Churches across America have adapted to COVID-19 concerns by finding creative ways to continue to hold small-group studies, typically online.

If you're a small-group leader, or if you want to suggest a study to your leadership team, we hope you'll consider SMI's four-session study, Multiply: A Biblical Guide to Investing

SMI's executive editor Mark Biller offered an overview of Multiply on a recent episode of the Crown Stewardship Podcast. He spoke with host Handre de Jongh of Crown Financial Ministries.

You can listen to a condensed version of that conversation below, or scroll down for a transcript. (For the full 42-minute podcast, go here.) 

Multiply's video sessions are available on DVD and via web streaming — including from RightNow Media. Print materials are available in hard copy and via digital download.

Although perfect for small groups and Sunday School classes, you can go through Multiply on your own too!

For more information about Multiply, visit www.multiplystudy.com.


Transcript

Handre de Jongh:  I'm Handre de Jongh, and I'll be your host on today's version of the Crown Stewardship Podcast. It is my privilege to have a Mark Biller with us today, the executive editor of the Sound Mind Investing newsletter. So you guessed it — we're going to talk about investment. Sound Mind Investing, and the Crown relationship, actually goes back together to the early 1990s. That's back when Sound Mind Investing founder Austin Pryor used to be a regular radio guest of Larry Burkett.

Mark, it's so good to have you with us today.

Mark Biller:  Well, thanks, Handre. It's great to be with you.

Handre de Jongh:  First, let's lay some groundwork for our listeners. An individual needs to establish a firm financial foundation before they're really ready to invest. So how do you approach that?

Mark Biller:  Yeah, that's absolutely right. You know, it's really important to take these financial steps in the right order. And that means building a solid financial foundation first so that you're able to withstand the risk and the variability that comes with investing.

The way that you accomplish that isn't going to be any surprise to Crown listeners. The two primary components are paying down all of your non-mortgage debt while also building up an emergency savings reserve. And once you've got debt pared down to a reasonable level, and you've got some emergency savings to fall back on, you know, at that point, it might be reasonable to start thinking about contributing to a 401(k), especially if your employer matches your contributions.

But otherwise, we'd really encourage people to pay off all of their non-mortgage debt and have at least a three months emergency savings reserve before they really fully transition their focus to investing.

Handre de Jongh:  So once a person actually has that financial foundation in place, they actually are ready to start investing, but you never, a lot of people get frozen by all the decisions they face in trying to get started. I know I was one. And so I can really understand how you freeze when you have all these multiple decisions you have to make. And sometimes I just wished there was some things, some handles or tools, to help me in making the decisions or to get me unstuck and on this path of investment.

And, and that's why I'm so excited Mark, that, that you guys had SMI created this small group study called Multiply, which actually walks people through a lot of these decisions. With that said, how do you frame up those action steps within this new study called Multiply?

Mark Biller:  Yeah, so our Multiply study, which is relatively new — you know, we've been teaching these principles for a long time — but with the Multiply study, what we really wanted to do, it's our attempt to boil down 30 years of financial teaching into the shortest, most essential need-to-know presentation of how to get started as an investor. So we really just kept whittling things down to the most important principles and the most specific items that we feel a beginner needs to get going. And at the end of it, we got it down to just four sessions.

Each of the sessions has a video that's about 15 minutes long. They're not very long at all. There's a study guide that goes along with the videos with questions to consider and, really importantly, we think, some very practical action steps with each lesson that guide a person through the process of actually getting started as an investor.

So the idea here was to create something that either a small group or a Sunday School class could really easily go through together, but also a stand-alone resource that an individual could go through on their own without a group because we knew there would be a lot of people that would want this information that weren't necessarily part of a group class going through it.

So the first of those four sessions focuses on why most people really are going to need the stock market if they're going to hope to maintain their buying power over a long, multi-decade retirement period. And we started there because, you know, there's been this kind of "retiring mindset" over the years that, you know, ideally you don't want to take risk in retirement. You can buy a bunch of bonds and live off the "coupons" or the interest payments. And that was actually a viable approach say 20 years ago, but with interest rates so low today, that just really isn't realistic for most people who aren't starting with an enormous nest egg.

So, in the first session of Multiply, we really focused on first, the biblical justification for investing and why taking some prudent risk with the Lord's capital and trying to fulfill our role as stewards — why that's appropriate biblically. And then we cover the difference between saving and investing and then kind of move into a discussion of compounding and the stock market in order to set the stage for the rest of this study.

Handre de Jongh:  In the second session of Multiply, you focus on four specific types of investment risks. What are those?

Mark Biller:  Yeah, so there are multiple risks, and some of them are going to be real obvious when I say them. And some of them, you may not have really thought about this way before. But the four that we focus on in this second session are, first of all, "inflation risk" — and that is simply that the risk that your savings won't keep up with the rising cost of living. And then the second risk that we're trying to deal with is "longevity risk." Now, this might seem kind of strange, but that living a long life is a risk. But when we look at that in financial terms, this is just the risk of outliving your money. The third one is probably the most obvious to people, and that's "market risk." This is the one that, that we all see every day as the market goes up and down. And that one's a fairly self-explanatory one.

But the last one is one that we focus a lot on in our Sound Mind Investing newsletter because we've found over the years it's so important. And this one is simply "the risk of getting in your own way." And what I mean by that, Handre, is the emotional and psychological factors that investors face that trip them up. It's really "fear and greed" and how those manifest. You know, it's long been said that the real challenge that investors face is navigating those currents of fear and greed. And obviously, as Christians, we don't want to be exposed to either. But those are kind of the levers that the market tugs that in terms of investor psychology.

So that the second session of the study goes into a lot more detail about each of these four risks, and more importantly, we talk about how investors can deal with and steer around each of these four risks.

Handre de Jongh:  Well, those are really, really good points. You know, some of these risks are things that happen to us, but we also have to be aware, as you said, of the risk that our own emotions actually pose to our long-term success.

Mark, so let's move on. The third section of Multiply actually gets into the nitty-gritty details that sometimes trip up new investors — you know, the alphabet soup of the IRAs, the 401(k)s, the Roths, and so on. How does SMI recommend approaching all of this?

Mark Biller:  Yeah, it really does get a little complicated trying to sort through all these different options. So we try to simplify things by drilling down on a few really key ideas and decisions that someone has to make.

So, first of all, before getting into those specific decisions, I just want to say that using these retirement accounts, like a workplace 401(k) or 403(b) plan, as well as individual retirement accounts or IRAs, it's very important for investors to take advantage of these account types because they really offer some huge benefits. And that's why we focus a whole session of the study on this. And we drill down first on which account type to use because some people have the option of using multiple different account types. They could choose their 401(k), or they could open an IRA. Other people, because of their situation, may be more limited in which types they can use.

So the first of the two major decisions that we tackle in this Multiply session is trying to help someone decide on whether to use a 401(k) — or if they have some other workplace plan, like a 403(b) — versus using an IRA. And then, the second decision is which type of contributions they should be making. And by that, we mean whether they should be making Roth versus Traditional contributions. Those have different tax treatment, which is why we have to work through as Roth, better for you, or as traditional better for you? And so in this part of the study, we walk through a series of really simple questions so that we can break this into bite-sized pieces — so things like: Do you even have access to a retirement plan at work? Does that plan offer matching contributions? Does your income level allow you to make tax advantage contributions to an IRA? And so on. There's a sequence of these questions. Then we kind of explain the pros and cons of the Roth-versus-Traditional decision.

So the takeaway here is this is a very practical walk-through that guides a person through selecting what type of account they're going to use to invest, and then which type of contributions are going to be most beneficial for them to make.

Handre de Jongh:  Well, this is so helpful, Mark. Coming to the fourth part, the last part of the Multiply study, it talks about how to bring all these pieces together into an investment plan. So break down for us how to go about creating a personalized plan.

Mark Biller:  Yeah. So, you know, the point of all of this is it really pays to get your head firmly in place about what your approach is going to be, and why, so that you can tune out the noise from the market and just execute on your plan. That's what we tackle in this last session of Multiply: figuring out how much you need to be saving to meet your retirement goals — that's kind of the starting point; what your ideal asset allocation, which simply means what mix between different types of investments you should have in your plan; and then we spend some time digging into the various options that you have as an investor.

And what I mean specifically by that we boil it down to three major approaches that individual investors can take. The first is doing their investing on their own using index funds, funds that just follow along with the market. And that can be done either on your own, or another real popular approach these days is using a target-date fund, especially within a 401(k) or retirement plan that handles a lot of these asset-allocation type decisions for you. So a lot of people in 401(k)s have an option of choosing to invest in a fund that is labeled with a year that corresponds to roughly the year they plan to retire. So if I'm planning to retire and say 2040, I might choose the 2040 fund in my retirement plan. And that's a very simple way to get moving in the right direction with the right mix of assets. So that's kind of the do-it-yourself path. That's one option investors have that we talk about.

A second option — we call it "do-it-yourself with help." And that's really the approach that our Sound Mind Investing members use where they rely on our strategies and our specific guidance to sell this and buy that. Those decisions are kind of made for them, but they're implementing those decisions on their own and their accounts. So they don't have somebody doing this all for them, even though they're getting help from us.

And then the last option to consider is having an advisor do most of the investing for you. That has some very obvious upsides, but it's also more expensive, so not everybody wants to go down that path either.

We try to break out the pros and cons of these different options. And that's really the last piece after we've got all the other pieces in place, it's this decision of: "Okay, now you know what to do. How are you going to actually implement this?"

Handre de Jongh:  Now, if someone is interested in digging deeper, actually going through the study and going through all those full points, how do they do that? Where do they do that? Give us a little bit of info, please.

Mark Biller:  Yeah, absolutely. The easiest way is to head over to soundmindinvesting.com and click on the Multiply graphic that's there on the homepage. You know, we've intentionally priced this study very low so that individuals can easily go through it on their own online. They don't necessarily even have to order anything. They can do it all online, or groups can order discussion guides in bulk and go through it together.

And I believe that the study is also available on the Crown platform. Is that correct?

Handre de Jongh:  Well, thank you so much for mentioning that because, yes, in fact, it is. If you visit crownonline.org, you will find the Multiply study there.

And it certainly has been an absolute joy, Mark, to have you on the Stewardship Podcast today — to hear all the wisdom and the insight that you have given us. And I'm certain that there's a lot of people that are very interested to go and look at the Multiply study. And just a reminder again, you can find this study if you go to soundmindinvesting.com. You can also find the study on the Crown Online platform. You can go to crownonline.org.

Well, thank you so much for joining us today for the Crown Stewardship Podcast. We hope that you will have a blessed day and a blessed week.