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  • 207 – The Benefits And Risks Of Annuities
    Click below to listen to Episode 207 – The Benefits And Risks Of Annuities
    The Benefits And Risks Of Annuities

    Dive into the sales practices, risks, and benefits of annuities.

    More episodes >>

    Are you curious about the real story behind those free steak dinner invitations for annuity seminars? In this episode, Bob and Shawn uncover the benefits and risk of annuities and why you should be cautious when attending those enticing events.

    After comparing both sides – the risks and benefits of annuities – listeners will be better prepared to make an informed decision concerning annuities as an investment option. As always, it is important that listeners do their own research, while also being cautious of deceptive annuities’ sales practices.

    HOSTED BY: Bob Barber, CWS®, CKA®

    CO-HOST: Shawn Peters

    Mentioned In This Episode
    Christian Financial Advisors
    Website
    Bob Barber, CWS®, CKA®
    Shawn Peters
    Bible Verses In This Episode
    1 PETER 5:8

    Be of sober spirit, be on the alert. Your adversary, the devil, prowls around like a roaring lion, seeking someone to devour.

    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 curious about the real story behind those free steak dinner invitations for annuity seminars? Well, in today’s episode, we will uncover the benefits and risk of annuities and why you should be cautious when attending those enticing events. Let’s get some perspective. Welcome to another episode of Christian Financial Perspectives. Today we’re going to be talking about annuities, which we’re kind of surprised that the last time we covered this topic was about two years ago. So I guess time flies when you’re having fun on a program like this.

    Bob (00:38):

    I guess so, because it does seem like we talk about annuities more often, but I think it’s because I’m getting free steak dinner postcards. Every week, I get at least two of them. Sometimes I get three of them, and I’m always telling Rachael, “Hey, maybe we ought to go to one of these.”

    Shawn (00:55):

    I told you last time one came through, I’d be happy if Rachael would go with me since she was the one invited. I would love to go and just listen to the pitch.

    Bob (01:04):

    And then ask questions. By the way, most of the time they’re framed in a point of about estate planning or they’ll be…like you think you’re going into an estate planning workshop or you think you’re going to something on lowering your taxes or getting more social security. It’s always kind of a twist. And then I always go look at the bottom of the postcard. In tiny, tiny print, it starts talking about annuities and insurance claim paying abilities. So Shawn, today, it has been a couple years since we just had a full program of annuities.

    Shawn (01:38):

    Because annuities get mentioned. It’s a financial product. So it gets mentioned in many other episodes.

    Bob (01:44):

    And all of our listeners and I know my clients, they get all the invitations every week, too. So we’re going to talk about the benefits and the risks. I think it’s important. There are benefits definitely. So we don’t want to just come out it being all negative. There’s some great benefits in annuities.

    Shawn (02:01):

    We want to try to give everyone listening, watching – whatever that might be – an objective fiduciary perspective on annuities. So that’s why I say the benefits and the risks because if you go to one of those events with the free steak dinner, you will not hear about any of the risks in a objective clear manner.

    Bob (02:22):

    That’s true.

    Shawn (02:23):

    So hopefully this will help. Full disclosure, we do have some annuities that we help manage for clients, but they are a very specific type of variable annuity. It’s for tax purposes. It doesn’t have a lot of extra fees. There’s no commissions. Exactly.

    Bob (02:37):

    I’ll read the scripture today. It’s kind of interesting how it goes with this. Okay. You’ll see how it goes with this later. Definitely. And maybe we will read it again it at the end. So it’s 1 Peter 5:8, “Be of sober spirit, be on the alert. Your adversary, the devil prowls around like a roaring lion seeking someone to devour.” Okay, so I thought of this because many times these high commission salesmen are kind of out there looking for something to devour.

    Shawn (03:09):

    Yeah. Well, and just do some basic math, Bob, right? You have these annuities that most of them are going to pay a commission of say up to 10%. Well if you send out 10,000 flyers/annuity invitations to a steak dinner, you spend what? Maybe $10,000? Oh,

    Bob (03:27):

    Well you’re going to spend probably $10,000-15,000 just to get the people there.

    Shawn (03:31):

    Then of the 10,000, let’s say a hundred people respond and you actually have a steak dinner for a hundred people, you only need what, one or two people to agree to spend a $100,000 to $200,000 on an annuity and you’ve paid for the whole thing.

    Bob (03:45):

    Gosh. I’ve heard people putting $500,000 in one of these annuities. And so right off the bat, I mean they could make, let’s say they’re just getting a low of a 6% commission, that’s $30,000 right there that they get back. By the way, they always say, no, we don’t get paid a commission. That’s a lie.

    Shawn (04:03):

    You get paid by the annuity company. I mean that’s the commission.

    Bob (04:07):

    Alright, well let’s go over the benefits. I want to cover the positive sides first, the benefits, and then we’re going to cover the risks of annuities because there are some major benefits and I think the very first benefit is one of the major benefits for dollars that or you’re having to pay tax on, and that’s because you get number one benefit is tax deferral.

    Shawn (04:29):

    Similar to the tax deferral that you get in an IRA. So once it’s in that annuity, even if it wasn’t originally qualified or tax advantage money, you do get that benefit within the annuity. So the growth, the interest of dividends, it’s sheltered from the taxes until you want to spend it by withdrawing the money.

    Bob (04:47):

    So why would you put IRA money then into an annuity?

    Shawn (04:52):

    That’s a good question. I don’t really have a good answer for it.

    Bob (04:54):

    You get deferral twice, but you only need it once.

    Shawn (04:58):

    So really the only reason you would use it for the tax deferral is if it’s non IRA money in the first place.

    Bob (05:02):

    That’s correct, yeah. Or non 401k money. By the way, anytime we mention qualified and non-qualified, what that means is qualified money has tax deferral. It’s like a 401k, a 403b, an IRA, Roth IRA. Those are qualified plans. And then non-qualified would just be like what you have at your bank and you have to pay tax on it. Or if you have a brokerage account and you have to pay tax on the dividends.

    Shawn (05:30):

    Yeah, individual brokerage account, joint brokerage account, whatever it might be. So the second benefit, guaranteed death benefit.

    Bob (05:36):

    That’s a big benefit. I just had a person I talked to, gosh about four days ago and they were in and they had about $700,000 in an annuity and they said that’s the reason they did it was for the guaranteed death benefit. But what you got to understand is that you’re paying for that if you…

    Shawn (05:55):

    Well, similar to life insurance. There’s a cost of providing that death benefit.

    Bob (06:02):

    If you’re buying an annuity strictly for the tax deferral and then you want the layer of a guaranteed death benefit on that, you’re paying an annual fee for that. By the way…

    Shawn (06:12):

    Those hidden fees that are expenses, expense ratio, whatever you want to call it, but they’re fees that are affecting your long-term growth.

    Bob (06:21):

    You remember me telling you, I went and looked at the benefits of annuities and I pulled up an article that was by annuity.org or something and it said annuities have no fees and I couldn’t believe it.

    Shawn (06:33):

    And you were looking for the disclosure of like, well hold on. Obviously, they do.

    Bob (06:40):

    Huge.

    Shawn (06:41):

    They all have some kind of fee.

    Bob (06:44):

    Right. I could not believe what I was reading. I mean just pure deceit and lies. I don’t know how else to say it, but that is a benefit. You get tax deferral, you can add on a guaranteed death benefit if it already has that built in, you’re paying for it. And we will explain that here in a minute. A third benefit is a guaranteed withdrawal benefit, and don’t get this mixed up between that’s what it’s paying you. I’ve had people say, “Well it’s giving me a guaranteed withdrawal benefit of 5%.” I said, “Well, isn’t that nice? You’re getting a guarantee that you can take back 5% of your money every year?” That doesn’t mean that it’s growing at 5%. That means you can take it back at 5%, but they’ll call it a guaranteed income benefit as well. But it has to do with, gosh, I get to take 5% of my own money or 4% of my own money every year. So it’s going to last at least 20 years if it’s making 0% for sure.

    Shawn (07:40):

    Yeah, that’s right. And really the only time the annuity company would be on the hook for anything is if you happen to get to the point in your life where you’ve withdrawn more than what is remaining in the account because it is a guaranteed withdrawal benefit. So at that point, okay, now they’re on the hook, but I’ve yet to see someone that actually lived long enough to withdraw it down to zero and then the annuity company still had to keep paying the withdrawal benefit. So really you just withdrew your account down to zero.

    Bob (08:11):

    So if you do the math, Shawn, you think about that, the annuity company’s basically saying, well, we need to make something in the next 20 years because if you’re pulling 5% a year times 20, you’re going to take out 100%. So yeah, I would hope that it would make something in 20 years and it will, I mean be realistic.

    Shawn (08:31):

    Let’s go into our fourth benefit before we go over the basic types of annuities. It can be low cost.

    Bob (08:35):

    Yeah, they can.

    Shawn (08:36):

    So most importantly, low cost commission free advisor annuities are available without any surrender penalties from day one, but they are not promoted as heavily like the high commissioned ones.

    Bob (08:47):

    I don’t think you would ever go to one of these free steak dinner workshops where they had to pay $10,000 to get you there from all the invitations. I mean they’re not paying $10,000 just for you. I understand that.

    Shawn (08:59):

    But to get the group together.

    Bob (08:59):

    But to get the group, by the way, you said 100. You’re lucky if you get 25 or 30 if you mail out 10,000 today because people do get so many of them. They can be low cost and it can give you these benefits. So as an example, we have a low cost advisor annuity. It’s just $20 a month and you get all…

    Shawn (09:19):

    The normal benefits of an annuity.

    Bob (09:21):

    Tax deferral. If you want to add on the expenses for the guaranteed death benefit or guaranteed income benefit, you can, but it’s disclosed and it’s very clear and upfront. Okay.

    Shawn (09:30):

    And there’s no commission involved with it. Alright. So the three basic types of annuities are, number one, fixed interest rate annuities, much like a cd, but the interest is tax deferred until you want to withdraw it. And then number two, fixed indexed annuities. These types of annuities are linked to capture some, but not all, some of the returns from a stock or bond index that you choose. And today, some offer many indexed options.

    Bob (09:56):

    This is the biggest, probably, annuity that’s sold today. Now this is where they’ll say, well, there’s no expenses. Well, so let me ask you. You get to choose an index, like you can choose an S&P 500 index or you can choose a small cap index or a large cap or an international index. So let’s say you choose the S&P 500 index. Let’s say it was a really, really good year like we’ve had in the last couple of years and that S&P 500 index, because of a few companies that really drove it, went up 15%. Well, if you chose that 15%, but you only got back say 3% or 4%, where’d the other 9% go?

    Shawn (10:33):

    To the annuity company?

    Bob (10:33):

    Exactly. Well wait, there’s no expenses.

    Shawn (10:38):

    Exactly.

    Bob (10:38):

    It’s just the math. I mean anybody that makes the comment that there’s no expenses to these is outright lying. And then the third type of annuity is a variable annuity, and that’s very simple. It’s kind of like a 401k because that performance depends totally on what you choose. You’ll usually have over a hundred investment choices in it from small cap, the large cap to sector funds like utility or an energy fund or a technology fund. But whatever you pick is going to go up and down with the markets.

    Shawn (11:11):

    Really again, they do vary. Like we were talking about before, there are some that have very low cost or like a fixed just 20 bucks a month kind of a cost. But very similar to if you had a brokerage account or you had an IRA, whatever the investment options are that you choose to invest in, that’s what ultimately determines the overall value of it. But since it isn’t an annuity, if you had a variable annuity for non-qualified non-tax advantaged money, wasn’t already an IRA, then it allows you to invest that more similar to if you had that in an IRA as a normal brokerage account.

    Bob (11:46):

    Yeah, that’s correct.

    Shawn (11:48):

    That’s where that could be helpful. But the annuities are always limited to, there’s what they almost call, basically they call them subaccounts, but it’s not just you can invest in any stock and mutual fund and ETF that you want. Well, these are what are available for that company.

    Bob (12:03):

    Right. You can’t invest in individual stocks in a variable annuity. Okay.

    Shawn (12:07):

    So the risks.

    Bob (12:08):

    Okay, so we talked about the benefits. We’ve talked about the three types. Now we come to the risks.

    Shawn (12:13):

    The majority of annuities have hefty surrender penalties because of the high commissions they pay salespeople to sell them. So you could be stuck for many years without getting back what you invested. And pretty common would be if it’s a five-year surrender penalty, then it means most likely it was a 5% commission to the person who sold it. If it’s a 10 year surrender penalty, probably a 10% commission.

    Bob (12:36):

    8-10%. Yeah.

    Shawn (12:37):

    8-10%. Exactly. So that’s just something to keep in mind that if they have a high surrender penalty and someone told you there’s no cost or there’s no fees or they’re not making a commission, well they lied to you because that’s why there’s a surrender penalty.

    Bob (12:51):

    And they always come up with the excuse, “Well, you don’t have to pay anything, you don’t pay me anything.” That’s true. The annuity company pays them, but if you want your money back, you do pay them. You put in a 100k. Now all of a sudden, if you want that a 100k back a few months from now or even a year from now, and it’s made 5%, 5% plus 100 is $105,000, but you want your money back, you’re only getting 92k. So what’s the deal with that?

    Shawn (13:12):

    Bob, based on that logic that you’re not paying the salesperson anything, that’s the same thing as if I go and buy a car and the car salesman says, “Well, you’re not paying me anything.” No, of course I’m not paying you anything. I’m paying the dealership for the car and they’re paying you, so you are getting paid by me.

    Bob (13:30):

    And as soon as you drive that car off that lot, it’s less in value because of the sales charges that you had to pay.

    Shawn (13:37):

    So number two, many have very high annual fees that can reduce your annual returns. This is primarily true of fixed indexed and variable annuities with guaranteed withdrawal and or death benefits because it costs money to provide those benefits.

    Bob (13:51):

    If you do a little research, you can find this yourself. I mean, you’ll find that these can get as high as 2.0-2.5% a year. So if your money’s making 7% and you’re paying 2.5%, you’re giving up nearly a third of your return.

    Shawn (14:03):

    Now you’re getting a lot less actual net return.

    Bob (14:06):

    Because of those high fees. Number three, this is a big one that a lot of people don’t realize is they’re not heavily regulated as far as the fixed and fixed index. The variable is because it’s a securities product, but the fixed and fixed indexed annuities are not a security product, therefore they’re not heavily regulated.

    Shawn (14:26):

    They’re considered an insurance product. So if you have an insurance license, which is a lot easier to get and a lot less regulation compared with actual investment products, just about anybody can sell them.

    Bob (14:37):

    So the unfortunate thing because of this is deceitful sales practices are very common in this field and a lack of regulation and required disclosure about what you are getting into.

    Shawn (14:49):

    Just as a general rule of of thumb, if someone is recommending a product to you or service to you, and they are compensated directly based on how much they can convince you to buy of said product or service, they have a monetary incentive to do what’s best for them, not what’s best for you. And that’s the case, especially with the fixed and fixed index annuities. That’s the case. They’re not a fiduciary advisor, they’re not doing what’s best for you that happens to align with their interest. They’re doing what’s best for their own interest, even though some people might be legitimately trying to help. The problem is there’s still that built in high monetary incentive to do what’s best for the salesperson, not the customer.

    Bob (15:31):

    It’s called a conflict of interest.

    Shawn (15:32):

    Exactly. So number four, which goes right into that, annuities can pay high commissions. So the ones that do are heavily promoted through the free workshops. They give you these expensive meals to entice you to come. Salespeople, they’ll spend $7000 to $10,000 or even more depending on how many they actually mail out for invitations. And then the cost of buying the meals and the marketing because they know they can easily make back their cost with very persuasive and high pressure presentations on just one single annuity sale because of the commissions. So they get a few sales, they are way ahead. The typical commission is anywhere from 5% to 10%. The annuity company pays a salesperson as soon as the money is invested. So just think about it, one $500,000 annuity can make a salesperson between $35,000 and $50,000 as soon as they get someone to write the check to the annuity company.

    Bob (16:23):

    Isn’t that amazing?

    Shawn (16:25):

    Yeah. For comparison, we’re a fiduciary investment management company. We charge a maximum of 1% on assets that we manage per year, but that means for a 5% commission, we’d have to manage the assets and maintain a good relationship with our clients for five years to get the same that an annuity company would pay a salesperson day one.

    Bob (16:47):

    That’s interesting what you said there, too. We have an incentive to maintain the relationship. They’ve been paid.

    Shawn (16:55):

    They’re gone.

    Bob (16:56):

    And maybe they’ll have a little bit of what’s called a trail commission, but it’s not anything like that 5% or 6% upfront.

    Shawn (17:04):

    Sometimes it’s what, a quarter of a percent, maybe, per year?

    Bob (17:07):

    Exactly. So those conflicts of interest are really out there.

    Shawn (17:13):

    That’s our fifth risk. The high commission annuities create a huge conflict of interest between the salesperson and you, the customer. So here’s the conclusion of the benefits and risk of annuities.

    Bob (17:24):

    We’re down to the end now.

    Shawn (17:25):

    There’s only four, so stick with us. Don’t be fooled into attending persuasive, free steak seminars that don’t tell you the whole story.

    Bob (17:33):

    If you have a friend that’s gotten one of those and they said they’re going, I would advise them not to go. They’re pros at what they do. They go to workshops by the annuity companies and learn how to say the right words.

    Shawn (17:47):

    It’s the same kind of tactics as the, I just blanked on it, the timeshares. You get in one of those timeshare places and it’s almost impossible to escape. They try everything in the book to like, “Well, are you too dumb to see a good investment?” Or, “You can’t make a decision.”

    Bob (18:06):

    They start saying stuff like that.

    Shawn (18:08):

    “You’re wasting my time. Well, don’t you want this?” Blah, blah, blah.

    Bob (18:11):

    So we got number one, don’t be fooled. Number two, please be on your guard against every kind of deceptive sales practice they can think of to sell you that. Number three, I advise to do your own independent research. Search for terms like “high commissions and annuities” or “annuity scams” on the internet, and you’ll see a lot of articles. Shawn, I noticed when I did this, I found a lot of articles by different states, the government has gotten involved in saying, “Be careful of these scams.” Even cities have said, “Be careful of these,” because there’s a big concern because it’s taking advantage of elderly people.

    Shawn (18:51):

    That’s right. Do your own research. As much as we want to be a trusted source of education in the area of finance, don’t just take our word for it. Look this up. You can find the proof. It’s out there. If it’s www.AnnuitiesAreAwesome.com, and it’s telling you that they’re totally fine to invest and there’s no fees, well, okay, consider the source of what you’re researching.

    Bob (19:11):

    I think this last one is one we want to end up on a good note. There are a few good commission free, low cost annuities out there offered through fiduciary fee-based advisors. But the temptation is so much greater to sell the high commission because you’re going to get 10 to 20x more upfront.

    Shawn (19:30):

    Yeah, exactly. We hope this has been informative for you today, and please if you hear of any of your friends that plan on going to a free steak annuity workshop or a free steak estate planning workshop or whatever it is that they want to call it, but the key in there is that “FREE really nice dinner”.

    Bob (19:48):

    And look for the fine print at the bottom of the postcard.

    Shawn (19:50):

    Warn them and if anything, maybe tell them to listen to this episode on the benefits and risk of annuities and hopefully it’ll save them. That’s all for today. As always, thank you for being here and God bless. See you next time.

    [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.

    21 min
  • Fool's Gold: The Hidden Costs and Risks of Gold Investing
    Have you ever wondered if investing in gold is truly a safe bet for your financial future? Is gold really the ultimate hedge against inflation and economic instability or are there hidden risks and downsides that you need to know about? In this episode all about gold, Bob and Shawn uncover the historical significance of gold, delve into the real risk and returns, and explore the Biblical perspective on gold as an investment. Overall, it's important to work with a fiduciary financial advisor to tailor one's investments to their goals and risk tolerance.
    20 min
  • 206 – Fool’s Gold: The Hidden Costs and Risks of Gold Investing
    Click below to listen to Episode 206 – Fool’s Gold: The Hidden Costs and Risks of Gold Investing
    206 – Fool’s Gold: The Hidden Costs and Risks of Gold Investing

    Is investing in gold really worth the hype, or is there more to know?

    More episodes >>

    Have you ever wondered if investing in gold is truly a safe bet for your financial future? Is gold really the ultimate hedge against inflation and economic instability or are there hidden risks and downsides that you need to know about?

    In this episode all about gold, Bob and Shawn uncover the historical significance of gold, delve into the real risk and returns, and explore the Biblical perspective on gold as an investment. Overall, it’s important to work with a fiduciary financial advisor to tailor one’s investments to their goals and risk tolerance.

    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
    GENESIS 13:2

    Abram was very rich in livestock, silver, and gold.

    EXODUS 25:28

    Make these poles from acacia wood, and overlay them with gold.

    1 KINGS 10:14

    Each year Solomon received about 25 tons of gold.

    2 CHRONICLES 1:15

    The king made silver and gold as plentiful in Jerusalem as stone. And valuable cedar timber was as common as the sycamore-fig trees that grow in the foothills of Judah.

    PSALM 115:3-4

    Our God is in the heavens, and he does as he wishes. Their idols are merely things of silver and gold, shaped by human hands./em>

    DEUTERONOMY 7:25

    The images of their gods you are to burn in the fire. Do not covet the silver and gold on them, and do not take it for yourselves, or you will be ensnared by it, for it is detestable to the Lord your God.

    DEUTERONOMY 29:17

    You saw among them their detestable images and idols of wood and stone, of silver and gold.

    ECCLESIASTES 1:9

    What has been, it is what will be, And what has been done, it is what will be done. So there is nothing new under the sun.

    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:

    Have you ever wondered if investing in gold is truly a safe bet for your financial future? Is gold really the ultimate hedge against inflation and economic instability? Or, are there hidden risk and downsides that you need to know about? In today’s episode, we will uncover the historical significance of gold, delve into the real risk and returns, and explore the Biblical perspective on gold as an investment. Let’s get some perspective. Welcome to Christian Financial Perspectives. Today we have a really fun topic on investing in gold. And Bob, I believe we have a quote to start with right on the truth.

    Bob:

    Well, you shall know the truth. The truth shall make you free.

    Shawn:

    It’ll set you free. So we are going to be covering this topic a little different than what I would say you have seen from your “insert favorite host or media host or news anchor who’s been sponsored almost every single time” to promote the selling and trading of gold. But we think it’s a very important one. We are not sponsored by anyone, so whatever we talk about on this show, not just this particular episode, but in general, it’s just something that we think would be helpful and put it out there. I know Bob, we cover a lot of topics that don’t really directly even relate to what we do as a firm, but just to try to get some Christian Biblically based knowledge out there.

    Bob:

    And fiduciary based, Shawn. It’s very important that we’re fiduciary based that way we don’t have a bias because we’re paid by our clients. We’re not paid by any vendor.

    Shawn:

    And over time too, we’ve got to work for a long time to make say a 10% payout. Well, we got to work for about 10 years on that.

    Bob:

    It’s not right up front. So what we’re going to do, we’re going to talk about the history of gold and how it’s been used in the past. So there’s a lot of great information today I think that you’ll find by listening and watching.

    Shawn:

    I’m kind of excited to share this with you guys. The inflation adjusted returns of both gold and the, we’re going to use the Dow Jones today as kind of our benchmark since everybody knows Dow Jones. And yeah, when you do the inflation adjusted for a investment touted as an inflation hedge, it’s become very interesting. So stay tuned to that part. Alright, so introduction. Gold has traditionally been seen as a hedge against inflation and geopolitical risk with its perceived value enduring for millennia.

    Bob:

    But you know what? Gold doesn’t provide. It doesn’t provide any income stream. It can carry storage costs and it often moves counter to stocks and bonds since all the way back since the 1970s, from our information.

    Shawn:

    Over decades, stocks and bonds have delivered higher total returns on average compared to gold.

    Bob:

    And gold tends to spike during political uncertainty. It can shine over the short periods, but it lacks compound growth when it comes to the long periods, like I say, because it produces nothing and it doesn’t pay any interest or dividends.

    Shawn:

    That’s right. That’s where it struggles. If fiat currencies collapse, practical goods hold much better value than speculative metals.

    Bob:

    These are some of the things we’re going to go deeper in today. Now, historically, gold has played a role and we think about it, it’s mentioned in the Bible hundreds of times, actually 440 times in the Bible gold is mentioned, and it once was considered a source of wealth and currency in the pre global, pre-digital, world economy.

    Shawn:

    I think Roman Empire Biblical times when it was readily accepted as payment. So examples.

    Bob:

    We have good scriptures.

    Shawn:

    We’re not going to read all of them. We’re just going to give you the scriptures. We’ve definitely encourage you to read them, but give you just kind of a highlight of it. So Genesis 132, “Abram’s wealth in livestock, silver, and gold.”

    Bob:

    Exodus 25: gold was used in the construction of religious items.

    Shawn:

    Like the Ark of the Covenant.

    Bob:

    Yeah, but it was also the golden calf.

    Shawn:

    That’s right. That’s it. Yep. Some good ones and bad ones. 1 Kings 10:14, “King Solomon’s yearly receipt of gold.”

    Bob:

    That’s because it was a currency back then. Okay. 2 Chronicles 1:15, “Abundance of gold in Jerusalem during King Solomon’s reign.”

    Shawn:

    And Psalm 115:3-4, “Contrast between the true God and idols made of,” you guessed it, “Silver and gold.” So, infatuation with gold.

    Bob:

    Well, there’s been a lot of infatuation with gold over the years.

    Shawn:

    That’s right. Throughout history, there has been an infatuation with gold as seen in the Bible, golden calf, King Nebuchadnezzar’s golden statue. And in modern times the gold rush of America led to the rapid growth of towns and the destruction of lives and the environment in the pursuit of gold.

    Bob:

    It’s amazing to me, Shawn, when I…we’re big Colorado people, Rachael and I love Colorado. Of course all Texans…

    Shawn:

    Especially when it’s summer in Texas, Colorado is where you go.

    Bob:

    And this is coming out in August, so that’s the time to be in Colorado. But we have visited, we love to go hiking and we’ve visited so many of the old gold mines and I’m amazed at the destructive – what it’s done to…

    Shawn:

    Just destroy the area.

    Bob:

    Yeah, I mean the environmental impact is incredible and this is God’s creation.

    Shawn:

    And incredibly bad.

    Bob:

    Yeah, incredibly bad. Exactly.

    Shawn:

    The term gold fever was coined to describe the unbelievable greed and obsession surrounding gold and those who worship gold have fallen, and the stuff is so plentiful in heaven that it’s used to pave the streets. I love that. I love if you think about that, that imagery of the streets are paved with gold. It’s not just the wealth and majesty of God the Father, but it’s also the fact that it means so little to God that the thing that for thousands of years was the thing to have and to seek is something he just paves the streets with. Yeah, that stuff? You mean pavement, asphalt?

    Bob:

    We see the concrete truck pull up today, it’d to be the gold truck pull up.

    Shawn:

    Yeah, exactly. So let’s go into our next section. So gold as a currency.

    Bob:

    Yeah, it was used as a currency for many years, but now…

    Shawn:

    Today, gold no longer carries currency benefits in the global economy and converting gold into an accepted form of currency that you can actually spend can incur very high transaction costs. From our research, it was 3-5% as kind of an average, but there are many dealers that in certain situations that they’ll charge significantly more.

    Bob:

    So if I go down to my grocery store or I go to get gas in my car, I’m not going to be able to pay in gold.

    Shawn:

    Bob, how many times do you go through the checkout and unfortunately it’s not a knock on some of the kids and other people working there, but how many times do you go through and they have a hard time figuring out how to calculate the change in regular currency? How in the world do we expect a cashier or someone working at HEB – for us here in Texas – to know how much gold they need from you for the groceries? You can’t use it.

    Bob:

    So gold always has to be converted back to the currency of the country to be spent.

    Shawn:

    And no government currently uses the gold standard, with Britain and the US abandoning it in 1931 and 1933 respectively.

    Bob:

    And the final abandonment by the United States was back in 1973.

    Shawn:

    That’s right. The fun part.

    Bob:

    This is the fun part. This is really interesting when we talk about investing in gold.

    Shawn:

    Historically low returns. Now what do we mean by that? I know if you go, and I’m sure if you guys want to pause it right now and go take a look at this, but all the information we’re going to be presenting today for these returns we got from www.macrotrends.net. There is an option, which I would encourage you to look at, choose the “inflation adjusted”, because otherwise you’re really not comparing apples to apples and especially in this case, because what’s one of the most common things we hear, Bob, people say gold is something to help with inflation. It’s supposed to hedge against inflation. Okay, well we did the inflation adjusted numbers and when you do that and compare gold and the Dow Jones Industrial average, which is again very well known, here are the facts. In 1980, again, this is inflation adjusted. I just want to make sure I say that multiple times.

    Bob:

    Right, because gold was not selling for this in 1980.

    Shawn:

    But inflation adjusted for today’s dollars, in 1980 gold was $2,736.96 an ounce. In 2011, 31 years later, gold was $2,529.45 an ounce. I dunno if you noticed, but that already went down by about $200. And as of summer of 2024 when we were recording this episode, about 44 years after 1980, gold is hovering around $2,327.28 an ounce. That is a loss of 14.97% or 15% for those who want a nice even number, a loss of 15% over 44 years. Now Bob, correct me if I’m wrong, but if that math is correct, that’s not a good return and definitely not helping with combating inflation, right?

    Bob:

    No, it’s not.

    Shawn:

    Okay. Because I’m pretty sure it should be going up significantly for inflation adjusted numbers if it was a good inflation.

    Bob:

    Well, I’m just looking at this. So that’s what the price is? See, I don’t follow it that much. I thought it was around $2,500. I didn’t realize it was that. That’s the latest figures.

    Shawn:

    The latest, this was specifically from the end of May. We’re recording this partway through June. I think it’s almost $2,500, but it’s still less than what it was in 2011’s Inflation adjusted numbers. So in contrast, alright, so we just covered gold, which was a loss of about 15% over 44 years. The Dow Jones Industrial average has grown significantly. In 1980, the Dow Jones was $3535.81.

    Bob:

    That’s inflation adjusted.

    Shawn:

    $3,535.81. In 2011, it was $16,096.35. And as of again, this month, June of 2024, it is $38,834.86. That is a gain of 998.33%. Okay, so for those of you at home, if you want to pause it for a second and get something to write with and then some paper, do the math, but which number is bigger? Negative 15% or positive 998%?

    Bob:

    Now what’s the reason for that, Shawn? Because I hear that and I think, “Okay, there’s got to be a reason.”

    Shawn:

    Yeah, what are the reasons for the lower returns?

    Bob:

    There’s a bunch of ’em actually. We came up with about five of them.

    Shawn:

    To hopefully help explain why. And the first one, which I have heard you say this so many times, 1) Gold produces nothing and pays no interest or dividends unlike stocks and bonds. So even if you have a portfolio of stocks and bonds that don’t really have a lot of growth potential, they’re not growth stocks, they’re large cap dividend stocks, for example. You’re still making an income off of that asset. The only way you make anything off of gold is selling it for enough additional higher price to make some money on it. That’s it.

    Bob:

    And I want to go to this point number three and we’ll come back to two. Okay. Okay. I know we have five points. Okay? Is that, 3) Buying and selling gold involves high commissions, too, often ranging from 5-6% or higher. I mean, we’ve heard as high as…

    Shawn:

    I’ve heard 3-5%, but it seems the highest number around 5-6%. The highest I heard was some elderly people being targeted at 50% where they thought their retirement savings, they were buying say $500,000 worth of gold. Come to find out they actually got about $250,000 worth of gold in today’s dollars. And so, I’m not saying that every gold dealer is going to be charging that high, but because it’s not regulated, which we’ll get into a little bit later as well, that causes a problem where they could swindle people, especially the elderly, which just boils my blood for people to take advantage of the elderly like that. Anyway.

    Bob:

    And this something else that’s very interesting is that, 4) The IRS classifies gold and silver as collectibles.

    Shawn:

    Yeah, that’s right.

    Bob:

    And when they do that, that’s subject to higher tax rates up to 28% on long-term gain taxes and ordinary income rates for short-term holdings. So you really don’t get that 15%.

    Shawn:

    So even the IRS doesn’t even classify gold as an investment. They classify it as collectibles.

    Bob:

    Right. Like we said, 5) It can’t compare to the historical returns of a well diversified portfolio of stocks and bonds, ETFs, mutual funds, and those are so easy to convert back to cash.

    Shawn:

    I mean, virtually no one even charges a trading commission anymore.

    Bob:

    Not anymore. Yeah.

    Shawn:

    So it’s super easy to trade if you do need to raise cash because again, in both situations, whether you have stocks and bonds or you’re owning gold, you’ve still got to convert it back at some point to the currency of your country. In our case, the US dollar.

    Bob:

    I wanted to point out that one, I don’t know if it really comes under the low returns, but we had it in this section was is, 2) Gold is very environmentally harmful. We’ve already pointed that out. It leaves a lot of lasting scars on landscapes and communities and it’s very linked to social injustice and…

    Shawn:

    Human rights violations.

    Bob:

    Yeah. Right.

    Shawn:

    Exactly. So seven reasons to avoid gold as an investment – if you haven’t heard enough yet. So 1) It’s no longer a widely accepted currency and must be converted back to cash for everyday transactions. You can’t go to the store and spend it.

    Bob:

    2) It has historically very low returns and is below what it was selling for 44 years ago when you adjusted for inflation.

    Shawn:

    That’s right. 3) It produces nothing and pays no interest or dividends.

    Bob:

    4) It’s environmentally hard on God’s creation. So we as Christians really need to think about when we’re buying gold, if we love the Creator, take care of the creation.

    Shawn:

    Which includes also not supporting child slavery in other countries.I don’t think the Lord would be happy with that. 5) It’s expensive to buy and sell because of high commissions and higher tax rates because it doesn’t have the benefit of the same long-term capital gains rates as stocks and bonds.

    Bob:

    And 6) It’s been proven over the long-term over and over that a well-diversified portfolio of stocks and bonds and even real estate will —

    Shawn:

    Outpace.

    Bob:

    Far outpace it.

    Shawn:

    Again, remember our numbers over 44 years? Negative 15% versus almost a 1000% return.

    Bob:

    And I think this last reason is really interesting a lot of people don’t think about if they’re going to own physical gold is, 7) It carries a high risk of theft.

    Shawn:

    Yeah. Exactly.

    Bob:

    Unless you’re going to put it in the safety deposit box, but then you got to walk from the safety deposit box back to your car.

    Shawn:

    Exactly. So Biblical perspective, as a fiduciary based Christian financial advisor or advisors, we believe that gold should be avoided as an investment. The Bible warns against coveting and idolizing silver and gold. Well, we’ve got two scriptures for you on this. Deuteronomy 7:25, “The images of their gods you are to burn in the fire. Do not covet the silver and gold on them and do not take it for yourselves or you will be ensnared by it for it is detestable to the Lord your God.” Bob, you want to take the next one.

    Bob:

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

    Shawn:

    That’s right. Just a couple quick additional points for you on why we think investing in gold is a bad idea.

    Bob:

    If we haven’t already beat it up already, right. It’s not an inflation hedge like the reputation says it is. It’s way over hyped.

    Shawn:

    Gold’s inflation hedging reputation is overhyped – period – as stocks and bonds have delivered higher long run returns on average, the environmental and human impact of gold mining is devastating, with evidence of destruction dating back hundreds and really thousands of years.

    Bob:

    You could see that today. You could still see it today. Yeah, this is a real big one, I think, as we’re ending up here is that gold dealers are not regulated like advisors in the financial services industry. This can really lead to investor exploitation through high commissions and targeting the elderly during times of economic uncertainty.

    Shawn:

    That’s right. And we’ve seen it happen.

    Bob:

    We have.

    Shawn:

    It’s really common, unfortunately, which again, I’m not kidding, it makes me feel like my blood boils when I hear about an elderly lady or a guy where they lost their spouse and then someone’s scaring them into selling their portfolio to buy a bunch of gold so they can make a huge commission. And it’s just, ughh, but that happens. That’s what happened, and there’s no regulation forit. I’m normally more libertarian. I don’t like a lot of regulation, but in this case.

    Bob:

    Two more points. So rather than timing precious metals markets, investors should focus on assets that build wealth through equity appreciation, dividends, interest, compound growth such as stocks, bonds, mutual funds, and real estate.

    Shawn:

    And the allure of “getting rich quick” and “beating the system” is not new.

    Bob:

    It’s not?

    Shawn:

    Nope. But has been given a modern spin to trick today’s population. As Solomon noted in Ecclesiastes 1:9, “What has been it is what will be, and what has been done, it is what will be done. So there is nothing new under the sun.”

    Bob:

    Amen. Do we have anything else? Oh my goodness.

    Shawn:

    In conclusion.

    Bob:

    Yeah. I think in conclusion we have really laid it out for investing in gold today.

    Shawn:

    Hopefully. Yeah. Hopefully everyone is very clear on what we are covering today. But in conclusion, investing in gold is not a substitute for a diversified portfolio. Historically, gold’s returns have not consistently beat inflation, which is what it’s always touted as. And the high fees further reduce long-term growth potential. By the way, those numbers we quoted earlier, that isn’t accounting for whatever the fee may have been in the beginning to buy it.

    Bob:

    Oh, it’s not.

    Shawn:

    Or selling it.
    So at an average of 5%, well you lost 5% upfront and then you lost 5% at the end. So those are just the prices, but we didn’t have to change that for the Dow Jones because there typically aren’t trading costs.

    Bob:

    So, now over 44 years, you’re down 25%.

    Shawn:

    Exactly.

    Bob:

    It’s abusive to people, especially children in other countries forced into slavery to mine the materials.

    Shawn:

    That’s right. Don’t fall victim to the lies, and hurt your future. Instead, work with a fiduciary financial advisor. It doesn’t have to be us. If not us, go to Kingdom Advisors or find an advisor that’s a Christian fiduciary advisor to help you tailor your portfolio to your goals and risk tolerance for a more reliable path to financial security. And as always, we are here for comments, questions, criticisms, jokes, whatever you want to share about financial advice, planning, and investment management. You can contact us during business hours by either calling or texting, (830) 609-6986, or you can find us on the web www.christianfinancialadvisors.com. As always, thank you for joining us, God bless, and see you next time.

    [DISCLOSURES]

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

    20 min
  • Do you suffer from Financial FOMO [Fear of Missing Out]
    Are you constantly chasing the next big investment opportunity? Do you never feel content with your current financial situation? Financial FOMO, or the fear of missing out, can trap us in a cycle of dissatisfaction, envy, and greed. In this episode, Bob and Shawn expose the dangers of the “Financial FOMO” mindset. Unfortunately, companies and media use financial FOMO to manipulate consumers into overspending and taking on debt. The antidote we recommend? Finding contentment in Christ, practicing gratitude, and focusing on reasonable returns rather than chasing the latest trends to help try and live a more fulfilling and financially stable life.
    21 min
  • 205 – Financial FOMO
    Click below to listen to Episode 205 – Financial FOMO
    Financial FOMO

    Check out these tips on how you can try and overcome the financial fear of missing out.

    More episodes >>

    Are you constantly chasing the next big investment opportunity? Do you never feel content with your current financial situation? Financial FOMO, or the fear of missing out, can trap us in a cycle of dissatisfaction, envy, and greed. In this episode, Bob and Shawn expose the dangers of the “Financial FOMO” mindset.

    Unfortunately, companies and media use financial FOMO to manipulate consumers into overspending and taking on debt. The antidote we recommend? Finding contentment in Christ, practicing gratitude, and focusing on reasonable returns rather than chasing the latest trends to help try and live a more fulfilling and financially stable life.

    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
    PHILIPPIANS 4:11-13

    Not that I speak from need, for I have learned to be content in whatever circumstances I am. I know how to get along with little, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me.

    HEBREWS 13:5

    Make sure that your character is free from the love of money, being content with what you have; for He Himself has said, “I will never desert you, nor will I ever forsake you.”

    ECCLESIASTES 5:10

    He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity.

    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:

    Are you constantly chasing the next big investment opportunity? Never feeling content with your current financial situation, financial, FOMO, or the fear of missing out can trap us in a cycle of dissatisfaction, envy, and greed. In this episode, we’ll expose the dangers of this mindset and uncover biblical truths that lead to true contentment in Christ no matter our circumstances. Let’s get some perspective. Welcome to another episode of Christian Financial Perspectives. We’re so glad that you’ve joined us today as we dive into financial FOMO, and I don’t know if you’ve ever heard of the term FOMO before, it means fear of missing out, but then there is financial FOMO, which we’re going to get into. Bob has graciously put a definition into our outline. Financial FOMO reflects the psychological aspect of investing where individuals are influenced more by emotions and the fear of missing out on market returns than by objective numerical analysis.

    Bob:

    Pretty good, huh?

    Shawn:

    End program.

    Bob:

    I think about, I guess it was just four or five years ago, and you knew when we started the podcast, Mary Jo helped me do it and we had a program way back that we did FOMO, and I was like, what’s FOMO? I didn’t even know what FOMO was, and now it’s become such a popular term and it’s very popular in the social media area as well. So you picked a really good scripture here. I like Shawn.

    Shawn:

    We actually have three scriptures for today.

    Bob:

    You have three of them today. Okay. Why don’t you read the first one? I’ll read the one in the middle and you catch this last one.

    Shawn:

    Sounds good. Well, first we’re going to start with Philippians 4:11-13. All of these are from the NASB if someone wants to read it for themselves, but Philippians 4:11-13, “Not that I speak from need, for I have learned to be content in whatever circumstances I’m in. I know how to get along with little, and I also know how to live in prosperity. In any and every circumstance, I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through him who strengthens me.” And this passage really, to start us out, really helps to emphasize the importance of finding contentment in Christ regardless of our financial circumstances.

    Bob:

    Boy, that scripture really goes good with the fear of missing out. The next one is Hebrews 13:5, “Make sure that your character is free from the love of money, being content in what you have, for He himself has said, ‘I will never desert you, nor will I ever forsake you.'” Yeah, it’s true. This passage reminds us to really find contentment in what we do have, not what we don’t have, and to trust in God’s provision and presence in our lives. And rather than constantly seeking more and more money, more possessions.

    Shawn:

    That’s right. And the most common thing that I hear people say sometimes is, “Money is the root of all evil.” It’s like, well, no, no, that’s a misquote. It’s, “The love of money is the root of all kinds of evil.” Not all evil, but all kinds of evil. And so we see, and I have one more scripture please, Ecclesiastes 5:10 that also again says loves money or love of money, “He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity.” This verse highlights the futility of constantly pursuing wealth and abundance as it will never bring true satisfaction or contentment. So there’s nothing wrong with money and wealth in and of itself, right?

    Bob:

    Yeah.

    Shawn:

    The problem comes in your heart. If you are seeking money for the sake of money, if you are seeking money for the sake of more possessions or things, even if you get it, you’re still not going to be happy. That’s the issue.

    Bob:

    It’s always going to be a little bit more in it. Yeah. When I was thinking about FOMO and financial FOMO,

    Shawn:

    Or F-FOMO,

    Bob:

    I mean I know it’s like FOMO, what does that FOMO mean again – fear of missing out. And I came up with lots of examples as I was thinking about this. I actually came up with 10 of them. The first example I see being that we’re in the financial advisory business, I see the fear of missing returns.

    Shawn:

    So chasing returns.

    Bob:

    Chasing returns, chasing returns is one of the examples of financial FOMO and always trying to buy those stocks or ETFs that everyone else seems to be buying. And it’s usually after, not before, they’ve appreciated beyond reason for the fear of missing out. It’s like, “I’ve missed, now I’ve missed this. I better go get in because it’s going to continue to go.” And boy, the media just plays into that.

    Shawn:

    By the time you heard about it, it’s probably already appreciated about as much as it will, and that’s just the way it works. So number two, switching advisory firms, changing advisory firms every few years due to fear of missing out.

    Bob:

    As I was thinking about this, switching advisory firms too, and I had an example, was occasionally, and by the way, it happens about every three or four years you have this timeframe. I don’t know where it’s the stars are aligned right or barometric pressure or what. You’ll have 1-2% of your client base that will start saying, “Well, I need to go find another advisor.” And other advisors are experiencing the same thing, because we’ll gain clients from an advisor that we’ll lose other clients to. And it’s like no one’s gaining anything.

    Shawn:

    There’s been a couple times, Bob, I remember we had a client leave for an advisor and there was a client that came to us that actually came from the same advisor.

    Bob:

    No, no. That’s what I’m saying.

    Shawn:

    They just swapped.

    Bob:

    Yeah, you swapped. No, that’s not just a couple of times. That’s happened many times.

    Shawn:

    Well, you’ve been around longer than me. I was saying specifically I remember it happening.

    Bob:

    My small town. Well, I say that. It’s not the small town of New Braunfels anymore. It used to be. But that happens and it’s interesting. It’s like that grass is better over there.

    Shawn:

    On that. It’s not that you can never switch advisory firms, right?

    Bob:

    Of course not.

    Shawn:

    What we’re talking about more is the every three to four years something, but we understand that maybe you were with a firm when you were younger, and as you’re maybe getting in your forties or fifties and you’re looking more towards retirement, if you feel like the firm you were with is not capable of helping with that, then okay, maybe you look for another one. We get it, but you’re better off not changing too often.

    Bob:

    That’s right.

    Shawn:

    So anyway, that’s kind of the point on that one. Number three, comparing your situation to others.

    Bob:

    Oh boy, that’s big FOMO, isn’t it?

    Shawn:

    A little bit, yeah. No matter how in tune we are with the Lord that is, I feel like, always a struggle.

    Bob:

    There’s always not…

    Shawn:

    …

    Bob:

    There’s always going to be somebody that has more, unless you’re Elon Musk or Warren Buffet, or…

    Shawn:

    Unless you’re on the top of the list.

    Bob:

    And you’re that top 5 in the world. I mean, there’s always going to be that you’re trying to compare, and you need to just stop it. Stop that. I mean, that is such an example of FOMO and fear of missing out.

    Shawn:

    And when you constantly do that, it leads to dissatisfaction and envy.

    Bob:

    Which takes us to the next point. Comparing also causes coveting, right?

    Shawn:

    So number four, coveting what others have or seem to be getting.

    Bob:

    And that’s the last of the 10 commandments. You’re not supposed to covet what others have, and that’s really desiring those possessions and lifestyle or financial success of others, and that can lead to resentment and inadequacy.

    Shawn:

    And you also don’t know, again, when it seems like someone is getting all this, well, what you don’t know in most cases, are they getting these things by putting it on the credit card that they’re not going to pay off in full before the statement, before the due date. Are they borrowing money from an equity loan or line of credit from their house? You don’t know. But even if they are not having to borrow money for it, you still shouldn’t focus on it. Focus on what the Lord has entrusted you with and manage it well.

    Bob:

    When I was talking to Rachael about this morning, she was mentioning that that FOMO gets people in high debt.

    Shawn:

    Yeah. Which goes right to number five, which is financial FOMO can result in becoming greedy. You end up having this constant pursuit of more wealth and possessions, and it leads to a greedy and selfish mindset where you prioritize the material gain over other important aspects of life, like your relationship with the Lord, your family. I mean, what kid would ever say as an adult, “Oh, I wish my dad or I wish my mom had spent more time in the office to buy us stuff instead of all the quality time that we got to have together.”

    Bob:

    Yeah. Well, like I mentioned a few podcasts back, you’ve never met a person on their deathbed that says, “I wish I had have spent more time making making money,” but they wish they’d spent more time. You can’t replace time with your family. And I think, see, this leads right into that next one.

    Shawn:

    You did really good on this one, Bob.

    Bob:

    Thank you.

    Shawn:

    Leads right into the next one.

    Bob:

    Well, number six, not exactly in this order, but I redid the order this morning before we made this. So, it leads into hurting relationships.

    Shawn:

    Financial FOMO hurts relationships,

    Bob:

    It strains them, it constrains them with friends and family and loved ones, because you’re constantly focusing on what others have and focusing on what you don’t have.

    Shawn:

    Instead of the people in your life. So number seven, financial FOMO results in a need for more and more control.

    Bob:

    I’ve seen this, Shawn, I’ve really seen this. Some people, they just need that control of everything and you need to let go and let God. And it’s that fear of missing out can lead to a desire to control every aspect of your financial life really causing a lot of stress and anxiety.

    Shawn:

    Yeah. It’s the same reason why we always encourage our clients and would encourage anyone watching or listening, if you do have investments and you have a professional financial manager that’s managing that for you, do not look at it every day. I would say, at most, look at it once a month because you are dealing with a year’s timeline, not a next few months, not this quarter. And so, fluctuations are normal. Don’t focus on having to control and worry about that all the time because it’s just going to cause you stress and anxiety that you don’t need.

    Bob:

    So I want to go into this number eight. This is an old saying. Many of us have heard our whole life, especially if you have ever been around ranching, because cows have a real tendency to do this. Financial FOMO tricks you into thinking that the grass is always greener somewhere else. I’ve seen cows get out of the pasture as. I did work on a ranch in my younger years and my grandfather was a big rancher, and they get outside the fence and they’re kind of like, I kind of want back in because they get mixed up when they get out and they don’t know where they are. But that mode of thinking will really cost you.

    Shawn:

    Yeah. Well, and that goes very much against what scripture tells us in that wealth gained quickly is quickly lost, but gained little by little lasts. I know I’m paraphrasing a little bit, but that’s the point, is that true wealth, financial wealth, I don’t mean true wealth like spiritual, but building wealth in this life, it comes down to little by little. There’s not some magic bullet or something else that’ll just, “Oh, you do this one trick, and financial advisors hate this one trick.” No, it’s little by little. I mean, how many clients have we dealt with over the years? And especially you, because you’ve been doing this longer than me, where you’re some of your wealthiest never made that much money as a household during their career, but they’re multimillionaires because they lived within their means. They saved and invested consistently. They didn’t constantly look for something somewhere else, and they stuck to the plan. So then when they retired, they were prepared.

    Bob:

    Which goes into number nine. They don’t have a jumper mentality. They don’t jump around. They don’t think the grass is greener and they don’t start jumping around like a rabbit trying to figure out where they are. They stick to it.

    Shawn:

    So financial FOMO causes a jumper mentality.

    Bob:

    Yes.

    Shawn:

    Which we don’t want.

    Bob:

    Yeah, exactly.

    Shawn:

    Then number 10.

    Bob:

    Number 10, yeah.

    Shawn:

    Financial FOMO can rob you of contentment and happiness.

    Bob:

    Oh, big time. Big time. It can lead to a constant state of dissatisfaction with what you have and unhappiness. You’re always seeking the next best thing. So as I was doing this, I said, okay, these are these 10 ways. I said, how is it used today? Because what’s kind of sad in all this is that companies and people use FOMO to their advantage, their financial FOMO…

    Shawn:

    To get people to do what they want from a financial perspective.

    Bob:

    So you go into that first one.

    Shawn:

    So number one, commission-based advisors, they use financial FOMO to sell high commission financial products like gold and annuities.

    Bob:

    They convince you if you don’t do this, you’re missing out, and they try to make you think you’re not very smart.

    Shawn:

    And you know what Bob? They are right. If you don’t do this, you’re missing out on a bad investment.

    Bob:

    Yeah. That’s true. The second one is the media. The media is constant. They’re using financial FOMO through advertising to entice consumers to spend money on products and services that they really don’t need, “But if you don’t have this, then you’re not going to get this.”

    Shawn:

    According to a certain car manufacturer around Christmas time, you’re supposed to buy your spouse a new car with a big red bow on it.

    Bob:

    Yeah. I’ve seen that.

    Shawn:

    Wait, we’re not going to mention it cause I don’t want them to get mad at us. Number three, entertainment. Programs like HGTV can make you feel like you’re missing out on the perfect home or renovation.

    Bob:

    I’m always saying, whatever color it is today, it’s going to change in two years. If you go spend all money because you feel like, “I’m missing out. My home needs to look this way because all the homes on HGTV look this way.” As soon as you get it all paid for, it’s going to change in two years, so just wait long enough, it’ll come back. Whatever you have right now, the colors probably would just come back.

    Shawn:

    Yeah. I mean, if the paint’s peeling or something, sure, you can reduce the maintenance, but you don’t have to change the color everywhere.

    Bob:

    Yeah. But I’ve seen so much of that. I mean, you’ve got a perfectly good granite countertop. Well now if it’s a certain color in granite, you’ve got to go get another color in granite or you got to get the stone. You’ve got to get something different, and that’s entertainment and they try to convince you of that. And I think HGTV, many times, is sponsored by all the vendors that sell the stuff.

    Shawn:

    That’s weird. Yeah. You see this thing about all these paint changes and the new countertops, and then they’re sponsored by “fill-in-the-blank paint company” and this stone or masonry group that that’s…Oh weird, right? So number four.

    Bob:

    Oh, this is a big one. I see the number one financial website, it’s probably CNBC, and then there’s Yahoo Finance and Google Finance. But these channels really use financial FOMO a lot to keep their viewers engaged and constantly seeking the next big investment opportunity. And they make you feel like a fool because they’ll say, “Such and such, this week was up this much or this month was up this much,” and they make you feel like, “Well, I’ve just missed out. I better go get into that before I miss out anymore.”

    Shawn:

    I don’t want to miss out on the next week.

    Bob:

    It kind of goes back to what we were talking about at the very, very beginning, but companies do this and of course number five is the big one. That was the one that my wife gave me the idea of this morning. Just the credit card companies and lenders.

    Shawn:

    Right. They use financial FOMO to make you their slave by encouraging overspending and taking on debt. They often promote a lifestyle that is beyond your means, leading to a cycle of debt and financial stress. I mean, the most common thing I’ve seen with credit cards is if you’ve been doing good with actually paying things off and you’ve got a good credit score, “Oh, well, would you like to increase your limit? You’ve actually been approved to increase your limit.” Well, if you’re spending what you need to spend and you’re making sure to stick with your budget, why would you need a higher limit? That doesn’t make any sense.

    Bob:

    It’s interesting, Shawn.

    Shawn:

    You’re just asking to get sucked in and spend more than you should be spending.

    Bob:

    A good credit score is good. I mean, I want you to have a good credit score, but really if you’re debt free, you don’t need a credit score.

    Shawn:

    Yeah, exactly

    Bob:

    Matter of fact, if you’re totally debt free, your credit score goes down. I don’t know if you knew that or not, even though you have tremendous amount in cash reserves and savings and investments. I mean, you could have $5 million or $10 million and be totally debt free and your credit score may be 200 because you hadn’t borrowed anything, but you’re a lot better off than most people. Okay, so I thought about there’s got to be an antidote to this financial FOMO. And I’ve thought of three different areas. Go ahead and share number one.

    Shawn:

    Sure. Number one is find contentment in Christ, not in the size of your portfolio, the latest returns, or what others seem to be making or have. Remember that true joy and peace comes from a relationship with God, not material possessions or financial success.

    Bob:

    You said it well, you wrote it down well, too.

    Shawn:

    I did. Yeah, it does help. Don’t tell anybody we have a computer in front of us to help with.

    Bob:

    Oh, I they know it. The second one is I want you to find contentment in the things that you do have, not in what you don’t have. Practice gratitude. Even say every day, “Lord, thank you for those things that I do have.” And focus on the blessings in your life rather than constantly seeking more. Get rid of that FOMO, that fear of missing out.

    Shawn:

    Number three, find contentment in reasonable returns not in what the financial media is trying to convince you that you’ve somehow missed out on.

    Bob:

    Can you see that a financial advisor wrote that? Yeah, I wrote that and I’ll say right now that reasonable returns are what we aim for around here. I’m not trying to hit home runs and get strikeouts. I’m trying to hit base hits.

    Shawn:

    If you’re looking at investment management purely from a performance standpoint, it’s very easy to get sucked into, “What is the return? I need to get the return higher.” But if you set realistic financial goals and you stick to a well thought out investment strategy rather than chasing the latest trends or hot investments, you’ll do well in the long run. I think a great example is if your average return is say 5-6% and you’re looking at your financial planning and for when you retire and then in retirement, okay, I’m hitting all the numbers for income that we’re going to need based on the plan. Great. Well, okay, maybe somewhere else there’s a 7% or 8% or a 10%, but does it really matter? If you’ve set out the goal and this is what you’re trying to do or if you have that goal of this is what I want to do in retirement, the Lord’s calling me to, it doesn’t really matter if you might be able to have a better return somewhere else if you’re on track for those goals that you’ve set.

    Bob:

    You said it perfectly and you’re going to have to take more risks to get those higher returns, too.

    Shawn:

    Yeah, exactly.

    Bob:

    I mean you have to. Risk and reward go hand in hand.

    Shawn:

    So in conclusion.

    Bob:

    In conclusion, yeah.

    Shawn:

    If we commonly accept the will of God for each one of us and accept changes in life, we’ll not be bothered by the severe or the constant obsessive fear of the financial fear of missing out.

    Bob:

    Amen. Let’s find our contentment in Christ and nothing else and focus on the blessings that are in our lives and overcome the negative effects of financial FOMO and live a more fulfilling, financial, stable life. I think that says it perfect.

    Shawn:

    Thanks as always for joining us. God bless. If you have any comments or topics or anything else you want to share, we’d love to hear from you. Comment, send us a message on our website, www.ChristianFinancialAdvisors.com or call or text us at (830) 609-6986. Until next time, thank you and God bless.

    [CONCLUSION]

    That’s all for now.

    We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.

    [DISCLOSURES]

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

    21 min
  • Budgeting Without Counting
    Feeling overwhelmed by the constant need to track every penny? Does the thought of budgeting and counting numbers fill you with dread? Bob and Shawn reveal a simple approach to managing your finances without the hassle of traditional budgeting. You'll learn how to gain control, reduce overspending, and aim to achieve your financial goals all without the burden of counting.
    19 min
  • 204 – Budgeting Without Counting
    Click below to listen to Episode 204 – Budgeting Without Counting
    Budgeting Without Counting

    Learn how to budget in a simpler way.

    More episodes >>

    Feeling overwhelmed by the constant need to track every penny? Does the thought of budgeting and counting numbers fill you with dread? Bob and Shawn reveal a simple approach to managing your finances without the hassle of traditional budgeting. You’ll learn how to gain control, reduce overspending, and aim to achieve your financial goals all without the burden of counting.

    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
    LUKE 14:28-30

    For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it— lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’?

    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:

    Feeling overwhelmed by the constant need to track every penny? Does the thought of budgeting and counting numbers fill you with dread? Well, in this episode, we’ll reveal a simple stress-free approach to managing your finances without the hassle of traditional budgeting. You’ll learn how to gain control, reduce overspending, and achieve your financial goals all without the burden of counting. Let’s get some perspective.
    Welcome back to Christian Financial Perspectives. So glad that you’ve joined us. My name’s Shawn Peters. I’m joined as always by Bob Barber, and today we’re getting into budgeting without counting. So for those of you who hate even holding or looking at a calculator or somehow it feels like when you try to budget, you’re just putting too many constraints on yourself and rules and you’re just a free spirit or something like that, I don’t know, whatever it might be. Well, today we’re going to present a plan to help you be able to budget, but in a way that avoids the counting and looking at counting very specific budget categories, if you will.

    Bob:

    It’s the cost of counting and numbers. And Shawn…

    Shawn:

    You’ve been doing this with you and Rachael, right? For many years.

    Bob:

    Rachael and I have been using this method for a good 15, 16 years, and it works very well. I’m the numbers guy. You know how opposites attract, right?

    Shawn:

    Yes. Bob loves to budget with counting.

    Bob:

    I love budgeting and accounting. My wife, if you want to get into an argument, you start talking about budgeting and counting. And I will say this, Shawn, from the many years of doing this with couples, there’s usually one that likes to do that and the other that doesn’t, or sometimes there’s both. They just can’t seem to budget correctly. There’s a little bit of counting that is involved in this in the beginning, but once you get past that, really you can let the app do it and it’s going to take care of it for you. It is amazing how well it works. And so people, I want you to, if you’re not driving and you happen to be at home, you might want to get out a notepad and write down some of this information. I’m going to give you some really great information today.

    Shawn:

    And really the strategy, the intent here is to help you gain control of your finances, but without the stress of having to constantly monitor your accounts.

    Bob:

    Yeah, that’s right.

    Shawn:

    But before we go any further, Bob, let’s go ahead and read Luke 14:28-30, “For which of you intending to build a tower does not sit down first and count the cost, whether he has enough to finish it, lest after he has laid the foundation and is not able to finish, all who see it began to mock him saying, this man began to build and was not able to finish.”

    Bob:

    Goes with budgeting, doesn’t it?

    Shawn:

    This passage really emphasizes the importance of planning and being wise with our resources. So, with the scripture out there, let’s go into step number one, which is determine your monthly expenses.

    Bob:

    There about four steps here, I believe? Four or five?

    Shawn:

    I believe so, yes. I believe we have four steps total.

    Bob:

    That is the first thing that you have to do. Yes, there is a little bit of counting upfront. Sorry, but I know we said budgeting without counting, but there’s got to be some upfront.

    Shawn:

    Budgeting with minimal counting. And it’s more so of initially.

    Bob:

    Yep. You’ve got to look at what your monthly expenses are and crunch those numbers to determine what your family can live on after taxes, savings, and giving.

    Shawn:

    That’s an important thing. After whatever taxes, savings, and giving you’re going to do and put into that plan, then what do you need to get by?

    Bob:

    And the normal month, of course has four weeks. Now we know there’s 30 days in a month. So on average you have to kind of compensate a little bit for that. Maybe day 8 or day 9, instead of day 7, 14, it might be 15, but you get the gist of it. Think about budgeting in four week increments. You think about basically eight or nine different things, and that is things like groceries, clothing, housing, utilities, that’s your electric, water, sewer, garbage and gas. Your transportation costs, like your car and upkeeping. Medical costs, insurance, which has to do with your home, auto, life, and disability. And then those miscellaneous costs like eating out and clothing and…

    Shawn:

    Just the non necessary clothing.

    Bob:

    Well, that’s true. That’s true.

    Shawn:

    Yeah, because there’s clothing, but that’d be more for the, well, I don’t need it, but I kind of want to get that new fill in the blank.

    Bob:

    Well, you can with this system that we’re going to talk about and how to crunch these numbers. But you have to figure this out first. You’ve got to figure out what can we live on. Now, if you’re making a 100k a year and your expenses are this is 120k, you’ve got a problem. But you know what I find, Shawn, is that most people, when they actually look at the numbers, they come in less.

    Shawn:

    But be sure when you’re looking at these, what do you need for the essentials that we’ve just listed? Make sure you include any debt payments, so credit card bills, student loans, things like that. Also, don’t forget to factor in things that are a little more infrequent. So at least annual change of oil in the car, things like that. Home repairs or gifts for Christmas for example, because that creeps up on people all the time.

    Bob:

    And we are, the way we’re going to talk about this, we’re going to have savings as a complete other category. Which has to do with the emergency expenses.

    Shawn:

    That’s right. So for the example budget today, we’re going to use a hundred thousand a year. It’s nice math. It’s a good number to start with.

    Bob:

    You can take 70% of these numbers and it’s 70.

    Shawn:

    Exactly. So at a 100,000 a year, that’s about 8,100 a month.

    Bob:

    That’s correct.

    Shawn:

    We did step one, which determined your monthly expenses. So now in step two, we’re going to break down your monthly expenses into weekly amounts.

    Bob:

    So we’re going to break that down by four weeks. The first is usually your most, because that’s at the beginning of the month. You have your heavier things like your mortgage payment, maybe your car payment. You got your utility bills that are usually due at the beginning of the month. So out of this $8,100, we determined, and this is very realistic, about $3000 of that — if you took the $8,100 and divided it by four, you’d be at $2,050 per week. But the first week’s going to take about $3000 of that because of the bigger bills that come up front. So what this means is, and we’re going to get into the next step, step three, you’ll see how we do this. But that means in that first week, all you’re going to spend is $3000 and we’re going to show you a way that it makes it impossible to spend more.

    Shawn:

    Right. So this leaves us with $5,100 for the next three weeks divided by three is $1700 a week.

    Bob:

    That’s correct.

    Shawn:

    So of course adjust these numbers based on your specific situation and when your bills are due. So I know for example, Jenna and I, we both have our mortgage payment that goes out on the 12th or as early as the 10th, depending on what day that falls on. And with our credit card bill, I think it’s on the 12th as well.

    Bob:

    So y’all may fall into week two of this. You may fall into a lesser on week one and the most on week two in y’all’s case. Okay.

    Shawn:

    So again, adjust it, but effectively you need to have that one. Or you can kind of look at it as well, we’re starting week two as our week one, but whatever the case is, just kind of keep on that consistent schedule when your paychecks come in and then move on from there.

    Bob:

    Now this is the first two steps, and that’s all the counting you got to have to do. I mean, that’s pretty much it.

    Shawn:

    From here on out, no more counting.

    Bob:

    But from here on out, we’re going to talk about a strategy that has worked so well in my own personal life. And I’ve talked this strategy to many of our clients and they absolutely love it. So here we go. Step three.

    Shawn:

    Step number three, set up two different bank accounts. So bank account number 1, strictly for depositing paychecks, paying taxes, you’re saving, and you’re giving. Never use this account for general spending.

    Bob:

    That’s never, ever, ever.

    Shawn:

    And we’ll say that multiple times.

    Bob:

    But you never take anything else from account number 1. That is so important.

    Shawn:

    Depositing income, paying taxes, putting money into savings, or giving. That’s it. That’s the only thing used for it. Now then bank account number 2, strictly for paying all your regular monthly expenses as we previously determined in step number one. So, having these two separate accounts helps to create a psychological barrier as well as technically to an extent there is a barrier in two separate accounts. But the biggest thing is when you have them in two separate accounts, it helps in your mind to be able to separate income and expenses. So you don’t look at your one account is very common for most people. You have your one checking account, that’s where everything goes into it.

    Bob:

    Everything comes in and everything goes out.

    Shawn:

    So when you’re trying to decide, “Oh, should we get this or do we need it or can we afford it?” You go, “Oh, look how much is in there?” But you very quickly forget, “Oh wait, what about this bill that’s coming in? What about this one? Oh, we also have this for giving that goes out to the church.” And so you’ve got to have those two separate accounts. That’s a big part of this.

    Bob:

    And preferably, Shawn — now this has worked well for Rachael and I — we have the accounts in completely different locations, too.

    Shawn:

    You’ve got one at a good local bank and then you have one at your good credit union.

    Bob:

    That’s the way it is with us.

    Shawn:

    Around here, we’ve got Frost and Randolph. So that would be the R-B-F-C-U.

    Bob:

    Any way you want to do it. But I think the best thing that you can do is actually setting this up in two separate accounts, two separate banks. I don’t want you looking at what’s in the bank account Number 1 that the income goes into. You have determined what your expenses are and then divided that by four and those first two steps, and then that’s going to come over. And the way that this works is you go to, and you’re looking at your account every day. Everybody has an online app. Everyone.

    Shawn:

    One thing to help on this is consider setting up automatic transfers when you already know what your paycheck’s going to be and the income, you know what the tax is and saving and giving, go ahead and set up the automatic transfers so that way whatever is supposed to move from bank account number 1 to number 2, happens automatically. You’re not checking it or decide, well this month I’ll do $3,500 to move over. No, nope, you got to stick to it.

    Bob:

    You do not do that. You do not do that. And the thing about this, so in this case, we were using $3,000 in the first week.

    Shawn:

    This gets us into step number four.

    Bob:

    Okay.

    Shawn:

    Transfer money from the bank account number 1 to bank account number 2, week one, you would, in using our example, transfer $3,000 from bank account number 1 to bank account number 2, no other funds should be transferred from bank account number 1 to number 2 until the next week.

    Bob:

    Well, what if I run out of money in day four, no more out? That’s exactly right. See, that’s the power…

    Shawn:

    You’ve already got the important things covered.

    Bob:

    That’s the power behind this. The power behind this is separating out the accounts. You’ve determined what you need on a weekly basis and you stick by it and you can look at that app every day and see what you’ve got. And if you are out of funds in day five or day six, you got to wait maybe one or two more days until the next part comes in. When you do it otherwise, any other way, it may look like I’ve got plenty, I still got a lot in there for the rest of the month. But then at the end of week two and a half or three weeks, you have nothing left. And then you have to go a whole week instead of a couple of days. I mean, this is extremely powerful. I’ve used it for so many years and man it works.

    Shawn:

    So at the end of that first week going into day seven or eight, you have the other $1700 transferred, and then just stick to the schedule for all four weeks.

    Bob:

    I mean, we live around this, Shawn, because Rachael, like you say, she doesn’t like budgeting or having to count all those numbers. And most people don’t. And she knows, okay, in week two, that’s when I can go buy more groceries or we can go, if we’ve already eaten out and used our budget by the fourth day of week one, we got to wait to week two. And same with each week. It keeps you right on schedule. And we’ve lived on the same amount, even with inflation, we’ve lived on this same amount pretty much for 15 years. We’ve been doing this even though my income kept rising, but I kept transferring over the same amount. And so I added that to savings and investing and giving.

    Shawn:

    Okay, that’s where the, well, what if something comes up in that second or third week that was not a, “Oh, I’d like to buy this or pay for it,” but there’s actually some sort of emergency. That’s when you would look at pulling from savings, if it’s truly an emergency.

    Bob:

    If it’s truly an emergency, an emergency is not a new car unless the other car has completely fizzled out. An emergency is not a new set of clothes. Emergency is an emergency. It is like for medical.

    Shawn:

    Or the AC completely broke and it’s Summer.

    Bob:

    That’s right. But by doing this this way, you will build up your investing and your savings accounts. And by giving from that account too, you’re giving from the gross, which is what God wants you to do.

    Shawn:

    That’s right. So which kind of leads right in, naturally Bob, to our benefits of budgeting without counting.

    Bob:

    Okay, learn to live on the same amount month after month, regardless of increasing income. You’re not always pushing more and pushing more. You’re determining how much is enough. We preach that around here. How much is enough?

    Shawn:

    That’s right. It gives, builds savings, invests extra money as your income increases, which is a big benefit.

    Bob:

    Number three is a big one, too. It definitely reduces the financial stress, especially if one of you is a budgeter like myself. Rachael doesn’t have to worry about counting the numbers. I’m looking at that. I’m looking at the account online. She looks at the account online. And some of you say, well, you don’t want to go look at your account online. The thieves are looking at the account online. And those that are looking to get into the bank accounts, you need to be monitoring your financial accounts often. I like to do them daily or weekly. Now if you have investing, don’t get caught up in looking at what the data says.

    Shawn:

    Yeah, we’re talking about the bank account, we’re not talking about the investment account.

    Bob:

    That’s right.

    Shawn:

    And Bob, one of the things is, again, since usually there’s one spouse is one way and you have the other way, but for you, I know you like to keep an eye on things, you like to be more in it and looking at all the numbers and Rachael doesn’t. Well, that’s very common with a lot of people. So this satisfies your need on the, “Well, I want to make sure that we’re staying with where we need to be. We’re staying on track.” But it allows someone who doesn’t like that to feel like they have a little more freedom where they’re not having to discuss and talk about every single little thing. “Well, what about this? Why’d you get this?” Well, it doesn’t matter. If you’re sticking within that budget, it doesn’t really matter if you spend a little more on clothing this time versus eating out.

    Bob:

    That’s exactly right, Shawn. It avoids arguments.

    Shawn:

    And then it encourages discipline and mindfulness in our spending habits. That’s a good one too. So, alright, well Bob, I’ll let you cover this part on personal experience since you’ve been doing this for so long.

    Bob:

    Well, I kind of have already. We set up this process many years ago because my wife, she doesn’t like counting and numbers. If I gave her a calculator, she might throw it back at me. So we’ve been married 40 years, we’ve been using this system for 15 to 20. It works extremely well. I’ve taught multiple clients how to use this system and it is very successful with them. It absolutely works. And like I say, many people have found success with this, even if they struggle with the traditional envelope budgeting system – constantly counting, you just got to break it down by the week.

    Shawn:

    So in conclusion, the importance of having two bank accounts cannot be stressed enough.

    Bob:

    No, it cannot.

    Shawn:

    You’ve got to have two different bank accounts for this to work. And again, we encourage you to have it at two different banks or institutions. It could be one credit union, one bank, but having that separation helps a lot because if they’re both the same bank and your name is on it or you and your spouse’s names are on it, well it’s just real easy to hit transfer from this account to this account. But when you have them at two different banks, they’re not automatically connected.

    Bob:

    And the thing is, is when you have it in two different institutions, also, it allows a couple extra days.

    Shawn:

    Yes, yes, that too.

    Bob:

    And so it’s really putting a wall between them because like you say, if you have it in the same bank account, you can transfer it instantaneously anytime. We don’t have enough now for another two days or three days. Well no, this helps you stay disciplined.

    Shawn:

    That’s right. It’s like drinking the water out of a straw versus a fire hose.

    Bob:

    Yeah, amen. It is.

    Shawn:

    Which causes a lot of waste of resources, but also just makes it a lot harder to get it done. If your choice is drink it from the hose at full blast , well you might just end up not drinking water.

    Bob:

    You’re also going to get a lot more wet, too, from doing that. So by implementing the strategy that we’ve talked about today, you can take control back of your finances, reduce stress, and work towards good, long-term financial goals. It’s really going to help a lot on the saving for emergencies and the investing and of course your giving as well, which I feel that the giving needs to be first.

    Shawn:

    Agreed. Alright, well that’s it for today. Thank you so much for joining us. God bless. And as always, you can reach out to us. Call, Text (830) 609-6986. You can also visit our website www.christianfinancialadvisors.com. Thank you and God bless.

    [CONCLUSION]

    That’s all for now.

    We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.

    [DISCLOSURES]

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

    19 min
  • 10 Biblical Investment Principles
    Are you tired of feeling lost in the world of investing? Unsure of how to navigate the ups and downs of the market? In this episode, Bob and Shawn explore 10 powerful Biblical principles that will guide you towards wise, faith-based investing decisions and help you stay focused on your long-term goals. Some of these areas include making investment decisions based on facts and math, rather than emotions or hearsay. Investing is a marathon, not a sprint, and should be viewed through a long term lens in order to create a well thought out financial plan.
    16 min
  • 203 – 10 Biblical Investment Principles
    Click below to listen to Episode 203 – 10 Biblical Investment Principles
    10 Biblical Investment Principles

    Explore 10 powerful Biblical principles to help guide you in your financial journey.

    More episodes >>

    Are you tired of feeling lost in the world of investing? Unsure of how to navigate the ups and downs of the market? In this episode, Bob and Shawn explore 10 powerful Biblical principles that will guide you towards wise, faith-based investing decisions and help you stay focused on your long-term goals.

    Some of these areas include making investment decisions based on facts and math, rather than emotions or hearsay. Investing is a marathon, not a sprint, and should be viewed through a long term lens in order to create a well thought out financial plan.

    HOSTED BY: Bob Barber, CWS®, CKA®

    CO-HOST: Shawn Peters

    Mentioned In This Episode
    Christian Financial Advisors
    Website
    Bob Barber, CWS®, CKA®
    Shawn Peters
    Bible Verses In This Episode
    Ecclesiastes 11:2

    Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.

    PROVERBS 7:7

    I saw among the simple, I noticed among the young men, a youth who had no sense.

    PROVERBS 18:15

    The heart of the discerning acquires knowledge, for the ears of the wise seek it out.

    PROVERBS 14:15

    The simple believe anything, but the prudent give thought to their steps.

    ROMANS 12:2

    Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing and perfect will.

    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.

    PROVERBS 14:7-8

    Stay away from a fool, for you will not find knowledge on their lips. The wisdom of the prudent is to give thought to their ways, but the folly of fools is deception.

    PROVERBS 13:11

    Dishonest money dwindles away, but whoever gathers money little by little makes it grow.

    ECCLESIASTES 3:1-2

    There is a time for everything, and a season for every activity under the heavens: a time to be born and a time to die, a time to plant and a time to uproot.

    1 TIMOTHY 6:9-10

    Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. 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.

    PROVERBS 21:5

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

    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:

    Are you tired of feeling lost in the world of investing? Unsure of how to navigate the ups and downs of the market? In this episode, we’ll explore 10 powerful Biblical principles that will guide you towards wise faith-based investing decisions, and help you stay focused on your long-term goals. Let’s get some perspective. Welcome back to Christian Financial Perspectives. We’re so glad that you joined us today. We’re going to be covering a topic that I feel like we’ve hinted at many times, Bob, but never covered this specifically or in this specific way, but 10 Biblical investment principles. Bob, why don’t you give our audience a little bit of a introduction on where this is coming from, why we’re covering this today?

    Bob:

    Well, I can tell you this, Shawn, that it took me a while to put this together. You’ve heard me say sometimes I can put together a program in literally 10 or 15 minutes. This one took me more like two or three days because I wanted to make sure I was getting it right and I was really thinking about how should we apply Biblical principles to investing, which, you know and I know we’ve talked about Biblically responsible investing so much, but this is going over the other aspects of it as well.

    Shawn:

    A little more, I guess you could say, how. So, how you might invest or create your own investment strategy, right? Okay.

    Bob:

    That’s correct.

    Shawn:

    Alright, well.

    Bob:

    So we have 10 of them.

    Shawn:

    We have 10 total we’re going to cover today. So Biblical investment principle number one, why don’t you go ahead, Bob, and I’ll handle the scripture.

    Bob:

    All right, well this is investing in a diversified portfolio of Biblically responsible companies that produce and distribute essential goods and services.

    Shawn:

    That’s right. And our scriptural reference for this is Ecclesiastes 11:2, “Invest in seven ventures, yes in eight; you do not know what disaster may come upon the land.” And one thing that we come across pretty frequently, Bob, when we say invest in BRI companies, well what that really means, for those of you listening are watching, are not only invest in Christian companies, most of the companies are not Christian, arguably most of them, I would call them neutral companies. They just focus on treating employees well, vendors well, they offer whatever their widget goods or services happen to be and they just don’t get involved in many of the contentious areas.

    Bob:

    That’s correct. That’s right. If they make widgets, they make widgets. They don’t get involved in all the other political jargon.

    Shawn:

    They’re not all Chick-fil-As and Hobby Lobby’s, for example. They’re just normal companies that don’t get involved.

    Bob:

    And this scriptural principle that we have in the scripture is truly diversification. Solomon’s talking to us about diversification and it’s diversifying in companies like you say, that produce and distribute essential goods and services, not “pie in the sky” kind of thinking.

    Shawn:

    Exactly. Exactly. Alright, so Biblical investment principle number two. Why don’t you?

    Bob:

    Well this is when you’re making investment decisions, make those decisions based on facts and math, not emotions or hearsay. Diversify across many sectors of the economy by company size, financial strength, and the markets that they serve, because many companies serve different markets, and avoid the day-to-day, financial media hype and the activities written by inexperienced writers and people. I mean, I’m …

    Shawn:

    Anybody can write an article.

    Bob:

    I am amazed Shawn at what I read on many of the financial websites and I go in, I dig into the writers, and the writers didn’t even major at all in finance. They majored in English, which is good. They’re writing proper English.

    Shawn:

    They can write really inaccurate stuff very well.

    Bob:

    They get the term trader and investor constantly mixed up, “Investors today are thinking…Investors the next hour are thinking…” That’s not an investor, that’s a trader, that’s not an investor. So that’s an example of it.

    Shawn:

    Investors deal, I would say at a minimum, on a month’s basis, not anything less than that. Anything less than that, you’re effectively day trader or weekly trader.

    Bob:

    So we’ve got the Biblical principles behind this for two scriptures I picked.

    Shawn:

    Both of these are from Proverbs. First one is Proverbs 7:7, “I saw among the simple, I noticed among the young men, a youth who had no sense.”

    Bob:

    That’s pretty strong, isn’t it?

    Shawn:

    Yeah. Well Proverbs never really holds back, does it?

    Bob:

    No, it doesn’t.

    Shawn:

    And our second one for this principle is Proverbs 18:15, “The heart of the discerning acquires knowledge for the ears of the wise seek it out.”

    Bob:

    Yes.

    Shawn:

    Yeah, so seek wise counsel would be another one.

    Bob:

    That’s right. Alright, so Biblical investment principle number three is avoid making irrational decisions that are motivated by greed.

    Shawn:

    Or hearsay.

    Bob:

    And stay focused on the long-term goals, not the day-to-day, what’s going on, but what is your long-term goals, and greed can get you in the wrong spot. You don’t want to let greed get you there. Because then you make irrational decisions.

    Shawn:

    That’s right. Then Proverbs 14:15, “The simple believe anything, but the prudent give thought to their steps.”

    Bob:

    Kind of sums it up, doesn’t it?

    Shawn:

    You’re making your decisions based on that long-term plan. So, first of all, you’ve got to sit down and make that long-term plan and figure out where you’re trying to get and by when and then that helps, kind of looking through that lens, it helps you to stay focused on that instead of worrying about what something does from one day to the next. Alright. Biblical investment principle number four.

    Bob:

    Do not conform and give in to overly emotional markets. The markets can get very emotional. When everyone is buying, the markets may be at all time highs and when they’re up by 10 or 20%, that’s the time to consider actually selling some off when everybody else is buying.

    Shawn:

    That’s right. Doesn’t mean to sell everything.

    Bob:

    This is usually on the tail end, too. This is usually the end of a two or three year cycle when you see everybody and their cousin, aunt, and uncle wanting to get in every 17-year-old, 15 year old is wanting to get in, everybody wants to get in the market. That’s the point when the emotions are involved in that, because everyone’s following the crowd that could be about to go off a cliff at that point. And on the opposite side of that is when everyone seems to be selling and the market’s declined by 10 to 20%, and they’re in a major valley versus a peak, that’s a great time to consider buying some and while it’s low. That is a very strong principle that has worked for guys like Warren Buffet for years. That’s what he does

    Shawn:

    The only time he ever consistently is in the news is you’ll hear about when the markets have not been doing well or a certain sector industry is kind of in the toilet and you’ll hear about, oh, Warren Buffet, he’s buying. He just bought such and such airline, or he just bought this energy company or shares in it. Of course. And yeah, it’s because that’s the principle that he’s been operating by for many, many years now.

    Bob:

    Yeah, that’s right.

    Shawn:

    But you never hear about the stuff he’s buying or the stuff he’s selling when everything’s at all time highs. They only bring him on when it’s all doom and gloom and they want to know what’s this crazy guy doing?

    Bob:

    So I wanted to make sure this scripture that you’re about to read, Shawn, I want to make sure that you understand, I don’t want to take this out of context, but when I looked at this scripture, we’ve got to be careful about just following the crowd and that’s where the first part of this scripture is really strong.

    Shawn:

    Gotcha. Romans 12:2 is a scripture for this one, “Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you’ll be able to test and approve what God’s will is, his good pleasing and perfect will.”

    Bob:

    Yeah, it’s that first part. It’s really strong. And the last part, God wants you, I mean, I’m not a prosperity theologist, but God wants you to do well. I mean Jeremiah…

    Shawn:

    Well, be a good steward of what he’s entrusted you with. Exactly.

    Bob:

    Plans for you to do well.

    Shawn:

    And I would say another scripture that I know it’s normally related to salvation, but when scripture talks about how broad is the path that leads to destruction, but narrow is the path that leads to salvation. Well, it’s kind of similar when the crowd mentality is typically, “Oh, everything’s going up. Everybody wants to get in, everybody wants to buy.” And then when it’s dropping, everybody wants to get out, everybody wants to get out. And the reality is the smaller group that goes against that push, against that tide, that crowd mentality are the ones that over time can do better.

    Bob:

    Interesting how you can apply Biblical principles to everything in your life. Biblical principle number five, be cautious of professional fear mongerers selling their conspiracy theories to promote their high commission products like gold and annuities. It’s a very strong Biblical investment principle.

    Shawn:

    On one hand they will create this fear and create this problem or this perceived problem and then they just so happen to have either something they sell or someone who’s sponsored. It’s like, “Oh, you should buy from this particular gold company or this particular type of annuity.” Weird how they created the problem that you may or not have even been aware of and then already had the solution right there. And they carry very high commissions.

    Bob:

    And like I say, I call ’em professional fear mongerers.

    Shawn:

    That’s right. They profit off of it. Alright. And 2 Timothy 1:7 is our scripture for this, “For God hath not given us the spirit of fear, but of power and of love and of a sound mind.”

    Bob:

    I use that scripture a lot when I hear of all the fear mongerers out there. Wait a second, God didn’t give us a spirit of fear. Now we’re supposed to be wise, but we’re not supposed to walk around fearful. Okay, Biblical principle number six, remember that nothing is free. If a return sounds too good to be true, it usually is. Get rich quick schemes usually only work for those selling them.

    Shawn:

    And it works for them, not because of what they’re teaching, but it works for them because they were able to trick a whole bunch of people into buying their nonsense and their training courses and whatever it is that they’re selling.

    Bob:

    I love it when you say that, nonsense. That’s a good word that you use.

    Shawn:

    Yeah, it is.

    Bob:

    Let’s read this scripture. It goes right with it.

    Shawn:

    That’s right. Proverbs 14:7-8, “Stay away from a fool for you’ll not find knowledge on their lips. The wisdom of the prudent is to give thought to their ways, but the folly of fools is deception.”

    Bob:

    I think it clears it up. Like you say, Proverbs never holds anything back.

    Shawn:

    Biblical investment principle number seven.

    Bob:

    Not every investment will be a winner. Investing is a long-term marathon, not a short-term sprint. Investors are not day traders, and day traders are not investors. Please hear that. I’ll say it again. Investors are not day traders, and day traders are not investors. And it’s all about the long-term with investors and it’s time, not timing, that wins.

    Shawn:

    If you miss one specific trading day for either buying or selling, and that breaks your portfolio and it breaks everything you’ve been working on you’re not investing, you’re gambling, also known as day traders. And for this one, Proverbs 13:11, “Dishonest money dwindles away, but whoever gathers money little by little makes it grow.” How many times do we see that in scripture where it’s talking about it’s little by little. It’s one day at a time. It’s not get rich quick. None of that makes any sense when you look at scripture.

    Bob:

    A good foundation is built over time.

    Shawn:

    That’s right. Biblical investment principle number eight.

    Bob:

    Bear markets, volatility, and up and down market cycles are to be expected and they’re normal.

    Shawn:

    And that’s for all investment options. I mean if you’re talking about the liquid markets for stocks and fixed income, equities, things like that. If you’re talking about actual, whether it’s residential, commercial, real estate, industrial, pretty much any market you look at, it’s going to go through cycles.

    Bob:

    If you’ve got an appraisal on a piece of real estate every single day, it would be a little bit different.

    Shawn:

    Even that would vary from day to day depending on the adjuster or the appraiser.

    Bob:

    Volatility is just something that comes with being an investor.

    Shawn:

    That’s right. And then our scripture for this one is Ecclesiastes 3:1-2, “There is a time for everything and a season for every activity under the heavens. A time to be born and a time to die, time to plant and a time to uproot.” I like the second part of that too. That’s for the invest or sell.

    Bob:

    Yeah, that’s correct. That’s correct.

    Shawn:

    Alright. Biblical investment principle number nine.

    Bob:

    Watch out for those Ponzi schemes guaranteeing unreasonable returns and always be diligent. Get rich quick schemes only work for the greedy, deceptive people that are selling them.

    Shawn:

    That’s right. And for this one, 1 Timothy 6:9-10, “Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction for the love of money,” not money itself, “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.”

    Bob:

    Shawn, one of the programs that I watch is the CNBC American Greed Program. Kind of interesting and it’s fascinating actually. What’s interesting though is the people, they always get into these Ponzi schemes because somebody guaranteed ’em 10% or 12% every single year, and then they get very upset when they find out it was a Ponzi scheme, but it was their own greed. Because if everything else is at 3% or 5% and it’s paying 12%, it’s unreasonable.

    Shawn:

    It could also be, there’s fear of missing out.

    Bob:

    Right, well that’s a big one.

    Shawn:

    I don’t want to miss out on this if it’s a good deal.

    Bob:

    That’s so big today, the FOMO mentality.

    Shawn:

    Yep, I know.

    Bob:

    Alright, we’re down to number 10.

    Shawn:

    Biblical investment principle number 10.

    Bob:

    Investing should always focus on long-term goals from 5 to 20 years with a well thought out financial plan that’s updated annually, otherwise you can quickly get off track.

    Shawn:

    That’s right. And for this one, Proverbs 21:5, “The plans of the diligent lead to profit as surely as haste leads to poverty.” And there you have it, 10 Biblical investment principles. Hopefully, this helped someone out there and maybe learned something new. We use these principles in our own management here for ourselves, for our clients.

    Bob:

    In my own life, I’ve used these principles for 30 years.

    Shawn:

    So thank you for joining us. As always, God bless and see you next time.

    [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.

    16 min
  • 10 Non Cash Giving Ideas to Lower Taxes
    Tired of your precious metals and valuables just sitting around collecting dust? Want to make a difference while also lowering your taxes? In this episode, Bob and Shawn explore 10 creative non-cash giving ideas that can help you bless others, leave a legacy, and reap the rewards of generosity. They cover ideas such as giving precious metals, real estate, stocks and bonds, as well as miscellaneous valuables and collectibles. If none of these non-cash giving ideas work for you, then you can always volunteer your time to bless others. Giving your time is something beyond donating cash or resources in order to help nonprofit organizations succeed.
    16 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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