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October 23, 2018 6 – 18 Income Tax Strategies
Click below to listen to Episode 6 – 18 Income Tax Strategies for 2018
18 Income Tax Strategies for 2018

Learn about “18 Income Tax Strategies for 2018” that may help lower your income taxes.

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Taxes are a subject that most of us don’t find exciting or interesting, but it is an extremely crucial topic. It is important to fully understand taxes, how they work, and how to implement strategies on legally lowering taxes.
In this episode of Christian Financial Perspectives, Bob and Mary Jo discuss “18 Income Tax Strategies for 2018” that may help lower your income taxes. They also supply a variety of Bible verses supporting paying your taxes, as well as verses on finance in general.
If you are interested in learning more about income tax strategies, including getting a copy of “18 Income Tax Strategies for 2018”, please contact the office of Christian Financial Advisors at [email protected] or by calling (830) 609-6986.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®
Mentioned In This Episode

Christian Financial Advisors
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Bob Barber, CWS®, CKA®
Mary Jo Lyons, CFP®, CKA®

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EPISODE TRANSCRIPT

[INTRODUCTION]
Bob: Welcome to Christian Financial Perspectives, a 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]
Bob:
Hosea 4:6, “My people are destroyed from lack of knowledge.” Well guess what, today we are going to talk about something so exciting. I know all of you are going to get revved up about it. Taxes. Yeah. We’re going to talk about tax strategies, “18 Tax Strategies For 2018”. Isn’t this exciting, Mary Jo?
Mary Jo:
I think you might be overstating it just a little, but that’s just me. Some of our listeners out there, they may be all revved up about taxes. Before we get too far into it, it’s important for us to say we are not tax advisors and you should consult your own tax professionals for your own specific advice and that what we are providing today is really meant for just educational purposes only.
Bob:
And we’ve got so many great resources too. During our podcast, if you can go to CISwealth.com or Christianfinancialpodcast.com. So many different ways to find us or you can even call us if it’s during business hours at the office and we can email out this resource to you, these 18 strategies that we’re going to be sharing. Cause there’s a lot of strategies, there’s a lot of meat to today and we’re going to try to make it as exciting as possible because I know that taxes sometimes can be boring, but then again, if you owe a lot in taxes, it’s not going to be boring. And you know Mary Jo, more than anything today, I think that’s going to be exciting for people if they’ll stay with us, today could result in a value of $500, $1,000, maybe even several thousand dollars in tax savings. Wouldn’t you say?
Mary Jo:
Absolutely, and you know there have been some changes that are important to note, but one of the other things we have available as a resource is a reference guide, so we’re going to be going over some specific numbers that are changing this year, and if you want to get a handout specifically to the tax reference guide for 2018 just give us a call and we’ll be happy to send that out to you.
Bob:
And the number that you can call, we try to make this easy for you because we know it’s a podcast we know you may be listening while you’re driving. Just remember 877-71-TRUTH. T, R U, T, H. Now a lot of people go, okay, What does that spell? It’s (877) 718-7884. Feel free to call us. Anybody here can get that out to you. You can go through our website, drop us an email, and we’ll be glad to get that out for you. Mary Jo, you have some good scriptures here I think that are important to share because this is Christian Financial Perspectives. As a Christian, it’s so important that we do pay our taxes.
Mary Jo:
Absolutely. Romans 13:6-7 is about obeying and submitting to the authorities. “Pay your taxes too for these same reasons, for government workers need to be paid. They are serving God in what they do. Give to everyone what you owe them, pay your taxes and government fees to those who collect them and give respect and honor to those who are in authority.” And you know Bob, I think that definitely speaks to why we pay taxes and that really is to set up the infrastructure of our communities, our states, and our country, and we take advantage of those, and so we should pay our fair share. But at the same time there are ways, legal ways, for us to minimize what we pay. And the more we minimize taxes that are paid out, the more we can do God’s work, wouldn’t you say?
Bob:
I do. Absolutely, but we want to be paying taxes fairly and we would never, on Christian Financial Perspectives especially, never ever say take money under the table where you don’t have to pay taxes because that’s in the face of scripture. Exodus 20 – we’ve got the 10 commandments and the eighth and nine commandments are “You shall not steal” and “You shall not lie”. That’s Exodus 20:15-16. This is so important when we talk about taxes that we pay our taxes, we pay them fairly, and that we are giving to Caesar what is Caesar’s. I noticed you have another scripture in here and I remembered when Jesus was talking about that and he had that coin. Why don’t you share that from Mark 12.
Mary Jo:
“Teacher, they said, we know how honest you are. You are impartial and don’t play favorites. You teach the way of God truthfully. Now tell us, is it right to pay taxes to Caesar or not? Should we pay them or shouldn’t we? Jesus saw through their hypocrisy and said, why are you trying to trap me? Show me a Roman coin and I’ll tell you. When they handed it to him, he asked whose picture and title are stamped on it? Caesar’s, they replied. Well then, Jesus said, give to Caesar what belongs to Caesar and give to God what belongs to God.”
Bob:
Isn’t taxes God’s provision? And I’ve heard people say, well, my taxes are just too high. Well, that’s God’s provision, so don’t complain about paying taxes.
Mary Jo:
No, maybe we shouldn’t complain, but we want to keep it at a reasonable rate.
Bob:
Yeah, exactly. You’re right about that. Before we get into the “18 Strategies for 2018”, there are some new tax laws from the tax cuts and jobs act of 2017, and we’ve just listed a few of these. Mary Jo, I’m going to let you go into some of those.
Mary Jo:
We’re not going to go too deep into this, but we definitely want to talk about what’s changing on the standard deduction. People used to itemize deductions and that may not be as easy as it once was, but it’s certainly there, but you might have to get a little bit more creative. If you are single, the standard deduction has gone from $6,350 to $12,000; married filing jointly it’s gone from $12,700 in 2017 to $24,000 in 2018; and your home mortgage interest deduction, that’s had some changes too. You’re able to deduct any existing mortgages, but if you’re taking out a new mortgage, you won’t be able to deduct that interest if it’s over $750,000. For most of us, that’s probably not a problem,
Bob:
But the giving has really changed from the perspective of the old standard deduction was $12,700 and the new one is $24,000 married filing jointly. So, if you don’t have a lot of other itemized deductions like home mortgage interest and just miscellaneous deductions that are going to total up to be over $24,000, then you may not get to deduct any of what you give away unless it’s over $24,000. So we’ll get into some strategies later about doubling up your giving in one year so it can be a deduction.
Mary Jo:
The other thing that I think is worth mentioning in 2018 are casualty losses, so I know due to Hurricane Harvey that not everybody had their insurance settlements by the end of 2017. ,2018 taxes are certainly still at play when it comes to you deducting those losses, but it has to be on a federally declared disaster, which Harvey was. I know that a lot of our listeners were impacted by Harvey in and around the Texas coast and we want to make sure that they are looking into that. We did talk about the fact that there have been a lot of changes in 2017 and we are not tax experts so that they do need to seek out their counsel from a CPA.
Bob:
Did you share the one about the home property taxes this year? I don’t remember hearing that one.
Mary Jo:
No, I didn’t. Go ahead.
Bob:
Okay, because that’s another one that’s interesting. Well here in Texas, and of course we have our podcast listeners all over the world, but in Texas we have pretty high school taxes and we don’t have an income tax here in Texas. So home property taxes can be really high. Let’s say if you have a $550-$600,000 home, those property taxes can be as high as $12,000 a year. The most you’re going to get to deduct now is $10,000. So, if you have $12,000 in home property, the most you’re going to get to deduct is 10k.
Mary Jo:
And that’s another big change. You know, Bob, there was another scripture that just kind of leads me to thinking about as we move forward, and that is the money for the sacred tent from Exodus 30:12 -16, “Whenever you take a census of the people of Israel, each man who is counted must pay a ransom for himself to the Lord, then no plague will strike the people as you count them. Each person who is counted must give a small piece of silver as a sacred offering to the Lord. This payment is half a shekel based on the sanctuary shekel, which equals 20 gerahs. All who have reached their 20th birthday must give this sacred offering to the Lord. When this offering is given to the Lord to purify your lives, making you right with him, the rich must not give more than their specified amount, and the poor must not give less. Receive this ransom money from the Israelites and use it for the care of the tabernacle. It will bring the Israelites to the Lord’s attention and it will purify your lives.” And you know, one thing I did notice, throughout the Bible, there are lots of references to tithing, but also to offerings made, whether it be with crops or with animals that are giving up as a way of like paying a toll almost. And so some of those are representative of the tax system, but there’s a lot of veiled references throughout the Bible on taxes. So I think it’s safe to assume that it is something we should expect to pay.
Bob:
So you’re saying taxes have been around as long as the Bible’s been around, which is for thousands and thousands of years.
Mary Jo:
Exactly right. And you know, Bob, another thing I did want to share is that we have talked about taxes, and taxes should be planned on throughout the year. It’s not just something to look at in April before the 15th of April when the tax filing deadline is upon us. But it’s something to be talking about and planning throughout the year. And one of the things I would encourage if you haven’t heard proactively from your CPA, that you might want to be proactive in contacting them to ask specific questions about what you should be planning for. Not all accountants will reach out to you, but I would encourage our listeners to find out what they need to change, what they need to plan on, and be giving thought to it before the end of the year, way before the end of the year to make sure they don’t miss any key deadlines.
Bob:
And we’re just a couple of months left at the end of the year. So, these strategies that we’re going to give you can be used a lot here at the end of the year. You can consider some of them year end tax strategies, but these are ongoing strategies as well. Mary Jo, are you ready to get into the 18 of them?
Mary Jo:
I am. The first strategy brings us to define contribution plans, and I think for most of listeners this impacts them in one way or another, but from a defined contribution plan, those are tax deferred accounts that you actually make a contribution to yourself. These could be your individual retirement accounts, your 401k’s at work or 403b’s. If you work for a nonprofit, this could be a SEP IRA, which is unique to people that are self employed and Simple IRAs. Again, for the self employed or small business owners primarily,
Bob:
And the contribution levels are different on all of these different types of plans. But remember, like Mary Jo just said, these are defined contribution plans. So, if ever you hear that term “defined contribution plan”, just think of an IRA. If you have a 401k, a 403b, like she said, if you’re a small employer, SEP IRA’s are really, I think, best Mary Jo for those that are just a one or two man shop.
Mary Jo:
Yes.
Bob:
And a Simple IRA is really good for somebody, say, less than 25 employees. The individual IRA limits are $5,500 per person or $6,500 per person if you’re over 50. Now remember, this can double if you’re married. So, this could be $11,000 per couple or $13,000 because 6,500 x 2 for the couple if you’re both above 50.
Mary Jo:
That’s one thing that’s good about getting older.
Bob:
You get to contribute more to your IRA. Now the thing about these IRAs though is that depending on your income level, they start phasing out or you can still contribute to an IRA and it be a tax deduction.
Mary Jo:
That’s exactly right. Those phase outs are: if you’re married filing jointly, your modified adjusted gross income is between $101,000-$121,000; above that, you phase it out. For single or head of household, it’s between $63,000-$73,000; and married filing jointly, it is $189,000-$199,000
Bob:
We said married filing jointly twice in here, so I don’t want to confuse anyone. That second time we said married filing jointly, that’s the phase out limit per spouse who is not a participant in a qualified plan. If you’re not participating in a 401k or a 403b, limits are much higher. You heard Mary Jo say at the beginning $101-121,000 then you heard her say $189-199,000. I don’t expect any of you, as you’re listening to this podcast, to get all these numbers. These are so many different numbers and this is why we emphasize that you meet with a qualified financial advisor, work with a CPA that will let you know what amounts can go into these individual IRAs, if any, if you’re maxing out a 401k or 403b or say a Simple IRA plan.
Mary Jo:
While we’re talking about the IRAs and the company plans and you mentioned if your spouse is participating in a plan, this is something I want to be sure that we share. I really want to encourage those non-working spouses. Even if your spouse is contributing to a company sponsor plan, you are working for the family company and you should contribute to your own individual retirement account even if you can’t deduct it. There are options that are out there for you, but everybody should be funding something for their own retirement, and that includes a stay at home spouse.
Bob:
I am totally in agreement with you there. Now, the nice thing is as we talk about these plans and get a little bit deeper, like we mentioned with a individual IRA, it’s $5,500 per person under 50 or $6,500 per person over 50. That’s the IRA, but as we get into the 401k’s and the 403b’s and the SEP IRA’s, those contributions increase dramatically. They increase all the way up to $18,500 per person. If you’re over 50, you add another $6,000 to that. So yes, you are hearing me correctly today that you can contribute into your 401k up to $24,500 if you’re over 50. When you talk about your employer match, depending on how much they’re matching you, you can go all the way up to $55,000. Now, think about so many, Mary Jo, that are listening today to our podcast. They’re not putting much in their 401k’s at all. For some, it may be a lot, but let’s say you’re putting $5,000 a year in, but you could be putting $10,000 a year in, and your effective tax bracket, let’s say, is 20%. So, you can put an additional $5,000 or even $10,000 into your 401k right there. You’ve saved a thousand, maybe a couple thousand, dollars on your taxes.
Mary Jo:
So, your contributions are reducing your taxable take home pay. So right there, that’s a tax savings to you. And a lot of people put in what the company is matching, but they don’t think about maxing out and they should pay themselves first. That tax break is better than any other kind of source of savings, if you will. Even if you don’t have the best investment options available in your 401k, there’s something there that will work for you. So, I really encourage people to continue to max out those. And if they can’t do it all at once, do it in increments. Like pay yourself another thousand every pay raise or at every annual review. Make sure you’re upping your contribution until you’re maxing out.
Bob:
We have a couple of months left before the end of the year. This is where I’ve actually helped dramatically some of our clients here at Christian Financial Advisors where we’ve looked at what they’ve added, and they have enough in savings to nearly – they could live the rest of the year without a paycheck for the last month or two – and they’ll take their entire check those last couple of months and put that into their 401k which results in thousands of dollars in tax savings.
Mary Jo:
And you know, Bob, we also talked a little bit about SEP IRA’s and these are again ideal for self employed individuals or those small companies with just one or two employees. In there, you can contribute 25% of your compensation or up to $55,000 because you are the employer, so the contribution is coming from the employer.
Bob:
The one thing about SEPs that I want the employer to know, let’s say you have five employees and you’re contributing for yourself that compensation up to 25%. if you contribute to your plan, you’ve got to do that same thing for those other two or three employees that you may have. So if their salary is say $50,000 and you’re going to put 25%, you’ve got to put $12,500 in their SEP IRA. With some small employers, it’s hard for them to do. And this brings us to the next and last plan that we’re going to talk about today, which is the Simple IRA plan. And this is actually what we have at Christian Financial Advisors cause we’re considered a small employer as well. This is allows a contribution of up to $12,500 per year and add an additional $3,000 on top of that. So, I’ve got a real strategy here that I’ve used a lot because I’ve been self employed for so long. We’ve got a husband and wife that work together. We just had one recently from Chick-Fil-A, and the spouse, the amount that he was paying her was this certain dollar amount. Little did he realize that he could pay his wife $15,500 per year and put all of that into the simple, it’s not a percentage of your income. You can put it all in there. So, if you’re a husband and a wife and you own a business and the wife is a stay at home wife and mom and you could put her on company payroll, she could put all of her money in – and have her do some things for the company, of course – we’re not saying to do anything illegal.
Mary Jo:
A lot of times she’s doing all the marketing for you, for example.
Bob:
Well, that’s true or doing the books.
Mary Jo:
That’s right.
Bob:
So you pay her a reasonable salary. She could put 100% of her salary into the simple plan all the way up – if she’s above 50 – up to $15,500 so it’s a great strategy. Again, see your CPA, make sure that’s a good one that would work for you.
Mary Jo:
We’re just trying to wet your whistle. Rolling, honey, give you an overview, but these are no by far have we gone over all the rules and regulations so you want to look into that deeper and see if it does apply to your individual situation. Strategy number two, that’s a defined benefit plan. This is a pre-established benefit for employees at retirement. Employees often value the fixed benefit of the plan, so it’s kind of like the old pension plans that used to be available, if you will, and the maximum that employer can contribute to a defined benefit plan is 220,000 and this is the employer’s contribution that can depend on the age of the employee. The older an employee is, the more that can be contributed into the defined benefit plan by the employer. What else do they need to know, Bob?
Bob:
So I just heard you say 220,000 now that has a lot to do with age and how old you are. But yes, that’s what’s crazy about a defined benefit plan. You can put over 200,000 you know what is interesting on top of this too, because we were just talking about contribution plans 10 minutes ago or five minutes ago, you can max out a defined benefit plan and you can max out a defined contribution plan. So you’ve got somebody in a high high income range that can put up to 220,000 and a defined benefit plan and another 50,000 into a 401k. Again, got to make sure your CPA run this by them, but that’s the kind of money that you could defer and we’re talking some serious tax savings of well over a hundred thousand dollars if you could do something like that because you’re going to be in that higher effective tax bracket of 30% plus,
Mary Jo:
And that is something really important for our high income earning professionals out there. You know, if you’re a self employed doctor, lawyer, anything along that line you should be taking advantage of these. Well you definitely encourage you to check into that tax advice with your professional advisors.
Bob:
The third strategy is just income timing. This could even be if you’re retired, but especially deciding do I want to take that bonus this year or next year? And it has a lot to do with how much are your itemized deductions going to total. So look at that and time your income based on a two to three year time horizon and try to push it possibly all into one year or even span it out over several years. Cause maybe you’re going to get a bonus this year but you’re not going to get one next year. See if they’ll split the bonus and give you half on December 30th or 31st and the other half on January 2nd or third.
Mary Jo:
And that’s a lot easier for the small businesses who have some customization ability. Have you worked for a major corporation? You know they have some pretty standard rules that they have to apply for all employees, but you’re a small firm. You might have some flexibility there.
Bob:
This next strategy I’ve got written down here, very Joe, is the use of a donor advised fund. And this is a really good program for somebody that wants to set up, what I refer to is nearly a giving bank account. Now, whatever you put into that, giving bank account in quotation marks, whatever you put into that giving account, you can’t take it back. It’s got to go to charity.
Mary Jo:
It’s a gift.
Bob:
Yes, exactly, but whatever you put into it is deductible up to a percentage of your income. This say you don’t know who you want to give all the money to. This might be somebody that has a huge bonus in one year, but they’re not going to get that in a second year and they want to give a large amount to some charities, but they don’t really know who those charities are or if maybe they do. They don’t want to give that much all at once, but maybe span it out over two to three years or five years, but they need that tax deduction right now, this year, that’s where we utilize a donor advice fund to figure out how to help you in a large income year. You’re giving over the next two or three years. Does that make sense?
Mary Jo:
You know, Bob, that’s a great strategy and one of the things that comes to my mind, it’s how many times do you belong to a church for example, and the church decides they want to build a new sanctuary or a new building and so they do a building fund and let’s just say you’re a member of such a church and you want to give generously to support that and you have some highly appreciated stock. You could donate that to a donor advised fund and parcel it out. You don’t have to give it all at one year. So you could give that in increments over a four or five year period depending on the length of that building fund and that campaign. And I think that that might work really well in that type of a situation.
Bob:
That is a perfect scenario, Mary Jo. I’m glad you brought that one up. The next strategy is medical expenses and this is where, again, because of what we shared at the beginning of the program, where a married couple, unless your itemized deductions are going to total over $24,000, you’re not going to get to deduct your itemized deductions. So medical expenses, if you can, lump those into one year so that you get a high enough amount to make it a deduction.
Mary Jo:
If you know you’ve got a bunch of testing coming up. I know last year or earlier this year, I guess it was, I did a lens implant surgery since I knew those were going to be all in this year, but I also gotta whole other testing done. So try to lump, all those together in one year, maybe a year when you have some medical or dental work that needs to be done so that you’re taking advantage of that 7.5% of your income and you can maximize that and then the next year you probably won’t be able to do it, but it’s kind of like alternating years, if you will.
Bob:
All right. I’m going to give this next strategy and then after that what I want to do is just have a quick break for y’all because I know if you’re listening to this podcast, your mind is probably starting to get like, ah, this is so much overload, but strategy number six and then we’re going to give you a little break here. Restructuring passive income, like in real estate, especially in commercial real estate, you can use what’s called cost segregation. Now this is why you’re going to probably need to give us a call and get a copy of these “18 Tax Strategies For 2018” because this is an example. The way that you own real estate and cost segregation is taking those things that rapidly depreciate like your heating and air unit in a building or your light fixtures in a building. You can depreciate that faster can you can the building, and that’s called cost segregation and you can get a larger tax deduction for those things that wear out sooner. I own our building where we are. It’s about a 11-12 year old building, but we’ve already had to replace some of the air conditioning units. But how you would deduct a building is over a 25-30 year period, but those air conditioning units lasts about seven, eight years in a commercial building like this before you have to replace them. So, you can take that deduction either all in one year or itemize it and take a cost segregation, rapid depreciate over that six or seven year period. Does that make sense?
Mary Jo:
Yes. And you know, I think this also speaks to when you say ‘restructure passive income’. You want to be thoughtful with where you put that income generating investment. If you have a taxable account and a tax deferred account, you might want to put those investments in the tax deferred account that spin off that additional income. That way you won’t have to pay taxes on that until you take a distribution. There are some tax efficiencies on where you place those investments, and I think that’s important for clients to think about. Also the types of investments we talk about in the bond world and the state of Texas. We don’t have a state income tax, so that’s not a huge problem for the majority of our clients, but if you live in a state that does have a state income tax, there are other kinds of bonds you may want to invest in that are more tax efficient for you. If you live in a high income tax state, you may want to invest in municipal bonds of that state because those don’t have state income tax liability. Lots of things to be thinking about on what kinds of investments that you do to generate income and where you put those investments.
Bob:
Mary Jo, tell somebody how they can give us a call right now. Give them some information about how to get hold of us.
Mary Jo:
They can reach us at our website for the podcast Christianfinancialpodcast.com or you can give us a call at 877-71-TRUTH.
Bob:
All right, so which strategy are we going to be covering next? What is our next one?
Mary Jo:
Our next one, strategy seven, is about required minimum distributions, RMD’s. Depending on where you’ve been investing all the time, you may have referred to these as a little bit different, but this is the money you have to start taking out of your tax deferred accounts after the age of 70.5. It’s not optional.
Bob:
This is so big, Mary Jo, you know why this is so big with a couple months left in the end of the year is because all of our podcast listeners that may be above 70.5, they may not have taken their RMD for this year.
Mary Jo:
Well, and I did hear that, you know, our leader in chief may be deciding to make some changes there and that may or may not be a good thing, but it hasn’t happened yet. So you’re still required to take that money out. And if your advisor hadn’t been in touch, it’s up to you. I’d be very proactive and make sure you get those distributions handled before the year end. A lot of clients don’t need their money to live on. So what are some strategies they can do with those distributions?
Bob:
Oh, the big one. I’m telling you, this is one of the biggest ones, and I know a lot of our podcast listeners, they don’t have anything to do with this because they’re like, I’m not even close to 70.5. I’m 25, but maybe you have a grandparent that is. This one is so big because they can take their RMD and send it directly to their church and totally bypass the tax system so that they don’t have to pay. If you take the RMD to yourself and then you go give it to your church, then as a percentage of your income nest deductible, and again, if those itemized deductions are not over $24,000 if you’re married, then it’s not going to count. But by sending your RMD directly to a charity or to your church. It goes right from your IRA to your church. And it’s a beautiful thing I’m so excited about. We do this all the time, especially because we’re a Christian firm. We’ve got a lot of Christians that want to give efficiently. This is one of the most efficient ways to give that I know.
Mary Jo:
Right. And a lot of people give to other charitable organizations that are not necessarily their church, but there are all kinds of opportunities across the globe that support kingdom work. There’s lots of flexibility there, but if you aren’t familiar with that and you think, well, I have to take my distribution but I don’t necessarily need the income, then I encourage you to check into that
Bob:
And as you notice, some of these are some giving strategies now. Like this next strategy is kinda like the RMD and giving away that to your church or your favorite charity. Strategy number eight is called a charitable gift annuity, and this is a very tax efficient way because you’re going to get a partial tax deduction based on the gift that the charity would receive at the end of an annuity. Now, think of it this way. You get a qualified charity that would issue a charitable gift annuity. You give them $100,000, and let’s say you’re 65 years old, but you’re giving them that in return for a guaranteed income for the rest of your life. Then, whatever is left in that annuity that you haven’t used up will go to the charity. Now, let me mention that annuities have been around forever and annuitizing an annuity has been an idea forever, but if you do this with an insurance , and you don’t use all of the money in your annuity that annuitized guess who gets to keep the money? The insurance company. But here, the charity gets to keep the money because they’re guaranteeing you for your life a certain income.
Mary Jo:
When I hear this, it always just reminds me of a reverse mortgage, if you will. It’s a way for you to get income now, but for charity to benefit in the end If you’re not fortunate enough to have a long life, and to win for both of you.
Bob:
And if you do a regular annuity with an insurance company, you’re not going to get a tax deduction. But if you do a charitable gift annuity, you’re going to get a tax deduction partial. It’s not going to be all tax deductible because remember, some of that’s going to be coming back to you
Mary Jo:
That leads us into strategy number nine, a charitable remainder trust. There’s all kinds of different trust out there, but what exactly is a charitable remainder trust?
Bob:
Well, I like to set up a charitable remainder trust in the case of a sale of a large piece of real estate. Our headquarters in Central Texas – property around here is just unbelievably hot. I mean it’s sells like the old saying, it sells like pancakes.
Mary Jo:
We were up there this weekend and just the growth around the New Braunfels area and the Texas Hill Country, it is amazing.
Bob:
It truly is. And if you have 20 or 25 acres here in the Texas Hill Country, it’s worth over a million dollars. 10 years ago, maybe you paid a couple hundred thousand for it at the most. So now, you’ve got this huge $800,000 gain and maybe you’re charitably minded, but you really don’t look at it too favorably. If I go sell this property, I’ve got an $800,000 gain, I’m going to have to pay tax on the whole thing. If you took that property and you donated it to a charitable remainder trust, and the charitable remainder trust sells the property, you don’t owe any tax at all. The kicker to it is you’re going to be able to get an income back for life and possibly even your children will get an income for their lives, but then someday whatever is left in that charitable remainder – just like it’s what it’s called remainder trust – whatever’s left in there will go to a charity. What we do is we help a family form their own family foundation using the donor advice fund like we talked about earlier. It’s a great strategy for those who have real estate with huge amounts of gains in them and want to sell them in a very tax efficient way.
Mary Jo:
That brings us to strategy number 10. We were talking about a charitable remainder trust and the next one is a charitable lead trust. This is just the opposite. You donate the assets that spin off income for example, and the charity gets to take advantage of that income for however long you deem appropriate. Typically, it’s for a few years, but then at some point when the need arises, the assets come back to the donor and they can then take advantage of that income that is spun off those assets. Does that make sense, Bob?
Bob:
It made sense andwhen you said it. That’s Exactly the way it works. Enough of this could make your head spin. So again, we know all these strategies and these strategies can result in literally thousands and thousands of dollars in tax savings. Give us a call and we’ll be glad to go over these strategies with you. All right, we’re just going to zip through these last six or seven very quickly. Strategy number 11 is sales and property taxes. They are deductible, but again, remember that the property tax now is capped at $10,000. If you have a home in which your property taxes are $12,000 with the new tax laws, you’re only going to get to deduct 10k.
Mary Jo:
Another one is a health savings account. Only an eligible individual can contribute to a health savings account. These are typically sponsored by an employer. The employee or both may contribute to the HSA. I know that my husband’s company, for example, the employer contributes as does the employee, and whatever you contribute into it is growing tax free. As long as it’s pulled out to use for a medical type expense, it’s qualified, then you never have to pay taxes on that gain that’s happened within the account. And you can use the balance to pay for medical expenses, which also include insurance premiums. So, if you’re paying for longterm care insurance, you can use the health savings account to pay for your premium.
Bob:
I did not know that. Really?
Mary Jo:
Yes.
Bob:
I never knew that.
Mary Jo:
Yes. If you could load those up right now while you’re working before you retire, you can hold those assets and then keep that balance in there and it can pay your Medicare premiums or your longterm care insurance premiums. So, it’s a great way to kind of build up some assets to cover those medical expenses before time for Medicare kicks in.
Bob:
And there’s catch-ups too that you can put additional dollars in if you’re above 55. So for a family, you can put up to $6,750 and add another thousand on top of that if you’re both over 55, and this is on the front page of your tax return. It’s not under itemized deduction. This comes out right off the front of it, kind of like a deduction that goes into a defined contribution plan.
Mary Jo:
So is that what’s known as an above the line deduction?
Bob:
Yeah, that’s correct. You got it. To put money in a health savings account, the amount that you can put in, you need to have a high deductible insurance plan, which most of us have today. All right. Strategy number 13 has to do with just capital losses. None of us want to have losses, but you have losses. You can offset gains with losses. So let’s say you have a stock portfolio, it’s got 50 stocks and hopefully 35 or 40 of them have gains, but you’re going to have a few with losses in there too. So, you sell your gains and you sell those with your losses. Maybe you want to keep those stocks, but you can sell them at the end of the year and it can go against the gain. Then you can buy those stocks back, actually, 31 days later.
Mary Jo:
31 days. So you want to make sure you don’t buy the same security, right back because that’s what’s known as a wash sale rule. You want to make 30 days, but you can buy something similar so that you’re not out of the market during that time.
Bob:
Strategy number 14 is creating a small business. Small businesses have so many different strategies they can use. If you’re going to have 25% of your home or 20% of your home is going to be used for that business, then 20% of the expenses of that home can be a tax deduction. Now again, you’ve got to run this by your CPA and make sure this is all above board. We would never emphasize that you do anything that would get you in trouble. We want to make sure that when we give these strategies to you, you gotta run them by a CPA or qualified tax advisor.
Mary Jo:
And we’re only suggesting a legitimate small business.
Bob:
Strategy number 15; give highly appreciated stocks to your charity instead of cash. Now, why would you do that?
Mary Jo:
So that you don’t have to pay the capital gains if you sell them upon selling the stocks.
Bob:
Right. Let the church sell it, and then the church doesn’t have any of the gains. Yet, you’re going to get the value of that stock as a full tax deduction.
Mary Jo:
It’s kind of a no brainer.
Bob:
16 most of us know about is the mortgage loan interest, that can be deducted on first and second homes, but there’s a limit on that. Now it’s up to $750,000 if you itemize your tax deductions. Mary Jo, I’m going to let you take it on home to 17 and 18.
Mary Jo:
Okay. The one thing on that mortgage loan interest is always want to remind our listeners that you can no longer deduct a home equity interest, but a mortgage loan is up to $750,000. The next is student loan interest. You can deduct up to $2,500 paid in 2018 towards your student loans. So, there is again some benefit for those. And then finally, strategy number 18 is self employed health insurance. You can deduct what you spend on health insurance premiums if you’re self employed and don’t qualify for a company sponsored health insurance plan. These are for the self employed individuals. Lots of benefits for those small business owners out there that they really need to make sure that they’ve got a great tax advisor.
Bob:
So there’s all 18 tax strategies. If you were able to stay with us during the entire podcast, God bless you. We’ve tried to be as enthusiastic as we can. I know taxes can be boring, but you know what? Like today’s program, it could be worth thousands and thousands of dollars in tax savings to for many of you if you utilize these.
Mary Jo:
There’s nothing boring about that.
Bob:
No, not at all. So it’s gonna be some good time well spent. I would emphasize that maybe you come back and listen to this again. Tell your friends, tell your aunts, tell your uncles, tell your cousins. I just don’t know many people that like paying taxes, so have them listen to this show. It’s christianfinancialpodcast.com. It’s easy to remember. We tried to make it easy. You can find us on iTunes as well. There’s just so many ways that you can listen to this program. If you haven’t heard all of our programs, maybe this was the first one. Go back and listen to a few because we really are trying to educate you about what God’s word says about money just good common sense. Financial….Come on Mary Jo, help me. Help me.
Mary Jo:
Well, good common sense. Financial wisdom.
Bob:
There you go, sister. There you go.
Mary Jo:
And just some great reminders out there. We hope that our words today have been a blessing and a reminder that maybe if you do have some questions out there to go get and seek advice, but we certainly hope that our words have reached you and been meaningful and until next time.
[CONCLUSION]
Mary Jo: You’ve been listening to Christian Financial Perspectives. Join us as we explore more about how to apply biblical wisdom to your financial situations.
Bob: To make sure you don’t miss any of our podcasts, you can subscribe to Christian Financial Perspectives on iTunes, Google Play, or Stitcher. To learn more about integrating your faith with your finances, visit out website at ciswealth.com or call 830-609-6986.
Mary Jo: That’s all for now.
[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.
44 min
October 16, 2018 Episode 5 – The 10 Uses of Money
We discuss the 10 uses for money:
- 4 DAILY uses
- 6 SETTING LONG TERM GOALS uses

There is a lot to explore and consider. We are sharing guidelines and these guidelines can be interpreted in various ways that’s why we thought today’s message is so important.
23 min
October 16, 2018 5 – The 10 Uses of Money
Click below to listen to Episode 5 – The 10 Uses of Money
Episode 5 – The 10 Uses of Money

Learn about the 10 uses of money for setting both daily and long term goals.

More episodes >>

In this episode we discuss the 10 uses of money, including 4 uses on a daily basis and 6 uses for money when it comes to setting long term goals.
For the 4 daily uses of money, we are utilizing the Live, Give, Owe, Grow model from Kingdom Advisors which is applicable for most people in everyday life. Afterwards, Bob and Mary Jo discuss the 6 uses of money when it comes to setting long term financial goals. This includes areas such as: Financial Freedom, Charitable Giving, Freedom from Debt, Lifestyle Choices, Family Needs, and Funding a Business.
There is a lot to explore and consider. We are sharing guidelines and these guidelines can be interpreted in various ways. That’s why we thought today’s message is so important.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®
Mary Jo Lyons, CFP®, CKA®

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

[INTRODUCTION]
Bob: Welcome to Christian Financial Perspectives, a 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]
Mary Jo:
Hi Bob. How are you doing today?
Bob:
I’m doing good, Mary Jo. I’m really excited about the subject we’re going to talk about today. I tell you, it was a hard program to put together because we want to be so careful with how we bring God’s word to everyone and make sure that we’re not taking anything out of context.
Mary Jo:
Today we’re going to talk about the “10 Uses Of Money”. We’re first going to explore the four daily uses of money and then look at six uses of money for setting longterm goals. We’ve had a lot of discussion over this topic. We’ve prayed about it and we just want to make sure that we get God’s blessing and favor and we find the right words to convey what’s in our heart and hope the Holy Spirit is moving within us to be able to share those right words with our listeners. When we talk about the uses of money today, there’s a lot to explore and consider, and there are a lot of guidelines in the Bible. These guidelines can be interpreted in various ways, and I think that’s why we thought today’s message was so important, but also gives a lot of room for interpretation. So what are your thoughts around that?
Bob:
We want to base everything that we say today when we talk about the 10 uses of money on scriptural guidelines, that everything has a scripture to go with it and that we’re not taking anything out of context. I think one of the main scriptures today that would sum up everything – if you have your Bible and you’re listening to our podcast, have the availability, and if you’re not driving or doing something that requires you to do something else, but if you’re able to open up the word of God with us, we would love for you to follow along. And we want you to know also that you can always go to Christianfinancialpodcast.com and email us or call us or get some information off of there because we want everyone to have our script from today’s program so that they can take these principles that we’re going to share from God’s word and apply them to their own lives. So with that being said, I’m going to use today’s main scripture from Philippians 4:11-13 and a lot of our listeners know this scripture, but if you don’t, here’s what it says, “Not that I was ever in need.” And this is Paul speaking. “For I have learned how to be content with whatever I have. I know how to live on almost nothing or with everything. I’ve learned the secret of living in every situation, whether it is with a full stomach or empty, with plenty or little, for I can do everything through Christ who gives me strength.” And this scripture is really saying to us that it doesn’t matter how wealthy we are or how poor we are, only contentment is going to be found in Christ and Christ alone.
Mary Jo:
That is so strong, Bob, and there’s so much there. Today as we explore the four daily uses of money and just to give a heads up to how we’re going to talk about those, it is live, give, owe, and grow. There are biblical principles around each of those. So to start off we’re going to talk about live and that’s our basic living expenses and God says in the Bible so many different passages regarding provision. Money. It’s just a tool. It’s a tool for us to use for our needs. In 1 Timothy 5, he talks about to providing. “If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.” And he talks about contentment also in 1 Timothy 6:6-8, “But godliness with contentment is a great gain or joy, for we brought nothing into the world and we can take nothing out of it, but if we have food and clothing, we will be content with that.” Bob, I think we also want to go on and explore giving. What does the Bible say about giving?
Bob:
Well, the Bible says in 2 Corinthians 9:7, “Each one must do just as he has proposed in his heart, not grudgingly or under compulsion for God loves a cheerful giver.” In the four daily uses of money, giving is one of those uses because giving breaks the power that money can have over us. And remember it’s not money that is evil, but it’s the love of money.
Mary Jo:
Right.
Bob:
And I like the scripture from Matthew 25:35-40 where it’s really talking and speaking to us about our giving and here’s what it says, “For I was hungry and you gave me something to eat. I was thirsty and you gave me something to drink. I was a stranger and you invited me in. I needed clothes and you clothed me. I was sick and you looked after me. I was in prison and you came to visit me. Then the righteous will answer him, Lord, when did we see you hungry and feed you or thirsty and give you something to drink? When did we see you a stranger and invite you in or needing clothes and clothe you? When did we see you sick or in prison and go to visit you and the King will reply, Truly, I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.” The power of giving breaks that stronghold that can have over us. When we’re giving, it’s very hard to be selfish because we’re giving and the scriptural guideline behind that, also, is it’s more blessed to give than to receive. You get so many blessings from giving.
Mary Jo:
Well, we’ve gone over live and give, and next we want to explore owe. There’s two types of owing – debt and taxes. Both of those are good and bad. Debt. Debt always mortgages the future. In Proverbs 22:27 it speaks very clearly to this. “If you lack the means to pay, your very bed will be snatched from under you.” That’s strong.
Bob:
It is, and that debt always mortgages the future. No one ever talks about debt like that, that you’re presuming upon the future when you take out debt.
Mary Jo:
You know when you live in debt and beyond your means, it can create such turmoil. It’s such a source of conflict within relationships. When you’re living without debt, it can provide such peace and that’s so important and I know that we’ve talked in the past about marital harmony and agreeing on how you’re going to approach debt. This is one of the biggest sources of conflict in most marriages. I would encourage our listeners to really play on that and talk with their spouses and how they’re going to approach that in their own relationships. Any thoughts?
Bob:
One of the thoughts is is I want to make sure that our listeners understand that we are not saying that it is a sin to borrow money. There is nowhere in scripture that it says it’s a sin to borrow money, but it has given us warnings and that is what the scripture that Mary Jo shared with you says, if you lack the means to pay, be very careful with the use of debt. Debt is not evil and it’s not sinful, but if you overextend yourself, your very bed could be snatched out from under you and I have seen this happen with people who’ve had to declare bankruptcy. The second area that we’re going to owe is not just debt, but we’re always going to owe this one. What is that one?
Mary Jo:
Taxes.
Bob:
Taxes. Yeah.
Mary Jo:
Taxes are not evil. It Is symptomatic of God’s provisions. So it’s a sign of what we’ve been given and what we’ve been blessed to receive. Romans 13:7 speaks to this. “Give everyone what you owe him. If you owe taxes, pay taxes. If revenue, then revenue. If respect, then respect. If honor, then honor.”
Bob:
This scripture points out to us that we are to pay our taxes, and as Christian brothers and sisters in Christ, we should never not pay what we owe in taxes and we should not be trying to avoid taxes illegally. Mary Jo, I’ve seen this with people who have said, if you’ll pay me with cash, I’ll give you a cheaper price. And I say, well, why is that? And they’ll say because I don’t have to report it.
Mary Jo:
Bob, you used the word illegal. So there are ways to minimize the amount of taxes that you owe. And I don’t think there’s any harm in that and that’s not against any of God’s guidelines and teachings. Certainly we want to take advantage of those, but these are legal ways to do so. And that’s the difference maker, wouldn’t you say?
Bob:
I would. One more thing as we leave the owe part of live, give, owe, grow is another scripture we were going to share was James 4:13-15 this says, “Be careful today or tomorrow. We’ll go into this or that city and spend a year there, carry on business, and make money. You do not even know what will happen tomorrow.” We really don’t. None of us know if we’re going to be here tomorrow or the next day. So when you take out debt, be sure that you can pay it back or your spouse can pay it back or you have enough life insurance to cover that debt until that debt is paid off.
Mary Jo:
Absolutely. And that brings us to grow – saving and investing for the future. Demonstrate financial maturity by giving up today’s desire for tomorrow’s benefit. That is really what we talk about when we talk about savings. Part of growing our money is making sure that we have enough set away or an emergency or for tomorrow if something unplanned were to happen. In 1 Corinthians 16:2 has that great verse that speaks to that, “On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up so that when I come, no collections will have to be made. Another one from Proverbs 13:11, “Wealth from get rich quick schemes quickly disappears. Wealth from hard work grows over time.” We’ve talked a lot the past and on the previous podcasts about saving and how important an emergency fund is. What are some other thoughts that you want to share with our listeners today, Bob, regarding that?
Bob:
To grow is also to save. Our old favorite from Proverbs 6 speaks to this that we’re always talking about here on Christian Financial Perspectives. Proverbs 6:6-8, “Go to the ant, you sluggard. Consider its ways and be wise. It has no commander, no overseer or ruler yet it stores its provisions in summer and gathers its food at harvest.” These scriptural guidelines that we’ve given from 1 Corinthians 16:2, Proverbs 13:11, and Proverbs 6:6-8 are all biblical guidelines that we can use when it comes to growing, saving, and investing for our future.
Mary Jo:
You know Bob, there’s another scripture from Luke 14:28-30 that I think illustrates these points very well, “But don’t begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it. And otherwise you might complete only the foundation before running out of money and then everyone would laugh at you. They would say there’s the person who started that building and couldn’t afford to finish it.” I’ve always talked about our favorite place because it’s on my heart and that’s in Rockport. Down along the beach road there are probably two or three properties that have a foundation sitting there with no house, and they’ve been there for years. Someone started those projects and then they just didn’t have the wherewithal to finish them. So, it’s so sad when you see that.
Bob:
They didn’t count the cost of what it was going to cost to finish. Huh?
Mary Jo:
That’s right.
Bob:
So Mary Jo, we’ve covered the four daily uses of money. So we started off the program, and we talked about the 10 uses. So we’ve covered the four daily uses. Now, we’re going to get into the six uses of money for setting longterm goals that will complete the 10 overall. So there’s the four daily uses and then the six uses.
Mary Jo:
Giving and saving – there’s a lot to still say about that before we move on to the six longterm goals of money. There are two productive uses of money. So what do we mean by productive? These are both biblical principles, applying God’s word. Giving releases selfishness, and a stronghold that the love of money can have over us, while saving demonstrates wisdom and provision for an unknown future. And you know, Bob, it talks in the Bible and it lays down the foundations that we need to save for the future, but also God will provide. So how would you respond to somebody that asks you, why should I focus on saving if God’s gonna provide for my needs?
Bob:
All right, I’ve got a good old country boy story for this one. All right, so this young man, he drives up the hill to the top of this beautiful farm and ranch that this Christian farmer and rancher has built over the years. When he gets on top of this hill, they go stand down on his porch, and this young man looks at this farmer and says, it is unbelievable how beautiful this is and what God has done here on this farm and ranch. And the rancher said, yes, you’re right. God owns it all, but you should have seen what it looked like before we were partners. You see, the rancher was a partner with God. In other words, he realized that God gave him that land, but God wants us to do something with it. Just like God enables us to work and enables us to save. But if we don’t do anything with it, it’s not going to grow. It’s not going to provide, so we have our part to do because God’s the owner and we’re the manager and how are we managing what he’s given us.
Mary Jo:
Ah, that’s great. So we’ve been focusing on the four daily uses of money, but with savings and growing, it kind of really sets the stage for six longer-term uses of money and that’s really to help us set up for longterm goals. The first one of those is financial freedom, where the ability to leave and go on a mission trip might be available to us or to be there for our grandkids when needed. You know, maybe we want to make an investment there. To serve in your church at retirement and to provide for your old age and rising cost of health care. All of these are things that having financial freedom can do for us. In Genesis 41 I know that there’s a message there that you wanted to share a little bit about Bob.
Bob:
When it comes to financial freedom, you’ll hear the term in the world financial independence. When it comes to that, there’s really a scriptural guideline that is given to us in the entire chapter, the 41st chapter in Genesis, and this is where Pharaoh has a dream and they go and get Joseph to come interpret the dream for him. He’s interpreting this dream as there’s going to be seven really good years, and during those seven good years, you should save a fifth of the harvest for the seven bad years. And that makes me think of those good years are when we’re young and when we can work and when we can save, but when we get older, we may not have that energy to go work that particular job. Or when we have a tough time come along, we may not have that money to save at that point, but during the good times, you need to be putting aside, and this is a scriptural guideline. Even a fifth, you know, that was 20% of the harvest during those good years. I think this is a great guideline for talking of the importance of setting aside that bucket of money so that you will have financial freedom to not only provide for yourself but for those in need in other places.
Mary Jo:
And you know, Bob, that financial freedom that really gives us peace of mind and I think there’s something to be really said for that. When you have peace of mind regarding your finances, you can open up your heart for other things and focus on other things and spend that time much more productively with your family
Bob:
Just so long as we don’t rely more on our savings and our investment account than we do on God. Does that make sense?
Mary Jo:
Yes. I mean God’s word has got to rule over our actions, if you will. That brings us to the second use of money for setting longterm goals, and that’s charitable giving. In 2 Corinthians 9:7 it reads, “Each one must do just as he has proposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver.” I know that’s one of your favorite passages.
Bob:
It really is and when we talk about the six uses of money for setting longterm goals, charitable giving is a longterm goal and this is why I like to help people set up like a family foundation or a giving fund donor advised fund.
Mary Jo:
Yeah, we do talk a lot with our clients around planned giving and that is preparing while you’re alive and to give after death. But you know, planned giving can also be during life as well, but it’s making specific plans on how you’re going to achieve your charitable goals and we can help with that.
Bob:
And the third one is freedom from debt. This should be a longterm goal that you’re completely free from debt. Again, we’re using that scriptural guideline that we use in the four short term uses of money, “If you lack the means to pay, your very bed will be snatched out from under you.” As you get older, I believe that debt should be completely eliminated for those that are above 60, 65, 70 years old. Because when you take out debt, again, you’re presuming upon the future.
Mary Jo:
That’s right, and we definitely want to avoid that. That brings us to lifestyle choices, but if these lifestyle choices turn you away from your reliance on God, then that’s not good. All financial decisions, they should be spiritual ones. For us as Christians, we should pray upon them and they need to be made in marital unity so that there is harmony between you and your spouse, so that you’re in agreement on your longterm goals and objectives and what you want to accomplish with your hard earned money. When we talk about lifestyle choices, this can be luxury items such as fancy cars, bigger homes, kitchen remodels. It’s not for us to judge on how someone spends their money. If you’re following all his guidelines, God doesn’t begrudge us from enjoying the fruits of our labor. What do you think about that one?
Bob:
I know some of the biggest givers, when I say percentage of their income – some that are given away 40, 50, 60% of their income – that live in some of the biggest houses and drive some of the biggest cars. So it’s like you say, it’s not for us to judge those lifestyle choices, but in setting a longterm goal, it does enable you to decide what lifestyle choice you want to live.
Mary Jo:
We talk a lot about provisions, but one of the most important things is family needs. In 1f Timothy 5:8, it speaks to anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever. So, there’s a lot to be said for that. Finally, we want to focus on possibly starting a business or helping someone else to start a business. That’s a pretty worthy undertaking. Did you have something there, Bob, that you wanted to share with our listeners?
Bob:
No, I just think that pretty much sums it up, Mary Jo. So I’m going to go through these 10 real quick and then we’ll end up the program.
Mary Jo:
Excellent.
Bob:
Alright. Overall, there’s 10 uses of money. There’s the four daily uses of money, which are live, give, owe, and grow. Then the last six of those are financial freedom, charitable giving, freedom from debt, lifestyle choices, family needs, and possibly helping someone else start a business or starting one yourself. Now again, I don’t expect those of you that are driving to work to memorize all these or write all of these down, so feel free to give us a call. I’m going to give that number and then it’ll be given again later, but it’s 877-718-7884 if you would like a copy of the list of these “10 Uses Of Money”.
Mary Jo:
Bob, and in closing, we want to end on this scripture to stay humble no matter how much we have. In Proverbs 27:1-2, “Do not boast about tomorrow, for you do not know what a day may bring. Let someone else praise you and not your own mouth, an outsider and on your own lips.” We’ve covered a lot today and you just never know what tomorrow may bring. A hurricane could come and take it all away. We’ve certainly seen that happen.
[CONCLUSION]
Mary Jo: You’ve been listening to Christian Financial Perspectives. Join us as we explore more about how to apply biblical wisdom to your financial situations.
Bob: To make sure you don’t miss any of our podcasts, you can subscribe to Christian Financial Perspectives on iTunes, Google Play, or Stitcher. To learn more about integrating your faith with your finances, visit out website at ciswealth.com or call 830-609-6986.
Mary Jo: That’s all for now.
[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.
23 min
October 09, 2018 Episode 4 – Estate Planning The Wrong Way The Right Way
Estate planning is a very important part of wealth management. In this episode, we are covering different techniques and tips that we recommend when it comes to creating an estate plan involving your family.
36 min
October 09, 20184 – Estate Planning The Wrong Way The Right Way
Click below to listen to Episode 4 – Estate Planning: The Wrong Way, The Right Way
Episode 4 – Estate Planning: The Wrong Way, The Right Way

We cover different techniques and tips that we recommend when it comes to creating an estate plan involving your family.

More episodes >>

Estate planning is preparing the management of an individual’s assets in the case of their death or incapacitation. This includes bequeathing assets to heirs and family members, as well as the settlement of estate taxes. Your estate includes items such as:
House(s)
Land
Farm(s) and/or Ranches
Accounts (retirement, bank, savings, etc.)
Business Interests
Investments
Life Insurance
Valuables (cars, jewelry, family heirlooms, etc.)
Intellectual Property

All of these aspects of estate planning can become overwhelming quite quickly. However, with these tips given in our podcast, we hope to teach the right way of estate planning through the use of certified professionals and letting your family know your plans ahead of time.

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®
Mary Jo Lyons, CFP®, CKA®

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EPISODE TRANSCRIPT

[INTRODUCTION]
Bob: Welcome to Christian Financial Perspectives, a 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]
Mary Jo:
In today’s episode of Christian Financial Perspectives, we’re going to discuss family estate planning the wrong way and the right way. So Bob, as we start today’s discussion, I know you have a favorite scripture that you’d like to talk about that kind of sets up today’s topic. Why don’t you share that with our listeners?
Bob:
Well, it’s actually a couple of them, but the main one is from Proverbs 20:21 that, “An inheritance gained hurriedly”, another version says quickly, “at the beginning will not be blessed in the end. And really this scripture has to do with dumping a large amount of money into your children, or grandchildren’s, lap all at one time and how that can actually hurt more than it can help. The title of this program that we’re doing today is called “Estate Planning: The Wrong Way, The Right Way”. I came up with this title from a great book that I would suggest that everyone get about estate planning when it comes to writing your will and how you’re going to do that. The book is called “Family. Money. Five Questions Every Family Should Ask About Wealth”. On page 20 of this book, it’s got these scenarios that they talk about from an estate plan and where the family gathers in the lawyer’s office and the executor clears his throat and reads this written document left by the parents to the children, and this is the first time in their lives that they’ve heard their parents’ requests for their children and now the parents are not there to share it with their children.
Mary Jo:
It sounds so cold.
Bob:
It does. It’s very, very cold. It’s around an attorney’s office in a cold room. That’s the worst case scenario, but you know, Mary Jo, that’s probably 99% of how our estates are left. The children, for the very first time, hear what their parents want to leave them around a cold lawyer’s table.
Mary Jo:
I never understand why these types of topics are so difficult for families to talk about openly, but yet it does seem challenging. But before we get too deep into the topic of estate planning, I think one of the things that would be helpful is if we define a little bit about what estate planning means and what an estate is. We’re going to go through some of that, but I don’t think a lot of our listeners would fully understand what an estate encompasses. In fact, many people don’t even think of themselves as wealthy. They don’t think they have an estate to worry about, but it doesn’t take a lot of wealth to create estate issues that need to be planned for. I think that most families need to be aware of some basic points regarding estate planning. How would you start off to describe estate planning, Bob?
Bob:
Well, you know, I’ve got this technical side from Investopedia. I’m going to read that, but I’m not so sure if that’s going to go right over everybody’s head.
Mary Jo:
Well, I think we want to share the technical side, but also the soft more personal side and kind of talk about both components, because they’re equally important.
Bob:
“Estate planning is the collection of preparation tasks that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.” Now, I know we just went over a lot of heads right there.
Mary Jo:
And you’re right, that is quite technical. So, why don’t we talk about what does an estate consist of. That might help clarify things.
Bob:
You know, really it’s everything that you have possession of or own. I mean, let’s start with real estate. That’s going to be your largest asset for most people. It’s going to be your home, single home, or maybe multiple houses if you own rental homes, any land you might own, a farm and ranch. It’s also going to consist of all of your investments like retirement accounts, bank accounts, your savings accounts.
Mary Jo:
You know, Bob, a lot of our listeners are business owners, small business owners and so it’s your business interest to be included in that, wouldn’t it?
Bob:
All business interests. I’ve been a business owner myself for over 30 years, and I can tell you that my estate is completely set up and actually I’ve done an estate plan four times now. I redo my estate plan every four or five years because it is complicated, and if you do own a business that is especially successful and with multiple employees, there’s a lot of estate planning that has to be done for that business interest and how that’s going to pass to the next generation.
Mary Jo:
That was a great point. It’s something that needs to be updated from time to time.
Bob:
It does, Mary Jo. I meet with people all the time and they say, yeah, we have our estate plan done and I’ll say, well how long ago did you refresh it? And they said, well, it was about 10 years ago. I said, how old were your children then? Oh, six or seven. So they’re now 18 and 22 and 25. Oh yeah, and one’s not around either or one passed away or one’s married or two of them were married. That’s all changed. So you’ve got to redo the estate plan for that. A lot of them, you know, have grandkids now, so that’s gotta be redone.
Mary Jo:
A lot of couples do it before they even have children, and so the children are not part of the estate plan, and that can be a real concern if something were to happen to the parents.
Bob:
We have other things that are part of the estate plan, like stocks and bonds and mutual funds. One of the things that people never about is life insurance. That’s actually a part of an estate plan. Just with the stroke of a pen today, you can create an estate worth $500,000 to a million dollars with an inexpensive term life insurance policy, especially if you’re below 40. Life insurance today is just so cheap to buy.
Mary Jo:
Right. So affordable.
Bob:
And so important.
Mary Jo:
Another thing that might impact a lot of our listeners here in Texas, and that’s oil and gas interest and water rights and royalties from these types of things. You know, certainly it’s not impacting everyone, but it could for some of our listeners.
Bob:
Well, a couple of years ago I was working with a lot of people in the Eagle Ford Shale when we had this oil boom and of course now the booms kind of over, but it still continues and people still continue to receive that royalty income. The thing about an oil and gas interest, if somebody has that, they need to do some very complex estate planning to get that away from their estate. If that passes down, the IRS could come in and value that at 10, 15, or $20 million. There are ways to set up a family estate plan using limited partnerships and different types of legal documents that will help to lower the estate tax burden that could come about by having those oil and gas interests.
Mary Jo:
And we’re going to talk about some of those things as we get deeper into our topics. But there are some other miscellaneous items that fall into an estate plan. One of those are collectibles, antiques, precious metals that they may have around, and one of the things that I’ve had some experience with is intellectual property. In my past life, I’ve dealt with a lot of college professors and doctors as clients and they typically might have patents from things that they’ve invented and copyrights and trademarks on intellectual material that they’ve created over the course of their career. That would have an impact on an estate, as would trade secrets, if they were business owners. So things that people may not ever think about.
Bob:
I want to mention that the majority of our listeners are not going to have oil and gas interests or these miscellaneous items like intellectual property, possibly. But all you have to do is take the value of a home, let’s put a home value at $350,000, and lets put your 401ks and your IRAs at another $400,000 – $500,000, now you’re 800.
Mary Jo:
Life insurance.
Bob:
The life insurance of $500,000. Now, you’re at 1.3 million. Do you see how quick you could get over $1 million and the importance of a good estate plan?
Mary Jo:
It’s so important to be thinking about it. So Bob, where does the wealth go after you’re gone?
Bob:
Well, I’ve broken it down into four or five areas that that can go. Of course your spouse, if you’re married, family, or other heirs. An area that I see that is missed out a lot is charities and ministries you care about. That is a place your estate plan can go. But you know, Mary Jo, in titling this program and in titling the presentation I’ve done to churches is actually called “Family Estate Planning – The Wrong Way, The Right Way” and as we get to talking about charitable planning. It’s been amazing to me, and I’ve spoken to a lot of pastors like pastor events, and I’ll ask pastors this question. I’ll say pastors, how many people have you had pass away in your church over the past 10 years? And a lot of these pastors have an average size church of 200-300 members. Then, you’ve got your mega churches that have thousands of members, but nearly all of them can answer at least 10, 15, or 20 people in the last 10 years that have passed away in their churches. The second question I always ask is, well, how many of them left anything to the church?
Bob:
Those that were involved in the church? You know, we had a tragedy happen here about a year and a half ago in one of our churches where the choir was in a major accident.
Mary Jo:
Oh, that’s right. Yeah.
Bob:
Lost a lot of members. And those were members that were very involved. I mean, they were in the choir in the church, and I don’t know how many of them left anything to the church, but usually pastors give me nearly this deer in the headlights look like, “I haven’t had anybody leave anything. Well, I’ve had one in the last 10 years and they left $10,000.” Yet, an estate can quickly get to a value of $1 million as we just pointed out, and I encourage our listeners, especially because we’re a Christian company, we’re Christian based. This is Christian Financial Perspectives, and I encourage you, if you’re going to do an estate plan, to leave a portion, even just a tithe of your estate to your church, that you’re so involved in or ministries you care about after you’re gone.
Mary Jo:
We know that so important to our listeners. They are very active in their churches. They are very committed to tithing, so we would expect that at death that they would want to remember their churches. So that is a little bit surprising. What are some other areas that the estate can go to after death?
Bob:
So let me mention the first couple again just to kind of refresh. Your spouse, family or heirs, charities and ministries you care about. Then this third one is anyone you care about and love, like a close friend. I’ve had some single ladies and men that never got married and they don’t have children or grandchildren, but they have close friends or maybe a niece or a nephew that they could leave that estate to. But again, coming back to that scripture that we started off with, be careful about just leaving and dumping $1 million estate into somebody’s lap. I mean, that can hurt them more than it can help them, especially if they don’t know how to handle money well. I have a philosophy. Usually they’re ready to handle the estate well if they don’t need it, if that makes sense to you.
Mary Jo:
Oh sure. And we’re going to talk a little bit more about that. The other thing we want to consider is how much can get eaten up in attorney’s fees and court fees of an estate and probate costs. Does that factor in, do you think, Bob?
Bob:
I don’t know about you, but I’ve had some of our clients that I’ve had very sizeable estates, and the estate could have been structured much better than it was. Huge amount of money. I mean in the hundreds of thousands of dollars. One of the cases that we had had to do with some oil and gas interests. Part of the family wanted it that was never involved with other parts of the family, and it went for a couple of years and it was very difficult on the families. Attorney fees and court fees can get very high and remember a will can be probated. This is why I like the use in a larger estate or if there’s any complexities in the estate of using a trust or a family limited partnership. That fifth area that we didn’t mention was estate taxes. Now today, estate taxes are really not that much of a problem as the exemption has gone up over $10 million per person. Most people are not going to fall on that. You know, I’ve had some clients that have passed away or their parents have passed away and some of the states where the state taxes emption is practically zero, so they have to pay a portion of that, especially in some of the Northeast States where they passed away. They have to give 5% or 10%, even if it’s just a $500,000 estate, which quickly adds up to that. $50,000 has to go to the state.
Mary Jo:
You drive around in different areas, whether around the countryside, in cities, but especially in beachfront and waterfront communities. And you’ll be driving and you’ll notice all these abandoned houses that used to be beautiful, but they’re just sitting there empty and neglected, and I often wonder are those just tied up in someone’s estate? And it’s kind of sad if you think about it.
Bob:
I wouldn’t doubt that at all. And there was one right down there in Rockport.
Mary Jo:
Yes.
Bob:
And I remember one down at the very end of Bayshore drive, and it sat there for years not being sold.
Mary Jo:
Exactly. If people just did some prior planning, things would go a lot smoother. You know, one of the things that is a concern when it comes to estate planning and sudden wealth is how soon that money can disappear. And oftentimes it’s just in a matter of months or years. I think you’ve referred to it as the sudden wealth syndrome. And you mentioned that a little bit earlier, but many heirs will spend their money that they receive in a very short order because they’re just not used to having it. So, they feel like it’s a windfall and they don’t realize how quickly it can evaporate, so it can be gone in two to three years without some planning.
Bob:
It’s just like winning the lottery for some people. You’ve heard of the horror stories of those that have won lotteries, won millions of dollars, and they’re worse off after they won the money years later than they were before they won the money. That is called sudden wealth syndrome. It’s like a disease, and you can look it up on the internet if you put in sudden wealth syndrome. There’s this entitlement mentality that comes along with it. For some reason when all of a sudden you come into some sudden money and you have a lot of it, I don’t know what it is, but it just comes under that sudden wealth syndrome problem. You think you’re smarter than everybody. You don’t need the advice of anybody and you just have these ideas about what you’ve always wanted to do. You don’t need the help of anyone whatsoever, which is not scriptural. As it says in Ecclesiastes, a cord of three strands is not quickly broken. Pity the man that has nobody to help him up when he’s down. Plans fail from lack of counsel. We mentioned that in Proverbs 15:22. If you are about to inherit a large estate, you really need to seek out the counsel of a wise financial advisor that’s experienced and that is also a fiduciary fee based advisor.
Mary Jo:
You know, one of the things, as you’re talking Bob, that comes to mind is it’s not just about those that maybe win the lottery or get a sudden inheritance, but it’s also our athletes and other professionals. If someone has a company that suddenly goes public and they, again, they get a windfall and you hear these sad stories that they had all this tremendous wealth and it’s gone so fast because they have all these other people that they’re having to support and they’re suddenly tempted. And the temptation, it’s out there, to buy luxury goods. It can just eat it up. Without planning and without wise counsel, it can be a shame at how fast that money can disappear. We want to help plan for future generations. I think you’ve shared that inheritance can be like a fire. Under control, it can give warmth, safety, and provision. Out of control, it can consume, destroy, and compound irresponsible behavior.
Bob:
This is so true, and we have seen this over and over and I love when we do our presentation. Jenna here who does all our graphics design, she has this amazing picture that shows the family around a real nice firepit enjoying one another and that’s a fire under control, but then we know about those fires in California and some of the ones in Colorado that just destroy everything. An inheritance quickly gained can be just like that. Please, I emphasize to those of you that are listening to the podcast today, you really need to get with someone that is experienced in estate planning. I’m very experienced in that and have set around many conference tables with an attorney, with my clients, with a CPA to where all this flows together.
Mary Jo:
So you’ve mentioned that’s that part of the estate planning team. We were going to say that for later, but why don’t we talk about that a little bit? Who all encompasses the state planning team, Bob?
Bob:
Well, we’ve had family meetings here, and we’ll have it over a full day. So besides the family being involved, that would be a fee based financial advisor, an estate planning attorney. In other words, an attorney that’s very experienced in estate planning. Don’t just pick any attorney you need to find one that’s very experienced in that. That would also be in the case if oil and gas interests are involved or business interests are involved, a CPA, maybe the bookkeeper. It also may bring in the insurance representative to structure the insurance properly.
Mary Jo:
And if trusts are involved, a trust officer to help administer those.
Bob:
That’s correct. We help people set up a trust, and we use a corporate trustee program. I like to use a corporate trustee over an individual trustee because the corporate trustee is not going to be manipulated possibly by the children or the family. They’re going to follow what the parents want with those assets after they’re gone and to be given in a loving and wise way to the heirs.
Mary Jo:
And I’ve heard that there are families that actually have taken a videographer to video these conferences. What do you think about that approach?
Bob:
We’ve actually had that happen. Yes, we’ve done that. I work with an individual that lives here in New Braunfels now and he works with families doing that. That is a fantastic way. You take that video and you upload it into a cloud based environment where the family can see it.`
Mary Jo:
We talked earlier about giving and how much is in our hearts and how we were a little surprised that we find that people don’t actually give to the church after death, but they’re so active and engaged before death. So we call that planned giving. And there are certainly ways to talk about where your heart is so goes your money. So having a planned giving specialist as part of that team of experts to help with the family, that can be very helpful.
Bob:
I was thinking there’s one more that’s so important, and that was true. And we had a plan giving specialist from the National Christian Foundation on a meeting that we had just about two months ago from a client that is about to have an IPO stock go public that could result in $25-$30 million in value, and he wants to give a large majority of that away because he’s felt that God has been a part of all this, and he certainly has.
Mary Jo:
Well, you know Bob, we’ve talked a lot about the wrong way and the right way. Let’s explore that a little bit more, but one thing I wanted to share is the more your children know about what to expect, the less likely they are to fight between themselves. My mom, over the years, she hated conflict and she wanted to avoid that at all costs and so she talked to us all individually and asked what we would want from the estate and she would label the items so that we wouldn’t have to have those heated discussions when the time came and it did make it so much easier. I think that kind of sets you up. Talk about the wrong way about approaching estate planning, and tell us more about that.
Bob:
Well, we talked about that a little bit in the beginning, but again, that wrong way is when that parent or loved one dies. And for the very first time, the family hears what the parents want to do with the estate.
Mary Jo:
We’ve talked a lot about the wrong way to approach estate planning. What are some of the right ways to consider for our families that are listening?
Bob:
Well, you remember I started off and I was talking about the book called “Family. Money. Five Questions Every Family Should Ask About Wealth”. And by the way, we give away this book to a lot of our clients once we’ve met with the estate planning attorney. In the back of this book, it has a four or five page area that talks about how to have a family meeting. We’ve had clients even go rent a retreat center or maybe rent out of five or six bedroom house on the coast or in the mountains and get all the family together. And during this meeting, they really talk with their family about how the wealth was acquired and how many years it took to make up that wealth and get to that wealth, especially, you know, if they’re like a business owner. As you know, wealth can take years and years to accumulate.
Bob:
It’s not done overnight, but when you inherit it, you get it overnight. Sharing with the family, things like where you grew up as a child, what were some of your childhood memories? What places have you lived? This should be a part of that family meeting. Maybe if you were in the military – where you serve or if your own organizations, what kind of boards did you serve on or ministries, what kind of mission trips did you do? What jobs have you had during your lifetime? As you can see here in front of you, the list just goes on and on. Like what were your parents and grandparents like? These are things that your children want to know. As you know, ancestry.com is at an all time popular high, and everybody’s wanting to get their DNA tested today so they know where they came from.
Mary Jo:
You know, Bob, it allows the parents the opportunity to tell their story and help their children understand what the parents wish for them in their lives, what their legacy goals are after they are gone. And it’s so great to be able to hear that directly from the parents. We talked a lot about the technical aspects of estate planning, but we want to touch on the spiritual and personal components. In fact, the Bible has much to say about estate planning if you dig deep. What are some of those passages?
Bob:
Well, we’ve got Deuteronomy 11:18-19, “Commit yourselves wholeheartedly to these words of mine. Tie them to your hands and wear them on your forehead as reminders. Teach them to your children. Talk about them when you were at home and when you’re on the road, when you’re going to bed and when you get up.”
Mary Jo:
So it clearly does say to talk about these things and be open with your families
Bob:
And to share with your families the good and the bad times and the victories and the mistakes you’ve made. Because as you know, you learn from mistakes. As a parent, I’d rather learn from the mistake than my child having to go through some of those hard lessons. So I need to tell them these are some of the mistakes. I think mistakes and learning from them gives you wisdom. Ecclesiastes 7:11 says, “Wisdom, like an inheritance, is a good thing. It benefits those who see the sun.” And you’ve got another version here that you like. I know that’s your favorite version, the New Living Translation.
Mary Jo:
Yes, “Wisdom is even better when you have money. Both are a benefit as you go through life. Wisdom and money can get you almost anything. But only wisdom can save your life.”
Bob:
And I remember in the Bible where God was asking Solomon, you can have anything you want. What do you want? He wanted wisdom. He didn’t ask for money. He asked for wisdom. Because when you have wisdom that’s going to get you through those hard times,
Mary Jo:
Right. And the money is nothing without the wisdom to know what to do with it and how to make it grow and work for you. And I think that’s the point of our message today.
Bob:
Let’s get to some of the technical components. I’ve seen that you’ve listed some of these here, Mary Jo. Do you want to share some of the technical components of an estate that somebody needs to have and these are very important documents.
Mary Jo:
Well, they absolutely are and we call this the suite of documents. If you will. An estate planning attorney can easily set these up, but I think these are the basics that everyone needs to have – a last Will and Testament and they also need to name an executor and a backup executor in those documents, especially for those that have minor children, you want to establish guardianship for those children. That becomes increasingly important if you have developmentally challenged family members. You want to set up a care plan for those individuals. You need a medical power of attorney, directive to physicians and a durable or financial power of attorney. I want want to talk a little bit about the directive to physicians. I think people don’t really understand what all is encompassed in that document, and they need to be very specific about their wishes and what they want to have happen at the end of life and that end of life care and transition. Once maybe hospice is brought in, how far do they want the family to go? Do they want to be on life support? If so, for how long? Do they want to have a feeding tube? So when do they want medicines to stop being administered? So I think you want to be very specific about the quality of that end of life process. Have you ever experienced that and how comfortable or uncomfortable that can be?
Bob:
Well, yes. I know that you have, and I did with my own dad
Mary Jo:
My mom, one of the biggest blessings that she did for us, she was very clear in her wishes. She spelled it out. In fact, towards the end she would follow us around and say, you understand what I want, don’t you? And she wanted to just make sure that we knew what her wishes were and it made it all so easy for us and my siblings. Another thing is you want to talk about your burial wishes. So many children don’t have any idea what their parents had planned. If you’re going to prepay for a burial plot, where is that plot? Where are the documents? Where’s the deed and what cemetery do you want to use? Maybe you want to be cremated and not buried. Talk about your spiritual thoughts around those two issues.
Bob:
I want to mention something about that because I saw that in your list too. You’ve got to decide if you believe this is scriptural or not. Being cremated, for a lot of Christians, are like, that’s not supposed to happen. I know how I feel about that personally. I don’t believe you should be cremated and your ashes spread elsewhere because the second coming, but that is something that I think you need to seek out God’s word on it and see what the Holy spirit says to you.
Mary Jo:
And you know, now there are thoughts, especially in coastal areas, and we’ve seen where cemeteries have been flooded. There’s all kinds of new information in today’s world that impacts that decision. So one of the other things we want to think about is if being buried and the funeral process, what should that look like? What do you want in the form of a casket? How much do you want the family to spend on that? What kind of flowers and songs. For a loved one to spell all that out like my mother did, she even put down what scriptures she wanted read, what songs were her favorite, and it just made it so easy for us during our time of grief. And so I really encourage people to talk about those things and document them.
Bob:
I think it’s also important for higher net worth families to have additional documents like forming a trust if they’re a very high net worth, because we have tax exemptions above $10 million, but they might want to consider setting up a credit shelter trust. That’s where you can double that tax exemption to over $20 million. And then there’s things like an irrevocable trust, a revocable living trust, there’s family limited partnerships, there’s buy sell agreements. I have a very complex buy sell agreement that we have in place and how that’s going to happen for our business.
Mary Jo:
An attorney can help families understand. Those are some very technical terms and they’re very complex vehicles, but they are important and that’s where a skilled attorney can come in and help you understand what the various trusts are, what they do for families, and which ones might be appropriate for your situation. As we wrap up, Bob, we talked about estate and legacy planning goals. What are some questions that a Christian would ask in respect to this?
Bob:
I think the question that the family needs to ask is do they really believe that God owns it all and when they’re passing down wealth to the next generation, how much is enough. It comes under the question too, should all heirs be treated equally?
Mary Jo:
That’s a good one.
Bob:
There’s no scriptural bases that the heirs should be treated equally. How much is enough for one may not be enough for another, especially under the case of a special needs child or in the case where a large quick monetary inheritance could actually hurt someone more than it can help them. There’s so many of these things that you’ve got to sit down and ask these questions. How can we help our children’s children also share in a biblical stewardship philosophy by how we set up our estate plan? We talked a little bit earlier about the donor advised fund and a giving fund. That’s a fantastic thing to do. We’ve set up one for our family to where 20% of our estate will go to our giving fund and that’s like a family endowment for the children to be involved in. Should you consider tithing part of your estate to your church or to that type of fund?
Mary Jo:
I think that’s a wonderful idea. It’s a wonderful legacy for young adults to help them understand giving and to help them open their hearts to the possibility. So, it allows them to research charities that they want to support. And it kinda gives the family a project to work on to make sure mom and dad’s wishes are carried out. But it gives them the ability to impact that as well. So, I think it’s a really cool concept. One of the things we talked about is should all heirs be treated equally? We’re living in a different time today, and we have so much in the news about the issues of drug addiction. So we want to make sure that each of those family members are equipped both emotionally and with wisdom and that they’re not a spin threat. Maybe that’s something to think about and wise people will just wonder, should we put somebody else in control of those assets so that anyone that has a tendency to maybe be irresponsible might have somebody to help police those, at least the ability to withdraw those funds. Or, they could only be used for certain things. So, you can be very specific on the way you want your assets to be distributed after your death. And that’s where those trusts become important.
Bob:
Well, Mary Jo, I think we have put enough information on someone in today’s podcast. I know we went really long, but estate planning is so important and I would invite you to come back and listen to this podcast. You might have to listen to it over a couple of days because there’s so much information that we have shared with you today, but the bottom line is don’t put off your estate plan. I think about 80% of the population puts this off. One of the very first questions that we always ask our clients when we do their annual financial review and assessment is, do you have your estate plan in order? And I’m amazed how many say no. Or if they say yes, I ask them that question. Well, how long ago? And that takes us right back to the beginning of the program. If you haven’t had an estate plan updated in the past eight to 10 years, you need to have it updated because so many things have changed since then.
Mary Jo:
Since this applies a lot to our more senior clients out there and those listeners. One of the things when they talk about their medical power of attorney, who is going to be best equipped to make those decisions if the individual can no longer make those decisions on their own. Is it a younger family member? Is it one of their peers or what happened if that person predeceases them? So you want to make sure that you give some thought as to who’s going to be the most appropriate person that’s not going to be as emotional as maybe one of your direct family members. A lot to consider there.
Bob:
So as we come to the end of the program, we don’t want you to feel alone out there when it comes to estate planning. There’s so much documentation that we have like questions to ask an attorney. There’s information on trust, there’s information on medical power of attorneys. There’s a whole book on estate planning information that we have and we’re here to help you. So, feel free to give us a call at (877) 718-7884 and if you don’t have a pen handy, all you got to remember is 877- 71-TRUTH cause we’re going to give you the truth about estate planning and about everything financial from a biblical perspective. Anything you want to close on today, Mary Jo?
Mary Jo:
I think that does it. We’ve covered a lot.
[CONCLUSION]
Mary Jo: You’ve been listening to Christian Financial Perspectives. Join us as we explore more about how to apply biblical wisdom to your financial situations.
Bob: To make sure you don’t miss any of our podcasts, you can subscribe to Christian Financial Perspectives on iTunes, Google Play, or Stitcher. To learn more about integrating your faith with your finances, visit out website at ciswealth.com or call 830-609-6986.
Mary Jo: That’s all for now.
[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.
36 min
October 02, 2018 3 – Virtues to Look for When Choosing a Financial Advisor
Click below to listen to Episode 3 – Virtues to Look for When Choosing a Financial Advisor
Episode 3: Virtues to Look for When Choosing a Financial Advisor

Mary Jo and Bob discuss virtues to look for when choosing an advisor.

More >>

How do you choose a financial advisor? It’s not just about experience (although experience is important), but looking for a financial advisor encompasses a variety of areas including client relationships, truthfulness, openness, and if they are approaching your financial portfolio from a holistic perspective.
Also, just because an financial advisor is a Christian, this does not make their business a Christian financial firm. Are they instituting Biblically or morally responsible investing? There are many Christian financial advisors who work in, or even own, a wealth management group, BUT do not incorporate Christian principles into their financial portfolios. If in doubt, just ask!

HOSTED BY: Bob Barber, CWS® and Mary Jo Lyons, CFP®
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®
Mary Jo Lyons, CFP®, CKA®

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]
Bob: Welcome to Christian Financial Perspectives, a 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]
Mary Jo: Hi Bob. It’s been a rainy few days here in Houston. How are things in New Braunfels?
Bob: Oh, it’s really nice. We had the same thing. I think that same rain came through here last night and we really need it. It’s been so dry recently.
Mary Jo: Well, just yet another example of God’s blessings. We do need that rain this time of year. So today in our episode on Christian Financial Perspectives, we’re going to discuss 14 virtues to look for when choosing an advisor. So let’s get started
Bob: And we’re going to use 1 Timothy 3. I know that most of you are probably driving on your way to work or you might be in your kitchen making a nice hot meal, but if you do have the availability of picking up your Bible and following along with us, we’d love you to open up to 1 Timothy 3, and you know, Mary Jo, what I’d like to do, I’d like to just read it first and then let’s go back in and dissect that. How’s that sound?
Mary Jo: That sounds great.
Bob: All right, so first Timothy 3, and I’m reading out of the New American Standard. “It is a trustworthy statement if any man aspires to be to the office of an overseer, it is a fine work he desires to do. An overseer then must be above reproach, the husband of one wife, temperate, prudent, respectable, hospitable, able to teach, not addicted to wine or pugnacious, but gentle, peaceable, free from the love of money. He must be one who manages his own household well, keeping his children under control with all dignity. But if a man does not know how to manage his own household, how can he take care of the church of God. And not a new convert so that he will not become conceited and fall into the condemnation incurred by the devil. And he must have a good reputation with those outside of the church so that he will not fall into the reproach and snare of the devil.” So, what we’re going to do today, Mary Jo, is we’re gonna look at this passage from 1 Timothy 3 here on Christian Financial Perspectives, and we’re going to take these words right off the scripture and apply them to using these virtues for somebody that may be looking for a financial advisor. We’re gonna use these biblical guidelines.
Mary Jo: That’s great, Bob. I think one of the things that might also be helpful before we kind of move in that direction, let’s just look at what a virtue is, what the definition of a virtue is, and the dictionary just simply refers to it as behavior showing high moral standards. And traditionally, there has been a list or paragons of virtue and those are known as goodness, virtuousness, righteousness, morality, integrity, dignity, rectitude, honor, decency, respectability, nobility, worthiness, and purity. I think these things are certainly not new. They have been with us since the beginning. And even if you go back to the Greek philosophers of Aristotle and Plato, they focused on the four virtues – prudence, justice, fortitude, and temperance. The Bible takes it even further. And especially in Timothy three, as you described.
Bob: You know, it’s so difficult for our listeners when they are looking for a financial advisor to help them with financial advice. I mean, who do you trust? This is one of the hardest things to do when it comes to ‘who am I going to trust with my money?’
Mary Jo: Well, and as we look at these virtues and the first book of Timothy and what it says, these are regarding our church elders, the overseers, and deacons. And if it’s kind of good enough for them, then I think that these virtues would apply in looking for a financial advisor, wouldn’t you agree?
Bob: I would and I cannot see how you can get hurt at all by following these scriptural guidelines of what we use in the church today for a deacon, overseer, or elder in the church.
Mary Jo: Exactly, and you know, Bob, one of the things I wanted to touch on, depending on which Bible you picked up, you encourage the listeners today to jump into their Bible and follow along with us if they have it available. As you were reading, one of the things I noticed is that the language in your Bible version is a little bit different than mine. I like the New Living Translation because it’s just easier to read. It’s a little newer. The words are not such tongue twisters, but it’s not quite as traditional. What version of the Bible do you particularly like?
Bob: Well, I like the New American Standard. I used to like the NIV, New International Version, a lot, but I really like the New American Standard now.
Mary Jo: There are going to be some differences and so I just encourage our listeners to recognize that as they read through the scriptures. Our words may be a little bit different than what they’re actually reading, but the intent is still there.
Bob: Absolutely, and as you break down the virtues that are in 1 Timothy 3:1-7 that I read, there’s actually between 12 and 14 virtues, depending on how you look at it. So you can see what I did. I went through and I pasted the scriptures and then I went and highlighted these areas that really come out on the page. So as somebody is looking for a financial advisor, I want them to look for these virtues and I believe it’s really going to keep you from falling into a problem with maybe choosing something or the financial advisor putting you in something that you shouldn’t have been put into. Because a financial advisor that’s going to follow these virtues, I believe, is going to do the right thing for you, not just for them.
Mary Jo: That’s exactly right. In the first one, it actually states they must be above reproach.
Bob: And when you think about that, above reproach, what does that say to you, Mary Jo? I’m just wondering
Mary Jo: That they are held to a higher standard. In our business, we call that a fiduciary standard and that just says that everything that we do must be in the best interest of our clients. Whereas a brokerage or a registered representative is held to a suitability standard. They are only required to recommend investments that are suitable for you. An investment can be suitable and still not be in your best interest. These legal standards are quite different. We believe it’s important for you to understand these differences. Bob and I are often asked what’s the difference between a registered investment advisor and a broker or registered representative? So I thought it would be helpful to expand on this a little. Another point of difference is registered investment advisors must also disclose any conflict of interest that may arise when making a recommendation. A broker is not required to do this. We are also paid a fee by you, the client, so our only motivation is to recommend investments that help you achieve your goals and objectives. Brokers, on the other hand, are often paid a commission on products they sell. Some brokerage firms offer higher pay outs on proprietary products over other similar products or investments. This practice has the potential in creating a conflict of interest. These products, while suitable to you as the investor, may benefit the firm more than other similar products. Now, I’m not saying that brokers are bad, but the potential for product bias is certainly there. Having spent many years in the brokerage industry, I have seen firsthand where employers incentivize employees to promote certain products over others by paying higher commissions. And human nature being what it is, this practice can’t help but influence some recommendations.
Bob: The second one that we have here is “faithful to his wife”. Today, I’d say faithful to his spouse because you’re a female advisor, and there’s more and more female advisors coming up in our business, which I’m very thankful for. This is a person that is not out carousing around, you know, a faithful person that shows loyalty
Mary Jo: Well, loyalty can be looked at in a number of different ways as well, but especially to a spouse. And I think it speaks to character above all else.
Bob: The third characteristic that we have is “exercising self control”.
Mary Jo: Living wisely.
Bob: And not doing what you want to do, but doing what the right thing is to do.
Mary Jo: You know, you want an advisor who is following their own medicine, if you will, that they are living within their means, that they are investing in the same principles and the same strategies that they’re encouraging you to follow. We follow a biblically responsible investment strategy, and I think our clients want to know that we are investing that way as well. And we certainly are.
Bob: I don’t know why I skipped over, I went from self control to having a good reputation, but then there’s “live wisely” right after self-control.
Mary Jo: Yes. Well I think those are kind of married together, if you will.
Bob: Yeah. Living with wisdom and God’s wisdom is so different than the world’s wisdom, and then the next one is a “good reputation”. Well, that’s pretty obvious, but it takes a long time also to get a good reputation. It just doesn’t come overnight. It comes over time.
Mary Jo: It can go away overnight, though.
Bob: Well, it sure can. You can slip just one time and hurt a lifetime of building a good reputation. And that’s why as Christian brothers and sisters, we must be very careful and continuously stay in God’s word and continuously be in tune with the Holy Spirit to guide us to not make stupid mistakes. I think it’s interesting how it has “live wisely” in that passage. This is the third verse of 1 Timothy 3. Live wisely is right before having a good reputation. Definitely those two go together because when you’re living wisely, you’re not going to be doing stupid things that’s going to hurt your reputation.
Mary Jo: Well and it also goes in with number one above reproach. So all of these are just, they’re overlapping. They’re integrated and it really just describes a whole being, if you will. I think the next one is that they are “able to teach and a good teacher”, and I think we have shared with our listeners in the past that I know I’m a teacher at heart and I really pride myself on taking my time to explain concepts, lingo, and jargon and make sure that clients are coming along with me and they understand what they’re doing, why they’re doing it, how they’re doing it, and that no question is a stupid question. I like that approach.
Bob: I’m so in agreement with you there, and I have had people that have sat across the desk from me and said, “I really like it, Bob, because you explained to us,” and I have the heart of a teacher too. As you know, that’s why we’re doing this program. We have the heart of a teacher. But when you’re choosing an advisor to help you, you want one that has the heart of a teacher so that they don’t mind explaining. They actually enjoy explaining the details to you and helping you to understand it. Because I want those across the desk from me to understand what they’re getting into. If you’re getting into a growth portfolio, you need to understand the risk associated that and when you hear the term, ‘things are guaranteed’. You need to understand, well, wait a second. That’s a very hard word to say that something’s guaranteed because really there’s no guarantees in life.
Mary Jo: Certainly not in our business.
Bob: How does that circle around? How do I teach that? Things are not guaranteed, but if you manage it with wisdom and don’t be an over spender and don’t be foolish with what God’s given you, it can last a lot longer.
Mary Jo: When you’re talking about being able to teach, I’ve heard so many of my women clients that have come and said, “My advisor, they talk down to me all the time.” And you don’t want that. So you want somebody who is explaining things in language you can understand, but at the same time is not being condescending.
Bob: How about this other one? Another one I found as we’re just digging in and getting into God’s word in this scripture is “he must enjoy having guests in his home”. Now that’s interesting that that’s put in there, and that really is about being hospitable.
Mary Jo: And that that’s a virtue.
Bob: Absolutely it is.
Mary Jo: Well I think that describes both of us. We both love entertaining and you know we’ve entertained each other in our homes and clients as well and it just means that you are comfortable relating to people, I think.
Bob: That you love people.
Mary Jo: Yes.
Bob: So when you’re looking for an advisor, you want one that’s above reproach and faithful and exercises self control and is wise, but you also want one that just likes people because that’s such an important thing. If you’re going to be working with somebody for years to come, you want to be able to get along with them and that you will love each other and help one another through those tough times.
Mary Jo: And you know Bob, these next two are kind of interesting and pretty well self-explanatory. You want someone who is “not a heavy drinker or violent” because that can certainly get in the way of their judgment.
Bob: It most certainly can, and that’s something that you can easily ask or you can watch. That’s where a good reputation is going to come into play, that somebody is not out heavily drinking and that can take you to violence and it’s interesting how those two go together, isn’t it?
Mary Jo: It is, and the signs are there. Also, to be “gentle and not quarrelsome”. I think, again, that speaks to our demeanor, our ability to communicate, and be able to have a dialogue. One of the things that I view my approach with clients is very consultative, and I want to engage with them, not lecture them. That quarrelsome – I find that fairly interesting. What about you?
Bob: Yes. You don’t want somebody who’s going to be argumentative with you but is going to guide you along without making you feel like you’re stupid.
Mary Jo: Yeah. Nobody wants to feel stupid.
Bob: That’s exactly right. The next one is “not love money”, and I think this goes so well with choosing a financial advisor. Money’s not evil, but it’s the love of money that is evil and if the advisor only cares about themselves and is trying to put you in a high commission financial product, that’s where this can really help you look for one that is not all just about the money.
Mary Jo: Well, there’s nothing wrong with being successful. You want an advisor who has been successful, who obviously has inspired other clients. Well, I think we all want to be associated with someone who other people want to be with. It validates our decision as to which advisor we choose. But on the other hand, I think you also want to be wary if your advisor has all these outward signs of opulence and excessiveness. To me, that’s a bit of a red flag.
Bob: I’ve seen this a lot in the financial product world of annuities and pushing annuities, which are high commission products. I’m not saying that all, but I feel like a lot of that, has to do with the love of money because when you really dissect those products and look at them, they’re not necessarily good for the client always, and many times they’re not. Everything’s not laid out to the truth of what it really is and how they can get someone stuck in a product like that. But again, I think it comes back to the love of money and that’s why those are sold so much because they pay such high commissions.
Mary Jo: Well and if something sounds too good to be true, it probably is too good to be true. And I think some of those guarantees – talked about our previous lives being on the radio and we’re doing this podcast now – I listen to talk radio a lot on my off time and sometimes I’ll hear these financial shows on the radio and they’re talking about these 8% and 10% returns, and you can never lose money. And I’m like how can they get by with saying that? Because we cannot do that. That’s that guarantee you were speaking of earlier. But I think that in today’s market, when you look at the average return and what the overall market is doing to make these kind of outlandish promises, you know that somebody’s getting paid somewhere and it’s probably not the client.
Bob: Well, Mary Jo, we’ve got about three or four more of these, but because of time’s sake, we’re going to have to get through these pretty quick. I can’t believe we’re already at this far into the program, but “not be a new believer”.
Mary Jo: You want them to have been a follower, a Christian, for the majority of their life. You don’t want somebody who’s a recent convert. I think then they’re not going to have those biblical foundations that we look for that are so important.
Bob: And this is when you’re looking for a Christian financial advisor that we want to mention this, too. We want to make sure that everybody understands this is where we’re coming from is picking a Christian financial advisor to help you.
Mary Jo: And that they are well respected and bring integrity.
Bob: And there you go. So that is about 14 or 15 virtues from the first chapter of Timothy, and when we were talking about the love of money, by the way, that’s just three chapters over in 1 Timothy 6:10, “For the love of money is the root of all sorts of evil.” And remember it’s the love of money. Money is not evil in itself, but I wanted to point that out as we were going through all these, that that particular famous scripture is just a few chapters over in the same book.
Mary Jo: You know, Bob, there’s another scripture that is also kind of important to touch on as we talk about these virtues for looking for a financial advisor. And that’s Matthew 7:15, the tree and its fruit which says, “Beware of false prophets who come disguised as harmless sheep but are really vicious wolves. You can identify them by their fruit. That is by the way they act. Can you pick grapes from thorn bushes or figs from thistles? A good tree produces good fruit and a bad tree produces bad fruit. A good tree can’t produce bad fruit and a bad tree can’t produce good fruit. So every tree that does not produce good fruit is chopped down and thrown into the fire. Yes, just as you can identify a tree by its fruits so you can identify people by their actions.” So we’ve heard it said that actions speak louder than words, but maybe there’s a bad apple in every bunch. What do you think about that and how it relates to our topic today?
Bob: I think that as clear as the handwriting is on the wall, as the old saying goes, and you must be aware of that because there are those out there that are very good at trickery and can trick you into thinking that this is the right thing for you and that’s why you must rely on the Holy Spirit and that’s why for a Christian, all financial decisions should be spiritual decisions as well and should be prayed about. Mary Jo, as we come to the end, let’s just go over some things quickly and kind of sum this up. Things to look for. I know you’ve put together a little list here that I think is really great. Why don’t you go through those?
Mary Jo: Well, certainly education and experience. You want certification so that there’s some credentials there that speak to their expertise and what you’re looking for them to help you with. You want to review their fee structure if there are any conflicts of interest. One of the ones that I think is so important is that they are independent versus being beholden to a brand or a firm, and what I mean by that is if there’s a name on the door and it’s not their name, then whatever firm their associated with, more than likely they are beholden to that firm. It’s kind of like having a franchise and they have to sell that brand of products. You may find that you’re having a lot of those funds in your portfolio because the advisor is steered towards that. Typically ,they get more compensation by using those investments, and you know our clients are unique individuals and their portfolio should reflect that.
Bob: That’s correct.
Mary Jo: We talked earlier about the standard of care. You’re looking for a registered investment advisors or certified financial planners. You want to make sure you’re working with a fiduciary and you also want to understand what’s going to be the working relationship with the firm. How often is the advisor going to meet with you? What are those reviews going to look like? What other services do they provide? On our website, we have a list of all the services and what are the benefits of being a Christian Financial Advisors client. You can go find that on CISwealth.com. Also, you want to look, are they offering holistic planning or just simply investment management? Your portfolio is only one piece of your overall financial wellness plan. Are they helping you with an income stream? Are they helping you with retirement planning, other financial planning topics, education, funding, and certainly planned giving? Do they have expertise in those other areas?
Bob: And don’t worry, we’re going to spend a whole other show talking about all the pieces of the financial puzzle.
Mary Jo: Exactly. You want to make sure that they have an investment philosophy and an investment process. Are they disciplined in their approach and consistent? Another key thing is do they have a team in place or are they a solo practice? Something can happen to the advisor and God forbid something were to happen to either one of us, but our clients are in great hands because we have a team in the office to help support them. And if I’m not available, there’s always somebody available to answer their questions. And lastly, you want somebody who is technology proficient. Do they have online tools and online website for you to go to? A client portal where you can securely post documents? I think that’s just a snapshot of some of the things you should be looking for. What did I miss, Bob?
Bob: I think you hit on them all, but I know that our listeners are going, “Oh, that’s so many things.” We’re going to put this list on the Christianfinancialpodcast.com website for Christian Financial Perspectives. Mary Jo, we’re out of time, so we’re going to need to sum this up for today. I want to thank you for listening to Christian Financial Perspectives. Any last thing you’d like to say, Mary Jo?
Mary Jo: Just very quickly, I do know that clients come and they’re not always looking for an ongoing relationship with an advisor, so sometimes they only have a few financial topics that they want to address and we offer what I call a quick start financial plan. If somebody just wants to look at their insurance needs or maybe talk about education funding or just some simple retirement strategies, we can customize our financial planning to an hourly consultation, and not every advisory firm has the ability to do that so we have more details about that on our website as well.
Bob: Thank you for listening to Christian Financial Perspectives and please join us next week as we explore “Estate Planning, The Right Way And The Wrong Way.”
Mary Jo: Who will you be a blessing to you this week? Until next time.
[CONCLUSION]
Mary Jo: You’ve been listening to Christian Financial Perspectives. Join us as we explore more about how to apply biblical wisdom to your financial situations.
Bob: To make sure you don’t miss any of our podcasts, you can subscribe to Christian Financial Perspectives on iTunes, Google Play, or Stitcher. To learn more about integrating your faith with your finances, visit out website at ciswealth.com or call 830-609-6986.
Mary Jo: That’s all for now.
[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.
26 min
October 02, 2018 Episode 3 – Virtues to Look for When Choosing a Financial Advisor
How do you choose a financial advisor? It’s not just about experience (although experience is important), but looking for a financial advisor encompasses a variety of areas including client relationships, truthfulness, openness, and if they are approaching your financial portfolio from a holistic perspective.
26 min
September 25, 2018 Episode 2 – What is Impact Investing?
Biblically responsible investing (BRI) is a subset of impact investing (also known by faith based investing). How does it fit under this umbrella? BRI seeks to align itself with companies supporting conservative agendas. BRI avoids buying publicly traded companies directly, or indirectly through a mutual fund or separate account manager, that are known to violate Biblical principles.
20 min
September 25, 2018 2 – What is Impact Investing?
Click below to listen to Episode 2 – What Is Impact Investing?
Episode 2: Biblically Responsible Investing – A Subset of Impact Investing

In this episode, we cover Biblically responsible investing, a subset of impact investing.

More episodes >>

Impact investing refers to investments “made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.” The basic goal of impact investing is to help reduce the negative effects of business activity on the social environment, some look at it as a form of philanthropy.
Biblically responsible investing (BRI) is a subset of impact investing (also known by faith based investing). How does it fit under this umbrella? BRI seeks to align itself with companies supporting conservative agendas. BRI avoids buying publicly traded companies directly, or indirectly through a mutual fund or separate account manager, that are known to violate Biblical principles.
Biblically responsible investing is an ideal strategy for those families and individuals who want their investments to be an extension of their lifestyle and how they choose to worship our Lord and Savior. Do your investments reflect your Christian values? We are hearing from people all the time who are interested in this but don’t know how to get started.
Click on the button below to request your complimentary personal moral report to find out!
REQUEST A MORAL AUDIT

HOSTED BY: Bob Barber, CWS®, CKA® and Mary Jo Lyons, CFP®, CKA®
Mentioned In This Episode

Christian Financial Advisors
Website

Bob Barber, CWS®, CKA®
Mary Jo Lyons, CFP®, CKA®

The Timothy Plan
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Want to ask a question about your specific situation? Schedule a complimentary 15 minute phone call.
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EPISODE TRANSCRIPT

[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]
Bob: Well, hello Mary Jo.
Mary Jo: Hi Bob. How’s your day going?
Bob: Well, I’m very excited about a topic today that we’re going to be talking about because as you know, I’m one of the pioneers of it and this is just going to be a lot of fun cause it’s something that’s dear to my heart.
Mary Jo: Well that’s great and I know that you’ve been dying to kind of get started on this one. In today’s episode of Christian Financial Perspectives, we’re going to discuss biblically responsible investing, but how it fits under the broader umbrella of impact investing. So let’s get started. You know, one of the things about financial services is we are guilty of talking in jargon, in industry jargon, and I know that gets in the way of our dialogue with clients a lot of times. So, we hope to be able to simplify that and take the mystery out of money. So one of the things to get started with when we talk about biblically responsible investing and impact investing, I thought it would be helpful if we defined what that is for our listeners. So I looked it up on Wikipedia and impact investing refers to “investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial, social, or environmental impact alongside a financial return”. So this is important for people that want to marry their money with their value system, if you will. So what better way to fit in the biblically responsible investing? I know they go even farther on Investopedia. So what do they say there?
Bob: The definition on Investopedia is impact investing is “investing that aims to generate specific beneficial, social, or environmental effects in addition to financial gain”. Here’s the definition. “Impact investing is a subset of socially responsible investing. But while the definition of socially responsible investing encompasses avoidance of harm, impact investing actively seeks to make a positive impact by investing, for example, in nonprofits that benefit the community or in clean technology enterprises”. Now, I think I got all that. That’s a little confusing.
Mary Jo: Okay, well, to just make it more simple. The basic goal of impact investing is to help reduce the negative effects of business activity on the social environment and some look at it as almost a form of philanthropy.
Bob: All right, so you’ve got this other thing in here. You call it ESG now explain what ESG means to our audience. You said we were going to get it into financial jargon and we were doing it right now.
Mary Jo: Well, we’re taking the mystery out of it, so I think you got to start with that with kind of defining. Our listeners are hearing these labels out in today’s press. You know, they’re hearing terms thrown around – socially responsible investing, impact investing, but they don’t know what all this means. So I’ve thought we would start with just defining it, and ESG is, again, under the umbrella of impact investing in its environmental and social governments. And they want to feel good about the companies they’re investing in. So, there’s growing evidence that suggests that when investing in the environmental and social governance factors, when you integrate that with your investment analysis, then you’re able to find companies that are poised to withstand the test of time. These factors have proven to present various types of risks to investors that they’re able to avoid. Does that make sense?
Bob: It kind of makes sense. I just start thinking about it. As a pioneer of biblically responsible investing and where it all stemmed from, and really I never even thought of it this way. Things are changing and times are changing. Back when I was thinking about biblically responsible investing, I didn’t even know how it came about, except from the fact that when the Southern Baptist Convention came out and said, we don’t want our members going to a well known amusement park because it was sponsoring gay day, which was considered an anti family agenda. And from that has how I got interested in biblically responsible investing because then I said, well, what am I investing in and what companies am I investing in that could be involved in supporting agendas that could be violating biblical principles? And that took me down this path. And then I started realizing, not even ever thinking about it, that socially responsible investing has been around for years. Making sense to you?
Mary Jo: Exactly. And so it’s kind of the broader umbrella if you will. And the faith based or biblically responsible investing just fits underneath that category. BRI, which is biblically responsible investing, is also known as faith based investing. And again, it seeks to align itself with companies supporting conservative agendas. And that’s just what you said that resonated so well with you so long ago, biblically responsible investing. It avoids buying publicly traded companies, directly or indirectly, through a mutual fund that are known to violate biblical principles. We do this through a screening process, so why don’t you talk a little bit about that, Bob, and what the screening process looks like.
Bob: We have a screening process, and I want to get back to the beginning. In the beginning, back in like 19 I think it was about 1994, 1995. It’s when I started finding out about this. The screening process we use today is called the eValueator. It’s a computer program that goes through and looks at all the companies and what they might be involved in, but I still remember back then how was I going to find out what all these companies were involved in, and there was a guy named Scott Fehrenbacher out of Seattle, Washington that was coming up with this program that was looking at companies and basically looking at several agendas like abortion, pornography, anti-family values, domestic partner benefits, gambling, tobacco, alcohol. Over time, he started introducing this concept and then a mutual fund family was founded off of that concept called The Timothy Plan. The Timothy Plan was really the very first mutual fund family in America that said we’re going to be biblically responsible. Back then, they called it morally responsible, but because morals in our country have such a wide range – where they shouldn’t, they need to be based on the Bible – but morality over the years it was changed from morally responsible to biblically responsible for the very fact that morality is being defined as whatever we want it to be. But the Bible was very clear what is right and wrong. So the program eValueator is what we use and we can enter in any mutual fund, ETF, even an individual stock, and it goes through and finds what the companies may be involved in and if they’re involved in those agendas that violate biblical principles, then we just steer clear of those companies and look for companies that are not in violation, that are making a good profit, and are doing good things for our society versus tearing it down.
Mary Jo: Well, exactly. One of the things to kind of make it simple. We are basically screening out companies that are harmful to society based on biblical foundations. Would it be safe to say that some of the screens that they are using now for the biblically responsible are some of the same screens that originated with the socially responsible movement?
Bob: Yes and no. Socially responsible investing will actually look for companies that are very involved in the LGBT or look for companies that may be giving to Planned Parenthood. So there’s really two different sides. The socially responsible investing side is more about the liberal agenda, where the biblically responsible investing side is more of a conservative agenda. I call the socially responsible funds, the funds for the Democrats and I call the biblically responsible funds the funds for the conservative Republicans. I mean, I know that you shouldn’t do that, but really that’s where it has evolved and they’re that far apart. Christians, many times, think they’re doing the right thing by investing in socially responsible funds. They’re really actually supporting many of the agendas that violate biblical principles and violate the moral fiber of what they believe in
Mary Jo: And we take it even a step further with the other issues that are also impacting the environment, if you will. Socially responsible screens may avoid energy companies all together while the biblically responsible screens allow for investment in natural resources such as energy and timber and mining companies, but they’re looking for companies that demonstrate sustainable harvesting practices and good stewardship of the earth. So the socially responsible screening basically adds another layer of due diligence, but then BRI adds even another layer. They’re cousins. They’re similar, but they also, as you described, are very different by nature, so we definitely wanted to point that out. One of the things that I have understood is that there’s basically 60 activities that have been screened out when looking at the biblical standards. You want to talk about that in a little more detail, Bob?
Bob: Well, I’m not sure what you mean by activities. The activities that we’ve been talking about already, correct? What you mean is the gambling, tobacco, alcohol, pornography, sporting agendas that would violate biblical principles like the LGBT, but also we’ve added human slavery to that as another agenda. So there’s about seven to eight main ones and then they’ll go deeper off of those.
Mary Jo: You know, I’ve heard those referred to as “sin stocks”. Is that a term that you’ve heard in your years as you’ve supported the biblically responsible movement?
Bob: Yes, it is. I have heard that because actually there are sin stock mutual funds that you can invest in if you want to, and I can’t imagine wanting to do that to profit from immoral agendas, but there’s sin stock mutual funds and this is just exactly the opposite of it.
Mary Jo: Our clients tell us all the time that they feel good about supporting companies that are a blessing to our communities, as well as to Christian families. That makes them feel good while they’re doing well with their money at the same time, if that makes sense.
Bob: It does. And you know what’s interesting is that we have seen, over the years, companies that passed our biblically responsible screens and then all of a sudden the company’s got involved in something that went in direct violation of it. We’ve watched those companies as they become involved in those immoral agendas – just kind of like crossing the line – and once they cross the line, it’s a slippery slope and they start going down that slippery slope. And we’ve seen it impact them in huge, financial ways. Not to say that it’s always going to, but it has many, many times in the past. Do you understand what I mean when I say that?
Mary Jo: Yes. I’ve always kind of said when there’s smoke, there’s fire. Not that that’s an exact parallel to your comment, but when you start going down the wrong path, I mean we’ve seen all in our personal lives and in our past. And you know, I think of it when we talk about our kids hanging out with the wrong kids, if you will. And then pretty soon, they’re around a crowd that you really don’t want them involved with. To take that to your investing portfolio is just another way to ensure that you’re following along with your core values and beliefs. And that’s what we’re looking for.
Bob: And you know what’s so exciting about this in our industry is to see how biblically responsible investing started with just one mutual fund family and how now there’s many mutual fund families to pick from. There is even biblically responsible ETFs now, electronic traded funds available, and we’ve watched the cost of the funds drop dramatically. There’s institutional shares that we combine now along with that. Because of the great computer technology, we can build individual stock portfolios. There’s no reason today to not be biblically responsible investing more so than ever in the history of biblically responsible investing. That still is kind of a new movement. I mean it’s over 20 years old, but when you think about socially responsible investing that started 50-60 years ago, BRI is catching on quickly. Now remember when we say biblically responsible investing, I say BRI. I know that’s a term we use a lot in our industry now. I know that many of our listeners have never heard that term, BRI. But when you hear that that means biblically responsible investing. The bottom line is you don’t have to give up your Christian convictions to be investing in a good, well-rounded portfolio. You’re going to get large cap value, you’re gonna get small cap growth, you’re going to get international, you’re going to get bond portfolios. All the different types of investments available. You could build a diversified model today that’s biblically responsible.
Mary Jo: We’ve come so far, and now that just shows you what a demand there is for this out there that they keep coming out with new ways to serve this. It is a bit of a niche market, but it’s a much more mainstream market than it ever has been in the past. You know, they used to refer to this as feel good investing, but you know, I say what’s wrong with that? It’s our money. And if you want to control how it’s invested, why shouldn’t you be able to do that? If you boil it down, I don’t think that anyone wants to support companies that do harm to our environment, that violate human rights, or support immoral business practices. That just doesn’t feel right, and we want to avoid that. Who wouldn’t? This practice, it’s not just for millennials and the younger generation, it’s for all Christians.
Bob: Well, it’s all about integrating your faith with your finances. That’s what we talk about. That’s what this show is about. It’s integrating your faith with your finances, and if we really believe that God owns it all, I know you and I believe that and we talk about that on the show through past shows. We’ve talked about what God’s word says about money, and as we go forward, we believe in the biblical principle that it belongs to God and we are managers of it and we want to be good stewards with it. This is where biblically responsible investing falls. It falls under that category of if you really believe God owns it all and you know that he does and you want to make a difference in how you’re investing, this is a way to do it.
Mary Jo: And you know Bob, biblically responsible investing, it’s an ideal strategy for families and individuals who want their investments to be an extension of their lifestyle. It is based in biblical scriptures in more than one way. And for those of us who choose to worship our Lord and Savior, we want to do it with our money as well. So I’m going to take a cue from the Bible in 1 Corinthians 10:31, “So whether you eat or drink or whatever you do, do it all for the glory of God.” So why shouldn’t we be doing that with our wealth as we grow it?
Bob: Amen. Mary Jo, I 100% agree with you and I want to challenge those that are listening today to find out more about biblically responsible investing. You can do that by going to our website for this podcast, christianfinancialpodcast.com. Also, on our website per Christian Financial Advisors, which is who we work for. There is a area there called the Education Center and you can go on the Education Center, a drop down that goes to Christian Mutual Funds, and we can put a link to that from the Christian financial podcast website so that you can go directly to that and see all of the available mutual funds to you.
Mary Jo: Well, before we wrap up, Bob, one of the things that I did want to point out is I think that some investors may be concerned that in order to support the biblically responsible investment strategies, they may give up something in the way of performance. Can you speak to that a little bit?
Bob: Well, yeah, I can and you may, you may give up some in the way of performance, but that has not been proven. The performance levels of BRI are right there with the performance levels of socially responsible, as well as a portfolio that’s not responsible at all in anything, but even if you do have to give up 1% or 2% of the portfolio, do you believe that God would honor that in maybe other areas of your life? Sometimes, being obedient calls for a little bit of sacrifice. I’m not saying you have to sacrifice, but I want to challenge you to be willing to do that. Mary Jo, if I made a 7% return versus an 8.5% return, but I knew that the 7% return went with my convictions and I knew that it was honoring our Lord and Savior Jesus Christ. I’m willing to go with a lower return. Not that I have to, but I’m willing to.
Mary Jo: I think that most Christians want their investments to reflect their Christian values. At least that’s what we’re hearing from our clients all the time.
[CONCLUSION]
Mary Jo: You’ve been listening to Christian Financial Perspectives. Join us next week as we explore more about how to apply biblical wisdom to your financial situations.
Bob: To make sure you don’t miss any of our podcasts, you can subscribe to Christian Financial Perspectives on iTunes, Google Play, or Stitcher. To learn more about integrating your faith with your finances, visit out website at ciswealth.com or call 830-609-6986.
Mary Jo: That’s all for now until next week.
[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.
20 min
September 18, 2018 Episode 1 – What God’s Word Says About Money
What exactly are the scriptural guidelines when it comes to money and finances? As Christians and followers of Christ, we can probably all agree that the Bible is made up of God’s word, and God is the source of Biblical wisdom. Biblical wisdom is timeless, transcendent, accurate, universal, and practical.
25 min

About Christian Financial Perspectives

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