Rob West: Some of the most remarkable advances in medicine are happening inside companies most of us have never heard of. Hi, I'm Rob West. What if investing in healthcare innovation could offer financial opportunity while supporting businesses that serve their neighbors and tackle some of the world's toughest problems? We'll talk about that today with Dr. Finny Kuruvilla. Then we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Rob West: Well, we're always glad to welcome Dr. Finny Kuruvilla back to the program. Finny is a co-founder and co-chief investment officer and senior portfolio manager at Eventide Investments, an underwriter of Faith & Finance. He also brings a unique perspective as both a physician and scientist. Holding an MD as well as a PhD in chemistry, Finny, so great to have you back with us.
Dr. Finny Kuruvilla: It's great to be with you, Rob, as always.
Rob West: Finny, you have a remarkable background as an investment manager. And so I want you to start not in medicine, but in the early days. I want you to take us back to where your interest in investing actually began. I think your story is fascinating.
Dr. Finny Kuruvilla: Yeah. So my parents moved to the United States from India in 1973. And we had little to nothing. It was very much a typical rags-to-riches story of working hard and being able to save. I was very impressed at my parents and that they were extremely committed to always tithing, no matter how little we had. It was always the first money to leave the bank account. And then my mom was working for Bank of America as a teller, and so she learned about the basics of investing and compound interest and all of that there. And she began to save when we had very little. And watching my parents go from the true lower class up into the middle class by putting into action the basic principles of sound, biblical finance was incredibly inspiring. And eventually, when I made my way to medical school, where I came to Boston in 1995, my mom was still my financial advisor of sorts and followed her playbook and her advice and learned investing from her.
Rob West: How remarkable. And that's really, Finny, when your interest in investing began to connect more intentionally with your faith and your values. Isn't that right?
Dr. Finny Kuruvilla: Yeah, that's exactly right. So one of the things that was nice about the program here in the MD-PhD program is you get a stipend. It's a nice perk, and you don't have to pay tuition. And so with that stipend, even though it's a modest amount, I was able to save every month. I was single at the time. And looking around at the options that were available, I didn't find anything super satisfactory. So eventually, I learned how to invest on my own. My roommate, he was doing his PhD at Harvard in economics, he gave me some advice about how to invest. And so I just learned how to invest on my own by reading books and by studying over those eight years of doing my MD-PhD.
Rob West: Incredible. And you went through all those years of training to become a physician. I'd love to hear, and we've got just about a minute and a half before our first break, what eventually convinced you that you could make perhaps even a bigger difference by investing in medical innovation among other things?
Dr. Finny Kuruvilla: Yeah. So one of the things that I did was I studied Peter Lynch. So Peter Lynch is right here in Boston. He was one of the people who made Fidelity as successful as they've been. And he has this line where he says, "Buy what you know." And he believes that if you invest at the intersection of your expertise with finance, you can do incredibly well. And so this was very inspiring to me, and so I started to invest at that intersection of the markets as well as biotech and some technology as well. And so that basic paradigm was what got me going, and it's still what fuels us: this idea that expertise is going to be differentiating in a sea of people who may be generalists or may not have any particularly deep domain expertise.
Rob West: Incredible. Well, we're going to unpack that after the break because this journey eventually led to the founding of Eventide. And Dr. Kuruvilla will share a bit about Eventide's story. It has grown dramatically. We'll also talk about investments that make the world rejoice. That's coming up in the next segment. Dr. Finny Kuruvilla, co-chief investment officer and senior portfolio manager at Eventide Investments is our guest today. If you want to learn more, head to faithfi.com/eventide. That's faithfi.com/eventide. Back with more after this. Stick around.
SEGMENT 2
Rob West: Your investments can do more than pursue a return. They can help fuel innovation and support businesses working to solve real human problems. They can ultimately support human flourishing and God's creation. And that's what we're talking about today: medical innovation today with Dr. Finny Kuruvilla. Finny is co-founder, co-chief investment officer, and senior portfolio manager at Eventide Investments. You can learn more about investments that make the world rejoice at faithfi.com/eventide. That's faithfi.com/eventide.
All right, Finny, you've taken us a bit through your story from the early days through medical school and your introduction to this idea that you enjoyed medicine, but you could have a profound impact through the innovation that was happening in many biotech companies. And that journey eventually led to the founding of Eventide, didn't it?
Dr. Finny Kuruvilla: Yeah, it sure did. So, I had been treating patients with a wide variety of mostly blood-related issues and blood disorders: leukemia, lymphoma, sickle cell, things like that. But in all of that, one of the things that I got increasingly excited about was the potential of using business as an accelerant to bring more advances and more healing into these patients that are suffering so much. And so, decided with my colleagues Robin and John, who I know you know well, to start Eventide back in 2008. We had some friends and family that were kind enough to be angel investors in our company, and we launched there right before the Great Financial Crisis of '08-'09.
Rob West: An interesting time to start an investment company. But it's been incredible to see the growth that's occurred since then. And Finny, I'm just so compelled by the vision of Eventide. I'd love for you to unpack that a bit for our listeners.
Dr. Finny Kuruvilla: Yeah, absolutely. One of the things that Jesus reminds us is that the two great commands are love God and love your neighbor. And when we think about investing, the most important verse I think for us to be thinking about is what does it mean to love our neighbor through our investing? And when we think about what investing is, investing is ownership. It's, of course, owning businesses. Businesses are supposed to be ways to express God's attribute of provision to the world. And so by assessing how well a business is doing at loving its stakeholders, loving its neighbors, we think that this is the most harmonious way to have our investing be an extension of our Christian values, not opposed to our values.
Rob West: It's an incredible vision. I want to take that, though, and make it really practical. I know there's some incredibly exciting things and innovation that's taking place right now in biotech, and it's central to the work you do as a co-chief investment officer. Give us just a picture of some of the things you're seeing right now.
Dr. Finny Kuruvilla: Yeah, Rob, right now, we are truly living in one of the most, if not the most, exciting periods in all of human history in terms of how rapidly healthcare is accelerating. And the most profound story of this year, the most exciting story of 2026, has been around pancreatic cancer, which historically has been one of the most fatal cancers to have. It's so deep in your abdomen, your pancreas, that it's often cancer appears so late when it's very metastatic. The big story of this year is the ability to target a protein called RAS, which is involved in basically signaling if cells should divide or not. And when RAS is mutated, it just tells cells, "Divide, divide, divide. Don't stop." And it has long been considered undruggable. But this year, we've had a breakthrough where one particular company was able to develop very successfully a medicine to target RAS, and thus to double survival.
Rob West: Wow. So, give us a sense of what some of the data is showing in the early days.
Dr. Finny Kuruvilla: Yeah. So, the early data that we have—and it actually just got approved, this particular medicine—the early data that we have is that normally metastatic pancreatic cancer has a median survival of 6.7 months. And with this particular therapy that targets RAS, survival is now 13.2 months. So, like I said, it's about double. And the way that it does that is by finding a little crack in a protein—there's a whole story around this—finding a crack, and then using a molecular glue, which is basically a way in which it recruits another large protein to shut it down. And so, basically, by shutting it down, you get that divide signal turned off, and then thus, the cells will die.
Rob West: That is just remarkable. To God be the glory for that, and I know it's continuing to advance. This is just one example of many you could cite today. From your vantage point, which is so unique, Finny—you know, you, of course, a physician, also an investor—what just goes through your mind and your heart as you see advancements like this and the opportunity to participate both as a patient as well as an investor?
Dr. Finny Kuruvilla: Yeah, I really believe that one of the privileges that each of us has in our many different facets as employees and owners of jobs is to be able to advance God's program, to roll back in some small way the effects of the Fall. We know that the Fall brings toil and pain and curse there, but in some way to show, to give a foretaste of what the Kingdom is like, is part of what we can be doing. And I think that through medicine, we can offer, just like Jesus did in His very powerful healing ministry where He made the lame to walk and the blind to see, this gives us an opportunity to extend Jesus's work into our day today.
Rob West: And what's incredible is that as Christ-followers, we can seek a strong financial return and have that go hand in hand with investing in companies that are creating this type of positive impact and redemptive purposes in the world, isn't that right?
Dr. Finny Kuruvilla: Yeah, that's exactly right. And I think what is so powerful about this concept is that investing should be, when you're doing it correctly, it should be in harmony with God's principles—that we're operating in the grain of how God made the world. We believe that doing what's right is also what's smart; that doing the right thing should lead to, in the long term, better results than those people who are cutting against the nature that God built into the world. And so, this is what's so powerful about loving your neighbor, is that it's not something that ultimately should be hurting you. In the long run, it's a way to bless not just your neighbor, but even it comes back to yourself. You're going to generate, for example, more goodwill, more loyalty there. You're going to be empowering the very people that you want to be serving. And so, I think this is what's so exciting about doing investing in God's way, is that it's not a lose situation; it's actually a win-win.
Rob West: Yeah, just about 45 seconds left, Finny. What's so exciting about what's taking place right now in faith-based investing is we're just seeing an explosion of world-class products like the ones your team and you are leading at Eventide. And you can honor your conscience and avoid companies misaligned, but you can also lean into human flourishing and the type of innovation we're talking about today at the same time, isn't that right?
Dr. Finny Kuruvilla: Yeah, that's right. It's not merely a negative vision about what I should be avoiding, but it's a positive vision about saying: What are the kinds of businesses that are going to be promoting the global common good, that are going to be demonstrating the way that God wants us to be treating one another? And so, I think it's a huge opportunity that we have today. And yeah, we, with many other firms, we're so excited to be playing a small role to be advancing God's interest and loving our neighbors well through the stewardship of our investing capital.
Rob West: It's an exciting day for God's people to deploy God's capital into the very things you're describing. Finny, thanks for your time today.
Dr. Finny Kuruvilla: Hey, thank you, Rob.
Rob West: That's Dr. Finny Kuruvilla, co-chief investment officer and senior portfolio manager at Eventide Investments. Learn more at faithfi.com/eventide. As I said, we're off today, so don't call in, but we've got some great calls lined up in advance, so we'll go to those just around the corner. I'm Rob West, and this is Faith & Finance on American Family Radio, biblical wisdom for your financial journey. We'll be right back.
SEGMENT 3
Rob West: Great to have you with us today on Faith & Finance on American Family Radio. I'm Rob West. Hey, if you would like to connect with an advisor in your area, especially if you want one that shares your values as a Christ follower who's met high standards in training, in a biblical worldview, character and competence, pastor and client references, regulatory review, that's a Certified Kingdom Advisor. And there's more than 2,000 now across the country and into Canada. And if you'd like to find a CKA to work with, you can just head to findacka.com. That's findacka.com. Let's head back to the phones. We're going to go out to Bakersfield, California. Olga, how can I help you?
Rob West: Hi Olga, are you there?
Olga: Hello, good afternoon. I'm here, Rob. Thanks for waiting.
Rob West: Great. Yes, ma'am.
Olga: Yes, I'm here because I'm I'm kind of struggling at the moment right now financially. In my full-time employment, it's not meeting all of my I'm not able to make up, you know, for my bills and what I need. Right now, I have I'm contributing to my 401(k) and also to an ESPP account. Just this month, almost $200 were taken out for my 401(k) and then almost $150 for the ESPP. So what I was thinking is maybe I should for a short time stop that, and maybe those that that money can help me with whatever else I need for my bills. Do you think that's a good idea?
Rob West: You know, temporarily reducing investment contributions, Olga, is perfectly reasonable. I think the key, though, is to address the cash flow deficit rather than, you know, automatically or on an extended basis, you know, pulling, you know, cutting out your investments. Because your power, your most powerful wealth-building tool over time is going to be your income and living on less than your income so that you can fund long-term investments and take advantage of compounding growth, especially growth inside retirement plans where, you know, the taxes are not putting a drag on the investment results. But at the same time, you know, we need to shore up your monthly budget first. And so I think to kind of stop the bleeding, if you will, you know, that certainly is a way to do that rather than pulling anything out of investments, you just stop putting new contributions in. But then let's go to work on getting you to a place where you're living below your means so you do have margin to be able to build up your reserves if you don't have an emergency fund and to resume your investments. So here's where I would go first. I think the first step is always to build an accurate monthly budget. So you really need to try to identify, if you don't know already, where the whether the shortfall comes from essential expenses, what we call discretionary spending, so the things you don't get a bill for. Is it a temporary expense, something that's changed that's only temporary and it will resolve and and go away? Or is it a longer-term mismatch between income and lifestyle? And so we've really got to dial into that and figure out, you know, using a several months spending history, um, you know, where the where the problem is. And then, you know, go ahead and and cut the, you know, any taxable investing first. So anything you're putting in investments that's not inside a retirement account. Um, the next step would be, uh, if you're getting any match, let's reduce the contributions only to, um, you know, the point where you're still getting the match, but you're not doing anything more than that. If you still have a shortfall, then you could cut out your retirement contributions altogether. But again, I think, you know, it's important to go to work to figure out what you can do to either increase income, dial back spending, uh, such that you could get back to a place where you could resume that in time. Does that make sense, though?
Olga: Yes, it does. It does. Yeah.
Rob West: Okay. All right. I'd be happy to provide a a Certified Christian Financial Counselor to you, Olga, uh, that could help you just to bring a fresh perspective, uh, to your budgeting process. Maybe give you some ideas on how to pull it all together, how to analyze it, and then maybe give you a some new insights on where you might be able to make some changes to get this budget to balance. Uh, would that be helpful to you?
Olga: That would be absolutely, yes.
Rob West: All right, good. Um, we'll cover the cost of that. It won't cost you anything. I'm just going to ask you to hold the line, my team will get your information, and we'll get a Certified Christian Financial Counselor in touch with you. Lord bless you. You got this, Olga. Call me back when you get it figured out, and let's celebrate together. Uh, let's go to Ohio. Hi, Susie, go ahead.
Susie: Yes, thanks for having me. Um, we have $160,000 invested, and then we have $160,000 in a deferred comp. Um, we're in our early 70s. Um, would there be an advantage of making a uh the deferred comp into a Roth conversion? And I don't really know anything about the Roth conversions.
Rob West: Okay. Yeah. Uh, potentially, uh, but for a couple in their 70s, I wouldn't automatically convert the whole $160,000 deferred comp to a Roth. Potentially a partial Roth conversion over several years might make more sense. Um, ultimately, though, what what type of account is it? Is it a 457, do you know?
Susie: Um, I don't know.
Rob West: Okay, no problem. Yeah, um, well, we we would just need to make sure that whatever it's in uh can permit the Roth account. You may need to roll it to an IRA, a traditional IRA first before the conversion. And you don't have to do it all at once. Uh, but essentially what happens is, um, you know, as you convert it, you are adding it to your taxable income for the year. So what's the benefit? Well, the benefit it goes is that it it goes from a pre-tax environment, um, where as you take it out, you pay the taxes on it, to an after-tax environment where now it's growing tax-free. So you're essentially paying the tax now versus later. And the reason people do that is because they think maybe that tax rates are headed higher in the future, which they certainly could be, um, or they're going to just for some reason be in a higher bracket. The only thing you'd have to look at, though, is, you know, given that you're probably on Medicare, as you convert that any portion of that IRA to Roth, um, it is added to your taxable income, which means you could have IRMAA, which is the additional Medicare premiums that kick in two years after your income goes up because this conversion would would increase your income. The benefit is you wouldn't have any required minimums and you could go ahead and lock in the taxes and not have to pay it later. So, um, let's do this. I want to talk a bit more about this and just make sure it's the right thing for you. We'll do that during the break, and then we'll be right back. Stay with us.
SEGMENT 4
Rob West: I'm so thankful to have you with us today on Faith and Finance here on American Family Radio. You know, here at AFR, it's all about equipping you with a biblical worldview. First and foremost, to encourage you to surrender your lives to Jesus, to place your full trust in Him for your salvation. And then beyond that, which is the biggest decision you will ever make, it's all about stewardship. How can we be stewards of what God has entrusted to us? Our time, our relationships. We're stewards of God's word and our talents and skills, and yes, His resources—the financial resources that have been entrusted to us. How do we live with a biblical worldview in every area of our lives, including this area of money, understanding the heart of God from Scripture, and applying that to the everyday decisions we make with His money? That's what we want to do on this program, to help you do just that. Let's head back to the phones. Missouri, Kristin, go ahead.
Kristin: Hi, thanks. My husband and I are both 51. We've got about $600,000 in retirement, everything invested in the stock market, everything in Roth accounts. And we rent, and we need to rent because of our ministry. But I'm wondering if it would ever be wise to take some of our contributions out of our Roth IRA, not the interest, but the contributions, and use that for a down payment on a rental house that we could, you know, have being rented out for the next 15 years until we retire and then possibly move into that house.
Rob West: Okay. Yeah, and what did you say your age was?
Kristin: 51.
Rob West: 51, okay. Yeah, and you've got about $600,000 in investments.
Kristin: Yeah.
Rob West: Okay. I mean, perhaps in the right situation. I wouldn't view it as an automatic upgrade from investing in the Roth. I mean, the fact that you're only considering the Roth contributions, the principal, is important. The IRA, you know, Roth contributions can be withdrawn without taxes or penalties, unlike the earnings, because they were already taxed. And so, the big, you know, the question then is, not can I take it out—yes, you can—it's should you? And so I would, I would look at, you know, what is the goal of buying the rental? Are you trying to create monthly income? Are you trying to diversify away from the market? Do you think real estate's safer? What would be the primary reason here?
Kristin: Well, primary reason in my mind would be to have in theory a paid-off house in 15 years, because we would be looking to get a 15-year fixed rate. But I don't know whether the stock market could outperform the, you know, the equivalent of what we would be taking out in contributions, whether it is moot, you know, whether it's equal after 15 years, or whether there would be a benefit to doing that and buying a rental house instead.
Rob West: Yeah, yeah. It's a great question, and I think, you know, the, you know, this is the, ultimately you need to look at which option better helps you reach your goal of having a paid-off home in 15 years. And, you know, as you look at, you know, leaving the money invested, the advantages are historically diversified stock investments have had strong long-term growth. It keeps your liquidity and flexibility, and you get this enormous benefit of this tax-free growth, which you would, you know, you would not have with the house. I mean, you would if you hold it until death and then it passes to your heirs and they get a step-up in basis, but not if you sell it. You'd have the capital gains on it, especially because it's a, it's a second property. And you keep a lot of diversification. The risk is the market will fluctuate; there's no guarantee it will be higher in 15 years. When you buy the rental property, the advantages are you get a tangible asset, to your point, it's paid off in 15 years, the rental income could provide retirement cash flow, real estate typically appreciates over time, and, you know, a paid-off property could reduce housing expenses in retirement. But you've got what's called concentration risk, which is everything tied up in one asset versus your portfolio, which is much more diversified. You have the repairs, and the vacancies, and the taxes, and the insurance, and the maintenance, which reduces your returns. And then real estate is, of course, less liquid and historically doesn't perform as well. So, you know, a part of this is going to come down to running the numbers and looking at your expected rental return. You know, typically you'd have a 4% to 5% cash return before considering appreciation, which, you know, if that's running 6% to 7% a year, that's pretty good when you put all that together. You also need to look at what you need for retirement. You know, the Roth is probably one of your most valuable retirement assets. And so, you know, that's lost years of tax-free compounding, and ultimately, you know, the loss of tax-free income that you could generate for yourself as you pull from the Roth, you know, down the road after 15 more years minimum of compounding. So, you know, I think at the end of the day, I would be cautious about moving a large portion of your Roth into a rental, just because I really don't like giving up that tax-free growth. I prefer you to have more diversification, and I prefer you to have more liquidity, which the house does not have. But, you know, if at the end of the day your goal is to own a piece of real estate tax-free and diversify away from the market, you know, I don't think I can disagree with that.
Kristin: Yeah. Okay, thank you so much. I appreciate that.
Rob West: Absolutely. Thanks for your call today. Let's go to Florida. Susie, go ahead.
Susie: Hi. Um, yeah, I just, my husband retired, and, and we have everything in our... don't know if it's a 401—it's just with, with Edward Jones, you know, stock options and all of that stuff. And, and we have a small house, about $250,000, and he thinks that if we put that $250,000 with the $400,000 we already have in, in that investment, and then, so sell the house, and then just rent another small house, we would be able to live on what we take out plus our Social Security—we're almost 70—then we would be able to live on what we take out and not have to worry about, you know, house things, whatever breaks down, and mowing the lawn, and all of that stuff. And I just have never heard of that as a, as a... normally people want to have a house paid off, which we do, when they retire. So I'm a little confused, and I wanted to know what you thought about it.
Rob West: Yeah, well I appreciate it. What are your thoughts on it?
Susie: Um... You know, I, I really don't know that much about investing at all to, to really have thoughts. It was just something I've never heard of doing—selling the home that you have paid off and living on the, the dividends from, you know, what would be around $600,000, you know? And you never know that the market's going to stay, or... I know at one point back in, I think it was 2008 or something when the housing market dropped, we lost, you know, $45,000. So I'm like, okay. So...
Rob West: Yeah. Well, I think that's ultimately what it comes down to, because I think this decision isn't whether investing $250,000 is better than owning a condo. The question is whether the growth potential of that $250,000 is worth giving up the stability of having a paid-off place to live. And I think we need to compare the cost of renting for the rest of your life against what the $250,000 could realistically earn, and the risk you would have to take with that $250,000 to earn it. And then there's the non-financial side, which is your home is where you live, it provides security and peace of mind, and, you know, we build our lives there. So it's not purely an investment, because investments are things that we sell when they've accomplished their purpose, and we don't do that with our homes. And so I think we've got to compare both the financial and the non-financial aspects of this. Hang on the line, Susie. We'll talk a bit more. We'll be right back.
SEGMENT 5
Rob West: Thanks for joining us today on Faith & Finance Live. I'm Rob West. We're taking your calls and questions today, so let's go to Illinois. Hi Rose, how can I help you?
Rose: Hi Rob. I've got a question for you. My husband and I both live in Illinois, of course. Um, and we bought some property 10 years ago and we're looking to build on it, and we're currently in the process of finding out how much that would cost. I'm looking to find out if what we want to build is too much and we sell that property, do I have a timeline where I can take that money and flip it into another home without tax ramifications? And if not, how much would I lose? I want to weigh how much it would cost to build the house versus financing, let's say, at whatever the 6% interest for $100,000 versus what the loss might possibly be when we sell the land, if there is a loss.
Rob West: Yeah. So help me understand what it is you're trying to zero in on right now. I understand you're getting the bids to see about building. Um, but in terms of what loss would you be describing here if you ended up selling?
Rose: If we can't afford to build, is there taxes that we would owe, or can we take that money that we would get from the land and roll it into another house and not have any tax ramifications?
Rob West: Yeah. When did you buy this property? You said a decade ago?
Rose: Roughly, yeah, 10 years ago.
Rob West: Okay. And have you been living—is there a dwelling on it now, or is it just land?
Rose: No, just land.
Rob West: Okay. Um, yeah, so essentially, if you were to sell it, you're going to owe capital gains on the appreciation that happened over the last 10 years. Do you know how much that is roughly?
Rose: Yeah, about $216,000.
Rob West: $200,000 in gains, or from your original purchase price?
Rose: Yeah, we bought it for 80... Yeah.
Rob West: Okay. Yeah, so the only thing you would be able to do is possibly do what's called a 1031 exchange, because essentially you would say that this was held for investment purposes, and then a 1031 exchange would allow you to sell it and defer the capital gains by purchasing another investment property. The problem would be if the next property was going to end up becoming your primary residence, then it's not a like-kind property. It would have to be investment property to investment property, and that would allow you to defer the capital gains. So if you sell this, which we'll call an investment property since there's no dwelling on it, and then you take the proceeds and you buy a home that you're going to move into, there would be no way to avoid those capital gains. And so you would probably have a 15% capital gain on the total gain that you had minus any improvements. So let's say it was $213,000, you know, we're talking $34,500 roughly.
Rose: Okay. And I'm going to also take that into consideration because if I'm buying this place and let's say it is a little bit too much, but I'm actually going to lose the $34,000 versus financing it and paying finance or doing that reverse mortgage like you were talking about... You understand where I'm going with that?
Rob West: I do, yeah, because that's now a part of the equation that says, "Okay, wait a minute, there's an additional cost here, which is the capital gains taxes." And so even if it's close, or maybe it looks a little better to sell and move on, maybe that causes you to say, "No, we're going to go ahead and stay and build," because now we don't have to pay the taxes. And if you stayed there the rest of your life—because this is kind of your forever home—and pass it down, all those capital gains would go away for your heirs if they inherited it, because they get the step-up in basis, so no one would ever pay the capital gains at that point.
Rose: Yes. Thank you. Okay, you gave me what I needed to understand.
Rob West: All right. Thank you for your call today. God bless you, Rose. To Chicago, Denise, how can I help?
Denise: Hi. I'm a federal employee and I'm planning on retiring this year, and also I will be 65. My plan is to take money out of my TSP, maybe 4.2 to 4.5%, and also I'm going to be getting my pension. And then after that, once I turn 70—I'm not going to take my Social Security—but after that, once I reach 70, then I only plan to draw 1 to 2% off the TSP. Is that a good plan?
Rob West: You've really thought through this! I like that a lot. Yeah, because I think what you're talking about taking right now while you delay the Social Security is still, I think, very reasonable. Because 4.5%, even if that were to extend well beyond age 70, is a very reasonable withdrawal rate, right there in kind of the sweet spot. And then by delaying the Social Security until age 70, it's going to give you about 25% more per year on that check. The federal pension provides that strong income foundation. And then if you can drop down to 1 to 2% from 70 and beyond, you will never outlive that money, and you'll have something to fall back on if you ever needed it for the unexpected down the road. So I would just say, at face value here, Denise, without knowing a lot more details, I like the sound of this framework.
Denise: Oh, thank you. You just made my day. God bless you, because I listen every day at work and I'm like, "Okay, okay, so I got it." You just made my day. God bless you. I appreciate it.
Rob West: Well, thank you, Denise. You're very sweet. Hey, call anytime if I can be of help to you. Let's go to Alabama and welcome Brent. Go ahead.
Brent: Hey, my name's Brent and I'm almost 64. I've been managing my own investments over the years and I have accumulated about $2 million in IRAs and Roth IRAs and... Just, I'm thinking about hiring somebody to help me with it, but I just don't like giving up the 2 to 5% that I'm going to end up having to pay somebody to help me with it. I've made moderate returns, I'd say somewhere between 5 and 15% annually myself. And I'm just wandering over, should I hire somebody?
Rob West: Yeah. And why the 2 to 5%? Where is that coming from?
Brent: No, I just know if somebody else manages it, they're probably going to want a percent of my investments to manage it.
Rob West: Yeah. Now, they certainly will if you delegate to an investment advisor, but on a $2 million portfolio, you should be closer to 1% a year than certainly not 2 to 5%—maybe 1.5% at the most. Now, there would be embedded fees that you would pay anyway, like the internal expenses of an ETF or a mutual fund, unless the advisor buys individual stocks. But in terms of the added cost for the advisor him- or herself, it really should be closer to, I would say, probably 1.25% would be more reasonable.
But I get the question, Brent, and I think it's a good one to ask because clearly you've done well, you've prioritized disciplined savings, sounds like you've done fairly well in the market. So all of that's good. And so, as a good steward, you're saying, "Does it make sense for me to pay someone to do something I've been doing myself?"
And I think some of the reasons why it might—I mean, I'm a big fan, especially in this season of life when you've spent a lifetime building a nest egg—is you're going to get some added benefits from that, I'll call it 1.25%. You're going to get tax planning. So considering and coordinating the IRA withdrawals with the Roth conversions and the RMDs can save substantial taxes by having an advisor in that mix. They're going to help often with retirement income planning, determining how much to withdraw and from which accounts. They can work with you on estate planning coordination.
And then I think just the peace of mind to have somebody with a rules-based approach to investment management. We've been in a pretty good market for the last couple of decades, apart from 2008, 2009, and then the pandemic. We've been in a pretty good environment, and during both of those, the market recovered pretty quickly. So having somebody with the time and the knowledge to stay on top of everything and make sure that you're not taking too much risk, and that they can keep you invested with that portion that's at the risk of the stock market—even if the market's down substantially because we were in a recession—I think you put all that together, and hopefully it'll give you the peace of mind to focus on what God has for you in the next season and not having to worry about watching the stock portfolio so closely. But at the end of the day, can you do it yourself? Absolutely. I just think there's a lot of reasons at this point in your life to go ahead and delegate that to someone else.
Brent: That makes a lot of sense. I appreciate it.
Rob West: Absolutely. And I think one of the ways to look at it, Brent, is to say, "Is the added value of somebody who's got the time and the expertise to do it, who can provide some of these other planning benefits around taxes and income planning and all that—is there the ability for them to add at least 1.25% annually over time in added value, and maybe even real return?" I would say absolutely, there really should be. And so I think you should get far more value out of having the relationship than not.
So I think the next step for you, unless you already have the person that you know you would talk to, would be to head to KingdomAdvisors.com and maybe interview two or three Certified Kingdom Advisors there in Alabama and find the one that's the right fit for you. Hey Brent, we appreciate your call today, my friend. Thanks for being on the broadcast. Call anytime.
Big thanks to my team today. Thankful for Taylor and Devin and Patty and everybody that makes this possible here at Faith & Finance Live every day. Go out and live as a faithful steward. Make God your ultimate treasure. Hold money loosely, make it a tool, give it generously, invest it strategically, and come back and join us tomorrow. We'll see you then. Bye-bye.
Rob West: Some of the most remarkable advances in medicine are happening inside companies most of us have never heard of. Hi, I'm Rob West. What if investing in healthcare innovation could offer financial opportunity while supporting businesses that serve their neighbors and tackle some of the world's toughest problems? We'll talk about that today with Dr. Finny Kuruvilla. Then we have lots of great listener questions ahead, but we won't be taking your live calls today because this program is pre-recorded. This is Faith & Finance on American Family Radio. Biblical wisdom for your financial decisions.
Rob West: Well, we're always glad to welcome Dr. Finny Kuruvilla back to the program. Finny is a co-founder and co-chief investment officer and senior portfolio manager at Eventide Investments, an underwriter of Faith & Finance. He also brings a unique perspective as both a physician and scientist. Holding an MD as well as a PhD in chemistry, Finny, so great to have you back with us.
Dr. Finny Kuruvilla: It's great to be with you, Rob, as always.
Rob West: Finny, you have a remarkable background as an investment manager. And so I want you to start not in medicine, but in the early days. I want you to take us back to where your interest in investing actually began. I think your story is fascinating.
Dr. Finny Kuruvilla: Yeah. So my parents moved to the United States from India in 1973. And we had little to nothing. It was very much a typical rags-to-riches story of working hard and being able to save. I was very impressed at my parents and that they were extremely committed to always tithing, no matter how little we had. It was always the first money to leave the bank account. And then my mom was working for Bank of America as a teller, and so she learned about the basics of investing and compound interest and all of that there. And she began to save when we had very little. And watching my parents go from the true lower class up into the middle class by putting into action the basic principles of sound, biblical finance was incredibly inspiring. And eventually, when I made my way to medical school, where I came to Boston in 1995, my mom was still my financial advisor of sorts and followed her playbook and her advice and learned investing from her.
Rob West: How remarkable. And that's really, Finny, when your interest in investing began to connect more intentionally with your faith and your values. Isn't that right?
Dr. Finny Kuruvilla: Yeah, that's exactly right. So one of the things that was nice about the program here in the MD-PhD program is you get a stipend. It's a nice perk, and you don't have to pay tuition. And so with that stipend, even though it's a modest amount, I was able to save every month. I was single at the time. And looking around at the options that were available, I didn't find anything super satisfactory. So eventually, I learned how to invest on my own. My roommate, he was doing his PhD at Harvard in economics, he gave me some advice about how to invest. And so I just learned how to invest on my own by reading books and by studying over those eight years of doing my MD-PhD.
Rob West: Incredible. And you went through all those years of training to become a physician. I'd love to hear, and we've got just about a minute and a half before our first break, what eventually convinced you that you could make perhaps even a bigger difference by investing in medical innovation among other things?
Dr. Finny Kuruvilla: Yeah. So one of the things that I did was I studied Peter Lynch. So Peter Lynch is right here in Boston. He was one of the people who made Fidelity as successful as they've been. And he has this line where he says, "Buy what you know." And he believes that if you invest at the intersection of your expertise with finance, you can do incredibly well. And so this was very inspiring to me, and so I started to invest at that intersection of the markets as well as biotech and some technology as well. And so that basic paradigm was what got me going, and it's still what fuels us: this idea that expertise is going to be differentiating in a sea of people who may be generalists or may not have any particularly deep domain expertise.
Rob West: Incredible. Well, we're going to unpack that after the break because this journey eventually led to the founding of Eventide. And Dr. Kuruvilla will share a bit about Eventide's story. It has grown dramatically. We'll also talk about investments that make the world rejoice. That's coming up in the next segment. Dr. Finny Kuruvilla, co-chief investment officer and senior portfolio manager at Eventide Investments is our guest today. If you want to learn more, head to faithfi.com/eventide. That's faithfi.com/eventide. Back with more after this. Stick around.
SEGMENT 2
Rob West: Your investments can do more than pursue a return. They can help fuel innovation and support businesses working to solve real human problems. They can ultimately support human flourishing and God's creation. And that's what we're talking about today: medical innovation today with Dr. Finny Kuruvilla. Finny is co-founder, co-chief investment officer, and senior portfolio manager at Eventide Investments. You can learn more about investments that make the world rejoice at faithfi.com/eventide. That's faithfi.com/eventide.
All right, Finny, you've taken us a bit through your story from the early days through medical school and your introduction to this idea that you enjoyed medicine, but you could have a profound impact through the innovation that was happening in many biotech companies. And that journey eventually led to the founding of Eventide, didn't it?
Dr. Finny Kuruvilla: Yeah, it sure did. So, I had been treating patients with a wide variety of mostly blood-related issues and blood disorders: leukemia, lymphoma, sickle cell, things like that. But in all of that, one of the things that I got increasingly excited about was the potential of using business as an accelerant to bring more advances and more healing into these patients that are suffering so much. And so, decided with my colleagues Robin and John, who I know you know well, to start Eventide back in 2008. We had some friends and family that were kind enough to be angel investors in our company, and we launched there right before the Great Financial Crisis of '08-'09.
Rob West: An interesting time to start an investment company. But it's been incredible to see the growth that's occurred since then. And Finny, I'm just so compelled by the vision of Eventide. I'd love for you to unpack that a bit for our listeners.
Dr. Finny Kuruvilla: Yeah, absolutely. One of the things that Jesus reminds us is that the two great commands are love God and love your neighbor. And when we think about investing, the most important verse I think for us to be thinking about is what does it mean to love our neighbor through our investing? And when we think about what investing is, investing is ownership. It's, of course, owning businesses. Businesses are supposed to be ways to express God's attribute of provision to the world. And so by assessing how well a business is doing at loving its stakeholders, loving its neighbors, we think that this is the most harmonious way to have our investing be an extension of our Christian values, not opposed to our values.
Rob West: It's an incredible vision. I want to take that, though, and make it really practical. I know there's some incredibly exciting things and innovation that's taking place right now in biotech, and it's central to the work you do as a co-chief investment officer. Give us just a picture of some of the things you're seeing right now.
Dr. Finny Kuruvilla: Yeah, Rob, right now, we are truly living in one of the most, if not the most, exciting periods in all of human history in terms of how rapidly healthcare is accelerating. And the most profound story of this year, the most exciting story of 2026, has been around pancreatic cancer, which historically has been one of the most fatal cancers to have. It's so deep in your abdomen, your pancreas, that it's often cancer appears so late when it's very metastatic. The big story of this year is the ability to target a protein called RAS, which is involved in basically signaling if cells should divide or not. And when RAS is mutated, it just tells cells, "Divide, divide, divide. Don't stop." And it has long been considered undruggable. But this year, we've had a breakthrough where one particular company was able to develop very successfully a medicine to target RAS, and thus to double survival.
Rob West: Wow. So, give us a sense of what some of the data is showing in the early days.
Dr. Finny Kuruvilla: Yeah. So, the early data that we have—and it actually just got approved, this particular medicine—the early data that we have is that normally metastatic pancreatic cancer has a median survival of 6.7 months. And with this particular therapy that targets RAS, survival is now 13.2 months. So, like I said, it's about double. And the way that it does that is by finding a little crack in a protein—there's a whole story around this—finding a crack, and then using a molecular glue, which is basically a way in which it recruits another large protein to shut it down. And so, basically, by shutting it down, you get that divide signal turned off, and then thus, the cells will die.
Rob West: That is just remarkable. To God be the glory for that, and I know it's continuing to advance. This is just one example of many you could cite today. From your vantage point, which is so unique, Finny—you know, you, of course, a physician, also an investor—what just goes through your mind and your heart as you see advancements like this and the opportunity to participate both as a patient as well as an investor?
Dr. Finny Kuruvilla: Yeah, I really believe that one of the privileges that each of us has in our many different facets as employees and owners of jobs is to be able to advance God's program, to roll back in some small way the effects of the Fall. We know that the Fall brings toil and pain and curse there, but in some way to show, to give a foretaste of what the Kingdom is like, is part of what we can be doing. And I think that through medicine, we can offer, just like Jesus did in His very powerful healing ministry where He made the lame to walk and the blind to see, this gives us an opportunity to extend Jesus's work into our day today.
Rob West: And what's incredible is that as Christ-followers, we can seek a strong financial return and have that go hand in hand with investing in companies that are creating this type of positive impact and redemptive purposes in the world, isn't that right?
Dr. Finny Kuruvilla: Yeah, that's exactly right. And I think what is so powerful about this concept is that investing should be, when you're doing it correctly, it should be in harmony with God's principles—that we're operating in the grain of how God made the world. We believe that doing what's right is also what's smart; that doing the right thing should lead to, in the long term, better results than those people who are cutting against the nature that God built into the world. And so, this is what's so powerful about loving your neighbor, is that it's not something that ultimately should be hurting you. In the long run, it's a way to bless not just your neighbor, but even it comes back to yourself. You're going to generate, for example, more goodwill, more loyalty there. You're going to be empowering the very people that you want to be serving. And so, I think this is what's so exciting about doing investing in God's way, is that it's not a lose situation; it's actually a win-win.
Rob West: Yeah, just about 45 seconds left, Finny. What's so exciting about what's taking place right now in faith-based investing is we're just seeing an explosion of world-class products like the ones your team and you are leading at Eventide. And you can honor your conscience and avoid companies misaligned, but you can also lean into human flourishing and the type of innovation we're talking about today at the same time, isn't that right?
Dr. Finny Kuruvilla: Yeah, that's right. It's not merely a negative vision about what I should be avoiding, but it's a positive vision about saying: What are the kinds of businesses that are going to be promoting the global common good, that are going to be demonstrating the way that God wants us to be treating one another? And so, I think it's a huge opportunity that we have today. And yeah, we, with many other firms, we're so excited to be playing a small role to be advancing God's interest and loving our neighbors well through the stewardship of our investing capital.
Rob West: It's an exciting day for God's people to deploy God's capital into the very things you're describing. Finny, thanks for your time today.
Dr. Finny Kuruvilla: Hey, thank you, Rob.
Rob West: That's Dr. Finny Kuruvilla, co-chief investment officer and senior portfolio manager at Eventide Investments. Learn more at faithfi.com/eventide. As I said, we're off today, so don't call in, but we've got some great calls lined up in advance, so we'll go to those just around the corner. I'm Rob West, and this is Faith & Finance on American Family Radio, biblical wisdom for your financial journey. We'll be right back.
SEGMENT 3
Rob West: Great to have you with us today on Faith & Finance on American Family Radio. I'm Rob West. Hey, if you would like to connect with an advisor in your area, especially if you want one that shares your values as a Christ follower who's met high standards in training, in a biblical worldview, character and competence, pastor and client references, regulatory review, that's a Certified Kingdom Advisor. And there's more than 2,000 now across the country and into Canada. And if you'd like to find a CKA to work with, you can just head to findacka.com. That's findacka.com. Let's head back to the phones. We're going to go out to Bakersfield, California. Olga, how can I help you?
Rob West: Hi Olga, are you there?
Olga: Hello, good afternoon. I'm here, Rob. Thanks for waiting.
Rob West: Great. Yes, ma'am.
Olga: Yes, I'm here because I'm I'm kind of struggling at the moment right now financially. In my full-time employment, it's not meeting all of my I'm not able to make up, you know, for my bills and what I need. Right now, I have I'm contributing to my 401(k) and also to an ESPP account. Just this month, almost $200 were taken out for my 401(k) and then almost $150 for the ESPP. So what I was thinking is maybe I should for a short time stop that, and maybe those that that money can help me with whatever else I need for my bills. Do you think that's a good idea?
Rob West: You know, temporarily reducing investment contributions, Olga, is perfectly reasonable. I think the key, though, is to address the cash flow deficit rather than, you know, automatically or on an extended basis, you know, pulling, you know, cutting out your investments. Because your power, your most powerful wealth-building tool over time is going to be your income and living on less than your income so that you can fund long-term investments and take advantage of compounding growth, especially growth inside retirement plans where, you know, the taxes are not putting a drag on the investment results. But at the same time, you know, we need to shore up your monthly budget first. And so I think to kind of stop the bleeding, if you will, you know, that certainly is a way to do that rather than pulling anything out of investments, you just stop putting new contributions in. But then let's go to work on getting you to a place where you're living below your means so you do have margin to be able to build up your reserves if you don't have an emergency fund and to resume your investments. So here's where I would go first. I think the first step is always to build an accurate monthly budget. So you really need to try to identify, if you don't know already, where the whether the shortfall comes from essential expenses, what we call discretionary spending, so the things you don't get a bill for. Is it a temporary expense, something that's changed that's only temporary and it will resolve and and go away? Or is it a longer-term mismatch between income and lifestyle? And so we've really got to dial into that and figure out, you know, using a several months spending history, um, you know, where the where the problem is. And then, you know, go ahead and and cut the, you know, any taxable investing first. So anything you're putting in investments that's not inside a retirement account. Um, the next step would be, uh, if you're getting any match, let's reduce the contributions only to, um, you know, the point where you're still getting the match, but you're not doing anything more than that. If you still have a shortfall, then you could cut out your retirement contributions altogether. But again, I think, you know, it's important to go to work to figure out what you can do to either increase income, dial back spending, uh, such that you could get back to a place where you could resume that in time. Does that make sense, though?
Olga: Yes, it does. It does. Yeah.
Rob West: Okay. All right. I'd be happy to provide a a Certified Christian Financial Counselor to you, Olga, uh, that could help you just to bring a fresh perspective, uh, to your budgeting process. Maybe give you some ideas on how to pull it all together, how to analyze it, and then maybe give you a some new insights on where you might be able to make some changes to get this budget to balance. Uh, would that be helpful to you?
Olga: That would be absolutely, yes.
Rob West: All right, good. Um, we'll cover the cost of that. It won't cost you anything. I'm just going to ask you to hold the line, my team will get your information, and we'll get a Certified Christian Financial Counselor in touch with you. Lord bless you. You got this, Olga. Call me back when you get it figured out, and let's celebrate together. Uh, let's go to Ohio. Hi, Susie, go ahead.
Susie: Yes, thanks for having me. Um, we have $160,000 invested, and then we have $160,000 in a deferred comp. Um, we're in our early 70s. Um, would there be an advantage of making a uh the deferred comp into a Roth conversion? And I don't really know anything about the Roth conversions.
Rob West: Okay. Yeah. Uh, potentially, uh, but for a couple in their 70s, I wouldn't automatically convert the whole $160,000 deferred comp to a Roth. Potentially a partial Roth conversion over several years might make more sense. Um, ultimately, though, what what type of account is it? Is it a 457, do you know?
Susie: Um, I don't know.
Rob West: Okay, no problem. Yeah, um, well, we we would just need to make sure that whatever it's in uh can permit the Roth account. You may need to roll it to an IRA, a traditional IRA first before the conversion. And you don't have to do it all at once. Uh, but essentially what happens is, um, you know, as you convert it, you are adding it to your taxable income for the year. So what's the benefit? Well, the benefit it goes is that it it goes from a pre-tax environment, um, where as you take it out, you pay the taxes on it, to an after-tax environment where now it's growing tax-free. So you're essentially paying the tax now versus later. And the reason people do that is because they think maybe that tax rates are headed higher in the future, which they certainly could be, um, or they're going to just for some reason be in a higher bracket. The only thing you'd have to look at, though, is, you know, given that you're probably on Medicare, as you convert that any portion of that IRA to Roth, um, it is added to your taxable income, which means you could have IRMAA, which is the additional Medicare premiums that kick in two years after your income goes up because this conversion would would increase your income. The benefit is you wouldn't have any required minimums and you could go ahead and lock in the taxes and not have to pay it later. So, um, let's do this. I want to talk a bit more about this and just make sure it's the right thing for you. We'll do that during the break, and then we'll be right back. Stay with us.
SEGMENT 4
Rob West: I'm so thankful to have you with us today on Faith and Finance here on American Family Radio. You know, here at AFR, it's all about equipping you with a biblical worldview. First and foremost, to encourage you to surrender your lives to Jesus, to place your full trust in Him for your salvation. And then beyond that, which is the biggest decision you will ever make, it's all about stewardship. How can we be stewards of what God has entrusted to us? Our time, our relationships. We're stewards of God's word and our talents and skills, and yes, His resources—the financial resources that have been entrusted to us. How do we live with a biblical worldview in every area of our lives, including this area of money, understanding the heart of God from Scripture, and applying that to the everyday decisions we make with His money? That's what we want to do on this program, to help you do just that. Let's head back to the phones. Missouri, Kristin, go ahead.
Kristin: Hi, thanks. My husband and I are both 51. We've got about $600,000 in retirement, everything invested in the stock market, everything in Roth accounts. And we rent, and we need to rent because of our ministry. But I'm wondering if it would ever be wise to take some of our contributions out of our Roth IRA, not the interest, but the contributions, and use that for a down payment on a rental house that we could, you know, have being rented out for the next 15 years until we retire and then possibly move into that house.
Rob West: Okay. Yeah, and what did you say your age was?
Kristin: 51.
Rob West: 51, okay. Yeah, and you've got about $600,000 in investments.
Kristin: Yeah.
Rob West: Okay. I mean, perhaps in the right situation. I wouldn't view it as an automatic upgrade from investing in the Roth. I mean, the fact that you're only considering the Roth contributions, the principal, is important. The IRA, you know, Roth contributions can be withdrawn without taxes or penalties, unlike the earnings, because they were already taxed. And so, the big, you know, the question then is, not can I take it out—yes, you can—it's should you? And so I would, I would look at, you know, what is the goal of buying the rental? Are you trying to create monthly income? Are you trying to diversify away from the market? Do you think real estate's safer? What would be the primary reason here?
Kristin: Well, primary reason in my mind would be to have in theory a paid-off house in 15 years, because we would be looking to get a 15-year fixed rate. But I don't know whether the stock market could outperform the, you know, the equivalent of what we would be taking out in contributions, whether it is moot, you know, whether it's equal after 15 years, or whether there would be a benefit to doing that and buying a rental house instead.
Rob West: Yeah, yeah. It's a great question, and I think, you know, the, you know, this is the, ultimately you need to look at which option better helps you reach your goal of having a paid-off home in 15 years. And, you know, as you look at, you know, leaving the money invested, the advantages are historically diversified stock investments have had strong long-term growth. It keeps your liquidity and flexibility, and you get this enormous benefit of this tax-free growth, which you would, you know, you would not have with the house. I mean, you would if you hold it until death and then it passes to your heirs and they get a step-up in basis, but not if you sell it. You'd have the capital gains on it, especially because it's a, it's a second property. And you keep a lot of diversification. The risk is the market will fluctuate; there's no guarantee it will be higher in 15 years. When you buy the rental property, the advantages are you get a tangible asset, to your point, it's paid off in 15 years, the rental income could provide retirement cash flow, real estate typically appreciates over time, and, you know, a paid-off property could reduce housing expenses in retirement. But you've got what's called concentration risk, which is everything tied up in one asset versus your portfolio, which is much more diversified. You have the repairs, and the vacancies, and the taxes, and the insurance, and the maintenance, which reduces your returns. And then real estate is, of course, less liquid and historically doesn't perform as well. So, you know, a part of this is going to come down to running the numbers and looking at your expected rental return. You know, typically you'd have a 4% to 5% cash return before considering appreciation, which, you know, if that's running 6% to 7% a year, that's pretty good when you put all that together. You also need to look at what you need for retirement. You know, the Roth is probably one of your most valuable retirement assets. And so, you know, that's lost years of tax-free compounding, and ultimately, you know, the loss of tax-free income that you could generate for yourself as you pull from the Roth, you know, down the road after 15 more years minimum of compounding. So, you know, I think at the end of the day, I would be cautious about moving a large portion of your Roth into a rental, just because I really don't like giving up that tax-free growth. I prefer you to have more diversification, and I prefer you to have more liquidity, which the house does not have. But, you know, if at the end of the day your goal is to own a piece of real estate tax-free and diversify away from the market, you know, I don't think I can disagree with that.
Kristin: Yeah. Okay, thank you so much. I appreciate that.
Rob West: Absolutely. Thanks for your call today. Let's go to Florida. Susie, go ahead.
Susie: Hi. Um, yeah, I just, my husband retired, and, and we have everything in our... don't know if it's a 401—it's just with, with Edward Jones, you know, stock options and all of that stuff. And, and we have a small house, about $250,000, and he thinks that if we put that $250,000 with the $400,000 we already have in, in that investment, and then, so sell the house, and then just rent another small house, we would be able to live on what we take out plus our Social Security—we're almost 70—then we would be able to live on what we take out and not have to worry about, you know, house things, whatever breaks down, and mowing the lawn, and all of that stuff. And I just have never heard of that as a, as a... normally people want to have a house paid off, which we do, when they retire. So I'm a little confused, and I wanted to know what you thought about it.
Rob West: Yeah, well I appreciate it. What are your thoughts on it?
Susie: Um... You know, I, I really don't know that much about investing at all to, to really have thoughts. It was just something I've never heard of doing—selling the home that you have paid off and living on the, the dividends from, you know, what would be around $600,000, you know? And you never know that the market's going to stay, or... I know at one point back in, I think it was 2008 or something when the housing market dropped, we lost, you know, $45,000. So I'm like, okay. So...
Rob West: Yeah. Well, I think that's ultimately what it comes down to, because I think this decision isn't whether investing $250,000 is better than owning a condo. The question is whether the growth potential of that $250,000 is worth giving up the stability of having a paid-off place to live. And I think we need to compare the cost of renting for the rest of your life against what the $250,000 could realistically earn, and the risk you would have to take with that $250,000 to earn it. And then there's the non-financial side, which is your home is where you live, it provides security and peace of mind, and, you know, we build our lives there. So it's not purely an investment, because investments are things that we sell when they've accomplished their purpose, and we don't do that with our homes. And so I think we've got to compare both the financial and the non-financial aspects of this. Hang on the line, Susie. We'll talk a bit more. We'll be right back.
SEGMENT 5
Rob West: Thanks for joining us today on Faith & Finance Live. I'm Rob West. We're taking your calls and questions today, so let's go to Illinois. Hi Rose, how can I help you?
Rose: Hi Rob. I've got a question for you. My husband and I both live in Illinois, of course. Um, and we bought some property 10 years ago and we're looking to build on it, and we're currently in the process of finding out how much that would cost. I'm looking to find out if what we want to build is too much and we sell that property, do I have a timeline where I can take that money and flip it into another home without tax ramifications? And if not, how much would I lose? I want to weigh how much it would cost to build the house versus financing, let's say, at whatever the 6% interest for $100,000 versus what the loss might possibly be when we sell the land, if there is a loss.
Rob West: Yeah. So help me understand what it is you're trying to zero in on right now. I understand you're getting the bids to see about building. Um, but in terms of what loss would you be describing here if you ended up selling?
Rose: If we can't afford to build, is there taxes that we would owe, or can we take that money that we would get from the land and roll it into another house and not have any tax ramifications?
Rob West: Yeah. When did you buy this property? You said a decade ago?
Rose: Roughly, yeah, 10 years ago.
Rob West: Okay. And have you been living—is there a dwelling on it now, or is it just land?
Rose: No, just land.
Rob West: Okay. Um, yeah, so essentially, if you were to sell it, you're going to owe capital gains on the appreciation that happened over the last 10 years. Do you know how much that is roughly?
Rose: Yeah, about $216,000.
Rob West: $200,000 in gains, or from your original purchase price?
Rose: Yeah, we bought it for 80... Yeah.
Rob West: Okay. Yeah, so the only thing you would be able to do is possibly do what's called a 1031 exchange, because essentially you would say that this was held for investment purposes, and then a 1031 exchange would allow you to sell it and defer the capital gains by purchasing another investment property. The problem would be if the next property was going to end up becoming your primary residence, then it's not a like-kind property. It would have to be investment property to investment property, and that would allow you to defer the capital gains. So if you sell this, which we'll call an investment property since there's no dwelling on it, and then you take the proceeds and you buy a home that you're going to move into, there would be no way to avoid those capital gains. And so you would probably have a 15% capital gain on the total gain that you had minus any improvements. So let's say it was $213,000, you know, we're talking $34,500 roughly.
Rose: Okay. And I'm going to also take that into consideration because if I'm buying this place and let's say it is a little bit too much, but I'm actually going to lose the $34,000 versus financing it and paying finance or doing that reverse mortgage like you were talking about... You understand where I'm going with that?
Rob West: I do, yeah, because that's now a part of the equation that says, "Okay, wait a minute, there's an additional cost here, which is the capital gains taxes." And so even if it's close, or maybe it looks a little better to sell and move on, maybe that causes you to say, "No, we're going to go ahead and stay and build," because now we don't have to pay the taxes. And if you stayed there the rest of your life—because this is kind of your forever home—and pass it down, all those capital gains would go away for your heirs if they inherited it, because they get the step-up in basis, so no one would ever pay the capital gains at that point.
Rose: Yes. Thank you. Okay, you gave me what I needed to understand.
Rob West: All right. Thank you for your call today. God bless you, Rose. To Chicago, Denise, how can I help?
Denise: Hi. I'm a federal employee and I'm planning on retiring this year, and also I will be 65. My plan is to take money out of my TSP, maybe 4.2 to 4.5%, and also I'm going to be getting my pension. And then after that, once I turn 70—I'm not going to take my Social Security—but after that, once I reach 70, then I only plan to draw 1 to 2% off the TSP. Is that a good plan?
Rob West: You've really thought through this! I like that a lot. Yeah, because I think what you're talking about taking right now while you delay the Social Security is still, I think, very reasonable. Because 4.5%, even if that were to extend well beyond age 70, is a very reasonable withdrawal rate, right there in kind of the sweet spot. And then by delaying the Social Security until age 70, it's going to give you about 25% more per year on that check. The federal pension provides that strong income foundation. And then if you can drop down to 1 to 2% from 70 and beyond, you will never outlive that money, and you'll have something to fall back on if you ever needed it for the unexpected down the road. So I would just say, at face value here, Denise, without knowing a lot more details, I like the sound of this framework.
Denise: Oh, thank you. You just made my day. God bless you, because I listen every day at work and I'm like, "Okay, okay, so I got it." You just made my day. God bless you. I appreciate it.
Rob West: Well, thank you, Denise. You're very sweet. Hey, call anytime if I can be of help to you. Let's go to Alabama and welcome Brent. Go ahead.
Brent: Hey, my name's Brent and I'm almost 64. I've been managing my own investments over the years and I have accumulated about $2 million in IRAs and Roth IRAs and... Just, I'm thinking about hiring somebody to help me with it, but I just don't like giving up the 2 to 5% that I'm going to end up having to pay somebody to help me with it. I've made moderate returns, I'd say somewhere between 5 and 15% annually myself. And I'm just wandering over, should I hire somebody?
Rob West: Yeah. And why the 2 to 5%? Where is that coming from?
Brent: No, I just know if somebody else manages it, they're probably going to want a percent of my investments to manage it.
Rob West: Yeah. Now, they certainly will if you delegate to an investment advisor, but on a $2 million portfolio, you should be closer to 1% a year than certainly not 2 to 5%—maybe 1.5% at the most. Now, there would be embedded fees that you would pay anyway, like the internal expenses of an ETF or a mutual fund, unless the advisor buys individual stocks. But in terms of the added cost for the advisor him- or herself, it really should be closer to, I would say, probably 1.25% would be more reasonable.
But I get the question, Brent, and I think it's a good one to ask because clearly you've done well, you've prioritized disciplined savings, sounds like you've done fairly well in the market. So all of that's good. And so, as a good steward, you're saying, "Does it make sense for me to pay someone to do something I've been doing myself?"
And I think some of the reasons why it might—I mean, I'm a big fan, especially in this season of life when you've spent a lifetime building a nest egg—is you're going to get some added benefits from that, I'll call it 1.25%. You're going to get tax planning. So considering and coordinating the IRA withdrawals with the Roth conversions and the RMDs can save substantial taxes by having an advisor in that mix. They're going to help often with retirement income planning, determining how much to withdraw and from which accounts. They can work with you on estate planning coordination.
And then I think just the peace of mind to have somebody with a rules-based approach to investment management. We've been in a pretty good market for the last couple of decades, apart from 2008, 2009, and then the pandemic. We've been in a pretty good environment, and during both of those, the market recovered pretty quickly. So having somebody with the time and the knowledge to stay on top of everything and make sure that you're not taking too much risk, and that they can keep you invested with that portion that's at the risk of the stock market—even if the market's down substantially because we were in a recession—I think you put all that together, and hopefully it'll give you the peace of mind to focus on what God has for you in the next season and not having to worry about watching the stock portfolio so closely. But at the end of the day, can you do it yourself? Absolutely. I just think there's a lot of reasons at this point in your life to go ahead and delegate that to someone else.
Brent: That makes a lot of sense. I appreciate it.
Rob West: Absolutely. And I think one of the ways to look at it, Brent, is to say, "Is the added value of somebody who's got the time and the expertise to do it, who can provide some of these other planning benefits around taxes and income planning and all that—is there the ability for them to add at least 1.25% annually over time in added value, and maybe even real return?" I would say absolutely, there really should be. And so I think you should get far more value out of having the relationship than not.
So I think the next step for you, unless you already have the person that you know you would talk to, would be to head to KingdomAdvisors.com and maybe interview two or three Certified Kingdom Advisors there in Alabama and find the one that's the right fit for you. Hey Brent, we appreciate your call today, my friend. Thanks for being on the broadcast. Call anytime.
Big thanks to my team today. Thankful for Taylor and Devin and Patty and everybody that makes this possible here at Faith & Finance Live every day. Go out and live as a faithful steward. Make God your ultimate treasure. Hold money loosely, make it a tool, give it generously, invest it strategically, and come back and join us tomorrow. We'll see you then. Bye-bye.
Some of the most remarkable advances in medicine are happening inside companies most of us have never heard of. What if investing in healthcare innovation could offer financial opportunity while supporting businesses that serve their neighbors and tackle some of the world’s toughest problems? On this Faith & Finance on AFR, Rob West will talk about that with Dr. Finny Kuruvilla. Then it’s on to calls.
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