223 – 3 Ways to Uncover ‘Free’ Money

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3 Ways to Uncover ‘Free’ Money

Discover 3 ways to enhance your investments for various life stages.

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Free money? Sounds too good to be true! However, Bob and Matthew discuss several ways that you can earn free money without compromising your values. This isn’t a “get rich quick” scheme, but rather using your investments in wise ways in order to build wealth over time while remaining content and glorifying God. Some of these strategies are best for retirees, while others are better suited for younger investors. Sit back and listen as we discuss 3 ways to uncover “free” money.

Mentioned In This Episode

Shawn (00:00):
Would you like to discover three smart ways to get free money without compromising your values. From employer matching contributions to tax efficient giving strategies, we’ll show you how to maximize opportunities that could put extra money in your pocket while staying true to biblical principles of stewardship. Let’s get some perspective.

Bob (00:26):
Hello, this is Bob Barber. Welcome to today’s program for Christian Financial Perspectives. It’s all about getting free money. How about that one? I bet you don’t hear that very often. How to get free money. But you can blame this on Matthew. He’s the one that wrote this. Okay. He wrote that one last week and Matthew’s taking some of the pressure off of me. I normally write all of the programs and Matthew, I appreciate that. Matthew and I were joking because I always want to introduce Matthew and then I don’t want to say his last name. So if I say it and I get it twisted wrong every time, it’s Barro- Vecchio,

Matthew (01:05):
Barrovecchio. There we are.

Bob (01:06):
And why can I not get this right after a whole year saying this?

Matthew (01:08):
I have no idea. Yeah, you’ve been practicing too. Getting closer.

Bob (01:12):
I was asking Matthew. I said, so Matthew, when you were in school, did your teachers ever get it right? And you said, yeah, they finally got it right, but it wasn’t the first week.

Matthew (01:20):
It took a few years

Bob (01:23):
And then he was telling me about a girl that had a name. We can’t mention her name here for privacy reasons, but it was very close. So if this long drawn out, Matthew is from Pennsylvania. I’m from south Texas, so if you’re getting mixed up, you hear my twang and we’ve got the two sides coming here. Matthew, so you wrote about three ways to get free money. Now, who would not want to hear about getting free money?

Matthew (01:50):
That’s great. There’s not, there’s few places in the world where this can be found.

Bob (01:57):
So you picked a scripture to go with this free money, right? What is that?

Matthew (02:01):
1 Timothy 6:6-8, “But godliness with contentment is great gain, for we brought nothing into this world and we can take nothing out of it, but if we have food and clothing, we will be content with that.” So you may say, wow, that doesn’t really go with free money.

Bob (02:17):
Yeah, I’m wondering how this goes with this.

Matthew (02:19):
Yeah. So as we go through all of these, what you’re going to see is that they’re all tiny things that you can be doing. This is not going to be, again, a get rich quick scheme or anything like that. It’s going to be things that you can do to further build blocks towards your wealth. And so it’s going to be something that hopefully will breed satisfaction and breed more to glorify the Lord and contentment as well.

Bob (02:53):
And I’ve noticed with these three strategies, one really fits the saver. One’s going to fit the retiree, and one’s going to be right in the middle.

Matthew (03:01):
That’s correct.

Bob (03:02):
I had a hard time with that middle one, but we’ll talk about it.

Matthew (03:04):
I did a little bit as well.

Bob (03:06):
We’ll talk about it. Okay, so what is the first way to free money? And when I see this, I’m like…

Matthew (03:12):
Of course!

Bob (03:12):
Duh. Right? Because people miss this one. They miss it constantly.

Matthew (03:16):
It’s an employer plan match. So if you have a 401k, a 403b or another savings plan, making sure that you are, as long as your monthly budget allows you to, contributing at least up to the match that your employer provides, you’re essentially getting free money. One way to look at this is that when you make a contribution, if they’re making a dollar for dollar contribution, it can be seen. It’s not technically, but it can be seen as almost a hundred percent return right away on your contribution.

Bob (03:46):
You are.

Matthew (03:46):
Because you’re getting that.

Bob (03:47):
I believe that. I mean, if you’re in say, an income of 100,000, let’s take an even number and you’re getting a 4% match. You put in 4,000, they’re putting in 4,000. So you don’t have to make anything and you’ve made 100% return. Or like you say, it’s like giving you free money.

Matthew (04:03):
Absolutely. And so over the course of time, when you look at the paycheck by paycheck, you say, oh, is it really that much? Maybe it’s not even $100 depending upon, but over the course of time, taking full advantage of the employer match and maximizing that, again, goes back to one of the programs from a few weeks ago around the compounding interest impact. This is one way in which you can further facilitate that, especially for those who are younger, earlier in their career. Because the sooner you get these monies in the account working for you over the long term, it can be very impactful.

Bob (04:42):
Most people have a 401k or a TSP plan or a 403b. There’s also simple IRAs and the 3% match seems to be the most common. But I’ve met some clients, they have a 6% or 7% match.

Matthew (04:57):
I spoke to someone recently, 8%.

Bob (04:59):
8%.

Matthew (05:00):
And I said, are you sure? And they said, yeah. Like, goodness.

Bob (05:02):
Wow, I hope you’re putting in 8%.

Matthew (05:04):
Yeah, praise God for that.

Bob (05:05):
Yeah. Yeah. So what’s the second one, which is one I had a hard time with that

Matthew (05:11):
I did as well.

Bob (05:11):
Shawn does the program with me too, and we’ve talked about this and I have a hard time with this, but here it goes.

Matthew (05:18):
Ready?

Bob (05:19):
Okay.

Matthew (05:19):
Credit card rewards. So disclosure here, if you or your spouse have had any history of issues with debt or credit card debt that took you a while to pay off, this may not be for you, right? This is something that takes obedience and a very disciplined approach. Discipline,

Bob (05:44):
Extremely discipline. Yes, it is possible. I mean, I know we’ve gone on a lot of free vacations and even gotten goods for free because we’ve never carried a credit card debt. We pay it off every single month. Every month.

Matthew (06:01):
So here’s the strategy, the idea here, assuming that you have the discipline and this isn’t going to cause issues, the strategy is finding those things that are reoccurring month over month that are automatic – streaming services, utility bills, water bill, things that are going to be around the same amount and you don’t actually do anything. They just automatically come out of your bank account, your checking account, probably. The strategy is putting those kinds of things on a credit card with rewards that are going to be in line with something that you could enjoy or use in your budget. For some people it might be free groceries. For other people, it might be just a percentage back. Others it might be travel rewards or something of the like. And so the idea is get it set up to where on a monthly basis it’s going through the credit card, you’re getting those rewards. Again, not going to happen quickly, but over time you will build those rewards and the credit card, you go ahead and you put it away somewhere safe, out of sight, out of mind.

Bob (07:08):
That’s what I like.

Matthew (07:09):
You don’t want to use this, you don’t want to use this for anything where you’re going to have that credit card in hand. The idea is to set it and forget it and have the payment be automatic. So you don’t even have to go in and make the payment every month. It just automatically happens. And once you set it up. again, you can set it and forget it, but you’re racking up those rewards little by little over the course of time.

Bob (07:31):
And put a limit on that credit card, right?

Matthew (07:34):
Yes. Right. Elaborate on that.

Bob (07:35):
Yeah, depending on what those average bills that you’re talking about, your utilities, and by the way, I just found out we were talking about this, that utility company that we use for our home in Rockport, Texas on the coast, you can even out your bill and basically I could never use the amount of electricity they’re going to offer, they’re offering me, but the bill stays the same every month. So if you’re in an area that has competition for utilities, you can do that. But let’s say all that total’s up to be $1400 a month for all of those recurring bills that you have. Set your limit at about $1600 that way you cannot go over it.

Matthew (08:20):
So you want to give yourself a little bit of buffer because things may…

Bob (08:24):
Bills go up and down.

Matthew (08:25):
It could, but yeah, calling the credit card company and setting a limit down from what they probably had it at by default, it just further protects you.

Bob (08:36):
You knew this was a hard one going by me, was putting that in the desk drawer or even just cutting it up.

Matthew (08:41):
You could. Absolutely. You could cut it up, shred it, and be done with it. Absolutely. I dunno if I’d recommend that. I think putting it somewhere safe, because who knows, you might need the number, but…

Bob (08:51):
I know we have used rewards for many things over the years.

Matthew (08:56):
Well, and that’s it. You mentioned vacation. Again, this isn’t paying for cruises around the world or anything like that, but we have probably annually paid for a long weekend where we get lodging and most of the food for free for our family of seven, and it’s a nice treat.

Bob (09:14):
So these first two that you’ve mentioned are available just about to anyone?

Matthew (09:20):
Correct.

Bob (09:21):
And this third one that you’re going to mention is available to retirees, more for retirees.

Matthew (09:27):
That’s right.

Bob (09:27):
But if you’re not a retiree and you’re listening to this, maybe you have a friend that needs to listen to this, kind of what we call free money, right?

Matthew (09:35):
Yeah. So if you’re at least 70.5 years old and you have a pre-tax IRA, then facilitating your tithes and offerings and giving through the qualified charitable distribution provision or QCD, is the strategy here. So many people use their income from Social Security or their bank account, or maybe they’re working still to facilitate their offerings and their giving to their church or local organizations, et cetera. For those who are over 70.5, you can take a distribution from a pre-tax IRA, and as long as the check is made payable not to you, but to a qualified 501c3 organization,

(10:27):
It comes out tax free. So I’ve worked with many individuals to simply redistribute in their budget that they’re giving. So, running their giving through the qualified charitable distribution, especially those who are 73 or older now and have require minimum distributions. This is a great way to satisfy the IRS requirement while also giving to an organization or a church that you would give to otherwise. And so where’s the “Free money.” It’s in the tax savings. By doing the, giving through the QCD provision, you now have given that tax free and the money that you would’ve used otherwise to do that giving now is available for something else, particularly the tax savings, either to go back into your budget or to even give more, maximize generosity to the kingdom work. So it’s a very simple idea that many people don’t think of, but it can be very powerful, especially when, again, for many of us to most of us, the goal here is to maximize generosity for his glory.

Bob (11:33):
We’ve been using this strategy in a huge way with our clientele here at Christian Financial Advisors for years. Now, one of the things, the way that I talk about this is… so they’re going to give cash money. They’re used to giving cash money to their charities of their choice. They give it out of the IRA, but then I’ve talked about them taking that cash that they were giving because they’re still giving. They’re just repositioning and saving that and putting that back into account and saving that over time.

Matthew (12:08):
Absolutely.

Bob (12:08):
It’s a wash, but you’re better off because you’re saving so much on your tax. So basically you don’t take money out of an IRA and then go give it to a charity if you’re above 70.5. You need to take it directly from the IRA to the charity.

Matthew (12:23):
So logistically, just an important point on the logistics of this, don’t try to do this on your own. This is where if you work with us, you want to call us, or if you have a financial institution you work with, you want to call them. Because a key piece for the IRS regulation is making sure that the check is payable not to the individual, but to the organization. Which usually, you need to call someone at the financial institution where your IRA is at in order to make sure that gets right.

Bob (12:50):
We have clients, it’s like a little shopping list nearly, and they give us this and they say, we want this much to go to this charity, this much to go to this.

Matthew (12:57):
Praise God.

Bob (12:57):
Yeah, no, it’s great. And we help them do that.

Matthew (13:00):
Yeah. Amen. It’s wonderful. So yeah, those are three ways in which you can experience free money and hopefully there’s one for everybody.

Bob (13:09):
If you need any help with this, of course, we’re always available by calling us at 830-609-6986 during business hours. Again, 830-609-6986. You can text that number as well. Or you can go to our website and hit the contact tab and our website is www.ChristianFinancialAdvisors.com. Thanks for listening. God bless y’all. Bye.

[DISCLOSURES]

* Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.