Jesus will return someday. Until then, each of us is called to be a faithful steward, which includes effectively managing our finances.
SMI's executive editor Mark Biller talked about that with host Rob West last week on American Family Radio's Faith & Finance program.
Click the play button below to listen. Scroll down for the transcript.
Faith & Finance with host Rob West airs each weekday morning 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:
"Concerning that day, an hour no one knows, not even the angels of heaven nor the Son, but the Father only."
Hi, I'm Rob West. Jesus made it quite clear that no one on Earth knows the day or hour of his return, yet we're to live as if he's coming back tomorrow. Does that mean we don't need to plan for the future?
Mark Biller weighs in on this issue today. And then it's onto your calls at 800-525-7000.
This is Faith and Finance on American Family Radio, biblical wisdom for your financial decisions. (opening music ends)
Well, Mark Biller is the executive editor at Sound Mind Investing, an underwriter of this program. We always look forward to having Mark on the program, and today we're going to be talking about "end times." Well, sort of.
Mark, great to have you back with us.
Mark Biller:
Thanks, Rob. Good to be back.
Rob West:
Mark, the Apostle Peter also said that no one knows when Jesus will return. Let me read 2 Peter 3:10. It says, "The day of the Lord will come like a thief, and then the heavens will pass away with a roar and the heavenly bodies will be burned up and dissolved, and the earth and the works that are done on it will be exposed."
But until then, Mark, what should we be doing as Christ-followers?
Mark Biller:
Yeah, Rob. Well, there are at least two very important things. I'm sure there are more, but we'll focus on two today. First of all, we should be anticipating the Lord's return. That's clear from these Scriptures that you started us off with. But at the same time, when it comes to money, we need to stay busy managing that as good stewards.
That might sound like common sense to a lot of your listeners, but a number of years ago, we realized that not everyone agrees with that second point. At the time, SMI was in the middle of a marketing campaign and we had sent several thousand letters to Christians explaining how SMI could help them create a personalized financial plan based on biblical principles. We added several hundred new subscribers through that campaign, which was great, but one man returned our order card with a message that he wrote in bold red ink and on the card he wrote, "The end times are at hand and you want me to set up a plan?"
Now, you have to love the heart behind that sentiment. We agree that we should live in a constant state of preparedness for our Lord's return, and we're excited about that as well. But until he does return, we don't feel like that's an either/or choice. And so, while we live in anticipation of the Lord's return, we need to manage the resources that are entrusted to us according to biblical principles as best we can.
Rob West:
I think that's well said. Now, planning for the future, of course, involves finances — in many respects. So, take us into God's Word. Where can we be reassured that our planning is, in fact, necessary?
Mark Biller:
Yeah, well, one of the key verses is Proverbs 21:5. That says, "The plans of the diligent lead to profit as surely as haste leads to poverty." And another one we can look at is Proverbs 22:3 — "A prudent man foresees the difficulties ahead and prepares for them. The simpleton goes blindly on and suffers the consequences."
But it's important to also recognize that the Bible makes it very clear that it's not just us setting up whatever plans we want and asking God to bless those. We need to ask God to guide us in this process and then trust him with the results.
A couple of Scriptures to make that point. We'd go to Proverbs 16:3, which says, " Commit to the LORD whatever you do, and he will establish your plans." And then Proverbs 19:21 says, "Many are the plans in a person's heart, but it is the LORD's purpose that prevails."
Rob West:
My friend Dr. Ken Boa talks about our role as stewards. Once we surrender our lives to Jesus, we're stewards of not only our time and our talent and our treasure, but he says we're stewards of truth and relationship. So stewardship is a hallmark of the believer.
But, clearly, finances is one big part of that, and we're called, according to the Apostle Paul in 1 Corinthians, to be "found faithful" as a steward.
So talk to us about how we need to think about financial planning in light of stewardship.
Mark Biller:
Yeah, so planning at its most basic, Rob, is being intentional. It's being proactive instead of reactive, and that's how stewards are supposed to operate.
I find it really interesting that John MacArthur in his book, The Second Coming — back to our original point — talking [first] about the return of Christ, but then transitioning over to this idea of stewardship.
John MacArthur unpacks the parable of the talents in that book, The Second Coming. And he breaks it into three parts. He talks about the responsibility we receive, the reaction we have, and the reckoning that we'll face.
And what he says is, as for the responsibility that we receive, the servants in the parable of the talents, they're entrusted with the responsibility to manage the master's wealth, not just hold it until he returns. They're empowered to act on his behalf to do productive things with what had been entrusted to them, and they were expected to do that.
In terms of the reaction that we have in the parable, two of the servants are faithful. They embraced the responsibility they'd been given and out of their desire to serve the master, they invested productively, they generated a good return. But then we see the third servant, he was fearful and he just hid the master's resources until the master returned.
And then the last point MacArthur makes there is the reckoning that we'll face. We're all familiar with it. When the master returns, the three servants were required to give an account of what they'd done with what was entrusted to them. The two that were faithful were told, "Well done, good and faithful servant." Of course, that's what we're all hoping to hear at the end of our lives. And that was because they had made the most of their opportunity to serve the master, and the master then rewarded them with the opportunity to manage even more of his resources.
But then the master called the unfaithful servant "wicked" and "lazy" and said the servant should have, at the very least, put the money in the bank where it could have earned some interest.
So [it's] an interesting thing that MacArthur also is looking at this the same way we are today — that in looking towards the Lord's return, there's this faithfulness and stewardship element while we wait.
Rob West:
So I guess the bottom line, Mark, is that we're to live like Jesus is returning today, but we plan to be here for a long time. Is that right?
Mark Biller:
Yeah, the good steward is looking forward to the return of the Master. It's not that we're ignoring that by any means. It's just that as we wait, we want to make sure we follow the Master's instructions to be productive with the resources that he's put into our hands and make the most of those until he comes back.
Rob West:
Yeah. Very good. By the way, we are taking your questions here today for Mark Biller in this portion of the broadcast. If you want to talk about your investment strategy, your portfolio, and how you need to think about navigating this market, give us a call right now — with lines open: 800-525-7000.
All right, Mark, let's get a bit more even practical about what this stewardship looks like in the context of financial planning. What would you share with our listeners about where they go from here?
Mark Biller:
Yeah, sure. Well, in terms of day-to-day money management, using a budget is a huge help to most people. It's probably the most basic but most important tool that most people have in their financial toolbox. A budget is going to help you to be intentional in how you allocate your income across your various priorities, which will include generosity, saving, investing, and spending.
Then as we transition to what we think of as retirement planning, planning for your later years, SMI has several tools on our website that can help people build an investment plan that's either focused around a particular retirement date. We also have some tools that can help them with an estimated retirement budget.
Those are a couple of key things that we're always referring to when we're answering listener questions — "What's your spending plan look like?" "Well, how does your income and your expenses, how do they match up in retirement?"
I think it's really important, Rob, to just remind folks the idea here is not to create the "perfect" plan. There's really no such thing as a perfect plan, and very few plans are even going to survive their first point of contact with the real world. You're always going to have to make adjustments.
But the planning process is essential, and that's really the key to be looking at these things, aware of the variables and making proactive changes before you get into some kind of a problem.
A person without any kind of a plan is really just hoping, they're guessing, assuming things are going to turn out okay. But a person with a plan — and ideally, again, a plan that's bathed in prayer built on a foundation of biblical principles — well, that's a person who's more likely than not to be found faithful.
Rob West:
Yeah. And Mark, when you have a plan, especially as it relates to investing, it keeps you from perhaps being tossed around by the news of the day and the most recent market volatility and allows you to stay focused on why you're investing, your time horizon, and your strategy, right?
Mark Biller:
Oh, 100%. The challenge as an investor is we're always driving forward — we're looking through the windshield — but all of the information we have is coming from the rear-view mirror! And so we spend a ton of time looking at history to inform us what the likelihoods are, what the parameters are likely to be. But at the same time, we've got to be aware we're always moving forward, things are always changing as we move. And so it is kind of this interactive thing. It's really not usually just a one-time set-it-and-forget-it.
But that's that planning process again. Create a good plan that you can lock into and then, hopefully, you can just make very minor corrections and adjustments as you go forward.
Rob West:
Back with Mark Biller with one more segment. Your questions at 800-525-7000. Stick around.
Rob West:
Thanks for joining us today on Faith & Finance here on American Family Radio. I'm Rob West.
We're taking your calls and questions — this segment for Mark Biller. If you have questions on the market, the economy, your portfolio, we'd love to hear from you. You can call right now at 800-525-7000. That is 800-525-7000.
Mark, let's turn the corner and talk about the market for a moment. Obviously, the market had been under quite a bit of pressure recently. And more in the last few days, at least, we've seen a lot of strength on the upside. Do you feel like a lot of that as a result of this most recent inflation reading, or is there a lot more to it?
Mark Biller:
Yeah, it's always tricky, Rob, to interpret the short-term "tea leaves" even after the fact. There are usually about 11 explanations for every market move in the short term.
One thing, though, that I have been noticing and have mentioned a couple of times to SMI readers this year is there is a typical election year "seasonality pattern" that we see over time — and not every election year lines up with that, of course.
But one thing that's been interesting as we've been tracking that is that it seems as if this year, most of the big market inflections have kind of been front-running the typical election timeframe. In other words, you might expect something to happen in the summer and that happened in the spring, and what we would normally anticipate in the fall has happened in the summer.
And so, an example of that is that very often during election years, we see the market be pretty weak in August and September, really even into October, and then just zoom out of the election and race higher into year-end.
Well, in keeping with this idea that the market has been kind of front-running these moves all along this year, we had that big borderline — very short but borderline — panicky moment there at the end of July, early August. And a lot of that was the Japanese market and some really weird things. But also our U.S. markets really wobbled there for about three days, took the NASDAQ down in double figures — those are the most popular tech stocks. The S&P 500 was down about 8.5% So it was significant.
And it was just interesting to me, having already noted that pattern, that this was a month or two earlier than we would normally expect that very type of move. So it just kind of has me thinking, "Well, maybe that was it. And now as we're getting the stronger recovery, that too could be kind of front-running that normal pattern."
Of course, against that, Rob, the usual disclaimers of short-term market moves are almost just fruitless trying to predict, but also the fact that September does tend to be the weakest month for U.S. stocks historically. So I would not take anything I just said as license to go get crazy and put on lots of stock trades and leverage up or anything like that! But it does kind of give a little bit of flavor to what we've been seeing over these summer months, which are often kind of dull but have not been dull this year.
Rob West:
Yeah, very good. I think it's a helpful analysis. All right, let's go to the phones. By the way, we have a few lines open. We're taking your questions — at least for this portion of the broadcast — on investing-related topics for Mark Biller — 800-525-7000. You can call right now.
Jeff is in Texas. Jeff, go ahead, sir.
Caller:
I wanted to get your take on these various companies that advertise for people to protect their assets by putting their money in gold — particularly like with the IRA for the tax benefits obviously — that there just is that if the economy and everything else, if the government goes south, then your assets will still be protected.
But the skeptical side of me is wondering, is that really true? Because it seems like if somebody else is really holding the purse strings, what's to keep either the government from seizing whatever they have — or them just flying the coop? Do I have a legitimate concern or...
Rob West:
Yeah, it's a great question. And clearly, Mark, we hear, well, we see an increase, a dramatic increase in the number of advertisements for gold IRAs whenever uncertainty and volatility is on the rise.
But how would you help Jeff think through this?
Mark Biller:
Yeah, Jeff, I would approach this through two different prongs because I have a very positive view of gold right now overall as it relates to people having a reasonable — and by reasonable, I usually am thinking 5% to maybe 10% type of portfolio allocation. I think that's a very reasonable amount to hold in gold and we've written a lot on gold at SMI. So if you just go to our website in the search box and type in "gold," you'll find a number of articles there.
But I also share your skepticism, Jeff, when I see these types of commercials. And that's because owning gold does not necessarily mean that I want to own that person's version of gold that they're marketing to me. And a lot of those are pretty expensive ways to own gold. They're usually pitching a specific product, of course, and I usually am not all that enamored with those products.
There are very inexpensive ways to have exposure to gold. If you want to do that through an IRA, you can buy the ETFs that track gold. There's GLD, there's PHYS. Those are a couple of the big ETFs that you can get gold exposure and own gold that way in an investment account.
And, of course, we talk from time to time about owning physical gold. And when you do that, you're typically trying to get the lowest markup, the lowest premium that you have to pay over the spot price of gold that you can find on the internet every single day, and different dealers will charge different markups. And that's where buying it from the commercial on TV can cost you a lot more money than just doing a simple web search or finding an article on SMI where we recommend a few places you might be able to buy gold with a lower markup cost.
At the end of the day, they call it a commodity because it's interchangeable. It's the same whether you buy it here or there. So get your gold at low cost and avoid those big markups.
Rob West:
Back with Mark Biller for one more segment after this stick around.
Rob West:
Great to have you with us today on Faith & Finance here at American Family Radio. With me during this segment, Mark Biller. He's executive editor at Sound Mind Investing, an underwriter of this program.
You can learn more about where we started today. It's the article titled Watching, Waiting, Planning, Working — thinking about our role as stewards in light of the anticipation of Christ's return. That's available for you to read at soundmindinvesting.org. Again, that's soundmindinvesting.org.
Mark, just picking up where we left off before the break, you were talking about the ways to buy gold, and I think you raise a great point, and that is you can have exposure to gold — whether that's physical gold that you buy yourself, something as simple as buying it from Costco or somewhere else, or you can buy it through a tracker ETF. And you don't have to move your portfolio to a gold IRA custodian, which tends to be more costly, right?
Mark Biller:
Yeah, that's exactly right. Plus, it locks you in. If you move it to a custodian like that, you have one option, and that's gold. And so, that's not always appealing for folks.
I definitely understand that the way we do it at SMI isn't going to work for everyone. But as I've mentioned before, what we typically tell our members to do is if they want to have a physical precious metals allocation — gold or gold and silver — to go ahead and do that, own their physical gold, have that on hand. And that should be thought of really as "We're probably never selling this, this is something we're hoping to pass on from generation to generation, assuming we don't have some kind of a crisis where we really need it." And that's really that insurance component, which is why most people want some physical metal in the first place, if they do.
And then on top of that — so we keep that allocation fairly small, maybe 5% or even less of a portfolio — and then what we do at SMI is we have a specific strategy that, historically, has given pretty good signals on when is a good time to have more gold exposure and when is not.
If you look at a long-term chart of gold, or a chart of gold versus stocks, what you see is — of course, there's a lot of short-term variation — but you actually see a lot of long-term trending moves, trending moves higher, trending moves lower. And that means that a trend-following strategy — which is the type that we like the most at SMI to begin with — can actually help identify when we want to add to a gold allocation and when we want to trim that back.
And so we will use those ETFs through people's brokerage accounts to add that additional exposure. But then it's really easy to take that exposure off when gold demonstrates it's no longer in a productive upturn trend.
So I know that it's a little much for a lot of people. But it is nice to know, it's good to know for people, that there are options both within their brokerage accounts where people have trouble figuring out, "How do I own gold if I can't buy coins? You have these two different options. The physical market is different from what you might want to do in your brokerage account or your IRA account.
Rob West:
Yeah. Very good. That's really helpful.
Well, he's Mark Biller. Mark, always appreciate our time with you, my friend! Folks, check out soundmindinvesting.org. That's soundmindinvesting.org.
We'll be right back.
