Rob West: What if the greatest evidence of generosity isn't how much you give, but how badly you want to?
Hi, I'm Rob West. When Paul describes the churches in Macedonia, he tells us something remarkable. These believers were poor and suffering, yet begged for the privilege of giving. Today, we'll look at what their example teaches us about a heart transformed by grace. And then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith & Finance on American Family Radio, biblical wisdom for your financial decisions.
In 2 Corinthians 8, the Apostle Paul is encouraging the church in Corinth to participate in a collection for believers in Jerusalem who were experiencing severe hardship. To inspire them, Paul points to another group of believers, the churches of Macedonia. But he doesn't point to them because they were wealthy—quite the opposite. Paul writes in 2 Corinthians 8:1–4, "We want you to know, brothers, about the grace of God that has been given among the churches of Macedonia, for in a severe test of affliction, their abundance of joy and their extreme poverty have overflowed in a wealth of generosity on their part. For they gave according to their means, as I can testify, and beyond their means, of their own accord, begging us earnestly for the favor of taking part in the relief of the saints."
These believers were experiencing a "severe test of affliction." Paul describes their poverty as "extreme." Yet somehow, abundance of joy and extreme poverty combined to produce a wealth of generosity. And perhaps the most remarkable detail is this: they begged to give. Think about that. Paul wasn't begging them for money; they were begging Paul for the opportunity to give it. They saw generosity as a privilege.
That can feel almost foreign to us today. Even in the church, giving can easily become something closer to an obligation—a bill we pay, a percentage we calculate, or even a kind of spiritual tax. The question we might ask ourselves is, "How much do I have to give?" But the Macedonians seemed to be asking an entirely different question: "How can we be part of this?"
They knew their brothers and sisters were suffering, and they didn't want their own hardship to keep them from participating in what God was doing. That's a heart transformed by grace. In fact, notice how Paul begins this passage. He doesn't say, "Let me tell you about the impressive generosity of the Macedonians." He says, "We want you to know about the grace of God that has been given among the churches of Macedonia." Their generosity was evidence of grace at work in them.
And verse 5 tells us why: "They gave themselves first to the Lord and then by the will of God to us." That's the key. Before they gave their resources, they had given themselves to God. When we understand that we belong to Christ and that everything we have comes from His hand, generosity begins to look less like losing something and more like participating in something. It becomes a privilege.
Now, we should be careful here. Scripture is not telling us that faithful Christians should recklessly give away money they need to meet legitimate responsibilities. Later in the same chapter, Paul provides important balance. In verses 12 through 14, he says that a gift is acceptable according to what one has, not according to what one does not have. And then he explains that the goal is not that others might be relieved while you are hard-pressed, but that there might be equality. "At the present time your plenty will supply what they need, and that in return their plenty will supply what you need."
So Paul's point isn't that we should give irresponsibly. He's showing us something deeper about the posture of a generous heart. Do I primarily see generosity as something being taken from me, or as an opportunity God is placing before me? When I hear about someone in need, is my first instinct to protect what's mine, or to ask whether God has given me something I can share? The Macedonians weren't generous because they had plenty left over. They were generous because grace had changed what they treasured.
And ultimately, Paul points beyond Macedonia to Jesus Himself. 2 Corinthians 8:9 says, "For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sake he became poor, so that you by his poverty might become rich." That is the heart of Christian generosity. We don't give to earn God's favor; we give because, in Christ, we have already received grace beyond measure. And when grace captures the heart, generosity stops being merely something we have to do—it becomes something we get to do.
All right, your calls are next at 800-525-7000. That's 800-525-7000. I'm Rob West, and this is Faith & Finance on American Family Radio, biblical wisdom for your financial journey. We'll be right back after this break.
SEGMENT 2
Rob West: Hey, it's great to have you with us today on Faith and Finance here on American Family Radio. I'm Rob West. Just a moment, we'll begin taking your calls and questions today on anything financial. Perhaps there's that question you've been wrestling with in your financial life. We'd love to unpack it with you, help you think about it in light of biblical wisdom, because we know that God's Word has a lot to say on this topic—2,300 verses on money and possessions. And it really starts with this idea of lordship, that we are to surrender everything that we have to the Lord, recognizing He owns it all. Psalm 24:1: "The earth is the Lord's, and everything in it, the world, and all who live in it." And then quickly following on the heels of the lordship idea is stewardship. We're to use God's resources to fulfill His purposes, and we have a high calling as managers of the money that God has entrusted to us by the King of Kings. And that's a high calling. Genesis 2:15: Remember, "The Lord God took the man and put him in the Garden of Eden to work and care for it." So, we're to take God's creation, and order it, and improve it, to be productive, and to steward all that He has entrusted to us. And as a part of that, we're to give it away. Generosity is sharing that releases the world's grip on us. It removes the grip that money can have on us and have specifically on our hearts. And when we give, we calibrate our hearts to the Father's. So, if we understand those big ideas—all found in Scripture—that we're to transfer ownership to God and recognize His lordship, and then we're to be good stewards and try to create financial margin to fulfill God's purposes, and then we're to grow in the grace of giving and sharing, seeing money as a tool—well, we've now put ourselves in a position to view money through the lens of Scripture, which is really how we operate from a biblical worldview. Well, we want to help you do that in light of the very practical decisions and choices you're making each day. And so, let's dive in. Today, we're going to begin in Chicago, and we'll talk to Judith. Go right ahead.
Judith: Rob, I have some investments in a investment company, and I don't know anything about tax planning. So now I'm finding that I'm paying a lot of taxes at the end of every year, and I don't have any 401(k)s or—what's that other one? I can't remember. Anyways—
Rob West: An IRA, maybe?
Judith: Yeah, IRA. I have—they have me in some mutual funds. They have some CDs, some online bank accounts, and I'm finding that, you know, they seem to sell and buy too much so that I'm, you know—and I've made done pretty well, but last several years, I'm just paying too many taxes, and I know nothing. I never learned anything about tax planning. Can you direct me to somebody or some place that I can talk to and have them help me with the tax planning?
Rob West: Yes, yeah, absolutely. I think that could really benefit you here, Judith. Having that CPA or tax professional that can review why you're paying so much in taxes and identify opportunities you might be missing. And there's an opportunity to coordinate the investments and the taxes, and so you want to make sure that your financial advisor is considering the tax implications of the investment decisions that are being made. Many people have good investments, but poor tax coordination. And, you know, that can look like using something called tax-loss harvesting in a taxable investment account where you're offsetting gains with losses, and you have an intentional strategy there. You can hold investments long enough to qualify for the lower long-term capital gains rates, which come by owning an investment at least a year before they're sold. You can look at tax-inefficient investments, things like taxable bonds, and you could look at things like that. You can also do—once you're 70 and a half, if you're not there yet—you could look at something called a qualified charitable distribution, although I think you said you don't have an IRA, so that would not apply. So, those are the kinds of things you would want to look at. And if there's an advisor involved in this, I think just having that conversation and making sure that advisor is working alongside your tax professional so there's good coordination here. So, you have an advisor, but you don't have someone who is actively working with you on tax planning, is that what I'm hearing?
Judith: Yes, and I have talked to my investor, and he doesn't really think—he just does what I tell him, which I don't really know exactly what to tell him. But I tell him, "I think the funds, the mutual funds you have me in are buying and selling too often." So then he'll say, "Okay, well, I'll work on that," but, you know, he really doesn't seem to have any help as far as tax planning. So, I think I need someone in addition to that person, 'cause he will do what I ask him, but, you know, like I don't know what—
Rob West: Yeah, and that doesn't sound like a great scenario. I mean, I don't want to automatically assume this is not the right fit for you, but a good financial advisor should absolutely be thinking about the taxes as a part of your overall financial plan, and that could include tax-efficient investments, again, being mindful of capital gains, using strategies like tax-loss harvesting that I mentioned. So, you know, although they may not be licensed tax professionals and don't prepare returns, you know, they typically will think about the tax implications and then at the very least be in coordination with your CPA, but, you know, should still be tax-aware and considering the tax consequences of investment decisions. It sounds like in your situation—and maybe this is the way it was designed originally, I'm not saying this advisor is doing anything wrong—but it sounds like you're, you know, making most of the decisions here and directing it, rather than the advisor telling you how it should be done in light of your goals and objectives, but really leading the way in both the investment side and the tax side. So, I think you've got a couple of options. If you have a long-standing relationship that you're happy with and this is a trusted advisor that you want to continue doing business with, great. We need to bring a tax professional to the relationship that can coordinate with the advisor. If you're open to a change, perhaps there's an advisor, you know, who could be a little more proactive and maybe you would benefit by somebody who, you know, could bring a little more intentionality to the relationship, rather than just being reactive, instead being more proactive. And if you wanted to consider a change, I would probably look for a Certified Kingdom Advisor there in Chicago. You could go to findacka.com, and there's a ton of CKAs that are amazing right there in Chicago. So, that would be the second option. Does that all make sense, though?
Judith: Uh, yes, but the Kingdom Advisor, what would he be doing or she? I mean, how—
Rob West: Yeah, well, it just depends on what you want. There's Certified Kingdom Advisors in the investment space, there's others that are just purely financial planners, there's yet a third category where, you know, they do both the investment management and the financial planning. I guess what I'm just saying is, I hear you saying that your advisor is being more reactive to what you're directing, and if you want an advisor who's a little more proactive that could do the financial planning and the investments, but really with an eye toward the tax planning without you having to tell the advisor what to do, that is available. That's, in fact, what most advisors do. And so if a change was required to get that, that's where you may want to look at some other alternatives. Otherwise, if you're happy with your advisor, maybe you just engage a tax professional separately and then just have the two coordinate together. So, you'd only want to look at a CKA to replace your current advisor if you felt like there was more you wanted out of the relationship and you were not happy with what you were getting currently. Judith, I hope that helps. We appreciate your call today. God bless you. A quick break, and back with more questions right after this. Stick around.
SEGMENT 3
Rob West: So glad you're joining us today on Faith and Finance here on American Family Radio. I'm Rob West. In our final segment today, Jerry Boyer and Walker Wildmon stop by. We'll get Jerry's take on the markets, the economy. Also, both gentlemen will weigh in on the latest from AFA Action in the area of corporate engagement. That's coming up in our final segment today. But let's head right back to the phones in the meantime. We're going to go out to Michigan. Sandra, how can I help?
Sandra: Hi, Rob. We've been hearing an awful lot about investing in gold, and we'd like to know some pros and cons of it and if it's worth investing in that.
Rob West: Okay, very good. What is your age, if you don't mind me asking, Sandra?
Sandra: We're in our early 70s.
Rob West: Okay, great. Yeah, so for somebody in their 70s, retired, I'd treat gold primarily as a diversification tool, not automatically as, quote, "a safe place" to move a large amount of retirement money. The potential advantages are that gold can behave differently from stocks and bonds, so a modest allocation—and I would put that at 5 to 10% of your investable holdings—that could diversify a retirement portfolio. It's also historically attracted investors during periods of inflation and geopolitical uncertainty, financial stress, all of which we have now.
I think the disadvantages are, first of all, that gold doesn't produce any interest or dividends or any kind of cash flow. So its price can fall substantially. Therefore, it isn't equivalent to a CD or a Treasury or an insured savings account. But the fact that it doesn't have any income is a disadvantage, especially in this particular season of retirement. It also, when you have physical gold—and there are other ways to buy it, but typically when folks have physical gold—it also brings other complexities and costs, namely the dealer markups. So when you buy or sell, you may not be able to buy or sell exactly at the spot price of the metal because the dealer who's helping you with that transaction is taking their cut. And so that just, you know, reduces your overall return. You also have storage and insurance costs as well.
So I would say, you know, for somebody in your stage of life where liquidity—meaning access to your money—reliable income, and the ability to withstand, you know, price declines may be particularly important, I think, again, seeing gold as a part of an overall diversified portfolio with a fairly, you know, small amount of 5 to 10% is probably the way to go. But give me your thoughts on all that.
Sandra: Uh, yes. What I wanted to know is uh, because of the fact that we keep hearing about how the dollar is cut in half compared to, you know, the value of it anymore, and that the value of gold is so much higher that, you know, it's better to go with the gold route than other investments, and I just don't understand that part.
Rob West: Mm-hmm. Yeah, it's a great question, and I know it's on the minds of a lot of folks these days. And frankly, it's how gold is being marketed right now as, you know, some sort of a hedge against what you're describing. And there is some truth behind, you know, what you're hearing, but I would separate that from the conclusion that that should result in you moving a lot more money into gold.
You know, gold often benefits when the US dollar weakens because gold is priced in dollars. So a weaker dollar can make gold more attractive. And that's been one factor behind gold's recent growth. But gold doesn't automatically rise every time the dollar falls, and a rising gold price doesn't necessarily mean the gold—or, excuse me, the dollar—is, you know, collapsing in any sense. Gold is affected by several things, including interest rates, and inflation, and geopolitical uncertainty, and investor demand.
And I think at the end of the day, what we need to understand is that, historically speaking, you know, gold has been more volatile than stocks and bonds, and it has not had the long-term performance. It has not done as well as a properly diversified stock and bond portfolio. So, you know, at the end of the day, I think despite there being some weakness in the dollar, and, and certainly the US having, you know, issues that we will have to reckon with related to our debt levels and the interest associated with it, we're still the largest economy in the world, and there is no rival at this point to the US dollar just in terms of the stability and, you know, the central bank confidence and the backing of the economy like we have.
If the dollar were to be replaced by something, we would have to have a viable alternative. And whether you look at the euro or the BRICS or, you know, even toward the Asian currencies, there's just not anything that has the stability and the confidence that the US does. And I think that will be true for the foreseeable future.
So I think the key for you right now is to say, what is the right mix of investments for us given where we're at, our goals and objectives? And I think that's, you know, a small allocation of gold, it's an allocation of bonds, and an allocation to stocks. You know, and at 70, it's probably, you know, as you think about this, um, you know, it's probably 30 to 40% in stocks, 5 to 10% in gold, and the rest in bonds would be, you know, a starting point for me.
Sandra: Okay. Now, how easy is that to cash in? You know, if you need to get cash, what steps do you take for that?
Rob West: For the portfolio I just described or gold itself?
Sandra: The gold itself.
Rob West: Yeah, it depends on how you buy it. So if you buy the physical metal, and then you have to insure it and you have to store it safely, um, you know, you've got to find a dealer. You've got to find a buyer, and, you know, you could use somebody local, you could use somebody that's national, online. I, you know, I would be happy to connect you with somebody who's a Christ-follower who can help with buying and selling. But there's always going to be a dealer premium. So whether you're buying, and they're going to, you know, charge you a bit more than the actual spot price of the metal, or you're selling, um, it's certainly not as easy as you might find with stocks and bonds because you can just go on, you know, online and click a button and sell that stock.
It's not that way with physical gold, so you've got to do your homework, you have to have a trusted vendor, and, um, you're going to have to transport it in terms of buying and selling. And that just creates complexity and cost. So that's why I think for that first 5%, I'd make that a forever allocation, and then do the other 5% with one of the exchange-traded funds. Hang on the line, we'll talk a bit more. We'll be right back.
SEGMENT 4
Rob West: Thanks for joining us today on Faith and Finance here on American Family Radio. I'm Rob West. We're helping you apply God's wisdom to your financial decisions and choices. When you call 800-525-7000, whatever your questions are today, we'd love to tackle them with you, whether you're thinking about your spending plan, maybe it's your investments. You know, I had a chance to talk about where gold might fit in your portfolio a moment ago, perhaps you're thinking about your own investment mix, or maybe you have some debt you're trying to get rid of. Whatever you're thinking about today, call right now. We do have some lines open: 800-525-7000. Again, that's 800-525-7000. You can call right now. Let's go out to Virginia. David, go ahead.
David: Yes, I'm 64 and a half. I work full time. Um, my 401(k) is not the best, so I plan on continuing to work for quite some time. But because I am at an age to be able to get Social Security, I've had recently had a friend say, "You don't collect your Social Security?" And I said, "No." He says, "Well, after you reach your target date, um, it's tax-free and you can keep working as long as you want without having to pay back." I'm just wondering if there's any truth to that, or should I—because I if I can draw Social Security along with my income, I may be able to retire uh in a few years earlier than I thought I could. I guess that's about it.
Rob West: Yeah. Well, there are several things going on here, David. The first is just recognizing that anytime you take Social Security before full retirement age, which is likely 67 if you were born in 1960 or later, um, you would—and and it could be a few months prior to that—um, you're going to have that permanently reduced if you take that early. So you just need to factor that in, um, that you are locking in that permanent reduction on the benefit. And for someone who's still working and doesn't necessarily need it, you know, I would love for that check to continue to grow, at least to what you're expecting to get at full retirement age, if not beyond that. It would grow 8% a year up to age 70. And then the cost-of-living adjustments that you get in the future, you know, would be based on that higher benefit amount.
Um, in terms of the uh ability to work, if you are working and you take Social Security before full retirement age, it can cause some of your benefits to be withheld temporarily. You will get them back after full retirement age in the form of a higher check; you'll get it back over time. But basically, you can earn up to $24,480 before the earnings test applies. Above that, Social Security with- would withhold a dollar uh of benefits for every $2 you earn over the limit.
So, for example, if you earn $60,000 from your job, you'd take off the $24,480, that leaves $35,000 roughly over the limit. And then you would divide that by two, so $17,000 of your Social Security benefits would be be uh withheld over the year. Again, once you reach full retirement age, Social Security recalculates your benefit to account for the months' benefits that were withheld, and then you'd get a higher check until you were paid back.
But the other thing to keep in mind, and this is perhaps where you misunderstood, or perhaps the person you were talking to misunderstood, the, you know, depending on how much income you have—and this has no bearing on whether you're pre-full retirement age or after full retirement age, this is always true—depending on how much income you have determines how much of your Social Security is taxable, if any.
So the IRS uses a calculation based on a half of your Social Security benefits plus your other income. And depending on that total in your filing status, that determines how much of your Social Security is actually included in your taxable income, and that could go up as high as 85% of your Social Security benefits. Now, that's not an 85% tax rate, it just means that up to 85% of the benefit becomes part of the income that's subject to tax based on the tax rate that you're paying. Does that make sense?
David: Yes, okay.
Rob West: Okay, yeah. So you just need to factor all of those things in. You've got a couple of things going on—three in fact. You've got this permanent reduction that you would have by taking it before full retirement age. Secondly, you'd have this uh, you know, earnings limit where your benefits would start to be reduced temporarily by you going over the limit. And then thirdly, no matter what your age is for the rest of your life, depending on how much income you have is going to determine how much of your Social Security is taxable.
David: Okay, great. All right, can I say something real fast? Um, I used to listen to Larry Burkett, and I read his book, The Coming Economic Earthquake, like 30 years ago, whenever it was. Yes. So I was one of the ones that took that to the extreme in worry, so I didn't do my 401(k). It was just like so conservatively, that's why I'm where I'm at now. So had I not took that so seriously, um, I would be a lot better shape now. So for those out there that, yes, at some point in time our economy could crash or whatever, yes, but at the same time, don't let that hold you back is what I want to tell everybody else, because that day does come and you need to be ready. So, um, yeah, that's why I'm not able to retire at my age, cause I was just way too conservative. Yeah.
Rob West: Hm, yeah. I hear you on that, and I certainly appreciate it. You know, Larry published that back in uh 1991, I believe it was, and he was warning about serious—the potential for a serious economic consequences from government debt. Um, and amazingly we—it didn't play out. Could he have just been early? Perhaps. We have far more debt today um than we did back then. Um, but I think, you know, the bottom line is, I think the biggest lesson is the danger of making, you know, long-term investment decisions on a one economic prediction um because at the end of the day, we just don't know.
And uh, you know, you can violate biblical principles economically and otherwise, and the implications of that may not play out as quickly as you might expect. Um, and, you know, over time, we know that those biblical principles are true, and they're always right, and they're always relevant, but we just don't know the timing of how they will affect, you know, real outcomes including economically. And in this case, you know, Larry called for something that at best case he was early on, worst case he was just wrong.
Um, but I think at the end of the day, we look to God's word, not predictions, and say, "Okay, what does faithfulness look like today with what God has placed in my hands?" Because only God knows the future, and I think faithfulness today looks like making God your ultimate treasure, seeing money as a tool, living appropriately, saving appropriately, investing thoughtfully, and giving generously. And, you know, I think uh your point is very well taken. So I appreciate you sharing that, David.
David: Thanks, sir.
Rob West: All right, God bless you. Uh, let's head to uh Ohio. Annette, go right ahead.
Annette: Hi. Um, thank you for taking my call. We listen most every day and appreciate the advice you give.
Rob West: Thank you.
Annette: I have questions about something you said a minute ago, and I didn't quite catch the name of it, but there's a way you can take money out of your IRA and put it—give it to a charity or a church?
Rob West: Yes. Yeah, you sure can. It's called a Qualified Charitable Distribution, Annette, and it's a really powerful tool because if you're 70 and a half or older, it allows the money in your IRA to go directly from your IRA custodian to an eligible charity, and it does not make that a taxable distribution, which every other withdrawal from your IRA is.
So it allows you to get more into God's Kingdom because 100% of that money goes to the charity, it's not added to your taxable income, and then a third benefit is, if you're 73 and have a required minimum, it counts toward the required minimum. So it's just a really powerful tool. It's called a Qualified Charitable Distribution, and during the break, let's talk a bit more and I'll make sure you understand all that. We'll be right back.
SEGMENT 5
Rob West: Great to have you with us today on Faith and Finance. Walker Wildmon and Jerry Bowyer are here, and we'll talk AFA Action and corporate engagement in just a moment. But first, Jerry, here we go again with this upside-down economy. Great news: soft jobs data and unemployment rising, so the market's up, right?
Jerry Bowyer: Exactly. And why does it work that way? Hearing the media try to explain that is always very confusing, right? Okay, so we only created 29,000 jobs last month, which is not nearly what it takes to keep the labor market healthy, and the unemployment rate went up. Typically when that happens, it's a matter of layoffs and, in addition, people getting into the labor market—maybe because they feel the need to—but not getting jobs yet.
The unemployment rate, by the way—people don't understand this—it's not the number of people who don't have jobs; it's the number of people who want to have jobs who don't have jobs. So if people decide, "You know what? Early retirement wasn't such a good idea. I'm having trouble making ends meet, so I'm going to get back into the job market," that drives up the unemployment rate. So it's people seeking jobs.
It was a bad jobs report. We had a good one the month before, but if you're getting rid of the ups and downs and just smoothing it out, this is a jobs market that's barely getting it done. It's mostly positive numbers—that's good—but it's not keeping up with normal labor market traditions, standards, and norms with averages.
So that's bad news, and the market would go down. Nope, the market didn't go down. Why? Because that meant, "Oh, wait a minute, the Fed might cut interest rates, might put money into the system, might not tighten. It means easier money." So what does that have to do with markets? People don't understand that when the Fed creates new money, it goes into the economy. One thing they know is it's not going into their bank accounts. Where is it going? It comes in through markets—open market operations.
Ever hear the Fed Chairman referred to as the Chairman of the FOMC? What's the "M"? Markets. Where do they pump money into the system? Not through consumer spending, not into your bank account—they do it through markets. So when that money is going to be pumped through the system, it's coming in through the markets, and markets go up in response to that. That's an upside-down world.
The other thing about that is the big story for the past few weeks is about rising interest rates and what that's doing—why that's been trouble for markets and for the economy. I just want to go back to—most people listening don't know what I'm referring to, but you will—the blackboard videos. I did videos for you and others that you use at Kingdom Advisors, where we talk about interest rates and how central it is and how to have a biblical worldview understanding of it.
What we know is if the central bank creates a lot of money, if they debase the currency, that pushes down interest rates. They're pumping money in; they're out there lending money, putting it into the system, and that lowers interest rates. But that's inflationary. What happens is eventually inflation comes along, it stays, and eventually it's undeniable. At that point, interest rates go up because you have to be compensated for the loss of purchasing power when you're the lender.
I've talked to you about this a hundred times. If I loan you $100 and I'm going to get back $105 from you next year, but the inflation rate was 5%, I didn't make any money. I didn't really get interest; I just got compensated for lost value. So I would want a higher interest rate to compensate me for that higher inflation. That's called an inflation premium, right? So that drives up interest rates.
But the other thing is, when you have high inflation, eventually the central bank gets out of denial and says, "Well, looks like we have to raise interest rates, take money out of the system, and fight inflation." So then what you do is you go from freakishly low interest rates to normal interest rates, but then they have to go higher than normal because there's an inflation premium in there and the Fed is pumping money out of the system in order to fight the inflation.
Right there, that's the boom-and-bust cycle that we've had ever since there's been a central bank, whether it's the Great Depression, the Great Recession, what's going on now, or the dot-com bubble. Over and over again, the central bank pumps money into the system to stimulate the economy. It doesn't stimulate the economy; it just stimulates prices, which causes inflation. The market responds, saying, "Wait a minute, I want more interest rate; I'm losing money on this deal." And then the central bank has to go in the opposite direction to pull money out of the system, so you go from 200-year-low interest rates now to above average. That's wreaking havoc with market valuations.
But it all comes down to this: Who should set interest rates? Answer: We should. When we're borrowing, when we're lending, when we're saving—if we're not willing to save if the interest rate isn't right, or we're not willing to borrow, the banks and the markets are just intermediaries between us. I'm 64; I'm a net saver, so I'm a lender. Younger people who are starting off with mortgages are net borrowers. We work it out between ourselves. The bank just handles the paperwork, and between my behavior as a 64-year-old and someone who's a 24-year-old in borrowing mode, we settle on an interest rate determined by the market.
When that's working the way it's supposed to—when we're a covenant-keeping people, when we're a saving people—interest rates are generally pretty low. But when the government tries to manipulate it to make us feel rich, to make us borrow so we'll spend because they think that causes prosperity, it sets off a boom cycle, at which point the bust is inevitable. When the government sets up a boom or a bubble, the bust has to happen; it's unavoidable.
So that's what we're on the edge of right now. We have huge valuations in AI; the market is almost entirely being held up now by AI, so we're extremely sensitive to what the Fed is going to do. Because we have a weak labor market, the Fed just might not be doing that tightening to fight inflation. They're choosing one side of their dual mandate rather than the other. They're choosing the inflation-fighting side of the dual mandate sometimes, and they're choosing the stimulating side of the dual mandate other times.
Today, they're doing the stimulating side because of the weak labor market. So what happens? Markets go up, gold goes up. Why is gold up? Because gold knows the Fed's more likely to be easy money because the employment market is weak.
Rob West: That's helpful. One more question, and then I want to quickly get to corporate engagement with Jerry. We had a caller earlier today who said, "I read Larry Burkett's The Coming Economic Earthquake in the '90s. Because of that, I didn't invest; I really went into a bunker mentality. I'm paying for that today, and therefore I'm still working into my retirement season because that never happened."
I think the reality here is, whether Larry was wrong or early doesn't matter; you can violate these principles that you just described and get away with it for a period of time—maybe a long period of time—but eventually, God's Word is always right in the end, right?
Jerry Bowyer: Right, exactly. It reasserts itself. If you jump off of a two-story house, it goes okay for a couple of seconds. "Hey, this isn't so bad," and then you hit the ground.
I think we have a situation here where some principles can be violated and you can get away with it for a while, and those tend to be borrowing and easy money principles. Because America is so historically grounded on Christian faith and a Christian worldview, it has all this borrowed social capital, making us the best-functioning economy in the world. So we can violate some of those principles and get away with it for a long time, but eventually it reasserts itself.
A lot of people have asked me about Larry Burkett's book, but the Christian thought-leader world has been dominated by doom predictions for a long time. Remember the Blood Moon thing? Yeah, back in 2012 or something like that. Christians were terrified, talking to advisors, asking, "Should I take all my money out of the market?" I ended up having a conversation with a very wealthy individual who said, "I'm going to sell all my stock and buy lumber land." I said, "How about half?" Because the market actually did really well after that, and the Blood Moon market meltdown never happened.
There's something about our mindset that makes us particularly susceptible to apocalyptic scenarios. Now, maybe it's because the last book of our Bible is the Apocalypse, right? So we are tuned for something to end badly. But guess what? We didn't have it in the 1980s. I think it's because Christians—to be favorable towards my brethren here—know that something's been wrong with America for a long time, so we have a sense of impending judgment.
But we don't necessarily add to that the prudence of saying, "Yes, but America compared to other nations, the dollar compared to other currencies—how does that compare? How much do we have going right because of our inheritance?" Rather than just saying, "Oh, this is really terrible; look what's happened to this country," we feel like we deserve judgment. Which may well be true, but just because we deserve judgment doesn't mean we get it, that it comes through markets, or that it comes as soon as we notice we've got these moral problems.
So I think there's a little bit of a fear that goes beyond prudence that we are particularly susceptible to. I am generally not finding that Christians historically have been more optimistic about the economy than they should have been; they've generally been more pessimistic, and a lot of them have sat out some really good gains and not participated in the market. I think that's a tragic loss.
Rob West: That's well said. I'm getting short on time here. Walker, I want to bring you into the conversation and quickly pivot. Some incredible work happening in the area of corporate engagement. Tell us what you're working on right now.
Walker Wildmon: Yeah, real quick. I just talked to Jerry's team this morning, and as of this morning, we filed a proposal with Goldman Sachs. What we're trying to do there is get transparency on their corporate matching program with charitable giving to ensure that religious groups, including AFA, are not excluded from their charitable giving.
Rob West: Wow. And Walker, this is an issue you've gone to bat with other companies on and seen some success, right?
Walker Wildmon: Yeah, absolutely. We've seen some success in other areas with Goldman Sachs, and so the hope here is that we reach a good resolution that is in the best interest of the company and shareholders.
Rob West: Incredible. Folks, just keep in mind, especially as we head toward the end of the year here, what an opportunity to make a gift of appreciated stock to AFA, and then allow AFA and the team at Bowyer Research to evaluate that and say, "Is there a conversation that we'd like to have with company leadership before this is sold?" Because that can affect real change, and that's what Walker's talking about with this latest piece of corporate engagement.
Gentlemen, thanks for your time this morning. We appreciate you.
Walker Wildmon: Thanks, Rob.
Rob West: All right. That's Jerry Bowyer and Walker Wildmon. They join us each Friday in this segment to update us on economics and corporate engagement.
Big thanks to my team today: Devin, Patty, Pat, Taylor, Michael, and everybody here at FaithFi. Have a great weekend. We'll talk to you next week. Bye-bye.
Rob West: What if the greatest evidence of generosity isn't how much you give, but how badly you want to?
Hi, I'm Rob West. When Paul describes the churches in Macedonia, he tells us something remarkable. These believers were poor and suffering, yet begged for the privilege of giving. Today, we'll look at what their example teaches us about a heart transformed by grace. And then it's on to your calls at 800-525-7000. That's 800-525-7000. This is Faith & Finance on American Family Radio, biblical wisdom for your financial decisions.
In 2 Corinthians 8, the Apostle Paul is encouraging the church in Corinth to participate in a collection for believers in Jerusalem who were experiencing severe hardship. To inspire them, Paul points to another group of believers, the churches of Macedonia. But he doesn't point to them because they were wealthy—quite the opposite. Paul writes in 2 Corinthians 8:1–4, "We want you to know, brothers, about the grace of God that has been given among the churches of Macedonia, for in a severe test of affliction, their abundance of joy and their extreme poverty have overflowed in a wealth of generosity on their part. For they gave according to their means, as I can testify, and beyond their means, of their own accord, begging us earnestly for the favor of taking part in the relief of the saints."
These believers were experiencing a "severe test of affliction." Paul describes their poverty as "extreme." Yet somehow, abundance of joy and extreme poverty combined to produce a wealth of generosity. And perhaps the most remarkable detail is this: they begged to give. Think about that. Paul wasn't begging them for money; they were begging Paul for the opportunity to give it. They saw generosity as a privilege.
That can feel almost foreign to us today. Even in the church, giving can easily become something closer to an obligation—a bill we pay, a percentage we calculate, or even a kind of spiritual tax. The question we might ask ourselves is, "How much do I have to give?" But the Macedonians seemed to be asking an entirely different question: "How can we be part of this?"
They knew their brothers and sisters were suffering, and they didn't want their own hardship to keep them from participating in what God was doing. That's a heart transformed by grace. In fact, notice how Paul begins this passage. He doesn't say, "Let me tell you about the impressive generosity of the Macedonians." He says, "We want you to know about the grace of God that has been given among the churches of Macedonia." Their generosity was evidence of grace at work in them.
And verse 5 tells us why: "They gave themselves first to the Lord and then by the will of God to us." That's the key. Before they gave their resources, they had given themselves to God. When we understand that we belong to Christ and that everything we have comes from His hand, generosity begins to look less like losing something and more like participating in something. It becomes a privilege.
Now, we should be careful here. Scripture is not telling us that faithful Christians should recklessly give away money they need to meet legitimate responsibilities. Later in the same chapter, Paul provides important balance. In verses 12 through 14, he says that a gift is acceptable according to what one has, not according to what one does not have. And then he explains that the goal is not that others might be relieved while you are hard-pressed, but that there might be equality. "At the present time your plenty will supply what they need, and that in return their plenty will supply what you need."
So Paul's point isn't that we should give irresponsibly. He's showing us something deeper about the posture of a generous heart. Do I primarily see generosity as something being taken from me, or as an opportunity God is placing before me? When I hear about someone in need, is my first instinct to protect what's mine, or to ask whether God has given me something I can share? The Macedonians weren't generous because they had plenty left over. They were generous because grace had changed what they treasured.
And ultimately, Paul points beyond Macedonia to Jesus Himself. 2 Corinthians 8:9 says, "For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sake he became poor, so that you by his poverty might become rich." That is the heart of Christian generosity. We don't give to earn God's favor; we give because, in Christ, we have already received grace beyond measure. And when grace captures the heart, generosity stops being merely something we have to do—it becomes something we get to do.
All right, your calls are next at 800-525-7000. That's 800-525-7000. I'm Rob West, and this is Faith & Finance on American Family Radio, biblical wisdom for your financial journey. We'll be right back after this break.
SEGMENT 2
Rob West: Hey, it's great to have you with us today on Faith and Finance here on American Family Radio. I'm Rob West. Just a moment, we'll begin taking your calls and questions today on anything financial. Perhaps there's that question you've been wrestling with in your financial life. We'd love to unpack it with you, help you think about it in light of biblical wisdom, because we know that God's Word has a lot to say on this topic—2,300 verses on money and possessions. And it really starts with this idea of lordship, that we are to surrender everything that we have to the Lord, recognizing He owns it all. Psalm 24:1: "The earth is the Lord's, and everything in it, the world, and all who live in it." And then quickly following on the heels of the lordship idea is stewardship. We're to use God's resources to fulfill His purposes, and we have a high calling as managers of the money that God has entrusted to us by the King of Kings. And that's a high calling. Genesis 2:15: Remember, "The Lord God took the man and put him in the Garden of Eden to work and care for it." So, we're to take God's creation, and order it, and improve it, to be productive, and to steward all that He has entrusted to us. And as a part of that, we're to give it away. Generosity is sharing that releases the world's grip on us. It removes the grip that money can have on us and have specifically on our hearts. And when we give, we calibrate our hearts to the Father's. So, if we understand those big ideas—all found in Scripture—that we're to transfer ownership to God and recognize His lordship, and then we're to be good stewards and try to create financial margin to fulfill God's purposes, and then we're to grow in the grace of giving and sharing, seeing money as a tool—well, we've now put ourselves in a position to view money through the lens of Scripture, which is really how we operate from a biblical worldview. Well, we want to help you do that in light of the very practical decisions and choices you're making each day. And so, let's dive in. Today, we're going to begin in Chicago, and we'll talk to Judith. Go right ahead.
Judith: Rob, I have some investments in a investment company, and I don't know anything about tax planning. So now I'm finding that I'm paying a lot of taxes at the end of every year, and I don't have any 401(k)s or—what's that other one? I can't remember. Anyways—
Rob West: An IRA, maybe?
Judith: Yeah, IRA. I have—they have me in some mutual funds. They have some CDs, some online bank accounts, and I'm finding that, you know, they seem to sell and buy too much so that I'm, you know—and I've made done pretty well, but last several years, I'm just paying too many taxes, and I know nothing. I never learned anything about tax planning. Can you direct me to somebody or some place that I can talk to and have them help me with the tax planning?
Rob West: Yes, yeah, absolutely. I think that could really benefit you here, Judith. Having that CPA or tax professional that can review why you're paying so much in taxes and identify opportunities you might be missing. And there's an opportunity to coordinate the investments and the taxes, and so you want to make sure that your financial advisor is considering the tax implications of the investment decisions that are being made. Many people have good investments, but poor tax coordination. And, you know, that can look like using something called tax-loss harvesting in a taxable investment account where you're offsetting gains with losses, and you have an intentional strategy there. You can hold investments long enough to qualify for the lower long-term capital gains rates, which come by owning an investment at least a year before they're sold. You can look at tax-inefficient investments, things like taxable bonds, and you could look at things like that. You can also do—once you're 70 and a half, if you're not there yet—you could look at something called a qualified charitable distribution, although I think you said you don't have an IRA, so that would not apply. So, those are the kinds of things you would want to look at. And if there's an advisor involved in this, I think just having that conversation and making sure that advisor is working alongside your tax professional so there's good coordination here. So, you have an advisor, but you don't have someone who is actively working with you on tax planning, is that what I'm hearing?
Judith: Yes, and I have talked to my investor, and he doesn't really think—he just does what I tell him, which I don't really know exactly what to tell him. But I tell him, "I think the funds, the mutual funds you have me in are buying and selling too often." So then he'll say, "Okay, well, I'll work on that," but, you know, he really doesn't seem to have any help as far as tax planning. So, I think I need someone in addition to that person, 'cause he will do what I ask him, but, you know, like I don't know what—
Rob West: Yeah, and that doesn't sound like a great scenario. I mean, I don't want to automatically assume this is not the right fit for you, but a good financial advisor should absolutely be thinking about the taxes as a part of your overall financial plan, and that could include tax-efficient investments, again, being mindful of capital gains, using strategies like tax-loss harvesting that I mentioned. So, you know, although they may not be licensed tax professionals and don't prepare returns, you know, they typically will think about the tax implications and then at the very least be in coordination with your CPA, but, you know, should still be tax-aware and considering the tax consequences of investment decisions. It sounds like in your situation—and maybe this is the way it was designed originally, I'm not saying this advisor is doing anything wrong—but it sounds like you're, you know, making most of the decisions here and directing it, rather than the advisor telling you how it should be done in light of your goals and objectives, but really leading the way in both the investment side and the tax side. So, I think you've got a couple of options. If you have a long-standing relationship that you're happy with and this is a trusted advisor that you want to continue doing business with, great. We need to bring a tax professional to the relationship that can coordinate with the advisor. If you're open to a change, perhaps there's an advisor, you know, who could be a little more proactive and maybe you would benefit by somebody who, you know, could bring a little more intentionality to the relationship, rather than just being reactive, instead being more proactive. And if you wanted to consider a change, I would probably look for a Certified Kingdom Advisor there in Chicago. You could go to findacka.com, and there's a ton of CKAs that are amazing right there in Chicago. So, that would be the second option. Does that all make sense, though?
Judith: Uh, yes, but the Kingdom Advisor, what would he be doing or she? I mean, how—
Rob West: Yeah, well, it just depends on what you want. There's Certified Kingdom Advisors in the investment space, there's others that are just purely financial planners, there's yet a third category where, you know, they do both the investment management and the financial planning. I guess what I'm just saying is, I hear you saying that your advisor is being more reactive to what you're directing, and if you want an advisor who's a little more proactive that could do the financial planning and the investments, but really with an eye toward the tax planning without you having to tell the advisor what to do, that is available. That's, in fact, what most advisors do. And so if a change was required to get that, that's where you may want to look at some other alternatives. Otherwise, if you're happy with your advisor, maybe you just engage a tax professional separately and then just have the two coordinate together. So, you'd only want to look at a CKA to replace your current advisor if you felt like there was more you wanted out of the relationship and you were not happy with what you were getting currently. Judith, I hope that helps. We appreciate your call today. God bless you. A quick break, and back with more questions right after this. Stick around.
SEGMENT 3
Rob West: So glad you're joining us today on Faith and Finance here on American Family Radio. I'm Rob West. In our final segment today, Jerry Boyer and Walker Wildmon stop by. We'll get Jerry's take on the markets, the economy. Also, both gentlemen will weigh in on the latest from AFA Action in the area of corporate engagement. That's coming up in our final segment today. But let's head right back to the phones in the meantime. We're going to go out to Michigan. Sandra, how can I help?
Sandra: Hi, Rob. We've been hearing an awful lot about investing in gold, and we'd like to know some pros and cons of it and if it's worth investing in that.
Rob West: Okay, very good. What is your age, if you don't mind me asking, Sandra?
Sandra: We're in our early 70s.
Rob West: Okay, great. Yeah, so for somebody in their 70s, retired, I'd treat gold primarily as a diversification tool, not automatically as, quote, "a safe place" to move a large amount of retirement money. The potential advantages are that gold can behave differently from stocks and bonds, so a modest allocation—and I would put that at 5 to 10% of your investable holdings—that could diversify a retirement portfolio. It's also historically attracted investors during periods of inflation and geopolitical uncertainty, financial stress, all of which we have now.
I think the disadvantages are, first of all, that gold doesn't produce any interest or dividends or any kind of cash flow. So its price can fall substantially. Therefore, it isn't equivalent to a CD or a Treasury or an insured savings account. But the fact that it doesn't have any income is a disadvantage, especially in this particular season of retirement. It also, when you have physical gold—and there are other ways to buy it, but typically when folks have physical gold—it also brings other complexities and costs, namely the dealer markups. So when you buy or sell, you may not be able to buy or sell exactly at the spot price of the metal because the dealer who's helping you with that transaction is taking their cut. And so that just, you know, reduces your overall return. You also have storage and insurance costs as well.
So I would say, you know, for somebody in your stage of life where liquidity—meaning access to your money—reliable income, and the ability to withstand, you know, price declines may be particularly important, I think, again, seeing gold as a part of an overall diversified portfolio with a fairly, you know, small amount of 5 to 10% is probably the way to go. But give me your thoughts on all that.
Sandra: Uh, yes. What I wanted to know is uh, because of the fact that we keep hearing about how the dollar is cut in half compared to, you know, the value of it anymore, and that the value of gold is so much higher that, you know, it's better to go with the gold route than other investments, and I just don't understand that part.
Rob West: Mm-hmm. Yeah, it's a great question, and I know it's on the minds of a lot of folks these days. And frankly, it's how gold is being marketed right now as, you know, some sort of a hedge against what you're describing. And there is some truth behind, you know, what you're hearing, but I would separate that from the conclusion that that should result in you moving a lot more money into gold.
You know, gold often benefits when the US dollar weakens because gold is priced in dollars. So a weaker dollar can make gold more attractive. And that's been one factor behind gold's recent growth. But gold doesn't automatically rise every time the dollar falls, and a rising gold price doesn't necessarily mean the gold—or, excuse me, the dollar—is, you know, collapsing in any sense. Gold is affected by several things, including interest rates, and inflation, and geopolitical uncertainty, and investor demand.
And I think at the end of the day, what we need to understand is that, historically speaking, you know, gold has been more volatile than stocks and bonds, and it has not had the long-term performance. It has not done as well as a properly diversified stock and bond portfolio. So, you know, at the end of the day, I think despite there being some weakness in the dollar, and, and certainly the US having, you know, issues that we will have to reckon with related to our debt levels and the interest associated with it, we're still the largest economy in the world, and there is no rival at this point to the US dollar just in terms of the stability and, you know, the central bank confidence and the backing of the economy like we have.
If the dollar were to be replaced by something, we would have to have a viable alternative. And whether you look at the euro or the BRICS or, you know, even toward the Asian currencies, there's just not anything that has the stability and the confidence that the US does. And I think that will be true for the foreseeable future.
So I think the key for you right now is to say, what is the right mix of investments for us given where we're at, our goals and objectives? And I think that's, you know, a small allocation of gold, it's an allocation of bonds, and an allocation to stocks. You know, and at 70, it's probably, you know, as you think about this, um, you know, it's probably 30 to 40% in stocks, 5 to 10% in gold, and the rest in bonds would be, you know, a starting point for me.
Sandra: Okay. Now, how easy is that to cash in? You know, if you need to get cash, what steps do you take for that?
Rob West: For the portfolio I just described or gold itself?
Sandra: The gold itself.
Rob West: Yeah, it depends on how you buy it. So if you buy the physical metal, and then you have to insure it and you have to store it safely, um, you know, you've got to find a dealer. You've got to find a buyer, and, you know, you could use somebody local, you could use somebody that's national, online. I, you know, I would be happy to connect you with somebody who's a Christ-follower who can help with buying and selling. But there's always going to be a dealer premium. So whether you're buying, and they're going to, you know, charge you a bit more than the actual spot price of the metal, or you're selling, um, it's certainly not as easy as you might find with stocks and bonds because you can just go on, you know, online and click a button and sell that stock.
It's not that way with physical gold, so you've got to do your homework, you have to have a trusted vendor, and, um, you're going to have to transport it in terms of buying and selling. And that just creates complexity and cost. So that's why I think for that first 5%, I'd make that a forever allocation, and then do the other 5% with one of the exchange-traded funds. Hang on the line, we'll talk a bit more. We'll be right back.
SEGMENT 4
Rob West: Thanks for joining us today on Faith and Finance here on American Family Radio. I'm Rob West. We're helping you apply God's wisdom to your financial decisions and choices. When you call 800-525-7000, whatever your questions are today, we'd love to tackle them with you, whether you're thinking about your spending plan, maybe it's your investments. You know, I had a chance to talk about where gold might fit in your portfolio a moment ago, perhaps you're thinking about your own investment mix, or maybe you have some debt you're trying to get rid of. Whatever you're thinking about today, call right now. We do have some lines open: 800-525-7000. Again, that's 800-525-7000. You can call right now. Let's go out to Virginia. David, go ahead.
David: Yes, I'm 64 and a half. I work full time. Um, my 401(k) is not the best, so I plan on continuing to work for quite some time. But because I am at an age to be able to get Social Security, I've had recently had a friend say, "You don't collect your Social Security?" And I said, "No." He says, "Well, after you reach your target date, um, it's tax-free and you can keep working as long as you want without having to pay back." I'm just wondering if there's any truth to that, or should I—because I if I can draw Social Security along with my income, I may be able to retire uh in a few years earlier than I thought I could. I guess that's about it.
Rob West: Yeah. Well, there are several things going on here, David. The first is just recognizing that anytime you take Social Security before full retirement age, which is likely 67 if you were born in 1960 or later, um, you would—and and it could be a few months prior to that—um, you're going to have that permanently reduced if you take that early. So you just need to factor that in, um, that you are locking in that permanent reduction on the benefit. And for someone who's still working and doesn't necessarily need it, you know, I would love for that check to continue to grow, at least to what you're expecting to get at full retirement age, if not beyond that. It would grow 8% a year up to age 70. And then the cost-of-living adjustments that you get in the future, you know, would be based on that higher benefit amount.
Um, in terms of the uh ability to work, if you are working and you take Social Security before full retirement age, it can cause some of your benefits to be withheld temporarily. You will get them back after full retirement age in the form of a higher check; you'll get it back over time. But basically, you can earn up to $24,480 before the earnings test applies. Above that, Social Security with- would withhold a dollar uh of benefits for every $2 you earn over the limit.
So, for example, if you earn $60,000 from your job, you'd take off the $24,480, that leaves $35,000 roughly over the limit. And then you would divide that by two, so $17,000 of your Social Security benefits would be be uh withheld over the year. Again, once you reach full retirement age, Social Security recalculates your benefit to account for the months' benefits that were withheld, and then you'd get a higher check until you were paid back.
But the other thing to keep in mind, and this is perhaps where you misunderstood, or perhaps the person you were talking to misunderstood, the, you know, depending on how much income you have—and this has no bearing on whether you're pre-full retirement age or after full retirement age, this is always true—depending on how much income you have determines how much of your Social Security is taxable, if any.
So the IRS uses a calculation based on a half of your Social Security benefits plus your other income. And depending on that total in your filing status, that determines how much of your Social Security is actually included in your taxable income, and that could go up as high as 85% of your Social Security benefits. Now, that's not an 85% tax rate, it just means that up to 85% of the benefit becomes part of the income that's subject to tax based on the tax rate that you're paying. Does that make sense?
David: Yes, okay.
Rob West: Okay, yeah. So you just need to factor all of those things in. You've got a couple of things going on—three in fact. You've got this permanent reduction that you would have by taking it before full retirement age. Secondly, you'd have this uh, you know, earnings limit where your benefits would start to be reduced temporarily by you going over the limit. And then thirdly, no matter what your age is for the rest of your life, depending on how much income you have is going to determine how much of your Social Security is taxable.
David: Okay, great. All right, can I say something real fast? Um, I used to listen to Larry Burkett, and I read his book, The Coming Economic Earthquake, like 30 years ago, whenever it was. Yes. So I was one of the ones that took that to the extreme in worry, so I didn't do my 401(k). It was just like so conservatively, that's why I'm where I'm at now. So had I not took that so seriously, um, I would be a lot better shape now. So for those out there that, yes, at some point in time our economy could crash or whatever, yes, but at the same time, don't let that hold you back is what I want to tell everybody else, because that day does come and you need to be ready. So, um, yeah, that's why I'm not able to retire at my age, cause I was just way too conservative. Yeah.
Rob West: Hm, yeah. I hear you on that, and I certainly appreciate it. You know, Larry published that back in uh 1991, I believe it was, and he was warning about serious—the potential for a serious economic consequences from government debt. Um, and amazingly we—it didn't play out. Could he have just been early? Perhaps. We have far more debt today um than we did back then. Um, but I think, you know, the bottom line is, I think the biggest lesson is the danger of making, you know, long-term investment decisions on a one economic prediction um because at the end of the day, we just don't know.
And uh, you know, you can violate biblical principles economically and otherwise, and the implications of that may not play out as quickly as you might expect. Um, and, you know, over time, we know that those biblical principles are true, and they're always right, and they're always relevant, but we just don't know the timing of how they will affect, you know, real outcomes including economically. And in this case, you know, Larry called for something that at best case he was early on, worst case he was just wrong.
Um, but I think at the end of the day, we look to God's word, not predictions, and say, "Okay, what does faithfulness look like today with what God has placed in my hands?" Because only God knows the future, and I think faithfulness today looks like making God your ultimate treasure, seeing money as a tool, living appropriately, saving appropriately, investing thoughtfully, and giving generously. And, you know, I think uh your point is very well taken. So I appreciate you sharing that, David.
David: Thanks, sir.
Rob West: All right, God bless you. Uh, let's head to uh Ohio. Annette, go right ahead.
Annette: Hi. Um, thank you for taking my call. We listen most every day and appreciate the advice you give.
Rob West: Thank you.
Annette: I have questions about something you said a minute ago, and I didn't quite catch the name of it, but there's a way you can take money out of your IRA and put it—give it to a charity or a church?
Rob West: Yes. Yeah, you sure can. It's called a Qualified Charitable Distribution, Annette, and it's a really powerful tool because if you're 70 and a half or older, it allows the money in your IRA to go directly from your IRA custodian to an eligible charity, and it does not make that a taxable distribution, which every other withdrawal from your IRA is.
So it allows you to get more into God's Kingdom because 100% of that money goes to the charity, it's not added to your taxable income, and then a third benefit is, if you're 73 and have a required minimum, it counts toward the required minimum. So it's just a really powerful tool. It's called a Qualified Charitable Distribution, and during the break, let's talk a bit more and I'll make sure you understand all that. We'll be right back.
SEGMENT 5
Rob West: Great to have you with us today on Faith and Finance. Walker Wildmon and Jerry Bowyer are here, and we'll talk AFA Action and corporate engagement in just a moment. But first, Jerry, here we go again with this upside-down economy. Great news: soft jobs data and unemployment rising, so the market's up, right?
Jerry Bowyer: Exactly. And why does it work that way? Hearing the media try to explain that is always very confusing, right? Okay, so we only created 29,000 jobs last month, which is not nearly what it takes to keep the labor market healthy, and the unemployment rate went up. Typically when that happens, it's a matter of layoffs and, in addition, people getting into the labor market—maybe because they feel the need to—but not getting jobs yet.
The unemployment rate, by the way—people don't understand this—it's not the number of people who don't have jobs; it's the number of people who want to have jobs who don't have jobs. So if people decide, "You know what? Early retirement wasn't such a good idea. I'm having trouble making ends meet, so I'm going to get back into the job market," that drives up the unemployment rate. So it's people seeking jobs.
It was a bad jobs report. We had a good one the month before, but if you're getting rid of the ups and downs and just smoothing it out, this is a jobs market that's barely getting it done. It's mostly positive numbers—that's good—but it's not keeping up with normal labor market traditions, standards, and norms with averages.
So that's bad news, and the market would go down. Nope, the market didn't go down. Why? Because that meant, "Oh, wait a minute, the Fed might cut interest rates, might put money into the system, might not tighten. It means easier money." So what does that have to do with markets? People don't understand that when the Fed creates new money, it goes into the economy. One thing they know is it's not going into their bank accounts. Where is it going? It comes in through markets—open market operations.
Ever hear the Fed Chairman referred to as the Chairman of the FOMC? What's the "M"? Markets. Where do they pump money into the system? Not through consumer spending, not into your bank account—they do it through markets. So when that money is going to be pumped through the system, it's coming in through the markets, and markets go up in response to that. That's an upside-down world.
The other thing about that is the big story for the past few weeks is about rising interest rates and what that's doing—why that's been trouble for markets and for the economy. I just want to go back to—most people listening don't know what I'm referring to, but you will—the blackboard videos. I did videos for you and others that you use at Kingdom Advisors, where we talk about interest rates and how central it is and how to have a biblical worldview understanding of it.
What we know is if the central bank creates a lot of money, if they debase the currency, that pushes down interest rates. They're pumping money in; they're out there lending money, putting it into the system, and that lowers interest rates. But that's inflationary. What happens is eventually inflation comes along, it stays, and eventually it's undeniable. At that point, interest rates go up because you have to be compensated for the loss of purchasing power when you're the lender.
I've talked to you about this a hundred times. If I loan you $100 and I'm going to get back $105 from you next year, but the inflation rate was 5%, I didn't make any money. I didn't really get interest; I just got compensated for lost value. So I would want a higher interest rate to compensate me for that higher inflation. That's called an inflation premium, right? So that drives up interest rates.
But the other thing is, when you have high inflation, eventually the central bank gets out of denial and says, "Well, looks like we have to raise interest rates, take money out of the system, and fight inflation." So then what you do is you go from freakishly low interest rates to normal interest rates, but then they have to go higher than normal because there's an inflation premium in there and the Fed is pumping money out of the system in order to fight the inflation.
Right there, that's the boom-and-bust cycle that we've had ever since there's been a central bank, whether it's the Great Depression, the Great Recession, what's going on now, or the dot-com bubble. Over and over again, the central bank pumps money into the system to stimulate the economy. It doesn't stimulate the economy; it just stimulates prices, which causes inflation. The market responds, saying, "Wait a minute, I want more interest rate; I'm losing money on this deal." And then the central bank has to go in the opposite direction to pull money out of the system, so you go from 200-year-low interest rates now to above average. That's wreaking havoc with market valuations.
But it all comes down to this: Who should set interest rates? Answer: We should. When we're borrowing, when we're lending, when we're saving—if we're not willing to save if the interest rate isn't right, or we're not willing to borrow, the banks and the markets are just intermediaries between us. I'm 64; I'm a net saver, so I'm a lender. Younger people who are starting off with mortgages are net borrowers. We work it out between ourselves. The bank just handles the paperwork, and between my behavior as a 64-year-old and someone who's a 24-year-old in borrowing mode, we settle on an interest rate determined by the market.
When that's working the way it's supposed to—when we're a covenant-keeping people, when we're a saving people—interest rates are generally pretty low. But when the government tries to manipulate it to make us feel rich, to make us borrow so we'll spend because they think that causes prosperity, it sets off a boom cycle, at which point the bust is inevitable. When the government sets up a boom or a bubble, the bust has to happen; it's unavoidable.
So that's what we're on the edge of right now. We have huge valuations in AI; the market is almost entirely being held up now by AI, so we're extremely sensitive to what the Fed is going to do. Because we have a weak labor market, the Fed just might not be doing that tightening to fight inflation. They're choosing one side of their dual mandate rather than the other. They're choosing the inflation-fighting side of the dual mandate sometimes, and they're choosing the stimulating side of the dual mandate other times.
Today, they're doing the stimulating side because of the weak labor market. So what happens? Markets go up, gold goes up. Why is gold up? Because gold knows the Fed's more likely to be easy money because the employment market is weak.
Rob West: That's helpful. One more question, and then I want to quickly get to corporate engagement with Jerry. We had a caller earlier today who said, "I read Larry Burkett's The Coming Economic Earthquake in the '90s. Because of that, I didn't invest; I really went into a bunker mentality. I'm paying for that today, and therefore I'm still working into my retirement season because that never happened."
I think the reality here is, whether Larry was wrong or early doesn't matter; you can violate these principles that you just described and get away with it for a period of time—maybe a long period of time—but eventually, God's Word is always right in the end, right?
Jerry Bowyer: Right, exactly. It reasserts itself. If you jump off of a two-story house, it goes okay for a couple of seconds. "Hey, this isn't so bad," and then you hit the ground.
I think we have a situation here where some principles can be violated and you can get away with it for a while, and those tend to be borrowing and easy money principles. Because America is so historically grounded on Christian faith and a Christian worldview, it has all this borrowed social capital, making us the best-functioning economy in the world. So we can violate some of those principles and get away with it for a long time, but eventually it reasserts itself.
A lot of people have asked me about Larry Burkett's book, but the Christian thought-leader world has been dominated by doom predictions for a long time. Remember the Blood Moon thing? Yeah, back in 2012 or something like that. Christians were terrified, talking to advisors, asking, "Should I take all my money out of the market?" I ended up having a conversation with a very wealthy individual who said, "I'm going to sell all my stock and buy lumber land." I said, "How about half?" Because the market actually did really well after that, and the Blood Moon market meltdown never happened.
There's something about our mindset that makes us particularly susceptible to apocalyptic scenarios. Now, maybe it's because the last book of our Bible is the Apocalypse, right? So we are tuned for something to end badly. But guess what? We didn't have it in the 1980s. I think it's because Christians—to be favorable towards my brethren here—know that something's been wrong with America for a long time, so we have a sense of impending judgment.
But we don't necessarily add to that the prudence of saying, "Yes, but America compared to other nations, the dollar compared to other currencies—how does that compare? How much do we have going right because of our inheritance?" Rather than just saying, "Oh, this is really terrible; look what's happened to this country," we feel like we deserve judgment. Which may well be true, but just because we deserve judgment doesn't mean we get it, that it comes through markets, or that it comes as soon as we notice we've got these moral problems.
So I think there's a little bit of a fear that goes beyond prudence that we are particularly susceptible to. I am generally not finding that Christians historically have been more optimistic about the economy than they should have been; they've generally been more pessimistic, and a lot of them have sat out some really good gains and not participated in the market. I think that's a tragic loss.
Rob West: That's well said. I'm getting short on time here. Walker, I want to bring you into the conversation and quickly pivot. Some incredible work happening in the area of corporate engagement. Tell us what you're working on right now.
Walker Wildmon: Yeah, real quick. I just talked to Jerry's team this morning, and as of this morning, we filed a proposal with Goldman Sachs. What we're trying to do there is get transparency on their corporate matching program with charitable giving to ensure that religious groups, including AFA, are not excluded from their charitable giving.
Rob West: Wow. And Walker, this is an issue you've gone to bat with other companies on and seen some success, right?
Walker Wildmon: Yeah, absolutely. We've seen some success in other areas with Goldman Sachs, and so the hope here is that we reach a good resolution that is in the best interest of the company and shareholders.
Rob West: Incredible. Folks, just keep in mind, especially as we head toward the end of the year here, what an opportunity to make a gift of appreciated stock to AFA, and then allow AFA and the team at Bowyer Research to evaluate that and say, "Is there a conversation that we'd like to have with company leadership before this is sold?" Because that can affect real change, and that's what Walker's talking about with this latest piece of corporate engagement.
Gentlemen, thanks for your time this morning. We appreciate you.
Walker Wildmon: Thanks, Rob.
Rob West: All right. That's Jerry Bowyer and Walker Wildmon. They join us each Friday in this segment to update us on economics and corporate engagement.
Big thanks to my team today: Devin, Patty, Pat, Taylor, Michael, and everybody here at FaithFi. Have a great weekend. We'll talk to you next week. Bye-bye.
What if the greatest evidence of generosity isn’t how much you give, but how badly you want to do so? When the apostle Paul describes the Macedonians, he tells us something remarkable: these believers were poor and suffering yet begged for the privilege of giving. On this Faith & Finance on AFR, Rob West explores a heart transformed by grace. Then, it’s on to calls.
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