. Bingo.
Bob:
So when you look at financial planning, I know, Ron, you’ve spoken that there’s three windows of defensive financial planning where insurance comes into this. What are these three windows that you’re talking about?
Ron:
The three windows, you could also say there are three parts of the foundation, either way, but the three things that you have to protect in financial planning is going to be your income. Remember, your greatest possession is the ability to possess good health. Because if you possess good health, you can make income. You can meet your long-term goals for retirement. So protection of income is the first window. The next one is estate or asset preservation. And believe it or not, automobile insurance falls in that category because if you don’t have enough liability and other parts of the four tiered insurance plan, you can lose your assets that you’ve been saving for. And the third window is actually health insurance or long-term care insurance.
Bob:
Yeah. Rachael is a cancer survivor and she’s doing very well now. And most of our listeners have heard me talk about Rachael over the years, but I’ll tell you, I am so glad we had the health insurance in place. I’ve told you we had disability. We had a disability policy for her. And on top of that, I used Christian Healthcare Ministries to cover my deductible. So, when Rachael got cancer and we had to go to MD Anderson, we moved her down to Houston from New Braunfels, which those of you that are listening that are maybe in the Northeast or in California, that’s about a three or four hour drive from New Braunfels to Houston. So, we had to move there, that disability coverage we had for her cause she was not able to work during that time covered all that missed income. And then the health insurance that you did for me, which is an incredible plan that we didn’t have to get approval from certain doctors. You didn’t put me in an HMO, but it was a PPO. So I liked that. And then, that third tier that I had was Christian Healthcare Ministries that took care of the deductible. So, we were at $0 and as you know, we went to MD Anderson for that one year. And then the cancer came back and then we had to have all that surgery. We never even saw the bills. One time Rachael was able to somehow see them. And she said, Bob, this was like over $250,000. And I think about many people, if they didn’t have that good coverage, what they would have missed in income if they didn’t have good enough coverage for health, plus they’d have to come up with a deductible during all that time, and we didn’t have any of that stress.
Ron:
It’s funny you mentioned that. I’m going to digress a little bit and talk about, because you brought up automobile insurance, the third part of your automobile policy, or actually it’s the fourth part, forgive me. It’s actually called medical or PIP. Many people reject it because they’re going cheap. They want to get cheap. It’s so inexpensive to have the medical or PIP. And what that does is that covers first dollar medical if you or anyone in your car is hurt, whether it’s your fault or not. So watch. So let’s say you have a $5,000 deductible on medical insurance. And by the way, that’s pretty common now, anywhere from$ 2,500 to $5,000 or $7,500, and then maybe I’m working with a client right now, we’re looking at a group plan and possibly $12,000 for a family deductible. So just imagine, if you rejected that PIP or medical for the automobile insurance and you get hurt in an accident, you have to come up with the first $5,000 out of your pocket.
Bob:
Or if your family is in an accident and all of you had to go the hospital, that’s $12,000.
Ron:
Right, but if you had PIP, which many people reject because they’re trying to save money on their auto insurance. If they’re hurt in a car accident, right. Albeit, a car accident, they would have that first $5,000 taken care of without having to go into their emergency funds.
Bob:
You got my PIP all covered there, Ron?
Ron:
You’re taken care of.
Bob:
I wanna make sure, because you just, you look at such details like this, that insurance is something, sorry, Ron, this is something that I don’t like to necessarily buy. It’s a necessary evil. But the thing is, is insurance is only as good as when you need it. And it’s right during that time that you really need it and you think, I thought I was covered for that. And I think many people, they don’t know that they’re not covered. I mean, you’ve shared some stories with me of they’re not your clients where they come to you after the fact, and the lawyer gets involved from an accident and sure enough, they didn’t have the coverage. They were just buying on price. Correct.
Ron:
Absolutely. Yup. And by the way, Bob, you know that PIP that we’ve just mentioned right. That stands for personal injury protection. And it’s the newer hybrid of the old medical coverage on the automobile accidents. Did you know that PIP pays for 80% of lost income if you’re involved in an accident, whether you’re at fault or not? So if you don’t have disability insurance at work, a group plan, or you don’t have an individual plan on your own and you’re in an accident and you can’t work and you’re at fault or whatever, whether you’re at fault or not, it would pick up first 80% up to the limits that you have. It’s so inexpensive.
Bob:
I’m curious what my limits are now. You take care of that, so I haven’t looked at my limits, but hopefully they’re high.
Ron:
Yeah. When have you ever heard this before?
Bob:
Nowhere. Nowhere at all. Have I ever heard this? I have a feeling that a lot of people that are listening to the podcast today are going to go look at what is their PIP on their policies, which you talk about income protection. Oh man. I mean, you turn off the income for anybody, and you think about the income protection we were talking about for retirement. I mean, the income comes from their investments. And if that is attached to the lawsuit because there’s not enough coverage, then there goes away the income. But I know you’d like to talk about income protection. So let’s get into talking about income protection and disability.
Ron:
The first window of the three, right? It is income protection. Again, your greatest asset or your greatest possession is not your car, not your house, not your boat. Your greatest possession is you possess good health because you can work and you can make an income. You can lose your income in three ways. You, the Lord can take you through death. You can lose your income by incapacitation through illness or an accident at work in the car, et cetera. Or unfortunately, you can lose major part of your income by getting divorced, unfortunately, but that’s the reality because many families are two income families. So think about this. Let’s say that there is a young family and both are working and they work for their goals. They want to have children. They may have children. They want to save up for that new house. The loss of one of those incomes, potentially, would wreck everything as far as their plans. That would sideline their plans. Where’s it going to come from if the Lord takes one of the breadwinners, what’s going to happen to the spouse?
Bob:
So you really need to think about there’s disability, but also like you said, death. That comes in under life insurance, correct?
Ron:
Absolutely. Yeah. Life insurance is going to cover the death aspect and then the incapacitation or disability would be disability insurance. And what I find mind boggling, we had this conversation yesterday, Bob.
Bob:
We did. I bet you know where I’m going.
Ron:
Yeah. We got to talk about why people buy life insurance.
Bob:
But they don’t buy disability. Just so y’all know, we lunches together a lot and everything cause I’m on one end of our building and Ron’s on the other end. So, but the odds of someone being disabled are so much greater.
Ron:
It’s four times greater the chance of you being disabled, typically for illness, number one, neuromuscular diabetes can incapacitate.
Bob:
What are those chances? Let’s say before you turned 65 years old between your working years, what are the chances you would become disabled versus death.
Ron:
Oh, significantly. I can go and research it and Google the exact amount, but it’s at least four times greater. And the reason why people don’t buy disability insurance is because they don’t understand it, number one. Number two, they only think of losing income through death. But again, it’s at least four times greater the chance of them losing their income to incapacitation.
Bob:
So, you’re four times greater, more likely to have a disability before 65 than you are to die.
Ron:
Definitely. Definitely. Yeah.
Bob:
I have disability coverage. You helped me with my total insurance needs and you looked at mine, but I have mine through a financial, through what do we call that kind of plan, a co-op?
Ron:
A group plan. You have a group plan.
Bob:
And it’s so inexpensive because I’m not really not at a high risk. I mean, I’m sitting here at a desk, but you know what, Ron, just a couple of weeks ago, I was talking to my painter and he was painting the home that we have down in Rockport for us. And it’s a two story and he was way up there and he was over on the roof and stuff. I said, brother, I sure hope you have good workman’s comp and you have good disability coverage. We had them down and we took care of their family for a week. I continued to work through Zoom and just a precious, precious family. He’s about 38 years old. And he said, yeah, I do have it, but I was like, I’m glad you do because you’re standing on that metal roof, two stories high. But you wonder how many don’t have adequate coverage like that? I imagine his coverage is probably pretty expensive cause that’s in a high risk. Right? But most of us don’t fall in that range.
Ron:
Correct. Depends upon if you work in an office. It would be a significantly less expensive, but the best place to start with disability is if you work for a firm or a school district or any entity, if they have a group plan, that’s typically the best place to start.
Bob:
So is that optional with most companies that people work for? That’s an option they can pick or is it automatically included or do you know the answer to that question?
Ron:
It depends upon what the employer wants to play, but typically it’s going to be paid by the employee, and it’s discounted because of the group, the large numbers that are involved in the business or the co-op and the price is significantly lower. Now, the problem with group disability is that typically you can only get 60-65% of your pay.
Bob:
But that is considered tax free pay isn’t it? Or is it?
Ron:
It is income.
Bob:
But I’ve heard if you pay for disability with pre-tax dollars, then you have to pay tax, if you pay with it with post tax, after tax dollars, it comes tax-free.
Ron:
That would be correct. Yes. Yeah, that’s correct.
Bob:
That’s what we do. We made that decision when Rachael and I bought disability years ago to pay for it with post-tax dollars so if we ever did have that time, and that time did come along, so it came under those stats that you’re talking about. We wouldn’t have to pay tax because then you’re adding insult to injury. I mean, you’re already down and out. You don’t want to have to pay more tax on it.
Ron:
May I say this, the problem with the group insurance, disability insurance, again, typically 60-65% is what’s going to be paid out if you’re incapacitated after a certain point, but you’re still missing a 30, 35% gap. So if you work for certain organizations like especially private industry, you can buy an individual to cover that gap.You can’t do it. If you work for what we call a FERPA organization. The acronym is actually Family Educational Rights and Privacy Acts – school districts, college. Typically, you can’t do that, but if you work for a private organization, you can buy an individual policy to put on top of your group policy that will cover that would cover 30-35%.
Bob:
Okay. Gotcha. All right. So we’ve talked about disability life insurance. Would you recommend for life insurance, it goes back to the old school, and I know you you’ve been selling life insurance for what? 25, 30 years.
Ron:
35 years.
Bob:
I think you kind of started off with this buy term, invest the rest. So do you always recommend that somebody buy just a term policy? It is so inexpensive. I mean, when you’re younger, gosh, you can get $500,000 of coverage for just pennies on the dollar.
Ron:
It goes back to starting with the end in mind. What are you trying to accomplish? If you’re trying to accomplish income protection, typically for, I would say 95% of the public, term insurance is the way to go, but that term product has to fit into your financial plan, right? That’s going to cover you during, typically, your peak earning responsibility years, 20 to 30 years. So, you can develop those assets so that by the time you hit 30 years, you can step out of it. You don’t want to be insurance rich. You want to be cash rich or investment rich. Right?
Bob:
So the insurance is just to cover you until – it’s kind of like flipping over to insurance. Like I’ve heard you say it’s kind of the foundation, because until you get your assets up there, the insurance is covering you.
Ron:
Absolutely. Yeah. Okay. I will say this though. Now with the onset of new fangled hybrid long-term care products, they’re built on a whole life chassis, life insurance chassis. In that case, I highly recommend it. But again, this takes a finesse and planning, and typically that’s going to come between ages 45 to 55. So after you step out of your term product, now you want to protect your, not your income. You want to protect your nest egg, and that’s why you’re going to buy long-term care insurance.
Bob:
You and I’ve talked about this long-term care. I mean, you’ve been talking to me about it a long time and the long-term care. It kind of fits in this gap. Right? I’ve heard you mention that if you’ve got more money, I mean, you’ve got 5 million plus or 10 million plus, you’ve got enough that’s going to generate and what the cost of the long-term care is going to be. And then you have those on the lower scale that maybe they just have $50,000 or a hundred thousand in savings. Do they necessarily need longterm care or does longterm care fit more like in that middle ground where so many retirees fall between that half million and one and half million dollar mark.
Ron:
I would even, say maybe $250,000-300,000 to the high point.
Bob:
All right. And why is long-term care needed so much? I mean, I hear it all time, but give us some stats.
Ron:
Oh my gosh. The cost of health insurance, of long-term care insurance, while you’re disabled could be anywhere from $$50,000 to 75,000, depending upon the venue, whether it’s it’s home service, where they come to your home and take care of you, or it’s a semi-private nursing home or room, or a private room could be anywhere from $50,000 to 75-$85,000 a year.
Bob:
So that can really eat into your savings quickly, into your retirement plan.
Ron:
Absolutely. Where’s that money going to come from?
Bob:
Yeah, but the cost of long-term care can be kind of expensive, can’t it?
Ron:
Long-term care insurance is commensurate to age. It’s predicated on morbidity. Morbidity meaning how long are you going to live in an incapacitated state where you can’t perform two or more ADL’s.
Bob:
Is there a perfect age to buy long-term care?
Ron:
Typically. And this is how I typically construct my portfolios, defensive portfolios for my clients. Typically, and I’m going to be very general now, anywhere from 20 to 45 or 50, your insurance, your life insurance, is going to cover your income there and your disability insurance. And then after you’ve finished that, assuming you’ve been investing the difference in an IRA, 401k, whatever, then you’re going to step out of that and you’re going to move into a long-term care product. So I would say to overlap maybe 45-60, 65 to purchase.
Bob:
Plus, your health is good during a time when you’ll qualify, right?
Ron:
It’s why 45 and 50 is a very pivotal age.
Bob:
Insurance companies are real funny about that. They don’t like to underwrite you when you’ve had a lot of health issues.
Ron:
Yeah. They know the morbid ages are typically from 45 and up and as you start getting older diabetes, neuromuscular issues. So they’re way ahead of us. They’re sharp.
Bob:
Well, that’s why the insurance companies are made of marble and granite in their high rises and our homes are made of sticks and stones.
Ron:
And they’re the biggest buildings downtown. Yeah.
Bob:
They know what they’re doing. I forgot to say, one thing I wanted to say, as far as life insurance protection, I’ve had so many people ask me over the years, how much life insurance do I recommend? I will tell you, I’ve always recommended basically 10 times income. So, we’ve got a breadwinner, they’re making a hundred thousand a year, multiply times 10. That’s about what they need. Can you speak into that? Do you recommend that same amount or is it more or less, what do you think?
Ron:
Typically, when I sit down with my clients, I want to know what their long-term goal is. I want to start with the end in mind, their midterm, and their short term. I know that Ramsey and other type of Crown Financial, they recommend if you’re going 10, 10 years of gross income, but that doesn’t factor in inflation, of course, as well. So I don’t believe in one shoe, one size fits all.
Bob:
It comes back down to the financial planning.
Ron:
Exactly. And that’s where the power of a financial planner or an experienced insurance professional can sit down and look into and incorporate every aspect of protecting so that you can save to get that nest egg.
Bob:
So Ron, we’ve covered a lot today. We’ve covered income protection, disability. In the beginning, we started talking about auto insurance. I think you shed a lot of light on the auto insurance because everybody has to have that and it’s pushed the most on TV and all the commercials and just, oh, people are not covered. I mean, my own daughter that was living in California. And now she’s back in Texas. Thank goodness. But she was getting a quote on a policy out there cause you weren’t licensed in California and we tried to get her to find somebody independent. I mean, the coverage was terrible. It was like $5,000-10,000, like Jaeci, this is not going to work. We got her with another major company that’s nationwide to help her with that coverage. And now she’s back in Texas getting her citizenship back here. She’s a Texas citizen, but anyway we’ve covered a whole lot. Is there anything that we’ve not covered today? We could go on and on and on and on. I know you and I like to like to talk this financial planning game so much, but for those that are hearing this podcast, what would you recommend to them? Cause we’ve got a lot of listeners that are out of state too, and you’re licensed in Texas, right?
Ron:
Oh, we do business in Florida, South Carolina. We insure life, disability, and long-term care in every state but in New York, my home state.
Bob:
I could never tell by your accent. It’s funny. When you come into the office and you get Ron on one side and he’s talking with that New York accent and you got me on the other side, I talk with my Texas accent. What is going on here? Ron and I have known each other a long time and we are great brothers in the Lord. Okay. So, any last words that you would just like to spill your heart out to help people? Cause I know you’re all about helping people.
Ron:
Yeah. I’m an educator at heart, 30 years, public school education. And I love teaching the word now and I would say this, “Why purchase this? Why not purchase this?” You have to think with the end in mind. Again, it goes back to what, what the Lord taught his disciples and count the costs and plan. And there’s wisdom in a multitude of counselors. We have, again, been so indoctrinated with these fun commercials. They’re not for us, those commercials. They’re for the insurance company. It’s not to teach. I had a plumber over to my house recently. And he had to put in – the thermostat blew out on one of my water heaters in the house because of the freeze we had. It went bad. So I had the part, it was covered under warranty. And I was so taken by this plumber because what he did was he could have just come in and put the part in and said, here you go, $500. No, I’m just kidding. But no, seriously, he was very, very, fairly priced. But he endeavored to teach me and share with me why he was doing what he was doing. And you want to know something? That man, he scored points on my, and I’m a pretty critical guy. I have high expectations, but I want to tell you, that’s what it’s all about. Become a lifelong learner. Solomon said above all else, get wisdom. Get knowledge. Ask why you buy the things you buy.
Bob:
Right. Good point. Good point. So when it comes to insurance, you’ve got to buy it with the end in mind, not just today, just because it’s required of you. Think about if you need that insurance, is it going to be there for you? Is that coverage going to be there for you? And if it’s not going to be there for you, which we’ve seen examples of it not being there at the time they thought it was going to be there for them, it barely covered them. So don’t buy insurance on price, buy it on coverage.
Ron:
Yeah. I mean, my mind is going as a teacher. Now I’m thinking of examples. This last freeze we had, I mean, most water claims are going to be paid, but hidden water seepage is not paid in most policies. Most people don’t know that about their home insurance. Most people don’t know that they buy a policy and they have a claim. They pay their typical 1% deductible. And all of a sudden, they say, why am I not getting a brand new roof? And they come to me complaining and they’re angry at that insurance company. The insurance company did nothing wrong. They stuck to their contract, but the people bought on price and they bought a name peril policy. Or they bought a policy that’s depreciated claim settlement instead of a replacement and all of a sudden they’re angry. Hey, buyer beware. They didn’t do their homework.
Bob:
So Ron, at the conclusion here, would you mind giving out your phone number and giving out your website address so that that people can contact you so they can make sure that they’re covered correctly? So when that time comes along, they don’t have to worry about that. Like I said, when Rachael had her cancer and she couldn’t work and we had that deductible that was covered in the health plan, you had us covered. So would you mind doing that? Just giving your phone number and information of how to get ahold of you?
Ron:
Sure. Yeah. It’s Christian Insurance Services. For short, you can, you can Google or just type in www.cinsure.org and our phone number (830) 515-5430.
Bob:
And the website address is Cinsure. Okay. C I N S U R E
Ron:
Even Christian Insurance Services. It’ll come right to us.
Bob:
Ron, thank you for being on the podcast today.
Ron:
My pleasure.
Bob:
Yeah. And hopefully you’ve enjoyed listening to Ron and my conversation. He is a true brother in the Lord and I love him dearly. I love his family. You love my family. I can’t wait to be in heaven praising the Lord together, brother.
Ron:
Hallelujah. Maranatha. Come Yeshua.
Bob:
Oh yeah. He’s a messianic Jew too. So I need to let you know that. He’s got the double blessing. That’s going to do it today for today’s podcast. Hope you enjoyed.
[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.
33 min
April 21, 202197 – How To Make Good Financial Decisions
Click below to listen to Episode 97 – How To Make Good Financial Decisions
97 – How To Make Good Financial Decisions

Learn how to avoid costly, financial mistakes.

More episodes >>

In episode 96, we talked about 21 common costly financial mistakes that we see people make. In this episode, we are going to break down different ways to avoid making these mistakes when it comes to major financial decisions. Examples of major financial decisions include items like buying a new car, moving, buying a new or second home, or taking out a college loan. Basically, this is any financial decision that goes above and beyond the normal daily, or even monthly, monetary decisions that we make.
In order to be best prepared when it comes to large financial decisions, we have divided our process into three different areas:
Emotional Side – This should carry the least amount of weight. However, for most of us, we let our emotions guide our decisions.
Spiritual Side – Does our decision honor God and have we sought his wisdom?
Factual Side – Does this financial expenditure make sense when it comes to pros, cons, and placing the actual facts down on paper?

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Bailey Theaker

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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:
So in our last podcast, we talked about 21 costly financial mistakes people make. And today we’ve got part two of this series, how to make good financial decisions. So, if someone is needing to make a major financial decision soon, this is a great podcast. I mean, this is for you, too, either one, and I think we’re always having to make financial decisions, aren’t we Bailey?
Bailey:
I’m excited to hear about it because last time we talked about all the things not to do. And so I think this will be helpful to learn what to do now. So Bob, when you are talking about those big financial decisions, what kind of decisions are you referring to?
Bob:
Well, it’s the big ones and it’s buying that new car cause nowadays at the price cars are, that’s definitely a big financial decision. I’ve got a Ford Explorer and you’ve heard me talk about this on several podcasts and I’m approaching a hundred thousand miles. I remember, I think I paid 37k for about five years ago and I went and looked at some new ones with a V6 because I pull a trailer. They’re like $55,000. That’s a big financial decision. And I look at that and I think, this is for sure a losing deal. I know that this thing is going to drop 30% in the first year. And over the next three years, I know it’s going to drop probably 50% in value. So, I don’t think that’s a real good financial decision for me, but yeah, but that’s one of the big ones. I think that’s one of the biggest decisions today because the cars have gotten so expensive. Of course, buying a home is another one. The third one that I’m going to mention, I think you dealt with that a little bit, didn’t you, just recently?
Bailey:
Well, it’s been about a year. I’ve been here a year.
Bob:
Yeah. Oh man, time flies, doesn’t it? I can’t believe you’ve been here that long. This is because we’ve been having so much fun, but it’s changing a job and tell our listeners what this involved a little bit in your life so they’ll know what kind of decision you had to make.
Bailey:
Yeah. Well, my husband and I both were on full-time staff at a church in Houston and we had some friends who were moving to San Marcos to plant a church and they asked if we wanted to be a part of that. And there was a part of me that thought no, absolutely not because we had job security and we had roots planted and we kind of knew where we were going. But it became pretty clear pretty fast that that’s where God was leading us to. So in that transition from moving from Houston to San Marcos to be a part of this thing that we didn’t really know what it looked like, we had to take into account a lot of the things that you’re going to talk about in this podcast.
Bob:
Yeah. I mean, changing jobs is such a big deal. And so many times it does involve moving to another city. So yeah, we’re going to give you lots of things that you need to think about. Taking on lots of new debt too, is another big financial decision, like for college and are you really going to be able to make the funds back because of that? And college debt’s one of the biggest things that people have today. And another one that I’ve noticed over the years that is a big financial decision, especially I guess for a lot of our older clientele, is doing a major remodel on their home. I mean that can run easily fifty to a hundred thousand dollars or more. And is that a good decision? So those are a few of the big decisions that I was talking about in the program, when I was thinking about making the program, Bailey, and I know this list, there’s probably 200 people that are listening to us right now on this podcast. And they’re like, well, you didn’t mention mine. All this still will apply to any big financial decision that you’re making.
Bailey:
Yeah. And I think if it feels big to you, then it probably is. So even if it’s not on our list, it can be exhaustive. Bob, I know when we were talking about it earlier, we kind of broke how to make these decisions into three categories, being emotional, spiritual, and factual. Would you describe a little bit what those look like?
Bob:
Well, the emotions, you kind of helped me come up with that one because as we were going over these three areas, these three categories that break into financial decisions, emotions probably carry, many times, the most weight – emotions and feelings. They carry, many times, the most weight, but they should carry the least amount of weight when it’s making a large financial decision. But like you say, most often it carries the most. And then we have the spiritual side of the decision. And as Christians, we really want to honor God with the financial decisions that we make. You’ve heard me say that all financial decisions for a Christian should be spiritual ones as well. And I know that when we break out of God’s will, it is not a good thing. And when we’re not going with scripture, it’s not a good thing. So I really want my financial decisions, and I would think those that are listening to us today would want to put a lot of weight on that one too, on the spiritual side of it. And then the third one that should carry a whole lot of weight, too, is the factual side of making a financial decision and really putting all the facts on paper before you make that decision.
Bailey:
Yeah, that’s so good. So starting with those emotional factors, what would you recommend as the best course of action to start on a big decision? What part do you think emotions play in that?
Bob:
So Bailey, while emotions do deserve the least weight in decision-making, like I said, most often they take up the most. I really think that we need to remember this scripture from 2 Corinthians 10:5, “That we should demolish arguments and every pretension that sets itself up against the knowledge of God and take captive every thought to make it obedient to Christ.” So those thoughts that we have in our head and those emotions and feelings that get in there, we need to be very careful about allowing those emotions to guide us. Do you remember me pointing out the four spiritual laws to you the other day from Campus Crusade? And we used to give out the four spiritual laws. And I remember in the four spiritual laws how they said for a Christian, you should not allow your feelings to dictate to you, but you should allow the facts. So when it comes to emotions, here’s some things I want you to write down and write down why you really want what you want. Like we were talking about the new car or we’re talking about the remodeling, write that down. Why? It’s the why. Why do you really want it and write down how your vulnerability could affect making that decision. You and I were talking before this about when you go into the new car dealership, right? And you’re saying you’re very vulnerable. I used to be vulnerable, but I’m not any longer. And I don’t let my emotions play in it at all, but they play on that vulnerability. So write down how you’re vulnerable, and knowing how you’re vulnerable will help you to not make that decision based on emotions. And write down reasons you now no longer feel good about what you have. Why do you not feel good about the home that you’re in? Because you’re saying you need to remodel it. Is it because you’ve been watching HGTV so much that your cabinets are just not the right color that they’ve been showing. All you got to do is hang around a few years, it’ll rotate back. HGTV, especially, are all about getting you to constantly buy new paint, buy new cabinets, buy new countertops, buy new furniture because advertising is what pays for it. That’s an example. Like, well, everybody else has it. I’m seeing it all on TV. Now I need that. Well, that’s a vulnerability. And that’s trying to make you feel like you’re no longer good because you don’t have the newest and best thing. And those are reasons that you should really write down why you no longer feel good about that. Like that car. Maybe that car has just got 70 or 80,000 miles on it. And it’ll go to 300,000, but you don’t feel good because they came out with a newer model and you think you need that newer model and you think that’s going to build your self esteem, but that’s not where your true self-esteem is built because after you get the payments for the car and you see how much it’s going to depreciate, that’s not going to feel very good. And it could a financial decision negatively also affect a relationship with someone that you care about? And many times, it can.
Bailey:
Hmm. I know for me personally, that I often feel led by my emotions. It’s the first thing that I notice in any kind of decision making or situation so that’s just really helpful. I had a counselor, a mentor of mine, tell me that it’s sometimes helpful to do a brain dump before you make any big decision, not just financial. And that means just like getting a piece of paper and dumping all of your thoughts onto it, all the things that are kind of coursing through you. Get that all out on paper, because that’s the stuff that can often guide us. So I love those four prompts that we could get down on paper and kind of get them out of our system. So what about the spiritual side of things, Bob?
Bob:
Well, the spiritual side is truly if God owns it all and we believe it’s his, then we should pray about all major financial decisions, minor ones as well. But really these big ones and seek God’s will, and also seek wise counsel. And so prayer, that’s the most obvious. Pray about it. And I’m not talking about a one time prayer. I’m not talking about I’m going to pray for this for five minutes and I’m done, but really pray about this for several weeks, several, several months, because we’re talking about big financial decisions that involve thousands of thousands of dollars and seek wisdom from God’s word. Proverbs is just full of it. There’s 31 chapters in Proverbs and I’ve read Proverbs for many, many years. Read those 31 chapters over a month. I mean you’re talking about with a new car today making a 35 or $40,000 decision, or remodel, or are you going to go to college and take on debt? You’re talking about huge financial decisions. Don’t you owe it to yourself to take 31 days and to read through the book of Proverbs. Just read one chapter a day. I did that for year so much. So my kids were thinking, dad do you know any other book in the Bible? I said, yes I know many other books, and I go to all the other books of the Bible and scriptures, but 31 chapters in Proverbs really match the 31 days. And those days or 30 days, you just read that an extra chapter. And then seek wisdom about the financial decision from a mature Christian and not just a mature Christian, but one that’s also financially successful. We want to learn from the eagles, not from the turkeys. And I’m not saying that because you haven’t been financially successful, you’re a turkey by any means. Don’t think of it that way, but you want to get financial advice from those that have been financially successful and have done it through wisdom.
Bailey:
Absolutely. I couldn’t agree more. I know that I’ve personally tested the waters of making decisions on my own versus making decisions after seeking God’s counsel. And the difference is just astronomical. When we have access to the God of the universe, who’s at work at everything, then why would we want to do things on our own? Why would we not want to look to him for things? When we were moving here and was a really big decision for us, the tension between faith and wisdom got weighty, feeling like, okay, God, I feel like you’re calling us this direction, but also we want to walk wisely and steward our finances wisely. And so we did those things too. We sought counsel from people that we trusted and we knew. We searched the scriptures and then we just sought the face of God daily in making the decision. And it took us a while. I mean, I think it took us at least six months to finally make a decision that we were going to move. But aside from kind of the emotional side, the spiritual side, let’s move into the factual side of the nitty gritty details that go on paper. How much is this thing going to cost? What does it actually look like? This is kind of the wisdom side of things. Bob, how would you devise we get all those details in order?
Bob:
Before we get to the facts. Can I say something just about you, Bailey. You think about this. You delayed that decision until you really felt God calling you with his timing. All right. How many days before y’all were finally going to move did you find out about the job with Christian Financial Advisors?
Bailey:
Yeah. Well, it was actually, it was a crazy story because we felt like God had definitely said, this is where you’re going. And so we started to put one foot in front of the other in this direction, but we couldn’t find a place to live because every house we applied for, somebody got it instead of us. And then we had a couple job offers, but I really was holding out for this place because I was really excited about what y’all were doing here. And so we just said, okay, we’re just going to pack our stuff and go. And so I got the call. We moved on a Saturday, I got the call that I got this job the Thursday before we moved.
Bob:
Two days before you moved. Now, you think about that. If y’all had moved ahead of God and his timing, this would’ve never happened, would it?
Bailey:
Yeah. They found out about our house that same week too.
Bob:
I mean, so many times when things are delayed and we’re not feeling a peace about it, if you don’t feel a peace about it and you’re not ready to go, there’s a reason for that. The Holy Spirit is guiding you. And we had just found out about two or three weeks before that, that Kirsten was going to go into the ministry. And so just the way this whole thing worked out, I see that timing. I’m glad that you listened to God, by the way, because the timing works. So, we got a lot of facts that we’re going to go through. We’re going to go through about 10 or 11 of them. And this is the longest process when it comes to making a financial decision after you’re praying about it, and while you’re doing this, continue to pray, continue to ask for wise counsel. And like I said, get those emotions out of it. So the first thing is you need to write down the actual decision that you’re thinking about on a piece of paper or nowadays, in a notepad. I mean, I do so much what I do in a notepad. I don’t write a whole lot down on paper anymore, but I do it on my notepad, on my iPhone, actually, many times at 1:30 in the morning when I can’t get sleep, I’m looking at those decisions. So write that down. And then you’ve heard this for so many years, but it’s still is just, it’s such good, common sense. Write down what the advantages of that decision, of making that decision to buy that new car, or to buy that new house, or to take that new job. What are the advantages? And then what are the disadvantages of that financial decision that you’re thinking about? I want to emphasize here. I am not telling people to not go buy a new car. I’m not saying to don’t do your remodel. Think about the advantages. Remember what you and I were talking about this the other day, the advantages of a new car may maybe because your old car is just not safe anymore. You told me you had an old clunker and you did not want to go up and down Interstate 35 with the fear that that car could give out when you’re in the middle of 35. Well, that would have put your life in danger. So, there are reasons to buy another vehicle. There are reasons to do a remodel. Many times your air conditioning is giving out and your appliances have had to be repaired 10 times and it’s getting beyond the cost that it’s worth any more. So I see those advantages, but the disadvantages are there too. And like you mentioned, in buying a new car, the disadvantages are the depreciation is just so massive. I mean, who wants to go put their money into something that’s guaranteed, guaranteed, to drop by 30% in the first year and by 50% by the third year. That’s a crazy investment. So vehicles are not an investment. By the way, I’m going to say right now, and you heard me say this the other day, there are no good deals when it comes to buying a vehicle. People say, I got a good deal. No, you didn’t get a good deal. It’s a depreciating asset. You did not get a good deal. And there’s no good deals when it comes to depreciation, a depreciating asset. But those are the first two things I think that are very important is just write that down and the advantages and disadvantages.
Bailey:
Yeah. And the third thing that you could write down, and I think this kind of gleans off of number two of writing down those pros and cons. After that, ask yourself the question, is it totally necessary that I make this purchase or that I make it the way that I’m thinking about making it? I mean, not having AC in your car in the middle of Texas when you have to commute an hour to work is probably not really doable for you.
Bob:
You might die from heat exhaustion. Yeah.
Bailey:
So that might be a necessary purchase, but ask yourself that question, is it necessary? And number four being, can you live without it? Do you actually need this thing in your life, or is it really a want?
Bob:
Let’s get back to the new car thing. Ask yourself is it totally necessary to buy a brand new car? Or could I buy one that’s two years old or three years old that’s already had that major depreciation taken out of it and is still a very good vehicle. And the answer to that is yes, without a doubt. The fifth one is can you afford the additional ongoing cost that’s going to come with that financial decision and is it going to fit within your budget without taking away from somewhere else? I’ve had an entire podcast on this. We talked about this in our last podcast. There’s only four places to spend money. Everything fits within live, give, owe, grow. Live, give, owe, grow. Now we’re always going to owe taxes, but when it comes to debt, as an example. If you raise your debt or you didn’t have any debt and you had to go into debt to afford it, now somewhere, something’s got to give. Your giving is going to have to go down or your living is going to have to go down or your growing, investing for the future. Somewhere one of those four is going to get affected because there’s only four pieces to the pie, and if you make one piece bigger, the other pieces are going to get smaller. Does that make sense?
Bailey:
Yeah, absolutely. That makes total sense. And that kind of leads into number six. Will this decision put you in more debt? This is a decision, totally presume on the future. I know I had a friend tell me kind of way back in the day before I got a credit card or anything and really started making adult decisions that well debt is just part of life and so you should just assume that you’re going to be in debt forever. And this person was in school and paying for college and had a car payment and that’s just the way that they lived their life. And I thought, Oh no, I really don’t want to live owing things to people all the time. And so as little debt as possible is just way, way, better, way more relieving. And so the question of will this put me in more debt, something to think about.
Bob:
Debt is bondage, and like Proverbs says, “You become a servant to the lender,” especially, and we shouldn’t be a servant to anybody but Christ, but you become a servant to that lender when your debt is too high. This comment that debt totally presumes upon the future. That’s a comment from Ron Blue, who’s very well-known in the Christian community for financial advice. I’ve had Ron on several of my podcasts. Ron’s about, I don’t know. I think he’s like 75 or 80 now. And he was the founder of Kingdom Advisors, this large nationwide group, I heard last it’s up to over 4,000 members now of Christian, financial planners and advisors, but he’s the first guy I ever heard say that, that when you take on more debt, you’re presuming upon the future. And really, none of us know what the future holds. Some of our last ones today, are there additional ongoing costs from the decision that you didn’t have before making that decision, like a second home? I’m pointing to myself here. We’ve had a second home, several of them, and I’ve had large and I’ve had small and then large again. And I’m ready to go back to small because the larger the home, even though it’s completely paid for. And like, we put it on VRBO, and it’s rented, but still there’s a lot of ongoing costs with owning a first home or even a second home. I mean, Bailey, right now y’all rent, and I know y’all probably want to buy. And I think that that’s a good thing to buy a home, but you’re going to have costs when you do that that you didn’t know about. I mean, insurance, taxes, maintenance, things will pop up. And now when something pops up and something goes wrong, you can just call your landlord and he’ll come fix it. Air conditioner goes out, he’ll fix it. Dishwasher goes out, they’ll fix it. Water heater goes out, they’ll fix it. You own a home, air conditioning goes out. Who fixes it? That’s on you.
Bailey:
That’s on you.
Bob:
Yeah. Water heater goes out, you fix it. I’m talking to you to everyone, they may not know it, but we’re doing a podcast on a Friday. So I’m in my place in Rockport. And my light went out on our pool down here, guess who fixed it? Me. Guess what? They started getting in and trying to fix the light. And because there’s a lot of sand down here, the pipe had broke and they had to go into the foundation down five feet because they couldn’t get the wire to go through. So a little, couple hundred dollar light ends up being a couple thousand dollar light. Those are the kinds of things that you just got to think about that are going to hit you from nowhere with financial purchases, especially a second home, or even even your first home. And what are the longterm financial costs of the decision and is it really worth it? Would it be better to wait for another time to make that decision and are there alternative, less costly options? Like I said, can you rent cheaper than owning it? I’ve had a couple of clients, they’re looking at buying an RV as an example. That’s another major decision nowadays. And you talk about something that loses value, a huge amount of value. And now there’s, I think it’s called RVrentals.com. Well, instead of going and buying a 100k RV, you can go rent it for three months for $9,000 at $300 a day. And the depreciation, you’re going to put out $9,000, but if you’d have bought it for a hundred thousand, it’s going to depreciate by 30k. So, you’re better off and you don’t have to worry about all the things that can go wrong either. So, there’s things like that. And you just always gotta think about what’s this financial decision going to look like years from now? Remember when we did the rule of 72 program, the podcast? And if you haven’t heard of, I’d invite you to go back and listen to that rule of 72, but you take $30,000 out and that’s not going to buy you much of a car today, but you take $30,000 out to go buy a car, that money is no longer growing, and my compounding interest, that money’s not going to double to $60,000 in say 10 years or 12 years.
Bob:
And it’s not going to double from 60 to 120. So you think about 20 years from now, that $30,000 car you bought is going to be worth 5-6k. But if you kept the money in there, it’d be worth 100k or more. Now, I’ll put this statement in here. There’s no guarantee of future returns. Past performance is no guarantee of future performance, but historically that’s what would happen. So, what’s that financial decision going to look from now? So, man, there’s a lot here to making good financial decisions, and I hope that we’ve helped you, as our podcast listeners. I hope we’ve helped you in making that next financial decision, make it be a good one. Like I say, if it’s not you that’s faced with this, maybe somebody that has to. Most of us know someone that’s coming along to that fork in the road, and they’ve got to make that decision, and it’s a financial one. I would encourage you to tell them about this podcast and have a listen to it. And as always, we always put the script of the podcast right behind the podcast on our website at christianfinancialpodcast.com, and it has all these different things that we’ve been talking about.
Bailey:
Yeah. Well, I know that that all those prompts and questions can feel somewhat overwhelming, but thankfully you don’t have to do it alone. We’ll have this podcast up on the website with all of those so you can reference back, and you can always give us a call at the office at (830) 609-6986, and we are happy to help.
Bob:
And you can always also go to christianfinancialadvisors.com. That’s all for today.
[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.
27 min
April 05, 2021 96 – 21 Costly Financial Mistakes People Make
Click below to listen to Episode 96 – 21 Costly Financial Mistakes People Make
21 Costly Financial Mistakes People Make

Learn about the 21 most common financial mistakes that Bob has seen people make.

More episodes >>

Unfortunately, many of us have fallen prey to common financial mistakes, but it doesn’t have to be that way. As Proverbs 21:5 says, “The plans of the diligent lead to profit as surely as haste leads to poverty.” There are so many that are easily avoidable if you know what to look for. This episode breaks down 21 of the most common financial mistakes that Bob has seen people make over and over again during his 30 years in the financial business.
Even though 21 financial mistakes may seem like a lot, this is actually just the tip of the iceberg. We really want our listeners to have a heads up and better understanding of their finances and why these mistakes can cost people so much in the long run. A few of the common financial mistakes that are discussed in this episode include buying a brand new car; paying too high of an interest rate; buying low quality in order to “save” money; not having a will; and not budgeting.

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Bailey Theaker

Kingdom Advisors
Website

The Millionaire Next Door

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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:
Welcome to the 96th podcast. We’re getting close. Close to that 100. So today we’re gonna be talking about 21 financial mistakes that people make, and I don’t want you to make them, but I’ve made some of them and I’m certain you have as well. I’ve served in financial industry now for over 30 years. That’s what all this gray hair is you see is about now. And I’ve seen a lot of these things happen that we’re going to share today and essentially we’re kind of doing 21. We might have more, but we’ve got to consolidate it because it’s 2021, and we’ve done 21 goals and 21 things to stay away from. 21 is kind of the big number this year. I really want to help guide our podcast listeners in making wise financial decisions and staying away from the stupid ones.
Bailey:
Amen to that. I’m all for hearing those. Well, like always, we’re gonna kick off with a scripture and this one comes from Luke 14:28-30 and it says, “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? If you lay down the foundation and are not able to finish it, everyone who sees it will ridicule you saying this person began to build and wasn’t able to finish.” Bob, I know you’ve been a part of a group called the Kingdom Advisors for a long time now, and they teach that there are four ways to spend money. You live, give, owe, or grow. Can you tell us a little bit more about that?
Bob:
Yeah, it’s really simple. I remember Ron Blue came up with this, who is the founder of Kingdom Advisors. By the way, I wanted to say, thanks for picking up scripture, too. That is a really great scripture. When I was putting this together, I didn’t have that scripture mind, and I saw you put the scripture up there. I’m glad you did. It’s a great one. When you look at money, there’s only four ways you can spend it. What you’re living on, what you owe, what you’re giving, and what you’re putting aside to grow. We call it live, give, owe, grow. And it’s really a simple way of looking at money. I’ve had an entire podcast on just this subject – live, give, owe, grow, and breaking down those four areas. And in the OWE area you’re always going to owe taxes. So that’s something we’re never going to get rid of, but it also has to do with debt. We’re gonna talk a little bit about that today in those 21 financial mistakes, but you also think that live, give, owe, grow, think of it like a pie chart. If you divide that into four pieces, if you’re living on too much, it’s going to make one of the other pieces smaller, right? Or if you live and you owe too much, then your giving is going to suffer. So the way that you increase any of those areas is by doing less in the other areas. But I don’t wanna see that happen with giving because giving, as we know, releases the bondage of selfishness that we have in our lives. We just had a podcast on giving that I think is so good. If you haven’t heard it, as our podcast listeners, go back and listen to that. Giving is all about, like I say, releasing the selfishness and then sending on ahead to the kingdom and eternal value.
Bailey:
That’s so good. Great. Well, with all of that in mind, let’s get into our list of 21 financial mistakes that people often make. Bob, what is the first thing on our list?
Bob:
Here we go, 21. It’s like a lot, isn’t it? The first one I’ve seen so many times is that people make quick decisions without knowing all the costs that are involved in those decisions. Like buying something too quickly, maybe buying that vacation home. I’m guilty, I’ll tell you, I’ve made a lot of these, but I’ve learned. Maybe you’re buying a new car without thinking about it. And I always think I’ve learned now, as an old guy, it’s best to wait two or three days, maybe even two or three weeks or two or three months, before you make large buying decisions, purchasing decisions. And I think you need to think really deeply about them and pray about them because as a Christian, financial decisions should be a spiritual decision as well. And I know I’m old fashioned here. I think it’s good to take a piece of paper and write down what are the advantages of buying that new car or buying a second home or whatever you’re gonna be doing that’s a large purchase. What are the advantages of that? And what are the disadvantages of it? And even small purchases, small purchases can really, really add up if you’re not careful. And today, you have these apps on your phone, walmart.com or amazon.com or whatever those apps are, you can just buy without even really thinking about it. It’s boom, boom, boom. And before you know it, that adds up too, so hold off on those decisions. Now food, you need food. I’m not ever saying to hold off on that or medicines, but maybe that brand new outfit that could cost $300 or that purse. It’s better to wait. Say, what are the advantages of this?
Bailey:
I know that my husband and I, we can often point the finger at each other for spending more money, but he’s more likely to spend money on the big things. So he’ll buy a new guitar for thousands of dollars. And I spent a lot of little bitty things like on Amazon. I’m constantly buying books and I’m spending $10 and $10 and $10 on books. So we’ll look at each other. He’ll say you spend all the money and I’ll say, no, you spend all the money, but he did it all at once. I just did it in little bitty pieces all throughout the month.
Bob:
I’m going to tell you right now, guys are famous for that. Well spend the money on the big new truck or the boat, or maybe the RV. Yeah. And then we will get upset with our wives when they’ll spend a little money, but those little pieces never add up to what that cost. I’m sorry, guys.
Bailey:
Well, we’ve made the rule that he has to wait like a month before he makes a big purchase and we decide together, but I do the same thing with smaller purchases. I’ll put in the cart and I’ll wait. I’ll wait a week or two, and then I’ll buy the book if I really want it later. So what’s number two on our list?
Bob:
This is interesting one, but I’ve been guilty of this myself is allowing tax consequences to dictate large financial decisions. We all hate paying taxes. I mean, I’ll meet people, my tax burden is way up there, over six figures, because I’ve been in business 37 years. I have to pay that, but people still complain that their taxes are $2,000, and I’ve seen people make decisions strictly based on what the tax consequences are. As an example, investments, I seen people that were over concentrated in one investment. I had a client many, many years ago have an enormous amount of money in just one major company. I can’t say what the major company is because that might be a recommendation to buy or sell, but it was a well known company that’s been around in America for 70 plus years. This was inherited stock from her dad, and I’m talking in the millions of dollars. So she was all concentrated in this one stock. And I tried to get her to diversify out of that, but she said, well, I have to pay all these taxes. I could see the handwriting on the wall that this was a company, and it’s an older company now, and the stock has dropped. I mean, it has dropped 80%, but she didn’t want to diversify because of the tax consequences. Yet diversification is all in God’s word. Ecclesiastes 11:2, “Divide your portions to seven or eight, because you do not know what disaster may come upon you.” So don’t make those large financial decisions strictly based on taxes, but it needs to be on wisdom too. The third one I see is people buying a new home or upsizing without counting all the costs. When you go into a new home, or an older new home, but when you buy another home, you’ve got to be thinking about the maintenance and repairs and the insurance and the taxes and utilities that are associated with buying that new home. Many times, it might be better just to stay put for a while and continue renting, even though the media has us convinced that you should all buy a home, but that’s not necessarily always the case.
Bailey:
Well, speaking of making those big purchases, what about buying a vehicle or a toy?
Bob:
I started touching on that awhile ago a little bit. Buying new cars too often is a major, costly financial mistake I see people make. I mean new cars depreciate by as much as 50% in the first three years. Not all cars, but pretty much 90% of them do. So I always ask somebody, would you repeatedly invest in a mutual fund or put money in a savings account knowing that for sure it was gonna be worth 50% less in three years every single time you invested in it? Should you do that? But many people switch out cars every two or three years, right as the depreciation is starting to level out. So it’s that first year and second year and third year. By the third year, it’s best to buy a car that’s about three years old. It’s still in good shape, and you can find one that’s still got low miles. Let somebody else lose all that money instead of yourself.
Bailey:
Sure. That makes total sense. What about big toys like boats and RV’s and things like that?
Bob:
You know what I’ve seen so many times? That’s another major mistake and they’ll buy these toys like boats or an RV, maybe a four wheeler or a motorcycle. And heck, I want you to have fun. Life is not all about work. But they’ll make these kinds of purchases before they have six to nine months of cash reserves and savings for emergencies or before paying off all their debts, before having a systematic savings plan, an investment plan for retirement. So that’s a huge mistake. You need to have those things in place first before you go buy those toys, which by the way, it’s going to go down 50% value also in the first three years, or maybe more.
Bailey:
I can attest to that. We bought a motorcycle about four years ago and we can’t even sell it for half of what it’s worth.
Bob:
And we’ve had some clients buy RV’s, and I’m telling you, you could travel the United States and stay in every Four Seasons and Ritz Carlton and JW Marriott in the United States and you’ll never get up to what an RV is gonna cost in just the gas alone. And then you’ve gotta pay rent and all the insurance and the hassle. I’ve heard a lot clients that have gone down that road and wish they hadn’t had.
Bailey:
Oh, I didn’t even realize how risky those kinds of purchases could be for people. They sound like fun, right? You don’t think about the risks.
Bob:
I’ve owned a couple of boats and you were asking me about that and you said, you have a new place in Rockport. Are you going to get another boat? And what did I say?
Bailey:
No. Because you’re going to make some friends who have boats.
Bob:
Exactly. They pay the insurance. I have friends that have boats, and when they wanna go out, I’ll say, hey, can I go out with you the next time you’re going out?
Bailey:
That’s wisdom right there. Okay. Well, let’s talk about borrowing money. What are your thoughts on credit cards and debt?
Bob:
Well a lot of people, they’re gonna be surprised at me saying this, but using a credit card instead of cash – and even if you pay it off every single month, which a lot of people do that they say, well, I’m using it to get all the points – what the studies have shown over and over and you can verify this with Dave Ramsey, that when you are using a credit card to pay bills with that on average, you’re gonna spend between 10% and 15% more per month or annually. Now I want you to think about that. Over the months and the years, you’re spending between 10% and 15% more, even if you’re paying off a credit card, every single month. So it’s costing you a lot more than all those points or airline miles that you’re getting.
Bailey:
Wow. I didn’t think about that. What about number seven?
Bob:
Number seven is taking on too much debt. And our financial institutions, they love you to take on that debt because then you become a slave to them, right? It says that in scripture, but the general rule of thumb, according to financial institutions, is you’ll have a debt up to about 50%. The experts, I guess I’m an expert now because I’ve been doing this for so long, as a general rule of thumb is you should not have more than 30% of your monthly income going to debt payments, and that’s including your mortgage. So take your mortgage. If you have a car payment or two, whatever other debts you may have, and it shouldn’t add up to more than 30%. That leaves you room for living and all the rest of life’s essentials, for giving, and for saving for your future.
Bailey:
Well something I never even think about when I’m looking at that is the interest rate. It feels like it always sneaks up on me after I have a credit card or take out a loan on something. Oh yeah, this isn’t just the loan. So what about interest rates?
Bob:
That’s definitely a big one, paying too high an interest rate on debt that you do have. I’m still seeing people that they haven’t refinanced their home in talking to them. They’ve got a rate of 4%, and they need to refinance now before rates go up, because they’re about to go up. If it’s a 30 year mortgage and you have 25 years left on it, move it down to 15 years or 12 years because you can get a rate that’s about half of that today. And that kind of plays into my next mistake, which is mistake number 9 of the 21 mistakes is not paying all your monthly obligations always on time. And what that does is that hurts your credit score, and your credit score determines that interest rate. So number nine kind of points back to number eight about paying the higher interest.
Bailey:
That’s good. Can you tell us a little bit about the mistakes that people often make when it comes to budgeting, or not budgeting, and saving?
Bob:
Well, yes, definitely. And this will be number 10 of our 21 when it comes to that budgeting and saving and spending everything you make. So you need to learn to live below your income, not above it, and also procrastinating. That’s number 11. Procrastinating to start saving because a convenient time to save is never going to come. Everybody thinks I can do that tomorrow, but that’s a huge mistake. It’s one of the number one reasons for financial failure. I’ve done an entire podcast on that, procrastination. Remember we did the rule of 72’s. We did that about 10 podcasts ago and how money compounds and it doubles on itself, and every month that you procrastinate to start saving is costing you down the line of what your money’s going to grow to. So spending everything you make is number 10. Procrastinating to start saving is number 11. And number 12 is having a lack of cash reserves for emergencies, because that kind of goes into that number 10. If you’re spending everything you have, you’re not putting aside cash reserves and you need cash reserves for emergencies, especially over the last year with the coronavirus because people have lost their jobs. People got ill and you need cash reserves for illness, or when things break, like if you own a home and your heating and air conditioning breaks, and you’re in your home, I’ve seen these heating and air units cost as much as $15,000. You need those cash reserves for that. If you don’t have those cash reserves and you’re spending everything you make, what’s going to happen when your air conditioning breaks in the middle of August? You’re gonna get it fixed, right? What are you going to do to get it fixed? You’re gonna go into debt. It spins. It goes into a circle. So you’ve got to learn to live on much less than you make. That mistake is not making that budget and not choosing a set amount to live on no matter what you make. And so Rachael and I, we’ve we set our income at a certain amount per month no matter what I make. I know a lot of our podcast listeners get bonuses, and their income goes up. But as the income goes up, instead of going up with that income, like we have done, we’re living on the same monthly amount today that we were living on 10 years ago. But my income is much higher, but we’ve learned to live on the same exact amount coming in every single month. There’s an old saying that I’ve heard at Kingdom Advisors to ask yourself, “How much is enough?” And it’s always just a little bit more. Learn to set up that budget. We were speaking with a couple just yesterday and one of them is about to graduate and become a doctor. So their income’s going to go way, way up, she’s about to get a very good paying job. But they’re used to living on this $40-50,000 or $70,000 a year, and now their income’s going to go to maybe $200,000 plus. Well, if you’ve been used to living on 70k, maybe raise your income a little bit. You need to congratulate yourself for all that work, but you don’t need to go from living on 70k to living on 200k or living on beyond that. So that way, you’re saving and building those cash reserves.
Bailey:
That’s so good. What are some of the things on the list that you feel like would be totally unexpected to our listeners that maybe they haven’t even thought about?
Bob:
Well, number 14 on our costly financial mistakes that people make and I see this a lot is buying low quality things that will cost you more in the long run like a cheaply made car or a cheaply built home, like a track home. You gotta be careful of that. I’ve seen many clients over the years. They’ve told me they bought a cookie cutter home and what’s happening is the builder is building the same home four years later, a mile away or two miles away, and selling it for the same price because it’s built with inferior products just to sell that home cheap. The paint is starting to come off or fade, and things are starting to happen with that home. They gravitate towards that newer looking home, but maybe if you had bought an older home and fixed it up, that was built the old fashioned way and slowly, that would not be happening. So I see things like that. Even appliances. Don’t always go for the cheapest appliance. Nowadays, appliances break, though. Buy the warranty that goes with it because they just wear out so much faster. They’re not built like they used to be.
Bailey:
Totally, totally. What’s number 15?
Bob:
This is out of nowhere, right? Not putting down roots in your community is a major financial mistake I see people make, like roots in your job and your location. There’s a book that came out many years ago called the “Millionaire Next Door”. And if you go and you read that book, and I would highly recommend everyone read that book, you’ll notice that nearly all of the millionaire next door people are people you would never suspect are millionaires. They didn’t move around chasing fantasies. They didn’t always think the grass was greener on the other side. They put down roots, and they had a strong stable foundation. Roots in one town, one job, one spouse. I’ve just seen that financial mistake when you don’t follow that, it really costs you in the long run having that mentality that the grass is always greener on the other side. That was actually number 16.
Bailey:
Yeah. But what about wise counsel? What mistakes have you seen people make as far as not seeking any counsel?
Bob:
Well, this is one of the big ones as we get near the end of our 21 is it’s not seeking God’s word and praying about all large financial decisions. Proverbs 2:6-8 says, “The Lord gives wisdom, and from his mouth comes knowledge and understanding. He holds success.” I like that word, “In store for the upright. He is a shield to those whose walk is blameless, for he guards the course of the just and protects the way of the faithful ones.” You notice some words in here? You’ve got success. He has a shield. He guards you. He takes care of you, protects you. This is why we need to focus on God’s word because it’s going to protect us. When it comes to those financial decisions, it’s a huge mistake for a Christian to move into any large financial decision without praying about it and seeking what God’s word says. In the next one, number 18, is not seeking wise advice from experienced counsel. A lot of folks have made bad decisions, but they’ve learned from those bad decisions. Look for those that have been successful. Don’t seek advice from the buzzards. Seek advice from the eagles. I mean, if I’m looking down at a hole at somebody and they’re stuck down in the hole and they were hiking somewhere and they messed up, I don’t want to get advice from them, but maybe I do, they’ll say, hey, go around, go around this. So, look for that wise counsel and look for someone that has those virtues that are found in 1 Timothy 3, which are virtues of an elder and deacon with a good reputation and well known in the community and married to one spouse and just known for their honesty and integrity doesn’t get angered easily. Just somebody that is calm and cool and collected and has a good foundation, kind of going back up to that top one. It’s really good to seek advice from wise counsel. And you’ll be surprised at wise counsel, many times they’ll say, don’t do that even though you wanted to do that. It’s a warning.
Bailey:
That’s good. Yeah. Well, I know that these last couple points talk a lot about some things that people often either forget to do or put off, put off towards later in life. And so what are these final three points in our list of 21 mistakes?
Bob:
Well, number 19, 20, and 21, number 19 is lack of insurance or buying it only on price. Please don’t buy insurance just based on price. That is very foolish. You need to buy insurance based on coverage and the protection it’s going to give you. We have a future podcast we’re going to be doing with Ron First from Christian Insurance Services and we’re gonna be calling it insurance do’s and don’t’s. That’s one of the things. Forgetting to buy that life insurance program or life insurance, like for the breadwinner, disability, health insurance, auto insurance, making sure your auto insurance has the coverages it needs. I would like to recommend that you choose an independent insurance agent, not a captive one where that’s the only company that they can sell. That company is gonna be pushing them to sell that. So that’s one of the things that I see people forget about is that one. Number 20 is not having a will. So if they died prematurely, that could be a disaster. Not having a power of attorney and a medical power of attorney if they were to go into the hospital. Do you have a living will or letting someone know if you want them to keep you alive on the machine or not if you became incapacitated. That’s the importance of a power of attorney and having someone that you know can make those wise decisions for you if you were incapacitated. And then the last one of our 21 today, that’s totally different too, of things that people don’t think about is investments and lack of diversification or over concentration in one investment. Don’t fall in love with a stock or a company just because that was your grandpa’s company that he worked for for many years, or maybe that was your dad’s or even your husband’s, who’s now passed. Don’t hold onto that stock just for that reason. And a way to measure that, a lot of people, they start to think they’re related to their stock. Call the company and see if they know who you are. Okay. So your investment is not related to you if it’s a publicly traded stock, unless you actually have large, large ownership in the company. Diversification is so important. And I’d like to sum up all 21 of these with Proverbs 21. There’s a great scripture in Proverbs 21:5 that says, “T”he plans of the diligent lead to profit as surely as haste leads to poverty.
Bailey:
Well, there you have it. That’s 21 financial mistakes that people make and that you can now avoid. As always, we’re here to help. If you have any questions, you can just call us at our office. The number is (830) 609-6986 or you can find us on the web christianfinancialadvisors.com.
[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.
0 min
March 24, 2021 95 – 10 Principles of Biblical Generosity
Click below to listen to Episode 95 – 10 Principles of Biblical Generosity
10 Principles of Biblical Generosity

Do you give generously and with a cheerful heart?

More episodes >>

Are you someone who gives your finances and your time out of a cheerful heart, or is it something you feel obligated to do? This episode discusses what the Bible says about the importance of giving generously. There are actually over 2300 verses in the Bible that talk about giving, money, and possessions! That is a lot of time spent writing about the significance of giving and doing it with a joyful heart.
Giving generously is a very important subject in the Bible and one on which Jesus frequently spoke. It shows our faith to God and that we trust in him for support. Plus, doesn’t all of our money belong to God anyways? “10 Principles of Biblical Giving” is based on 10 giving principles that The National Christian Foundation came up with. These include:
1. God is absolutely good
2. God owns everything
3. God created us to bear his image
4. Giving brings transformation
5. Jesus is enough
6. God is our never ending supply
7. Giving is a form of worship
8. The motive matters more than the money
9. What we do now is of eternal importance because tomorrow is not guaranteed
10. Time is of the essence, not of in the future

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Bailey Theaker

National Christian Foundation
Website

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.
[EPISODES]
Bob:
Welcome to the 95th podcast of Christian Financial Perspectives, 95. These numbers keep getting closer and closer to a hundred. That’s a lot of hours of listening to me.
Bailey:
It’s a lot of good information in there.
Bob:
I hope so. Well today we’re going to share the “10 Principles of Biblical Generosity”. This is something I was telling you about earlier today. I get a weekly email from the National Christian Foundation and I’ve had them on the podcast several times in the past speaking about unique ways of giving assets. I mean, there’s just so many different ways to give today. It’s not just from cash, but it’s through your stocks, it’s through land, it’s through IRAs, many, many different ways. When we speak of 10 principles of biblical generosity, this was an article I got. It was called that. And I looked at it and these really came out at me and I said, this would be a really good podcast to bring to Christian Financial Perspectives because, I mean, the title kind of struck me – 10 principles of biblical generosity. What could that be?
Bailey:
Yeah. I read through some of their points as well. And so much of what they said was just solid gold. I mean, one of their quotes said, we believe biblical generosity is much more than a financial transaction. It’s a spiritual practice that has the power to transform every major area of our lives. When our giving is rooted in scripture and responsive to God, we draw closer to his purpose for our life, bearing the image of Christ.
Bob:
Yes, it is. It’s so much more, like you say, than just a financial transaction. It’s really what our love relationship is with the Father, with the creator of the universe, the Maker, with God. And so we’re going to get into these 10 principles. I’m telling you, I think you’re gonna really like these. These things you may not have heard, but maybe a lot of them you have. You’re going to hear some scriptures. Some of my favorite ones are in this one too, but it never hurts to hear God’s word again. So we’ve got these 10 principles, and so Bailey start off with the first one.
Bailey:
Yeah. So principle number one is that God is absolutely good. And this is rooted in one of my favorite scriptures, probably one that you’ve all heard before, have committed to memory, but it’s John 3:16 and it says, “For God so loved the world that he gave his only son that whoever believes in him should not perish but have eternal life.” And our God is a God of unimaginable love and generosity. And he gave his son for us, the ultimate gift. Beyond love and generosity, that gift also demonstrated God’s justice and his mercy toward us, and his enduring trustworthiness to provide everything that we need for life and godliness. And I love that this is the first point that they chose to start with because it really just brings everything back to that focal point that the gospel is at the center of everything. It all comes back to Jesus.
Bob:
It is, it is. And that is the ultimate gift. I mean, you give your son, and God gave his son and came down here amongst us to live on this earth to see what we have to go through. God didn’t have to do that, but he did it because he loved us, because he’s a giving God. So the heart of God is giving. He’s absolutely good. The second point in here is that God owns everything and you’ve heard me mentioned many times here, anyone that’s listened to even 10 of my podcasts, they know my favorite scriptures is Psalms 24:1. It’s one of them. It’s that, “The earth is the Lord’s and everything in it.” And then the second verses is, “All who live in it for, he founded it on the seas and established it on the waters.” Everything. Just think of God’s hand and he’s holding you. He’s holding the whole earth and he’s holding you in that. And every single thing we have belongs to him, and there was another scripture that they were using in these 10 principles is from Romans 12:1, “In view of God’s mercy, offer your body as a living sacrifice, holy and pleasing to God, for this is the true and proper worship.” And if God owns it, owns everything, and we love him, then in view that mercy offer ourselves to him. And it’s not just ourselves, but everything that God has given us because our bodies are from the Holy Spirit, and the Holy Spirit dwells within us when we’re a believer and we’ve receive God as our Lord and Savior. And if you don’t know Christ as your Lord and Savior, there’s nothing more exciting than knowing him. And it’s so simple. Wherever you are, even if you’re driving, don’t close your eyes while you’re driving, but even if you’re driving, you say, Lord, I made a mess of this on my own. I need you. Just give it to God because he’s the author of life. He wants to come in and be with you, and his Holy Spirit to guide you in. When you believe God owns it all, he holds the rights to it all. It’s all his, and this not just includes our possessions, but our bodies and our minds and our whole life. What’s interesting is before I came to Christ, like all of us, we’re a slave to sin, but then God comes in and redeems us. And he paid for that sin through his son, Jesus Christ, dying on the cross for us. When I think about it and when I was seeing this, there’s a quote in here that’s kind of interesting that we’re doubly owned. God owns us and then Christ sealed that with his death and resurrection on the cross by giving his blood to cover over our sins. So we’re doubly owned. Isn’t that cool?
Bailey:
I love that. Well, principle number three is that God created us to bear his image in Genesis 1 it says, “Then God said, let us make man in our image after our likeness and let them have dominion over the fish of the sea and over the birds of the heavens and over the livestock and over all of the earth and over every creeping thing that creeps on the earth. So God created man in his own image, in the image of God he created him, male and female he created them.” God designed us to look like him and to reflect his goodness in the world. When we get to set our focus on him as the creator and us as the creation, then we get to live our lives as children of God and living our lives with an awareness of that, that I’m God’s kid, that he’s looking after me, that he cares for my needs. There’s a joy and a freedom that comes with that that’s unlike anything I’ve ever experienced. One of the ways that we look like God is by being a generous people. I mean, he’s a generous God. You can’t out give God. And so we get to look like him by being a generous people and by reflecting his nature of stewardship and generosity
Bob:
Principle number four is how that giving brings a transformation in our lives. When we become a giver, it transforms us ,because it’s hard to be giving and selfish at the same time. And Christ was not selfish. He gave. God gave. Like Romans 12 is a very good scripture. Romans 12:2 says, “Do not conform to the pattern of this world, but be transformed.” Okay. Giving brings transformation, “but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is, his good and pleasing and perfect will.” So we’re called from the scripture to be transformed and allow God to shape our minds to the mind of Christ and to accept God’s view of the world, we need to make our thoughts obedient to God’s purposes. Giving is a supernatural, transformative step-by-step process of learning and agreeing to trust God in his ways over our selfish ways. And there’s another scripture here from Timothy 6:17-19 that says, “Command those who are rich in this present world.” So those of us that have been given a lot that are wealthy in this present world, “not to be arrogant nor to put their hope in that wealth,” because that wealth can disappear, which is so uncertain, “but to put their hope in God who richly provides us with everything for an enjoyment, command them to do good, to be rich in good deeds and to be generous and willing to share. In this way, they will lay up treasure for themselves in heaven as a firm foundation for the coming age so that they make take hold of life that is truly life.” So when we’re giving, it’s like sending a treasure in front of us, sending a treasure to heaven.
Bailey:
That’s so good. That’s so good. And to piggyback on that, the next point is is just that Jesus is enough. You said to not put our hope, if you’ve been given a lot, in this world. That’s wonderful, but to not put your hope in that, because that’s not going to sustain you, but there is someone who will and it’s Jesus, and he is more than enough. Psalm 23 says, “The Lord is my shepherd I shall not want.” Because we have a good shepherd who cares for our needs, who sees us and knows what we need, we don’t need to want for anything. We have everything that we could ever need. Psalm 23 is one of my favorite passages of scripture. I mean, you could take every line of that scripture and live by it day by day. But I love that he says that, “I’ve prepared a table for you in the presence of your enemies.” And so it’s like, not only am I going to want for nothing, but God has prepared a feast. And then a place at that feast for you to sit in the presence of your enemies. Like not only does he feed his kids, but he feeds them good food, right? Like he gives them a feast to eat.
Bob:
I love that. Jesus is enough. We don’t need anything else. We’ve got Christ. Boy, that is so opposite from a secular viewpoint, because the secular viewpoint is you need more and more and more and more and more. But here it is saying that Jesus is enough. Principle number six of giving generously is God is our never ending supply. Deuteronomy 8:17-19. This is a scripture I’ve quoted in some biblical workshops I’ve done in churches. “You may say to yourself, my power and strength and my hands have produced this wealth for me. But remember the Lord your God, for it is he who gives you the ability to produce wealth.” Let me read that one more time. “You may say to yourself, my power and my strength and my hands have produced this wealth for me. But remember the Lord your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors as it is today.” This passage reminds all of us that we can never forget why we have life, why we experience any success, even material successes, because God has allowed us to have that, and God gives us the ability to produce wealth. There’s another scripture that goes along with this, and it’s talking about testing God in generous giving. And we’ve spoken of this before, but it’s a well-known scripture. It’s there in Malachi, Malachi 3:10-11, “Bring the whole tithe into the storehouse that there may be food in my house.” And what is God saying? “Test me in this.” It’s the only place in scripture says that. “And see if I will not throw open the flood gates of heaven and pour out so much blessing, there will not be enough room to even store it. I will prevent pests from devouring your crops.” Now, maybe we don’t have crops today, but he’ll prevent those things from happening that would pull away from that. “And the vines in your field will not drop their fruit before it is ripe.” Tell me it, that’s a powerful, powerful scripture that says we can actually test God in our giving. And then I have another one I want to share, cause I love some of these scriptures on sharing, is 2 Corinthians 9:6-8, “Whoever sows sparingly will also reap sparingly.” So if you’ve been stingy, it’s not saying that, is it? “Whoever sows sparingly will also reap sparingly and whoever sows generously will also reap generously. Each of you should give what you’ve decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to bless you abundantly, so that in all things and at all times, having all that you need, you will abound in every good work.” So remember, God loves a cheerful heart and realize that this scriptural principle of whoever sows sparingly will also reap sparingly.
Bailey:
And I love that. I love that it talks about the cheerful heart that you can give with. And so the next point is giving is a form of worship. My husband and I are planting a church in San Marcos, and we’re really intentional about the words we use. When we’re talking about church. We don’t call Sunday gatherings “church” because the church is a people, it’s not a gathering. And we don’t call the music that we play “worship” because worship is so many other things. It’s not just singing. And I love that this talks about generosity being a form of worship. Acts 17:25 says, “Nor is he served by human hands as though he needed anything since he gives himself to all mankind, life and breath and everything.” The National Christian Foundation said it like this, “When we give generously and sacrificially, it’s not because God needs anything from us, but because we want to show our love for him. Giving is an expression of obedience. Yes, but also of gratitude, trust, and increasing joy. God seeks out and recognizes those who worship him this way.”
Bob:
That’s powerful, isn’t it? It’s very powerful when they say that, that it’s not because God needs anything. God owns it all. And it all belongs to him. But it’s showing our love for him. I don’t think I’ve ever seen it anywhere written that giving is a form of worship. Have you ever seen it written anywhere like that?
Bailey:
No, I don’t think so.
Bob:
I don’t think so either. If anything, in all these principles, I think that this might be one of the most important principles to remember of the 10 principles of biblical generosity, that giving is a form of worship. Principle number eight. We’re just about done. I mean, we’ve already gone through seven of these now. Principle number eight is the motive matters more than the money. Think about the widow’s offering. We’ve heard this story in Mark 12. I’ve heard it all my life. Mark 12:41-44, “Jesus sat down near the collection box in the temple and watched as the crowds dropped in their money. Many rich people put in large amounts. Then a poor widow came and dropped in just two small coins.” I shouldn’t say just two. “Jesus called his disciples and said, I’ll tell you the truth. This widow has given more than all the others who are making contributions, for they gave just a tiny part of their surplus, but she, poor as she is, she gave everything she had.” Now, you think about when you hear these billionaires, Oh, they gave 1% of that billion, but she gave 100% of her pennies. So, that is truly having the right motive of giving. It’s always struck me as it’s not the amount, but it’s the motive. So what’s the reason for giving? Is it to please man and so you can get your name on a big building and for the world to pat you on the back, or is it to seek God’s heart? Acts 20:35, “In everything I did, I showed you that by this kind of hard work, we must help the weak remembering the words, the Lord Jesus himself said, it’s more blessed to give than receive.” So giving, it measures our hearts, which God sees clearly. And Jesus always said, there’s more blessing in giving than getting, but you only know this if you’ve experienced it in doing it yourself.
Bailey:
Principle number nine is what we do now is of eternal consequence because tomorrow is not guaranteed.
Bob:
None of us know about tomorrow.
Bailey:
Amen. Matthew 6:19-21 says, “Do not lay up for yourselves treasures on earth, where moth and rust destroy, where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal, for where your treasure is, there your heart will also be.” Nothing on earth really lasts, not your money or our things, not even our bodies. And this earth is not the home that we’re destined to live in forever. But we do have a home that lasts forever in the kingdom of God. And when we set our eyes on that eternity, we’re so freed up here on this earth to be generous with the time and the resources that we have.
Bob:
Amen. And then we come down to the last principle. The 10th principle is biblical generosity. Time is of the essence, not of the future. James 4:13-15 says, “Now, listen you who say today or tomorrow, we go do this or that in that city. Spend a year there, carry on business, and make money, while you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, if it’s the Lord’s will we will live and do this or that.” So even though we’re promised eternity, really none of us even know if we have another day here on this earth. There is a time for everything and it’s never too late to start. And the Bible communicates a clear sense of urgency when it comes to giving.
Bob:
And we’re called to do it wisely during the days that God’s given us. 1 Timothy 6:17 and we’ll end on this, “Tell those that are rich in this world not to be proud and not to trust in all that money. Money could not be trusted. They should put their trust in God. He gives us all we need for our happiness.” So there you have it, 10 principles of biblical generosity. First one, God is absolutely good. Next, God owns everything. Third principle, God created us to bear his image. The fourth, giving brings transformation. The fifth, Jesus is enough. The sixth, God is our never ending supply. The seventh, giving is a form of worship. The eighth, the motive matters more than the money. Number nine, what we do now is of internal importance, and time is of the essence, not of in the future.
Bailey:
Amen. Well, if any of our listeners are looking for Christian financial advisors to help you in all of the unique ways that there are to give, you can give us a call at (830) 609-6986, or visit us online christianfinancialadvisors.com.
[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.
0 min
March 05, 2021 94 – Location No Longer Matters
Click below to listen to Episode 94 – Location No Longer Matters
Location No Longer Matters

Why having a financial advisor in a different state isn’t a big deal anymore.

More episodes >>

Just 2 years ago, having a financial advisor in a different state, or even city, was something that most people never considered. Why? The capabilities to video chat, email, and sign digitally have been available for many years, but most people had not been utilizing these technologies. The recent coronavirus restrictions changed all this and vastly accelerated the adoption of these technologies far ahead of the expected timeline.
Now with the widespread acceptance of these technological capabilities, and ease of use, you no longer have to choose a financial advisor based on their proximity to you. Instead, you can now find a financial advisor with the experience that fits your values, wants and needs regardless of distance. In this podcast, we discuss why “Location no longer matters”.

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Bailey Theaker

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:
So welcome to our 94th podcast where we are really using some high tech stuff today. I’ve got Bailey on one line with me. So we’re recording from three different locations and we’re doing this because today’s podcast is going to be about the reason that location no longer matters. And I also have my son-in-law, Shawn Peters, that works with me and is head of all of our high tech world inside of Christian Financial Perspectives and Christian Financial Advisors on with me. We’re using our technology today and we’re basically Zooming each other, like so many of you have been doing through your Sunday school classes and Bible studies and watching church. Welcome, Shawn. Bailey’s used to being on this with me. So I’m looking forward to having you on with me. You’re the future of this. Say hi to everyone.
Shawn:
Hello, everyone. Happy to be here. Thanks for having me on guys. And I’ll do my best today.
Bob:
I think it’s going to be a lot of fun. Bailey. You want to say hi?
Bailey:
Hi guys, good to be back. I’m excited to cover this topic.
Bob:
You know, it is an interesting topic, isn’t it? The reasons that location no longer matters. It’s been amazing to me, technology that has been around for many, many years. I mean, we were using go to meeting before we used Zoom, but over the last year, because of the coronavirus, it seems like it pushed everybody into using Zoom, like I was saying, for their Bible studies. Rachael and I’ve been watching church online because Rachael had cancer and we’ve gotta be careful about her getting the coronavirus. We’ve been healthy so far, but the adoption of this technology and online meetings and even digital signatures and document storage, what has been around for many years, it has taken everybody a long time to adopt.
Bob:
But now they’ve had to really adopt it, haven’t they, Shawn.
Shawn:
Absolutely.
Bob:
Today, we’re going to cover all the ways that these latest technologies are working. And I know that Shawn and Bailey, we came up with quite a few reasons that location no longer matters. I think there were something around 20 different reasons. So financial planning and services, the cool thing about it is it can take advantage of automation and it can be made available today online, but a lot of it depends on the company. I’ve noticed that the small companies can adapt this technology, whereas the larger companies, many times they have adapted to it, but they can’t adapt as quickly. So I can see how we’ve just adapted to this so, so quickly, and how we can be high tech right in there with the big guys. Does that make sense?
Shawn:
Yeah. It’s a kind of a double-edged sword. When a larger company or a group, they may have more monetary resources and staff, things like that available to them. But the downside to it is when you have a much larger group, it’s more difficult to plan ahead in order to make changes as the industry and as technology changes, to be able to really take advantage of that, because there’s just a lot of logistics that go into that and retraining staff, migrating systems. As an example, I know HEB here in Texas, they had to switch to a new credit card processing for their terminals in order to take advantage of the chip instead of just the swipe for the card. Now this isn’t even including Apple pay and Google pay. Some of those other tap to pay options is just making the switch for credit card processing to include the chip option. They had to plan ahead and migrate all of their stores overnight across Texas. So you can imagine the logistics that go into just even a normal, simple hardware or technology change, but to have to coordinate all those changes across the entire state of Texas for all HEB stores. I mean, just imagine how much of a nightmare that could be, whereas a smaller local store can say, Hey, we have these new tap to pay options for our little card readers and they just install it one day and later that afternoon, everybody’s ready to go. So it’s a little bit like that for what we’ve been experiencing as a smaller firm compared to maybe a huge thousand plus person firm. We’ve been able to adapt and migrate to more resilient systems, which not only gives better protection for our clients, but also gave us the flexibility to more socially distance and still have access to our full capabilities as a firm, even when working remotely.
Bob:
So whether you have one or a hundred advisors, we have the same technology or even better. And we’re just a phone call away, a text away, an email away, a chat away from our clients. And it really makes it easy for somebody, whether they’re even a thousand miles away or whether they’re down the street, we can serve them the same. And communication is just so convenient now and efficient through online scheduling of meetings and the addition of text and email and phone that you can just go to a website now, and it used to be so hard. I remember when we would try to schedule somebody and for them to coordinate with our schedule and they would have to get with their spouse, et cetera, and they’d have to figure out the time. So now, they can just go online through our portal right there and just set up a time during business hours to meet with us.
Bailey:
It’s really interesting. It feels like the world kind of turned upside down overnight. And I do think that that’s a huge win that because we’re a small firm, we got to turn upside down with it and adapt pretty quickly because of the things that Shawn was saying.
Bob:
What’s interesting about this Bailey too, is we’ve been using these technologies for a good 10 years. I mean Shawn was with our firm back in ’08. If you remember, we were doing some “go to meetings” back then. So that was 12, 13 years ago. And we were using the technology, but people were not adapting to it. So this technology has been out a long time.
Shawn:
We’ve kind of seen a complete inverse of back then to now, because at that time, during the 2008 to 2013 timeframe, you would see maybe 10-15% adoption of using GoToMeeting, especially for one-on-one meetings. Now, you obviously use it more often for a large group, like during a webinar or online presentation, but for actual client meetings, it’s maybe 10-15%. But now, especially because of the coronavirus this past year, it vastly accelerated the adoption to where now, if anything, it’s the complete inverse of that where 10-15% of meetings might actually be face-to-face.
Bob:
I would even say it’s maybe less than that. I feel like that 90 to 95% of our meetings have been online. And what is interesting about that too, is it doesn’t matter where we’re located. You know, Shawn, you’re in one location, Bailey you’re in another, and I’m in another. I’m in a location that’s 200 miles away from y’all right now. It doesn’t matter where the location is anymore. It has really made that a huge deal that meetings can be done from any location. And as long as you have a cell phone or internet service, a tablet, I mean, I did one with a client just last week and I could see he was in his truck because you could see him talking and his steering wheel was right in front of him. Well, he wasn’t driving while we were doing it, by the way. He stopped. But we were doing that online meeting right then. And he had a bunch of business that he needed to do. He’s in outside sales. He owns his own business, but this made it where he didn’t have to take off time to come all the way to our office and spend more than the time necessary for us just to be online at that point during that meeting. That was very important to him, and he liked it. He said he liked it.
Shawn:
Yep. Clients can jump on. And we have this secure document storage and sharing to be able to share the relevant reports. So even if someone is out and about and remote and they don’t necessarily have a normal desktop laptop computer, just maybe having their phone, they can at least see their advisor and talk to them. They can, either in real time or after the fact, review the reports that you’re going through at the same time. And they don’t have to spend time driving. They don’t have to add in that time in addition to the actual meeting, especially if maybe they’re 200 miles away, they don’t have to worry about meeting in person and all the logistics involved in that.
Bob:
Yeah. That risk of spreading the coronavirus, which is what we’ve all been worried about it. But even the flu or colds, you don’t have to worry about that with online meetings, they’re less time consuming, and it saves on travel and think about a lot of people that are caretakers today, and they may be taking care of their children or maybe it’s grandparents taking care of grandchildren or the sandwich generation. They’re taking care of children and elderly parents. And they don’t want to have to find somebody to watch them while they come to a meeting. Well, they can jump on a meeting right there at their home, with their children in one room or grandchildren in another and their elderly parents in another room. That makes it so much easier to do that. So you can do it from the comfort of your home, your office. You could do it outdoors on a beach if you wanted to, as long as you have internet service. And nowadays, all the countries of the world have good internet service. Another thing that’s neat about today is how the financial planning and Bailey, you and I, we’ve done a complete programs podcast on this is that the financial plan can be totally done online too. Somebody comes into our office, we’re sitting across from each other and we are seeing face-to-face. And by the way, I’m not saying this totally, totally replaces personal contact. You just can’t replace that. But what it does replace is that location is a problem because location is no longer a problem, but financial planning today is done online, and it can be done in small increments of time versus having to take out a whole half day. And there’s so much when it comes to financial planning and all the different issues that you talk about, it actually makes it nicer. And the financial planning that we’re doing online is very interactive and you integrate it. As soon as you put things into the plan, it goes into a cloud and it’s updated immediately. And you can just pick up right where you left off the next time you’re in a financial planning meeting. So this is something that we’ve done. We’re working this with clients that are in California or in New York or in Illinois, it doesn’t matter because all of this, like you say, is so nice today because location no longer matters.
Shawn:
My wife’s on the board for a nonprofit. And ever since the coronavirus outbreak in March last year, they moved all of their monthly board meetings. And they have some periodic ones too, but they moved all their regularly scheduled board meetings to Zoom. And so with that, she’s been able to attend the board meetings and everybody could see one another face-to-face virtually and talk about things. And of course, the cats and our son Rhonan entertain each other while she’s in the board meeting. And so it’s great. And it cuts down on time because before, when they had to go in person to the board meeting, she’d have to plan for an extra 20 minutes maybe of driving each way, plus the time for the board meeting itself. And so with that, it just takes so much more time. Now, we’re becoming truly location agnostic.
Bob:
That’s a good way of putting it. I like it used to be where when someone wanted to open an account, they used to have to come into the office and sign all the documents, or we would send the documents overnight UPS, FedEx, or mail. But now through technology, signature’s are becoming effortless with e-signature programs. We can send our registered investment advisory agreement. We can send all of the paperwork to open accounts. We use TD Ameritrade. We can do all of that. We can send our investment policy statements, investment management agreements, everything can go through this technology with signatures, not just from those that are coming on board, but from us as well. I use the same programs. As you know, we’re all communicating with each other virtually this way.
Shawn:
Absolutely. We use the same programs like DocuSign, Hello Sign, Adobe Sign, just to name a few of the larger ones. And we use DocuSign, not just for the custodian accounts and move money requests and all these other different types of paperwork. But even when we’re having to review things for compliance and marketing purposes, internal meetings, all of that is handled in DocuSign. Even if we’re working in the same office physically, it’s just better for tracking because it timestamps everything. We have the history of when documents were sent and received, there’s a geographical location stamp and an IP address. It’s also more environmentally friendly because we’re not printing tons of paper. It saves money on paper and ink. And in many ways, like I just mentioned, it’s actually better than a traditional signature.
Bob:
I kind of like how we broke this down. We talked first about how there’s the adoption of the technology, and then the switching over to everyone is now kind of forced to use it. It’s making life so much more convenient. But I think there’s another thing, too, that we wanted to mention. And we were talking about this together is how technology has changed the way a person looks for the right financial advisor now.
Shawn:
So one of the things that I think is interesting is the perks for a staff that uses the latest technology. There’s a lot of ways that makes it easier for clients to be better served. And so with the right technology, a high-tech financial firm can actually hire qualified staff regardless of their location. It’s not just about the convenience of meetings and not having to travel in the case of the caretaker type of situation. But it’s that when you, as a financial firm are looking for better talent and better people to serve your clients, you’re not limited to whoever happens to live physically nearby your office. So just like when we meet with a client in California, we might have an advisor that lives in California or a service person that lives in Florida. Just pick the place. And so that translates into a better quality of service for the clients that you serve as a financial firm.
Bob:
When we were putting this together and we were talking about all these benefits of this technology where location no longer matters and there was something that you pointed out, and I really want to spend some time on this. People would only look for somebody to serve them that was within a driving distance of them, maybe two blocks or two miles or within 30 minutes normally. What if you didn’t have the right kind of financial advisor that would fit you exactly? Then you were kind of forced to use that financial advisor. And you remember, we were talking about the franchise financial advisor?
Shawn:
Yep, exactly. So why would you choose an advisor the same way you find the nearest fast food franchise? I mean, we’re not talking about a sandwich or a taco. This is obviously something that is a little bit more important. It should have a little bit better potential quality that you can choose from. And so with location being not as relevant because of technology, it allows a client to choose the right advisor for them, not just the one that’s nearby.
Bob:
It’s not like the local Dairy Queen? I called it the Dairy Queen advisors, and we can not, and we’re not going to mention any advisory firms on the podcast, but wherever there’s a Dairy Queen, there’s one of these advisors within probably a couple of blocks of that Dairy Queen. And that advisor pretty much uses the exact same mutual fund family. And actually, this advisory firm that’s nationwide has gotten in trouble for that in the past.
Shawn:
Every client is essentially exactly the same and their model, the way to grow, has nothing to do with being the most knowledgeable, being the right advisor for a client and finding the right portfolio, finding the right investments for a client. It’s all about you just happen to be nearby. That’s why you would go with an advisor from this particular group that we will not name, as opposed to now, really clients shouldn’t be limited to that. Clients should be able to find the advisor that not only has the right experience, but also fits with their values. Again, when you just go with whoever’s nearby, there’s not a lot of options, but you can find a firm that has the experience and have the same values that you do to help you along your financial journey.
Bob:
I grew up in a small town during my junior high and high school years. And it was called Lake Jackson, Texas. And I remember back then, the town was probably about 6,000 or 7,000 people. When you wanted to go buy something, you only had one or two choices. If they didn’t have it, that was it. That was all you got to have. But today with technology, we’ve got the world that’s available to us and it should be the same way with the way that you pick a financial advisor to serve you. Pick one that fits you. Pick one that has the perfect fit for you and that will go with your values and what you care about and the experience and it doesn’t matter whether the firm has 20 on staff or 2000 on staff. The awesome thing is is now, like we were mentioning at the beginning of the program, smaller firms can adopt these technologies and give you that one-on-one service that you deserve with your financial life. And all of us are different. Every single time I do a meeting with somebody, there’s not this exact particular outline I’m going to use because it’s a picture of you, not a picture of what I want you to fit into. I don’t make you fit into a certain mold and you should not have to fit into a certain mold just because that’s the only advisor you have close to you. So whether they’re two blocks away or 2000 miles away, if it’s the right advisor, pick that advisor, but don’t pick them just because they’re around the block. And with the technology today, like you say, that we’re using with Zoom and it used to be GoToMeeting and you know, all these technologies are coming out. They’re all the same. They’re virtual technologies. You can see your advisory firm, you can meet their staff, and really get a good feeling for what is serving you best. And I think that really comes down, also, and I want you all to chime in with me on this is that for the Christian, they need to find an advisor that doesn’t just happen to be a Christian, but they want to find a Christian financial advisor. And Shawn, I know you’d like to spend some time on this. I’m going to give you a little bit to talk about what I mean by that.
Shawn:
One of the verses that comes to mind is 2 Corinthians 6:14. And that says, “Do not be yoked together with unbelievers, for what do righteousness and wickedness have in common? What fellowship can light have with darkness?” So, not only is technology opening up options to find someone with the right experience for you as a client, but also it opens up the doors to firms that are focused on Christian and biblical principles at the core of how they operate their business. As you said, Bob, it’s one of my favorite things. You were the first one I think I’ve ever heard say that, but there’s a difference between a financial advisor that happens to be a Christian or happens to go to a church nearby and a Christian financial advisor. And the difference with that, it may sound simple, but Christian is first and foremost, not something that’s tacked onto the end. And so with technology and the way it has improved today, and also the fact that people have essentially been kind of forced to adopt it faster than we expected, what that has done is just open the floodgates of available options for people to be able to find someone that has the experience they’re looking for and actually aligns with their beliefs and with their values as a believer.
Bob:
Bailey, I’m seeing you shake your head to that. You’re like, yeah, yeah. You’ve been awful quiet here during this podcast. Of course, Shawn and I’ve got that dominating personality.
Bailey:
Well, you guys are on a roll. I feel like you have so much experience with this. I’m learning just as much as our listeners are too, but yeah, no, I agree. I think that the world has changed even just in our personal relationships. I have relationships that I’ve been closer in because they’re in my home or closer to me, but the relationships that feel far away, like I have a brother who lives in Washington. I haven’t been able to be a part of that relationship as much as I’ve wanted because it feels like he’s so far away all the time, but now everybody’s far away it feels like. Now, everybody we have to FaceTime with or connect with over the phone. And so him and I have gotten a lot closer since all of these technology things have come up. And I think that goes for an advisor too. You no longer have to settle for the person who’s in your neighborhood, that you can connect just as well with somebody over Zoom, maybe even better based on their personality. I think it’s a lot like finding a therapist, like you wouldn’t just go to the person that’s next door because they’re a therapist. You would find somebody who’s a good fit for you or else it wouldn’t work. And a financial advisor’s a little bit like that too.
Bob:
Or a good surgeon, right. You know, the good surgeon may not be in your own hometown. I mean, when Rachael had cancer, we drove all the way over to Houston, to MD Anderson, to get the best help. You have to take a full day to go down there and come back if you’re going to do that. I mean, when she was getting all that therapy she was needing to get, we found a place and moved to Houston for a while. And by the way, we were using these technologies back then. That was just three years ago. But you’re right. Why would you ever just pick the person just because they’re located close to you if they’re not qualified to serve you, but I’m telling y’all in the financial advisory business that I’ve been in over 30 years now, I’ve seen this over and over where I picked the guy that happens to be two blocks away from me, even if that person is not qualified or I pick somebody because they’re with this large franchise, even though they may not have the experience because they’re used to franchises. But then, like you say, here’s the menu. You go to McDonald’s, and I’m not putting McDonald’s down at all. Bailey, I know you’re a big McDonald’s fan, but you go to McDonald’s or you go to Chick-fil-A or whatever. You go to Chick-fil-A, you’re getting chicken. You’re going to McDonald’s, you’re getting these four or five hamburgers. Now I’m not going to mention any of the franchise advisory firms, but they’re out there and y’all know who they are. They’re in every city, a lot of them with the big banks, but many times I’ve seen, too, from as long as I’ve been in this industry, that once they gain the experience and they no longer need the franchise, they’ll become independent. And another thing that we’ve mentioned over and over and this might be for those that are hearing the program for the first time is it’s so extremely important to pick a fiduciary based advisor, one that is going to be working on a fee and not a commission, and an advisor that doesn’t have this hierarchy over, if y’all could see me. I’m kind of like the hierarchy over your head. No one can see this while they’re listening to the podcast, but saying, this is what you need to push. I think we’ve hit on a lot of reasons today just why location really no longer matters at all. We at Christian Financial Advisors, and as Christian financial advisors, we can serve anybody anywhere because of these incredible technologies. And we’ve seen this enormous growth as the Christian community has had to adopt these technologies over the last year. Like I said, Rachael and I, we watch church online. Rachael Zoomed last night with her small group. Like I said, I’m talking to you all on this Friday, I’m down here in Rockport, Texas, 200 miles away from the office, and she did her meeting last night. You could see all of her small group on the screen in front of her and they were from different locations. So if you could adopt it for church, you can adopt it for Bible study. You can adopt it for a financial advisory firm as well. And there’s many out there. We’re a member of Kingdom Advisors. We’re not the only Christian financial advisors out there, but we would love to serve you if you would want to give us that chance. If you need some help finding somebody locally, we’ll try to help you do that too. Any last words that y’all would like to say?
Shawn:
If I can summarize it, then I would say it like this. We really believe what we say we believe. We walk the walk. We walk the talk that we’ve been discussing here in that we have the technology. We have the values. They’re at our core. We have the experience as a team to be able to handle everything that we’ve been talking about today. But if anyone is listening for the first time, or if you’re a longtime listener, maybe somewhere in between, just know this, that our point is not that you’re limited in just what’s nearby. You have technology available to you. The industry has finally, I feel like, crested that hill to an extent, where it’s always been dragged, kicking and screaming, because of compliance and regulation, as far as technology adoption. But we’re finally really cresting that hill to where if you’re looking for an advisor that has the experience, that has the same values as you, and has a fiduciary relationship to make sure that they’re putting your needs first, not just trying to push for a particular commission, and they’re not having someone over their head as Bob said, then you can find that advisor. Don’t settle for what’s nearby is what I would say you should take from this.
Bob:
The football coach I used to have would say, don’t you settle for mediocrity. You can be the best. Bailey, any last words?
Bailey:
No. I just think we live in a new world, and I’m excited to be a part of it with you guys.
Bob:
We’re in that new world right now, all three of us, as we speak to you and bring this podcast from three different locations. We did this to make a point today that we’re using this technology as well. So thank you for listening to today’s podcast. That’s going to be all for now.
[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.
0 min
February 02, 2021 93 – Dealing with Investment Uncertainty
Click below to listen to Episode 93 – Dealing with Investment Uncertainty
93 – Dealing with Investment Uncertainty

Bob addresses some of the most recent events that may affect the market.

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Over the past few weeks, Christian Financial Advisors has received numerous phone calls, emails, and texts about many of the recent events. In this podcast, Bob addresses some of them including the coronavirus, the new administration and Biden’s numerous executive orders, the massive borrowing of money due to coronavirus unemployment, and last week’s manipulation of GameStop’s stock price.
This podcast encourages you to take a step back from all of the chatter of the news and social media platforms and replace it with prayer, scripture, and God’s outdoor creation. Listen to the 5 ways that Bob and the team at Christian Financial Advisors are combating these economic fears including incorporating biblical wisdom, diversification techniques, and setting emotions aside.

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

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®

Bailey Theaker

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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.
Bob:
Philippians 4:11-13. “I’m not saying I need anything. I’ve learned to be happy with whatever I have. I know how to get along with little and how to live when I have much. I’ve learned the secret of being happy at all times. If I’m full of food and have all I need, I am happy. If I am hungry and need more, I am happy. I can do all things because Christ gives me the strength.” This is from Philippians 4:11-13 again. This is Paul speaking. I believe he was writing this when he was probably in a jail and he was being ridiculed for what he was doing and sharing the gospel of Christ. I love this scripture, because it reminds me that we should not base our feelings on external circumstances, but instead on that relationship with Christ, because there’s just so much happening today in our world.
Bailey:
Amen. Amen. Well, that’s what we’re talking about today. We live in a crazy time, don’t we? I mean, there’s a lot going on.
Bob:
We do. Yeah, it is. I think there’s just so much going on right now.
Bailey:
Yeah. Well, there’s a lot going on right now and it’s created a lot of fear and uncertainty in our clients and our investors. And what are some of the things that you’ve noticed that have contributed to that, Bob?
Bob:
Well, I think the first thing is this, everybody I think is just about fed up with the Coronavirus, and it continues to be a problem that continues to spread and thank goodness for the vaccines that are coming out. I know there’s a lot of conspiracy theories around this vaccine, but I know a lot of people already that have gotten the vaccine and they’ve had no side effects. And it’s funny, yesterday I was getting my haircut and she says, “At the age I’m at, if it helps me to live another 20 years, even if I grow a third arm, I’m going for it.” I said, okay. So I think the Coronavirus has really created a lot of strife and like we’re pinned up. You think about it. It’s like the walls coming in on you. You add on top of this the new administration that’s coming in right now and Biden and gosh, I mean the executive orders that he’s just done in the first couple of weeks is mind boggling. I heard it was over 40 of them. He was talking about unity before, but this doesn’t seem to push unity at all. There’s a lot of people that are very upset about that. Along with that, we continued to borrow massive amounts of money, and we’re printing it. That’s basically how you borrow it. It’s coming out of nowhere to overcome this impact that the coronavirus has had and the unemployment. I think that this could ultimately create high inflation and higher interest rates. And a lot of people were thinking, how are we going to pay this back? We gotta pay all this back. And with the stimulus package, they just keep coming out with more and more and more. And by the way, I always take those stimulus packages, and I divide it by the number of people that are actually unemployed it’s supposed to help. And when you look at the numbers, they should be giving $60,000 – $70,000 per person, and they’re giving them 1500 a month or a thousand a month for a few months. So it’s nothing like that. Where’s all this money going? And I think that has a lot of people concerned. And to add on top of all this uncertainty, like last week out of nowhere, we got this social media organization called Reddit. I’m not into social media. So I didn’t know about Reddit, but they created all this havoc with these hedge fund managers over a company named GameStop. And GameStop’s the biggest news going right now, over a company that’s never really made much money. And they even had negative returns the last few years as far as what they’re making. And it goes up 300% or 500% or 10,000%, just crazy stuff like that. And I think things like this are really pushing into all this uncertainty and this investment fear. And you just start adding all that together.
Bailey:
Yeah. And add into that that we really are on the information overload age, just constantly having information thrown at us. Most of it is just perpetuating fear. I mean, we have 24 hour news channels. We have social media at every turn. We have professionally paid doomsdayers that are making up all kinds of conspiracy theories just to scare people into buying high commission gold and silver. And you think, man, is this the end of the world. And with all of that noise just being thrown at us from every side, the team at CIS is getting tons of phone calls, tons of texts and emails and questions and concerns about what to do about all of this. And so, Bob, what is your advice?
Bob:
My advice, first of all, anytime that it starts getting crazy like this, my advice is first, you got to get on your knees. You gotta get into God’s word and seek God. What would God have you do, and turn off all this noise. Just turn it off. Get completely away from the social media part of it. Don’t look at your Facebook. Don’t look at Instagram and Twitter, all that, just turn that stuff off. The news is bombarding us. I have a relative. I’ll go to her house, and she keeps the news on all day long, and it’s just constantly feeding her spirit. Turn that stuff off, turn the internet off and TV. Turn it off for a few days or even, how about this, a few weeks and get out and take walks and go hiking or fishing. We’re surrounded by so many beautiful parks here in our whole country. Everywhere has some parks available to them within an hour’s drive, and get out of those parks and enjoy God’s creation and just get away from it. Because when you’re in the middle of it, you can’t see it. But when you get away from it and seeking God’s word will definitely get you away from that.
Bailey:
That’s so good. There’s a scripture that I hear you quote all the time. And so, I know it’s a scripture that you love to lean on, really always, but especially in chaotic times like we’re in, and that scripture is Matthew 6:25-34, right?
Bob:
Yes. I love Matthew 6:25-34. I’m a nature freak. I love nature. I love the mountains. I love to go down to Rockport and look out over the bay and watch all the pelicans. And in this time of year, there’s the whooping cranes and it’s just so beautiful. I always take this scripture to heart when I’m looking out onto nature and in those areas and it’s from Matthew 6:25-34. So I’m going to read it for us. “Therefore I tell you, do not worry about your life, what you will eat or drink or about your body or what you will wear. Is not life more than food and the body more than clothes?” This is it right here. “Look at the birds of the air. They do not sow or reap or store away in barns and yet your heavenly father feeds them. Are you not much more valuable than they? Can any of you by worrying add a single hour to your life?” Isn’t that great? I mean, you can’t. It’s not going to add a single hour to your life. Now we’re at the 28th verse. “And why do you worry about clothes? See how the flowers of the field grow. They do not labor or spin, yet I tell you that not even Solomon,” the wealthiest man that probably ever lived in the face of this earth, “in all his splendor was dressed like one of these. If that is not how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, you of little faith? So do not worry what shall we eat? What shall we drink? Or what shall we wear? For the pagans run after all these things and your Heavenly Father knows that you need them.” And this is the key one, “but seek first his kingdom and his righteousness and all these things will be given to you as well. Therefore, do not worry about tomorrow for tomorrow will worry about itself. Each day has enough trouble of its own.”
Bailey:
Wow, wow. What a timely word. We’re not encouraging people to just bury their head in the sand and act like the world isn’t happening around them. We’re just saying turn your face toward God who sits on the throne.
Bob:
Absolutely. You’ve got that. Can you see when you’re reading that scripture if you’re out in nature and watching nature, you can just see how that applies.
Bailey:
I remember last week we had a couple of people calling in who were really concerned about the world. And you were sitting at home in your home office and talking to me on the phone, and you just said, I’m just looking at my property and the trees around me, and they look like they’re doing okay. If they’re doing okay, I think God cares about us too. So I know that at CIS, we use five principles during chaotic times. Bob, would you walk us through those five principles?
Bob:
Sure will, and these are five principles we use during the good times, too, but I think I need to re-emphasize that during these chaotic times, these principles. The first one is we always use proven, long-term, biblical principles and wisdom for managing the money that God has given us. And these principles, they work through good and bad times. Ecclesiastes 3:1-8 tells us, “There is a time for everything and a season for every activity under the heavens, a time to be born and a time to die. Okay. So think about plants and everything. A time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing.” Does that sound like coronavirus right now? “A time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak,” and last, “a time to love and a time to hate, a time for war and a time for peace.” This scriptural reference really lets us know that there’s always going to be chaotic times, but you notice it says there’s going to be good times, too. A time to mend, a time to build up. So when you’re in the midst of chaotic times, you’ve got to take your eyes and look forward, look up, versus looking down and realize this too shall pass. My grandma always said this. This too shall pass. She always said that during tough times and she was right and you are always going to have the good and the bad times.
Bailey:
That’s so encouraging. And yeah, just a reminder that God is sovereign over all of it. I’ve heard it said before that there’s never a time when the Trinity panics. There’s never a time when the Holy Spirit and the Father and Jesus get together and they’re like, “Oh no, what are we going to do? Like, they really messed it up this time.” And so they’re never in panic. And so Bob, what will be the second principle that we use during chaotic times?
Bob:
One of the things that we have to tell ourselves in this is, is that never allow or emotions or feelings or social media or those professional doomsdayers with all their conspiracy theories to dictate to us how we’re going to live our lives, or here at Christian Financial Advisors, how to manage our portfolios. We cannot manage portfolios based on emotions and feelings or what social media is saying. I know I’m saying the same thing again, but you just can’t base it on that. You have to base it on well thought out processes and wisdom.
Bailey:
This is so good to hear because I am on social media. I do watch the news and it feels like every day things get crazier or something new happens. And so, just to hear that steady “We’re going to keep doing what we’ve been doing. We’re going to keep looking at God.” That’s really comforting to hear. So what is the third principle?
Bob:
The third principle is we’re always going to invest in biblically responsible, values-based companies. And along with our partners, we have a very stringent set of rules that we go by in good and bad times and screening processes, and we’re going to follow it. We’re always going to follow those when considering adding any company to our portfolio. So, we’re not going out and putting GameStop in our portfolio. It doesn’t fit. And the way that we do this with biblically responsible investing is first we look at companies to avoid, and then we look at companies to buy. And in avoiding companies, we use the scriptural guideline of Ephesians 5:11. Maybe you’ve heard this one before. It’s kind of a well-known scripture that says, “Have nothing to do with the fruitless deeds of darkness, but rather expose them.” So this means when we look at companies to put in our portfolios, if the company gives money or supports liberal causes or that wants to take away our freedoms, we avoid that or companies that support destructive behaviors and lifestyles, we avoid that. Companies that make money on gambling, tobacco, alcohol, pornography, and abortion. We avoid them. Companies that give money and support organizations like Planned Parenthood or takes away human lives in their most vulnerable state. We avoid them, and companies that are pushing the LGBTQ agenda to our youth. We avoid them. Okay. All right. So people think, okay, what’s left. Believe it or not, there are still thousands left. We consider buying companies when they follow the scriptural guidelines found in Galatians 6:9, “Let us not become weary in doing good, for at the proper time, we will reap a harvest if we do not give up.” So the companies that we consider for our portfolios, when we avoid those, we consider ones that are supporting pro-life values, companies that want to make a world a better place and serve mankind with the things we all need like food, clothing, shelter, technology, healthcare, companies that treat their employees well with fair pay, good benefits, retirement plans, and time off for family. Companies that provide a safe working environment for their employees, companies with good employee training programs, companies that are compassionate toward their employees, and companies that care about the environment and God’s creation. So once all these companies make it through this lengthy filtering process that we go through, so you can see, we’re just not putting anybody in our portfolios. We then start looking at all their financials and their net income and their profit and their debt and their dividend yield and are they over or undervalued and the list goes on. So, we put them through quite a process.
Bailey:
Yeah. That is quite a lengthy process for considering what we’re going to invest in. I mean, you really put a lot of thought and care into managing people’s portfolios, huh?
Bob:
Yes, we do. We certainly do.
Bailey:
All right. And what is the fourth principle?
Bob:
The fourth principle we use is found in Ecclesiastes 11:2, and it says, “Invest in seven ventures. Yes, in eight, for you do not know what disaster may come upon the land.” So how do we take that scripture and apply it? We apply that by investing across many different sectors. So diversification in some sectors may do well in some years, and some sectors may do better in other years. We invest across many different sizes of companies from large to mid-size to small companies, from value-based to growth based to those in the middle. We also invest across many countries and we utilize a strategy that I’ve utilized for years here called our bucket strategy. And we’ve talked about that on some other programs. That strategy is where we set somebody up, as an example, all our retirees that are taking money out right now, we’ve put enough money over in a portfolio that is not driven heavily, if at all, by the markets. And we put aside four years of their retirement income. So we don’t have to worry about what’s happening in the next three to four years. That’s called our bucket strategy. Yet we still have some growth in there and we still have maybe some aggressive growth. So we build this bucket strategy across many different types of portfolios utilizing that scriptural principle.
Bailey:
Wow. Wow. I love that. That is so helpful. And so now we’ve kind of gone over the first four. We have one final principle in handling the chaotic world that we live in. What’s that fifth principle?
Bob:
It might be one of the most important ones. And we consistently monitor and actively manage all our portfolios using a forward looking approach. You can’t look in the rear view mirror. If you’re driving in your car and you’re trying to drive by looking in the rear view mirror, you’re going to crash. So, we always take a forward looking approach. And as a fiduciary based manager, I cannot allow myself to be ever out of touch with where the markets are and where they’re going. We’re constantly making that tweak. We’re tweaking and making those small necessary adjustments along the way. And our client’s assets here, they’ve got to be run like a well-oiled machine where I’m constantly making tweaks along the way to keep it at peak operating conditions. It’s like that old philosophy in baseball. Don’t ever take your eyes off the ball. I don’t know if that makes sense to you or not. I use sports analogy sometimes, cause I was so involved in sports when I was younger.
Bailey:
Yeah. And I’ve heard you say that you are actively managing portfolios and you’re doing it more than ever. I mean, every single day, you are fine tuning people’s portfolios. You spend a lot of time and energy on it. So before we end today’s podcast, at the beginning of the podcast, you had mentioned kind of four big things that are creating all this investment fear and uncertainty today. And so I would love to get your opinion on those four things. And the first thing you said was the Coronavirus and it continuing to be a problem. Could we discuss your opinion on that?
Bob:
My opinion is that we’re going to be over it in about 12 to 18 months. It may not be as soon as we want. I know everybody would love to be over this tomorrow, but we’re seeing the vaccines come out, and I kind of go back to that philosophy of my grandma and Ecclesiastes. And there’s a time to tear down and a time to mend. And I do believe we have a time to mend. I think we can see the light at the end of the tunnel, especially with how we’re learning to adjust to the Coronavirus. And going forward, we all may be a lot healthier because now we’re really in tune with germs and how we need to not be spitting on everybody when we talk now, not getting within a foot from our face. But I don’t think it’s going to continue to be a problem. I think coming out of it, there’s going to be a lot of pent up demand for travel and people are going to want to get out and the economy could be roaring once we get out of this thing.
Bailey:
Wow. Well, here’s hoping. The second thing that you mentioned was the new administration and Biden’s numerous executive orders that he’s put out. What’s your opinion on that?
Bob:
Well, it’s really interesting. My opinion on all these executive orders and this new administration is, and especially since the Democrats have complete control, have you ever heard of the frog in the pot strategy? Like if you put a frog in a pot and there’s and old saying, if you turn the heat up real, real slow, the frog won’t jump out of the pot. But if you turn the heat up real fast and make it so hot quickly, he sees what’s going on. He jumps out in the pot. I believe, actually, with what’s happening right now, they’re turning up the heat so quick and so fast that those of us that are concerned about this new administration, I think the frog is going to want to jump out of the pot quickly. And I think in two years, we’re going to be surprised at the elections in two years and a turnover of Congress.
Bailey:
Wow. Wow. That’s a great analogy. I love it. That’s a great analogy. The third thing you mentioned was the continued massive borrowing and printing of money to overcome the impact of COVID and unemployment in many sections of the country and how this could ultimately create high inflation and higher interest rates and things like that. What’s your opinion on that?
Bob:
My comment is always things do have to be paid back, and we could definitely be looking at higher inflation. So you need to structure your investments in your portfolio, the investments that will take advantage of that inflation, in goods and services that will actually raise their prices as that happens. So, I think it’s something that we all need to be aware of. It’s coming. We can not continue with these low, low interest rates on our fixed income side of the equation for our portfolios. We’re really being careful. We’re going very short term on all of our bond holdings. Because as things go up, if you have long-term holdings, it’s called bond duration. And as an example, if you have a 20 year bond and interest rates just went up by 1%, that bond could drop by 20%. So you want to have bonds that are six months to three years out max. That’s the analogy that we’re taking, but I think it’s eventually going to have to. We’re going to have to pay the Piper.
Bailey:
Sure, sure. And the last thing that you mentioned was the big Reddit crisis from last week, the social media platform that created such havoc with hedge fund managers and the media over GameStop. Can you comment on that a little bit?
Bob:
Sorry, GameStop. But I just think GameStop’s an insignificant company that produces nothing of lasting value. I looked it up we’ve never bought this stock, but I looked it all up, and they’ve had a net loss over the last few years in income, and it’s been a terrible investment until last week’s, what I call, manipulation tactics to falsely drive the stock up. I just don’t think society really needs companies like GameStop. So this whole story has been really blown out of proportion through the social media and in Reddit. That’s part of that, and they’ve manipulated this stock and the way did it is very sad in the long run. It’s probably going to be insignificant, but we may be talking about this thing later. And in my opinion, this is just my opinion, I think some people could be going to jail for front running this stock. Because there was a group of people that made a whole lot of money by pushing this out, and the stock was just not worth anything, but they pushed it to over three or $300-$400 a share, and they sold. Quite frankly, this is not the first time that this has happened. There’s a little company that was in Houston, Texas called Enron that some people may remember from way back. Another one called Lehman Brothers and this kind of thing’s happened before. It’s happened before, it’s happening now, and it’s going to happen again. So I just don’t let it bother me because I’m investing in a well-diversified, thought out portfolio that has processes and filters behind it. And we shared those earlier.
Bailey:
Well, thanks Bob, for such a timely podcast for today’s time in dealing with all of the fear and uncertainty that’s certainly available right now. I think you’ve helped a lot of people. I mean, you’ve helped me and I think that you’ve definitely helped our clients and listeners feel better and more confident that there is a way to find some solid ground amidst all of the shifting, changing things happening around us. And today’s podcast definitely falls in line with the name of our podcast, Christian Financial Perspectives.
Bob:
Thanks Bailey. Those are encouraging words. Sometimes, I don’t know if I’m deserving of that. God’s grace. It’s just God’s grace. I’m telling ya. I’m a sinner like all of us, and God has given me his grace. And based on that, I’d like to end with these four short scriptures for our listeners and they’re not long ones, but 2 Timothy 1:7, “For God has not given us a spirit of fear, but of power and love and of a sound mind.” Next, Psalms 24:1 that you hear me quote often, “The earth is the Lord’s and everything in it and the world who all live in it.” And then the last two, Proverbs 15:22 that, “Plans fail for lack of counsel, but with many advisors, they succeed.” And Ecclesiastes is 4:11-13. One of my favorites too, “If two lie down together, they’ll keep warm, but how can one keep warm alone? The one may be overpowered. Two can defend themselves. A cord of three strands is not quickly broken.” So with that last scripture, please know that I and the whole team are here for you, our listeners, and you never have to walk through your financial life alone because it is lonely out there by yourselves. And the three strands in this case, think of it this way, the CIS team walking with you is one strand, then you’re the other one, and the most important strand is God and his wisdom, found in his word, guiding and leading our decisions as we go through life.
[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. 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 host, Bob Barber. Bob does not provide tax advice and encourages you to seek guidance from a tax professional.
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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…