The Biblical Wealth Podcast

What Should I Do With $1,000/month?

January 05, 2022 Jared Williams Episode 57
The Biblical Wealth Podcast
What Should I Do With $1,000/month?
Show Notes Transcript

The Biblical Wealth Podcast is changing format and will be primarily a Q&A based show so that I can answer more of your questions.  The show will still feature guests and at times topical episode series.  You can send me a question for the show at www.biblicalwealthsolutions.com/askjared

Questions Answered:
1. What is coaching? 

2. Does my investment need to be a RegD?/ Can I raise money from friends and family to make a larger investment? 

3. What should I do with my extra $1000/month? 


Click here to find all the resources from The Biblical Wealth Podcast.

Want to hear your question answered on the show? Visit www.biblicalwealthsolutions.com/askjared to submit a question.

Schedule a 15-minute Q&A Call

Did you know that the ideas I share on this show are things we actually specialize in helping you implement?  If you want to better protect your family, have more control over your money, and invest for cash flow now, then I want to invite you to sign up for a free Biblical Wealth Coaching call.

Get my free video course, First Step to Financial Freedom.  In it I'm going to show you a simple, profound strategy that can make a massive difference in your financial future.

Submit your questions to www.biblicalwealthsolutions.com/askjared 

Welcome to the biblical wealth podcast. This is the place for Christian families learn to achieve financial freedom for God's glory. I'm your host, Jared Williams, founder of biblical wealth solutions. And I'm here to answer your questions, introduce you to leading experts. And to help you transform how you think about stewarding your money. I'm going to teach you how you can create freedom of time, and then how to use that freedom impacting the lives of others, for the glory of God. Did you know that the ideas I share on this show are things we actually specialize in helping you implement? If you want to better protect your family, have more control over your money, and invest for cash flow now, then I want to invite you to sign up for a free biblical wealth coaching call with myself or someone on my team by visiting biblical wealth solutions.com/call. Again, that's biblical wealth. solutions.com/call. We look forward to talking with you soon. Thank you for listening to today's episode of the biblical wealth Podcast. Today, I'm going to be answering three questions for you. Number one, what is coaching? And I will go into more depth as to why we're talking about this today. Just a little while. And number two is, does my investment need to be a Regulation D? Or can I raise money from friends and family to make a larger investment? In Question three, actually hear some version of this question all the time. What should I do with my extra $1,000 a month? So those are the questions we're gonna discuss today. Before we jump into those, I want to say it's good to be back. If you've been following along in recent episodes, you know, I've taken a break from podcasting for a little while, just had some projects that are really needed to focus on for your benefit. We recently released a course the first step to financial freedom, which you can hear more about near the end of this episode, and another behind the scenes project that will be really exciting to get finally finished and be able to move forward on. But it's good to be back, we do have a new format for the show, as you probably have already picked up. We're going to be doing more of a question and answer format for the podcast. And so I'm going to be taking questions from you the listener questions from clients that we're working with, and just wanting to make it a little more, you know, real world and applicable. I think previous episodes have been great in terms of teaching strategies, teaching about different products and investments and ways of thinking about our money and how to steward that to pursue financial freedom for God's glory. But there's a lot of real world questions as well that come up. And I think those are going to be really valuable to discuss on the show. I mean, I think for for me, and certainly for you to be able to think through how do these things apply even if they don't necessarily apply to you? You know, a specific question, it can be really good to think about how someone else would approach this or how would think about a question that someone else might answer differently. So so that will be the primary format of the show moving forward, we definitely will still have guests on to share about specific investments and strategies and just ideas for you to think about. I'm hearing their stories and how they've implemented that. But again, primarily a q&a format to the show now, the best thing is you can submit questions, I would love to hear your questions and be able to answer those for you on the show. To do that you can visit biblical wealth solutions.com/ask. Jared, all one word, ask Jared J. R Ed. And there'll be a forum there where you can submit questions for the show. They will be anonymous, I can use your first name if you'd like. But otherwise, we will make sure that there's not any identifying information in that. So without further ado, let's jump into today's questions. So number one, what is coaching? Again, if you've been following the podcast for a little while, you have probably noticed me talking about this idea of coaching. More lately, I've started talking about having a free coaching call and just what that process looks like. There's been a few reasons for making this shift from previously doing more financial advice to coaching and the truth is really what I've been doing and what my partner's been doing behind the scenes, has been more of a coaching relationship anyway, we just not thought of it that way or called it that. But it really has already been more of that type of a relationship. And there are a number of good reasons to focus more on working with people in a coaching manner than in an, you know, an advisory manner, so to speak. So again, back to this question of what is coaching? Well, you could ask 10 Different people to get 10 different answers to that question. But for me, coaching is a relationship with a focus on or with a focus being on growth and improvement. So again, this is a mutual relationship with a focus being on growth and improvement. Now so so more broadly, there may be a specific goal already in mind. And that certainly is the case. For us when we're working with folks in a coaching relationship, our, you know, our long term goal is to achieve financial freedom for God's glory. But or coaching may be more, more open ended, it may be more to help clarify goals and obstacles, this may be referred to as life coaching or something like that where someone feels stuck or knows they could be doing more, or there's a few different issues they're trying to work out. And they don't exactly have this as the end goal in mind. But they know they need someone to help them kind of work through what's going on help to focus on and clarify what the, you know, long term and short term goals are to getting there. And then having someone to kind of walk through that with them and give them that support and encouragement and accountability. And so I think that, that our biblical wealth coaching is kind of a hybrid of those, I mean, we have the long term goal in mind, we have, you know, our biblical and better path to financial freedom. But also, that's a for most people, that's a pretty long term, pretty long term goal, depending on where you're starting in age, and so forth. And so there's going to be a lot of are many, you know, mini Ma, NY, in my ni goals along the way. And so most of the families that we work with do need some help, clarifying what those mini goals are going to look like, and kind of getting those broken down and having a path to eventually achieving financial freedom. And I wanted to answer just briefly how it coaching is different from therapy or consulting or advice. Because I think they can, all those things have some definite similarities. They're all fairly relationship based. They're all trying to help solve problems, but they are also different. And so I will say that therapy has more of a focus on dealing with issues in the past. And that's not always the case, obviously, I'm making some blanket statements here. But therapy is more about fixing what you know, maybe broken from the past or dealing with things that took place in the past where coaching is really much less concerned about what happened in the past, other than maybe to the point of being able to go forward, that is much more future focus that is much more going with the present and dealing with the future, and much less about what may have happened previously, consulting I think, is a lot more analytics and information based, it's much more about working with someone generally for a short period of time to solve a specific problem, or to provide a specific answer or solution to a need that they're having. So a business consultant might come in and say, These are the problems that I've identified. And these are the few solutions that go with those problems. And that's it, but it's very focused on, you know, one specific thing, or it may even be a consultant who is simply doing an analysis of something and giving the information. And you know, it's up to you to do with it what you want. But it's it's much more information analytics based advice, even financial advice. Is, is a bit different from coaching as well. In the advisor role, the advisor is often telling people, you know what they should do or what they ought to do, they're saying you should make this investment or you ought to buy this product or make this decision or you ought not to do, you know, whatever this decision is, and really kind of putting a stamp of approval, so to speak on it. Or for again, for investment advice. Specifically, it may be managing portfolios and things. And so again, we're saying you should do this, you should make this investment purchase. And in fact, we're going to do it for you. Because we have a relationship and agreement that allows for that coaching really doesn't tell you what you should or ought to do. It's much more of a, let's talk through the options, let's help, you know providing information to enable you to make an informed decision. Here are the you know, the three options, so to speak. And it may be a lot of helping think through what those options are going to be what the outcomes of those options may be. But at the end of the day, coaching isn't about telling someone what they should do or ought to do it is helping identify what it is that they want to do, and maybe helping figure out how they can go about doing that. And then providing the encouragement or the tools possibly or the accountability to get it done. It is, in my opinion, the most focused on taking action, getting something done seeing progress made. And yes, there's information given in there. But that's not the main focus. Oftentimes information can be, you know, gotten in much easier, more passive ways where coaching is going to be focused on helping someone truly make progress. So I'm excited for that. I'm excited to be able to work with you know, work with you in that kind of capacity and really seeing people not just being told what they ought to do, but staying with them and working with them and making sure that those things are happening. So that we're seeing progress of the we're seeing families, better protecting, well, better protecting their families, we're seeing people better protect their families, we're seeing them invest for income, we're seeing them save more efficiently. And ultimately, you know, we're seeing them practicing stewardship and pursuing financial freedom for God's glory. So, question number two, moving on. The question again, was, Does my investment need to be a Regulation D? Or another way I hear this asked often is, can I raise money from friends and family to make a larger investment? So this question may not relate to you, but it's actually a question I'm asked pretty frequently, by listeners and by clients. The truth is, many of my listeners, many of the people we work with, you know, they get pretty creative, they like to think outside the box, that's what makes them, you know, attracted to what we're doing and biblical wealth solutions, and definitely trying to follow a biblical and better approach and, you know, moving away from that the typical financial approach, and so, as they get creative, they may think of, you know, an larger investments they would like to make, that they don't have enough money for. And so maybe they think I would like to be able to make this investment. And maybe I could ask some other people come in, and, you know, make this investment with me, or, I've had people, you know, reach out who are listeners who, you know, already run an investment of some kinda, they're doing an investment successfully. And as their family and friends are seeing this success they're having with their investment, they'll approach them and say, hey, you know, I would like to invest with you, could I give you, you know, $50,000, or $10,000, or, you know, $200,000, whatever it is, and invest alongside what you're doing? Because it seems like you've got something, you know, really figured out. And so the question that's being asked of me is, you know, does this need to be a Regulation D? Is this something I can do? Is this, you know, legal? Or how could I go about using other people's money to help make larger investments? And so again, there's a lot of context to this. And, and I definitely need to preface this with, I'm not an attorney. And so, you know, I end these conversations, almost always, you know, referring someone to, you know, one of a few attorneys that I've worked with, and have experienced with and who I think would be a good fit for this question. But I did want to answer it. Again, it has been a number of podcast listeners have contacted me asking this question. So unfortunately, there's not a super cut and dry answer to this, there are points where it becomes obvious, but there's some gray area in there as well, II believe. But generally, if you are raising money from other people taking other people's money and investing it on their behalf, and especially if you're not an investment advisor, a licensed investment advisor and doing that through some type of, you know, other entity that's being regulated, then you probably do need to have what's called a Regulation D, which, which is one way that the SEC, the Securities Exchange Commission allows people to issue securities, and that and the Regulation D specifically, is allowing them to do so exempt from registration. So they don't go through this very lengthy, very expensive registration process, it's meant for small companies, small business, or small investors and small, is relatively small, may still be many millions of dollars, but not billions of dollars, like, you know, large funds or large public companies or things like that. So smallest is very relative. But for an example, I had had a listener reach out to, he had been investing for a long time, and doing well, he was making loans on residential flips. So he had flippers who were wanting who were finding properties and wanted to buy the properties, they wanted to renovate them, and sell them and, you know, three, six months, and they needed capital. And, you know, for whatever reason, the bank wasn't a good option, oftentimes, it's just banks are slower about that. And they needed to move fast to, you know, when the property, get it done, make their money and move on to the next one. And so he had a network of these residential flippers, and they were coming to him. And so he, he had, you know, become successful in other business. And so he was making loans to them, and charging, you know, moderately high interest, but for short periods of time, and they take the money, do their job with the house and pay him back. And it was going very well. And so as time went on, he had people start coming to him, and saying, Hey, I'd like to invest with you, can I give you some money? Will you invest this, you know, for me or on my behalf? And eventually, it grew into a, you know, a business, a whole company, where he was, you know, advertising and raising capital people were multiple people were lending to him, and he would pull that investment, and then go out and make this, you know, make these loans these profitable loans. And, you know, that was an example and I said a key word there and that was pulling. When people start pulling other people's money together. That's definitely an indicator that this likely needs to be a Regulation D or some type of You know, true security true, you know, on the SEC radar of what's going on. Now, you know, two people can go in together and buy a home or two people can get together and, you know, make a loan. And generally, there's not going to need to be, you know, a Regulation D or any kind of structure for that. But when you get into multiple people, multiple investors, especially multiple investors coming together to make a single investment, that is when it makes sense to look at a regulation deed. And the reason people don't is that they can be moderately expensive, I mean, you're probably looking at least 10 grand to form a an entity that is a regulation deep, but generally, that's pretty inexpensive for the types of people who were trying to do these sorts of investments. So I would tend to lean on, it's definitely better to be safe than sorry, I've seen people who didn't have that in place, who were told you don't need to have a Regulation D for this, when, in fact, they did. And they were doing great business and everything was going really well. And eventually, there was a you know, there was an investigation, and they've gotten into some big trouble. And you know, it's cost them probably hundreds of 1000s of dollars, if not more to avoid, you know, a 10 or $20,000, you know, attorney fee to set this up the right way. So, I'm not gonna spend a lot of time with this, this isn't relevant to all of our all of my listeners, but if you are someone who is considering, you know, using other people's money to invest, you know, alongside them, or for them, or whatever, then definitely find that attorney reach out to me, I've got plenty of connections, I'll introduce you to someone, but look for someone who can help you do this the right way, when in doubt, you know, confirm, and, you know, if it's gonna cost money, then you just got to see if that makes sense, you may find out that you don't need, you know, the Regulation D and you spent very little money. In fact, most of the attorneys that I've worked with have had one or even two, you know, upfront calls for at no cost. And so we really didn't have to, you know, pay them until we were going to move forward with putting something like that into place. So, enough on that, but I've been asked a lot as want to go and put that out there. If you're considering it, you know, talk to me again, I'm just gonna make a referral. I can't tell you yes or no, I'm not an attorney. But definitely don't, don't just assume you don't or assume that you. No one will ever know or like you're too small. That's definitely not the case. And it's definitely not wise to go about doing, you know, business at all in that way. So moving on question number three, what should I do with my extra $1,000 a month? Now, I hear some variation of this question all the time. And this specific question came from a client of mine. And so I'll give some color to his specific question. And I'll talk about, you know, how what we discussed and, you know, I guess how I would answer that question more broadly. So this client came, and he's, he's married, has, has a few kids, and had about $1,000 a month of discretionary income after all the bills were paid, and everything that he could do, you know, essentially what he wanted to do. And he, at the time, he had $1,000, in savings, and he had a vehicle loan, and a student loan. And so, you know, his, in his mind, he was, you know, wanting to aggressively pay off that debt, because, you know, both of those debts, obviously, on interest, that he was paying on those, and so he wanted to get those paid off as quickly as possible, and the be debt free, you know, other than his mortgage, but be debt free of those two loans, no other credit card loans or anything like that. His wife was more concerned and felt like they needed to be saving the money. And so that was really their big question of, should we be saving this money? Or should we be paying off debt. And so as we went through the conversation, he kind of shared with me all the financial details. And in this case, we didn't build his entire financial model. We ended up doing that later. But we didn't do it for this conversation. He was just sharing me about the data sharing with me about, you know, what, they have other expenses and Sputa questions I asked. And I asked him, you know, what would he do if that vehicle had a $3,000 repair? Or if his home needed a 3000 or $6,000 repair? What would be his plan at that point? And he, you know, thought for a minute and said, Well, I'm not really sure what I would do. And after given some more time, he was like, I guess I would have to take out a loan and I would have to go into more debt in order to cover this expense. And, and as we talked through, he, you know, he agreed that some kind of expense like this, whether it's a home or a vehicle, or you know, kid, he's got several kids, so a kid getting hurt and having a medical bill or, you know, and having a relatively high deductible, whatever it is, it's pretty much inevitable that there will come a time when he's going to have a, you know, multi $1,000 cost come out. That's just life and part of life. And so, when I asked him what he would do, he ultimately concluded he would have to go into debt to pay for that. And when I asked him what kind of debt he would use, you know, he agreed it would be, you know, some kind of a credit card or unsecured loan or something like that to cover these expenses and agree that the end interest on that kind of loan would likely be much higher than the interest he's paying right now on his auto loan or his student loan, which, of course, auto loans are secured by the vehicle and student loans are just typically given better interest rates. And so, you know, he ultimately concluded that he needed to focus on saving, and not only so he would have just, you know, money and, and cushion and buffer for things in life, but kind of seeing it as an insurance against worst debt, he began to see that the debt he had, you know, while no one likes paying interest, and like, no, no one likes having debt. It wasn't that bad. And certainly by not having more money saved and more money in the bank, he was putting himself at risk, essentially, from having much higher interest debt in the future, and that it was essentially a matter of time. And so we talked and kind of figured out what his target should be, you know, What should his emergency fund look like? At which point he could we can have another conversation, he could then go back and more aggressively attack that debt, you know, or at that point, is there something else that he should be focusing on. And so for you, the listener, you may not be in that specific situation, but for you, I would refer you to our biblical and better path for financial freedom, which kind of lays out these steps in the process of how we should think about, you know, using money we have and making financial progress. And so, we actually did that with him as well. In addition to just savings, we've looked at his protection strategy, and saw a pretty big hole. And that was the his income was not protected in the event of a disability, he had life insurance, and he had a fairly good amount of life insurance and a good type of life insurance for him. But what was lacking was any kind of disability insurance. And so, you know, ask the question of what would your wife do? Or what would you do, if you had an illness or an injury or, you know, a variety of things that could happen, and you were not able to work for, you know, three years, or something, and his wife does work part time, but it's very part time, she primarily works at home, you know, raising their children. And he said, that would be pretty catastrophic. And he didn't know what they would do in that situation. And so you know, of that $1,000, he took a small amount, and it really only needed to be a small amount, and put that toward protecting his income. And so we went back to, you know, this model of protect, so first measure, we figured out what the numbers were, that's where the $1,000 came from. So first measure, then protect, then Save, then control, and ultimately, we'll get to grow and investing later. But he saw the importance of going ahead and protecting that today, because without that income, he certainly wasn't going to be able to pay off his debt, he certainly wasn't going to be able to continue saving, and he certainly wouldn't be able to invest for the future. And so he saw the priority of protecting his income today. And so that's what I would encourage you as well, too, if you have some discretionary income, you know, figure out what that number is, is there a way you can improve that number with him, we found some areas where he could get rid of some employee benefits that he really didn't need or weren't very efficient, and he was paying for, we found a way to reduce taxes for him. And and so that brought more than $1,000 a month coming in now. And then it was okay, are there any holes on the protection side of things. And then we began looking at savings. And so that, you know, that was his big, big concern. And it can be a challenge to think through that because it doesn't, you know, quite fit into the model. And it really is a case by case basis. But I've talked in the show some about productive debt versus unproductive debt. And his that was kind of in between, you know, it wasn't productive debt that's covered by an asset and, you know, producing income and something that I would definitely encourage people to consider. But it also wasn't high interest credit card debt that was, you know, crippling, or going to take a really long time to pay off or would be hard to, you know, make a return better than the return on just simply paying off, you know, that debt. And so for that kind of debt, that he had this kind of in the middle there, whether to aggressively pay that off, or whether to just wait and kind of pay the minimums depends on the rest of your situation. If he had a healthy emergency fund, if he had money going towards savings already, and really had enough going there, then we could take that and use it for investing, then I think at that point, it would make sense to be more aggressive toward paying off that debt and just saving, you know, whatever interest he can, but in his situation, because he had protection that he needed to fill out, he certainly needed to have savings. And he even later, once the you know, once he hit that savings goal, I would certainly argue that continuing to save and beginning to invest could give him a far better, you know, return than paying off that interest. And so, you know, he was surprised to hear but I encouraged him just to simply continue making that making those debt payments, but not paying anymore not being aggressive and seeing that the you know, the interest cost is there. You either have to pay interest or you have to pay opportunity cost. That's a good thing to take from this that there is no avoiding it. You either pay interest or you pay the opportunity cost of what your money could be earning, had you invested it or had you even use it to protect yourself against so catastrophic loss that could be out there. So when I'm asked What should I do with my extra $1,000? Of course, I don't know, we have to look at the model and see but but I will always encourage people to consider our five phase process our five phase path to financial freedom, which is measure, protect, safe, control, and grow. And generally, when we look at your model, and we look at this process, the answer to what should I do with my extra $1,000 A month becomes pretty obvious. So hope you enjoy this new format. got quite a few more questions and everything we're going to get to of the next few episodes. Again, if you'd like to submit and ask a question, you can go to biblical West solutions comm slash ask Jared. Again, comm slash ask Jared J. R. Ed, I'd love to hear from you. I'd love to answer your question on the show. Let me know what you think, you know, send me an email, comment on the you know this episode in the blog post. I'd love to hear what you think of the new format, whether you like it or don't like it or have suggestions. I'm open to ideas. I have really loyal listeners, and I appreciate you very much and we'd love to hear your thoughts. People often ask me, what's the first step to becoming financially free. And if that's you, or someone you know, you've come to the right place, because I've put together for you a short, free video course to help you get started. Just visit biblical wealth solutions.com/course. In it, I'm going to show you a simple, profound strategy that can make a massive difference in your financial future. So go ahead and visit biblical wealth solutions.com/course to start and we'll see you there. That's all we've got for this episode of the biblical wealth podcast. One thing that would really help the show and other new potential listeners is for you to write this show and leave a comment in iTunes or wherever you listen. Also, make sure to link up with us at biblical wealth solutions.com/blog or on social media. And please just Share, share, share this podcast with anyone who you think might enjoy it. Until next time, remember, you can achieve financial freedom and then use that freedom for God's glory. This podcast is for informational purposes only no securities or non security investments are being offered by this podcast. Any opinions expressed are subject to change any individual results or accomplishments described herein are not necessarily indicative of your personal financial situation or potential future results. types of investments discussed in this podcast may not be suitable for certain investors and each individual's financial situation is unique and you should consult with us your advisor or accountant before making an investment