Christian Financial Perspectives

Learn about the amazing risk investment portfolio platform, Riskalyze®.

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We fear volatility when it comes to investing because we think it automatically means losses. However, volatility is a natural part of investing. The higher the volatility, then the higher the possible return, and the lower the volatility, the lower the return.

It’s the same way with everything else in life. The faster you drive the more risk or volatility you can have, but many are willing to take that chance to arrive at their destination sooner.

In this episode, we want to introduce you to a tool that will help you choose peace over worry when it comes to your investments called Riskalyze®. Riskalyze® is a financial technology company that provides software for analyzing investment risk and building and implementing investment portfolios. Bob and Mary Jo interview special guest, Mitch Mitchell, who is the Customer Success Manager for Riskalyze® to give a complete breakdown of this piece of technology, how it works, and how you can use it.

GUESTS: Mitch Mitchell, Customer Success Team Manager at Riskalyze®

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

[INTRO]

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[EPISODE]

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MJ: Today on Christian Financial Perspectives, we will be talking about taking the fear and worry out of investing.

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Mary Jo, investors are much more likely to fear losses than they are to celebrate the gains in their portfolios. I always see that. You know, I notice this because we never seem to get the emails or phone calls as long as their investments are going up in their portfolios. When it goes down for a few days or a few weeks and they get that monthly statement, the phone rings and the emails start coming in. Why is that? Why do you think that it?

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As advisors, we talk a lot with our clients about understanding their risk tolerance. We ask a lot questions. We drill down to see how they’re going to react to volatile markets and what kind of returns they expect on their portfolio, how much downside they can stomach in a down market, what’s going to keep them up at night. That’s how we try to figure out what is the most appropriate investment for them.

In the past, we’ve always done this using percentages. It’s made sense to us because we talk about the market in percentages. We talk about returns as percentages. It’s just kind of in our DNA and how we were trained. But, when it comes to our clients, I don’t think those percentages actually resonate so much. It was our best guess as to what percentage of stocks and what percentage of bonds was appropriate based on how they answered our questions. But, you know, I just don’t think when you tell a client that they should be in 60% stocks and 40% bonds that the majority of them actually know what that means.

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Welcome, Mitch!

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A customer success manager is specifically focused on the success of the customer. I recently went to Pulse, which is the largest customer success conference in the country. It’s put on my Gainsight.

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Another way to put Riskalyze is that it is a risk alignment tool, which is another oversimplified way of saying it, which isn’t quite as interesting as the story behind it.

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Nobody would take this bet. So he would up the ante. “Okay, how about my eleven dollars versus your ten,” and no one would take it. “Okay, how about my twelve dollars versus your ten? Bear in mind, we can play this over and over again.” No one would take it. What he was able to do by repeating this is he was able to empirically and objectively measure just how much people hate losing more than they love winning. Let me say that again. He was able to objectively and empirically measure just how much human beings hate losing more than they love winning. That is the kind of fear that drives people away from investing. They fear losing what they have more than they would love growing what they have.

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So, one of the ways that we help people and advisors is that we help advisors objectively measure, empirically, in the same way Kahneman did, just how risk averse various investors really are. We put a score, given to that client based on a Riskalyze questionnaire, that e,piraclly measures just how much they are willing to risk losing in the short term in order to make sure that they can grow their investments in the long term.

One piffy way that our founders have put that recently is “helping investors to invest wisely for the long term making good long term decisions one good, short term decision at a time.”

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So, what this questionnaire does is help to quantify the potential loss tolerance of the investors. I loved your speed limit analogy that you said earlier necause you are going to get to your destination a lot more quickly iof you are traveling at 75 mph. The risk of course, there, is that if you experience a crash at 75mph, it’s going to hurt a lot more than if you experience a crash at 35 mph. On the other side of that coin, however, if you’re driving at 35 mph, the risk that you’re taking is that you might not arrive to your destination on time, and you could miss the event that you’re headed to.

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If your passenger in this analogy is your client, is their definition of conservative or aggressive going to match yours?

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Now, to get to these speed limit signs and where does somebody fit – in other words, where do they feel comfortable. Do they feel comfortable driving 75 or do they feel more comfortable at 55 or 25. There’s a whole lot of questions that you ask, and there’s a theory behind these questions. It’s hard because the questions seem so similar as you are going through them. Can you tell what the theory behind all of these different questions are and how it works coming at an arrival of where their risk tolerance is?

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So, the risk questionnaire sort of gives them two options: here’s how much you said you are willing to risk losing, and then it will attempt to, shall I say, tempt them away from that number either by offering them more reward or the same amount of reward but at less risk. It will repeat that question over and over again. Trying to make sure that they can zero in from a range to a point in order to determine what their risk tolerance is. So, if it’s able to tempt them to a higher amount of risk by offering more reward, they weren’t really that committed to their risk aversion, and that might actually surprise them when they see the dollars and cents of how much reward they could get by taking on more risk, you might find out that they are actually much more risk tolerant than they initially thought. They were only thinking about the risk before, they weren’t thinking about the long term rewards.

Conversely, if they decide to take on this same amount of reward, but they say, “Ooh, I can get that same amount of reward for less risk”, then it turns out that they may be even more risk averse than they initially thought, and they were actually only looking the potential upside that they were going for. They were more goals oriented than they were risk oriented. That could have been very dangerous for them in the long run if they had experienced more loss than they expected, and that’s dangerous for everyone involved in that relationship.

So, this particular questionnaire really zeroes in on what their true risk tolerance is and then assigns to them an objective risk number that sets the speed limit for the advisor so that they can, get this, assign a portfolio to the particular client that is measured in the exact same way and matches their speed limit without exceeding it, point for point.

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So, that’s a lot of the fear that drives it, but that’s exactly why Riskalyze was made. People will sabotage their own future based on fear. Riskalyze helps them to understand the risks of their portfolio and understand what their own risk tolerance is, and make sure that they are invested in a portfolio that they can be comfortable with for the long term. If they understand the risk they are taking on, it’s not as scary anymore, and that empowers them to stay invested even when the market has a downturn and make sure that they can achieve their goals for the long term.

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If a portfolio has a risk number in the 30’s or 40’s, it’s not invested as aggressively as the SEP 500 or a similar portfolio to that. It cuts down on a lot of panicked phone calls if all the sudden a market experiences a downturn, and your client calls up and says, “Oh my goodness, the market is down so many points.”

You can say, “Yes. We talked about this. I showed you the stress test. I showed you that your portfolio has a risk number in the 40’s, where the SEP 500 has a risk number in the 70’s. Lo and behold, you’re not going to miss as much money as the rest of the market. When it has another upturn, you’re going to be right back on track, having lost very little compared to the rest of the market.”

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Scenarios is rear facing, but if you look back, you can choose specific dates to see what your particular portfolio’s performance would have been during those dates. Actually, what is was during those dates and then compare that to other significant market environments. Say, if oil experienced a huge downturn, you could come up with a pretty good argument as to what your particular portfolio would do if oil tanked.

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We can assign a coefficient to show measure just how differently they move and when they move opposite of one another, that’s actually good. That actually creates, sort of, an inverse movement in your portfolio, minimizing the risk. So, you can have an extremely mathematically efficient portfolio that maximizes the reward and minimizes the risk through diversification. That yellow bar shrinks the size of the red bar, basically showing how much risk has been minimized. That red bar would have stretched all the way to the left side of the yellow bar, but now it doesn’t, which is why you can have portfolios that have significantly higher rewards than they have risks in that 95% probability range.

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So Mitch, how does Riskalyze address or handle this emotional behavior we’ve been talking about of the individual investor?

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It certainly is important to understand just how powerful emotions are on our decision making process, but when we understand our emotions, when we understand what we are afraid of, when we understand our fears, suddenly they don’t have as much power over us. That is what is the real magic of Riskalyze is it’s helping investors to understand what their fears are, and then to understand their investments in a way that helps them to understand the risk that they are taking on.

In the parable of the talents that Jesus talked about, we see the 10 talents and the 5 talents. Which one of the servants was the one that the master rebuked? The one who went and buried that talent.

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You know, someone with $20,000, 4% is $800, so there’s a big difference in the higher those numbers get. What I’m really seeing is that when people take this risk test, depending on how much money they have, they realize dollar amounts. That’s making a big, big difference. They truly gain an understanding of the monetary risk, not just the percentage risk, with all of the different portfolios that they can choose from ultra conservative to conservative to moderate to growth to aggressive growth. They know how that risk plays or doesn’t have to play when meeting their financial goals.

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As we wrap up today’s show, I wanted to share the advantage to managing risk this way: It allows you to stay invested, to follow your advisors advice, and avoid emotional reactions to market volatility. When we do this, investors are far more likely to achieve their long term investment goals – to buy low and sell high instead of buying high and selling low.

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But, do you know the risk of your actual investments are and how they compare? Is it inline with what your goals are? If you would like to learn more, give Mary Jo or I a call at Christian Financial Advisors today. We’re also including a link on the Christian Financial Perspectives, our podcast website which is christianfinancialpodcast.com, so you can take the riskalize test, or you can go to our Christian Financial Advisors Website. We will have the links on both of those websites so you can take that test. We encourage those that are investors to learn what your risk number is.

That’s going to do it today on Christian Financial Perspectives as we finish up on Riskalyze.

[CONCLUSION]

That’s all for now, until next week!

[DISCLOSURES]

Asset allocation, which is driven by complex mathematical models, should not be confused with the much simpler concept of diversification. Asset allocation mitigates risk, it does not guarantee future performance. A diversified portfolio does not assure a profit or protect against loss in a declining market. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

Mitch Mitchell and Riskalyze are not affiliated with Christian Financial Advisors. 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 Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional.Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor.

Learn how you can go from FOMO to JOMO.

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Bob and Mary Jo address the phenomenon regarding FOMO or “Fear Of Missing Out”. This episode shows how we can move from FOMO to JOMO “Joy of Missing Out” – joy and contentment with where you are and what you have. Wikipedia defines the “Fear of Missing Out” as:

“A pervasive apprehension that others might be having rewarding experiences from which one is absent.” This social anxiety is characterized by, “A desire to stay continually connected with what others are doing”.

As Financial Advisors, we call this mentality “Following The Herd”, which many of us are guilty of doing for fear of missing the next big thing. The same is true in other areas of our lives. Many times, investors experience FOMO, or “Fear Of Missing Out”, when they hear about a friend or family member making a big short term profit on a risky investment. Once you hear about a trade or investment that everyone is talking about, it is usually too late to profit from it, and the opportunity is lost.

In other words, FOMO can perpetuate the fear of having made the wrong decision on how to spend time.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

[INTRODUCTION]

Bob: Welcome to Christian Financial Perspectives, a weekly podcast where we talk about ways to integrate your faith with your finances. This is Bob Barber.

Mary Jo: And I’m Mary Jo Lyons.

Bob: Are you ready to learn how to apply biblical wisdom to everyday financial decisions?

Mary Jo: Join us as we look at integrating your faith with your finances. If it’s your first time listening, welcome to our podcast, and if you’re a returning listener, welcome back.

[EPISODE]

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[DISCLOSURES]

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 Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional. Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor.

Learn about types of retirement plans and how they can work together to create an income stream for life.

More episodes >>

Have you worked for a large company for over 20 years? Are you between the ages of 55 and 65 and now thinking about retiring, but you are just not sure what to do? You are not alone!

Retirement may be on your mind, but you might not be sure how that 401k, plus a possible pension plan and company stock, is going to work all together to create a stream of income for the rest of your life. It can be scary because making a mistake at this age gives you little, if any, time to recover.

In this episode, Bob and Mary Jo cover the importance of working with a trusted advisor to help you understand the complexity of all of the moving pieces and parts of retirement and how these pieces fit together for your benefit.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

[INTRODUCTION]

Bob: Welcome to Christian Financial Perspectives, a weekday program where we talk about ways to integrate your faith with your finances. This is Bob Barber.

Mary Jo: This is Mary Jo Lyons.

Bob: Are you ready to learn the truth about money from a biblical perspective?

Mary Jo: Join us as we discuss what God’s word says about money and integrating your faith with your finances. If it’s your first time listening, welcome to the program and if you’re a returning listener, welcome back.

[EPISODE]

Bob: Proverbs 2:7, “All wisdom comes from the Lord, and so do common sense and understanding. God gives helpful advice to everyone who obeys him and protects all of those who live as they should.”

Bob: Proverbs 15:22, “Plans go wrong for lack of advice. Many advisors bring success.” You know, Bob, I know we talked about this before, but I just love Proverbs. It’s like a little instruction manual on how to live life while loving God and just staying true to his commandments. I also find it fascinating as you look through the scriptures and we use different resources all the time and we discuss different versions of the Bible, they are all just worded a a little bit different. There is a difference that a few words can make. I dunno. I’m continually fascinated by that. I know I’m a broken record and you get tired of me.

Bob: Oh no, I don’t. I never get tired. I never get tired of you , Mary Jo.

Mary Jo: I’m glad to hear that.

Bob: I totally agree. Proverbs is so sweet in that there’s 31 chapters and many of the months have 31 days, and you can read the chapter that corresponds to the day of the month. I tell you, Mary Jo, I read Proverbs so much to my children. They’re like, dad, do you know any other book? And I was like, yes I do. But you know, Mary Jo, I’ve never seen anyone hurt in life by following God’s word, especially in the book of Proverbs. I mean, it really tells you how to live life.

Mary Jo: It does. What are we talking about today?

Bob: I’ll tell you. So today we’re going to be talking about financial wisdom for pre retirees. You know, you’re thinking about, I’m about to retire maybe in the next year or two or three years now.

Mary Jo: So maybe you’ve worked for a large company for 20 years, 20, 30, 40 years. You’re between the ages of 55 and 65. You’re beginning to think about retirement. Say you’re an empty nester or the kids or out of the house, so now you can kind of focus on your savings and what you need to do, but you’re maybe not sure what to do. And the thing is, you are not alone. There are so many people that are right there with you.

Bob: So as you’re listening to our podcast today, think about this. Can you relate to some of this? You’ve worked for a major corporation, like an energy company or a large manufacturer or a technology company for many years. You’ve been really, you know, wise. You’ve not always spent everything you have. So what you’ve done is you’ve put a sizable amount in your company retirement plan like that 401k and now it’s accumulated quite a bit. Maybe you have a defined benefit plan, maybe even some company stock, and you’re just not sure what to do. You know, retirement’s on your mind. But you’ve got this 401k. You’ve got this pension plan. You’ve got this company stock. And how’s all this going to work together to create a stream of income for you for the rest of your life? And I tell you, Mary Jo, it’s just plain scary from what I’ve seen with people because making a mistake at this age, it just doesn’t give you hardly any time to recover. You can’t do it. You can’t make mistakes at this age.

Mary Jo: Well, and that’s why I’m such a fan of planning. So, you know me, but I do think that’s what it’s all about. You know, Bob, recently I read this article that executives need to plan to keep planning. And it occurred to me that the statement, it’s not just true for executives, it’s true for everyone. It’s for all of us. And you’ve got time consuming demands on your career, your family, the complex nature of all your financial circumstances and the planning for your own future. It can be daunting. You know, where do I start? How do I approach it? But we’re here to kind of make the chaos simple and there are some steps you can take to just go through it. Just like anything else, I approach it very methodically. Let’s just take it one step at a time.

Bob: I like that saying, “You need to plan to keep planning”. And you know, Mary Jo, situations can change so quickly today, especially with the volatile markets that we seem to have more and more today because of technology and the, you know, the robo advisers and all this computer trading that’s going on. Plus, a change in family dynamics or a health crisis that all of a sudden hits you out of nowhere. That can all change your situation very quickly as well.

Mary Jo: And you know, that’s why it’s so important to work with a trusted advisor. One who shares your values – and for us it’s those Christian values that are so important – and that understands the complexity of all the moving pieces and parts of your financial life. That’s what we do here at Christian Financial Advisors. We look at how they all fit together. We walk alongside you as you move through these stages in life, helping you make sense of the complex web of financial decisions that you face as you move forward. And we help you create peace among the chaos.

Bob: And maybe you’re even one of these high level executives in a C Suite, meaning a CEO or CFO or mid level manager or an area supervisor or somewhere in between. You could have a complex earning package to sift through and maybe you’ve never thought of yourself as an executive, but still you’ve accumulated that sizeable amount in your 401k or stock options and you just need help figuring it out, how to navigate this transition. That’s where we are. We’re here to help you with that. Absolutely.

Mary Jo: So how do you go from a paycheck provided by your employer to a paycheck provided by your own investments? And how does this fit with social security? When should you consider taking social security? You know, you’ve probably got a lot of questions and we have answers.

Bob: So let’s try to get into some of those questions and get into some answers. And here’s what we see as some of the complex earning packages like base salary, maybe that’s higher than the national average and how do you handle that, bonus pay outs that can be fully or partially guaranteed or fully or partially discretionary or tied to a company performance or other metrics. I’ll tell you that’s a lot of wording in there, but we see that. Company stock, this can be a very complex topic which we want to talk more about in just a few minutes.

Mary Jo: A lot of managers have deferred compensation. Those are typically longterm incentive plans. They can be tied to a noncompete agreement after retirement. So it’s a way to keep you from going to work for a competitor, and there are some things that you really need to consider in the timing of those payouts. I know my husband has that in his situation and he did have a noncompete. So as long as he doesn’t go to work for anybody else, some of what he earned in the past will be paid out and it’s in those years and that’s what we’re using to kind of bridge that gap between early retirement and your typical retirement age. So those are incentive deferred compensation plans and a lot of people have those so we can help you kind of figure that out.

Bob: Now, Mary Jo, like in Mike’s situation, his noncompete agreement is only if he doesn’t go in the same field, he could still go to work. Like he could go to work for a major lumber company if he wanted to, right?

Mary Jo: Exactly. Let’s hope he thinks about that.

Mary Jo: Oh, he’s home 24/7 now.

Bob: Well, I go to a couple of the big ones, but actually all three of them in my town every day it seems like, especially cause we’re building a house right now. My wife says, “Yeah, I could see if you ever retired,” which I’m never going to because my wife says, “No way will you ever retire, Bob. I will not let you retire. You’d drive me crazy.” But that’s where I would want to go to work with one of those major companies like that. But you know, there’s profit sharing and there’s lump sum pay outs. There’s accrued vacation. Boy, we’ve seen some big payouts here. You know, how’s that gonna hit you tax wise, accrued sick leave, and there’s just all these tax consequences to that. There’s employee benefits, knowing what is a portable taxation of each depending on who pays the premium, the employer or the employee. Just a lot of questions.

Mary Jo: Bob, another thing to think about is the executive perks and the taxation of such. So as a general rule, the cost of providing executive perks results in taxable income to the executive, but it’s also deductible to the company. So that’s one of the benefits of why they do it.

Bob: And you know, a lot of companies like these larger companies or even some smaller, private companies, they’ll offer some financial planning benefits for their employees. So you want to check with your company and see if they’ll even reimburse you for the cost of financial planning.

Mary Jo: You know Bob, it’s so common. HEB is one of our biggest local employers here in Texas, and they have a benefit for their executives and their managers. The cost, it’s usually passed on as taxable income. There are fringe benefits including employee discounts, free parking, meals and lodging, and athletic facilities. So you want to look and see if those are available to you and if you are getting paid for those, how is it impacting you from a tax perspective?

Bob: You’ve helped some HEB folks haven’t you?

Mary Jo: Absolutely.

Bob: Then you have this company’s employer’s stock, and you know you’ve got the executive’s interests that may be tied to the company. The company stock can be in the form of options. We’ve seen that, awards, restricted units, and that can get very complicated. Mary Jo, you know, we have a great CPA firm that we work with. They have one of their CPAs that understands all this complexity and we usually bring him into the meeting because you’ve got your vesting schedules, your tax consequences, how can you avoid this stock and other funds? Can you cash it out any time? Just so many different questions, but we’ll bring him in and get these questions answered.

Mary Jo: One of the things you said I think is really important and something a lot of people fail to think about. If you’ve got a heavy concentration of stock options in your employer, then everything you have is tied to that employer. Your salary is coming from that employer. You’ve got the huge stock options and if you’re investing in your 401k in funds that own that company stock as well, think about how concentrated that is and if they have a dive in their stock price, it’s going to have a real impact on your financial future. So you want to be looking at all your exposure to that company stock and diversify, diversify, diversify. So, many employers offer a 90 day period for you to exercise any existing stock award grants once you leave the company. And it’s generally true for both you, if you leave the company voluntarily or if you let go or they’re bought out in. Sometimes, when you go through a corporate acquisition, your investing can be accelerated and you’re given the opportunity to exercise those rewards in a timely manner. Typically, as I said, it’s 90 days. You have stock awards when restricted stock shares vest, they are added to your W2 and are taxed as income. So, you want to be thinking about what else is going on in that year you’re planning to exercise those stock options. Are you going to get that lump sum pay out of your vacation and your sick days? That could really give you a big jump in your income that year. So maybe you could spread it out. Some things to think about.

Bob: You know, here’s an interesting thing you’ll hear. We hear this a lot with somebody that’s worked for a major company and is getting these stock options is called “net unrealized appreciation” or NUA and that takes a lot of special tax handling, as well. So if you own company stock in your employer’s retirement plan, we encourage you to seek us out before liquidating that because that can be a complex issue and you really need to understand it, and we’ll help you to understand that

Mary Jo: These whole stock options, it is a pretty complex scenario and if you are impacted by it, we definitely want you to really get some help in that regard. A lot of these are incentive stock options. There’s also non-qualified stock options and one of the things that we kind of think about when we’re looking at those incentive stock options, it might incentivize leaders in a company to take excessive risks and maybe do behavior that could lead to catastrophic corporate failure. We’ve seen it happen time and time again. Just think about this big company in Houston years ago, a big utility company.

Bob: Oh, you can name it. They’re not publicly traded anymore.

Mary Jo: Does Enron mean anything to you? But corporate malfeasance in order to predict the value of large pools of stock options, it happens all the time or more than we can imagine. So you want to be looking at that.

Bob: And one of the many advantages of using a biblically responsible investment strategy, like we’re always talking about here on Christian Financial Perspectives, at Christian Financial Advisors, we screen out these companies that have poor disciplinary records and who have bad corporate citizens.

Mary Jo: I think that’s so important and something that we can help them look at for sure. It doesn’t impact everybody, but there is that potential for risk, and I really kind of want to stress that concentrated positions. Executives of major companies have a lot of eggs in that one basket. So when we talk about diversifying, we say that no more than 10% of your overall investments should be focused on that company. Your compensation is often tied to company performance, and your benefit package can include stock options and grants or employee stock purchase plans that could result in more concentration of your company stock, and your salarie is tied to that company as we talked about. And your future earning, your human capital, is also tied to that company. That’s another big chunk. So we really want to stress the need to diversify, and you might need help with that.

Bob: So you know, Mary Jo, as we talk about this, we’ve talked about so many complex issues when it comes to this compensation package as somebody’s about to retire, which we start off if you’re about to retire in the next one to three years, it just goes to show that it can get very, very complicated. But we’re here to help you through all that.

Mary Jo: And there’s also something that we want to talk about and that’s understanding your health situation. According to USA Today, a recent report from the Center for Retirement Research showed that 37% of seniors were forced to retire earlier than planned. This was due to poor health, employment issues, and family problems. So maybe they were laid off and couldn’t find a job, or they had elderly parents that needed help. You know, there were other family dynamics that entered into it. So an unexpected early retirement likely means you would have to retire with smaller savings. To avoid this, they recommend you stay fit and healthy and save aggressively at an early age.

Bob: And understanding all of these employee benefits and retirement benefits, like what’s portable, what’s not, analyze your insurance needs in retirement. Do you need to maintain your disability or life insurance once you quit working? Life insurance needs are something to think about when you’re younger, but as you get older, things can change. You may not need as much, but then again, you may. So if you’re considering retirement before the age of 65, are you going to have access to retiree healthcare? And if not, who’s going to cover that expense?

Mary Jo: Have you thought about inflation and how that’s going to impact your spending power over time? Charitable giving and philanthropic causes are also something we wanted to think about. For those higher income earners, the tax rates and capital gain grades make charitable giving attractive, but it’s also something that a lot of us want to participate in. We don’t have to necessarily be a high earner, but we all have giving goals and many executives, they’re wealthier now than they were five years ago due to the bull market. This could result in unrealized capital gains, especially in an after tax portfolio. So if you’ve been fortunate enough to be saving after tax and you’ve got some highly concentrated, highly appreciated positions there, you may want to think about a donor advice fund where you could donate those to the fund or a charitable remainder trust. Those are attractive options to help you manage the tax consequences of some of those appreciated stock positions.

Bob: Another thing is retirement readiness. We like to look at “what if” scenarios to develop longterm goals and wealth optimization and tax strategies. Looking at your individual situation. So like at CIS wealth management, what we do every day is we use a planning software that’s very interactive. We’re living and breathing and once we get the basic financial information entered into the system, we can model a lot of different what if scenarios and look at those results.

Mary Jo: Clients ask us, “Well, what if I want to retire earlier or work longer? What if I want to buy that boat now or maybe that RV and what if I want to take the entire family on a major expensive vacation or maybe an overseas mission trip? Can I afford to do that?

Bob: Or what if we need longterm care insurance or go into a nursing home; can we afford that? Do we have enough?

Mary Jo: Do I have enough to give more to my church or a favorite charity?

Bob: So it really comes down to what are your replacement income options when you retire? The more you make, the more you will need to save to maintain that lifestyle you’ve gotten used to, and the older you get, the harder it is to replace it.

Mary Jo: That’s true. And as we age in the higher our earnings are, the longer it takes to replace that same level of job. So there’s definitely more risks. Something to think about as well. Also tax planning – from research and strategy development to the preparation of your tax returns. A lot of companies here in South Texas, they have cross border tax issues for companies that are maybe from Mexico or you work in Mexico or you work in other countries outside. So those can create all kinds of complex tax situations that you may need help planning, and you might have some cashflow and debt management issues to work through. So we want to help advise you on budgeting and the appropriate use of debt as we age. Ideally, we want to wind down all that debt before we step away from our employment, and you might want to have your distribution, as we were talking about earlier, of executive compensation plans. When are you going to take what and how’s it going to impact you from an income perspective and a tax perspective?

Bob: As we do this financial assessment, not everyone sees themselves as being retired when they retire because they have other goals in life. It may be that extended mission trip – we actually have a client that is on an extended mission trip and when I say extended, like three years – and they had saved enough to be able to afford that and it’s just a really neat thing and I talked to him just the other day and they were so excited about what they’re doing.

Mary Jo: That is such a blessing for them to be able to do that. It didn’t happen overnight, and it took planning. The other thing we want to look at is estate planning. Most of us, we don’t want to give more to the tax man than we absolutely have to. So that’s a wealth transfer assessment, and women executives have their own unique needs. I don’t want to talk in generalities, but women tend to be givers and they might have significant charitable intentions. They also are more likely to be caught up in that sandwich generation. You know, they might have to be helping elderly parents. At the same time, they’re helping young adult children. They have some own unique needs, and we want to look at those appropriately.

Bob: And then last, then get to the investment coordination. You know, Mary Jo, so many people put that one first.

Mary Jo: There’s so much more to consider. It’s part of the puzzle but it’s only a piece of the puzzle.

Bob: Yup. Cause every element of a comprehensive financial strategy needs to fit together with all those other components. It’s kind of like a jigsaw puzzle. It should all fit together. You need to coordinate and correlate all your investments, funds and managers across all these different investment strategies for retirement.

Mary Jo: You know, Bob, I’ve heard so many people that they fail to look at it. I always think of it as like a crazy quilt. So you’ve got all these pieces and they all kind of fit together and they have all these crazy stitchings that adhere them to each other. But once it’s all said and done, it’s like a nice blanket that keeps you warm. It all has to fit together and that’s where you need help with a trusted financial advocate. According to DALBAR’s annual report, quantitative analysis of investor behavior, investors tend to consistently underperform the market due to emotional reactions to market volatility. Those that work with an advisor tend to do better than those that go it alone for this very reason. Having someone to help you navigate the many financial decisions that await you can help turn chaos into calm. A discipline process and a steadying hand to help guide you can be a difference maker.

Bob: We’re here to help you with all this. So give us a call at Christian Financial Advisors at (830) 609-6986 or connect with us on LinkedIn or Facebook and subscribe to this podcast.

[CONCLUSION]

Bob: You’re listening to Christian Financial Perspectives. Join us next week as we explore what God’s word says about money and don’t forget, you can sign up for our free newsletter at ciswealth.com or give us a call at (877) 71-TRUTH. That’s (877) 718-7884. To make sure you don’t miss any of our podcasts regarding the truth about money, be sure to subscribe to Christian Financial Perspectives at christianfinancialpodcast.com for free. If there are any specific topics you would like to hear more about, we’d love to hear from you.

Mary Jo: That’s all for now until next week.

[DISCLOSURES]

Before deciding whether to retain assets in a 401k or rollover to an IRA, an investor should consider various factors including, but not limited to, investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgements, required minimum distributions, and possession of employer stock. For a comprehensive review of your personal situation, always consult your legal 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 are the hosts Bob Barber and Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional. Investment advisory services offered to Christian Investment Advisors, Inc DBA, Christian Financial Advisors, a registered investment advisor.

Check out these tips when it comes to saving money while on vacation.

More episodes >>

In this episode, Bob and Mary Jo talk about something fun that is on everyone’s mind this time of year – summer travel. They share ideas, tips, and suggestions on how to get the biggest bang for your buck while traveling. Not every vacation needs to be on the cheap, but sometimes we all enjoy splurging. However, the money that you save is more money in your pocket that you can do other things with.

We never know what could happen tomorrow, so it is important to do some traveling while you are physically able to enjoy it. If you think you can’t afford it, get creative! Save where you can and splurge in other areas of your life.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

Learn about Kingdom Advisors from their president, Ron West.

More episodes >>

You may have heard Bob and Mary Jo talk about Kingdom Advisors before. Joining them is special guest Rob West, the President of Kingdom Advisors, a professional association promoting the integration of a biblical worldview into financial practices. In this episode, you will learn about Kingdom Advisors, who they are, and what that can mean for you.

Rob serves as primary spokesperson for the organization along with giving leadership to organizational strategy and content. He has dedicated his professional career to work at the intersection of faith and finance, having led a successful faith-based financial services firm, serving as the host of several radio programs on a biblical approach to finance, and speaking frequently on matters of faith and finance.

GUESTS: Rob West, President of Kingdom Advisors

* Rob West and Kingdom Advisors are not affiliated with Christian Financial Advisors.

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

[INTRODUCTION]

Bob: Welcome to Christian Financial Perspectives, a weekly podcast where we talk about ways to integrate your faith with your finances. This is Bob Barber.

Mary Jo: And I’m Mary Jo Lyons.

Bob: Are you ready to learn how to apply biblical wisdom to everyday financial decisions?

Mary Jo: Join us as we look at integrating your faith with your finances. If it’s your first time listening, welcome to our podcast, and if you’re a returning listener, welcome back.

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[DISCLOSURES]

Rob West and Kingdom Advisors are not affiliated with Christian investment advisors, Inc. 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 Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional. Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor.

Check out Part 2 of our “Planning for Incapacity” series focusing on Long Term Care in this episode.

More episodes >>

On today’s show, Mary Jo is joined again by Ron First of Christian Insurance Services to discuss “Planning for Incapacity” in our 2 part series. In this episode, Mary Jo and Ron discuss protection – primarily long term care planning and ways to cover this expense.

Long term care is a very complex topic. In this episode, Mary Jo and Ron cover the basics of long term care and give our listeners a high level overview of the key elements surrounding it. Learn exactly what long term care insurance is, why it’s important, and the best time to get it.

GUESTS: Ron First of Christian Insurance Services

* Ron First and Christian Insurance Services are not affiliated with Christian Financial Advisors

Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.

[INTRODUCTION]

Bob: Welcome to Christian Financial Perspectives, a weekly podcast where we talk about ways to integrate your faith with your finances. This is Bob Barber.

Mary Jo: And I’m Mary Jo Lyons.

Bob: Are you ready to learn how to apply biblical wisdom to everyday financial decisions?

Mary Jo: Join us as we look at integrating your faith with your finances. If it’s your first time listening, welcome to our podcast, and if you’re a returning listener, welcome back.

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[DISCLOSURES]

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 Mary Jo Lyons. Bob and Mary Jo do not provide tax advice and encourage you to seek guidance from a tax professional. Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor.