Retaking ESG Investing

Today's first moneywise I was prerecorded so our phone lines are not open to answer God's call went out to slay Goliath. We have a similar calling with our investments. Rob West some decidedly ungodly elements of taken over the sphere of corporate engagement with investing. How should Christians respond I'll talk about that with Robert naturally today we have some great calls lined up but we will be taking your life calls today because we're prerecorded.

This is moneywise the biblical wisdom for your financial decisions for the talk about investing that glorifies God Roberts, the CEO of inspire investing an underwriter of this program, and Christian investors have been quick to abandon and reject the rapidly growing so-called ESG investing movement because of its worldly ideology. But Roberts here today with the different calling for Christian investors, Robert, great to have you back with us. It is my pleasure to always think grandma Rob Robert. I mentioned ESG investing and perhaps we should start with the definition of ESG. What is it and why has it been so controversial in the Christian community will be the investing world. I think you want to where you get letters and jargon to be one of the many jargon cultivated after environmental, social and government and corporate governance investing it a movement in our trend in the past 20 years, and it really taken a better world by storm. Just a few years ago. I think we picked over more than 50% of all net assets in the United States according to the survey looked at were I incorporating some sort of ESG environmental screening or filter or analysis, and that number is only increased. All the large firms, Morgan Stanley, Merrill Lynch is of the world BlackRock to the world have really embraced this concept and and what it means is that instead of looking at just the financial aspect of the return and financial risk metrics like volatility and ends on a support analyst are also looking at the environmental impact of the company you know whether there will company or technology company knowing there's an environmental impact, good or bad. The social impact things such as supply chain management. Things like labor sourcing employee benefit and no company culture sort the more objective criterion and corporate governance where you know how the company being run how the negative comp related to the compensation for the run-of-the-mill factory worker what the spread their policy and procedures they have in place all the different sort of qualitative metrics that they're coming to look at a company and really finding in research that there is a link between the risk of an investment and limited ESG metrics and that the kind of added momentum to the to this movement where the company is dumping stuff into the river that they shouldn't be going to get in trouble for that, and a broad idea of risk you ESG but unfortunately a lot of that ESG taken from a bit decidedly progressive liberal viewpoint and that's where conservative can have had an issue with ESG scrubber you mentioned the massive growth of the space I saw recently a forecast that by 2025. Approximately 1/3 of all global assets under management. And that's not just domestic are forecast to have this ESG mandate. So why do you think were seeing this kind of growth trend in this area will is driven a lot by ideology and the United Nations issued guidance and even requirement them sorts four types of funding and then backing there's various shareholder activist groups that have gotten involved in. Unfortunately, they were the combatant and we can talk about most. But ideology is to support things like the activism abortion. Other issues that conservative Christians would have you with and to me, you know, the driving force behind ESG in general slow will continue to talk about this after the break. Should Christians stay on the sidelines and it's not how can they use ESG investments in the Christ honoring the way were talking with Robert.

Naturally, CEO of inspire investing much more to come.

Just around the corners are so grateful to have you listening moneywise live on Broadway team is off today time away from his family. So don't call him but got some great questions lined up in advance. Let's head right back to the phones.

Pat is in Florida and Pat Hogan and I have paid off the mortgage earlier this year we have. Note that we ordered our credit report from all three companies and I now understand that they have one of them because it's soft inquiries have five soft inquiries the other will enhance three solid fire it because in the Review inquiries. There's three. My question is should we freeze all her account all the different credit reports. Should we freeze our accounts with them yet. What is really two separate issues of the soft inquiries where your credit file is being accessed either because you are pulling yourself for informational purposes or a company is accessing it.

Perhaps a company you already do business with the check your credit periodically. You don't initiate that they're doing it just to determine whether or not to extend you an increase in your limit, or something like that. None of those are to have any bearing on your credit score. It's only the hard inquiries where you authorize a lender to pull your credit file for the determination of whether or not they want to extend you or will extend you credit and the terms of which they'll do so. So the fact that those soft inquiries are listed there is not of any concern to me and that's very normal and it's not affecting you in any way now separate from that is the question of should we freeze our credit files and I don't ever think that's a bad thing to me and certainly if you been notified that your counsel been compromised or you bet identity theft. I think it's a no-brainer. Apart from that it's really just you know, do you want this extra measure of security whereby if anyone tries to open an account in your name. They would have to have the pin number for the lender to be able to access the credit file and if they were doing that fraudulently they would not have that pin number and thereby they would be stopped in their tracks that's added security.

What's the downside well. The only downside is if you're out seeking credit you just have this extra level of security where you're going to need to provide that pin number. I don't think that's too onerous and there's a real benefit there. If for some reason somebody tried to do something in your name fraudulently so I'm not concerned about the soft inquiries and as to the credit freeze I like it. I think it's great in this day and age were there so much digital fraud going on and there's no cost to do it with any of the credit bureaus and so it's fairly easy to set up okay great I don't think it really for us to check our credit scores central debt free know what would be helpful is just to pull those credit reports that I would do that a couple of times a year just to make sure. Now the risk is going to get even lower if you freeze the credits but credit accounts but just to make sure that everything on there is accurate because every now and then there's erroneous information on their and you don't want that to come to roost. You know once you're trying to go out there and borrow some money. It sounds like you may not ever need to again but you just want to get those cleaned up for some reason there's something there that's not accurate. So that would be the reason to continue to monitor those credit files a couple times a year, but apart from that, it sounds like you all should be good in good shape and I'm delighted to hear that you debt free. So thanks for checking in with us bad. May the Lord bless you this Christmas season.

Let's head to what will stay in Florida and will talk to Mary Karen have your own moneywise. I will just fill that I love this question.

Mary, you're never too old to invest in stocks.

I think the key is what is your time horizon and what are your objectives. So tell me about the money you would be investing is this money that's kind of extra on the side or is it money that you're actively pulling money out of to live on one of our children by our home and moved into a duplex left with one of the cads and O'Kelly can't set buying home and never paying $4000. I'm so what are they doing that we have been investing in and the market that I am wondering if I was getting too old now to be with Dell buying that. So I think the key is your time horizon because anything we have in the market. We want to make sure for that portion. We have at least a 10 year time horizon. If you're in good health of the Lord to reach this money could need to last for a couple of decades so you as you think about this money.

Let's talk for second just about the rest of your financial life. Do you have an emergency fund. It's already in place and if so how many months worth of expenses. Do you have set aside all will will one that dealt… Till you have to weigh that out okay and are you doing all this yourself. You have an advisor there that we don't know well like church that we will land mentally distant been investing with him okay what I might look at consolidating all your investments with that one advisor that you have a good relationship with including this extra 4000 a month because what I don't want you doing is having you know things, scattered about were one person doing one thing and one person's doing another.

I'd rather you have a relationship with somebody you trust that you have a good rapport with everything's in one spot and then he can deploy an investment strategy that makes sense for you not taking unnecessary risk, but having enough of a growth component to their portfolio with money, especially that you don't need where it can grow for the future so you can give it as an inheritance, give it away as appreciated stock to a ministry of charity. Whatever the Lord so I consider consolidating everything in one place with the end of the day. There is no problem with you investing and 85 fact, you still may have the bidding of the Lord's plans quite a bit of time left a lot more to accomplish.

Pause for a brief break. This is moneywise life biblical was this is a sermon for tuning in the moneywise live. This is biblical wisdom for your financial decision was to host our team is not here today taking some time off, so don't call in lined up some great questions and write back to the phones. Cleveland, Ohio hi Tammy, thank you for your patience can help all the house got hit. I will look hundred thousand on the big house. What are your thoughts on me, or selling and buying a smaller house in today's economy how to use a have to buy six. It seems like a lot of work I got my house like I did last.

I also all 50 out. Sure, sure, 50 okay very good so I think the first question is just doesn't fit into your budget. Not only the mortgage that you got today but also just the upkeep.

You know the maintenance on at the expense of the exterior and maintaining the property and if you don't need that much space you would you be better off downsizing. We talk about how you go about that in the second but you talk to me about your budget and how did this current home fits into a mom in 19 don't play with taxis and children, probably around 2000 okay yes that's more than we would want to see me and typically you know what I would like to see is no more than 25% your take-home pay going toward your principal, interest, taxes and insurance which would be about 1150 so you you obviously you can choose to spend more, but that's just going to really hamper your ability to do other things. Cover your expenses have margin to save for the future, not to mention the giving that we love for you to get a building on the front end and you just have the flexibility so I think because you're spending that percentage upwards of almost 50%, 45% or more. I think there's an opportunity here for you to get the right size that so you have to be willing to let go of the home that it sounds like you really love and I've certainly heard you say that, but if you did could put you in a situation where you've got no more manageable budget. You got less going to housing, which just gives you more flexibility and that's always a good thing because living within your means is so key to really every financial success.

Now you mention smaller homes you think mean automatically you're going to need to put some money into it. Not necessarily.

I think the key is your what square footage do you need if you're downsizing you could in fact downsize to a brand-new home that would need know anything done. It could be literally no preconstruction purchase of you wanted to. I think the key is what is your budget. What would allow you to end up with a mortgage payment that is in fact no more than 25% your take-home pay and what would that mean in terms of the area you need to look in the size of home you need to look at and the newness of it in terms of the upkeep and the maintenance.

The good news is because this housing market has been so strong, you should be able to get top dollar coming out of your existing home that would allow you to move into that in a smaller home at a lower price. Even if you're gonna paying top dollar for that category of house, but I think at the end of the day you want to do a lot of planning to make sure that you are in fact going to be able to get to a place with the smaller home where you're bringing your overall housing category expenses down into a range that's going to give you more flexibility and more margin because if we just make a lateral move and you end up paying too much or there is more upkeep or you have to pump a lot into maintenance and renovation, then we really haven't solved the problem. You've just given up this home that you love so I think you gotta do your homework to settle make sense though.I mentioned to a way of my money, so any year so okay alright so yeah that that was a net number into your putting you know quite a bit away and that's great.

So II think at the end of the day. You just need to decide guilt you need to take a look at your budget and then first question is you know is there anything you're unable to do because your budget is constrained by 40% of your take-home pay 45% going to housing or are you comfortable you feel like the home and it's not too much upkeep and it's a good investment and it fits within your budget and if it does, great. Keep it but if you feel like it's either too much house too much upkeep or you need to just bring the total going to housing down that I think you're downsizing is a good thing if you got more than you need, and it's certainly something you take a look at. You may want to connect with one of our moneywise coaches that can help you think through this. Look at your budget and give you some thoughts and counsel, but I think it really comes back to that spending plan. Tammy and just looking at whether or not you feel like you're in a good spot, or if you need to create some more margin to accomplish other goals that I think that should lead you to seriously consider downsizing. We appreciate your call today. Thanks for checking with us. Linda is in central Florida and Linda go right ahead.

I just filed for bankruptcy in June and it's been discharged now and he's not mentally incompetent on disability and I am I have minimal income as well. We don't have a anything in saving my question is bankruptcy. What do what the best thing to do to start rebuilding our credit. Yeah so you is you look at rebuilding your credit after bankruptcy Linda number one. I think the first thing to recognizes Judy to see the manager expectations about how long it will take for this to come off your credit report every 10 years of your file Chapter 7, seven years for Chapter 13 and so is this going to take time, but it can be done so don't get discouraged. You want to go to annual credit report.com. Pull your credit reports.

Make sure everything is accurate, if not dispute what's there, you'll want to monitor your credit report. Initially you could see a drop of 200 points, but it will begin to improve slowly. Remember, the most recent information impact you the most.

That which is further back is in a will impact you the least you want to be in on time. Pair with anything you are using reduce your credit card use. So if you still have open accounts get those balances below 30%. If they're still out there and if you don't have one, you could always get a secured card where you basically put an amount on deposit they issue you a credit card against it, that secured by what you have on deposit and then you just make an automated have an automatic charge hit that that's a budgeted expense every month. You just automatically pay off and that on time payment every month is going to reestablish you. You could also look at some to call the credit builder loan which is in a where the lender holds a certain amount of money in secured savings and you just make monthly payments and the interest gets paid to yourself that you know is reported to the credit bureau so there are some things you can do.

I think you just need to come to be consistent in reestablishing yourself and as time goes by. This score will start to come up in your rebuilding so you guys have a great opportunity to, re-set everything and assess the Lord what he would have you to do moving forward.

We appreciate your call today. Thanks for checking in with us all the best, folks, this is moneywise the by the way, that's a great time of year for you to think about your giving and we would ask that you would consider giving to moneywise.

We do that quickly and securely our website moneywise.org just click that we are entirely listeners low thank you to pause for a brief break will be back much more on money you join us today for moneywise line wisdom for your decisions. Our team is often recorded as were taking some time away from the studio which means were not here to answer your call don't call in, but stayed with us because we got some great calls. We lined up in advance puts it back to the phones right now Carol Stream outside of Chicago, Illinois is Chris and Chris Karen before we are not really a way of renting. We have had real estate in the past but like certain children such, we don't have anything right now my question is should we buy something or continue renting our life. Well I heard in your voice, your excitement around the fact that you are debt free.

So how does the idea of taking on a mortgage at this point feel to you is that something that gives you pause or would you be okay with that as long as it fit in your budget. I'd be okay with paying rent or mortgage free mortgage. Hopefully look at a constant rate. That's right, and rental prices have been elevated but it's also a red-hot housing market right now unfortunately which means that you're going to be not able to benefit from that on the sale that you could then roll into a purchase. You just can have to enter these, sky high prices, which isn't necessarily a bad thing.

If you plan to stay there. We normally would say make sure you stay put 3 to 5 years, I'd say you know probably 5 to 7 at a minimum, and you know if this is kind of where you're going to be for your retirement of the Lord Terry's and your good health. This could be a 2030 year home so it sounds like you know you could be in a great spot.

I think the key would just be Chris, what you have saved up that you can put toward a down payment and you know can we find something that fits the general location and what your needs are and a lifestyle in a price range that your budget can support an answer that is closure of the down payment. Probably yes just given that you're currently paying rent and you know we all know what's going on with rental prices these days, so if you were to think about this in terms of what you need to spend to find something comparable would you be able to put a 20% down payment and with the mortgage payment be something that's you know sustainable in your current budget.

If you look at all that I know very high real market here in the sky got married. If it weren't for the fact that my husband during the type probably move but first conformal highlighter so no one sees God much retirement I need to continue and you expect will stay there in the Chicago area, even beyond reaching the end of this business yet okay and I spent some time looking at real estate prices in terms of what you would need to spend for something comparable. We have, and I think we can get something for free $400 less more paint rank, and do you have a down payment. We don't. I only have about 10,000 right now, not near enough so I think that's the challenge is that the last thing I want you to do is to cut a stretch to get into something. Although you set up your saved her 100 month. That's good. But then you'd kinda be going in without really any equity, and given that your real estate prices are at a premium. Right now, you essentially what you have in equity. If we saw cooling in the housing market, because we were bumping up against the recession in a you could find yourself upside down. Now, emotional plan to sell it, that's okay but still not a great place to be and you can have private mortgage insurance on top of that which is gonna make it. You know a bit more expensive because that's an added expense on top of the mortgage and taxes and insurance that doesn't benefit you at all. So my preference would be you continue to rent and save our role as monies probably fairly tight. You don't have a whole lot of margin. So if you're going to save 20% down payment were probably talking quite a bit a runway between now and then.

So yeah, I'm just a little leery of encouraging you to jump into a major purchase like this. At this point without a whole lot to put toward the down payment. Especially if that's currently your emergency fund so I'd probably say let's continue to rent and then let's see what happens in the next 12 to 24 months with the economy, the housing market before you guys make a move. I don't think this is the time to get in unless you can do it without a much larger down payment and you have now know hundred and 12 month okay yeah I think we just kind of push the pause button continue to monitor the situation. The key will be keep your lifestyle as lean as you can so you can save as much as you can and will reevaluate down the road listen all the best to you and your husband for your great ministry work there in Chicago. We appreciate your call today. Indianapolis, Indiana hi Angela, how can help you rental property live in because of the family and I moved back home with my mom to take care of her. So that would need a window in the home covered that like a home equity loan better than the likely line of credit. Discus got a fixed interest rate. Interest rates are still very low right now.

I think the key is if it's a needed repair.

It's obvious he can improve the value of this asset that you should build to get back at least the lion share of down the road when you sell it and if it's going to cause damage to the home by you not doing the repair. Obviously that's important because that will deteriorate the value of the home over time. The key is always more borrowing you know is it for an asset that's appreciating yesterday of unity with your spouse and you have to answer that. And you know, ultimately, is this something that you have a guaranteed way to repay meaning. Do you have it in your budget so that you can support the debt service on a monthly basis if you looked at all of that and do you believe that you've got the margin bill to cover government loan. It may clear out the $8000 that I don't have to worry about and make some excited about that. So you think that okay then I think that is probably the loan to do and the only other thing would just be can you stagger this and do it over time and pay cash or savings, but if you don't have that ability.

The home equity loan is probably the one just make sure you count the cost bill that in your plan was try to get it paid off just as quick as you can, but I would be in support of what I'm hearing you ask about Angela. We appreciate your call today. Let's head to the opposite end of the country Southern California hi Gloria, what can I do for you, making out credit card of $3000 and yeah very good. So when your husband retires, assuming you can stay on this track and let's say the house is paid off. At that point had you run a retirement budget to look at what you would need on a monthly basis without the mortgage payment and compared that to the income sources you have all 95 okay well I like the idea that we paid at all, because that would be the largest expense we could take out of the equation to get your lifestyle down as low as possible. I think the question is just what are your what is your budget going to look like when you get to that point. Five years from now the house is gone. In terms of the payment. You've got to your emergency fund fully funded you what other expenses are to come off if he's commuting lessor know any number of things. Let's work that budget up and then compare that to the income sources you'll have your continued work if he's gonna begin enough use reach full retirement age than he's gonna begin taking Social Security. Let's see what gap you have on a monthly basis that this retirement account needs to make up the challenges you know if that 200,000. Let's say it's now 250,000 by then the other question would be that typically we would only want you to pull off about 10,000 a year and I don't know whether that's good you do what you need in terms of giving you the money you need. So the options there are to try to save more, which means you know, perhaps trimming your lifestyle soon put more toward long-term savings right now or he works a little bit longer or he retires from his current job and finds additional part-time work to supplement so that you can wait take Social Security later or you know he could bring in some additional income but I like the idea of you all trying to sync up the house pay off between now and retirement. I don't think you can get huge returns in the stock market anytime soon. You know the next few years. Given what we've seen the last decade, so I like the idea of staying with them paying off the mortgage in five years. I think the question is just how can you save more and feel is there a need for him to continue to work or work part time after he retires those of the things to consider, but it starts with that budget. What is your budget going to look like. Compare that to the known income sources you have in retirement goes back if you have further questions. We appreciate it before we wrap up today.

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