Last week on American Family Radio's Faith & Finance program, SMI's executive editor Mark Biller joined host Rob West to talk about Joseph's noteworthy example of financial preparation, found in Genesis 41. Mark also took a few questions from callers
To listen, click the play button below. Scroll down for the transcript.
Faith & Finance airs weekday mornings on American Family Radio. A different version airs weekday afternoons on Moody Radio.
(More radio appearances by members of the SMI team are posted on our Resources page.)
Transcript
Rob West
"And he gathered up all the food of these seven years, which occurred in the land of Egypt, and put the food in the cities. He put in every city the food from the fields around it." — Genesis 41:48.
Hi! I'm Rob West. Joseph's story isn't just dramatic. It's a powerful example of godly wisdom in uncertain times. His preparation during years of abundance helped an entire nation weather a famine.
Today, Mark Biller joins us to explore what Joseph's legacy teaches us about planning ahead.
Then it's onto your phone calls at 800-525-7000. This is Faith & Finance on American Family Radio — biblical wisdom for your financial decisions. (opening music ends)
Well, Mark Biller is a good friend. He's the executive editor at Sound Mind Investing, a longtime underwriter of this program — and a trusted source of wise investing advice. Mark, always great to have you with us.
Mark Biller
Thanks, Rob. Always a pleasure to be here.
Rob West
Mark, we're looking, of course, at your latest editorial at soundmindinvesting.org. I love this article. It's titled Years of Plenty, Years of Famine Revisited. Now, the title clearly draws from a biblical theme, so go ahead and set the stage for this conversation today.
Mark Biller
Yeah, sure, Rob. So it's hard for me to believe that I wrote the original version of this editorial almost 20 years ago, back in 2006. That's why the "Revisited" is at the end of the title,
But basically, it tells how Joseph has always been one of my favorite Bible characters. His rollercoaster journey from favorite son to slave, to master of the house to prisoner, and eventually to viceroy of Egypt. It's amazing. It's inspiring.
And the culmination of that story, I think, holds out hope to every believer going through difficult times. Joseph tells his brothers in Genesis 50, verse 20, "You intended to harm me, but God intended it for good." And the whole story, Rob, is just an incredibly inspiring example of God at work in the affairs of men to accomplish his ultimate purposes.
Rob West
Yeah, that's well said. The financial side of Joseph's story, Mark, really comes into focus during his time in Egypt, doesn't it?
Mark Biller
Yeah, it sure does. So the turning point, really, of Joseph's experience comes when he interprets a pair of dreams for Pharaoh. And Joseph, through that, realizes that Egypt is about to experience seven years of abundance, which are going to be followed by seven years of famine. And Joseph, of course, gets put in charge of the preparations during those years of plenty so that the people can survive the coming years of famine.
Rob West
Mark, when you first wrote this editorial a couple of decades ago, as you said, what were you seeing or sensing about the direction things were headed at that time?
Mark Biller
Yeah, back in 2006, that original editorial was written with kind of a strong sense that America might be facing a similar "years of plenty, years of famine" scenario ahead. And, given that, it really stressed that we'd be wise to consider the personal implications of Joseph's story and start making appropriate preparations during those years of plenty, those good times, for any difficult years that might be coming down the road.
Rob West
Interestingly, as we look back, Mark, that warning proved to be remarkably well-timed, didn't it? We did kind of find ourselves in that global financial crisis shortly after you published this. And some of the core issues were not addressed for that crisis back then. Unpack that a bit.
Mark Biller
Yeah, sure. So at the time of the last crisis, Rob, we had what most people would've considered at the time to be runaway debt. We had about $10 trillion in U.S. debt, government debt in 2008. Well, one example of us not really addressing core issues, we've just exploded that number in the 15 years since. We're up to about $36 trillion of government debt today.
Another example would be the banking system, and the "too big to fail" banks were at the center of that crisis. And we did implement some reforms. But whether through intent or not, those reforms — if we look at what's happened over the last 15 years, we've actually had a dramatic shrinking in the number of smaller banks and consolidation within the bigger banks, which have made those "too big to fail" banks even bigger today than they were back then.
Rob West
Wow.
Mark Biller
Probably the biggest one on my personal list, Rob, is that rather than using that crisis as an opportunity to move away from central banks repeatedly intervening in economies and markets, which really arguably helped lay the groundwork for the whole initial financial crisis, what we've seen since is global central bankers just doubling down. We've had 15 years of quantitative easing, a decade of near-zero, and, in some cases, even negative interest rate policies. Of course, the big post-COVID response.
And then I'd probably put as the last item here, rather than our political leaders using that opportunity to come together and deal with some of these really important issues, our politics have just gotten more and more fractured and divided — probably the worst in my lifetime.
So that's why I said in the editorial that some of those core issues really never got addressed, despite all the activity after the financial crisis,
Rob West
And those are big issues — enough to probably cause some concern. So I guess the logical question is, are you sensing then a similar kind of concern today as you were in 2006?
Mark Biller
Yeah, so after all that bad news, the good news, Rob, is that unlike in 2006, I really don't have any sense of specific foreboding about something bad coming ahead. Now, I would add to that, though, there are signs of stress everywhere within the financial system, and we never know when the next crisis might arrive.
So I always turn back to scripture, and knowing what the Bible says about debt and the many clear warnings about debt, it really doesn't take a prophet to see that eventually the global economy's debt addiction is likely to cause some problems at some point.
Rob West
Yeah. Mark, what does that mean on a personal level? How should we be preparing those listening to your voice right now?
Mark Biller
Yeah. Well, I'm glad you asked the question that way, Rob, because, well, it's really easy for us to focus on these national or global problems, God has graciously provided protective principles to help us prepare individually for future storms.
So if we're wise, those of us who may presently be fortunate enough to be enjoying "years of plenty" — when home prices are high and asset values are high and unemployment has been low — well, we should be preparing right now for future strains to the system. And we can do that by diligently working to get debt-free, funding an emergency savings reserve, investing for the future, diversifying broadly — all those principles that we regularly talk about on these programs.
Rob West
Yeah, very good. Well, we're talking with Mark Biller today. We're talking specifically about an article that he has recently revised and updated at soundmindinvesting.org. Go check it out. It's called Years of Plenty, Years of Famine Revisited.
Interestingly, he wrote this in 2006, just having a sense that maybe something was on the horizon and that we as God's people needed to be prepared for perhaps that transition from years of plenty to years of famine. Well, what ensued was — in 2008 and 2009 — the global financial crisis. And although Mark isn't calling for something similar to happen again in the near future, there are some great lessons we can take away — always from God's word and specifically this story of Joseph.
And he and the article address some of the core issues that not only weren't addressed back then but have become much bigger today in terms of too big to fail, and the quantitative easing and monetary policy, not to mention the national debt. So a lot to take away here and read, including how you should respond in your own life as a faithful steward with what passes through your hands. You can find the article at soundmindinvesting.org.
When we come back, we're going to go right to the phones. Kevin's waiting patiently, and Carol, and perhaps your question for Mark Biller — 800-525-7000. We'll be right back with much more just around the corner. Stay with us.
Rob West
Great to have you with us today on Faith & Finance. I'm Rob West. Mark Biller here today, executive editor at Sound Mind Investing, a longtime underwriter of our program.
In this segment, we're going to take your phone calls — questions from Mark Biller today. We'll sneak in a few others as well.
To Kentucky. Kevin, you've been waiting patiently. Go ahead.
Caller
Yes, sir. I had a question, actually, two different questions. One was I've got probably about $525,000 in a 401(k) setting with Fidelity. I also have a second Fidelity account that has probably about, I guess about $16,000 in it. The one that's $16,000 as far as the percentage, is doing a lot better than the has the previous one. But my question was — it's been fluctuating from anywhere like $480,000 to $620,000, but it's really not been climbing over the last six years.
I felt like it should, and I was wondering if I need to roll that into the one that I have that has a smaller amount into it, and then try to just match what's in there that's doing better. Probably about four percentage points better than what the other one is.
Rob West
Yeah. Mark your thoughts.
Mark Biller
Yeah, good question, Kevin. What you're thinking about doing is not a bad idea, but you may not even need to roll that account into the other one that's been outperforming.
The first thing I would look at is what is the smaller account invested in? And you're probably going to find that either the stock allocation is higher than in the smaller account than in the larger one, or maybe it just has some different specific investments that have been performing better. But it could be as simple as being able to adjust your 401(k) investment mix — the allocations and what you're invested in over there.
Now, you want to be a little bit careful because — I'll give you an example. If say the larger account is invested, say 60% in stocks and 40% in bonds, well, of course, that type of mix not going to keep up with say, a 100% stock investment if that's how the smaller account is invested.
And so really the first step is always to figure out what is the appropriate mix for you at your age, your risk tolerance, the different factors that are unique to you — [that's] going to determine how all of these accounts really should be invested. We always encourage people, even when they have multiple accounts, maybe the husband and the wife each have a couple of different accounts — it can get kind of hairy with people sometimes with multiple accounts — but we always encourage them to look at that as one big pie and allocate the one big pie, even if it's spread across multiple accounts.
The first thing, Kevin, I would do is look into those accounts, see how they're invested. Maybe you can just make the adjustments right there without even having to move anything from one custodian to another. That would be the easiest. So that would be the first thing I would check.
Rob, any other thoughts?
Rob West
No, I think you're right on. Kevin, is that helpful?
Caller
It is. I did have one additional question. I have probably about $12,000 in credit card debt. Well, what I was wondering is I know that sometimes you can take a loan out of the 401(k) and repay yourself to pay that off. I mean, the credit card I have is great, considering it's [rate], 9.99% interest versus 24 or something like that. But at the same time, I didn't know if it would be better to maybe take a small loan out and pay that off and then pay myself back into the 401(k), or —
Rob West
Yeah, you certainly can do that. And the upside of that is, to your point, you're getting out of that 9.9%, you're paying yourself back. The downside is if you separate, it becomes taxable, but it's not a significant amount of money — meaning separate from your employer. And a lot of times, just the pressure comes off and so then you just say, "Well, it's not a big deal" — just kind of you're not as laser-focused on getting it paid back when it's a 401(k) loan, paying it to yourself versus the credit card.
But just given the assets that you have, there's no reason to be paying that 9.9%. There's not any reason for you to use the credit counseling program or anything just because you've already got a fairly low rate. So I wouldn't be totally opposed to you doing that. But I would say, let's just really stay committed to getting that paid back as quick as you can. [I'd] rather that money be working for you in that 401(k) rather than on loan to pay off that debt. So hopefully that helps.
Thanks for your call today. Joshua's in Florida. Go ahead, sir.
Caller
Hey, thank you for taking my call, Mr. West, and hello, Mr. Mark!
My question is, is the World Economic Forum in the UN going to be successful about this 2030 "Reset"? And one more quickie. Have you heard Trump talk about anything about opening the energy reserves for the U.S. and for fracking and drilling? Thank you.
Rob West
Yeah, some softballs for you there, Mark, huh?
Mark Biller
Yeah, I don't know about that. Hey, Joshua, thanks for those questions. So, the "Great Reset" —for listeners who maybe aren't up to speed on that. My general summary of that is that the World Economic Forum has been kind of pushing for a great "reset," which involves several different things.
A lot of it was in response to COVID, or at least was accelerated there. One of the big aspects of that is moving away from the economic system that we've had, which is more of a pure capitalism towards what they call "stakeholder capitalism," where companies should be run more in the interests of everybody, all stakeholders — meaning citizens and customers and on and on and on — instead of just being run as businesses for the benefit of their shareholders. So there are a bunch of other pieces to that, but we'll kind of use that as our working definition.
So Josh is asking, are they going to be successful in implementing this by 2030 or at some similar close timeline? I guess my 2 cents, Joshua, — and that's really all it is, I'm not an expert on this —but is that this has clearly been something that has been pushed pretty hard already.
We saw a lot of that push here. I think it's been even worse in other places like Europe and Australia and some other friendly countries that have maybe taken a harder turn in this direction. But when I say it's already been hard pushed here, one of the aspects of that was we had the big, I'm losing the acronym, Rob, you're going to have to help me, but it was the not DEI, but there was another one that applied to corporations and investments that was essentially the secular version of Christian values investing. And so —
Rob West
Maybe "ESG."
Mark Biller
That's what I'm looking for. Thank you, Rob! The ESG part of that.
And so a lot of people focused on — BlackRock as one of the biggest asset managers, their CEO, Larry Fink was a big proponent and pusher of ESG for a while. We had a lot of SMI people asking us questions five years ago, three years ago, about using BlackRock funds because they didn't want to be a part of that.
And so one thing, Joshua, that I would say that's very encouraging is in the last few years, at least in the U.S., that ESG push has really crumbled. BlackRock has done a 180 on that and has turned away from making that a part of their investment process. A lot of other investment groups and companies that maybe were just kind of going along with that because they didn't want to fight the cultural tide, they've taken the opportunity to get off of that bus. So that's a much, much less impactful push at this point, at least here than it was even I'd say five years ago.
Of course, the difference with Trump and the White House is a big one. And so we'll just use that to kind of segue over to the second question you asked, which was about oil and the reserves and so forth.
My impression, Joshua, is right now with oil where it is — it's been trading really in the $60 range, back and forth through the sixties or so — that's a relatively reasonable oil price. And we've got OPEC really flooding the market with a lot of oil, which makes it hard for — Trump continues to encourage US production of oil and other traditional energy sources — but it's hard when the price is down at this level because oil companies just don't make a lot of money at these prices.
So that's not the worst thing in the world because oil in the ground is oil that we can pump later at reasonable prices. But I think it does kind of put a little bit of a cap on his ability to really ramp up U.S. oil production right now. It would probably take a little bit higher prices to incentivize U.S. energy companies to really hit the accelerator on that production. So those are my two cents.
Rob, anything you want to add to any of that?
Rob West
No. I mean, I think that was very well said, and I trust your insights on this. Joshua, was that helpful?
Caller
Yep.
Rob West
Awesome. Thank you for your call, sir. We appreciate you being on the program today. Some great questions.
Let's see. We're going to go to Michigan next. Carol, go right ahead.
Caller
Thanks for taking my call. I had a question about the HELOC [home equity line of credit] loan. My realtor suggested it in order for us to buy and sell. We have a house that's paid off. We were thinking about selling it, although we don't know if it would be one year down the road, five years down the road, but if something came up, he said it was saying it would move a lot faster and easier because you could pay in cash.
My question with the HELOC loan is, is it safe to have on your house? Can we trust the bank, and oh, can somebody else use the money behind the scenes without us knowing about it, like theft?
Rob West
No, I wouldn't be concerned about that. I mean, the only concern is just your ability to pay. And so right now, you own your home free and clear, as long as you keep the insurance and the taxes paid, namely the taxes, you're good in the sense that nobody can take your home unless they did it with theft through a fraudulent deed conveyance.
But as soon as you put a mortgage on it, which is what a HELOC is, if you had something come out of left field and you weren't able to pay it, now your home is at risk.
But I would look at other alternatives just to see if you could time the sale and the buy without having to take on a lot of debt through a home equity loan.
But in terms of your question about somebody hijacking that and using it for nefarious purposes, I wouldn't worry about that. It's really just a matter of do you want to take on debt at this point when you're debt-free, or can we solve for this home purchase another way?
So thankful for Mark Biller's visit today. He's such a good friend and a great partner at soundmindinvesting.org. Listen, folks, go check out this article. You'll really enjoy it. It's called Years of Plenty, Years of Famine Revisited. You'll find it at soundmindinvesting.org.
When you're there, check out the SMI newsletter for great content and for mutual fund recommendations if you're a DIY investor — or the Sound Mind Investing Private Client group, if you want more hands-on active management.
This is Faith & Finance. So thankful for my team today: Sandy and Taylor and Devin, and everybody here at FaithFi that makes this possible.
Come back and join us tomorrow. We'll see you then. Bye-bye!
