John Coleman: This is John Coleman and welcome back to the Faith Driven Investor podcast. We’re recording this just one day after the Faith Driven Investor conference this year. It was an incredible time. I know much of the content will become available over the coming days and weeks, and so we’d encourage you to dig in. And it was an encouragement to me, as always, just about the variety of different faith driven investing trends that are going on around the world. Hearing from our global colleagues in places like Africa was amazing and it was a really restorative time, so I’d encourage folks to dig in and catch up on some of that content, if you can, in the broader markets. It’s been it’s been a pretty wild time. We thought we had some volatility dampening and that normalcy might be returning. And instead, the last few weeks have been extraordinarily volatile in markets with a number of different topics breaking. Fortunately, as always, for our Marks on the Market series, we have a few very smart investors who are going to come talk us through that volatility, talk us through what they’re seeing in markets and offer perspectives on how we might navigate those markets. Well, first joining us is Benji Bailey. Benji is the vice president of investments and senior fixed income manager for Praxis Mutual Funds. And Everence Financial, he’s been in the business for 20 years or so, managing fixed income instruments, etc., and is just an extraordinary guy on those topics. Brian McClard is the director of investments and head of the Investment Strategies Group at Ronald Blue Trust Company, which obviously manages a variety of different institutional and retail clients. And Brian is in markets every day thinking about a variety of asset classes and brings a great perspective. And then we have Justin Speer, who’s a principal and senior analyst with Sovereign’s Capital, helping to lead the public equities team at sovereigns, having just recently developed the first public equities fund there. So gentlemen, thanks so much for coming today and talking to us through this.

Brian McClard: Pleasure to be here.

John Coleman: Benji, I’m going to start with you. Just to put you on the hot seat. You live in the fixed income markets, obviously, in addition to other markets. And one of the big pieces of information over the last couple of weeks was the recent Fed’s meeting and Fed’s announcements. What did you think of the most recent Federal Reserve announcement and interest rate increases? And what do you think the impact is going to continue to be on financial markets?

Benjamin Bailey: Yeah, so the Federal Reserve has a mandate. Some people call it a dual mandate. It’s really three things. One is maximum employment, the other stable prices, and then moderate long term interest rates. And at this point, though, they’re kind of viewing their entire goal, get inflation in check and they pretty much have nothing else in their mind. I kind of think of it. It’s kind of like a young kid or actually really me that likes to order ice cream and doesn’t really think about anything else whatsoever until they get that ice cream cone. That’s kind of where they’re at this point. But they seem to be using the playbook that they’ve had back from the eighties. They don’t have lots of different things that they can do, but they do have the Fed funds increases or they have decreases. And they keep talking about how important it is to lower inflation. So making those Fed funds increases and talking about it, the combination of those things is really what they’re trying to do to give people comfort that they’re very serious about inflation. So I don’t want to get too deep into this kind of bond nerd area necessarily, but when you think about where we’re at now, so we’re at a 3 to 3 in a quarter Fed funds rate, the market’s pricing in moves that are higher. But just because they’re pricing in another one and a half percent move, that doesn’t necessarily mean that long term interest rates have to move up another one and a half percent. Their more recent moves are really going to be a bigger deal for like your money market account, maybe your savings account. So a lot of these things that they’re already priced in, so they raise it one and a half more percent than really interest rates are kind of where they need to be at this point. But if the market get surprised and maybe inflation stays higher, you know, then they could move it up a little bit more. So the good thing is, you know, that we’ve actually have, you know, higher rates for savers. So that’s really a positive thing. And we have a lot of kind of this negativity already baked into the fixed income market.

John Coleman: That’s super helpful, Benji. And I do want to circle back to more bond nerd stuff in just a moment with how you’re thinking about those markets. And I definitely empathize with the fixation on ice cream. It feels like we get along on that crime. Before we dig into that too deeply, though, Brian, I was hoping to pitch it over to you. Obviously, there’s been a lot of volatility in public markets, both as a result of the Fed announcement, as well as maybe some other compounding factors. What are you seeing in public markets right now and what do you think has driven the decline over the last couple of weeks?

Brian McClard: And, of course, has been a volatile market the entire year. And really with this latest downturn from August, I think we’ve seen something like a 15% sell off in the S&P alone. So this last quarter has been enough volatility for a full year, even though it’s only been the last couple of months. But believe it or not, it’s really been because of some demonstrated economic resilience. We’ve had inflation be a little bit stubborn to come down maybe, and I don’t know if we’ll get into that or not, but because of those things, the Fed has really just reiterated their their idea that they’re going to keep at it raising rates. Just kind of as Benjamin was mentioning, you know, until inflation softens. And so you’ve had the situation where good news is bad news. And that means what’s happening is the market’s trying to stay ahead of the Fed, and that’s what you’re seeing in prices.

John Coleman: That’s helpful. And, Justin, maybe I’ll come over to you on that front. Are we reaching a bottom? I mean, we have seen these precipitous declines building on losses earlier in the year. Now, when is the bottom? I mean, do you think we have more room to fall? And what are you looking to figure out if we’ve reached the trough?

Justin Speer: You know, they don’t want to come out and say that I know where the bottom is going to be expressed. But I think it comes down to answering this question. It’s going to come down to whether or not we’re heading toward a hard landing or a soft landing. And I believe the market right now is pricing in in the equity markets something closer to a soft landing scenario today. And I’ll talk about that in a minute. But just to kind of retrace where we are, the market is back to the recent low that it achieved on June 16th. So the market from its peak in January. And I when I say the market, the Russell 3000, the broad U.S. market is down 25% from the peak that it achieved in early January. So just for perspective, that’s the fifth worst decline from a market peak since 1990. We’ve had, in addition to this, seven other bear markets since 1990. This is the fifth worst in historically. So you think about 105 days on where we’re literally as of yesterday, right on top of the low, we just retraced back to that low 105 days from that bottom in mid-June, and we achieved that 25% decline. The market historically, if we had bottomed, is up closer to 30% on average, 105 days off of a bottom. And we’re currently flat because of inflation globally being higher and stickier than the market expected, which means policymakers, as Benji was talking about, need to push harder and longer on removing the excess liquidity from the global system. So what we seen we see an interest rate spike, I mean, a dramatic spike like the speed to which this move has taken place. We have not seen in a very long time in terms of absolute stuff like this, the fastest year over year increase since the early nineties, but also a much lower base. So it’s a big move in rates. The yield curve turned negative for the first time since 2007. So when I look at twos versus tens, it’s negative. From the first time since 2007, business conditions are cooling and the dollar has raised higher against all other currencies. So postively the labor environment has been extremely tight and consumer confidence is held up and spending is held up pretty well outside of housing, which has collapsed to below pre-pandemic levels. But the bond market and the stock market are telling us that the labor environment, in my opinion, is about to face some headwinds. So we’ll see how consumer spending holds up. But ultimately, the pullback in the market has certainly been anticipating some of this. So let’s pull back to what we’ve been thinking about. As we’ve known, this is going to be coming to a certain extent, this removal of liquidity and excess stimulus. But I believe that most of the sell off has merely just removed a chunk of the post-pandemic froth in the S&P 500 multiple. You know, so if we think about the sell off, it’s been painful, but it doesn’t appear that the market is pricing in a deep recession here. The multiple right now and the S&P 500 is really approximating the 20 year average on forward estimates. And I think that those estimates are probably at risk of being revised lower because I look to 2023. So literally, I think what we have, we had a big party and we had $7 trillion of stimulus shoved in our pockets and free money and it led to the multiple going up to 22, 23, 24 times as recently as last year. And so all we’ve done is remove that froth. The multiple is literally on top of its 20 year average now. But a big question for me as I kind of think about this that remains elusive is how much consensus analyst board expectations for earnings will need to be revised lower in the coming quarters amid a slowing in demand. The lagged filter through that continues of accelerating cost inflation. That’s going to work its way into the P&L, into the margin structures of these companies. So I expect that the upcoming earnings seasons will continue to provide some answers on that front. So estimates have come down about 3% on 2023 estimates. And as we consider the removal of stimulus, we’ve done that back of the envelope. Just removing that stimulus, assuming that the pandemic never happened, I think we probably have another 10 to 15% risk to earnings estimates. Some of these estimates, I think, are embedding the idea that stimulus is going to go on forever. And we just don’t see that. Obviously, we’re going to see the opposite. So the debate we face today as we wrap this up is if policymakers can remove stimulus, camp down inflation without creating a hard landing scenario and it’s not […], we don’t know. I think that’s the real debate. But we don’t have to look far back in history to see other periods of extreme excess and how long it took for the market to break the tech wreck. And the early 2000 consisted of two painful pullbacks in the market. From August 2000 through September 2001, about 385 days, the market fell 36% peak to trough and it recovered. But then it fell back again. In May 2002 to October 2002, it fell another 30%. And then in the Great Recession, the housing bubble that corrected it took the market about 500 days to work without peak the trough, and that was a 55% correction. So that’s the question. Can we get out of this excess liquidity? Can policymakers globally do it without creating a hard landing or can we get through a soft landing scenario? And I think that’s the major question for all of us.

John Coleman: So I want to pause right here maybe and just reflect on that. And Brian and Benji turn to you all just for your perspectives, because I know this is top of mind for everyone. Reflecting on what Justin just said. What are your thoughts? Do you see the world in the same way? Do you think we’re actually nearer a trough than that? What are your perspectives on what’s left in the volatility and public equity markets right now?

Brian McClard: Yeah, I thought that was a great analysis that Justin laid out. You know, the drawdown this year, primarily valuation related in our minds because of, as you mentioned, the sharp readjustment of the discount rate. When you look at P/E right now, they’re really commensurate with where Treasury yields are. And you’re not seeing corporate spreads blow out either. And so in our minds, recession risk is not priced in right now. So if you have a recession, we believe there’s more pain to come if you don’t have a recession. You know what? We actually could probably be near the bottom.

Benjamin Bailey: Yeah. And for me, kind of just being on the bonds side, I almost feel like I should say I’m sorry or something from the beginning of the year just because, you know, like the dividend discount models and those types of things, that’s when interest rates started to go up and people are like, Oh my goodness. Well, if I have these, you know, high tech companies and they have earnings out multiple, multiple years, then it’s one thing if interest rates are at 1%, but something much different if they’re out three and a half percent. But yeah, I mean, there’s certainly a lot of negativity that’s baked in at this point. But certainly, I mean, it doesn’t seem like all of it is necessarily baked in.

John Coleman: Benji, I want to kind of pause with you for a moment and think about bond prices, about debt investments right now generally. You know, I’ve thought back to my childhood when you could get a certificate of deposit that would yield 7% or you could put money in a savings account and get a few percent. And there are a lot of people now who have never experienced that effectively since 2007, 2008. There’s no real return on cash at all. And some of these instruments, like CDs, have just become almost nonexistent. As you look at this environment right now, certainly this year, bond prices have been highly volatile as well. How do you think about approaching debt markets right now, where there are opportunities and where there are great risks in your mind?

Benjamin Bailey: Yeah, I mean, I mentioned a little bit about being sorry. And I think, you know, part of this is generally bonds have kind of played this diversification where it’s just been they haven’t played that role so far this year. I mean, in the 44 year history of the Bloomberg Aggregate Index, every time that stock returns have been negative, you know, bond returns have been at least flat or slightly positive. And they haven’t done that so far this year. But I also think I mean, at this point, they’re also offering really good value. Right. So the yield on that, Bloomberg Aggregate, and just as a reminder, that’s kind of like the S&P 500 for the fixed income markets and that yield is right now at 4.7%. So almost 5%. It hasn’t even been this high since 2008. And that was obviously during the Great Recession. And so and total returns for bonds, they’ve kind of have two main components in that. The one part is an income return or kind of the coupon or yield, and the other part is the price return that you get. So we started the year with just such low rates, it was about 1.7%. And that means that over a 12 month period, your income return would be, you know, that 1.7%. But since interest rates have gone up about 3%, right, that 1.7 up to the 4.7, that means that, you know, you’ve gotten your income return of 1.7 or a little more because interest rates have been going up. But that’s not nearly enough, you know, really to overcome these negative price returns that we’ve had of about -16%. So the net total return kind of net net gives you in this 13% area. But I think the good part, and again, while I’m excited about this, is that the math works a lot differently now. So interest rates go up a little bit more. Yeah, you can have a slightly negative return over the next 12 months, but with interest rates is high at almost 5%, you’re in a much better balance kind of between your positive scenarios versus your negative scenarios. And certainly things can get worse. I’m a bond guy, so I can always think of bad things that can possibly happen, no doubt. But, you know, if they stay solid or kind of I mean, even if they would actually have interest rates, it would fall a little bit. You would have your yield of about 5% and maybe even a little bit of positive price returns. I think, you know, big picture, this is actually a really good time for savers.

John Coleman: That’s really, really helpful. Brian, I want to back out from the U.S. markets for just a moment and look internationally, particularly at our friends across the Atlantic in the United Kingdom. You know, recently there was a new British government that came into power. They announced a new tax cuts, which I think the markets viewed as potentially inflationary. And then the Bank of England announced some actions. And there was a ton of volatility overseas. I think at one point the pound actually dropped to near parity with the dollar, which has never been the case before. What’s your perspective on what’s happening in the U.K. right now and any overflow impacts that U.S. investors can expect to see from that?

Brian McClard: That’s a great question, actually. And as you mentioned, for those who didn’t hear the whole situation, whenever the new government announces big tax cuts, they were the largest in 50 years and they were going to be deficit financed. And that was really concerning, I think, to the market because they viewed it as fiscally irresponsible and so they lost confidence. That’s what kind of caused the sell off in the currency. And of course, the rates rose. But a big piece of that that came up was the fact that the pension fund industry is so large in the U.K. is about 120% of GDP by some estimates. And because of the way they structure their investments, in essence, what it means is that when interest rates rise precipitously, they receive margin calls which require them to post collateral, which means they have to sell assets which causes a spiral. So the Bank of England had to step in and defend its currency, in other words, to keep it from going down and to also drive rates back down again and just really reestablish kind of an orderly market. So the reason why that’s important is because that’s essentially put them on the opposite course where central banks have been doing around the world. Right. Because everyone’s been tightening in order to fight inflation. Now it looks like the U.K. is going the other way. And so, you know, they’re wanting are you going to be able to fight inflation? Are you just going to exacerbate it and make it worse? And I think during times of stress, during times where liquidity is flowing out, I think you’re going to see these types of tests on the financial plumbing come to bear a lot more. So it’s very normal from that perspective to stress as the system stretches to to stress, test it and see what breaks. There’s speculative attacks even from folks who are trying to find opportunities. They are they we can see can we profit from there? And you know what? The U.K. isn’t the only one going through this. It’s just they’re the ones who are maybe showing a little bit more severe cracks at this moment. I mean, the Bank of Japan had to intervene to defend their currency. China’s talking about it. And so this is a normal part of this environment. And you’re going to see this. This is more of a liquidity issue in my mind, that it is a solvency issue. Yeah, we’ve got big long term debt issues on public balance sheets around the world and it has to be reconciled with that. I don’t believe they’re going to be reconciled in this way and in this time. So for the time being, I feel like, you know, there’s a little bit of a hiccup and things return to normal and then we’re good again.

John Coleman: Yeah, it’s certainly interesting. Oh, go ahead, Benji.

Benjamin Bailey: I am just going to jump in real quick. Just to say, I mean, a couple of bonds that I thought were just it was pretty wild what happened in the last few days. And they’re like the United Kingdom in their 30 years bond in one day went up 100 basis points or 1%, meaning like the price return on that was negative almost 20% in one single day. And then the next day. Then, of course, then, you know, they decided that they needed to jump in and it fell back about 1%. But just think about extreme volatility. When you own those long term bonds, you know, fall 19% and go up 19%. It is shocking what happened.

Justin Speer: Yeah, I think it just shows in these moments where you’re trying to fight inflation, pull back on liquidity, there’s opportunities for mistakes and policy mismatch that create this more risks. And so it’s something that I think every asset class we all just have to be mindful of and just be prepared for and take advantage of.

John Coleman: And this is in some ways the most complex economic environment that any of us have operated through. Right. I mean, if you think about just the U.S. market, this combination of inflation and recessionary pressures in this kind of mix hasn’t happened since the late seventies, early eighties. And then you throw in on top of that this process of de-globalization for probably the first time in many decades. The overseas risks with Ukraine and other economic moves by central banks around the world. There is just a ton of complexity here that makes it difficult, I think, to sort out which of those different factors is going to weigh the most on markets, right? Like what is actually going to win out in the prices of these different instruments?

Brian McClard: What in a brewing long term question as well that we’ve not seen in our lifetime is just the level of indebtedness that exists globally with these governments and we don’t know how that resolves. So that’s a big question.

John Coleman: Yeah, 100% right, Brian. I mean, the levels of data around the world are consistently higher, at least in the developed world than they’ve been at any point in history, to my knowledge. I mean, coming out of world wars, some of the major powers obviously had a heavy degree of indebtedness. But this kind of consistent structural indebtedness in the developed world is a relatively recent phenomenon. And, you know, we were told for a while by experts to not worry about it too much. But I think in environments like this, you start to worry about it. And interest payments on the debt become really concerning actually in this type of environment. I want to zero in on one specific aspect of that and then maybe pull out and ask you guys for a little optimism before we move to that. Justin, the inflation question has come up again and again throughout this question. Maybe you could lead us off, but I’d welcome other comments with the Fed’s actions. Do you think we’re actually getting close to taming inflation, or is there still a lot of work to go? And is the Fed going to be capable of doing it on its own, or are the actions of the US federal government going to play a meaningful part there as well?

Justin Speer: Well, in terms of, you know, are we near taming? I do believe we are going to tame. I think there’s blunt instruments, but there are tools in the arsenal of policymakers that if we don’t, it’s because we made a mistake. But I believe so. And we’ve already started to see some of the embers of that. The shift hiring rates have already catalyzed a big contraction in domestic housing activity that’s ultimately going to cool inflationary pressures in the housing component of CPI. We’ve also seen oil in a broader basket of commodities sliding sequentially, which implies less year over year headwinds on the horizon for producers of goods. In the next 3 to 6 months, the yield curve has inverted, which suggests the market is bracing for a slowdown or even a contraction in the economy. And so ultimately, I think going to result in a rise in the unemployment rate, slow wage growth. And I really think that’s the goal of the Fed is to do that, but do it without causing a hard landing. That’s the delicate balance. But lastly, just looking at tips and maybe, Benji, you could talk about this, but looking at tips, the break even spread on the five year treasuries. I pulled it up last night. So the five year treasuries less the five year tips is implying about 2.4% inflation on average over the next five years, while that spread has been subsiding after peaking at over three in April. So it tells you that the bond market is telling you that they believe eventually we’re going in front of this and ahead of this. But what does it mean in terms of just this inflation, the impact of inflation in the coming year? What’s the impact? Big picture for companies, I think there’s different constituents to consider. But for companies in a weak demand environment and I’m thinking anything with volumes below 2%, so I’m actually going to see volume fall negative. I believe in certain areas of the economy. It’s extremely difficult to deal with inflation if you’re a company, just a traditional industrial company, big picture, weak demand, inflation coming through your P&L, very difficult to pass that on. You don’t get volume leverage and it’s very difficult to pass prices on to your customers in that kind of an environment. The other thing that’s happened is because of COVID and one of the big reasons for the inflation is we’ve had not just stimulus, but we’ve had supply chain disruptions that have been a function of COVID and absenteeism, but also government benefits that have incentivized people to stay at home. And so there’s that, too. But all these pictures of, I think, some of that element, that tension within the labor force is alleviating demand. Slowing is going to alleviate some of the supply chains. And that’s going to help. I think on the inflationary front, the big picture, it’s very difficult for these companies to deal with it. And we may see with risks to margins higher, we may see that lead to companies laying off folks, reducing wages, in other instances finding innovative ways to become more productive, which is something that we’ll be looking for for households. It’s just tough. It’s tough for us middle class folks. It’s tough for the middle class and lower income wage earners. We have to continue to respond by adjusting our spending and for our family, last week it was ribeye and this week it’s tuna fish, and next week it may be dog food. And my dog does not like sharing, you know, so we have to make adjustments. But also it’s very tough. And for policymakers, this is a major ballot issue. You know, for them it’s more of a what we’ve already seen the pressure on them to respond. And there’s potential for policy mistakes that we saw like we saw this week or perception of policy mistakes anyway, in these scenarios or policy mismatch from central bankers and governments like we’ve seen. And for us though, at Sovereigns like we want to see companies responding for the rank and file for the people serving their people, their team members, they’re going to be opportunities to serve in this environment. And our desire really is to see leaders and companies offering programs to help their employees cope with this environment. It’s a big challenge. It’s also a big opportunity to serve and point people to Christ.

John Coleman: That’s great. Brian, Benji Any difference of opinion on the inflationary front?

Brian McClard: I thought that was a great analysis. I think in terms of a framework maybe of how we kind of view it look pre 2019, the Fed was not able to get inflation essentially above 2%. Right now, suddenly we’re at 8%. So it’s kind of like, okay, what happened? Well, obviously, we believe some of the culprits are really that fiscal and monetary injection. So filling a $2 trillion hole with $10 trillion. Right. That extra 8 trillion has to go somewhere. So because of that, though, we view that that it’s temporary kind of adjust and was alluding to but how temporary just the two questions and the two questions are how fast and how far. In other words, how far does it go from 8% now to 2% where it was before or some, which is, by the way, the Fed’s target for inflation, or does it in somewhere a little bit above 2%? And the how far kind of relates to what’s changed and how fast kind of relates to what’s sticky, what’s sticky right now and what needs to change there. But it is suffice to say, I think there are some sticky items that make it a little bit slower. I think there’s a couple of things that have changed. Inflation comes down mostly, but maybe not all the way. Long term drivers like the debt issue we talked about the aging demographics and just really the continued productivity enhancements. I think the long term forces will still be inexorably lower from that standpoint.

John Coleman: Well, let me include some of the market commentary, and then I want to switch to more faith driven components of this, just how you all are thinking about managing clients, for example, and faith driven impacts. But I do want to end on a positive note. So maybe around the horns, starting with Benji. Give me one thing you’re optimistic about, Benji. You’ve probably been the most optimistic given that you are in some of the bond markets right now. But give me one thing you’re optimistic about in investing right now.

Benjamin Bailey: Yeah, well, I mean, I really do like the higher yields. I mentioned that before. But I do think to just the math, which I think the math is a little cleaner in terms of bonds and you think about yield. And when they go higher, that’s kind of your future returns. But I still think stock prices, yeah, we could go a little bit lower, but in the whole scheme of things is, you know, we had such high PE ratios and that meant future returns are going to be pretty low. And so this kind of adjustment back to, you know, sadly the E is going a little bit lower. Not obviously the price is going quite a bit lower. But I mean, I see this as a positive just kind of all around in that your basic 60-40 like 60 stock 40 bonds portfolio really has a better outlook than what it would have had a year ago or certainly two years ago. So that to me is a good positive.

John Coleman: Brian, what do you think something you’re optimistic about in investments?

Brian McClard: Okay. So Benji took my number one, which is the yield that but you know what? That shows that how important it is that there is yield again. And so I think that’s important. But let me throw out my second choice that I would throw out there is the fact that these economic woes that we have out there, that we’re facing, they’re known. And believe it or not, I’m almost scared to say it. But the fact that we’re close to crisis levels in some cases, like with energy in Europe and some of these things, because what that means historically, what we observe is that crisis brings opportunity right, you hear necessity is the mother of all invention and is during those times whenever we know the issues and then we can come together, we can solve them and we can have a better and more robust future. And so I’m very optimistic that our standpoint you can look at example after example, historically Asian debt crisis, 97 and 98. You know, it was painful, but it’s led to a lot more resilient economies with better policies for the most part, and improving, just as one example. And so very excited about what’s going to come out the other side of this painful time.

John Coleman: Justin. Round us out.

Justin Speer: Yeah. So, you know, shameless plug for the firm here at Sovereign. You know, our mission is to love God and love our neighbor through investing. And that mission really stays true irrespective of market environment. We have a dual mandate for our public equity platform and goal of generating returns, at least in line with the broader benchmark market. And secondly, striving for a deeper spiritual integration within the companies who we come alongside and engage them and leaders and who invest sharing best practices, putting them in a community with other like minded CEOs. So on the performance side of the ledger, yeah, I mean, you in a career, you don’t get many of these opportunities. You know these are pretty rare and an opportunity to serve our clients and put them in some pretty compelling opportunities. We’re actually starting to see it, particularly in smallcap growth realm, seeing some really interesting opportunities there already. Companies whose stocks have just been smashed disproportionately and in some cases it’s just merely a liquidity event. You’re calling a rally. What’s going on? There’s no news. It’s a hedge fund selling out. Oh, well, this is a great opportunity. So there are opportunities for longer term investors in a long term, and there’s going to be some mismatch in strategies. A lot of hedge funds are short term focus, we are long term focused. So they may be making the right move now, but in the long run, it may not be a good move for us. That’s an opportunity that can emerge for our clients in the long run. But also really important on the other side is the right opportunities for us in an already has to serve and support these leaders of these companies who are facing a lot of pressure right now. Not just performance but there’s also some political things that they’re dealing with. Sorry about that. In the long run.

John Coleman: That is one of Justin’s company calling, he get good counsel.

Justin Speer: I know I asked for a stock pick over here and I but this is giving us opportunities to share best practices, commune with them, and hopefully God can make a difference for them and our clients in these periods of volatility and interaction. So it’s actually accelerated some relationships for us that are really important. Part of our process.

Brian McClard: I love it.

Brian McClard: That’s really good. Justin and Justin is kind of talking to what we think of as positive spiritual integration in public equity markets in addition to our alongside what people conventionally think of negative screening, which is how do you positively influence or engage companies? You know, Benji, one of the things we’ve had less time to dig into is this idea of how to do that in fixed income markets. Right. And it does look a little bit different, I think, than equity holdings. How do you approach this idea of faith integration in fixed income markets?

Benjamin Bailey: Yeah. So I mean, what we do at the Praxis Mutual Fund, we call it Stewardship Investing. So we’re thinking about being stewards not only of the money and having appropriate returns, but obviously they’re God’s resources in the end. So we want to be stewards of that and I think it is quite a bit different in a lot of ways between equities and bonds, and it can be somewhat partial, but equity investors, they can buy stocks and they can be invested in community or creation benefiting type things. But I think in the fixed income markets we’re really offered a unique opportunity. So an example, earlier this year we bought a bond, has a government guarantee, so it’s quite safe, got a little extra yield than what you would with the US Treasury and all that money is going to supply clean water and good sanitation for 5 million people in Southeast Asian and Africa. So our yield was the same as other similar response, but we were literally enabling people to get water that they wouldn’t have gotten before. Matthew 25:35, says, So I was thirsty and you gave me something to drink, right? So and talk about making an impact on someone’s life. And we did do this in a mutual fund that people are able to buy, that they’re buying, you know, for a retirement or saving for their kids college fund. But talk about just making a direct impact on someone making that difference, and you can do it in your bond fund. So I think that’s an exciting thing that, you know, Bonds can offer that real direct impact.

John Coleman: And I love that. That’s an awesome word, Brian, maybe to round out. And we’re going to circle back to everyone on the question we like to in the podcast on which is what are you learning right now through Scripture that you want to share with others? Before we do that? Brian, obviously, you’re in touch every day with a number of investors, right, with individuals who are trying to weather these markets. How do you and your colleagues just think about helping individual clients, whether these markets right now and what kind of counsel are you providing them?

Brian McClard: Yeah, that’s a good question. That’s really at the heart of what we do, isn’t it? Because no one enjoys these types of markets. But, you know, the fact of the matter is, these markets are part and parcel of the investing experience. And we really believe the reason why the vast majority of our clients are really in a good place, even during this uncertain time, is because we really try hard to tie the investment portfolios directly back to the client’s financial plan. And and more specifically, I would say to the time horizon of when the client needs their money so that they can feel comfortable that their goals aren’t in jeopardy during these kind of uncertain periods. And so that’s one really critical part of it. And I know it’s human nature to worry during these times that I still think it’s okay to worry during these times because it points directly back to that plan because, you know, one wise person said, if you worry, then you don’t have to worry. Right. And the meaning is, is that if you’re worried, then you’re prepared, you’re doing something about it. And I would add to that, it’s not what keeps you up at night that you should be concerned with, but it’s what wakes you from a dead sleep. Right? And so that’s the importance and that’s the value of the plan. You know, these rough seas, they’re just a normal and expected part of the journey, but you never really reach your destination unless you leave the port. And so that’s what we’re here to do with our clients.

John Coleman: It’s really great, Brian, to conclude, as we maybe offer some counsel to everybody out there. We do want to start on a spiritual topic and Justin, we’ll start with you, maybe just a couple of minutes apiece. What are you learning through scripture right now that you want to share with others?

Justin Speer: No at the firm here for about a year now. And I’m just learning the power of culture and the power of servant leadership and what that can do for any organization, for not just companies, but my household, for families, for governments, for business. It’s a really powerful model that was founded by Jesus Christ. And I’m just reminded of Mark, chapter ten, verse 44, where Jesus is teaching all of us, teaching his disciples who had a heart problem about being the greatest. He says, Whoever desires to be greatest among you, you need to be slave of all, servant of all, for even the son of man did not come to be served, but to serve and for Jesus. It wasn’t just words. It was really powerful actions that demonstrated that he really meant it. And for me, I want to be great in his eyes. And it’s a real powerful reminder. But we’re finding companies with what we call level five leadership, […] level five leaders, who is humble, passion about their business. But we’re finding these incredible leaders who are trying to honor God and running a business, loving on their employees, creating these incredible cultures in a time where it’s really hard to attract and retain talent. These companies have a bit of a competitive advantage I think in all different stripes of industries and sectors. I’m just it’s really powerful to learn that. And I’ve been in the game a long time. I’ve been doing it for 20 years, investing now, come to work with my lunch pal, my little BCF, and get in front of these leaders and talk to them about what, you know, what are we going to see in the next year or two? Never really talk about culture that’s so powerful. A lot of that goes into generating these great businesses that generate good returns for their employees. But I’m learning on time and I’m just thankful for the opportunity learn. And it’s making me hopefully a better person because when you read these passages, you know, sometimes I tend to think about other people. But really I need to be thinking, master, is that I mean, are you trying to tell me something? And so that’s one and one more is just first Timothy 6:6 when Paul says, you know for godliness with contentment is great game and these types of environments, be godly, be content in whatever circumstance we happen to be in great game, not necessarily in this life, but in life to come. And it’s it’s a good reminder for me these types of times.

John Coleman: Benji, what’s on your mind?

Benjamin Bailey: Yeah. So I think that God’s been working with me on as am I looking for peace in difficult times of life, or am I looking for peace as in like calm, tranquility in my life that really just isn’t going to be there. So our church is doing this series. It just finished it up on an is titled Flourish and a lady shared her struggles with cancer and just really sad things that she went through. And she read a verse as Isaiah 26 three and it said, You will keep in perfect peace all who trust in you and all whose thoughts are fixed on you. You know, so interesting, though, when I think of that, though, when I hear that and I think so God wasn’t even offering her peace like calm, peaceful ocean, no waves. You really instead he is offering her this peace that even during this rotten thing that she was going through, that her body was going through, that he was going to be giving her that peace. And I think sometimes I want that kind of calm, peaceful ocean, you know, just kind of laying out there. And I get frustrated when things get hectic or they’re busy and stressful, but God isn’t offering me kids that are do exactly as I say. That would be fun at certain points. That doesn’t seem to work out many times, but or really a job that doesn’t have stress. Right. Because he wants to be that peace even when my life is in tumult. Right. So I need to be reminded of that because otherwise, I mean, I don’t even know why I want that, because the stress free life isn’t even what I should desire in the first place, because I really just want to make a difference. I want to make an impact. And when you’re doing that, I really need God to be that peace for me, even while I am, you know, probably ruffling feathers here or there or doing things that make my kids frustrated or whatever it might be. But really that he can be that peace for me when my thoughts are fixed on God. So that was an important thing that I needed to relearn, I guess.

John Coleman: Why don’t you wrap this up, Brian?

Brian McClard: Yeah. So, Benji, that’s a great truth. I tell you, it seems like peace is something that this entire culture is looking for and is just not finding. I read some headlines somewhere that said that they were recommending that all adults under the age of 65 be mandatorily tested for anxiety because peace has been so elusive. And we’re actually going through a study right now and the Holy Spirit has been fantastic. In First Corinthians two, it says that we understand the spiritual truths that are freely given us by God through the Holy Spirit. So in other words, we think about wisdom and peace and patience. It says not with human wisdom, because the natural person does not understand the things of the Spirit of God, because they are spiritually discerned, right? Not through our flesh. And so I think about how day in and day out, especially today, right? We have so many gifts, so many abilities, so many tools, so many resources. We have Google at our fingertips. And so it’s so easy to try and reason our way through life, to muscle our way through the challenging problems of the day. But it is critical that we are walking. In fact, I’m saying this to myself, that I’m walking in the spirit and not relying on my own power in order to find wisdom and peace and patience. Right. And which, of course, not only yields spiritual benefits, but physical benefits as well.

John Coleman: Guys, this is a fantastic discussion. Those are great words to end on. Again, we’ve got Benji Bailey from Praxis Mutual Funds, Brian McClard from Ronald Blue Trust and Justin Speer from Sovereign’s Capital. We’re grateful for your time, guys, and we hope that you’ll come back to the FDI podcast again sometime soon. Thank you.

Justin Speer: Thank you all.

Brian McClard: Thanks, guys.

John Coleman: Welcome back to the Faith Driven Investor podcast. We have a very special episode for you today. This is John Coleman and I am joined by two legends of the faith driven investing movement. Ron Blue is here with us today as well as Henry Kaestner. And we’re celebrating the launch of the Faith Driven Investor book, which has come out now and is available over electronic copy. It’s launching soon in hard copy. And we’re just so pleased that the book is out there that so many people have been able to tell their stories and that both Ron and Henry can talk to us about the launch today. Those of you who are listeners of Faith Driven podcast generally will know my business partner, Henry Kaestner. Henry, co-founded Sovereign’s Capital. He co-founded Bandwidth, co-founded Faith Driven Investor and Faith Driven Entrepreneur, and has really been an encouragement to so many of us. He’s one of the reasons I got into this industry and has helped so many others get activated. And of course, Ron Blue has been at the center of some of the most important institutions in the faith driven investing world. The founder of Ronald Blue Trust, one of the founders of the National Christian Foundation of Kingdom Advisors, and such a counselor to so many other folks. And so we’re really privileged to have both of you join today. Thank you for coming on.

Henry Kaestner: Thank you, John. I think that’s if he call it a legend alongside Ron Blue is very deserving of a chuckle. I’m anything but that, but Ron is indeed that. And so it’s a great honor to be on this episode, to talk about the book. And then for somebody like Ron Blue to spend time with us, both with the book and on today’s podcast is a great honor.

Ron Blue: Well, you’re very kind, but you let me tell the truth. So thank you. I appreciate that. And the reason you become a legend is you don’t have a long time. I’m 80 years old. So have you just said this ten years ago? I wouldn’t be a legend, but today I am maybe.

John Coleman: Well, thank you both for being here. And maybe just to kick off Henry, I know this is the second book in a series of books on Faith Driven. The first was Faith Driven Entrepreneur. Maybe just to start with, what made you want to try and pull together folks around a Faith Driven Investor book and tell us what your hope is for the book?

Henry Kaestner: We really enjoyed the Faith Driven Entrepreneur book that we put together, and one of the things that was great about it was that I did get an opportunity to share a bit about the way that God had worked through bandwidth, through David and I. But we also had J.D. Greer write some of the chapters and Chip Ingram, write some of the chapters, and Lecrae wrote the foreword, and it was a great joy to work on this is a team of four and I wanted to double down on that. I thought as we look at something like faith driven investing with the complexity that’s involved in stewarding the resources that God has entrust us with across market return investments, concessionary return investments or patient capital. And then on the third end of the spectrum, of course, philanthropy and giving, there’s a lot there is also a lot of history there. And if we want to be able to tell the story the right way and I still think that there’s so much more of the story to be taught, but if we wanted to be able to approach it the right way, it would be most beneficial for the movement and for our readers if they could hear lots of different perspectives from people who are really experts in the space. And some of those people are experts in the world of finance and investing. Ron Blue Of course, being a great example and others like Finny Kuruvilla and it will be McKinsey, Cathie Wood, Will Thomas, Ofosu Jumo, just the list goes on and we’ve got I guess maybe 15 people worked on this project, but also people like Tim Keller and Andy Crouch, who ostensibly when you look at it, you want to think of them as being finance experts, and yet they are experts in culture and identity, spiritual formation and discipleship. And so we wanted to get their voices into a really important project.

John Coleman: That’s fantastic. Henry And maybe dive into that a little bit deeper, because I think as you approach the book, you note that this is not just about sin screens, although that may be okay. It’s not just about negative screens. This is about a more comprehensive look at what it means to invest with faith aligned values. What does that mean for you and why is this a different contribution to the literature on this subject?

Henry Kaestner: Great question. So I think it is core of the book and the core of all of our lives is this desire to know God and enjoy him forever. And what we wanted to convey in the book is a lot of practical advice about how we might go about doing that with the investments that God has entrusted us with. But to start that off on this formation of the two principles that really guide our Faith Driven Entrepreneur and Faith Driven Investor movement, which is number one, is to receive the gift of the gospel, a new and even deeper level to be reminded of the God who loves us so much that sent His son at great cost to reconcile us to him and allow us to steep in that where we are as disciples, but then also where God has us in the marketplace as entrepreneurs and investors. And then to accept the invitation. To participate in the work that God is doing in his kingdom, to have a different sense of what God might have in store for us and His Kingdom as it is brought about on Earth, as it is in Heaven under His power for His glory, and just the joy that comes along with that. So we know that there’s great utility in having practical advice and wisdom, but we wanted to steep it again. A new in a gospel and kingdom message and then to build off of that with some concepts of, okay, so how do you bridge the discipleship, the gospel through to markets? Well, how do we think differently about risk? How in a world in which there’s been some great work done on making sure that we know about the products we invest in and how to avoid investing in so-called sin stocks, things like gambling and adult entertainment, etc. But how are we known for what we’re for? How can we have our investing that reflects the image of the Creator? God, how do we redefine return? What does that look like? How do we find beauty in broken things? How do we, as I said before, think differently about risk? How do we do it in community? God create us in community. The temptation, especially with wealth, is that wealth isolates. How can we invest well in a way that rewards those we invest in in ourselves and community? How do we think about partnerships and then really looking at this concept of point from one pocket? And I mentioned this before, we want to be able to look at investing in this newer, holistic level, which is, okay, we have these financial resources that God has entrusted us with. How might He have us deploy those assets to participate in the work he’s doing, but then to deploy them with market rate return when it’s called for it, when the opportunity or the cause that we see calls for market rate return, because that’s oftentimes the best way to be able to deploy capital. Sometimes it’s patient or concessionary. And then let’s bring giving and philanthropy into the equation as we’re really investing not just for financial return for ourselves, but like in the parable of sowers, we’re investing for eternity here. And so I think that when we get up to heaven, it’s not going to necessarily be this key distinction of what our investment portfolios did or what our philanthropic portfolios did, but just holistically, how do we deploy capital? So how can we look at that? And that’s one of the reasons why we have so many authors, because that’s a complicated question and dynamic. We wanted lots of people to speak into that.

John Coleman: Ron, I want to turn to you, if that’s okay. I mean, you’ve thought as deeply and as long about faith driven investing is probably anyone on the planet. Maybe you could just reflect on some of what Henry said and your own understanding what the Scripture tells us about investing and what our calling as investors is with relation to our faith.

Ron Blue: Well, Henry just used a word that I wrote down because I didn’t want to miss it. And that was think. Okay. We think differently as believers than those who aren’t, because our thinking is Holy Spirit driven, God’s word as our source. And so we think differently. And I like to illustrate faith based investing and faith based finances. And when I speak and I hold up the Wall Street Journal and I said, Now here’s the best of the best that comes out on a daily basis. But when I look at it and I say now, however, the date on this is April 20, 2021. Now. How relevant is it today? And the answer is, it may be there may be some things that are relevant, but I’ve got to read this every day, and it may or may not be relevant for some length of time. And then I hold my Bible and I say, this was written 3000 years ago, and it never changes. And I, I take the Wall Street Journal then, and I put it inside the Bible, and I say, this is faith based finances. And faith based investing is applying God’s wisdom to the best of the professional world. And it looks different when you make wisdom based decisions. You need the knowledge. No question about that. But that alone will not necessarily give you the right thinking on investments. And you know what’s really interesting Colossians 2 versus two and three, say for in Christ are hidden all the treasures of wisdom and knowledge. Isn’t that interesting? That is my answer to what is faith based investing. It is applying God’s wisdom to the Holy Spirit and His Word to the best that there could possibly be out there in the professional world. So I look at a guy like Henry who’s been incredibly successful in the investing world. Now, a lot of people have been really, really good in the investing world. And I think if any, you know, one of the brightest guys that any of us would ever want to meet or Jerry Bowyer or Bob Dole or a lot of the people that are out there are the best of the best. But you know that they begin their day talking to the Lord. And God then can work through them, through the day. And I know I’ve experienced and I’m sure you have to, John and Henry, but I’ve gone into a meeting with someone and I prayed for wisdom. And I go in there and something happens. I’ll ask a question that I did not plan on asking or make a comment that I did not plan on making. And I’ll say, Wow, God was at work. And I’ve walked out. And I said, That was one of the best questions I’ve ever asked. And I knew it didn’t come from me. It wasn’t mine. So that to me is the combining of the wisdom and the knowledge. So I’m combining two languages into one and making my decisions on that basis. That’s the way I would think about it. The other thing I would think about, Henry said something else about eternity, and I was asked a question by a really successful investment guy a couple of weeks ago, and he said, I’m getting ready to have a meeting tomorrow with a client. And he’s really concerned about this economy. And this morning at coffee, I was asked by somebody, what’s the stock market going to do? You’re a financial expert. And I said, Well, let me answer it this way. I said, Some of my friends think it’s going to go up. Some of my friends think it’s going to go down. And I’m for my friends. So we don’t know, of course. But anyway, I was answering this question about how do I talk to this person? And I say, What is your client a believer? And he said, Yes. And I said, okay. Number one, I would ask him, So have you sold? And if the answer is no, and then I say, Well, then you haven’t lost any money yet. And that’s where people make a mistake. They tend to think it’s kind of like buying a house. Markets go up, markets go down. And that and I said, secondly, if you’ve planned well, you’ve planned for the ups and downs. I mean, that’s a part of the economy. And we know that we live in a fallen world and markets are going to go down. I’ve lived 80 years. I’ve seen a lot of markets, a lot of crashes. But then the third thing that I say, and it’s coming back to what Henry said in terms of eternity, I said to this adviser, I said, you know, if the person believes that God owns it all, then he hasn’t lost anything yet. Yeah, it’s God’s. Yeah. And God has a right. And it changes my perspective if I think of it that way. I think God is I’m doing this, I’m investing. And you said it already that God entrusted me with these resources and they are going to go up and go down in terms of the investments that I do. They don’t always go up. And if he owns it, I can’t lose it.

Henry Kaestner: Yes. One thing I want to add in and, John, that I should have mentioned before about the book, because this is so important, because it underpins the movement, is that while in the book you’ll see great examples about public markets investing in private investing and real estate investing, etc.. What undergirds all of this is the concept of hard posture, which is this movement is not meant to be prescriptive or presumptuous. It’s an invitation for us all to get down on our knees with our spouses or with our investment committees and ask God how we might steward the capital that He has entrusted us with. It’s an opportunity to commune with the living God, and that’s something that’s really, really powerful. And so it’s not meant to be this big yoke around. It’s like, Oh my goodness, guys, give me this money. And it is just if I make this mistake. No, no, no, no. God wants us to be faithful and obedient. Yes. But he’s invited us into something greater, which is just being with him in our 9 to 5 job to include the money that we invest. And it’s a beautiful thing, but it’s not meant to be a negative thing. Like, don’t do this, don’t do that. Or if you don’t invest this way, it’s going to be bad. Or, you know, you can get down on your knees with your spouse. And the answer may be from God to invest in solar farms in Nevada desert. Somebody else may get down on their knees and the answer may be to invest in an emerging market. It’s in developing entrepreneurs. There is somebody else. Real estate. There’s no answer other than to seek God in his wisdom.

John Coleman: When did this first hit home for you, Henry? With regards to both entrepreneurship and investing, I know it’s been some time, but do you remember that moment where this hit home for you?

Henry Kaestner: Well, when I was running bandwidth with David, I had a verse. It was printed on my computer to remind me not to. Every hour, check out the latest going on in the sports world at the espn.com, which was effectively. To whom much is given. Much is expected. And effectively, if you don’t deliver, you’re going to be beaten with many blows. It was meant to keep me focused, and there is a performance mentality that I had about my job and then the investments I had, which is I’m going to be held accountable at the end of time about all the things I thought and did. And my view of God was so much different than it is now. It was an incomplete and I think a false version of God. Now, while all those things are in Scripture, the totality of Scripture is an invitation to the life that is fully life. And the fact that we are actually participants in what we pray for every day, that God’s kingdom would come about on Earth as is in Heaven. And I can’t remember exactly when it happened, but there is a transition from me believing that I was earning my own salvation to one where I finally realized I couldn’t I couldn’t do it, couldn’t do it under my own power. And it brought me deeper into the gospel. And actually a big pivotal point for me both in my entrepreneurship and my investing, is when I met a really good friend of mine and Ron’s when I was 38. So I came to faith at 28. At 38, I met this guy named Daryl Heald. Kimberly and I were given maybe 20% at the time, Bandwith was doing well, given 20%. I thought there’s probably a special place in heaven for the double tithe. I don’t know what we’re getting, but it’s coming to us. Right. And he asked me this question that sent me reeling, which is. Henry, why do you give. Why do you give? And I don’t know what my answer was at the time, and he doesn’t either. We’ve become great friends, but it’s probably theologically seem like something along the lines of, I don’t want to pay it forward. I don’t even know. But it seemed that everything that happened in my scripture reading over the next six months, it had to do something with money. Wow. Even the ones that even the passages that didn’t. So things like God taken five loaves and two fish from that boy and feeding 5000. And I realized that he had all of that boy’s heart, but he had 20% of mine. Ron mentioned something a little bit ago about the concept of God owning it all. When I came to understand that and I came to understand he actually didn’t need me to advance his kingdom, but he invited me into it is a gift and it’s not a burden, but it’s an invitation to something much bigger. It completely changed my world and gave me a sense of a God who loves me and wants something better for me in my vocation and in my investments. And a countercultural view as I came to understand that God owned it all in a way that freed me up. To have more joy is just you can only see that in God’s economy. So that’s what it happened for me. Thanks for asking.

John Coleman: And this holds a special place for me because, you know, when I came to the industries, God led me into faith driven investing. But he used a guy named Henry Kaestner and another guy named Luke Roush who really exposed me to this. And it’s exactly that authenticity and passion, I think, Henry, that were first attracted to me. I want to turn back to Ron momentarily. But Henry, what do you hope people reading this book leave with? What are the kind of two or three things that you hope as people read this book that they really come away with?

Henry Kaestner: Just this deeper realization of the God who loves them and just an invitation to participate in the work he’s doing in the world that will give them more, more joy. And in doing it and community being a part of the story that he is working in our backyards, across real estate, across private equity, public equity, and then also overseas. He’s got something beautiful in store for us and the gifts that he’s asked us to store and he’s given them to us because he wants them to be a tool to bring us closer to him. And if people can come away from this with a different view and a fuller view of the loving God, that’s a win. If people can come away from this and do nothing other than getting down on their knees again and just say, God, I now I think I understand the financial assets you’ve entrusted with me more. Direct my steps. Help me to understand. That’s the big win.

John Coleman: That’s a good word. And I know we’ve all talked about how we can’t earn our way to heaven, but I have heard that you can get a leg up if you leave a five star review on Amazon or your favorite review site or purchase more than ten copies. And I have heard that that makes a difference. Correct me if I’m wrong. And so, Ron, we’ve heard from Henry what he hopes people take away from the book is you think about your own contribution, which was, as you touched on earlier, being attuned to God’s word in the course of investing. Or if you’re in financial life, what is it that you hope people really take from your contribution to the book?

Ron Blue: Well, I think that the most significant question we referred to it a couple of times, but that is who owns it. You know, and until you answer that question, you’re not a steward. And when you answer that question, it changes everything. Because money transcends all of life. So if we just look at money being investments are being how I spend my money, if God owns it all, my decision making is different. And I believe that, you know, your checkbook reveals your spirituality. It is one objective measurement of spirituality. So what I would hope people take away from it is that God owns it all and He gives you all the wisdom you need when you need it to think right about what you’re doing, be in investing or whatever. So that question I guess the second question, John, would be Hebrews 13:5. I used to say this until you set a finish line. You’ll never stop accumulating. There’s nothing wrong with accumulating, but accumulating for what? And then when you have a finish line, it allows you to go beyond even in your giving. We helped a lot of people in our firm give away, a lot of money, but they had to set a finish line first and then they understood that the rest of it was really excess. And it’s okay to have it. It’s okay to have wealth. There’s nothing wrong with that. But the people who give major amounts away have set a finish line. And I come back to the question, how much is enough? And the answers in the Bible, Hebrews 13:5. It says, Be content with what you have. And so I believe this, that if if you’re not content with what you have, you’ll never be content with what you don’t have yet. And I think we fight a real battle today against greed because it is so prevalent in this affluent society that we live in. So I would like for people to come away asking the right question, because you don’t ask the right question. You never get the right answer. Who owns it? How much is enough? Are you content? That would be my hope.

John Coleman: Ron, one of the things we’ve heard from Henry and from so many others is how you’ve inspired them in the area of faith driven investing, of managing your capital in a way that’s aligned with faith as you think about your own career in life. Who have you looked to as an inspiration in that world of people? Obviously, the Scripture very much so. But are there people who have really encouraged you on that path, or are there people you look to today who you think are innovating and are really helping us to move this idea of faith driven financial management or investing forward?

Ron Blue: Well, yes, kind of in the past and in the future, I was really, really fortunate, I think, in that when I became a believer in 1974, I was in a discipleship group. Within a week, and discipleship, especially one on one discipleship is pretty rare today. And that’s really unfortunate because we need that accountability. We need that direction. You know, the guy that was discipling me, he and I were getting on an elevator, a five story building, and we stepped on the elevator and the doors closed. The elevator was full. And he said, Ron, tell me what you think of Jesus Christ. And, you know, I muttered and stuttered and so forth. And we got off on the fifth floor and he said, I wanted to just to teach you the value of a 10 seconds testimony.

John Coleman: Wow.

Ron Blue: I’ve never forgotten that, of course. And that was 50 years ago, probably now. And he stayed a mentor of mine throughout his life. He died not too long ago. In fact, the three people that impacted me the most, he was one. Dr. Howard Hendricks from Dallas Seminary, was a person in his generation who may have done about as much for the kingdom as anybody. But I called Hendricks all the time. He had the ability to take a concept or a thought and put an end to saying, for example, he said, You don’t know whether you’ve been a successful parent, until your children have raised their children. Well, that gives you a whole different perspective on raising kids. He also said, never forget it. He said, You know, if you want to find out how important you are, you should put your fist in a bucket of water, take it out and see what kind of impression you left. He had the ability to say things like that. And so I quote Hendricks a lot when I speak, and he meant a lot to me. And then the third person that had a real impact in my life was Dr. Bill Bright, the founder of Campus Crusade. I was on the Campus Crusade board for about 25 years, and I stayed on that board because he gave me eight days a year ago, right? And Bill was a man of faith. Incredible faith. If there was ever a problem, I call him one time. And I said, I got a real problem, Bill. I need some help. And I told him of my problems and he said, Wow, what an opportunity to trust God. And that was. Bill. He was famous for saying that because that was his life and the way he lived his life. So Dr. Bright taught me a lot about faith. He taught me a lot about leadership. He taught me a lot about vision. There is no greater visionary. He taught me a lot about leadership. He let people lead. You know, I think of the ministries that came out of Campus Crusade with the Jesus film and athletes in action and family life radio and on and on and on and on. 50,000 staff around the world. It was such a privilege to have a world perspective and to be in the shadow of such a man of faith. So I’ve been a very, very blessed man, John. You’ve gotten to know a lot of leaders and see those that succeeded and seen those that failed. And I tell you, quite frankly, my concern right now is that we’ve in the Christian world, we’ve become somewhat of a celebrity culture. And that’s scary because that is really hard to handle. Celebrity. I wouldn’t consider myself a celebrity, but I’ve done a lot of speaking and I just I discipline myself when anybody complimented me on a speech or thought or whatever. I never denied it. But in my heart I said, thank you, God, because God did. And I just am concerned that I would become a celebrity culture in the Christian world. And so the humble man of faith is rare. Now, frankly, I consider Henry to be one of those guys and a guy like Bob Dole that I know really well in the investment world, same thing. I don’t know much more humble man than Bob. So there are examples out there, hugely successful people who have humility and we need it. It scares me when people become famous. Whether they can handle it or not.

John Coleman: When we’ve seen so many instances where that’s gone wrong recently and you’re right. You know, it feels to me there’s a careful balance to strike in the sense that God does raise up men and women to do his work, to do great things. He’s done that since biblical times. At the same time, with that profile comes risks, right? With the elevation comes risk. And how people manage that with humility is such an important part of their legacy because it’s so easy for that to go wrong. And you’re right, it does seem to me that humility is the key component that keeps people from going off track, right? The ability to credit credit where it’s due to know that it’s not about them and to constantly remind themselves that they’re on a mission and that that mission is not their own advancement, it’s not their own celebrity. And to never become too enamored with that, because we know that’s all ephemeral. Right. And that we’re really serving something much higher.

Ron Blue: Well, and frankly, in the faith driven investing world. You’ve got a real opportunity there to help people understand. I would say the perspective of wealth and why God gives you wealth. And I believe he gives you a wealth to use. Maybe it’s giving and maybe it’s investing. From a spiritual standpoint, there’s no difference because God owns it all. Okay, so you’re using his resources to accomplish his purposes and people respect those that are experts in the investment world. So there’s an authority there that has been given to Faith Driven Investor and Faith driven entrepreneurs and needs to be handled with terrific humility because it’s a gift. Okay. It is a gift.

John Coleman: That’s right.

Ron Blue: I consider myself one of the most blessed men in the world because I know so many really good people and I’ve seen so many faithful people. So I’m pleased that you considered me to write a part of the book and be a part of what you’re doing.

John Coleman: One that’s Ron. I can say this because I am not a contributor to the book. It is an exceptional group of people. And and you’re right. I mean, there are so many really bright voices in the space right now. There are a number of incredibly smart, incredibly capable, but also incredibly humble people like Kathy, like Finney, like yourself, like Rob, like my partners, Luke and Henry, who I think are really advancing this work in a meaningful way and also avoiding many of the trappings that you described. And I know that we all are incredibly grateful that you chose to be a part of the book, but much more importantly than that, that you’ve chosen to build a career in this area and that you’ve chosen to really advance the ball through Ronald Blue Trust, through NCF, through Kingdom Advisors, through your other efforts in a way that’s inspired so many others. So we’re really grateful to have you on today, Ron, to talk about this.

Ron Blue: I consider it a privilege. John, thanks for asking me.

John Coleman: And I would be remiss if I didn’t end the show by just reiterating the Faith Driven Investing book is out now, an electronic copy. There will be hard copies available in January of 2023. It’s from Tyndale and if you go to Faith Driven Investor dot org right now and register for one of the Faith Driven Investor Foundation groups launching in January. If you’re one of the first 200, you will get a free copy of the book. So there is a great deal if you’re going to do that. We encourage everybody to check it out. There are wonderful contributions by Ron and Henry and others, and we’re so grateful to you for listening to us today. Thank you.

John Coleman: Welcome back to the Faith Driven Investor podcast. This is John Coleman and I am very privileged today to be joined by the State Treasurer of Kentucky, Allison Ball. Treasurer Ball has had a remarkable career dating back to when she was a kid and had a startup and has long lived in financial markets and she has held a number of posts over time, including as the youngest statewide officer in her state for a period of time, the first statewide officer to give birth while in office, I think at one point, which we can dig into and a number of other things. So we’re very privileged to have Allison joining us today. Allison, thanks so much for being on the podcast.

Allison Ball: John Thank you. But I’ll even make this sound even a little bit cooler. I was the youngest woman in the country to serve in a statewide elected office, and I was that for about three years. It’s one of those positions, you know, you’re not going to hold forever. Someone else at some point will be younger than you. But for about three years, I was the youngest woman in the country to hold a statewide elected office.

John Coleman: That is unreal. And when was that? When did you come to statewide elected office?

Allison Ball: So I got elected. I ran in 15, sworn in in 16. So a few years back, but not real long ago. And like I said, for three years I was the youngest one. There are a few younger now, not very many. There was a woman in Missouri who came in a little bit younger than me. And then there was a woman in Michigan who was like three months younger than I am. So I’m still in the young stage when it comes to statewide elected officials.

John Coleman: That’s amazing, Allison. And what a cool witness to other people, too, just to encourage other women in their offices, other people, I mean, to be able to take up big responsibilities early.

Allison Ball: Thank you. I hope so.

John Coleman: Well, where I want to start today, you know, Allison, a lot of folks just won’t be familiar with what a state treasurer does. And obviously, you’ve done the role for some time now. Talk us through what a state treasurer does. How do you spend your day and what are you focused on?

Allison Ball: Sure. Well, I’ll talk to you about my office, because there’s a saying among state treasurers, and it’s kind of funny to think that we have a saying, but we do. And the saying is, if you’ve seen one State Treasurer’s office, you’ve seen one State Treasurer’s office, it’s because there’s a lot of variety. They all have similarities, obviously they all touch on money, most of them do something with investments. So there’s just a variety of ways that those skills are used in Kentucky. I always describe myself as the watchdog of taxpayer dollars, and I’m actually an attorney by background. So I like to emphasize that part because I say that whatever comes out of my office is in line with the Constitution, in line with the law that it’s correct. So it’s not just a bookkeeping role. It actually has an aggressive oversight role as well. So in the background of everything I do, I’m that watchdog of taxpayer dollars. Everything I do deals with money in some way. I deal with our banking relationship. I deal with the IRS on the point person for those entities. And I also do deal with our investments. I sit on our teachers retirement system. It is a board. Most of these are actually run by boards. I chair the State Investment Commission, which does our cash management or debt management, a variety of other things like that. And I’ve been a big proponent of financial literacy, so I brought that to this office that did not exist prior to me being Treasurer. And then one of my favorite things to talk about, I’m going to mention this because this is true in a lot of treasurers offices. If you know this, you want to check this in your own state. I’m in charge of what’s called unclaimed property in Kentucky, and it’s basically a statewide lost and found. Most states have these most states have them run by the treasurer’s office. This is worth you checking on whoever is listening to this. You may have some money that you don’t know about and it is a great thing to talk about it. Thanksgiving her parties is a neat way to be able to make yourself memorable to people because you may find somebody some money. So we actually are part of a national database called Missing Money.com. You can go to our website and see if you got Kentucky money, but if you check missing money.com, that’s a bunch of states put together and you can see if you’ve lost money in Florida or your home state or wherever. And my job is to get people their property back. It’s a privilege to do it. I love doing it. I’m a big believer in property rights. Some states are more interested in keeping that money because they can utilize it while it’s in the state coffers. But it’s been my guidance. My motivation is that I’ve always tried to get the money back, so I’ve returned more money than any other treasurer in Kentucky history, returned about $146 million. So that’s a fun piece of trivia that a lot of people don’t know about, about Treasurer’s offices. But it’s true for most of them, it’s true for mine. So that’s kind of a gambit, a quick gambit of what I do. There’s a few other things of interest. I run a program called Stable Kentucky, and they’re able accounts, their savings and investment accounts for people with disabilities. And that’s something that I brought on while I was treasurer and and a few other things here and there we can talk about. I’m also a big believer in transparency and I watch the transparency website so people could see where their money is going. Coming from the financial sector, I actually was a bankruptcy attorney before being treasurer. I realized how important it is. You can’t make good financial decisions unless you know where your money’s going. And that’s true at the state level, not just in the individual level or business level. So that was one of the things I pushed for when I came into office. So that’s a quick overview of things that are happening in the Kentucky State Treasury. There’s some similarities in other states, but, you know, that’s what’s happening here.

John Coleman: That’s amazing. I didn’t realize the diversity of things that are going on and I kind of want to talk about all of them. I wish we had four or 5 hours today just to start digging in, you gave us some sense of this with the lost property at $146 million. States are managing a lot more in terms of the banking relationships, financial transactions, pools of assets like the cash. You mentioned retirement plans than people think. I think people just don’t think about the pools of assets that are in their states. Would you mind just giving us a little more detail on that? What are those pools and how big are they and what difference does that make to the residents of your states?

Allison Ball: Sure. Well, there are different pools, and of course, they’re in the billions of dollars. And that’s the case all over the country in different states. There are some states, North Carolina is one where their state treasurer is the sole fiduciary of all of their pension systems. So he makes all of the decisions. That’s one end of the spectrum. Everything goes through him. I think even our insurance, if I recall correctly, actually goes for him too. So he has a heavy weight of responsibility on his shoulders. He does a good job, but he’s the one person who’s making those decisions for most of us. We have a team of people. The responsibility is shared. And I’ll tell you, I’ve heard I think it was the 1980s. Once upon a time, a lot of decisions were left to the Treasurer once upon a time, and there was a Treasurer who had figured out how to. This was for the State Investment Commission, so for cash management purposes was actually dividing up among different Kentucky banks and there were some kickbacks involved. So once upon a time they realized that that was probably not a great idea to have one person unless, you’re very confident in that one person. So in Kentucky, that was shifted to a board. So most of my responsibilities, I sit on a board, among others. But most of the time I am the one elected official, so I’m the one who is representing the people as a whole, which I think gives me a pretty powerful voice to represent what we want and just good long term thinking.

John Coleman: And how big? Like the teacher pension plan. What does that look like in Kentucky and how many teachers is that taking care of?

Allison Ball: Sure. So I’ll tell you, one of our great challenges for our teacher retirement system has been we’ve had a very high unfunded liability for a long time. So when I came in office, I knew this was going to be an issue that I was going to have to think a lot about. Right now, it’s about 57% funded, which doesn’t sound great, but actually it’s better than most of the other funds in Kentucky. So that’s our good one. But that’s meant that it’s required some real long term thinking about that particular program. There’s a variety of reasons of why it ended up where it was at. Some of it was political. You had governors and you had members of our state legislature who, instead of wanting to put money into the program, they wanted to use it for things that just had more immediate returns. And that’s always kind of a risk when you’ve got political people involved in things so that they can get more favor and more votes if they’re doing something quickly with money rather than long term. And for the whole time that I’ve been in office, there’s been a much more serious commitment to making sure that the money is that is needed in that program is in there. So that has stem the tide. We’re not bleeding out. Money like that has been going on for decades. It actually was just very unsound for a long time. There really weren’t a lot of actuarial studies done on it, and it was just a quick way to get favor. So they were taking money and just not thinking long term with it. Our state government workers pension, which I actually don’t sit on and I’m running for state auditor right now and the auditor actually has an oversight role for all of our pension systems. So I’m eager to be involved in that. But our state workers is about 15, 17% funded. So that tells you kind of the gamut of where we are. That one has become pretty much a pay as you go. It’s on a much better footing than it was when I got here, because there’s a long term plan and there’s a commitment to make sure the money is there. But that has been in crisis mode for a while, and Kentucky is just going to be a long term commitment to make sure that we’re just careful with it.

John Coleman: That’s amazing. I mean, it is incredible. As you look around the country, there are billions of dollars in these plans. You’re taking care of tens of thousands, often state employees, teachers, folks that people want to support. You know, your normal person out there really wants teachers to have a good retirement. That’s what they signed up for and they want to make sure they’re funded. And yet these pension plans, as you noted, have often been historically at least mismanaged or used for the wrong purposes and therefore been underfunded. One way that people have sought to correct for that is their investment strategies and those. How do you think about investments broadly? I guess in those types of pools of assets? And I know the pools are quite different because you mentioned there’s cash management, which is obviously one thing. These pensions will often have very diversified investment profiles. How do you think about that and what, if any, role as the Treasurer do you play in thinking about those asset allocation strategies to help make sure that the funding increases for those programs?

Allison Ball: Well, one thing that actually is good about the teachers retirement system is that the strategies weren’t bad, so that wasn’t the problem. We’ve actually always gotten pretty good returns. We’re getting good returns now. They’re definitely long term investments. They’re cautious investments. The one for the state employees has had different people at the helm a different time. So strategies have changed quickly from one administration. To another, and that causes problems. Obviously, if you’re talking about long term investments, if you’re changing your strategies, quite often, that takes a toll. And that has there were some efforts on that one to be involved in hedge funds that became very politically unpopular. And the teachers retirement system has actually never invested in hedge funds. And that’s one of those you get what you pay for kind of a thing. But there’s a lot of political disfavor towards that type of an investment. You know, whether rightly or wrongly, people just have an impression of it in the public. And that’s not something the teachers have done. So the teachers, one actually has been pretty good. We get pretty good returns. Definitely think about long term. You know, it is pretty diversified. You know, we do invest in some private equity. So there’s a variety of investments of that program. But I think that what you always have to be careful with is you can’t take great risks with this type of a program. You really have to be in it for the long term. And that’s something that we remind ourselves right now as we’re watching the market behave the way that it’s behaving. You know, we’re in it for the long term. And how are we doing? I’ll tell you one thing that’s interesting about teachers in Kentucky. They live a very long time and we have

John Coleman: Which is good. That’s a good thing.

Allison Ball: Great is great. You know, it’s a fulfilling profession and they make a difference in people’s lives. We have a lot of small towns in Kentucky where teachers have known generations of children and they’re very involved in their communities. So it’s a great way of life. So we have teachers that live a very long time and in Kentucky, you actually only have to be a teacher for 27 years. So if you’ve hit your 27th year while you’re in your forties and you live to be 180, which we actually have, we have teachers that are 108. We actually have quite a few that are over the age of 100. It’s not unusual at all for teachers to live to their eighties and nineties in Kentucky, which is wonderful. But, you know, that makes you realize that you have to take care of their money for a long time and make sure it’s there. So I think we actually send birthday cards to everybody that’s over the age of 100. It’s a way for us to honor them and also keep track of how they’re doing.

John Coleman: That’s it’s amazing. Allison, you know, I want to dig in to one topic that’s been really relevant for states recently and just get your perspective on it. The topic of ESG has come up a lot recently with states. There have been certain states like Texas or West Virginia that have been very vocal because through ESG policies, certain financial institutions have taken negative steps towards industries in states like the oil and gas industry in Texas or coal in West Virginia, etc.. And some of those states have looked unfavorably on that, obviously, and have begun to question whether ESG in their asset management portfolios is good for the residents of their states, at least the way it manifests today and whether it actually helps to achieve investment returns. Talk to me a little bit about that topic as you see it from your perch in Kentucky.

Allison Ball: Sure. Yeah. So from the Kentucky state treasuries perspective, I first began to hear about ESG. I know I’m talking to an audience that’s well familiar to you all know what this is and you encounter it all the time. I usually have to give kind of a rundown of what it means, but I remember when I first got in office and I started going to meetings for state treasurers, and we have a lot of public finance people that come in and talk to us. And I remember it kind of seemed academic, it seemed novel, it seemed like something people were trying to sell and they were pushing it as great stewardship. You know, it’s not just about investments anymore. We’re stewarding. We’re thinking about stakeholders. All these things are telling us. And I kind of just brushed it aside, didn’t take it very seriously. And I also thought and I sort of followed the Milton Friedman approach of, you know, we’re about returns and profits. And that’s what my focus is. I’ve always felt like that’s my responsibility. I’m not supposed to do other things. I have this core responsibility of making sure that I’m getting good returns for people that I’m responsible for. So when I first started here about it, I brushed it aside. I remember other treasurers were similar too. I remember having a conversation not that long ago. This may have been in 19 actually, that I was at a meeting and there was another state treasurer was actually pretty respected and dealt a lot with investments and he was saying, Yeah, we’re having another discussion about that. What is it again? I can’t remember the acronym. There’s the letters E something or other. So that was sort of the attitude among state treasurers for a while is that it was just it was a novelty. It was something that was trying to be sold to us. And some people gravitated to it and others didn’t. And treasurers, for the most part, are a pretty conservative bunch. They’re pretty fiscally responsible bunch you know, whether you’re Republican or Democrat, we kind of tend to be that way. So that was sort of the attitude. Well, in the last year or so, I really seen a big push to make it the only game in town. And this has been a warning to me as a Kentuckian. I told you about where our pensions are at 57% funded at about 17% funded. They’re not in the place where we need to play around. You know, you’ve got these older teachers who are 100 plus years old. My job is to make sure that they have the money when they retire for as long as they’re retired. That money is there for them. It’s not my job to play around with those funds. And Kentucky is different from some other places. You mentioned West Virginia. You mentioned Texas. Kentucky is like them that we are a fossil fuel state. I’m from the mountains of eastern Kentucky and from a small town in that Hatfield McCoy area. I’ve got generations of family members who have been coal miners, so coal is near and dear to my heart. I know the value of it. I know the value of it to America. I know the importance of. That kind of cheap energy and oil and gas. You may not realize this is actually big in Kentucky as well, and it’s big in eastern Kentucky, where I’m from. So for me, you know, I hear about this ESG and I start to worry about am I actually thinking about investments in terms of returns? And I actually taking care of this the way I’m supposed to do it. And there’s a double whammy in Kentucky because it affects our economy, because there’s been a big push on the E side, on the environmental side to truly target and eliminate the fossil fuel industry. And a lot of people have been pretty straight up about it. I talk to coal operators often and they tell me that they’re told they won’t be able to get financing because the particular bank that they’re trying to work with, Will maybe they’ve worked with for a long time, doesn’t like coal anymore. And it’s very much an ideology, I think, rather than an investment strategy. I know that people will argue with you and tell you otherwise, but it feels very much like an ideology to me, rather than just the traditional type of investing that we’ve looked at in the past. And I think there’s strong argument. So that’s the way that’s the case. So in Kentucky, it’s something that I’ve been very involved in. We actually got a bill passed last year about the fossil fuel industry that said that if you are you know, if you’re a bank, if you’re any kind of a company, if you’re an asset manager, if you are trying to boycott the fossil fuel industry for trying to eliminate the fossil fuel industry, harm it specifically because of the work that they do, then we’re not going to do business with you as a state. So we got that passed and it’s not going to work with us. We’re not going to work with you. And as far as my fiduciary obligations, this is true of many places. We have a sole interest obligation, meaning, you know, we are investing for the sole interest of returns for those beneficiaries. And then we have another one. We say, Kentucky, that we’re supposed to invest to support our economy and our industry in Kentucky, and that includes fossil fuels. So I actually asked our attorney general recently, given that obligation, if it would even be legal to play around in the ESG world. And I got a resounding answer from the AG’s office that said it would be illegal given that obligation. And I think that’s actually probably pretty true. A lot of other states do. So I would caution if you are in the public finance world, I would caution you before you jump into a lot of ESG stuff because you actually may be breaching your fiduciary duties.

John Coleman: That’s so interesting, Allison. One of the things we say around our firm, the firm I work at, is that all investing is impact investing. It’s just a question what impact you’re having. And this idea, you know, ESG is just one manifestation of particular manifestation of a set of values that you can invest along this idea, for example, that you all can invest in a way that is beneficial to the residents of Kentucky that serves the interests of Kentuckians. That’s an expression of values that may stand in contradistinction to some of the ESG values that is very much aligned with how the resources of your state can support the people of your state. I think people miss that. I think ESG is now become known as the way you express values. And what’s lost in that is it’s just one particular set of values you can express. There are other ways in which you can express your values through your financial capital. And I think that’s one of the encouraging things that’s happened, is people are waking up to that and thinking about the ways in which they can leverage the assets that they have and the influence that they have in a way that really serves the people that they’re intended to serve.

Allison Ball: Yeah, that’s a great point. And, you know, you’re coming from a different world than I am because I’m stewarding the people’s dollars. So I have to be careful in a way, you know. But from a Christian perspective, you were in a wonderful place where you can invest in the people that you’re investing for, in ways that are expressing those values and are consistent with that. And of course, as a state elected official, I have to be mindful of the state as a whole how I do that. But, you know, you’re in a great place where if you want to be supporting things that are consistent with your Christian faith, you have the great ability to do that and more power to you. And for me, I have to be so careful to be doing things the way that the citizens of Kentucky have put me here to do.

John Coleman: And that clarity is a great thing for you because it makes your mandate very clear and it makes the parameters with which you operate very clear. I want to back up I want to circle back to some of the great programs that you just mentioned, because it sounds like you’re very passionate about them. But before we do that, I want to get more of your story. So I read that you are a ninth generation Kentuckian, which seems like a very long time ago, and you just mentioned growing up in eastern Kentucky. Tell me more about your family history there and what that means to you as a public servant in Kentucky.

Allison Ball: Yes. Yes. So like you just said, I’m ninth generation from eastern Kentucky, from the same small county. It’s Floyd County in the mountains, in the coalfields. I actually just lost both of my grandparents. They’ve been with me for my whole life. My papa have just passed away in 95 and my nanny just passed away at 92 and the passed away in the last month. And they’ve just been a tremendous influence to me. I’ve always told people I’m related to about half the counties as my family’s been there so long. We’ve been there since the 1790s, and it’s a wonderful way to feel rooted. You know, I really know where I’m from. There are not many people in the country now, I think, that have that kind of history with the place. You know, I know my family, I know my ancestry. I love Eastern Kentucky. It is a rugged and independent area. It’s not an easy area to live in. You know, there’s hollers where the sun doesn’t shine. There are mountains. It’s I. Isolated. But if you’re from there, you’re probably Scotch Irish. Your family came over at some point in the early 1800s or late 1700s. And if you’ve decided to live that far away, that off the grid back then, you probably have some independent streak to you. And that has been passed on for a long time. So I’m very, very proud of the region that I’m from. I love it. It’s beautiful. It’s a place where it’s in the Bible Belt. So, you know, everybody’s got their own family churches and their own family graveyards. And it’s a beautiful, incredible area. And I’m just so thankful that’s where I’m from. It’s been a wonderful place to be from, so it really makes me just have a deep heart, not just for my region, but also for my state.

John Coleman: That’s great, Allison. You know, it’s interesting to me because I want to get to your path in public service. You actually started very entrepreneurial as well. And I, I read an interesting story that I want to let you tell. But tell me a little bit about your entrepreneurial streak as a young person and how you came to really appreciate the financial world that led you to the path you’re on today.

Allison Ball: Sure. Yeah, I know exactly what you’re referring to. So when I was a kid, my mom and dad really wanted to teach me money management principles and nobody had taught them. I referenced my papa a little while ago. My nanny, both of them grew up in the Great Depression. My papa knew how to stretch a dollar, you know, a thousand ways. He was always wheeling and dealing and selling things that he’d had other people just great at money management. But he never pass that on to my dad. And then my mom, she grew up somewhere else, and she just didn’t really get that from her parents either. So both of my parents, smart people, my dad was working on his Ph.D. when I was born. My mom was a schoolteacher, and they had never learned these money management principles. Obviously smart. My dad has told me that when I was born he had to sell the hubcaps off his car in order to buy diapers for me just because no one had really taught them. So at some point in time, there was this blue collar millionaire that took pity on my dad and took him under his wing and just started teaching my dad money management principles. And his name was Dexter Yager. He was incredible, man. He passed away a few years ago. A huge influence on my whole family. We loved him dearly. My brother is actually named after him. My brothers, Johnathan Dexter. Huge influence. So he started teaching my parents these principles. My mom and dad thought, Well, we got to do this to Allison and we’ve got to pass this on to the next generation. It wasn’t passed on to us. We’ve got to do a better job. So they started giving me an allowance and they gave me $5 a week, $20 a month. And I remember feeling like I was set for life. You know, I had this steady income that just came in and they wanted me to learn to think long term. You know, the goal set to save my money was I was buying my own things that I would be really responsible with. And I wasn’t at all. I would spend it as soon as it came, and as soon as they gave it to me, it was gone. And my parents were watching this for a while and they came to me and they said, Allison, we’ve decided to stop giving you an allowance because this isn’t working. And that the words they used is, Allison, you’re becoming a socialist. So I had a early poli sci lesson as a nine year old when this happened. So they cut off my allowance. They said that, you know, you’re going have to figure out some way to earn some money and we’re not going to give it to you anymore. You’re going to figure this out. So I was very angry about this and I was pouty and I probably had become kind of entitled spoiled at this point because I really felt like that I just just deserved this money. And so after a few months of being pretty pouty, I realized that they were not going to change their mind. And I would have to come up with some way to get some money on my own. So I launched a business. I started Positive Pencils International, so I was thinking a worldwide company, and they were positive pencils. Like I said, they had positive sayings on them. They said, I’m a winner, believe in yourself. You can do it different, like peppy little things. And I sold them for $0.25 each or four for $1. So it was a great deal. And I remember the first week that I sold my pencils, This is pre-social media. So like I had to have face to face conversations with people to get them to buy my pencils. So, you know, I developed a lot of skills through that, you know, some courage to be able to have those kinds of conversations. And I remember after my first week of selling my pencils, I went to everyone I could and I calculated how much I made profit and I made $200 profit by the end of the first week. And that was a huge moment in my life for a lot of reasons. I remember thinking, Oh my goodness, my parents were right. I have so much more money now than I had before, but all of a sudden money had a lot more value to me because I had worked for it. And anything that I want to buy after that point, I would calculate, okay, how many pencils does it take to buy this video game or whatever it was that I wanted? So I actually became very, very careful with my money all through my teenage years. I was pretty stingy. But I also learned to goal set. And, you know, anything that I really wanted to buy, I knew I had the ability to buy it because I could earn it myself. So I became a big believer in entrepreneurialism of the free market of hard work. I actually think that’s one reason why I ran for office early was because I had a business as a kid and I didn’t think to myself, I’ve got to wait till I’m an adult [….] school to be able to do something. I knew I could start doing things now. So a huge lesson for me. It’s foundation of my life. I actually kept my business until I went to college and then I sold it to my younger brother. So it continued for a while and he kept it going and it doesn’t exist anymore. But it was a thriving business for a long time. Huge lesson for me and also a reason why I believe in financial literacy. I know how important that was for me as a kid to learn that lesson, so I want to pass that on.

John Coleman: That’s amazing. Did your brother get a pretty good deal on the business or did you negotiate hard?

Allison Ball: So, you know, my brother is 13 years younger than I am. There’s a big age difference for the two of us. So I actually had him apprentice for about two years before I sold it to him. So I want to make sure he was ready for this responsibility. And we worked out a deal where I got what I felt like I needed out of it. And I, you know, I didn’t make it too hard for him either. I also had an interest in the business continuing on. So it was okay.

John Coleman: It’s okay to incorporate other things in the sale price, right?

Allison Ball: That’s right.

John Coleman: You touched on a couple of themes there I want to pick up. The first is just how it prepared you to take office at an early age. And you mentioned in the country you were the youngest statewide officer for three years and took on this enormous responsibility that we’ve discussed. How did you handle that enormous responsibility and what advice would you have to others who might seek out that kind of responsibility?

Allison Ball: Sure. Well, I really do believe that God has a purpose and a plan for everybody. My dad’s good friend is Charles Stanley, and my dad was an associate pastor in Atlanta for a little while under him. And Charles Stanley always says, you know, God’s got a will and a purpose and a plan for you. My dad always said that to me. I really believe that’s true. So I do believe that, you know, there’s a calling on your life. And sometimes it’s not always easy to figure out what it is you’re supposed to be doing. But I felt like I was supposed to go to law school after I graduated undergrad. And then I moved back home to Prestonburg, where I’m from. And I practiced law for a while. I was a prosecutor for a number of years, and then I gravitated towards bankruptcy law, and I really just had an interest in that. I’ve always had an interest in economics and policy in public service. I’ll tell you the area I’m from, the county I’m from. When I ran for office, it’s 90% registered the party that I am not. So.

John Coleman: Oh, wow.

Allison Ball: Like, I would love to run for office, but I don’t know that I could ever do this from where I’m from. And somebody planted a seed in my head and said, You know what? You should run for a statewide office. I think you’ve got the background where you could do something like that. At that point in time the Treasurer’s office had been underutilized and I don’t think people understood it very well. They didn’t know it and I thought, you know, with a background like mine, I really feel like I could take this office and I could run with it. And I’d always felt like God opened doors at different times. So I really had God just leading me. I didn’t necessarily have it in a sense from the Lord that God was saying, I want you to run for this office now. But I kept seeing doors open and as I would pray through it, I really felt like that was kind of taking me step by step by step. So I ran for office after never having run for anything before. Outside of law school student government. I was a class rep in our Student Bar Association, but except for that, I had never run for office before. So I put my hat in the ring. I had a three way primary and of course I won the three way primary. The person who came in second was 13 points less than me, and then I won that general by 22 points. I was the highest vote getter that year. The way Kentucky does it is we have a gubernatorial year who everybody has a statewide office runs that year. So attorney general, governor, secretary of state, treasurer, we all run the seven that run that year. So I was the top vote getter of everybody who ran that year. When I ran for reelection, I was also the top vote getter. So that was a fun thing. But I really felt like God just gave a great favor. He was with me through all of that. I just had a sense of his direction. So I really do believe that there has to be a calling. I’ll tell you, politics is not easy. I think the world of finance is not easy. But I really believe that we need Christians in public office. I believe we need Christians in the financial sector. As I see things develop in the ESG world, one of the things that has come to me over and over and over again as though we need Christians at high levels in these organizations, because one of the reasons why we see shifts that we as believers aren’t comfortable with is because there aren’t Christians who are at the helm of these particular industries. So I’m a big believer in follow God’s calling, follow God’s guidance in that.

John Coleman: That’s amazing, Allison, and touch on that a little bit more. So you are a person of sincere faith and longstanding faith. How does that really influence your approach to public service, your approach to finances, your interactions with the people you represent?

Allison Ball: Sure. Well, it influences everything I do. So when I was beginning to see doors open as I was considering running for office, I remember having a moment where I was at a worship service at the University of Pikeville. Those were college students. I was not a college student, but I just happened to be there at that time with some friends. And I remember sitting in during the time of worship and just really had this sense that God was going to give me opportunities and then I was going to do very well at certain things, but that God was telling me I had to be authentically a follower of Jesus at the same time. And, you know, these opportunities are great, but these opportunities are not for me that I was supposed to be authentically a believer, authentically a follower of Jesus. So I have a mandate. I know that God blesses me when I’m authentically a follower of him. I guess the point really anyway, isn’t it? Like this is why we’re always on mission in our lives. So that’s always guided me in everything I do. You know, we have a direction as believers, we people of integrity. And that’s so important if you’re dealing with finances, you know, honesty, accountability, stewardship, all of those things are core Christian principles. They’re being Christlike. So all of those things influence me in a great way. We live in a time where politics is very volatile and I am very open about being a follower of Jesus. I would describe myself as a person of faith whenever I talk. And so I’m mindful that I’m a witness. For some people, I may be the only Christian they interact with. So I have to make sure that the image they get when they’re with me is an image that reflects well of Jesus.

John Coleman: That is such a good reminder. I know now I work in an explicitly faith driven firm and and it is a good check on any behavior I might exhibit that doesn’t line up with that. You feel an additional sense of obligation, and I’m certainly not in a public office in the way that you are, but I think we are. It’s a good reminder that we’re called to something even greater than our profession in or witnesses to something even greater than our profession. And so we have a higher standard that we are encouraged to abide by than even the standards we would put on ourselves from a professional point of view. You know, one of the interesting parts of your story, Allison, in addition to your faith in your youth, is that in two industries that are very heavily male, both financial services of various times, which traditionally have been heavily male and public service, which has traditionally been heavily male. You’ve been a woman really pioneering that. I mean, the first I love that statistic, that first statewide officer to give birth while in office, which is just amazing. What does it meant to you to be a woman in office? And as you’re talking to other women who are listening to this podcast, how would you encourage them about the path that they want to pursue, either in finance and investments or in public service?

Allison Ball: That’s a great question. And I’ll tell you, I actually was the first one to give birth twice. So not just one. So, so, but I also had a second child. So I may hold the record for a little bit. Maybe we’ll have a third and then we’ll really solidify this record.

John Coleman: You’ll be like Tom Brady setting records and just setting them again and again, outpacing everybody. Yeah.

Allison Ball: That’s right. That’s right. But something I actually did not have an awareness of until I actually got in office, I didn’t know that I was the youngest woman to be elected at a statewide level, so I’d gotten elected. So it wasn’t part of my talking point. It wasn’t something I was really aware of practicing law. I often was the only woman in the courtroom. And so this is somebody I’ve experienced for most of my life, at least from a professional perspective. But one thing I did not realize is how encouraging it is to other women to see a woman do something like this. I remember when I was at UK law school one time and one woman told me this young woman, and she said that you cannot be what you don’t see. And so she was thanking me because she said now she’s see someone who’s doing this. So I did not realize this was going to be part of God’s story for me. But I hope that it is encouraging, and I think that it is encouraging, I have women to be all the time that say they felt like God has called them into something. And seeing another woman doing this, you know, in the financial sector as an elected official, in a place where there are typically men, that just gives them the courage, they can do it, too. It’s actually been really important, I think, to be a mom and a wife and do this. You know, people have different seasons, different responsibilities and different callings. I’m not saying that that every mom out there needs to hold a demanding job like this. That’s not the case. You know, you have to do what you feel called to do, what God’s leading you in your life to do. But there’s a lot of women who said that they wanted to do something like this and this encourages them that this actually is a possibility. So, you know, my husband and I, we actually got married after I got sworn in. We got engaged about a month after I was sworn in. We got married my first year in office, a year, nine months and two days later we had Levi and then we had Marigold last year. So a lot of people have been able to see my story as it’s progressed. And it’s neat because I realize like it’s God’s timing or we got married a little bit later than a lot of other people do, but that was God’s timing and I really like that also is an encouragement to people is that if you’re just seeking God in your trust, in God, you’re doing what He’s led you to do. God can put all these pieces together. You know who you’re supposed to be married to. The children that he wants you to have, how you want you to do it. So I’ve always felt like if God is calling me into elected officials role and I feel like he has and he called me to get married, which he did, and he’s called me to be a mom of two children. He’s called me to do each of those things well, and there’s a way to do each of those things well. So I hope that is a great encouragement to women who watch this. Women often. And there’s books after books after books on this. And I do think it’s true that women a lot of times self disqualify. So I always try to take a moment to just really encourage women that they have a lot more gifts, skills, capabilities, and they realize and we need their voice. We have so many wonderful men doing great things, but we need perspective of women too. We don’t want to lose great talent just because you know, your self disqualifying. And I think many times we as Christians kind of fall in many traditional roles, so we probably even more of that with tendency to do that. So I’m always trying to encourage women that don’t self disqualify. I’ll say real quick, one quote that I love that I often refer to when I talk to women. Leslie Rutledge is the first female attorney general of Arkansas. She’s running for lieutenant governor right now. She was the first to have a baby while serving in office at a constitutional level. So it’s a small sorority. We know each other. And I remember Leslie told me that when she was running for office the first time, people told her, Are you ready for the rough and tumble of politics? It’s mean. Can you handle this? Are you ready? And she told them, any woman who survived junior high can handle anything that politics can throw at you. And I love that because that’s not true just for politics. It’s true for any profession. That is a hard profession. You know, if you’re a woman who survives junior high, you probably got what it takes to do whatever it is God is calling you to do. So I’m always trying to encourage women that we need their voice, we need their involvement, we need a greater level of leadership from women in the country.

John Coleman: And I think it’s neat that you’re able to demonstrate there is often this false choice, I think, in our society that you either need to pursue a professional path or need to have a family. Right. And I know it’s quite difficult. So that’s not underestimating that. I’m married to a wonderful woman who’s pursued various professional things, but you can’t have both of those things actually. And that a woman can achieve a family life, as well as a very successful professional career, I think is such an important message. The other that you touched on, there was a great study or maybe a disappointing study in that they looked at how women and men approach job applications. And, you know, job applications are written to be the ideal candidate, often way overinflated for what the role requires. And maybe unsurprisingly, men would apply for anything regardless of whether they were actually qualified for it. Even if they were dramatically underqualified, men would kind of throw their hat in the ring and move forward, and women would read it very carefully. And if they were disqualified on any front would, as you termed it, self disqualify. And it is important, I think, that message that you’re delivering, that you shouldn’t underestimate yourself. Right. You’re actually capable of doing these jobs, taking on big roles. And don’t be the person who disqualifies yourself, right? Force others to disqualify you if you’re legitimately not qualified. But don’t be afraid to take risk and put your hat in the ring, even for something as big as a statewide public office. I want to touch you know, you’re responsible for great public stewardship in your private life. You’re also stewarding something related to this last topic of women. I know that you and Asa have been big supporters of crisis pregnancy centers, something that’s in the news quite a lot now with the Dobbs ruling. Why does that matter to you and what role does that play in your life?

Allison Ball: Sure. Well, both Asa and I are huge advocates for life, and that’s something we both deeply care about. I remember when we were on our very first date, Asa started talking to me about some things that were important to him, just making sure we were on the same page and we started talking about what we felt about life. And Asa had told me the story is an amazing story about how his mom was, I think, on some steroids at the time that he was conceived. And so the doctor came and said he is at great risk to have all kinds of health problems. He’s going to have a lot of mental disabilities and that you are young. So my advice to you, the doctor said, is just a board game. Try again. Another point. You know, this is not worth the risk. And Asa told me his parents were kind of shocked and I thought, well, a doctor knows what he’s talking about. And they were kind of inclined to do that. And they were actually at a Christian college at the time. So they ended up talking to another doctor who was the doctor on campus. And that doctor, I’m told, reached across the table and said, Do not abort this child. God has a plan for this child. And she started talking to Asa’s mom about what that meant and everything. So they ended up going ahead of having Asa. And what I love about that story is that Asa was born perfectly healthy and he talks about how his dad, when Asa was born. Is that you ever said, does he look normal? Does he have his fingers? Does he have it? Those were serious questions they were asking about Asa. And of course, he’s a genius and he’s wonderful and exemplifies everything that’s wonderful about manhood. You know, I just think he’s perfect. But they were going to abort him. And, you know, he’s the person who’s my husband and a father, my children and a tremendous leader. So he has always just been a great advocate abouut that he cares about it personally. It’s important to him. So we talked about that and it was one of the first causes that I began to care about as a kid when my parents would start to talk to me about issues that were important. So we have always cared about this and we cared about it even more. We had our own little babies. I remember that we went to hear the ultrasound and the heartbeat and see Levi moving around at I think it was a day before 20 weeks. And in Kentucky, 20 weeks is the cutoff after you can’t have an abortion after that point. And we just were just so deeply moved, hearing him, his heartbeat, watching him move around there, the only protection that little fellow had or a precious little boy was our decisions, which is just kind of a moving moment for us. So we also being working parents, little ones. We know how hard it is to raise little ones. And we want to support moms who have just made this incredibly heroic and sacrificial decision to keep these babies, whether it’s through adoption or keep them themselves. So we know how difficult it is. It’s costly. You lose a lot of sleep. So we want to rally behind all these incredibly heroic moms who are doing this, whether they’re married or they’ve got a dad who’s in the picture or they’re doing it on their own, however they’re doing it, we want to rally around them and rally around these precious little lives that God has tremendous plans for. So we’ve always given, we’ve always cared, but that’s been on our top list and we give special offerings. And Levi was born and we did it again when Marigold was born, just thanking God for our healthy little children. So that’s something we care about deeply.

John Coleman: It’s a great testimony, Allison. I know we’re running a bit short now, but I want to end with the question we ask everyone, which is this is the Faith Driven Investor podcast, and we like to ask folks, you know, is there anything that you’re learning from God through scripture right now that you’d want to share with others that’s making an impact on you?

Allison Ball: Sure. Boy, I tell you, this is actually a heavy time in my life because like I told you a few moments ago, I just lost my my grandfather, my grandmother. So my papa my nanny, who I was hugely close to we actually lived with them for a year. So when my parents were trying to figure out their finances, they ended up they sold their house in Atlanta and their plan was just to conserve money. So we lived for a year in the back bedroom of my grandparents house and losing them has been it was a shock. Both of them were surprised they were not having ill health or anything. And this has just been a you know, if you believe the things that Jesus says about eternal life and his faithfulness, then you would believe it in the hard times. And this has been a hard time for me personally because of losing them. So have just really been just pouring into what Jesus says about his faithfulness and what He says about how He goes to prepare a place for you in heaven and kind of what that is like. So in a deep way, that’s been something that God’s been helping me through. I know I’m not the first one to go through loss. You know, everyone goes there’s at some point in time. But this has been the most impactful loss that I’ve gone through. And just it’s been important seeing God’s faithfulness in this time.

John Coleman: Well, Allison, our prayers will be with you as you process that loss. I know that is that is really hard to lose such a valued family member. And man, I just think so many people will be encouraged by this. I think many people will wish they were a Kentuckian now getting to hear what great representation they would have. And I think it’s such an encouragement to others who might, at a young age or as a woman or just as a person, generally decide to take up the mantle of public service and to do so in a relatively complex office like Treasury, where you do have such diverse responsibilities. So we are very grateful to you for coming on the Faith Driven Investor podcast, and I hope we can get you back again sometime soon.

Allison Ball: Thank you very much. It was a joy.

Finny Kuruvilla: How do we connect the huge problem of global poverty with the practice of investing? A lot of people cynically believe that investing is simply about helping the rich build bigger barns. But Faith Driven Investor have a higher calling. We believe that we should responsibly and biblically manage our money by, yes, wisely allocating our resources. But by doing that in a way where we’re promoting human flourishing, including perhaps especially championing the interests of the poor, the widow and the orphan. I’m going to give you four points today about how to practically connect our our world to the problem of global poverty.

Finny Kuruvilla: Number one, we need to respond to poverty with a Christian worldview. Jesus’s first sermon that he gave in Nazareth, he opened with this line, The spirit of the Lord is upon me because He is anointed me to preach the gospel to the poor. He sent me to heal the brokenhearted, to proclaim liberty to the captives, recovery of sight to the blind, and to set at liberty those who are oppressed. Now, when we hear Jesus talking about the Gospel being good news for the poor, some people react and think, Wait a minute, what about dependency and handouts? And how does all this work? The Bible is a very wise document. And to illustrate this in first Timothy five, it talks about how younger widows, those who are less than 60 years old, aren’t supposed to be financially supported by the church. And Paul tells us why. He says that those very women would become idle and given over to gossip. And so this is a great example of where we are told not to simply commit mindless giving, but to think holistically about the person’s welfare. This should give us some kind of idea that, in fact, the Bible is more sophisticated and how it thinks about poverty. This kind of sophistication is badly needed in the world today, where we have changing and tragic dynamics about global poverty. Consider this today obesity has far overtaken starvation as a cause of death in the world. Addiction of all sorts food, alcohol, drugs, sex, technology, those kinds of addictions are more bound up with poverty than ever before. And you compound that with violence in the community in many parts of Latin America. Homicide is on the rise, particularly ending the lives tragically of many young men. All of this leads to vastly different outcomes. For example, men in Iceland live on average to 80 years old. But in Haiti, men live to 33. What a tragedy. How do we deal with this? Your beliefs about poverty are going to determine your approach. So if you believe the cause of poverty is a lack of material resources, well, then your approach is going to be to give money. If you believe the cause of poverty is a lack of knowledge, then you’re going to try to educate the poor. If you believe the cause of poverty is oppression by powerful people, then you will try to work for social justice. Instead, I’m going to call us to move past exclusively secular models of poverty, of poverty. Brian Myers has said it so well. He says the secular approaches share a common perspective, which is the modern worldview. All are materialistic, often technocratic, and reflect a firm belief in human reason, technology and money as the keys to solving the problem of poverty. Their biggest common gap lies in the absence of religion and things spiritual, in their explanation of why people are poor and what can be done to help them. So how do we think about this from a Christian perspective? Myers and others have made the case that poverty is primarily at its root cause about disordered and sin damaged relationships. We all live in a web of relationships. We’re relating to our communities. We’re relating to the environment. We’re relating to God. We’re relating to ourselves. And when those relationships become damaged by sin, it makes us vulnerable to poverty. Think, for example, about the person who wants to start a business but has to go to the local loan shark who might charge two, 300, 400% interest on that loan. Think about someone who is wanting to appease a God and has to give away precious resources in the form of an animal to sacrifice. Or communities where theft and lying are commonplace. Or someone who doesn’t believe that they have dominion over creation and the creative capacities to start new, productive and flourishing businesses. All of these kinds of problems abound in the world of poverty. So what do we do? Healing these kinds of sin, damage, relationships and defective worldviews. This is very challenging work. This is not glamorous. It’s long and it’s slow. But this is where the role of the church is essential to heal relationships and worldviews requires people not just writing check. This calls forth the necessity of visitation. I am so struck by the verse, a very famous verse, James 1:27 that says religion that is pure and undefiled before God, the Father is this to visit orphans and widows in their affliction, not to write a check to orphans and widows in their affliction, but to visit orphans and widows and their affliction, and to keep oneself unstained from the world.

Finny Kuruvilla: Number two live simply give generously and intelligently. Now we all know this, but we still don’t do very well at it. When John the Baptist begins his ministry, he says that we’re to bear fruits in keeping with repentance. And he says whoever has two tunics is to share with him who has none. We need to go to our closets and ask how many tunics do we have? And to repent of of hoarding and not putting into practice the basics of what love your neighbor is. Jesus tells us in Luke 12 to sell our possessions and give to the needy and to thus procure for ourselves money bags that don’t grow old that that will be enduring. I love the quote from Mahatma Gandhi who says live simply that others may simply live. He also says, the world has enough for everyone’s need, but not for everyone’s greed.

Finny Kuruvilla: Number three, we should avoid investments that snare the poor into addiction and slavery. I mentioned earlier that addiction is so bound up with poverty, and I think most of us know this at a head level, but I want us to know it at a heart level. The power of business to snare and to propagate poverty, whether it be through alcohol addiction, through gambling, through through cigarets, through pornography. And the whole realm of sex trafficking. Through a lot of the idleness and addictions that have happened with with our phones and social media, etc.. It is it is absolutely extraordinary how our dollars expressed in business can affect the world for good or for bad. We have described in the past an example that is particularly poignant for me. Many of the cigaret companies have figured out, well, in the united states you can’t sell to minors. There’s pretty strict laws against that. But abroad there’s there’s much less restriction and much less control over that. In Indonesia, as an example, the average age to begin smoking has fallen from 19 to 7 years old. And we did some research where the largest beneficiaries, the largest shareholders of these very companies are college 5 to 9 savings plans, meaning American mothers and fathers who are saving for their children are in fact doing that by benefiting from putting into addiction minors on the other side of the globe. How tragic that is. We should obviously avoid these kinds of behaviors as faith driven investors, as Christians who want to be faithful.

Finny Kuruvilla: Number four, we should embrace investments that lift the vulnerable out of poverty. I want us to think for a moment about the biblical principle of gleaning. What is gleaning? Gleaning is where if you’re a farmer and you have a field, you’re supposed to leave the edges of your field unharvested so that the poor can come and glean on their own and thus provide food for their households. This is a very important principle. I want us to think about gleaning in the context of who the stakeholders are of a business today. We have talked about at Eventide how there are six stakeholders, customers, employees, the supply chain, host communities, the environment, and then broader society embedded within society and in host communities are the poor, whether they’re locally or globally present. What does it mean for a business and what does it mean for us as investors to follow this principle of gleaning today in our world? We at Eventide have made the decision to pursue what we call the 1% initiative. It’s just taking 1% of our capital, a modest percentage of our capital, and say we’re going to devote this to this problem of alleviating global poverty. How do we do this? We do this by primarily by harnessing the positive power of business, by taking that 1% of the capital and giving it to businesses that are in the developing world that are employing the global poor to pull them out of poverty with dignity. Last year, we announced a partnership with World Vision and its affiliate, the Vision Fund, which we think is one of the best, if not the best example of a company that’s out there in the developing world employing the global poor. And here, this $37 million is capital that we get back. It’s a modest return on our investment. But we, again, think this is so important to follow this biblical principle of gleaning. So I want to leave you with a challenge here. Will you commit 1% of your investment capital for gleaning by the global poor?

Finny Kuruvilla: In conclusion, I’ve given you four ways that we can address this problem of global poverty. Number one, respond to poverty with a Christian worldview. Number two, live simply, give generously and intelligently. Number three, avoid investments that sneer the poor into addiction and slavery. And number four, embrace investments that lift the vulnerable out of poverty. Let’s honor our Lord. Let’s honor Jesus by making the gospel. Good news again for the poor.

John Coleman: Hello and welcome back to the Faith Driven Investor podcast and our monthly Mark’s On the Market Session. I’m John Coleman, your host for today and I’m really excited about the podcast today. Obviously in the news at the moment are cryptocurrencies, crypto exchanges and all types of Web 3.0 related technologies and the incredible distress that’s sweeping through the markets right now, at least partially as a result of the collapse of FTX and Alameda trading, two of the biggest institutions in that area. This is a fascinating topic. It’s a topic where there is a ton of intersection for a Faith Driven Investor in particular. And I’m really excited to introduce the two folks we have with us today. One is my guest slash co-host. One of my partners at Sovereign’s Capital, Jake Thompson, who leads our venture capital investing segment. The handsomest man in faith driven investing and a big advocate of Web 3.0. And Jake, it’s awesome to have you on co-hosting today.

Jake Thompson: It’s awesome to be here even though you’ve just lost all credibility for everyone involved here. But thank you, John. It’s good to be with you.

John Coleman: It is in audio podcast, Jake. So they’re just taking me at my word.

Jake Thompson: Fair enough.

John Coleman: And we’re excited to welcome as a guest a gentleman who’s had just a wealth of experience in this space. Breaux Walker, Breaux is the managing director at Architect Partners. He’s a partner at RJ FinTech International. He’s effectively an investment banker in the crypto space, has deep experience both in China and the United States, and a deep history in the corporate world, in startups and in finance dating back to I think, Breaux, you started your career at Merrill Lynch, if I understood that correctly, and so very pleased to have you on today and benefit from your expertize.

Breaux Walker: Thank you, John and Jake, for having me. It’s a great pleasure.

John Coleman: Well, why don’t we I mean, just to kind of jump into it, I know will break down the broader marketplace here shortly. But what the heck is going on with FTX? I think everybody is seeing this today and their founder, Sam Bankman-Fried, and how that seems to have set off just an incredible amount of distress in the ecosystem. How do you describe what’s happening with FTX right now Breaux?

Breaux Walker: So I think the background of Sam and his group and the origin of FTX, you know, you look for origin stories in companies and you look for the DNA of the team. I think no one should be surprised, having known that this group has been thriving on risk and taking risks, including leverage, since they came out of school and probably even they were playing poker in school to pay their tuition. So I think looking at the background of this company, the fact that they were enablers and merchants of risk, their entire history should leave people wondering why they didn’t consider the risks of the organization, the exchange and structure previously, and especially in terms of the fact that there were no third party regulators overseeing that risk. So this company came up this exchange came up in this group because there was Alameda Research, their trading group prior to FTX came up as a group of traders basically that were really willing to take on a significant amount of risk to be able to make additional sort of margins in crypto back in 2018 and 19. And they just continued that trend all the way up until a few weeks ago where, you know, I think people’s eyes were opened to it and to what actually they were doing. And so I don’t think there should be any surprise if someone did just like the next layer of diligence and the next layer of kind of asking of questions. But the problem was that the euphoria of the price increases and the euphoria of the market, you know, run up really as is the case in many markets, not just crypto, people sort of neglect to ask the next level of questions. And that’s my general view of what happened.

John Coleman: And to potentially mischaracterize it. I mean, part of the problem, right, was the interaction of these two entities, the exchange and the trading company, and that, you know, the exchange kind of functioned like a bank or a trading platform where you had customer assets and those customers might be lending against those assets, etc.. But it looks as if Alameda trading wasn’t simply trading on its own book, but it was actually using customer assets to trade in these risky strategies, potentially without permission, which is one of the big topics under discussion. And that, you know, for a typical investor, that’s mind blowing because you could never consider a bank doing that, for example. And yet in this unregulated space, it appears that the lack of governance within those two organizations or by regulators allowed something to happen that created this kind of systemic risk within both entities. Is that a fair characterization?

Breaux Walker: It really is. But I think to say that this is an exclusive FTX problem is really not necessarily the case. I mean, we’ve had exchanges, reputable exchanges such as Coinbase, Gemini, etc., have their own issues, not of this magnitude. They were insider internal issues or issues that would not have ever occurred at a regulated securities exchange. So, yeah, this is a larger issue, but many of the exchanges have had similar issues because they lack regulation and oversight, especially.

Jake Thompson: And Breaux, walk us through a little bit of the scene to blow up just a couple of weeks ago. Is there some crypto Twitter? And then there’s got to be some news outlets that broke the story by the beginning of the story. Goes back much further. You mentioned back 2018, but it seems that even this past summer a lot had happened. The crypto industry that started to show some of the fissures in the foundation of this space of these exchanges. You talk a little bit about maybe how some of the other headlines we’ve heard recently, how those are connected. And if you see that being indicative of a true contagion in this space, in which case there might be other shoes to drop? Or is there almost a virus in the herd? And it’s almost on calling that we guess. Where are we in that whole spectrum?

Breaux Walker: Well, the answer to that question could be very lengthy. So trade cartel, I think the rumblings about FTX have been out there for a long time and I would just characterize it under the umbrella of too good to be true or how are they making their money when their fees are so low? And we don’t know and there’s no transparency on their other business activities. So, you know, the smartest people I know in crypto and mostly the people I rely on are people come from tradfy actually people who are come from bulge bracket investment banks like the El Al Cash and Bank of America, people who actually come from traditional finance because they’re very skeptical by nature. Traditional crypto people in general are optimists and sort of can be Pollyanna. So I think, you know, this connection between Alameda and FTX really has been known in the community for a long time. It was masked under this sort of they’re a benevolent market maker mantle. But, you know, the fact that nobody talked about openly in whispered corners of crypto, in conversations, conferences, there was a lot of discussion about, yeah, this is doesn’t smell right at all. There’s something wrong here. They’re they’re making too much money and whatnot for the fees they’re charging. They must be trading, you know, they must be doing proprietary trading somehow in some way. So it’s been known and this is one of the problems with the industry, I think, as a whole, the this lack of transparency that we pride ourselves on and we say we’re open and everything. So yeah, it has a long way to go before that’s actually the case.

Jake Thompson: Well it reminds me, having been in banking back in 2007, 2008, a lot of what was going on there, subprime mortgages, where you had this assumption, well, as long as housing prices are going up, that’s going to cover over a host of sins, so to speak. And you started seeing different applications that weren’t getting all the income information and the rest. That just became more normal than it should have. But the market made it so it was okay because it kept going up. Then, of course, the Warren Buffett quote, right when the tide goes out, you see who’s swimming naked. And it seems like there’s some of that that was going on here. But I want to differentiate, too, if it’s indeed worthy of differentiation between the governance and these individual organizations within crypto and in web 3 technology inherently. Because I think we’re seeing a lot of folks are saying, see, told you. So this crypto web 3 thing is just inherently riddled. There’s no way to really make this work. Is that what we are seeing? What exactly broken? Is that really a pockmark on web3 technology itself?

Breaux Walker: I don’t think it’s […] a web3 technology itself. I think what it’s pockmark is the acknowledgment by the Web3 community slash blockchain slash crypto that individuals and some level of centralization are still individual conflicts of interest, meaning people in the middle of these technologies or platforms or, you know, just the need for some level of interaction creates this sort of level of, you know, the ability to corrupt it. Put it that way, it’s not as automagically as we need it to be and it’s not as transparent as we need it to be. So it’s similar to like A.I., where I’ve done a lot of work, some other ones. I mean, until we find a way to have a transparent sort of AI value supply chain or whatever, there’s always going to be the ability for an individual to bias or to corrupt that technology, which in its pure sense is great and web3 and blockchain. And this is like a whole. We could talk for a long time about how, you know, when somebody designs a blockchain, obviously there can be bias in there or there can be fraud designed into it after it’s set up. Yeah, it records things, you know, transparently and automagically and all that, but it can be set up for fraud or gamed in other ways. So I think the Web3 community needs to really admit that we’re not there yet. On the dream of Web3, it’s more like with all these 2.1 and 2.2 and a lot of baby steps right now. So that’s the main problem. I think challenge we have is like just being realistic with the larger community about what we can and can’t do today.

John Coleman: One, just a lot of the symptoms you’d expect to see from a potentially dysfunctional market were there and people ignored them because it had been going up. You know, it’s we’ll get to coins and currencies maybe a bit more in a moment. But I just think about all the lending that was going on. For example, even when rates were really low and you were getting a couple percent in typical fixed income, you know, you’d be promised ten or 12 or 15% sometimes lending rates on your cryptocurrency and you just don’t get rates that high without risk. Right. I mean, they were kind of promise as an almost riskless investment. And of course, that’s not true. And we’re seeing that kind of house of cards, as Jake said, as the tide goes out, really collapsing at the moment. You know, a lot of venture capitalists have been active in this space recently and a lot of venture capitalists are losing a lot of money at the moment alongside consumers. Where have the VCs made mistakes and where do you think VCs go from here with regards to Web 3.0?

Breaux Walker: Well, I think they needed to be more responsible in terms of obviously their diligence. I mean, that’s kind of an obvious statement at this point. Let’s be real. I think some of them knew what was happening, a small percentage, I’d say, and was hoping for sort of a greater fool theory to happen or that somehow these issues would work themselves out as the prices of the coins went up, the asset class as a whole. The second thing is that, you know, they needed to be more transparent about what the tech can do today, what it can’t do, its weaknesses and all of that. So I think people like, you know, A16 and whatnot got butchered a lot by the crypto community because they weren’t quote unquote purists. But you know, the point is, I think the fallout of this and, you know, Luna and all this is like there is not a pure model out there. There’s not a pure technology that exists today because any of these so-called decentralized systems or whatever can be corrupted today. And until we figured that out, nobody can stand on their high horse and say, hey, we’re decentralized or A16 is doing these sort of centralized things because everybody is centralized today. Every single project protocol is a centralized point of failure or choke point.

John Coleman: Jake, you’re investing in this stuff right now. I mean, how are you thinking about it at the moment?

Jake Thompson: Yeah. So we are not doing a ton of web3 just because we think so much of it has been characterized by a run up that is unsustainable. But we’re very, very interested in those companies that may otherwise be thrown out with the bathwater. Breaux, you mentioned kind of Web 2.1, 2.2, etc.. I think there are a lot of what folks would call Web 2.5, right? These bridges from our current Web, it’s incredible how many more of these terms we can be introducing here, but it’s not quite the totally distributed type of model. So we’re really interested in looking at the pickaxes, the shovels of this space. Right. Talk to a company even earlier today that’s trying to put together a CRM for Web three companies. Right. Because there’s not a lot of way to access all the data that’s coming on chain, those kinds of companies we’re really interested in. And it’s so unique just thinking through the lens of VC, because one of the VCs biggest dreams is a huge category, right? Where you can bet on companies is going to be a rising tide. And even if they’re holding the boat right, the boat is going to rise for a while. And while there was for my take a whole lot of FOMO that was going on and that’s just wrong and self-centered and the rest. Right. And yet we all fall victim to it from time to time. There was a lot of very rational decisions being made of saying, well, this could be even bigger than the Internet. Let’s put ourselves back to 1993. We would invest in a few companies in a category that gets so big. Well, I have much more margin for error, so I can invest in companies with slightly less governance or some issues here or there. And that’s going to be okay right now when people started turning a blind eye, to your point Breaux, I think there are a lot of issues there, too, a lot of VCs we’re making that rational choice, because if you didn’t invest right, FTX is famous for some stories where some investors would say, well, you don’t really have any board without side investors. You have no governance, right? You have no this or that. I suggest you put those things together and maybe I’ll invest in much less colorful language. They essentially said, go take a hike, right? Where the only way you can get a piece of what seemed like a leader in a category defining space wasn’t going to have governance, and you wouldn’t be allowed to have access to it if you insisted on that. So VCs were in a tough spot, but I think that’s in the calculus that might have been more rational than at first blush.

John Coleman: When it was some of this stuff where it’s like things that were almost characterizes endearing. Then when you look back were just such clear signs of disaster. I think one of the stories out of Sequoia, right, was that they were interviewing SBF, Sam Bankman-Fried about the investment and he played World of Warcraft or some multiplayer game like Fortnite or something the whole time, and they were fawning over that at the moment. And in retrospect you go, Oh my gosh, this guy was totally unequipped to run anything of any sophistication that required, you know, maturity and professionalism. I just think that that will change as well. I think the standard that will be set for founders and for the maturity of founders and for the people that they put around them, I think has got to change. And you mentioned something, Breaux, at the beginning where some of the best people in the space are actually traditional finance people now. And I have a feeling you’ll see some of that traditional finance infrastructure begin to insert itself here if the industry wants to sustain itself.

Breaux Walker: Well, it’s interesting to see at the sort of low point or recent low point of exchanges that JPMorgan has said that they’re coming in with an exchange. I mean, this is really an obvious thing. You know, if you think about the timing and what not, some people might think, well, that’s great. But no, it’s actually that’s what we need. You know, more of that from those type of people.

John Coleman: Can I pivot a bit and then I want to come back to regulation actually at the end, because I do think that you’ve mentioned it a couple of times, Breaux, and it’s a topic that we need to address before we get into that. You know, exchanges aside, most people’s exposure to this market is actually holding points, right? They may have a coin in a wallet somewhere like Coinbase, which you mentioned. They may have used exchanges, but really they’re paying attention to the price of Bitcoin or the price of Ethereum or these other coins that they may hold. You know, I think the latest stat I saw recently was that there were 21,000 different crypto coins out there. And I was talking with a friend. My personal perspective just to get this started was that we’re going to end up with kind of five or ten really successful coins out of that 21,000 and that many of them will go away. But what’s your perspective right now on the coin marketplace, which has declined quite a lot, and what you expect for the kind of short term and long term there?

Breaux Walker: Well, I don’t know if the first part of your comment was a question about the regulation, but I really want to spend a bit of time on that because I find that’s really a major malfeasance on the part of our regulators. I mean, if people are not called, you know, in on their lack of, you know, without passing laws, but at least their direct kind of confrontation of what was obvious fraud or at least kind of obviously too good to be true kind of investment product offerings, you know, to U.S. investors, you know, then that’s really a bad thing. I mean, that’s just not a confidence builder for investors going forward. Whatever else happens to SBF or happens to the private entities involved, the fact that these guys have been able to plaster their advertisements all over sports arenas and whoever missed that in the government should be fired right away. I mean, you know, it’s one thing to let them kind of act under the radar and kind of around the edges and try and get some private investors from Canada or whatever. It’s another thing for them to advertise during the Super Bowl. And, on you know FTX, so the fact that they’re going after like Tom Brady and, you know, Steph Curry, whatever, yeah, that’s ridiculous in my mind. The guys in the government, the people in the government that allowed this to happen and allow those ads to go through and didn’t issue massive fines for people basically offering securities on national TV and Super Bowl halftime to widows and orphans and, you know, across the heartland. Yeah, that that’s just unexcusable. So that’s where the anger, the, you know, punishment definitely needs to be directed in my mind, because by any other standard in the FCC or any other regulatory regime, those are the people that are kind of in. The gatekeepers and need to be responsible. So I think that’s just a major problem that they’ve somehow like as politicians are good at doing it deflected this on everybody else. But whatever happens to all the other people and private entities, they’ve got to be held accountable for the way they let this get out of hand and out of control. To investors, all this, you know, they’re going to do whatever they can do to make money as long as it’s legal. And that’s another problem. There’s too much of this stuff is not illegal today. That’s a different but related problem. So I don’t know if that’s your question, but you triggered me kind of, John, with your first part of your question, because I just can’t believe the tough law that these regulators and government have and all of the vitriol and all of the anger and everything is directed at people who were self-interested and most of them doing nothing illegal at all. Well, is that their fault? Or the people who, you know, we pay and are sitting in places of power to protect us? You know, it’s misguided right now, in my view.

John Coleman: Well, let’s finish this topic then and come back to coins. You know, one of my perceptions and Jake, I would love your reflections is that part of the challenge here is just knowing who’s in charge of regulation right. Is that the SEC? Is that the Fed? Is that the IRS? You know, there are different agencies that are involved which causes confusion. Part of the challenge is the space is so new and rapidly evolving that regulators are having a tough time keeping up with it. And then there is a I’ll call it a reported or seeming conflict where certainly, you know, Sam Bankman-Fried was the second largest donor to one of America’s political parties last year. And his parents have worked very closely with certain key regulators, running agencies right now and things like that. And there’s just, I think, a whiff of impropriety over the whole thing where there has just been a lot of money flowing around the ecosystem in the sense that politicians have been complicit in this because of that money. I mean, Jake, you know, you’ve heard kind of Breaux’s comments. How do you think about regulation in this space? What’s the problem and what’s the path forward?

Jake Thompson: I think it’s everything that you mentioned, John. It’s so complex in a bunch of ways. And you look at some of these hearings of regulators even going after big tech companies. Right. And it’s obvious that there’s not a baseline understanding of technology, of basic terms, how it all fits together. So even the number of folks that want to go after figurehead and we’re talking about centralized finance here, it’s easy to point to SBF. But then you have other organizations that are totally decentralized, right, where the owners are, those that have the tokens and vote on governance and the rest. And it is truly decentralized, which maybe would have addressed the problems we’re talking about. But if the regulators going after saying, okay, we’re going to clamp down on this or what does that look like? Right. You are the foundation that helped the launch of token but is now distance itself is very hard to find what the head of some of those are. And I think for that reason you see the regulators really stepping in much after the fact. Right. Maybe there’ll be some movement on exchanges now. But what we are seeing is movement on the ICOs that were happening in 2017, 2018, right where now we’re seeing the fallout. It’s much easier to say here are the damages. And it is amazing. And Breaux, I agree with you. Investors are going to act in their self-interest. There is some finger pointing we can do to those who just made decisions that were not rooted in common sense. Right. The number of people who are coming back and saying, well, I lost all this money who insure this in the federal government, who is there an FDIC for crypto? Who is that again? Well, no, this has nothing like that. And so it’s just such a nation industry. It doesn’t help that, at least from my perception, the average age of those that are deeply involved in crypto, it’s they haven’t seen market cycles, they haven’t been in traditional finance, right. Sam Bankman-Fried I think is 27, 28 years old. And so there is a lot that is happening fresh as an industry. A lot of people, this is their only experience in it as is really hard to wrap your arms around it.

John Coleman: Well, and it’s one place where in traditional finance what has been the standard for some time even though it works very imperfectly as we’ve seen is self regulation. Is the financial institutions actually proposing ways in which their ecosystem should be restricted to help regulators come up with the right framework? And from my point of view, I feel like that’s almost got to be the next step where the binances of the world and the coin basis of the world and others actually begin to step up and offer more constructive recommendations on what limits the industry should place on itself and what regulators should do otherwise. You’re right, Jake, they’re either going to be hopelessly behind or they’re going to become hopelessly restrictive. Right. Which would be bad, I think, for all the participants in the ecosystem.

Jake Thompson: I think you see Gensler and others that are looking to have a pretty iron hand now and roll over this. We are starting to see this is a big encouragement to me, folks like Vitalik Buterin, who is one of the co-founders of Ethereum. Right, starting to work with another leader of Binance, the largest exchanges out there to say, what does it look like? Do you have an algorithm that can audit some of these things that we’re talking about so you can push the on button and say, Yep, your liabilities, write all the Bitcoin, say or there we can actually account for Unchained. So you’re good to go? I think it will take those who understand this with the push of the regulators, not necessarily the knowledge of the regulators to be able to put something constructive around the industry. As you noted John.

John Coleman: Well, maybe to circle back to our coined topic now, Breaux, if you don’t mind looking a lot of Bitcoin or Dogecoin. Am I in big trouble? What should I do?

Breaux Walker: No, I. I agree with your sentiment that there will be far fewer coins out there. You know, obviously, most of them have no utility or simply speculative kind of gambling tokens, put it that way. So I think the ICC, you know, it’s clear that most of them are securities. They have absolutely like I said no utility. They’re simply there for people to speculate on. So I think whether by market forces or by regulatory forces, most of them will go away and we’ll get down to a very small number over time that will grow as people find new utility for blockchain and actually do real projects that are invested in and regulated. But really, those bars are very, very high. And, you know, I think the regulators will wipe out thousands of them and whatever. So it’ll be a much smaller number and then from there will grow. I happen to be after a lot of thought over the summer when and Ethereum Maximalists and I feel like it’s good for the industry and people will like this. A lot of people and you know my wife’s company [solana] I hope that she doesn’t watch this or whatever, but I feel like that’s the bet. You know, for smart contracts, if Ethereum doesn’t survive and thrive and get stronger and faster and cheaper, although, I think the rest of the industry. Yeah. I don’t have much hope for the second and third and a quote unquote Ethereum killer by now. Three years later, you know, if you wanted to kill them, you had your chances. And it’s not now, you know, they made the POS transition and whatnot. And so I think that will have a lot of sort of projects under Ethereum and different utilities around. But I consider that to be sort of the world wide web standard of crypto going forward. And I say that because there will be there will be sort of tokens underneath and projects under that, but it will all be under ethereum or it should be in my mind.

John Coleman: Jake, what do you think this flight to quality and recovery looks like? I know you’re sitting on your board eight right now hoping for a dramatic recovery in the NFT space. What do you think is coming?

Jake Thompson: No No unfortunately, not at board eight you know, I’m encouraged by a number of projects that were seemingly strong but even had governance issues. And I’ll mention one called helium that got a whole lot of press, had incredible investors from coast to coast. And the short of it is there are hardware devices all over the country. I mean, there are a million of them now. And it creates a mesh network for 5G, for Internet access, for Internet of Things. Right. The scooter going by. And it was a really neat tokenomics model. Right. And that’s just how the tokens and the business model and all the stakeholders, how it all works together. But even that, right, a lot came out as this was starting to crumble as far as policy and advertisements, even just the amount of money that went to the founders. And I’m a believer in that project, so I say that with some grace, but I think even the excellent project like that, there was some issues, some frailties that we saw that are starting to be fixed now. I’m very encouraged by the corollary of VC, where what we used to be priced most is growth and now it’s more profitability, right? It’s more unit economics. I think we’re seeing that in the crypto space so that you will see a handful of those projects that will continue on to grow as point. Maybe some are under Ethereum, some are under tokens like Solana. I’m a big believer in that layer two space, right? Ethereum, there’s still a lot of issues in terms of making it cheaper to transact on it. And there are these solutions at all. Since you take it off the dream chain, do all the transactions needed and bring it back. I think if I were investing in a token, not investing advice, of course, but if I were investing in a token and checking out of space, I think that layer two is one of the more interesting right now. But I think the space in one year will look a whole lot cheaper than it is now. And I think that’s largely the result of a forest fire. Right. Which is painful to time. It turns out it’s healthier for the forest in the longer term.

John Coleman: So I want to pivot now. This is the Faith Driven Investor podcast and I know Breaux you have been particularly thoughtful about the crypto ecosystem and Web 3.0 as it relates to people of faith. Would you mind just touching on how does a person of faith approach this market, and what do you think is good about this for people of faith? And how should we be thinking about investing in and driving forward this ecosystem?

Breaux Walker: Well, again, another potentially very long answer, because I’ve thought about this a long time. And since I came into crypto in China, where I lived for many years in 2015, 2016. So, you know, I think there’s a huge benefit to peer to peer, you know, direct to your other Christians, let’s say, or even if they’re customers. But I think peer to peer technology has a ton of applications, you know, and I think the allure of that is part of what’s driven the crypto sort of, you know, craze and whatnot. And that is that people see the benefits, whether it’s a cost benefit or actually unlocking a relationship or transaction that wasn’t possible before because there was an intermediary that would have blocked out or made that transaction impossible. So I think, you know, there’s a lot of ways to do this. I think in developed countries, let’s say in the U.S., there’s definitely ways to use crypto and blockchain for churches, let’s say, or, you know, organizations of faith to, you know, better bond their membership and to better help their membership to exchange, you know, anything they want. I would say something of value because it doesn’t have to be monetary value, but it could be books, you know, it could be Christian books, it could be anything tickets to see, you know, a certain speaker. So I think there’s a loyalty slash community building mechanism here that is very strong. It’s very private. You know, obviously, people are worried about government. More and more people are making inroads into their lives and their privacy. And so there’s a privacy aspect here that is there that doesn’t exist, but it’s more of a, you know, the idea of tokenomics in building these coins. And you mentioned, you know, I think was it Shiba or Doge or whatever is really building a sense of community around something of value. You know, people laugh. In the beginning I laughed at Doge even. But you know, these communities feel that there’s a value or values that they share and the token was just a representation of that. So, you know, it’s like, you know, just going to Disney World or whatever, does that add some long term meaningful value or whatever in your life? It’s debatable, but people would say buying the coin and sharing the coin and sending the gift, they felt they benefited in some way from it. So there’s a lot of to be taken from the doge and that shiba coins for Christians and building communities and churches and whatnot. Same thing. Even if you’re a business owner in terms of like building loyalty with your customers, you can use loyalty in crypto and blockchain is actually a very suitable kind of application as well. Obviously talking about fintech and more of a cross-border, you know, getting funds to a minister in Venezuela, for example, I mean, in Cuba where I go a lot. So I did a lot of sort of Bible smuggling and things of that nature in my youth. And I think that was the first thing I thought about, you know, in China when I lived there, I didn’t really dare much to do stuff like that then because I had a lot more to lose as a adult with kids and stuff. But, you know, the Christians in China need our support, you know, really drastically and there are millions of them. So there’s a lot of ways to flow funds and not just funds, but Christian materials, books. They’re starving for all that, you know. So I see it as a the ability to kind of go around governments that are repressive to help people. I’ll say people, but it could be believers, nonbelievers or whatever. But that to me is very exciting.

John Coleman: Jake, I want you to weigh in on this, too. But I will say the first time I felt like I really understood the appeal of Bitcoin back when Bitcoin was the next thing, whatever point version of the web that was. Jake I’m not sure. Maybe it was 1.87 or something. Was someone from a developing market who explained, Look, Americans are going to be very slow to understand why crypto currencies and coins matter because you have a relatively just society, a stable legal system and a stable currency. And he said he was from Argentina and he said, look, with the way our currency moves and the government manipulates it, Bitcoin, as much as that it’s volatile, is still much safer than our local currency. And he said, if you speak to other people in developing markets, whether it’s because their currencies are unstable, whether it’s because they live in restrictive regimes, as you mentioned, like China, where the party has clamped down and so much of people’s lives, this ability to operate independent of them and to have a financial life independent of your government does enable greater freedom for people. And certainly, as you mentioned, enables greater. Support for ministries that might be excluded, for example. So I do tend to think there’s a very redemptive purpose for this marketplace. In addition to all the community building and everything else that you talked about, and hope it doesn’t become overshadowed by some of the challenges that we’re seeing now. But, Jake, maybe if you don’t mind wrapping us on this topic, because I know you’re thinking about this a lot.

Jake Thompson: Yeah. As Sovereign’s Capital we invest, we’ve got a thesis around inherent blockchain. Technology needs to solve a core problem. Right? And so we’ve got a whole framework for that. But I’ll mention three examples. One is exactly you guys are talking about where there’s not a trusted intermediary. Right. And you need to have something that’s truly trustless. Another one would be micro-transactions, right? Where it’s too expensive to send a certain amount across the traditional infrastructure, but crypto allows do that very easily. Third, want to be where creators are creating and can be involved in some of the upside of what they’re rather than platforms taking that like we see today and the subprime what you guys are saying about how we support the church in the body of Christ globally, I think uses all those in really compelling ways. But I’d say even more motivating for me is not necessarily specific uses because I think the space is going to grow so much over time. Right. Like any startup, you kind of invest in the people first because you don’t know what the company, what the industry is going to look like. And I just get really excited about followers of Christ who are entering the space to be a faithful presence in a place that has been defined probably more by greed and a very sincere desire to love and serve. Right, but not necessarily having a strong core of why we’re doing that, what that means, but also a naivete to and believers are going in there looking to love their neighbor, to understand what God has for his creation by being able to be in places like there’s an entire group of folks who are CEOs of household name projects within crypto. And there’s a WhatsApp group has hundreds of people that are in those types of positions that you wouldn’t always know. And I just get excited about that faithful presence being out there as a space of all. So I encourage anyone to get involved as they feel called to it.

John Coleman: Well, I want to wrap today. This has been a fascinating and vibrant discussion, Breaux. We always end by asking people just what God is teaching them in their lives right now through Scripture, and wanted to give you an opportunity just to let people know what’s in your heart from what God has been teaching you lately.

Breaux Walker: Yeah, that’s a great question. So I met with a couple of friends yesterday and I’m working on helping them also with some crypto advisory and whatnot. And we prayed, you know, after talking about all the crypto stuff or whatnot. And for me, you know, and not to tie this back into crypto because I know you didn’t ask that question directly, but I think it is direct as I told the Christians in crypto group as well, you know, I really want to leverage this technology and and whatnot to really spread God’s love and that could be sending blankets to communities or food or whatever. Again, back to what I did a lot of in my youth. And so for me, it’s like the God is love message and how can we use the crypto and blockchain to really spread that love? That’s kind of what I’m praying a ton about now is not just the message, but how to manifest that, how to use the tools at my disposal, at our disposal to try and turn that into action. You know, kind of what the Lord would do if he were here with crypto and blockchain is how does he use it to spread as much love and blessings to people in need? So that’s kind of what I’ve been focused on for the last few months.

John Coleman: That’s a good word, Breaux, and a good way to end the podcast. We’re really grateful to you for spending time with us, Jake. We’re mostly grateful to you for spending time with us as well.

Breaux Walker: [….].

John Coleman: I know you guys have done a phenomenal job helping to demystify what’s been a relatively confusing space today, and we’ll see how this continues to develop. But it is really exciting right now. It’s a really interesting space and we’re grateful that you came on and shared with our listeners how to navigate it. Thanks so much.