July 17, 2025 • 42 mins
Warren Buffett says, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Character and integrity matter—especially in the world of money. Now, after more than sixty years of market-shaping moves and famous one-liners, Buffett is calling it a career. On the next Faith & Finance Live, Mark Biller joins Rob West to reflect on Buffett’s legacy. Hear timeless lessons for every investor. Then it’s on to your calls. That’s Faith & Finance Live, where biblical wisdom meets today’s finances, weekdays at 4pm Eastern/3pm Central on Moody Radio.
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Episode Transcript
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S1 (00:09):
It takes 20 years to build a reputation and five
minutes to ruin it. If you think about that, you'll
do things differently. Hi, I'm Rob West. With those words,
Warren Buffett reminded us that character and integrity matter, especially
in the world of money. Now, after more than 60
years of market shaping moves and famous one liners, Buffett
(00:29):
is calling it a career. Today, Mark Behler joins us
to reflect on his legacy and share what timeless lessons
every investor can learn from it. Then it's on to
your calls at 855 7000. This is faith in finance live,
and we're so glad you're along with us today. Uh,
Mark Bellard joins us today. He's our good friend and
executive editor at Sound Mind Investing. SMI recently ran a
(00:53):
thoughtful article reflecting on Warren Buffett's remarkable investing career. So
today we're taking a closer look at the principles that
designed or excuse me, defined, I should say Buffett's approach,
many of which knowingly or not, reflect biblical wisdom about money,
patience and stewardship. So, Mark, let's start there. First, let
(01:14):
me say hello. Thanks for being with us.
S2 (01:16):
Oh, it's always a pleasure, Rob. Thanks for having me back.
S1 (01:19):
Hey, give us a snapshot of just how successful Buffett
has been over the last 60 years.
S2 (01:25):
Yeah, sure. Rob, it's kind of mind blowing. According to
the Wall Street Journal recently, if you had invested $100
in Buffett's Berkshire Hathaway stock back in 1965, it would
have been worth a mind blowing 5.5 million by the
end of last year. Wow. Now to to contrast that 100,
(01:49):
the same $100 investment in the S&P 500 index would
have grown to $39,000. So 39,000 for the index, 5.5
million for Buffett. It's no wonder that when asked to
name the greatest investor of all time, most people immediately
think of Warren Buffett.
S1 (02:08):
Well, that's exactly right. And those numbers speak for themselves.
You all did this thoughtful article. And by the way, folks,
if you'd like to read it, you'll find it at
Sound Mind investing.org. It's called the Wisdom of Warren Buffett.
But try to put your finger on Mark what Buffett
do differently.
S2 (02:25):
Yeah, there are a few things, Rob, that I'd point to.
You know, the first is Buffett's widely known as a
value investor, which simply means that his specialty was uncovering
these undervalued stocks and businesses. He certainly did that many,
many times. But I think what is sometimes overlooked is
Buffett was also flexible enough to apply his specific value
(02:50):
framework to companies that most people wouldn't think of as
value stocks. A good recent example of that was he
built a huge position in Apple over the last decade.
Now he's recently sold that. But the point is, most
people wouldn't think of Apple as a value stock. That's
a growth tech stock. So he was he was a
(03:11):
flexible investor even though he had these deep value roots. Um,
another one from really early in his career that really
just kind of is a great example of his outside
the box thinking. Was he decided early on that Berkshire
was not to issue dividends? Now, today that's normal. A
lot of companies don't issue dividends. But back in the 1960s,
(03:35):
that was really flouting the conventional orthodoxy and wisdom. Um, but,
you know, it was just a case of Buffett being
willing to be a maverick. He thought that he could
generate better returns for investors by reinvesting profits within the
company and increasing the share value. And boy, was he
(03:55):
right about that. Um, you know, one last one. A
lot of people point to Buffett's patience as a key
to his success. He would famously build these really large
cash positions within his portfolio until the right opportunities would
come along. And a lot of the time, those opportunities
would come when the market was selling off, when we
(04:16):
were in deep bear markets. And that led to one
of Buffett's most famous quotes, which is be fearful when
others are greedy and greedy when others are fearful.
S1 (04:27):
Yeah. A great point there. And that points to the
deeper truth, which is the value of staying disciplined when
others panic. I know that was a hallmark of Buffett's career,
and we could certainly see that time and time again.
We'll get Mark's thoughts on that. Um, you know, while
we can't follow his exact path, we'll ask Mark what
(04:49):
the takeaways are that we can apply to our own
investing decisions. Also, some of those pithy quotes that Buffett
is famous for will unpack a few of those. We'll
also be taking your phone calls here. Mark Biller here today.
So it's a great time to call with your investing
related questions. If you have questions on your portfolio or
(05:09):
perhaps the economy. By the way, a new all time
high on the S&P 500 today. Amazing to see what's
going on in these markets. Hey, the number to call
800 525 7000. That's 800 525 7000. We'll be right back.
Stay with us.
S3 (05:33):
The opinions offered during this program represent the personal or
professional opinions of the participants, given for informational purposes only.
Any information provided is not intended to replace advice from
a financial, medical, legal, or other professional who understands your
specific situation.
S1 (05:57):
We're talking Warren Buffett today, perhaps one of the most
well known and famous investors of all time. He's calling
it a career. That's right. He's hanging it up after
a 60 years as an incredibly successful investor. And boy,
there's so much we can learn from his approach, his discipline.
He's famous for those, uh, annual meetings and the letter
(06:18):
that he wrote each year to his shareholders. Also his
pithy quotes. We'll be sure to unpack a few of
those along the way as well. Mark Miller is here today.
He's executive editor at Sound Mind Investing. You can read
the thoughtful article reflecting on Warren Buffett's remarkable investing career
at Sound Mind Investing. Mark, I mentioned before the break
(06:40):
this really deeper truth that I think is, uh, stems
from the the quote that you mentioned, and that is
the value of staying disciplined when others panic. Um, you know,
what are some of those takeaways that we can apply
to our own investing decisions from Warren Buffett?
S2 (06:59):
Yeah, there are quite a few. Rob, you know, one
of the things that you mentioned right up front today,
I really like the way you said it, about how
Buffett's approach, knowingly or not, reflected biblical wisdom. I think
that's great. Um, you know, I don't I've not seen
anything that makes me think that Buffett is a Christian.
But as a Christian, you know, I look at the
(07:22):
the pillars of his approach, specifically patience and self-control. And
of course, I'm immediately thinking, okay, those are fruits of
the spirit that we should all, as believers, be trying
to cultivate through the activity of the Holy Spirit in
our lives. And so, Christian or not, he was a
good example of some of these things. And, you know,
(07:42):
as we try to be inside out investors, that's a
phrase we use at SMI, trying to let those, um,
those fruits of the spirit, those biblical character qualities, lead
our decision making. It's going to, uh, cause us to
look in some respect at least, uh, like the way
(08:05):
Buffett would invest. So I think there's a lot we
can glean just from that. But like you said, Rob
tons of quotes, tons of material in his meetings and
shareholder letters, um, over the years. And, you know, let's
let's hit a couple of those real quickly. One that I,
I really like was Buffett once said, if you don't
(08:26):
find a way to make money while you sleep, you'll
work until you die, which is that's a tough love
kind of quote. But I it kind of gets the
point across that, um, the earlier you can get started
investing and getting your money working for you, the better.
Buffett made his first stock investments when he was just
(08:48):
11 years old, so he quickly discovered the benefit of
putting money to productive use. Uh, another one I think
that's really insightful that he said was risk comes from
not knowing what you're doing. Now, a lot of times
on our programs together, Rob, we'll have questions that come
in about, you know, investing, being like gambling, that kind
(09:10):
of thing. And certainly there can be some similarities, especially
if people are speculating or day trading. But for investors
who are adhering to these timeless principles, like diversifying their holdings,
keeping their emotions in check, maintaining a long term perspective,
you know, these again, these are all biblical principles. And
(09:34):
so it's true that, like Buffett said, if you know
what you're doing, in other words, if you're putting these
principles into practice. Well, investing in the stock market It
has been many people's best opportunity to build wealth.
S1 (09:49):
Yeah, there's no doubt about that. And the the results
speak for themselves, that's for sure. Uh, Mark Buffett was
also famous for not letting global events dampen his enthusiasm
for investing. Isn't that true?
S2 (10:01):
Yeah, absolutely. He would frequently step up when everybody else
was scared to death. And the depths of the global
financial crisis. In 2008, he penned a really powerful editorial
and I can't remember which newspaper, but really encouraging stuff,
trying to encourage people. Uh, one of his quotes along
(10:22):
those lines was, in the 20th century, the US endured
two world wars and other traumatic and expensive military conflicts
the depression, a dozen or so recessions and financial panics,
oil shocks, epidemics, and the resignation of a disgraced president.
Yet the Dow rose from 66 to 11,500. So the
(10:46):
point being, there's always stuff to worry about. And yet
the market has pretty relentlessly continued to march higher, especially
if you look over a long time frame. Uh, another
related quote for 240 years, it's been a terrible mistake
to bet against America, and now is no time to start. So,
(11:08):
you know, a couple of the consistent themes throughout his
career were this endless optimism about American businesses. And frankly,
he was almost giddy. He had this enthusiasm about the
opportunity to become a part or, in his case, sometimes
a sole owner of some of those businesses through investing.
S1 (11:28):
Yeah. Really interesting. Uh, another thing is that Buffett was
definitely very quotable. Uh, I mean, that's perhaps what he's
most known for. Uh, I'd love for you to share
maybe a couple of those gems that you found researching
the article?
S2 (11:43):
Yeah, sure. There are so many it was hard to
pick and choose honestly, but here are a few of them.
One is games are won by players who focus on
the playing field, not by those whose eyes are glued
to the scoreboard. So in other words, follow your investment
process and let the outcomes take care of themselves. Another
(12:04):
one that I liked was success in investing doesn't correlate
with IQ. What you need is the temperament to control
the urges that get other people into trouble in investing.
He had a related quote. Rob, that was something about
if if all it took was knowledge, the richest people
would all be librarians. Um, but the point of those
(12:27):
quotes is that there there are a lot of risks
that come with the territory of investing, but the biggest
risk for most investors is letting their emotions get the
best of them and guide their decision making. Um, got
time for one more?
S1 (12:42):
Sure. Yeah.
S2 (12:43):
Yeah. Okay, well, how about whether we're talking about socks
or stocks? I like buying quality merchandise when it's marked down.
So pretty ironic, Rob, that stocks are the one thing
that people love to buy more of when they go
up in price, but then become way too afraid to
(13:03):
buy when stock prices decline.
S1 (13:06):
That is so true. And again, one of those discipline based,
rules based approaches to investments, uh, that, uh, made Warren
Buffett famous. This famous. There's no question about it. Well,
if you'd like to learn more, be sure to check
out this article that was penned by our friends at
Sound Mind Investing. You'll find it sound mind investing. Again,
(13:28):
that's sound mind investing. Uh, you'll find it there. It's
titled The Wisdom of Warren Buffett. One more time. Sound
mind investing? Well, we're going to continue to talk about
the life and career of the famous investor Warren Buffett.
Straight ahead. Also, Mark Behler hanging around. He's going to
be answering your calls and questions. We'll head to those
(13:50):
phones right after this break. But if you have a question,
something going on in your investing life, perhaps your portfolio,
you're wondering about the market and the economy, where it
might be headed from here. Today's a great day to call.
Mark will be taking those questions. We've got lines open
so you'll get right through right now 800 525 7000.
(14:11):
Again that's 800 525 7000. After 60 years Warren Buffett
hanging up. What can we learn from him today? Much more.
Straight ahead. Stay with us. The wisdom of Warren Buffett
(14:34):
today with Mark Behler here on Faith and finance live
on Moody Radio. I'm Rob West. We're taking your calls
and questions, specifically questions on investing related topics. You're wondering
about your portfolio. Where might that market be headed from
here after hitting a new all time high today, despite
a lot of challenges out there, here and around the world, uh,
(14:56):
we have fresh highs on the Dow and the S&P 500.
What might that mean for you? Call right now 800
525 7000. Again that's 800 525 7000. Mark Biller taking
those questions today. Let's head to the phones. Juneau, Alaska.
Yu Ming, how can we help?
S4 (15:14):
Rob, thanks for taking my call. This is an investment related,
but I'd like to get some clarification. All right. Financial
advisor suggested that we open a checking account on my
IRA that I can write checks for Qcds on. And
my accountant is suggesting that. No, let the financial advisor
(15:35):
issued those checks out of your IRA, rather than you
writing a check on that account. Which is correct. Can
I do that? Or should I just let the financial
advisor handle the check writing?
S1 (15:47):
Yeah, well, I'll give you my take and we'll get
Mark Miller to weigh in. See if he agrees. You know,
I mean, absolutely. You can. Uh, IRAs with check writing
privileges are a thing. And so every time you write
a check against that IRA, it is a distribution. So
you just need to recognize that. Why would you do that? Well,
because it's primarily for convenience. You just simply write yourself
(16:08):
a check. And no need to call your advisor or
custodian every time you want access to the funds. So
it makes it more flexible. And you absolutely can handle
those RMDs that way as well. Um, you have to recognize,
as I said, every check written is a taxable distribution. Uh,
probably the only downside, unless I'm missing something, is there's
(16:30):
no undoing it. Um, you know, unlike some distributions made
in error. Often they're irreversible. I mean, perhaps you could
get it back within 60 days. And but I think
there's a risk there. And perhaps sometimes it's easier to
lose track of RMD totals or withholdings or, you know,
unintentionally take more out than you expect. Your accountant probably
(16:54):
is preferring a more controlled reportable withdrawal to simplify tax
prep and and avoid mistakes. But other than that, I
can't think of anything. Mark. Your thoughts?
S2 (17:05):
Yeah, I think the only other angle on this is
that specifically for Qcds, those do need to go directly
from the account to the charity without going through your
hands as the IRA holder. And so that would be
one reason, just to keep the safeguard in place of
(17:28):
having the advisor issue those QCD checks directly instead of
you writing them from your IRA. Like Rob said, you
can do it because, you know, think about somebody who
has an IRA but doesn't work with an advisor. Well,
they would be taking care of qcds themselves. So it
can be done. But I think that Rob's idea there
(17:51):
of the safeguard is is absolutely right. And the the
accountant is probably saying this is going to be a
safer setup if we let the advisor just go ahead
and issue those checks. So there's no possibility that it
gets messed up and goes to the individual first and
then to the charity, which can present a problem then
(18:12):
for the QCD being valid.
S1 (18:15):
Does that make sense?
S4 (18:16):
Great, great. Yes, that absolutely makes sense because that's mainly
what we want to do. The check in for is
just to write the qcds, because I've got other funds
to draw on for my personal, you know, living expenses
and that stuff. It's mostly distributed for QCD. So yeah,
that does make sense. And I'd probably go along with
your suggestion to just let the big boys do it.
(18:38):
And that way I'm completely out of the picture, so
to speak.
S1 (18:42):
Absolutely. You mean it's a great question. I appreciate your call.
I will say, you know, I've had a CPA in
here before that says you can actually write a check
from your IRA, make it payable to the 501 C3
because it's not coming to you. It's going directly, you know,
and that is considered a QCD. But I agree with you, Mark. And,
you know, having that cut from the custodian is probably
(19:04):
a little cleaner and maybe avoids some confusion along the way.
But a great question. You mean call any time we
do have some lines open. If you have a question
today for Mark Biller on the markets or investing related topics,
we'd love to hear from you. 800 525 7000 you
can call right now. Um, Mark, any other quotables from
(19:26):
Warren Buffett that we didn't cover?
S2 (19:28):
Oh, boy. Um, I think we hit most of them. Rob. Um,
they're like I said, there are so many, um, that
that one about the librarian always makes me me chuckle.
S1 (19:41):
But yeah, I hear you.
S2 (19:43):
He was a very quotable guy and very generous with
his time. Um, you know, he'd do those annual couple
day conferences with his shareholders and, um, you know, these,
these extensive annual letters that as a writer myself, I'm
a little jealous of because every one of them was seemingly, uh,
an instant masterpiece. Um, you know, he also, in speaking
(20:07):
of his generosity, you know, he's he's pledged to, um,
give 99% of his, his wealth away through his estate
within the first decade after it's settled, uh, to various charities.
So some tangible displays of his generosity there as well. So, yeah,
a yeah, a lot, a lot of things we can
(20:28):
glean from old Mr. Buffett.
S1 (20:30):
Yeah, that's for sure. We're going to be headed back
to the phones here for your questions. And Mark Biller
in just a moment as the the lines are filling
up here. Uh, Mark, what do we know about his
plans for distributing his estate and any generosity that'll be
a part of that?
S2 (20:46):
Yeah. You know, I don't know a whole lot. Honestly, Rob,
about the details. My impression has been that some of
the causes that he's, uh, excited about are not ones
that that I'm excited about. And that's partly why I
said earlier on, you know, I haven't seen a lot
of indication or really any indication that Buffett is a believer. Um,
(21:09):
and yet, even in spite of that, there there are
a lot of biblical principles we can glean from his approach.
S1 (21:16):
Yeah, there's no doubt about that. Check out this article again.
It's called The Wisdom of Warren Buffett. It's sound mind investing. Org.
All right. When we come back, we're going to dive
into your questions. We've got a bunch of them coming
in right now for Mark Biller. If you have an
investing related question, go ahead and call right now 800
525 7000. Again, that's 800 525 7000 more with Marc Biller.
(21:40):
And your questions on the markets and investing. That's straight ahead.
This is faith in finance live I'm Rob West. A
quick break and we'll be right back. One of Warren
(22:03):
Buffett's quotes that Mark Biller mentioned a moment ago for
240 years, it's been a terrible mistake to bet against America,
and now is no time to start. That's particularly appropriate
today when the S&P 500 rises to a new record closing,
boosted by solid earnings and US economic data. Mark, If
(22:24):
I had rattled off everything that would happen in the
first six months of 2025, would you think we'd be
sitting here at a new all time high in July?
S2 (22:34):
Absolutely not. In fact, it's funny you say that, Rob.
I was just working today on an article for our
next issue where I was just detailing everything that happened
just during the second quarter of this year. And I
said almost that you took the words right out of
my mouth. I said, if an investor had known what
(22:54):
would happen between the beginning of April and the end
of June, you know, an investor could certainly be excused
for thinking that stocks would be down 20, 30, 40%. Yeah.
And in fact, to be fair, um, on April 8th,
at the very low for the market, the S&P was
(23:15):
down 21.3% from its February high. But you know we've
seen what's happened since the the rebound has been epic
record breaking in many respects. And here we are inside
of one calendar quarter back at all time highs. Um,
it's been fairly astounding. Yeah.
S1 (23:35):
And there's no doubt that it has. And, uh, who
knows where we're headed from here? It seems like we're
living in fast forward these days. A week is, you know,
a month, and, uh, but nevertheless, that's just the reality
of of where we find ourselves. All right, let's dive
into some phone calls today. Nearly all the lines full.
Lots of questions for Mark Biller today. Who's our guest?
He's executive editor at Sound Mind Investing. Org to Chicago. Hi, Pat.
(23:59):
Go ahead.
S5 (24:01):
Hi. Can you hear me?
S1 (24:03):
Yes, sir.
S5 (24:04):
Okay, so my question is, is now this is kind
of old, but in 2013, um, uh. Oh, boy. Warren
Buffett said that he would advise the person that was
going to take care of his family's money to put 90%
in the S&P and 10% into short term bonds. So
I have two girls and both of them just graduated college,
(24:26):
and they have about 150,000 in the market, and they
are in just the S&P. And the thinking was that
we love the S&P. And the girls got 40 years
until they need the money. And so my question is,
is my plan was to leave it there until it's
a significant amount of money and or another ten years
and then start diversifying. So that is I'm looking for some, uh,
(24:50):
some thoughts on that.
S1 (24:52):
Yeah. Very good Mark.
S2 (24:53):
Yeah, I like it, Pat. Um, you know, this is
one place where Buffett did have a little bit of
a tendency to to kind of have a, um, for thee,
but not for me kind of approach. So he was
kind of famous for, um, telling people that most folks
should just invest in the S&P 500 or in index funds,
(25:18):
where he certainly did not have that approach. He was
a very active investor himself. Um, but that said, I
agree that index investing is the easiest, most straightforward. And
and it's hard to argue against that approach for most investors. Um,
so as far as just being in the S&P 500,
(25:41):
it's good to recognize what is the S&P 500 index.
That is really an index of the largest U.S. companies.
And because of the way that index is constructed, it's
capitalization weighted, which is fancy language for the biggest stocks
in the index make up a a bigger proportion of
(26:05):
the index and the returns than the smaller stocks. And
so what we have today is there are about a
half dozen to a dozen of the very largest US stocks.
You could name them Microsoft, Apple, Amazon, Nvidia, and so
forth that really are a very disproportionate impact on that
(26:29):
S&P 500 index. Nvidia is 7% of the S&P 500
all by itself. Those those top ten make up, I believe,
about somewhere in the 30 to 40% range. So you
just need to know when you're investing in the S&P
500 index that you you're very top heavy. That's probably
(26:50):
the best way to say it Pat. And so there's
nothing wrong with that. And certainly for the last six, seven,
eight years those stocks have been the place to be.
But there are times there are periods. We've seen it
way back in the 1970s with the nifty 50. Similar setup.
We saw it at the end of the 1990s, when
(27:10):
the S&P 500 was up over 20% for five consecutive years,
but then 2000 flipped the calendar, and over the next decade,
the S&P 500 had a negative total return. And so
that would be the argument, Pat, for potentially diversifying at
least a little bit, maybe sooner than that. And the
(27:34):
easiest way I think to do that would be to
add a little bit of international exposure. Um, we did
a program. What? Rob, maybe two months ago that kind
of talked about the, the opportunities, um, in international stocks
and how we've really rarely gone as far to one
(27:54):
side of the boat in terms of U.S. versus the
rest of the world stock markets, in terms of valuations
and so forth. So that might be one thought, Pat.
Very easy. You could keep that in index funds as well.
But you know, I'd I'd be hard pressed to say
if you peeled, you know, 10% or 20% of that
(28:15):
off of the S&P 500 and went into foreign or
international stocks. I have a hard time believing that ten
years from now, you'd really regret that decision, and you
might be really grateful that you added a little diversification
to the mix. Rob, what are your thoughts on all that?
S1 (28:34):
Yeah, well, I couldn't agree more. I'd love your thoughts
on that. Any any questions, Pat? Or does that all
make sense?
S5 (28:42):
Well, yeah. No, it totally makes sense. Obviously in my
portfolio I'm older. I've done that as well. And I
actually did that about nine months ago when it paid
off beautifully. Um, what about just buying more of just
the total market instead of I have a lot of
faith in the US, right. So and maybe buying more
of the total market like starting to buy starting to
(29:03):
have them buy the total market instead of international.
S1 (29:06):
Yeah. Mark.
S2 (29:07):
Yeah. I mean, that's certainly another option that's going to
get you a little further down the the tree into
the mid caps and the small caps. Now you know
that that indexing effect that I was talking about earlier with,
with the tendency for those returns to flow upward into
those larger companies, um, you know, you would have to
(29:30):
have to kind of think what would be the catalyst
to make those smaller companies suddenly start to outperform. But
those cycles, they do go back and forth. So having
some of that exposure certainly isn't a bad idea. We
certainly diversify in our portfolios here at SMI and have
some small cap exposure, so maybe starting to add new
(29:52):
money to a total market would be one way to
start bringing that diversification in. Um, if you didn't want
to go the international route. So yeah, certainly. No, no
problem for me on on that score.
S1 (30:06):
Excellent. Pat, thanks for your call today. Interestingly, Mark, I
was just looking today at the percentage of active managers
outperforming year to date has gradually declined. It's now at
about 48%, so less than half. And that's all. As
the market has rebounded from its April low and reached
this new all time high. It'll be interesting to see
whether that continues. Huh.
S2 (30:28):
Yeah, absolutely. It's been a tough row against that S&P.
It's been a tough bogey.
S1 (30:33):
Yeah no doubt about it. All right. Another break. And
then back with our final segment with Mark Biller. Lots
of great questions coming up Martha in Florida. We're coming
your way after the break. Plus, perhaps your question. 800
525 7000. Mark Biller from Sound Mind Investing, our guest today.
We'll be right back. Great to have you with us
(30:59):
today on Faith and finance live here on Moody Radio.
I'm Rob West with me today. Mark Biller, my good friend,
executive editor at Sound Mind Investing. We've been talking about
the life and career of the famous investor Warren Buffett.
A great, thoughtful article reflecting on his remarkable investing career
is available at Sound Mind Investing. Org. It's a great read.
(31:21):
You'll check it out today. When you head to that website,
just click on the Wisdom of Warren Buffett. All right,
let's get to as many calls as we can here
in this final segment. Uh, let's go to Florida. Martha,
thanks for your patience. Go right ahead.
S6 (31:35):
Uh, yes. Uh. Good afternoon. How are you?
S1 (31:38):
Doing great. Thanks for your call.
S6 (31:39):
Great. Got a question? I have a certain amount of
money in my, um. My 401 K, and I'd like
to do a backdoor Roth, uh, you know, transferring it
back into the Roth account. Uh, I've been doing it
little by little, and I was wondering, is it better
to just go ahead and transfer, uh, like, um, maybe
(32:01):
the whole thing or half and half, because then I
get the the, um, Irma with the Social Security. Yes. Accounts.
It does count as income.
S1 (32:12):
Yes. Yeah. Good. Good point. Mark. Any thoughts on that?
S2 (32:16):
Yeah. Martha, I think the the thing I would look
at is what's the tax implication of that going to be.
And I think that, you know, what you were describing
about doing it little by little. That can be really
advantageous if you are keeping an eye on the tax
bracket and the the increasing tax rate that you would
(32:37):
pay by going up into the next bracket. Um, a
lot of our, um, management clients, you know, that's one
thing that we will do with them is kind of
walk them through how much they can convert each year
in order to stay under the threshold that would kick
them into the next tax bracket. So that would be
(32:58):
the only thing that I would really be looking at
there as far as maybe keeping the break on that
a little bit, just to keep the tax bill down.
Rob any thoughts?
S1 (33:07):
Yeah I think that's exactly right. And so that really
is your next step here Martha, because there's probably a
sweet spot that factors in both the tax bracket of
you converting more in any given year. And what you're
pointing out, which is, is very real. And that is
this Irma threshold as well that's going to kick up,
you know, hundreds of dollars potentially more per month for
(33:30):
Medicare Part B and part D, which doesn't hit until
two years later. But you don't want to get caught
by surprise on that. So I think getting with your
CPA to kind of balance those two in terms of
the tax bracket and then the Irma thresholds, and then
figure out what is that optimal amount to convert in
any given year through the back door.
S6 (33:53):
Okay. Well thank you. Um, now how how long can
you do this? Until what age? If you're 70, can
you do it after 70 or, um, is there a
age where are you?
S7 (34:05):
You're no longer able to do this.
S1 (34:07):
Yeah. And are you talking about specifically the, uh, the
backdoor Roth IRA? Yeah, right. There is no current time
limit or expiration date for doing a backdoor Roth, as
long as it's allowed under the existing law, which it
currently is. Could they do away with it in the future? Yes,
but there is no deadline or age limit.
S6 (34:30):
Okay. Thank you so much.
S1 (34:32):
Okay. We appreciate your call today. Lord bless you. And
thanks for being on the program. Uh, let's go to
Las Cruces, New Mexico. Elliot, how can we help you?
S8 (34:41):
Yes, I'm interested in what you guys think about the
pros and cons of a registered index linked annuity or ryla.
S1 (34:48):
Yeah. Mark.
S2 (34:49):
Boy, um, I'm going to have to plead a little
ignorance on that one. Rob. Your thoughts?
S1 (34:56):
Yeah. So I don't know that I know the specifics
of it. Describe your understanding of that type of annuity. Elliot,
what is is being sold to you?
S8 (35:07):
Well, this one in particular is linked to the S&P
500 index which tracks the movements. Um, and when you
buy the rally, you're not investing in the underlying stocks.
Rather the index just indicates the percentage gain or loss.
So you set a floor, the maximum amount of loss
you're willing to accept. And there's a different crediting periods
(35:32):
you can get for market exposure or downside protection. Yeah.
And just a lot of decisions to be made.
S1 (35:41):
Yeah. Well and it has some of the same kind
of typical things that you would want to consider with
any annuity. And there's all kinds of flavors and varieties.
And you know, you've got to read the fine print
because they tend to be complex. And that's one of
the reasons I don't love them. But essentially this is
blending kind of the features of a fixed indexed annuity
(36:01):
with a variable annuity that offers the market exposure. And
in your case, you're saying it's linked to the S&P
500 with that downside protection. And that's why people buy
them because they like the the potential growth, uh, but
not full participation. Um, with the downside protection. And, you know,
typically you can get tax deferred growth, uh, as well.
(36:24):
And I think you pick a term in terms of
how long it goes. You know, the downside is, um,
you know, you your principal is not guaranteed, uh, there's
complex terms and surrender charges. So, um, you know, it's
subject to market risk within limits. But the biggest issue
is just the limited upside because you've got the caps
(36:45):
and the participation limits. Whereas, you know, I would rather
you have a properly diversified portfolio, take the downside risk,
but get 100% of the upside. But Mark, any other thoughts?
S2 (36:57):
Yeah, that's the biggest thing Rob, is that, you know,
people think, well, if I have a cap, say of 6%
or 8%, that sounds perfectly reasonable. Upside cap. Um, but
the problem is market returns are lumpy. And so you
don't get years typically that go, you know, 9%, 9%, 9%, 9%.
(37:20):
You go, you know, 20%, 4%, -5%, 20%. And when
you hit those big years, if you're capped at, say, 6%,
when the market's up 20, that really alters your long
term return profile. Um, so even though you're cutting off
(37:41):
some of that downside, like you said, Rob, you are
really significantly impairing the upside.
S1 (37:48):
Yeah, it's exactly right. So I think that's the thing
to consider. Elliott, perhaps you visit with a certified Kingdom advisor. Uh,
you could find one at com and at least get, uh,
another approach to consider alongside an insurance product like the
one you're describing. That would probably be my preference, but
at the end of the day, you've got to, you know,
(38:08):
determine what is the best fit for you as the steward.
We appreciate your call today. Thanks for being on the program. Uh,
let's see, we're getting short on time. Let's head to Tampa. Hi, Nancy.
How can we help you?
S9 (38:19):
Hi. Thank you so much for taking my call. Sure.
I'm looking to to invest wisely for, um. I have
12 grandchildren, but the three are very, very special needs.
And I'm worried that, you know, I won't be here forever.
And I know where I'll be. But I worry about
their putting aside long term for them. What's the. Do
(38:41):
you have any words of wisdom or where to look
for information?
S1 (38:45):
Yeah. Good question. Mark your thoughts.
S2 (38:47):
Yeah. Those are are big questions. Um, are the are the,
the the parents of the special needs children. Are they, um,
are they knowledgeable about investments and and and handling investment
accounts and that sort of thing?
S9 (39:07):
Um, they've had some, you know, a financial classes. Yes. But.
S2 (39:13):
Yeah.
S9 (39:13):
Okay, good. Um.
S2 (39:15):
Well, I guess a lot of that, Nancy, is going
to depend on the timing of the, the money. And
when you think that that money is really going to
be needed for their care, um, to the extent that
this is for further down the road, of course, we
can invest with a little bit more risk, a little
more aggressively using some maybe stock market oriented investments, to
the extent that that money is going to be needed sooner,
(39:38):
then we don't want to take a whole lot of
risk with that, want to invest that more conservatively. Um,
that's a starting point. Rob, any general thoughts there?
S1 (39:49):
Yeah. I mean, I think you're exactly right. And I
love the way you're thinking through this. Uh, you know,
first there's the 529 able account. And that allows individuals
with disabilities to save and invest up to 18,000 a year.
And the key is it doesn't jeopardize your government benefits.
And then it grows tax free, kind of like a Roth.
And then usually that's paired with a special needs trust,
(40:12):
which is not an investment itself, but can hold investments
and then provide that long term financial support again without
disqualifying them for benefits. And those are usually for larger inheritance,
inheritances or to hold assets. A key difference is control
that the trust is managed by a trustee, while the
(40:34):
able account is usually owned by the beneficiary of their
garden guardian. So, you know, what I would do is
get with a, if you haven't already, a special needs
planning attorney and a certified Kingdom advisor to help you
structure a plan that meets both the the legal and
the financial needs. You know, for your grandchildren while honoring
your desire to provide for them. And then, you know,
(40:56):
I think the advisor wants the legal pieces are in place,
could work through it with you to determine what is
the right investment mix, just given the time horizon that's there,
to make sure they have the cash that's needed or
the appropriate time. But that for that portion where there
is a longer time horizon, you know, that can be
working for you and, um, you know, growing, uh, for
(41:19):
the future. So, Nancy, I hope that helps you. We appreciate, uh,
your call today. And we do have an advisor who's
kind of a part of the the faith and finance family,
if you will, that, um, has a child with special
needs and really specializes as an advisor in that type
of planning. And so if you're looking for somebody, um,
(41:41):
you know, who can bring that level of competency, uh,
feel free to hang on the line. And our team
will get your information and and get you connected. But
we appreciate your call today. Uh, Mark Biller, uh, Any
final thoughts? Put a bow on our conversation today about
the wisdom of Warren Buffett before we let you go.
S2 (41:58):
Yeah, well, I think, you know, one of the last
quote from Buffett really will do the trick here. He
said investing is a lifelong journey. Stay disciplined, keep learning,
and never stray from the principles that have built enduring wealth.
That's probably a good way to to end it today.
S1 (42:16):
There's no doubt about that. Excellent, Mark. Listen. Always love
when you're here, my friend. Thanks for your godly counsel
and and insightful perspectives on the markets and so much more.
We appreciate you.
S10 (42:28):
Well, that was fun, Rob. Thank you.
S1 (42:30):
That's Mark Behler. He's executive editor at Sound Mind Investing.
Visit Sound Mind Investing org. Check out this article The
Wisdom of Warren Buffett. Learn more about being an Smai
member and check out their private client group if you
need investment counsel. We'll see you tomorrow. Faith and Finance
Lives a partnership between Moody Radio and Faith five. Bye bye.
It takes 20 years to build a reputation and five
minutes to ruin it. If you think about that, you'll
do things differently. Hi, I'm Rob West. With those words,
Warren Buffett reminded us that character and integrity matter, especially
in the world of money. Now, after more than 60
years of market shaping moves and famous one liners, Buffett
(00:29):
is calling it a career. Today, Mark Behler joins us
to reflect on his legacy and share what timeless lessons
every investor can learn from it. Then it's on to
your calls at 855 7000. This is faith in finance live,
and we're so glad you're along with us today. Uh,
Mark Bellard joins us today. He's our good friend and
executive editor at Sound Mind Investing. SMI recently ran a
(00:53):
thoughtful article reflecting on Warren Buffett's remarkable investing career. So
today we're taking a closer look at the principles that
designed or excuse me, defined, I should say Buffett's approach,
many of which knowingly or not, reflect biblical wisdom about money,
patience and stewardship. So, Mark, let's start there. First, let
(01:14):
me say hello. Thanks for being with us.
S2 (01:16):
Oh, it's always a pleasure, Rob. Thanks for having me back.
S1 (01:19):
Hey, give us a snapshot of just how successful Buffett
has been over the last 60 years.
S2 (01:25):
Yeah, sure. Rob, it's kind of mind blowing. According to
the Wall Street Journal recently, if you had invested $100
in Buffett's Berkshire Hathaway stock back in 1965, it would
have been worth a mind blowing 5.5 million by the
end of last year. Wow. Now to to contrast that 100,
(01:49):
the same $100 investment in the S&P 500 index would
have grown to $39,000. So 39,000 for the index, 5.5
million for Buffett. It's no wonder that when asked to
name the greatest investor of all time, most people immediately
think of Warren Buffett.
S1 (02:08):
Well, that's exactly right. And those numbers speak for themselves.
You all did this thoughtful article. And by the way, folks,
if you'd like to read it, you'll find it at
Sound Mind investing.org. It's called the Wisdom of Warren Buffett.
But try to put your finger on Mark what Buffett
do differently.
S2 (02:25):
Yeah, there are a few things, Rob, that I'd point to.
You know, the first is Buffett's widely known as a
value investor, which simply means that his specialty was uncovering
these undervalued stocks and businesses. He certainly did that many,
many times. But I think what is sometimes overlooked is
Buffett was also flexible enough to apply his specific value
(02:50):
framework to companies that most people wouldn't think of as
value stocks. A good recent example of that was he
built a huge position in Apple over the last decade.
Now he's recently sold that. But the point is, most
people wouldn't think of Apple as a value stock. That's
a growth tech stock. So he was he was a
(03:11):
flexible investor even though he had these deep value roots. Um,
another one from really early in his career that really
just kind of is a great example of his outside
the box thinking. Was he decided early on that Berkshire
was not to issue dividends? Now, today that's normal. A
lot of companies don't issue dividends. But back in the 1960s,
(03:35):
that was really flouting the conventional orthodoxy and wisdom. Um, but,
you know, it was just a case of Buffett being
willing to be a maverick. He thought that he could
generate better returns for investors by reinvesting profits within the
company and increasing the share value. And boy, was he
(03:55):
right about that. Um, you know, one last one. A
lot of people point to Buffett's patience as a key
to his success. He would famously build these really large
cash positions within his portfolio until the right opportunities would
come along. And a lot of the time, those opportunities
would come when the market was selling off, when we
(04:16):
were in deep bear markets. And that led to one
of Buffett's most famous quotes, which is be fearful when
others are greedy and greedy when others are fearful.
S1 (04:27):
Yeah. A great point there. And that points to the
deeper truth, which is the value of staying disciplined when
others panic. I know that was a hallmark of Buffett's career,
and we could certainly see that time and time again.
We'll get Mark's thoughts on that. Um, you know, while
we can't follow his exact path, we'll ask Mark what
(04:49):
the takeaways are that we can apply to our own
investing decisions. Also, some of those pithy quotes that Buffett
is famous for will unpack a few of those. We'll
also be taking your phone calls here. Mark Biller here today.
So it's a great time to call with your investing
related questions. If you have questions on your portfolio or
(05:09):
perhaps the economy. By the way, a new all time
high on the S&P 500 today. Amazing to see what's
going on in these markets. Hey, the number to call
800 525 7000. That's 800 525 7000. We'll be right back.
Stay with us.
S3 (05:33):
The opinions offered during this program represent the personal or
professional opinions of the participants, given for informational purposes only.
Any information provided is not intended to replace advice from
a financial, medical, legal, or other professional who understands your
specific situation.
S1 (05:57):
We're talking Warren Buffett today, perhaps one of the most
well known and famous investors of all time. He's calling
it a career. That's right. He's hanging it up after
a 60 years as an incredibly successful investor. And boy,
there's so much we can learn from his approach, his discipline.
He's famous for those, uh, annual meetings and the letter
(06:18):
that he wrote each year to his shareholders. Also his
pithy quotes. We'll be sure to unpack a few of
those along the way as well. Mark Miller is here today.
He's executive editor at Sound Mind Investing. You can read
the thoughtful article reflecting on Warren Buffett's remarkable investing career
at Sound Mind Investing. Mark, I mentioned before the break
(06:40):
this really deeper truth that I think is, uh, stems
from the the quote that you mentioned, and that is
the value of staying disciplined when others panic. Um, you know,
what are some of those takeaways that we can apply
to our own investing decisions from Warren Buffett?
S2 (06:59):
Yeah, there are quite a few. Rob, you know, one
of the things that you mentioned right up front today,
I really like the way you said it, about how
Buffett's approach, knowingly or not, reflected biblical wisdom. I think
that's great. Um, you know, I don't I've not seen
anything that makes me think that Buffett is a Christian.
But as a Christian, you know, I look at the
(07:22):
the pillars of his approach, specifically patience and self-control. And
of course, I'm immediately thinking, okay, those are fruits of
the spirit that we should all, as believers, be trying
to cultivate through the activity of the Holy Spirit in
our lives. And so, Christian or not, he was a
good example of some of these things. And, you know,
(07:42):
as we try to be inside out investors, that's a
phrase we use at SMI, trying to let those, um,
those fruits of the spirit, those biblical character qualities, lead
our decision making. It's going to, uh, cause us to
look in some respect at least, uh, like the way
(08:05):
Buffett would invest. So I think there's a lot we
can glean just from that. But like you said, Rob
tons of quotes, tons of material in his meetings and
shareholder letters, um, over the years. And, you know, let's
let's hit a couple of those real quickly. One that I,
I really like was Buffett once said, if you don't
(08:26):
find a way to make money while you sleep, you'll
work until you die, which is that's a tough love
kind of quote. But I it kind of gets the
point across that, um, the earlier you can get started
investing and getting your money working for you, the better.
Buffett made his first stock investments when he was just
(08:48):
11 years old, so he quickly discovered the benefit of
putting money to productive use. Uh, another one I think
that's really insightful that he said was risk comes from
not knowing what you're doing. Now, a lot of times
on our programs together, Rob, we'll have questions that come
in about, you know, investing, being like gambling, that kind
(09:10):
of thing. And certainly there can be some similarities, especially
if people are speculating or day trading. But for investors
who are adhering to these timeless principles, like diversifying their holdings,
keeping their emotions in check, maintaining a long term perspective,
you know, these again, these are all biblical principles. And
(09:34):
so it's true that, like Buffett said, if you know
what you're doing, in other words, if you're putting these
principles into practice. Well, investing in the stock market It
has been many people's best opportunity to build wealth.
S1 (09:49):
Yeah, there's no doubt about that. And the the results
speak for themselves, that's for sure. Uh, Mark Buffett was
also famous for not letting global events dampen his enthusiasm
for investing. Isn't that true?
S2 (10:01):
Yeah, absolutely. He would frequently step up when everybody else
was scared to death. And the depths of the global
financial crisis. In 2008, he penned a really powerful editorial
and I can't remember which newspaper, but really encouraging stuff,
trying to encourage people. Uh, one of his quotes along
(10:22):
those lines was, in the 20th century, the US endured
two world wars and other traumatic and expensive military conflicts
the depression, a dozen or so recessions and financial panics,
oil shocks, epidemics, and the resignation of a disgraced president.
Yet the Dow rose from 66 to 11,500. So the
(10:46):
point being, there's always stuff to worry about. And yet
the market has pretty relentlessly continued to march higher, especially
if you look over a long time frame. Uh, another
related quote for 240 years, it's been a terrible mistake
to bet against America, and now is no time to start. So,
(11:08):
you know, a couple of the consistent themes throughout his
career were this endless optimism about American businesses. And frankly,
he was almost giddy. He had this enthusiasm about the
opportunity to become a part or, in his case, sometimes
a sole owner of some of those businesses through investing.
S1 (11:28):
Yeah. Really interesting. Uh, another thing is that Buffett was
definitely very quotable. Uh, I mean, that's perhaps what he's
most known for. Uh, I'd love for you to share
maybe a couple of those gems that you found researching
the article?
S2 (11:43):
Yeah, sure. There are so many it was hard to
pick and choose honestly, but here are a few of them.
One is games are won by players who focus on
the playing field, not by those whose eyes are glued
to the scoreboard. So in other words, follow your investment
process and let the outcomes take care of themselves. Another
(12:04):
one that I liked was success in investing doesn't correlate
with IQ. What you need is the temperament to control
the urges that get other people into trouble in investing.
He had a related quote. Rob, that was something about
if if all it took was knowledge, the richest people
would all be librarians. Um, but the point of those
(12:27):
quotes is that there there are a lot of risks
that come with the territory of investing, but the biggest
risk for most investors is letting their emotions get the
best of them and guide their decision making. Um, got
time for one more?
S1 (12:42):
Sure. Yeah.
S2 (12:43):
Yeah. Okay, well, how about whether we're talking about socks
or stocks? I like buying quality merchandise when it's marked down.
So pretty ironic, Rob, that stocks are the one thing
that people love to buy more of when they go
up in price, but then become way too afraid to
(13:03):
buy when stock prices decline.
S1 (13:06):
That is so true. And again, one of those discipline based,
rules based approaches to investments, uh, that, uh, made Warren
Buffett famous. This famous. There's no question about it. Well,
if you'd like to learn more, be sure to check
out this article that was penned by our friends at
Sound Mind Investing. You'll find it sound mind investing. Again,
(13:28):
that's sound mind investing. Uh, you'll find it there. It's
titled The Wisdom of Warren Buffett. One more time. Sound
mind investing? Well, we're going to continue to talk about
the life and career of the famous investor Warren Buffett.
Straight ahead. Also, Mark Behler hanging around. He's going to
be answering your calls and questions. We'll head to those
(13:50):
phones right after this break. But if you have a question,
something going on in your investing life, perhaps your portfolio,
you're wondering about the market and the economy, where it
might be headed from here. Today's a great day to call.
Mark will be taking those questions. We've got lines open
so you'll get right through right now 800 525 7000.
(14:11):
Again that's 800 525 7000. After 60 years Warren Buffett
hanging up. What can we learn from him today? Much more.
Straight ahead. Stay with us. The wisdom of Warren Buffett
(14:34):
today with Mark Behler here on Faith and finance live
on Moody Radio. I'm Rob West. We're taking your calls
and questions, specifically questions on investing related topics. You're wondering
about your portfolio. Where might that market be headed from
here after hitting a new all time high today, despite
a lot of challenges out there, here and around the world, uh,
(14:56):
we have fresh highs on the Dow and the S&P 500.
What might that mean for you? Call right now 800
525 7000. Again that's 800 525 7000. Mark Biller taking
those questions today. Let's head to the phones. Juneau, Alaska.
Yu Ming, how can we help?
S4 (15:14):
Rob, thanks for taking my call. This is an investment related,
but I'd like to get some clarification. All right. Financial
advisor suggested that we open a checking account on my
IRA that I can write checks for Qcds on. And
my accountant is suggesting that. No, let the financial advisor
(15:35):
issued those checks out of your IRA, rather than you
writing a check on that account. Which is correct. Can
I do that? Or should I just let the financial
advisor handle the check writing?
S1 (15:47):
Yeah, well, I'll give you my take and we'll get
Mark Miller to weigh in. See if he agrees. You know,
I mean, absolutely. You can. Uh, IRAs with check writing
privileges are a thing. And so every time you write
a check against that IRA, it is a distribution. So
you just need to recognize that. Why would you do that? Well,
because it's primarily for convenience. You just simply write yourself
(16:08):
a check. And no need to call your advisor or
custodian every time you want access to the funds. So
it makes it more flexible. And you absolutely can handle
those RMDs that way as well. Um, you have to recognize,
as I said, every check written is a taxable distribution. Uh,
probably the only downside, unless I'm missing something, is there's
(16:30):
no undoing it. Um, you know, unlike some distributions made
in error. Often they're irreversible. I mean, perhaps you could
get it back within 60 days. And but I think
there's a risk there. And perhaps sometimes it's easier to
lose track of RMD totals or withholdings or, you know,
unintentionally take more out than you expect. Your accountant probably
(16:54):
is preferring a more controlled reportable withdrawal to simplify tax
prep and and avoid mistakes. But other than that, I
can't think of anything. Mark. Your thoughts?
S2 (17:05):
Yeah, I think the only other angle on this is
that specifically for Qcds, those do need to go directly
from the account to the charity without going through your
hands as the IRA holder. And so that would be
one reason, just to keep the safeguard in place of
(17:28):
having the advisor issue those QCD checks directly instead of
you writing them from your IRA. Like Rob said, you
can do it because, you know, think about somebody who
has an IRA but doesn't work with an advisor. Well,
they would be taking care of qcds themselves. So it
can be done. But I think that Rob's idea there
(17:51):
of the safeguard is is absolutely right. And the the
accountant is probably saying this is going to be a
safer setup if we let the advisor just go ahead
and issue those checks. So there's no possibility that it
gets messed up and goes to the individual first and
then to the charity, which can present a problem then
(18:12):
for the QCD being valid.
S1 (18:15):
Does that make sense?
S4 (18:16):
Great, great. Yes, that absolutely makes sense because that's mainly
what we want to do. The check in for is
just to write the qcds, because I've got other funds
to draw on for my personal, you know, living expenses
and that stuff. It's mostly distributed for QCD. So yeah,
that does make sense. And I'd probably go along with
your suggestion to just let the big boys do it.
(18:38):
And that way I'm completely out of the picture, so
to speak.
S1 (18:42):
Absolutely. You mean it's a great question. I appreciate your call.
I will say, you know, I've had a CPA in
here before that says you can actually write a check
from your IRA, make it payable to the 501 C3
because it's not coming to you. It's going directly, you know,
and that is considered a QCD. But I agree with you, Mark. And,
you know, having that cut from the custodian is probably
(19:04):
a little cleaner and maybe avoids some confusion along the way.
But a great question. You mean call any time we
do have some lines open. If you have a question
today for Mark Biller on the markets or investing related topics,
we'd love to hear from you. 800 525 7000 you
can call right now. Um, Mark, any other quotables from
(19:26):
Warren Buffett that we didn't cover?
S2 (19:28):
Oh, boy. Um, I think we hit most of them. Rob. Um,
they're like I said, there are so many, um, that
that one about the librarian always makes me me chuckle.
S1 (19:41):
But yeah, I hear you.
S2 (19:43):
He was a very quotable guy and very generous with
his time. Um, you know, he'd do those annual couple
day conferences with his shareholders and, um, you know, these,
these extensive annual letters that as a writer myself, I'm
a little jealous of because every one of them was seemingly, uh,
an instant masterpiece. Um, you know, he also, in speaking
(20:07):
of his generosity, you know, he's he's pledged to, um,
give 99% of his, his wealth away through his estate
within the first decade after it's settled, uh, to various charities.
So some tangible displays of his generosity there as well. So, yeah,
a yeah, a lot, a lot of things we can
(20:28):
glean from old Mr. Buffett.
S1 (20:30):
Yeah, that's for sure. We're going to be headed back
to the phones here for your questions. And Mark Biller
in just a moment as the the lines are filling
up here. Uh, Mark, what do we know about his
plans for distributing his estate and any generosity that'll be
a part of that?
S2 (20:46):
Yeah. You know, I don't know a whole lot. Honestly, Rob,
about the details. My impression has been that some of
the causes that he's, uh, excited about are not ones
that that I'm excited about. And that's partly why I
said earlier on, you know, I haven't seen a lot
of indication or really any indication that Buffett is a believer. Um,
(21:09):
and yet, even in spite of that, there there are
a lot of biblical principles we can glean from his approach.
S1 (21:16):
Yeah, there's no doubt about that. Check out this article again.
It's called The Wisdom of Warren Buffett. It's sound mind investing. Org.
All right. When we come back, we're going to dive
into your questions. We've got a bunch of them coming
in right now for Mark Biller. If you have an
investing related question, go ahead and call right now 800
525 7000. Again, that's 800 525 7000 more with Marc Biller.
(21:40):
And your questions on the markets and investing. That's straight ahead.
This is faith in finance live I'm Rob West. A
quick break and we'll be right back. One of Warren
(22:03):
Buffett's quotes that Mark Biller mentioned a moment ago for
240 years, it's been a terrible mistake to bet against America,
and now is no time to start. That's particularly appropriate
today when the S&P 500 rises to a new record closing,
boosted by solid earnings and US economic data. Mark, If
(22:24):
I had rattled off everything that would happen in the
first six months of 2025, would you think we'd be
sitting here at a new all time high in July?
S2 (22:34):
Absolutely not. In fact, it's funny you say that, Rob.
I was just working today on an article for our
next issue where I was just detailing everything that happened
just during the second quarter of this year. And I
said almost that you took the words right out of
my mouth. I said, if an investor had known what
(22:54):
would happen between the beginning of April and the end
of June, you know, an investor could certainly be excused
for thinking that stocks would be down 20, 30, 40%. Yeah.
And in fact, to be fair, um, on April 8th,
at the very low for the market, the S&P was
(23:15):
down 21.3% from its February high. But you know we've
seen what's happened since the the rebound has been epic
record breaking in many respects. And here we are inside
of one calendar quarter back at all time highs. Um,
it's been fairly astounding. Yeah.
S1 (23:35):
And there's no doubt that it has. And, uh, who
knows where we're headed from here? It seems like we're
living in fast forward these days. A week is, you know,
a month, and, uh, but nevertheless, that's just the reality
of of where we find ourselves. All right, let's dive
into some phone calls today. Nearly all the lines full.
Lots of questions for Mark Biller today. Who's our guest?
He's executive editor at Sound Mind Investing. Org to Chicago. Hi, Pat.
(23:59):
Go ahead.
S5 (24:01):
Hi. Can you hear me?
S1 (24:03):
Yes, sir.
S5 (24:04):
Okay, so my question is, is now this is kind
of old, but in 2013, um, uh. Oh, boy. Warren
Buffett said that he would advise the person that was
going to take care of his family's money to put 90%
in the S&P and 10% into short term bonds. So
I have two girls and both of them just graduated college,
(24:26):
and they have about 150,000 in the market, and they
are in just the S&P. And the thinking was that
we love the S&P. And the girls got 40 years
until they need the money. And so my question is,
is my plan was to leave it there until it's
a significant amount of money and or another ten years
and then start diversifying. So that is I'm looking for some, uh,
(24:50):
some thoughts on that.
S1 (24:52):
Yeah. Very good Mark.
S2 (24:53):
Yeah, I like it, Pat. Um, you know, this is
one place where Buffett did have a little bit of
a tendency to to kind of have a, um, for thee,
but not for me kind of approach. So he was
kind of famous for, um, telling people that most folks
should just invest in the S&P 500 or in index funds,
(25:18):
where he certainly did not have that approach. He was
a very active investor himself. Um, but that said, I
agree that index investing is the easiest, most straightforward. And
and it's hard to argue against that approach for most investors. Um,
so as far as just being in the S&P 500,
(25:41):
it's good to recognize what is the S&P 500 index.
That is really an index of the largest U.S. companies.
And because of the way that index is constructed, it's
capitalization weighted, which is fancy language for the biggest stocks
in the index make up a a bigger proportion of
(26:05):
the index and the returns than the smaller stocks. And
so what we have today is there are about a
half dozen to a dozen of the very largest US stocks.
You could name them Microsoft, Apple, Amazon, Nvidia, and so
forth that really are a very disproportionate impact on that
(26:29):
S&P 500 index. Nvidia is 7% of the S&P 500
all by itself. Those those top ten make up, I believe,
about somewhere in the 30 to 40% range. So you
just need to know when you're investing in the S&P
500 index that you you're very top heavy. That's probably
(26:50):
the best way to say it Pat. And so there's
nothing wrong with that. And certainly for the last six, seven,
eight years those stocks have been the place to be.
But there are times there are periods. We've seen it
way back in the 1970s with the nifty 50. Similar setup.
We saw it at the end of the 1990s, when
(27:10):
the S&P 500 was up over 20% for five consecutive years,
but then 2000 flipped the calendar, and over the next decade,
the S&P 500 had a negative total return. And so
that would be the argument, Pat, for potentially diversifying at
least a little bit, maybe sooner than that. And the
(27:34):
easiest way I think to do that would be to
add a little bit of international exposure. Um, we did
a program. What? Rob, maybe two months ago that kind
of talked about the, the opportunities, um, in international stocks
and how we've really rarely gone as far to one
(27:54):
side of the boat in terms of U.S. versus the
rest of the world stock markets, in terms of valuations
and so forth. So that might be one thought, Pat.
Very easy. You could keep that in index funds as well.
But you know, I'd I'd be hard pressed to say
if you peeled, you know, 10% or 20% of that
(28:15):
off of the S&P 500 and went into foreign or
international stocks. I have a hard time believing that ten
years from now, you'd really regret that decision, and you
might be really grateful that you added a little diversification
to the mix. Rob, what are your thoughts on all that?
S1 (28:34):
Yeah, well, I couldn't agree more. I'd love your thoughts
on that. Any any questions, Pat? Or does that all
make sense?
S5 (28:42):
Well, yeah. No, it totally makes sense. Obviously in my
portfolio I'm older. I've done that as well. And I
actually did that about nine months ago when it paid
off beautifully. Um, what about just buying more of just
the total market instead of I have a lot of
faith in the US, right. So and maybe buying more
of the total market like starting to buy starting to
(29:03):
have them buy the total market instead of international.
S1 (29:06):
Yeah. Mark.
S2 (29:07):
Yeah. I mean, that's certainly another option that's going to
get you a little further down the the tree into
the mid caps and the small caps. Now you know
that that indexing effect that I was talking about earlier with,
with the tendency for those returns to flow upward into
those larger companies, um, you know, you would have to
(29:30):
have to kind of think what would be the catalyst
to make those smaller companies suddenly start to outperform. But
those cycles, they do go back and forth. So having
some of that exposure certainly isn't a bad idea. We
certainly diversify in our portfolios here at SMI and have
some small cap exposure, so maybe starting to add new
(29:52):
money to a total market would be one way to
start bringing that diversification in. Um, if you didn't want
to go the international route. So yeah, certainly. No, no
problem for me on on that score.
S1 (30:06):
Excellent. Pat, thanks for your call today. Interestingly, Mark, I
was just looking today at the percentage of active managers
outperforming year to date has gradually declined. It's now at
about 48%, so less than half. And that's all. As
the market has rebounded from its April low and reached
this new all time high. It'll be interesting to see
whether that continues. Huh.
S2 (30:28):
Yeah, absolutely. It's been a tough row against that S&P.
It's been a tough bogey.
S1 (30:33):
Yeah no doubt about it. All right. Another break. And
then back with our final segment with Mark Biller. Lots
of great questions coming up Martha in Florida. We're coming
your way after the break. Plus, perhaps your question. 800
525 7000. Mark Biller from Sound Mind Investing, our guest today.
We'll be right back. Great to have you with us
(30:59):
today on Faith and finance live here on Moody Radio.
I'm Rob West with me today. Mark Biller, my good friend,
executive editor at Sound Mind Investing. We've been talking about
the life and career of the famous investor Warren Buffett.
A great, thoughtful article reflecting on his remarkable investing career
is available at Sound Mind Investing. Org. It's a great read.
(31:21):
You'll check it out today. When you head to that website,
just click on the Wisdom of Warren Buffett. All right,
let's get to as many calls as we can here
in this final segment. Uh, let's go to Florida. Martha,
thanks for your patience. Go right ahead.
S6 (31:35):
Uh, yes. Uh. Good afternoon. How are you?
S1 (31:38):
Doing great. Thanks for your call.
S6 (31:39):
Great. Got a question? I have a certain amount of
money in my, um. My 401 K, and I'd like
to do a backdoor Roth, uh, you know, transferring it
back into the Roth account. Uh, I've been doing it
little by little, and I was wondering, is it better
to just go ahead and transfer, uh, like, um, maybe
(32:01):
the whole thing or half and half, because then I
get the the, um, Irma with the Social Security. Yes. Accounts.
It does count as income.
S1 (32:12):
Yes. Yeah. Good. Good point. Mark. Any thoughts on that?
S2 (32:16):
Yeah. Martha, I think the the thing I would look
at is what's the tax implication of that going to be.
And I think that, you know, what you were describing
about doing it little by little. That can be really
advantageous if you are keeping an eye on the tax
bracket and the the increasing tax rate that you would
(32:37):
pay by going up into the next bracket. Um, a
lot of our, um, management clients, you know, that's one
thing that we will do with them is kind of
walk them through how much they can convert each year
in order to stay under the threshold that would kick
them into the next tax bracket. So that would be
(32:58):
the only thing that I would really be looking at
there as far as maybe keeping the break on that
a little bit, just to keep the tax bill down.
Rob any thoughts?
S1 (33:07):
Yeah I think that's exactly right. And so that really
is your next step here Martha, because there's probably a
sweet spot that factors in both the tax bracket of
you converting more in any given year. And what you're
pointing out, which is, is very real. And that is
this Irma threshold as well that's going to kick up,
you know, hundreds of dollars potentially more per month for
(33:30):
Medicare Part B and part D, which doesn't hit until
two years later. But you don't want to get caught
by surprise on that. So I think getting with your
CPA to kind of balance those two in terms of
the tax bracket and then the Irma thresholds, and then
figure out what is that optimal amount to convert in
any given year through the back door.
S6 (33:53):
Okay. Well thank you. Um, now how how long can
you do this? Until what age? If you're 70, can
you do it after 70 or, um, is there a
age where are you?
S7 (34:05):
You're no longer able to do this.
S1 (34:07):
Yeah. And are you talking about specifically the, uh, the
backdoor Roth IRA? Yeah, right. There is no current time
limit or expiration date for doing a backdoor Roth, as
long as it's allowed under the existing law, which it
currently is. Could they do away with it in the future? Yes,
but there is no deadline or age limit.
S6 (34:30):
Okay. Thank you so much.
S1 (34:32):
Okay. We appreciate your call today. Lord bless you. And
thanks for being on the program. Uh, let's go to
Las Cruces, New Mexico. Elliot, how can we help you?
S8 (34:41):
Yes, I'm interested in what you guys think about the
pros and cons of a registered index linked annuity or ryla.
S1 (34:48):
Yeah. Mark.
S2 (34:49):
Boy, um, I'm going to have to plead a little
ignorance on that one. Rob. Your thoughts?
S1 (34:56):
Yeah. So I don't know that I know the specifics
of it. Describe your understanding of that type of annuity. Elliot,
what is is being sold to you?
S8 (35:07):
Well, this one in particular is linked to the S&P
500 index which tracks the movements. Um, and when you
buy the rally, you're not investing in the underlying stocks.
Rather the index just indicates the percentage gain or loss.
So you set a floor, the maximum amount of loss
you're willing to accept. And there's a different crediting periods
(35:32):
you can get for market exposure or downside protection. Yeah.
And just a lot of decisions to be made.
S1 (35:41):
Yeah. Well and it has some of the same kind
of typical things that you would want to consider with
any annuity. And there's all kinds of flavors and varieties.
And you know, you've got to read the fine print
because they tend to be complex. And that's one of
the reasons I don't love them. But essentially this is
blending kind of the features of a fixed indexed annuity
(36:01):
with a variable annuity that offers the market exposure. And
in your case, you're saying it's linked to the S&P
500 with that downside protection. And that's why people buy
them because they like the the potential growth, uh, but
not full participation. Um, with the downside protection. And, you know,
typically you can get tax deferred growth, uh, as well.
(36:24):
And I think you pick a term in terms of
how long it goes. You know, the downside is, um,
you know, you your principal is not guaranteed, uh, there's
complex terms and surrender charges. So, um, you know, it's
subject to market risk within limits. But the biggest issue
is just the limited upside because you've got the caps
(36:45):
and the participation limits. Whereas, you know, I would rather
you have a properly diversified portfolio, take the downside risk,
but get 100% of the upside. But Mark, any other thoughts?
S2 (36:57):
Yeah, that's the biggest thing Rob, is that, you know,
people think, well, if I have a cap, say of 6%
or 8%, that sounds perfectly reasonable. Upside cap. Um, but
the problem is market returns are lumpy. And so you
don't get years typically that go, you know, 9%, 9%, 9%, 9%.
(37:20):
You go, you know, 20%, 4%, -5%, 20%. And when
you hit those big years, if you're capped at, say, 6%,
when the market's up 20, that really alters your long
term return profile. Um, so even though you're cutting off
(37:41):
some of that downside, like you said, Rob, you are
really significantly impairing the upside.
S1 (37:48):
Yeah, it's exactly right. So I think that's the thing
to consider. Elliott, perhaps you visit with a certified Kingdom advisor. Uh,
you could find one at com and at least get, uh,
another approach to consider alongside an insurance product like the
one you're describing. That would probably be my preference, but
at the end of the day, you've got to, you know,
(38:08):
determine what is the best fit for you as the steward.
We appreciate your call today. Thanks for being on the program. Uh,
let's see, we're getting short on time. Let's head to Tampa. Hi, Nancy.
How can we help you?
S9 (38:19):
Hi. Thank you so much for taking my call. Sure.
I'm looking to to invest wisely for, um. I have
12 grandchildren, but the three are very, very special needs.
And I'm worried that, you know, I won't be here forever.
And I know where I'll be. But I worry about
their putting aside long term for them. What's the. Do
(38:41):
you have any words of wisdom or where to look
for information?
S1 (38:45):
Yeah. Good question. Mark your thoughts.
S2 (38:47):
Yeah. Those are are big questions. Um, are the are the,
the the parents of the special needs children. Are they, um,
are they knowledgeable about investments and and and handling investment
accounts and that sort of thing?
S9 (39:07):
Um, they've had some, you know, a financial classes. Yes. But.
S2 (39:13):
Yeah.
S9 (39:13):
Okay, good. Um.
S2 (39:15):
Well, I guess a lot of that, Nancy, is going
to depend on the timing of the, the money. And
when you think that that money is really going to
be needed for their care, um, to the extent that
this is for further down the road, of course, we
can invest with a little bit more risk, a little
more aggressively using some maybe stock market oriented investments, to
the extent that that money is going to be needed sooner,
(39:38):
then we don't want to take a whole lot of
risk with that, want to invest that more conservatively. Um,
that's a starting point. Rob, any general thoughts there?
S1 (39:49):
Yeah. I mean, I think you're exactly right. And I
love the way you're thinking through this. Uh, you know,
first there's the 529 able account. And that allows individuals
with disabilities to save and invest up to 18,000 a year.
And the key is it doesn't jeopardize your government benefits.
And then it grows tax free, kind of like a Roth.
And then usually that's paired with a special needs trust,
(40:12):
which is not an investment itself, but can hold investments
and then provide that long term financial support again without
disqualifying them for benefits. And those are usually for larger inheritance,
inheritances or to hold assets. A key difference is control
that the trust is managed by a trustee, while the
(40:34):
able account is usually owned by the beneficiary of their
garden guardian. So, you know, what I would do is
get with a, if you haven't already, a special needs
planning attorney and a certified Kingdom advisor to help you
structure a plan that meets both the the legal and
the financial needs. You know, for your grandchildren while honoring
your desire to provide for them. And then, you know,
(40:56):
I think the advisor wants the legal pieces are in place,
could work through it with you to determine what is
the right investment mix, just given the time horizon that's there,
to make sure they have the cash that's needed or
the appropriate time. But that for that portion where there
is a longer time horizon, you know, that can be
working for you and, um, you know, growing, uh, for
(41:19):
the future. So, Nancy, I hope that helps you. We appreciate, uh,
your call today. And we do have an advisor who's
kind of a part of the the faith and finance family,
if you will, that, um, has a child with special
needs and really specializes as an advisor in that type
of planning. And so if you're looking for somebody, um,
(41:41):
you know, who can bring that level of competency, uh,
feel free to hang on the line. And our team
will get your information and and get you connected. But
we appreciate your call today. Uh, Mark Biller, uh, Any
final thoughts? Put a bow on our conversation today about
the wisdom of Warren Buffett before we let you go.
S2 (41:58):
Yeah, well, I think, you know, one of the last
quote from Buffett really will do the trick here. He
said investing is a lifelong journey. Stay disciplined, keep learning,
and never stray from the principles that have built enduring wealth.
That's probably a good way to to end it today.
S1 (42:16):
There's no doubt about that. Excellent, Mark. Listen. Always love
when you're here, my friend. Thanks for your godly counsel
and and insightful perspectives on the markets and so much more.
We appreciate you.
S10 (42:28):
Well, that was fun, Rob. Thank you.
S1 (42:30):
That's Mark Behler. He's executive editor at Sound Mind Investing.
Visit Sound Mind Investing org. Check out this article The
Wisdom of Warren Buffett. Learn more about being an Smai
member and check out their private client group if you
need investment counsel. We'll see you tomorrow. Faith and Finance
Lives a partnership between Moody Radio and Faith five. Bye bye.
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