Christian Financial Perspectives

Christian Financial Perspectives

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Christian Financial Perspectives episodes

  • 227 – Christian Stewardship and Investing
    Click below to listen to Episode 227 – Christian Stewardship and Investing
    Christian Stewardship and Investing

    Learn the definition of Christian stewardship and how we can be better managers of the blessings God has entrusted us with.

    More episodes >>

    One of the biggest stressors as humans probably has to do with our finances. Almost everything requires a payment, and treating finances in a way that glorifies God is just another add-on that Christians may have, something Christian Financial Advisors calls “Christian Stewardship”. Bob and Shawn discuss Christian stewardship and its relevance in today’s society.

    Christian stewardship is the belief that everything we have, including our time, talents, and resources, is a gift from God to be used responsibly and for His glory rather than only for personal gain. We are his managers of the money, gifts, and blessings that have been bestowed upon us.

    So how exactly does a Christian honor God with their finances? Biblically responsible investing is one way of showing Christian stewardship. Christians can invest in companies that demonstrate Christian values and avoid companies that violate those values, regardless of investment returns.

    HOSTED BY: Bob Barber, CWS®, CKA®

    CO-HOST: Shawn Peters

    Mentioned In This Episode
    Christian Financial Advisors
    Website
    Bob Barber, CWS®, CKA®
    Shawn Peters
    Bible Verses In This Episode
    PSALM 24:1

    The earth is the Lord’s, and everything in it, the world, and all who live in it.

    HAGGAI 2:8

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

    JAMES 4:17

    If anyone, then, knows the good they ought to do and doesn’t do it, it is sin for them.

    2 CORINTHIANS 6:17

    Therefore, “Come out from them and be separate, says the Lord. Touch no unclean thing, and I will receive you.

    ECCLESIASTES 5:10

    Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.

    2 TIMOTHY 1:7

    For God hath not given us the spirit of fear; but of power, and of love, and of a sound mind.

    EXODUS 20:3

    You shall have no other gods before me.

    I TIMOTHY 6:10

    For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

    HEBREWS 13:5

    Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.

    MATTHEW 6:21

    For where your treasure is, there your heart will be also.

    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

    Shawn (00:00):

    If in your heart you don’t see the importance of the stewardship aspect of the biblically responsible investing side of it, your heart is not in it. Welcome back to Christian Financial Perspectives. My name’s Shawn Peters. This is Bob Barber, and today we have a very awesome topic that is both deep, but one that we feel is very important.

    Bob (00:32):

    We’re talking about Christian stewardship today and investing.

    Shawn (00:37):

    I know Bob in particular has spent a lot of time preparing for this episode and we are going to do our best to cover it in a way that number one, glorifies the Lord, and number two, that is done so in a way that is loving because sometimes the truth can be hard to hear, but we don’t want to be presenting this as well as us being prideful or as us trying to say like, “Oh, we’re holier than thou,” like a Pharisee kind of a thing. But it is something that’s important that we want to make sure that we get out there and that at the end of this episode, I would say whether you agree with us or not, that’s not really on us. That’s going to be something between you and the Holy Spirit. And we hope that this will bless you.

    Bob (01:27):

    Shawn, in developing this as sometimes the programs that come to me in 10 or 15 minutes, I think in this next 20 or 30 minutes you’re going to be listening to me. This took a lot of time, maybe 30 to 60 hours. I mean, because I was trying to say it in such a way that like you say, is loving, but in the same way, at the same time truth, truth can be dividing. I’m trying to lay the foundation here for you is first we got to talk about what is a steward. And as I looked at different definitions, I had one I came up with, it’s basically like a manager. So Shawn, I’ll let you read what is a steward, the definition I came up with.

    Shawn (02:12):

    So we’ll lay some of that framework and foundation for you here. So the definition of a steward, “A steward is responsible for managing anything entrusted to their care. This includes managing property, resources, finances, planning, organizing, staffing, leading, and making wise decisions.” So that’s a steward. But today we’re talking about Christian stewardship.

    Bob (02:34):

    Which adds another layer.

    Shawn (02:37):

    “Christian stewardship is the belief that everything we have, including our time, talents, and resources, is a gift from God to be used responsibly and for his glory rather than only for personal gain.”

    Bob (02:50):

    That’s the big thing right there.

    Shawn (02:52):

    Okay. Stewardship includes handling, finances, investments – are what we spend our time on, the gifts that we have, things that maybe you’re very talented or good at. That’s where that talent comes in, possessions and relationships.

    Bob (03:05):

    It’s looking at the manager and the steward from a biblical perspective. And then what goes into all this as the other part of the foundation is God’s ownership. The core principle behind Christian stewardship is the understanding that God owns everything, he owns it all and that we are managers, we’re stewards of his creation and all the resources. I mean this is everything.

    Shawn (03:34):

    Arguably that is the pillar because why Christian stewardship? Why talk about it? Why is it even a thing? Well, because starting with number one, God’s ownership. If God owns everything the earth is the Lord’s and everything in it, which is one of our scriptures we have today. Well, from that foundation then it’s a natural progression that, well of course we would be Christian stewards because none of it actually belongs to us. We’re simply managing and trying to do a good job with what God has entrusted to us.

    Bob (04:08):

    That’s hard for people to hear in America. “What do you mean this is not my stuff, this doesn’t belong to me?” He says in scripture it belongs to the Lord, it’s his. And like you say, we’re managers of it, but he gives us a lot of responsibility like an owner would in a restaurant or in a construction business or any business. The owner gives the manager a lot of responsibility and that manager is also held accountable

    Shawn (04:37):

    That’s right.

    Bob (04:37):

    So his responsibility and accountability and Christian stewards are responsible. We’re responsible for caring for and managing God’s gifts wisely and responsibly, knowing we will be accountable to how we use them, these things that God has given us to manage.

    Shawn (05:00):

    It makes me think, too, at Christian Financial Advisors, I’m the operations director, so we’re not a 50 or 100 person firm right now. So, effectively whether you want to say operations director or chief operating officer or whatever you want to call it, at the end of the day there are certain things that Bob, you give me as responsibilities and I have some discretion. However, when it comes to what I’m doing, I always have to think, okay, well would Bob be okay with this? Is this something that aligns with Bob’s values and priorities as the owner of the business? And so that’s kind of the same idea of everything that God has entrusted to us. Well, he’s the big “O” owner.

    Bob (05:47):

    Because when you say that…

    Shawn (05:48):

    Because he actually owns it.

    Bob (05:49):

    Yeah, exactly. Because when you say that, that pressure on me comes to, wait a second, God owns this. And that’s why we want to operate Christian financial advisors from a biblical worldview because God owns it.

    Shawn (06:03):

    It does help me a lot that you are trying to align your stewardship of the business with what the Lord wants because then me aligning myself with what you’re trying to do, at least there’s not a conflict. If I was working for a boss who was not a believer, who wasn’t a Christian, that might be hard because there might be some times where, well, this is something that’s important to the person who owns this business even though God owns it all. But what about when there’s a conflict of, well, I know this is what the Lord would want me to do, but that’s not necessarily what the person I’m working for wants me to do.

    Bob (06:38):

    So I came up with, there’s four examples by the way. There’s a lot more examples of stewardship, but I came up with four main examples because this is going to go into what we’re talking today, which is about Christian stewardship and investing, but the first example is stewardship of finances, and that involves using our money wisely, giving generously, and investing with biblical principles.

    Shawn (07:02):

    That’s right. That’s right. And number two, stewardship of time. So prioritizing God’s work and using time effectively to serve others and advance his kingdom.

    Bob (07:12):

    Number three is the stewardship of talent, using our abilities and skills to serve God and to serve others.

    Shawn (07:20):

    That’s right. And then number four, stewardship of the environment. Caring for the earth and its resources, recognizing that we are responsible for protecting God’s creation. And when you look at these four primary areas, I guess you’d kind of say these are kind of covers most of it. Obviously, we could go into a lot more detail within each one of these, but when you’re looking at, well, when you’re wanting to be generous, when you want to do more for the Lord’s kingdom, that doesn’t always mean that if you don’t have a certain amount of dollars, you don’t have a certain amount of money, that you can’t be a good steward, that you can’t be generous because you have time, you have your talents, you have just, Hey, what are things you could do to help care for the earth and resources, not as a worship or elevating to almost idolatry the world. No, no, no. We’re doing a good job of this again, because the Lord made this. It belongs to him.

    Bob (08:18):

    Right.

    Shawn (08:19):

    I want to take good care of it.

    Bob (08:20):

    That’s why Christians should be should be…

    Shawn (08:22):

    We should the weirdest green nuts or environmentalists on the planet for whatever reason we’re not.

    Bob (08:27):

    It’s so funny because, and that’s something that we’re going to be talking about, which is biblically responsible investing is taking care of the environment. You don’t want to trash the environment because that’s what God made for us.

    Shawn (08:37):

    It’s out of respect for the creator and the one who owns it.

    Bob (08:41):

    And he made the creation for us.

    Shawn (08:43):

    I always think of it as if you’re house sitting for somebody, are you going to trash the place and put holes in the wall and maybe do some remodels for the way you, well, hold on. If you’re supposed to be housing, you’re supposed to make sure when they come back it looks at least as good as when they left. Not worse.

    Bob (09:04):

    Biblical basis for stewardship is found in many scriptures such as the command to work the land.

    Shawn (09:10):

    Genesis 2:15.

    Bob (09:12):

    And the Parable of the Talents, which we’ve had an entire program and you could go through our archives and look for that. We spoke strictly about the talents, I think Matthew…

    Shawn (09:21):

    Matthew 25:14-30. It’s a really good one. Again, that’s a fantastic example, too, of how with stewardship, not everyone is the same. We’re all entrusted with different things, whether it be different amounts of actual financial resources or talent or how much time we have on this earth. And so what it comes down to, though, is no matter how much or how little that you are entrusted with by the Lord, it’s do the best that you can to honor him.

    Bob (09:51):

    So here we get into Christian stewardship and investing. We’ve laid the foundation for it now and Christian stewardship and investing today is known as biblically responsible investing.

    Shawn (10:03):

    And some people call it faith-based investing.

    Bob (10:06):

    They do.

    Shawn (10:06):

    But we want to be specific. We mean the Bible.

    Bob (10:08):

    So this is just one form of Christian stewardship is how we invest those resources that God has given us. So there’s kind of a definition here of biblically responsible investing. I’ll let you go over that, Shawn.

    Shawn (10:23):

    So some examples include investing in companies that demonstrate Christian values while avoiding companies that support services or produce goods that violate them, regardless of how good the investment returns may or may not be with biblically responsible investing.

    Bob (10:38):

    As we’re going through this and we talk about the returns and biblically responsible investing, sometimes biblically responsible investing returns will be better, sometimes it will be worse. The main thing is this is not about the returns, this is about obedience.

    Shawn (10:52):

    Bob, we were talking a little bit in preparation for this, but there is a command for us to go and make disciples of all men.

    (11:00):

    But to do that, people have to come to faith in Christ first. They have to receive the Holy Spirit. We can’t really get into the real discipleship and learning more arguably advanced concepts. If someone hasn’t accepted Christ as their savior and has the Holy Spirit, they can’t really move on to that other stuff. They’re missing that first piece. Well really that’s when we say that the returns whether they’re better or worse. Okay, we certainly talked about that. We’ve talked about in other programs, but what it comes down to is if you’re watching this, if you’re listening to this, if in your heart you don’t see the importance of the stewardship aspect of the biblically responsible investing side of it, your heart is not in it. The rest of that conversation is kind a moot point because we’re not in agreement on that foundation and therefore whatever you do in any kind of comparison to secular versus biblically responsible, you’re kind of starting from a negative, I guess.

    Bob (11:59):

    You’re itching me to go, I want to get into this. So the biblical basis for biblically responsible investing and stewardship, believe it or not, it’s found in hundreds of scriptures, but we’re not gonna’ going to read all of them now. So we’ve already shared one with you, which is Psalms 24:1, “The Earth is the Lord’s and everything in it and all who live in it.” The second one is that kind of goes along with that Psalms 24:1 is Haggai 2:8, “‘The silver is mine and the gold is mine,’ declares the Lord Almighty.” He’s saying all the money is his because that was used as the monetary exchange back then.

    Shawn (12:35):

    And then we have James 4:17.

    Bob (12:37):

    Which goes under BRI again.

    Shawn (12:38):

    That’s right. “If anyone then knows the good they ought to do and doesn’t do it, it is a sin for them.” And 2 Corinthians 6:17, “‘Therefore come out from them and be separate,’ says the Lord, ‘Touch no unclean thing and I will receive you.'”

    Bob (12:52):

    So this is the basis for biblically responsible investing. It really is calling for separation from the way the world does it. This is God’s ways, not man’s ways. Okay. Christian stewardship and investment returns. Another great scripture I think is very important when we talk about that investment returns is Ecclesiastes 5:10 says, “Whoever loves money never has enough.” That’s the main thing there. “Whoever loves wealth is never satisfied with their income, As this too is meaningless.” You see Christians stewards need to be extremely careful of investment returns becoming an idol. So we’re going into a different part here. We we’ve talked about stewardship and investing and now we’re talking about investment returns because I’ve seen in my years of doing this, Shawn, in America, investment returns become a form of an idol to somebody. When I looked up the definition of idolatry, it’s the worship of anything that’s made by human hands and minds, which is many times behind investment returns.

    Shawn (13:55):

    Yeah. Well, and Bob, as you’ve seen in over three decades of working with clients, I mean you’ve had clients that have been with you for over 30 years.

    Bob (14:04):

    Yes.

    Shawn (14:05):

    And many, many that have been with you for 20 and somewhere more or less than that, but you’ve had a lot of longterm relationships.

    Bob (14:13):

    I’d say average about 25 years. Yeah. It’s been a long time.

    Shawn (14:15):

    And correct me if I’m wrong here, but have you not noticed that the actual potential investment returns are almost never really that important? Because what it comes down to is that planning and making sure that you’re saving and investing enough and that chasing the returns, not only is it not going to make you wealthy, but it also isn’t really the most important thing for that planning for that long term, and therefore being a good steward.

    Bob (14:43):

    Yeah. We’ve mentioned that we’ve had programs that investment returns is not what is behind the majority of wealth.

    Shawn (14:50):

    That’s right.

    Bob (14:51):

    It’s not about investment returns, but if we obsess over those investment returns or lack thereof, and we start becoming fearful again, it’s becoming an idol. 2 Timothy 1:7 tells us, “For God has not given us a spirit of fear, but of power and of love and of a sound mind.” And we should not fear ever. When markets are down, it’s interesting when the markets are way down, the phone’s not ringing off the hook here, but I remember talking to Matthew when he was with another major secular firm. He said, man, Haywood gets so many calls and people would be so mad because we know who owns it and we’re not putting the investment returns as an idol in putting this above God because Exodus 23, which is the first commandment, “You shall have no other gods before me.’ So we’re not going to make investment returns our god.

    Shawn (15:52):

    That’s right. God cares much more about how we invest and what’s in our hearts, the why, than the returns we make on this earth, whether good, bad or average. Because remember, God owns it all. So what does it matter to the Lord if you made a little bit more here or a little bit less here or somewhere in between because he already owns it all anyway. How do you have more than 100%?

    Bob (16:18):

    Now, this is going to be an interesting one, too, as we’re talking about stewardship investing, you realize investments should be viewed as tools for stewarding God’s resources, not as objects of worship.

    Shawn (16:30):

    That’s right. 1 Timothy 6:10, “For the love of money is a root of all kinds of evil. Some people eager from money have wandered from the faith and pierce themselves with many griefs.”

    Bob (16:41):

    I don’t mean to be adding or taking away from scripture when I say this, but in this passage, if you took the love of money and just replaced it with the love of investment returns because investment returns can create more money.

    Shawn (16:54):

    It’s still the same. It’s helpful for the concept.

    Bob (16:56):

    It’s meaning it’s the same, it’s the same meaning. The question, and the question always is, how much is enough If you make 7% over 6% or how about 8% over 6%? At what point do we as Christians ever sell out our Christian values for possibly a better return if it’s even available? And not that it’s going to be that with biblically responsible investing, but remember some years, sometimes two years or three years, it may be better with secular investing and doing it God’s ways and then the next three years it may be better with biblically responsible investing because as you know, biblically responsible investing focuses more on the midsize companies versus the mega caps because the mega caps get so woke on us that it’s very hard for us to invest a lot in the mega caps and when the market is relying on three or four companies to push it up that don’t fit our scenario.

    Shawn (17:51):

    And also that one year versus the other, it comes down to investment philosophy as well. Because you’re looking for companies that, keep in mind, we say biblically responsible investing. For those who haven’t seen some of our other programs, that doesn’t mean we’re only investing in Hobby Lobby and Chick-fil-A, like openly Christian companies.

    Bob (18:09):

    Which those two aren’t even public, so we couldn’t.

    Shawn (18:10):

    Exactly. Yeah. But it’s more so of, well, no, these are companies that simply are aligning with biblical principles and values. They’re not violating those things. They’re treating people well. They’re producing good products. And so just think about it logically. Okay, well those companies that do that are also going to be far less likely to get into trouble from chasing stuff just for the sake of greed or trying to abuse people or vendors. And so it just depends on the year which one did better or worse.

    Bob (18:41):

    We’re getting kind of to the end. I had a couple more scriptures in here. There’s so many. Hebrews 13:5 warns us to, “Keep our lives free from the love of money and be content with what you have because God has said, ‘Never will I leave you. Never will I forsake you.'” Again, you can replace that love of money with the love of returns. It’s basically the same thing.

    Shawn (19:01):

    That’s right. And Matthew 6:19-21. I won’t read the whole thing, but it reminds us about where to store our treasure and why. And specifically in verse 21, it states, “For where your treasure is there your heart will be also.”

    Bob (19:12):

    As we come to the conclusion in obsessing over investment returns actually reflects a materialistic worldview that aligns with the world’s priorities, not god’s.

    Shawn (19:25):

    That’s right. Matthew 6:24 warns, “No one can serve two masters. You cannot serve both God and money.” Pursuing wealth above all else leads us to neglect God’s kingdom and justice.

    Bob (19:37):

    This next little saying, I’m going to say I’ve got it from a friend of mine that’s really strong, very deep into the biblically responsible investing movement. He said, “The pursuit of better and better returns over proper stewardship of God’s resources can cause us to forget that the internal value of our lives is not found in wealth, but in the kingdom of God.” Matthew 6:19-21 teaches that we should store up treasures in heaven, not on earth where they’re temporary. Christian stewardship and biblically responsible investing are very different from the world’s ways. It’s a clear choice here. God’s ways or man’s ways. So I hope this has helped you today. We’ve gone into quite a journey. It took a little bit longer than normal, but remember, biblically responsible investing is just another way of aligning your faith and your life with the biblical worldview. And if you’re interested in learning more, Shawn, give them all our contact information.

    Shawn (20:38):

    Sure thing. You can call our text us at 830-609-6986. You can also visit our website, www.ChristianFinancialAdvisors.com, and some other areas of Christian stewardship we’ll be covering the future, Christian stewardship and financial planning, Christian stewardship and possessions, Christian stewardship and estate planning, Christian stewardship and giving, Christian stewardship and spending, Christian stewardship and financial advice, and Christian stewardship and saving. As always, thank you so much for joining us. If you stuck around this long, go ahead and give us a like or drop us a comment on if you have a preference for another topic you’d love to hear us cover. And yeah, hope you join us for the next one. God bless.

    [DISCLOSURES]

    * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

    22 min
  • Why Rental Home Income Isn't Worth The Hassle
    Have you ever considered rental house income as an extra source to add to your finances? Things may not be as easy as they seem, as rental homes are often not delivering the expected returns for investors, especially in high property tax areas like Texas. Bob and Matthew cover the estimated yield income from a rental home property in comparison to other investment choices. If rental income is something you’re interested in delving into a little more, a better alternative to rental homes may be to invest in a diversified portfolio of publicly traded real estate investment trusts (REITs). Not only can they provide higher yields of over 5% with more liquidity, they are also much less time and hassle than owning individual rental properties.
    14 min
  • 226 – Why Rental Home Income Isn’t Worth The Hassle
    Click below to listen to Episode 226 – Why Rental Home Income Isn’t Worth The Hassle
    Why Rental Home Income Isn’t Worth The Hassle

    Learn why rental home income isn’t as much as you think it is.

    More episodes >>

    Have you ever considered rental house income as an extra source to add to your finances? Things may not be as easy as they seem, as rental homes are often not delivering the expected returns for investors, especially in high property tax areas like Texas. Bob and Matthew cover the estimated yield income from a rental home property in comparison to other investment choices.

    If rental income is something you’re interested in delving into a little more, a better alternative to rental homes may be to invest in a diversified portfolio of publicly traded real estate investment trusts (REITs). Not only can they provide higher yields of over 5% with more liquidity, they are also much less time and hassle than owning individual rental properties.

    HOSTED BY: Bob Barber, CWS®, CKA®

    CO-HOST: Matthew Barrovecchio

    Mentioned In This Episode
    Christian Financial Advisors
    Website
    Bob Barber, CWS®, CKA®
    Matthew Barrovecchio

    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

    Shawn (00:00):

    Are you dreaming of real estate investing but concerned about landlord hassles? Many investors are surprised that rental homes aren’t delivering expected returns in today’s market. We’ll break down the real numbers behind rental properties in Texas and reveal a simpler alternative with better yields and less headache. Let’s get some perspective.

    Matthew (00:27):

    Hi, welcome to our program today, Christian Financial Perspectives. My name is Matthew Barrovecchio and I’m here with Bob Barber. And we’re ready to talk about something that Bob has a lot of experience in and is very passionate about – why rental home income is not worth the hassle. Tell me more. This is very interesting to me.

    Bob (00:48):

    Well, it is interesting to a lot of people because they’ve heard their whole lives how great rental homes are. You’ve got HGTV always pushing it, and to me, when I looked at it, and I’ve been down the road, by the way, I’ve owned rental homes. My dad owned like 40 of them.

    Matthew (01:09):

    You’re speaking from experience.

    Bob (01:11):

    A lot of experience and actually growing up in it and having to clean up after people with the way they left them. Alright? But the income from a rental home is, like you say, it’s just not worth the hassle anymore, especially here in Texas where we have high property taxes and a few other states do as well. And we’re going to prove that today, and I’m going to use some typical examples of homes here in the Austin, San Antonio area where we are, but other areas may have a higher price than this, but also the rent will be higher, so it will all kind of measure out the same.

    Matthew (01:49):

    Correct. Yeah. Yeah. The principle still applies nationwide, likely.

    Bob (01:53):

    Yeah. So I took a typical, if somebody’s going to says I want to go out and buy a rental home, a lot of times it’s a retiree because they like the income, say, I want to buy the rental home, and the income’s not the problem many times, but it’s the net income after all the taxes, insurance, the maintenance. So I picked a typical three bedroom, two bath, two car garage, single family home that’s about 2000 to 2200 square feet. Like I say, in the Austin/San Antonio region, which our whole region is about 4 or 5 million people. I mean, we’re big, and a lot of people are moving to Austin and San Antonio so they know what we’re talking about. But a home like that in some areas can be gotten as low as $350,000 today.

    (02:39):

    Which may surprise a lot of people that are, because we’re nationwide. Somebody might say, well, I can get that for 150, or some might say that would cost me a million dollars. But several years ago, that was about a 100k more when interest rates were so low. But since interest rates have been driven up so much, the higher interest rates have pushed the prices down very much around here. I found that – so you went and you buy this home for $350,000. I found that the typical rent for this home is $22,800/year. Right at, I mean, about $1900 a month is what you can rent it for.

    Matthew (03:18):

    Okay.

    Bob (03:18):

    So $22,800 a year. Now, right now you think, well, that’s a pretty good income on the $350,000 investment.

    Matthew (03:26):

    Yeah, it’s not quite 10%, but it’s getting close to it.

    Bob (03:29):

    But that’s not at all the whole story.

    Matthew (03:30):

    It’s not?

    Bob (03:34):

    I like it because isn’t it, there’s the old saying, it’s not what you make, but it’s…

    Matthew (03:38):

    What you take.

    Bob (03:39):

    It’s what you keep.

    Matthew (03:40):

    Oh, okay.

    Bob (03:41):

    It’s what you keep. It’s not what you make, but what you keep.

    Matthew (03:44):

    Okay.

    Bob (03:44):

    And in my research, the property taxes on this price of home in Texas, the property taxes run about $7,000 annually. Now, we’ve always looked at a lot of properties in Colorado because we always go there, but they have a state income tax, but the property taxes, there may be only a thousand dollars. So it’d be a big difference, but the home prices would be higher. So you’re stuck in this same thing. But here in Texas, the property taxes would average around 7k. Since insurance has gone up so much. We’ve all watched our homeowners insurance really skyrocket nationwide.

    Matthew (04:18):

    We’ve seen that in Florida a lot.

    Bob (04:20):

    So now that’s around $3,000. So immediately you’ve got $10,000, just the property taxes and insurance driving that $22,800 gross income.

    Matthew (04:35):

    Yeah, down by almost 50%.

    Bob (04:37):

    Exactly. Yeah, exactly. You take just that number and not what your time is worth. Not anything breaking, not a client moving out on you. Many time, renters will maybe stay in for two years and then there’ll be a month where it goes empty or two months while you’re finding another tenant, that gets that down to a 3.6% annual yield. So you with me?

    Matthew (05:00):

    I am. Money markets today are paying higher than that.

    Bob (05:04):

    They are, yeah. Yeah. CDs are right at about 4%. So why in the world would you want this risk of one property? Also, if you lose…

    Matthew (05:16):

    Not diversified.

    Bob (05:16):

    If you just lose one month’s rent or you have a water heater go out, or we had a hail storm here about a month ago, got to replace the roof, you would have the deductible. Every single time I talk to somebody who’s owned a rental home, they always say, yeah, we just had to do this and this and this. It’s always something that they had to do to that rental home, that knocks that yield even lower. I mean, you’re down in the 2.5% to 3% range, and no one really ever thinks of this. If you’re financing at today’s rates, you’re negative cash flowing.

    Matthew (05:56):

    With rates at what? 6-7ish percent?

    Bob (06:00):

    About 6-6.5 %.

    Matthew (06:01):

    Yeah.

    Bob (06:02):

    Right now you can get maybe a 5.5% loan at a 15 year loan, but then your payments are going to be higher paying ’em to pay it back in a shorter period. So what’s the alternative? I mean, you might like real estate. Real estate does produce income. I believe a good alternative to this, and I’ve fallen into this myself, is commercial real estate where you have triple net leases. What does that mean? The tenants are paying all the taxes, all the insurance, all the maintenance. Anything goes wrong. I was just telling you in my office building that I own, we just had to replace a toilet in the building. We just had to replace a faucet. Anything that goes wrong with that building, I get to pass that cost on to the tenants. There’s no such thing. I mean, maybe there is in some areas, but I’ve never heard of a triple net lease for a rental home, where you go back to the tenant and you say, “Hey, I had to replace this roof. I need to ask you to pay for the cost of this.” No, that’s not flying. But in a commercial situation, it does. But even at that, you’ve got to be careful about buying a commercial building because you’re putting all your, what did your mom always say? Don’t put all your eggs in one basket.

    Matthew (07:18):

    Yeah. I mean, think about just over the last five years, how commercial real estate and real estate in general has changed, right? By taking on that additional risk of putting all your eggs in one basket, it’s a huge risk, especially if the dynamic changes in the market.

    Bob (07:33):

    You’ve got one market, one area, one type of real estate.

    Matthew (07:36):

    Think about malls as an example.

    Bob (07:40):

    I think there’s an easier way, much easier way.

    Matthew (07:44):

    Tell me more.

    Bob (07:45):

    Okay. The easier way is owning commercially, commercial real estate traded through a real estate investment trust, and a real estate investment trust, what it does, is it goes in and it buys lots of different properties in many different categories. Now, you can have just a real estate investment trust. It just focuses on industrial buildings. You could have one that just focuses on offices. You could have one that just focuses on apartments. You could have one that just focuses on data storage that they’ve come out with those recently. When it comes to owner real estate trust, there’s also two areas I want to caution my listeners and those that watch us on YouTube, and that’s owning a privately traded REIT. Don’t get yourself caught in owning a privately traded real estate investment trust.

    Matthew (08:42):

    Why?

    Bob (08:43):

    Because they can pull the rug out from under you. And what I mean by that, that’s an old country boy saying – pulling the rug out from underneath you – is they can categorize, I mean, redo what the share price is per share without any notice, and you just get this letter in the mail, you bought into that privately traded REIT at $10 a share, and all of a sudden you get a letter, it says it’s worth $7 a share. Now you’re like, I dropped 30% in value.

    Matthew (09:16):

    How did that happen?

    Bob (09:18):

    Where a publicly traded real estate investment trust is daily traded in the markets. You always see the price. If it starts dropping, you see it and you know it. It’s very transparent. A privately traded REIT isn’t. In my earlier days, years. I mean, this is 15, 20 years ago when I did do commission-based products. We sold REITs back then. Real estate investment trust that were privately traded. About half of them did well, half of them didn’t do so well, and they got those letters. And so I would caution anybody against that.

    Matthew (09:56):

    Okay,

    Bob (09:57):

    So the answer to all this is putting together a good portfolio of publicly traded real estate investment trust between industrial and retail. It can be things like owning a Walmart and a Target, maybe an HEB here in Texas or Kroger.

    Matthew (10:16):

    Maybe an HEB in Florida someday.

    Bob (10:18):

    Yeah, you’re hoping that, right? There’s REITs that focus on lodging and resorts and hotels, office buildings, residential apartment homes, warehouses, healthcare. We’ve got all these listed here, even cell phone towers, timber land, farmland REITs, there’s even REITs that just buy outdoor advertising signs. That’s a good cash flow, all kinds of REITs. And we put together a couple years ago, because we had some clients that own rental homes. They’re like, I’m tired of these things. And when I pointed out to them…

    Matthew (10:52):

    “Get me out.”

    Bob (10:52):

    Yeah, the returns. So we put together a diversified portfolio of publicly traded real estate investment trust with a minimum investment of $100,000 to go into this. And it’s 30 different types of REITS within it.

    Matthew (11:09):

    3-0. Thirty.

    Bob (11:12):

    30. Yeah. Across all the different sectors. And the yield of that is over 5.25-5.5% even today. Remember what we were just talking about? With a rental home, that yield is going to be somewhere around 2.5 – 3%. So this gives you a better yield. It’s 100% liquid daily. There’s no title company you have to go to. There’s no closing cost. What you see is what it’s worth. If you decide you want to sell your real estate investment trust portfolio today, it’s sold within minutes.

    Matthew (11:46):

    And you’re not spending time on calls or maintenance or anything like that,

    Bob (11:51):

    None of that. We call it mailbox money, by the way. I personally have our portfolio, and of course I have to buy that after everybody else buys it or else it would be front running. So I buy behind everyone, but I’ve owned it for several years now and I really like the dividends that come from it. And I’ve had some very nice appreciation. Now you can have depreciation too, because it’s going to move with the markets, but it’s a long-term hold, and that’s the way I would look at it. So if you’d like something like this, it just kind of perks your interest and you’re like, I like the idea of getting income from rental property. This is really a good alternative to owning a rental home. Plus you just have so much more diversification and liquidity.

    Matthew (12:42):

    Right. Yep. That’s great. That’s great. And for the individual who wants to be in a rental home because they like working with their hands, go get a handyman job. Do things around the neighborhood.

    Bob (12:56):

    Exactly. You’re going to make more money.

    Matthew (12:58):

    Right.

    Bob (13:00):

    If you’re interested in this, give us a call. Our number is 830-609-6986. You can call or text that during business hours, and you can also find us on the web www.christianfinancialadvisors.com. Any last words you’d like to share?

    Matthew (13:13):

    No sir. Alright, grace and peace. God bless you.

    Bob (13:15):

    Alright, thanks.

    [DISCLOSURES]

    * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

    14 min
  • Ten Traits of an Orderly Financial Household
    Do you ever feel like your household isn't in order, especially when it comes to your finances? This is something many people struggle with, and why it's important to have a trusted financial advisor by your side to walk you through the steps of getting your finances in proper order. Bob and Matthew discuss 10 of the areas that they see people struggling with the most when it comes to organizing finances. From choosing the proper insurance for your house and health to having an up-to-date estate plan, there are several important areas of discussion in today's episode. If you are looking for help with putting your financial household in order, our fee-based, fiduciary-driven financial advisors and planners are here to help.
    22 min
  • 225 – Ten Traits of an Orderly Financial Household
    Click below to listen to Episode 225 – Ten Traits of an Orderly Financial Household
    Ten Traits of an Orderly Financial Household

    Instead of getting overwhelmed, hire a fee-based, fiduciary-driven financial advisor and planner to help get your financial household in order!

    More episodes >>

    Do you ever feel like your household isn’t in order, especially when it comes to your finances? This is something many people struggle with, and why it’s important to have a trusted financial advisor by your side to walk you through the steps of getting your finances in proper order. Bob and Matthew discuss 10 of the areas that they see people struggling with the most when it comes to organizing finances.

    From choosing the proper insurance for your house and health to having an up-to-date estate plan, there are several important areas of discussion in today’s episode. If you are looking for help with putting your financial household in order, our fee-based, fiduciary-driven financial advisors and planners are here to help.

    HOSTED BY: Bob Barber, CWS®, CKA®

    CO-HOST: Matthew Barrovecchio

    Mentioned In This Episode
    Christian Financial Advisors
    Website
    Bob Barber, CWS®, CKA®
    Matthew Barrovecchio
    Bible Verses In This Episode
    MALACHI 3:10

    “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”

    PROVERBS 3:9

    Honor the Lord with your wealth, with the first fruits of all your crops;

    PROVERBS 30:25

    Ants are creatures of little strength, yet they store up their food in the summer;

    PROVERBS 21:5

    The plans of the diligent lead to profit as surely as haste leads to poverty.

    PROVERBS 22:26-27

    Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

    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

    Shawn (00:00):

    Are you struggling to bring order to your family’s finances? Many households miss key elements that create true financial peace. In this video, we’ll uncover 10 biblical traits of an orderly financial household – from emergency funds to estate planning. These principles will help you honor God with every dollar. Let’s get some perspective.

    Matthew (00:27):

    Hi. Welcome to our program today, Christian Financial Perspectives. My name is Matthew Barovecchio and I’m here with Bob Barber. And we’re going to talk about the 10 traits of an orderly financial household. Bob, tell us more about how you came up with this topic.

    Bob (00:44):

    It’s years, years and years of experience, Matthew, and seeing what is the ingredients that make a financial household successful. And this is pretty easy for me. I mean, I came up with these 10 in probably 15 minutes, that quick because I just see these traits in orderly financial households over and over.

    Matthew (01:14):

    I love the word orderly in the title. Our God that we serve is a God of order.

    Bob (01:19):

    That’s right.

    Matthew (01:20):

    He is not a God of chaos. And so I think right off the bat, it’s an encouragement for me and should be an encouragement for everyone here, that this is all rooted in the God that we serve. So it’s exciting.

    Bob (01:31):

    And speaking of that, we always want to focus on biblical principles here because this is Christian Financial Perspectives and we are different. We’re a different financial program, not based on a secular worldview, but a biblical one. And that’s why this first one is so important.

    Matthew (01:49):

    Perfect segue.

    Bob (01:50):

    Yeah, go ahead. I’ll let you go into this first one.

    Matthew (01:53):

    No, it’s great. Yeah. So right off the bat, number one trait, a focus on giving tithes and offerings.

    Bob (02:00):

    Yes, exactly. Malachi 3:10 says, “ring the whole tithe into the storehouse and see if there’s not enough room for it,” that you won’t have enough room for it. “And I will throw open the heavens and blessings so much that you won’t have enough room for it.” And I’ll protect you as well in this scripture.

    Matthew (02:20):

    Amen.

    Bob (02:20):

    I’m kind of quoting it off the top of my head right now because it’s not in front of me, but it’s just bring the whole tithe into the storehouse and see if there’s not room enough for it that you will not have enough room to maintain it all. And I’ve also noticed when people tithe, it’s the craziest things like your car doesn’t break down as much. You don’t have the air conditioning breaking down in your home as much. It’s just the weirdest thing actually. And it’s the one place in the Bible where God says, “You can test me.” Yes. We should never test God. But in this, God says, test me in this, in that scripture, there’s another one in Proverbs 3:9. It says, “Bring the first fruits of what you’re producing and see if your barns,” because they were using barns back then, “Would not be overflowing with so much abundance, you won’t have enough room for it.” So these really play into an orderly financial household, because everything comes behind this when you first do this.

    Matthew (03:24):

    Precisely. Tithe is biblical, but God also wants our heart. He’s worried about our heart. Right? He loves a cheerful giver.

    Bob (03:33):

    That’s what it says over in the New Testament. God loves a cheer giver.

    Matthew (03:37):

    Amen. So there are times in one’s financial journey where giving to the degree that one feels the Lord is directing them to or guiding them to is an act of faith.

    Bob (03:51):

    Yeah, it is.

    Matthew (03:52):

    But Hebrews 11:6 tells us that, “Without faith, it’s impossible to please him.”

    Bob (04:01):

    And we should not have a spirit of fear, which is I think that’s in 1Timothy 6:7.

    Matthew (04:06):

    I think somewhere in there.

    Bob (04:08):

    That God does not give us a spirit of fear but of sound mind. So by not tithing, does that revolve around fear that God’s not going to provide the rest?

    Matthew (04:20):

    Yep. Giving breaks the power of money.

    Bob (04:22):

    It does.

    Matthew (04:23):

    And it puts mammon and a lot of what we revolve the American culture around in its place and elevates the Lord, right?

    Bob (04:32):

    Takes away the idols. Because mammon is an idol. Money is an idol. Remember they built the golden calf as an idol while Moses was up there getting the 10 commandments, they go build a golden calf – made out of gold, made with human hands, the same thing. So it is the good starting point.

    Matthew (04:51):

    Yeah. Amen. Amen. All right. Let’s move on to number two. We could probably spend another 30 minutes on that one.

    Bob (04:55):

    We could.

    Matthew (04:55):

    All right. Number two, having a sufficient emergency fund for your situation.

    Bob (05:01):

    I’ve seen this play out so much. When my wife got cancer, gosh, it’s been eight years ago now, I can’t believe, which is, praise God, she’s still here. She’s doing great. And still cancer free. Having that emergency fund, it saved us, Matthew. I mean, we had at that point, six to nine months in money market, CDs, cash, and I’d been listening to Larry Burkett, anybody that’s listening, that’s an old name. That’s who Dave Ramsey learned everything, learned so much from, and he’ll say that he’ll give a lot of that credit to Larry Burkett. But that emergency reserves…

    Matthew (05:40):

    It’s important.

    Bob (05:41):

    It is. And I mean, when I’ve had to buy a new car or I’ve had to… air conditioning breaks down, that’s expensive nowadays. Having that emergency fund there, or you lose a job, there’s all these different things.

    Matthew (05:56):

    So everyone’s situation is different. So it’s really important to tailor one’s emergency fund around their specific needs.

    Bob (06:04):

    That’s right.

    Matthew (06:06):

    I tend to stratify this into two areas. So number one, protecting against income shocks. Income shocks.

    Bob (06:15):

    Which would be losing your job.

    Matthew (06:16):

    So these are for the individuals who are working, and if I lose my job and I need…

    Bob (06:21):

    Or you get a disability…

    Matthew (06:21):

    Or something, correct, and I need to bridge the gap between job A and job B for a period of time, I have something there and available to meet expenses. This is where the whole idea of having three to six or maybe nine months of expenses set aside comes from. For many people though, they’re retired. So this idea of income shocks really isn’t applicable. So then the other thing that an emergency fund should be focused on is protecting against expense shocks.

    (06:49):

    And this is for everybody. So I often have people think about it this way, look around your home, think about the things that you own. What’s the most expensive thing that could break that if it broke, you needed to replace it or repair it pretty quickly. A medical emergency is another thing that would fall into that category. And of course, that’s different for everyone’s, dependent upon the coverage that they have, but that’s just a very quick and simple way to think about the income shocks and expense shocks and how much objectively one should have in their emergency fund.

    Bob (07:27):

    Just a few days ago, we had a big storm here, and there was a lot of hail. And I can think about how many roofs might’ve been damaged from that. As I was hearing this coming down, I was thinking, oh my goodness. And the deductibles pretty high now because there’s been so much hell damage to roofs around here.

    Matthew (07:40):

    Yeah. Goodness.

    Bob (07:41):

    Yeah. So boy, you better be ready for that. That’s a big expense. Or like you say, the AC breaking down can be, Hey, I want to share the scripture before we go to number three.

    Matthew (07:50):

    Please. Oh yeah, sorry.

    Bob (07:52):

    Behind the reserves is look at Proverbs 30:25 and it looks at, “Ants are creatures of little strength, yet they store up their food in the summertime.” The summertime is when they’re harvesting and they store that up. Yeah. Number three.

    Matthew (08:05):

    Number three. A reasonable budget where monthly expenses are tracked.

    Bob (08:09):

    This is easier than ever today with all the software programs that can link up and even some banks even have within their apps now. You can do budgeting, but yeah, you want to make sure you’re accurate too, right?

    Matthew (08:24):

    Oh, absolutely. So you’ve done programs before on budgeting without counting?

    Bob (08:30):

    Oh yeah. That’s the approach that Rachael and I use. And the budgeting without counting the numbers is probably one of the easiest ways for most people, because most people are not, they don’t like that extreme details, what I’ve noticed. But by learning to live on the same amount each month, it just becomes a mindset after a while.

    Matthew (08:52):

    So setting the budget is one thing. Tracking it is another. So just one thing that’s worked well for Anne and I, my wife, is we have a vast majority of our monthly budget just set on autopilot. It just automatically comes out. We don’t have to think about it, no intervention. But when you go to the grocery store or you do something extra.

    Bob (09:12):

    Or you buy eggs nowadays. The eggs went up double the price, but that kind of blows your budget.

    Matthew (09:20):

    It can. Especially with five children. Absolutely. So we have a text that we have ongoing, going back and forth – this much for home expenses, this much for extra. Extra would be taking the kids out for a donut or whatever. And every two weeks we get a replenishment and we’re constantly texting each other back and forth as we spend. So we know, hey, when one of them hits zero, we’ve got to wait for it to be refilled. And that’s just an example of something where you can use technology but track it easily. The best budget and the best tracking mechanism is going to be the one that works for you, the individual.

    Bob (09:58):

    That’s true. Tthere’s so many different ways.

    Matthew (10:00):

    Whatever you going to stick to, that’s going to be the one that’s best.

    Bob (10:05):

    I’m the old fashioned guy. I still use Quicken, which was probably the first budgeting software that was made, but I know now there’s mint and just so many other, even the right capital who we use can do that for you. Right.

    Matthew (10:17):

    All right. You want to read this scripture as well?

    Bob (10:20):

    Yeah, absolutely. “The plans of the diligent lead to profit is surely as haste leads to poverty.” I think this scripture really goes into why budgeting is so important. The word haste and we just do things out of not thinking about it, not using wisdom, that can lead to poverty, because you and I have both seen where people don’t budget and the budget gets out of hand and they’re spending, there’s a problem when you’re spending more than you have coming in, you start to get our government.

    Matthew (10:51):

    Right, right. Yeah. Not good.

    Bob (10:54):

    Yeah.

    Matthew (10:55):

    Alright. Number four, no high interest consumer debt on depreciating assets.

    Bob (11:00):

    You notice I said on depreciating assets, I’m not against borrowing money, but it does say in Proverbs 22, “Do not be a man who strikes hands in pledge or puts up security for debts because if you lack the means to pay, your very bed will be snatched out from under you.” Now, that’s a pretty tough scripture. Your bed will be snatched out from underneath you. See, if you are borrowing money on depreciating assets, then it’s worth less many times than what you owe. Or an appreciating asset like real estate and a loan to value of 50% loan to value or 60% loan to value. You’re not getting in an upside down position. I’m hearing right now because of vehicles that cost so much right after covid. Remember, all the shortage of vehicles, the majority of people were upside down in their auto loans. And that’s a depreciating asset. And Rachael and I, we don’t owe anything on our automobiles. Now, I know it’s hard today because automobiles cost so much money.

    Matthew (12:10):

    They can.

    Bob (12:10):

    But hey, buy a 3-year-old automobile, don’t buy that brand new one.

    Matthew (12:13):

    Absolutely. Yeah. Yeah. That two to three year, pre-certified, that’s the sweet spot. Yeah, absolutely. Okay. Number five, a diversified portfolio of non-qualified and qualified accounts and added to monthly if you’re still working, especially if you’re getting a match by the employer and you have a retirement plan in place. So this is all around saving.

    Bob (12:37):

    Every orderly household I’ve seen does this. And yeah, so if you’re saving 500 a month, put 250 in a qualified plan, 250 in a non-qualified plan, because you want, you don’t want everything to be in your 401k or your IRA.

    Matthew (12:50):

    Correct.

    Bob (12:50):

    You want this cash reserves, and that can be in a conservative or a moderate type balanced portfolio that’s building up over time.

    Matthew (13:02):

    So for those of you who have an employer plan, taking advantage of whatever they match, first and foremost, is a big deal, right? Because where else on earth can you get “free” money?

    Bob (13:13):

    Get 100% return right off the bat?

    Matthew (13:15):

    Pretty much, right?

    Bob (13:16):

    Yeah.

    Matthew (13:16):

    But then from there, it is important to consider the different types of accounts that you can save in because by just like we want to diversify our investment portfolio, we want to diversify the accounts that we are investing in to diversify the tax treatment of the growth of those accounts because it just puts us in a better position to be strategic and optimize withdrawals and retirement.

    Bob (13:42):

    You say diversify several times. Ecclesiastes 11:2 says, “Give your portions of seven or eight because you do not know what disaster may come upon the land. And that’s why you want to diversify with that.”

    Matthew (13:51):

    Amen.

    Bob (13:51):

    Number six, so many people do not have, but an orderly household will, they’ll have a well thought out written estate plan in place, wills and medical power of attorneys, financial power of attorneys for if you’re married and one of you becomes incapacitated. If you’re not married, if you became incapacitated, who’s going to make those decisions for you? So you have to have a trusted person that you can trust to make those decisions for you. And it needs to be in writing and in good documentation. And boy, you see, I’ve met people that don’t have this in place what chaos that causes.

    Matthew (14:32):

    Yeah, I would agree. It’s a very foundational and important thing, but agreed, surprised by how many individuals we meet with and they don’t have a will, a trust, they don’t have anything in place.

    Bob (14:49):

    Well, we met just with one yesterday, a very prominent businessman, and they’re talking about doing an estate plan when I’m like, I’m glad you’re talking about it, but I was surprised to find out they didn’t have one yet.

    Matthew (15:01):

    So while we’re not the individuals to draft up these estate planning documents, that’s what an attorney is for. We definitely can help with a lot of the preparation and upfront dialogue to help our clients determine what their wishes are so that they’re most prepared or best prepared, rather.

    Bob (15:19):

    We’ll do a whole other program on estate planning. And I’ve taken my example from my personal estate plan and really taught that to a lot of people. Number seven is having your insurance coverages in place and life insurance, health insurance, disability, auto, home, all that. By the way, these commercials that are out there, they make a joke of it. You should never buy insurance based on price. It should be based on coverage, shouldn’t it? I mean, because when it comes time that you need it, you’re going to want the coverage.

    Matthew (15:49):

    Correct.

    Bob (15:51):

    But I am amazed at how much it’s pushed to be buying on price.

    Matthew (15:56):

    Number eight, a focus on saving for higher education, particularly in plans that are geared towards that for children and grandchildren’s future, their educational future.

    Bob (16:09):

    Yeah. We see that over and over in an orderly household. And this doesn’t necessarily mean a college education as we know today. A trade school is a fantastic option for a child today, and we need so many more electricians and plumbers and welders. The trades are, I think, the future of what we need more than anything.

    Matthew (16:30):

    I agree. So I think this is really an important one where understanding the passions of the children or grandchildren that you’re saving for and gearing the savings amounts and vehicles towards the education that’s going to be required is really important. We have five children, as you know, and as I mentioned earlier, I’m very confident that at least two of my five children will not go to a college or traditional university, more of a trade school. And that’s just because of what their innate passions and interests are in. And so that’s very different.

    Bob (17:14):

    That’s okay. And that’s great.

    Matthew (17:15):

    It’s actually, it’s actually…

    Bob (17:17):

    But it is drilled into my generation. You’ve got to have that 4 year.

    Matthew (17:19):

    Mine as well. Mine as well. I mean that’s why millennials with college debt is pretty prominent.

    Bob (17:26):

    And even many are not even using their degree.

    Matthew (17:28):

    Unfortunately. Correct. Yeah.

    Bob (17:30):

    So let’s get to these last two. These last two are as we end up sound, financial principles in an orderly home are modeled by the parents and they’re taught to the children and grandchildren. Rachael and I want to teach our grandchildren, and we’ve already started that by paying them a quarter here or a nickel here for different things that are done and teaching them math as well. I mean, my 6-year-old grandson was already starting to add and subtract triple digits.

    Matthew (18:07):

    Yeah.

    Bob (18:08):

    We just sit around and talk about math and he likes it like his grandpa.

    Matthew (18:13):

    Yeah. My grandparents, Nick and Ann, my parents, Mike and Cindy, they’re the whole reason why I’m sitting here with you, right. Growing up where sound financial principles was a regular topic in the household is where my interest for finance came from.

    Bob (18:31):

    Getting back to that first one we talked about today with the tithe, I am old fashioned, but I still believe it’s good to put that check into the offering plate, which by the way, many churches don’t do the offering anymore and I think they need to bring it back. That’s just me. Alright, last one. So important.

    Matthew (18:48):

    Having a financial plan that’s in place that integrates everything that we’ve talked about over the last 18, 19 minutes.

    Bob (18:55):

    All these areas that we discussed, for the average person, are not top of mind. They’re confusing, they’re difficult. But that’s why looking at hiring a coach, a fee-based financial advisor, not commission-based, because when they’re commission-based, there could be a major conflict of interest because the only way they’re paid is by selling you something. But a fee-based financial advisor, financial planner can come alongside you and help you integrate all of these areas.

    Matthew (19:32):

    Yep. I hear you say often do what you do best, and delegate the rest. And so we practice that here. But this is a great example of, for someone who is not in the financial planning profession themselves, like hiring a professional to think about all of the holistic components of it is very important.

    Bob (19:53):

    We hire CPAs to do our taxes. We hire doctors or dentists for healthcare, lawn maintenance companies. I’ve got one now. I just couldn’t get my yard right. We were talking about this last night, doing the fertilization and things like that. So it makes sense to hire a fee-based advisor to help you with your financial health and household, right?

    Matthew (20:15):

    Yep. And so Christian Financial Advisors, we do just that, right? So we’re fee based, fiduciary driven using biblical principles and the wisdom that the Lord has provided to build financial plans and help people on their stewardship journey. So to learn more about how we can help you, you can give us a phone call at our office, (830) 609-6986 during regular business hours. Or you can visit us www.christianfinancialadvisors.com to learn more about how we approach this to honor God and schedule an appointment. So thanks so much for watching today. God bless y’all. Have a great day.

    [DISCLOSURES]

    * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

    22 min
  • Understanding Investment Risk, Reward, and Time
    Investment risk vs reward vs time is a great topic that allows us to better understand how the market works when it comes to timing and longevity. Bob and Matthew divide various investment styles up into 5-6 portfolios, with comparisons between investment portfolios and driving speeds. These include: Cash and cash equivalents, Ultra-conservative, Conservative, Moderate or balanced, Growth, Aggressive Growth. The higher the risk, the higher the possible reward, but it's also extremely important to keep in mind your time horizon when it comes to choosing an investment portfolio. Emotions can lead investors to make poor decisions, so professional guidance from fee based advisors, like Christian Financial Advisors, is valuable to help maintain a long-term perspective and disciplined approach.
    18 min
  • 224 – Understanding Investment Risk, Reward, and Time
    Click below to listen to Episode 224 – Understanding Investment Risk, Reward, and Time
    Understanding Investment Risk, Reward, and Time

    Learn about different investment portfolios based on risk, reward, and time.

    More episodes >>

    Investment risk vs reward vs time is a great topic that allows us to better understand how the market works when it comes to timing and longevity. Bob and Matthew divide various investment styles up into 5-6 portfolios, with comparisons between investment portfolios and driving speeds. These include:

    • Cash and cash equivalents
    • Ultra-conservative
    • Conservative
    • Moderate or balanced
    • Growth
    • Aggressive Growth

      • The higher the risk, the higher the possible reward, but it’s also extremely important to keep in mind your time horizon when it comes to choosing an investment portfolio. Emotions can lead investors to make poor decisions, so professional guidance from fee based advisors, like Christian Financial Advisors, is valuable to help maintain a long-term perspective and disciplined approach.

      HOSTED BY: Bob Barber, CWS®, CKA®

      CO-HOST: Matthew Barrovecchio

      Mentioned In This Episode
      Christian Financial Advisors
      Website
      Bob Barber, CWS®, CKA®
      Matthew Barrovecchio
      Bible Verses In This Episode
      ECCLESIASTES 11:2

      Divide your investments among many places, for you do not know what risks might lie ahead.

      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

      Shawn (00:00):

      Do you know where your investments fall on the risk scale and more importantly, why it matters? From ultra conservative to aggressive growth, understanding the relationship between risk, reward, and time can make the difference between investment success and failure. We’ll break down the essential principles that every investor needs to know. Let’s get some perspective.

      Matthew (00:29):

      Hi, welcome to Christian Financial Perspectives. My name is Matthew Barrovecchio, and I’m here with founder of Christian Financial Advisors, Bob Barber. And we’re going to cover a very foundational topic today, Bob.

      Bob (00:47):

      We are, but it took me, I think I’ve been working on this one, the subject today for probably a couple months where sometimes Matthew, I’ll work on a topic that we cover, it can come out in 15 minutes, but this one is a very difficult one to talk about, and as you were looking at it before, definitely the “glazed, deer in the headlights” look can happen here.

      Matthew (01:17):

      Absolutely.

      Bob (01:18):

      But I think it’s important that anyone that’s hearing this, especially if they’re trying to do investing on their own, listens because they don’t understand truly what we’re going to be talking about. Most people don’t, and when they try to go do things on their own, I see that.

      Matthew (01:38):

      Yeah. Yeah. It can be, I’ll use the word “dangerous”.

      Bob (01:42):

      Yeah, yeah. It can be dangerous. That’s a very good word.

      Matthew (01:46):

      Yeah. Wonderful. So the title is “Understanding Investment Risk, Reward and Time”.

      Bob (01:53):

      Time, yeah. Hey, that reminds me of, was that Jeopardy?

      Matthew (01:58):

      It wasn’t, but it could be. It could be,

      Bob (02:02):

      Yeah.

      Matthew (02:03):

      Alright, scripture Ecclesiastes 11:2.

      Bob (02:06):

      It talks about giving your portions to seven or eight in Solomon’s warning of this, one of the richest men that ever lived in the world, if not the wealthiest, spread out your risk, “Give your portions of seven or eight because you do not know what disaster may come upon the land.”

      Matthew (02:23):

      And so what’s the investment principle here?

      Bob (02:26):

      It’s diversification.

      Matthew (02:27):

      Bingo.

      Bob (02:27):

      Like my grandma used to say, don’t put all your eggs in one basket.

      Matthew (02:33):

      That’s right. Yep. All right, so let’s take a look at this. I think the topic we’re going to talk about primarily to start is risk. And you frame this as a scale of zero, which is zero being the lowest risk and a hundred being the highest risk.

      Bob (02:48):

      And you could think of it like driving from zero miles per hour all the way up to a hundred miles per hour. And you know that the faster, if you get up to a hundred miles an hour, it’s dangerous.

      Matthew (03:01):

      Yikes.

      Bob (03:01):

      Yeah. Yeah. I mean, if you have a wreck at that point, it could be fatal. Driving 50 or 60, it can be one of the safest ranges. As you know though too, if you drive 15 or 20, somebody’s going to hit you from behind most likely.

      Matthew (03:17):

      There’s risk there as well. You could run out of gas. You don’t get there in time.

      Bob (03:22):

      That’s a great way to say it. Run out of gas, you could deplete your portfolio. All of this, these risk scales really run from zero to a hundred. And when you are looking at portfolios to diversify in and put your money in, I’m the portfolio manager here, and I put together these portfolios based on modern portfolio theory, and I put together these five portfolios and all of them come under a risk number. I explain this to our clients all the time so they understand where they fall in the risk scale, which is important and they like hearing it, but they also like to say afterwards, I’m sure glad you’re managing this for me.

      Matthew (04:07):

      Yes, sir. Yep. Before we get to those five, the first one is this range of zero to 20. This is more of your what we call cash, cash equivalents, real short time horizon. So tell us more about that.

      Bob (04:20):

      Money market accounts, you don’t have any volatility there. It’s just very low returns, but also there’s no volatility at all except you’ve got the risk. You’ve got a risk, don’t you? You’ve got a risk of not keeping up with inflation. For as long as I’ve been doing this, I remember a guy saying years ago, years and years ago, he says, “I call that going broke safely,” because of what inflation is deteriorating the purchasing power when all of your money is in that cash. But that’s good for emergencies. You want a good six to nine months of cash reserves.

      Matthew (05:07):

      Potentially. Yeah. So having that’s great. So having enough in there to serve the purpose of the goal of the emergencies. But the key there, and I feel like many people tend to fall into this category unintentionally, you have too much, probably have more than they need in there, and that’s where you need to reallocate potentially.

      Bob (05:31):

      But on the opposite end of that, the very opposite end of 80 to a hundred on the risk scale is your aggressive growth, and they could have too much there, too.

      Matthew (05:39):

      Absolutely.

      Bob (05:40):

      If they really don’t understand the risk behind it, the time that’s required there. So we got these five portfolios. I’m going to mention ’em real quick.

      Matthew (05:50):

      Let’s do it.

      Bob (05:51):

      Ultra conservative, zero in stocks, conservative, moderate or balanced – that’s where most people fit – growth and aggressive growth. That’s the five portfolios that we put together here along with a complete separate other one that we call real estate only. It’s just a real estate portfolio. Okay. Okay.

      Matthew (06:10):

      So let’s start with the ultra conservative. Tell us more about that.

      Bob (06:14):

      I put this on a risk score out of that 100 of 25 to 35, and the returns of an ultra conservative are just going to be a little bit better than what you would get in that cash. You have a little bit of volatility and you need to expect – look at a one to three year time horizon because the more you go up on the risk, the more time that you’ve got to allow it to do its thing.

      Matthew (06:40):

      Sure. Okay. The way that we look at this though is the ultra conservative portfolio, is that 0% equities, 100% bonds. Is that correct?

      Bob (06:49):

      Yeah, fixed income bonds, it can have cash in it, too. And it depends on where the interest rate movement is. When interest rates were rising up so much a few years ago, we had a lot of cash, but we had a lot of floating rate in there as it floated up, as the rates went up. But it has zero stocks, none at all. Use this over time. If they’re going to go on that vacation in two years, this is a great place to put that. A little bit more risk than just cash in the bank. But it’s a great place. And all these are 100% liquid. Every one of these portfolios, 100% liquid, because we’re a fee-based advisor. So there’s no sales charges in or out of these.

      Matthew (07:28):

      So likely not for someone who is saving for something 20 years from now, but for two years or something like. Right.

      Bob (07:34):

      Yeah. Right. Perfect.

      Matthew (07:35):

      Okay. Alright. The next one is conservative.

      Bob (07:38):

      And this is where we step up a little bit. We’ve got a risk score here. Think of it again like you’re driving

      Matthew (07:43):

      Speed limit.

      Bob (07:43):

      36 to about 44 miles an hour. So you’re getting a little bit more risky. You’re getting some more volatility.

      Matthew (07:50):

      You’re in the neighborhood. There’s speed bumps, there’s beware of children crossing…but not on the highway.

      Bob (07:57):

      And this can have up to a 20% stock exposure in it. But that stock exposure is more in the large mega cap companies, more of your established companies where an aggressive growth will have more smaller companies and more aggressive companies. This is a typical time horizon of three to six years. So you’ve got to give it that time because it’s going to have more volatility. Every one of these we were talking about, you get more and more and more volatility, right?

      Matthew (08:28):

      So it’s the risk and reward, the higher the risk, the higher the potential reward and vice versa.

      Bob (08:34):

      Yeah. We want to say that potential, potential reward, correct. Because there’s no guarantees.

      Matthew (08:37):

      Absolutely. Yeah. Yep. Okay. Now middle of the road.

      Bob (08:42):

      Middle road is by far the number one for retirees.

      Matthew (08:46):

      Portfolio for retirees generally.

      Bob (08:48):

      And I look at what we manage on a bell curve and our moderate, our balanced portfolios are really it’s way up here. That’s the majority of what we manage. And then we taper off on the side, ultra conservative on the side of aggressive,

      (09:05):

      But moderate is where a lot of people feel comfortable. In a perfect world, it’s going to be a 50/50. You’re going to have 50% in stocks, 50% in fixed income bonds and cash equivalents. That’s going to be overweighted or underweighted depending on where the economy’s going or where we feel it’s going. And that’s going to be based on hard data. Makes sense?

      Matthew (09:30):

      Yep. Makes perfect sense.

      Bob (09:31):

      And so like I say, about 45 to 65, I like to drive about 60 to 65 when I get up around 75. And here in Texas, down in south Texas where I drive the speed limits can get 75 and 80 miles an hour. I get where I don’t feel comfortable at that. It just feels too fast.

      Matthew (09:50):

      Yeah. Yep. Yeah. And so I’ll pause for a moment because an underlying theme, especially for conservative and moderate, and as we continue with the remaining two is when you look under the hood, we’re not going to go into details on this now, but when you look under the hood, you mentioned mega large cap, there’s going to be medium sized companies, there’s going to be small companies, there’s going to be companies in all different sectors.

      Bob (10:15):

      All of these portfolios…

      Matthew (10:16):

      Coming back, coming back to Ecclesiastes 11:2, the diversification puzzle, so to say, is not just this macro stocks versus bonds that we’re talking about, but the reality is there’s several sub components to it that really matter.

      Bob (10:30):

      Very much matter. And there’s 11 sectors, and I like to see that you’re diversified across all 11 sectors and all of these portfolios when it comes to stocks and the different sectors for bonds, which is short term, midterm, long-term, high quality, low quality, whether we call high yield. So all that plays into this, and this stuff just swims in my head every day, and I’ve been doing it for so long. I understand portfolio theory, as you would say.

      Matthew (11:01):

      Perfect.

      Bob (11:02):

      So now we get into our last two.

      Matthew (11:04):

      So we’ve got our growth and aggressive growth is what we call ’em.

      Bob (11:08):

      And time horizon, you better really, in my opinion and what I’ve seen over the years, this is a 10 year time horizon or more.

      Matthew (11:16):

      For which one?

      Bob (11:17):

      For both of them. For growth and aggressive growth. Aggressive growth could even be longer. 12, 13 years because the volatility is like a rollercoaster ride

      Matthew (11:25):

      Can be.

      Bob (11:26):

      And the growth portfolio, it’s never 100% invested in stocks. It could be up to 80%. And we try to keep it at that with 20% in fixed income. But then the aggressive growth and the aggressive growth you’re getting all the way in. I mean, you’re 98-100%, and you better have a stomach for it. You better understand that there’s a lot of volatility that’s going to happen there.

      Matthew (11:49):

      Yeah. So what did we speak about earlier? We spoke about speed limit going too fast. You go a hundred miles an hour, yikes, y’all might wreck. But then there’s risk on the other side of going too slow. You might run out of time, you might not make it there in time, might run out of gas. So in my experience, what I have seen is if individuals put themselves in a position to where they are taking on more risk than they should be, then ultimately when things don’t go well in the markets, they react…

      Bob (12:25):

      They get emotional

      Matthew (12:26):

      And they don’t react back to where they should be. They react beyond what they should be. So they try to correct a bad decision by making another bad decision. So this could look like someone who growth or aggressive growth is way too risky for them. And instead of going back to where they should be, they go all the way to ultra conservative, which is not where they should be at.

      Bob (12:50):

      They go from one extreme to another.

      Matthew (12:51):

      Bingo. Exactly.

      Bob (12:53):

      Matthew, tell people how long you’ve been doing this now.

      Matthew (12:55):

      Yeah. So, I’ve been in the financial services industry for 20 years and in this role as an advisor for eight years or so, and living through 2008, 2020, and 2022, some not so great years and some great years. And so I’ve seen it.

      Bob (13:13):

      You’ve seen this.

      Matthew (13:13):

      I’ve seen it all. And I’ve seen some great situations and some not so great situations where individuals have reacted. And a lot of times people need our help to protect them against themselves.

      Bob (13:28):

      They do. And emotions have no play in it. Now we’re going to do a program in a couple of weeks. We’re going to talk about how you can use your emotions to actually invest, but that’s actually going against them. So when everybody’s buying, you’re selling. And when everybody’s selling, you’re buying.

      Matthew (13:41):

      Oh, interesting.

      Bob (13:41):

      That’s what Warren Buffet does.

      Matthew (13:43):

      I look forward to that.

      Bob (13:45):

      Yeah. So there’s really a conclusion to all this is that it’s hard to do on your own. And I’ve met many that have tried to do it on their own. And when I start talking about all the different portfolios and the risk and reward, they really don’t – you can see the glaze, the glaze gets in the eyes and understanding investment, risk, reward, and time, and understanding the difference also between an investor and a trader. The media is so good about calling an investor. I mean, they call a trader an investor, and it’s not true. Investors think in the long run, and I wanted to just go to some of these people writing this, go, “What are you doing? You’re doing a disservice,” because investors are not going to be concerned about the day to day movement.

      Matthew (14:39):

      Correct. Right. They’re not going to allow fear and emotions to drive the decisioning, which is why a foundation to all of this, and a lot of what we do, everything we do is taking things from a biblical worldview, not a view that is of this world, especially American culture.

      Bob (14:58):

      And when you get out there and you try to start day trading, you’re in a different league. And those that do it and are successful at it, they have full research teams behind them. And I always like to use the analogy, if I got out there and tried to play – I’m Texan – so if I tried to play with the Houston Texans, I’d get hurt bad.

      Matthew (15:17):

      Sure, me too.

      Bob (15:20):

      I’m not going to get out there with those big football players. And when somebody tries to do day trading, they try to get out there with the true pros and they have the technology. They may be successful at it for a time, but I never have met any personally that have been successful at it over a long period of time.

      Matthew (15:40):

      If you’re going to take on a side hustle, that’s not the one, right?

      Bob (15:43):

      Yeah. That’s correct.

      Matthew (15:45):

      So it’s great. Hey, a good investor never allows emotions day-to-day news to drive their decisioning. And we can help, Christian Financial Advisors can guide you through the maze that is the risk reward, trade off, and help you create a well thought out portfolio. So give us a call by reaching our office. So you can text us at 830-609-6986. Or you can go to our website, www.christianfa.com, and click a button to schedule an appointment.

      Bob (16:17):

      Thanks. You did great with helping bring this complicated subject.

      Matthew (16:21):

      Well, teamwork.

      Bob (16:22):

      Teamwork. There you go.

      Matthew (16:23):

      You, me, and the Lord.

      (16:25):

      Praise God. All right. God bless y’all. Have a great day.

      [DISCLOSURES]

      * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

      18 min
    • 3 Ways to Uncover ‘Free' Money
      Free money? Sounds too good to be true! However, Bob and Matthew discuss several ways that you can earn free money without compromising your values. This isn't a “get rich quick” scheme, but rather using your investments in wise ways in order to build wealth over time while remaining content and glorifying God. Some of these strategies are best for retirees, while others are better suited for younger investors. Sit back and listen as we discuss 3 ways to uncover “free” money.
      15 min
    • 223 – 3 Ways to Uncover ‘Free’ Money
      Click below to listen to Episode 223 – 3 Ways to Uncover ‘Free’ Money
      3 Ways to Uncover ‘Free’ Money

      Discover 3 ways to enhance your investments for various life stages.

      More episodes >>

      Free money? Sounds too good to be true! However, Bob and Matthew discuss several ways that you can earn free money without compromising your values. This isn’t a “get rich quick” scheme, but rather using your investments in wise ways in order to build wealth over time while remaining content and glorifying God. Some of these strategies are best for retirees, while others are better suited for younger investors. Sit back and listen as we discuss 3 ways to uncover “free” money.

      HOSTED BY: Bob Barber, CWS®, CKA®

      CO-HOST: Matthew Barrovecchio

      Mentioned In This Episode
      Christian Financial Advisors
      Website
      Bob Barber, CWS®, CKA®
      Matthew Barrovecchio
      Bible Verses In This Episode
      1 TIMOTHY 6:6-8

      But godliness with contentment is great gain. 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.

      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

      Shawn (00:00):

      Would you like to discover three smart ways to get free money without compromising your values. From employer matching contributions to tax efficient giving strategies, we’ll show you how to maximize opportunities that could put extra money in your pocket while staying true to biblical principles of stewardship. Let’s get some perspective.

      Bob (00:26):

      Hello, this is Bob Barber. Welcome to today’s program for Christian Financial Perspectives. It’s all about getting free money. How about that one? I bet you don’t hear that very often. How to get free money. But you can blame this on Matthew. He’s the one that wrote this. Okay. He wrote that one last week and Matthew’s taking some of the pressure off of me. I normally write all of the programs and Matthew, I appreciate that. Matthew and I were joking because I always want to introduce Matthew and then I don’t want to say his last name. So if I say it and I get it twisted wrong every time, it’s Barro- Vecchio,

      Matthew (01:05):

      Barrovecchio. There we are.

      Bob (01:06):

      And why can I not get this right after a whole year saying this?

      Matthew (01:08):

      I have no idea. Yeah, you’ve been practicing too. Getting closer.

      Bob (01:12):

      I was asking Matthew. I said, so Matthew, when you were in school, did your teachers ever get it right? And you said, yeah, they finally got it right, but it wasn’t the first week.

      Matthew (01:20):

      It took a few years

      Bob (01:23):

      And then he was telling me about a girl that had a name. We can’t mention her name here for privacy reasons, but it was very close. So if this long drawn out, Matthew is from Pennsylvania. I’m from south Texas, so if you’re getting mixed up, you hear my twang and we’ve got the two sides coming here. Matthew, so you wrote about three ways to get free money. Now, who would not want to hear about getting free money?

      Matthew (01:50):

      That’s great. There’s not, there’s few places in the world where this can be found.

      Bob (01:57):

      So you picked a scripture to go with this free money, right? What is that?

      Matthew (02:01):

      1 Timothy 6:6-8, “But godliness with contentment is great gain, for we brought nothing into this world and we can take nothing out of it, but if we have food and clothing, we will be content with that.” So you may say, wow, that doesn’t really go with free money.

      Bob (02:17):

      Yeah, I’m wondering how this goes with this.

      Matthew (02:19):

      Yeah. So as we go through all of these, what you’re going to see is that they’re all tiny things that you can be doing. This is not going to be, again, a get rich quick scheme or anything like that. It’s going to be things that you can do to further build blocks towards your wealth. And so it’s going to be something that hopefully will breed satisfaction and breed more to glorify the Lord and contentment as well.

      Bob (02:53):

      And I’ve noticed with these three strategies, one really fits the saver. One’s going to fit the retiree, and one’s going to be right in the middle.

      Matthew (03:01):

      That’s correct.

      Bob (03:02):

      I had a hard time with that middle one, but we’ll talk about it.

      Matthew (03:04):

      I did a little bit as well.

      Bob (03:06):

      We’ll talk about it. Okay, so what is the first way to free money? And when I see this, I’m like…

      Matthew (03:12):

      Of course!

      Bob (03:12):

      Duh. Right? Because people miss this one. They miss it constantly.

      Matthew (03:16):

      It’s an employer plan match. So if you have a 401k, a 403b or another savings plan, making sure that you are, as long as your monthly budget allows you to, contributing at least up to the match that your employer provides, you’re essentially getting free money. One way to look at this is that when you make a contribution, if they’re making a dollar for dollar contribution, it can be seen. It’s not technically, but it can be seen as almost a hundred percent return right away on your contribution.

      Bob (03:46):

      You are.

      Matthew (03:46):

      Because you’re getting that.

      Bob (03:47):

      I believe that. I mean, if you’re in say, an income of 100,000, let’s take an even number and you’re getting a 4% match. You put in 4,000, they’re putting in 4,000. So you don’t have to make anything and you’ve made 100% return. Or like you say, it’s like giving you free money.

      Matthew (04:03):

      Absolutely. And so over the course of time, when you look at the paycheck by paycheck, you say, oh, is it really that much? Maybe it’s not even $100 depending upon, but over the course of time, taking full advantage of the employer match and maximizing that, again, goes back to one of the programs from a few weeks ago around the compounding interest impact. This is one way in which you can further facilitate that, especially for those who are younger, earlier in their career. Because the sooner you get these monies in the account working for you over the long term, it can be very impactful.

      Bob (04:42):

      Most people have a 401k or a TSP plan or a 403b. There’s also simple IRAs and the 3% match seems to be the most common. But I’ve met some clients, they have a 6% or 7% match.

      Matthew (04:57):

      I spoke to someone recently, 8%.

      Bob (04:59):

      8%.

      Matthew (05:00):

      And I said, are you sure? And they said, yeah. Like, goodness.

      Bob (05:02):

      Wow, I hope you’re putting in 8%.

      Matthew (05:04):

      Yeah, praise God for that.

      Bob (05:05):

      Yeah. Yeah. So what’s the second one, which is one I had a hard time with that

      Matthew (05:11):

      I did as well.

      Bob (05:11):

      Shawn does the program with me too, and we’ve talked about this and I have a hard time with this, but here it goes.

      Matthew (05:18):

      Ready?

      Bob (05:19):

      Okay.

      Matthew (05:19):

      Credit card rewards. So disclosure here, if you or your spouse have had any history of issues with debt or credit card debt that took you a while to pay off, this may not be for you, right? This is something that takes obedience and a very disciplined approach. Discipline,

      Bob (05:44):

      Extremely discipline. Yes, it is possible. I mean, I know we’ve gone on a lot of free vacations and even gotten goods for free because we’ve never carried a credit card debt. We pay it off every single month. Every month.

      Matthew (06:01):

      So here’s the strategy, the idea here, assuming that you have the discipline and this isn’t going to cause issues, the strategy is finding those things that are reoccurring month over month that are automatic – streaming services, utility bills, water bill, things that are going to be around the same amount and you don’t actually do anything. They just automatically come out of your bank account, your checking account, probably. The strategy is putting those kinds of things on a credit card with rewards that are going to be in line with something that you could enjoy or use in your budget. For some people it might be free groceries. For other people, it might be just a percentage back. Others it might be travel rewards or something of the like. And so the idea is get it set up to where on a monthly basis it’s going through the credit card, you’re getting those rewards. Again, not going to happen quickly, but over time you will build those rewards and the credit card, you go ahead and you put it away somewhere safe, out of sight, out of mind.

      Bob (07:08):

      That’s what I like.

      Matthew (07:09):

      You don’t want to use this, you don’t want to use this for anything where you’re going to have that credit card in hand. The idea is to set it and forget it and have the payment be automatic. So you don’t even have to go in and make the payment every month. It just automatically happens. And once you set it up. again, you can set it and forget it, but you’re racking up those rewards little by little over the course of time.

      Bob (07:31):

      And put a limit on that credit card, right?

      Matthew (07:34):

      Yes. Right. Elaborate on that.

      Bob (07:35):

      Yeah, depending on what those average bills that you’re talking about, your utilities, and by the way, I just found out we were talking about this, that utility company that we use for our home in Rockport, Texas on the coast, you can even out your bill and basically I could never use the amount of electricity they’re going to offer, they’re offering me, but the bill stays the same every month. So if you’re in an area that has competition for utilities, you can do that. But let’s say all that total’s up to be $1400 a month for all of those recurring bills that you have. Set your limit at about $1600 that way you cannot go over it.

      Matthew (08:20):

      So you want to give yourself a little bit of buffer because things may…

      Bob (08:24):

      Bills go up and down.

      Matthew (08:25):

      It could, but yeah, calling the credit card company and setting a limit down from what they probably had it at by default, it just further protects you.

      Bob (08:36):

      You knew this was a hard one going by me, was putting that in the desk drawer or even just cutting it up.

      Matthew (08:41):

      You could. Absolutely. You could cut it up, shred it, and be done with it. Absolutely. I dunno if I’d recommend that. I think putting it somewhere safe, because who knows, you might need the number, but…

      Bob (08:51):

      I know we have used rewards for many things over the years.

      Matthew (08:56):

      Well, and that’s it. You mentioned vacation. Again, this isn’t paying for cruises around the world or anything like that, but we have probably annually paid for a long weekend where we get lodging and most of the food for free for our family of seven, and it’s a nice treat.

      Bob (09:14):

      So these first two that you’ve mentioned are available just about to anyone?

      Matthew (09:20):

      Correct.

      Bob (09:21):

      And this third one that you’re going to mention is available to retirees, more for retirees.

      Matthew (09:27):

      That’s right.

      Bob (09:27):

      But if you’re not a retiree and you’re listening to this, maybe you have a friend that needs to listen to this, kind of what we call free money, right?

      Matthew (09:35):

      Yeah. So if you’re at least 70.5 years old and you have a pre-tax IRA, then facilitating your tithes and offerings and giving through the qualified charitable distribution provision or QCD, is the strategy here. So many people use their income from Social Security or their bank account, or maybe they’re working still to facilitate their offerings and their giving to their church or local organizations, et cetera. For those who are over 70.5, you can take a distribution from a pre-tax IRA, and as long as the check is made payable not to you, but to a qualified 501c3 organization,

      (10:27):

      It comes out tax free. So I’ve worked with many individuals to simply redistribute in their budget that they’re giving. So, running their giving through the qualified charitable distribution, especially those who are 73 or older now and have require minimum distributions. This is a great way to satisfy the IRS requirement while also giving to an organization or a church that you would give to otherwise. And so where’s the “Free money.” It’s in the tax savings. By doing the, giving through the QCD provision, you now have given that tax free and the money that you would’ve used otherwise to do that giving now is available for something else, particularly the tax savings, either to go back into your budget or to even give more, maximize generosity to the kingdom work. So it’s a very simple idea that many people don’t think of, but it can be very powerful, especially when, again, for many of us to most of us, the goal here is to maximize generosity for his glory.

      Bob (11:33):

      We’ve been using this strategy in a huge way with our clientele here at Christian Financial Advisors for years. Now, one of the things, the way that I talk about this is… so they’re going to give cash money. They’re used to giving cash money to their charities of their choice. They give it out of the IRA, but then I’ve talked about them taking that cash that they were giving because they’re still giving. They’re just repositioning and saving that and putting that back into account and saving that over time.

      Matthew (12:08):

      Absolutely.

      Bob (12:08):

      It’s a wash, but you’re better off because you’re saving so much on your tax. So basically you don’t take money out of an IRA and then go give it to a charity if you’re above 70.5. You need to take it directly from the IRA to the charity.

      Matthew (12:23):

      So logistically, just an important point on the logistics of this, don’t try to do this on your own. This is where if you work with us, you want to call us, or if you have a financial institution you work with, you want to call them. Because a key piece for the IRS regulation is making sure that the check is payable not to the individual, but to the organization. Which usually, you need to call someone at the financial institution where your IRA is at in order to make sure that gets right.

      Bob (12:50):

      We have clients, it’s like a little shopping list nearly, and they give us this and they say, we want this much to go to this charity, this much to go to this.

      Matthew (12:57):

      Praise God.

      Bob (12:57):

      Yeah, no, it’s great. And we help them do that.

      Matthew (13:00):

      Yeah. Amen. It’s wonderful. So yeah, those are three ways in which you can experience free money and hopefully there’s one for everybody.

      Bob (13:09):

      If you need any help with this, of course, we’re always available by calling us at 830-609-6986 during business hours. Again, 830-609-6986. You can text that number as well. Or you can go to our website and hit the contact tab and our website is www.ChristianFinancialAdvisors.com. Thanks for listening. God bless y’all. Bye.

      [DISCLOSURES]

      * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.

      15 min
    • Tax Efficient Asset Location
      This episode covers the in depth topic of tax-efficient asset location, which involves strategically placing different types of assets (such as stocks and bonds) in various account types (such as taxable accounts, Roth IRAs, and traditional IRAs) to minimize the overall tax burden on investment returns over time. Bob and Matthew break this down into various key points of asset allocation, asset location, how exactly it works, is asset allocation for everyone, and what is the advantage? Asset allocation is not a “one size fits all” strategy, and it can require analysis and understanding from a certified financial advisor.
      17 min

    About Christian Financial Perspectives

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

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