Free Money Finance

How Real People Grow Their Wealth

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's a Bankrate piece that tells how real people grow their wealth (versus those who are born wealthy, get a large inheritance, etc.) They start by making this comment:

For most people, wealth does not come in a windfall but instead gathers gradually as a result of years of hard work and diligence.

How true. This is why "time" (and lots of it) is step #3 in my three steps to becoming rich. If you gather little by little and invest it over a long period of time, it eventually becomes a good amount of wealth and presto -- you're rich!

This piece made me think of the following from Proverbs 13:11:

Dishonest money dwindles away, but he who gathers money little by little makes it grow.

:-)

Just another suggestion from the Bible that, if followed, will help make you rich.

The Bible on Today's Economic Woes

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's a piece that discusses the Bible and how it addresses many of the money woes we face today. In particular, I found these quotes to be compelling:

"If you are able-bodied, you need to work earnestly, avoid the slavery of debt and give freely to God and others."

"If you look at where we are as a nation, if we followed that biblical principle, we wouldn't be in this situation," he said.

Obviously it's a bit more complicated than that, but he does have a point. Think of how much better off so many people would be (and how much better off our nation would be), if we all simply worked hard (growing our careers), avoided debt, and gave as we should. Of course I'd add in spend less than you earn, which is also in agreement with the Bible.

These simple principles are why I say the Bible will make you rich. But, of course, you have to follow them. And not following basic money principles can put people in a tough financial situation -- a scene we're seeing played out over and over and over again these days.

A Christmas Sermon

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. Today's piece is a guest post from Marotta Asset Management.

Christians celebrate the birth of Jesus on Christmas Day. But for too many of us, it's the season that unravels the careful financial planning of the previous 11 months. So this year, instead of trading your financial goals for a mountain of gifts and debt, take a moment to contemplate how a spiritual perspective can help you put your wealth in perspective.

In Christianity, my religious tradition, we are only stewards of our wealth. We are entrusted to use it wisely to meet the responsibilities we've been given. Thus our money belongs to God, and we must first ask ourselves, "What does God want us to do with his money?"

You may find a spiritual perspective on wealth either strange or presumptuous. But for all of us, money is an unconscious placeholder for what we value. The way each family uses money expresses their beliefs. Even when someone uses money hedonistically, it reveals their worldview. More commonly, our use of money negotiates a plethora of competing values such as education and recreation, security and travel, or children's needs and parents' needs.

Every spiritual tradition promotes certain actions and ideals as beautiful, virtuous and true and discourages others as ugly, sinful and false. Having a spiritual view of wealth management, whether based on the Judeo-Christian, Buddhist, Baha'i, or any other faith, helps us purposefully apply our values and use money to meet our goals.

The wisdom we gain from our spiritual traditions challenges us to consider our wealth from a new perspective. In the Christian tradition, the words directly attributed to Jesus, often marked in red in the Bible, have the highest authority. But whatever your religious faith, consider the words of Jesus as a prophet and spiritual leader. In the gospel of Matthew (23:23), Jesus says, "You give a tenth of your spices--mint, dill and cumin. But you have neglected the more important matters of the law--justice, mercy and faithfulness."

Giving a tenth of your income each year, or tithing, is a noble endeavor. Many people use this percentage as a benchmark of their generosity, but Jesus offers us a greater challenge and an important warning. He cites three values that are particularly germane when dealing with our perspectives toward wealth management: justice, mercy and faithfulness.

Justice, the first virtue, is acting fairly. The notion of justice seems to be instilled universally in the human mind and heart. We all recognize injustice, especially against ourselves! But the truth of justice is that all people, regardless of their wealth, have equal value in the eyes of God. Although most believe this to be true in the abstract, wealth can make people act otherwise.

We tend to treat those with power and wealth with more respect and deference than those without. And if we have acquired wealth, we may think ourselves better than others for having done so. But being more productive does not make us more valuable. True justice values every person. And its opposite is pride, believing ourselves better than others because we have wealth, status and power.

In the Christmas story, the wise men come bearing gifts for the baby Jesus. They bring him gold because he is a king. Some have cynically mocked the golden rule, misquoting, "He who has the gold makes the rules." The gift from the magi reminds us that Jesus has the gold, and with him as king, justice rules. Wealth need not make us prideful, and we can treat others with equity and humility.

Mercy, the second virtue that Jesus mentions, translates as kindness toward those in need. Mercy is also a universal virtue. Few would argue against being tenderhearted and compassionate. Although the goodness of mercy is universal, unfortunately the practice is not. Statistics show that the more money people possess, the smaller percentage they give to charity.

If mercy is the virtue, greed is the vice. Making progress toward our financial goals need not blind us to those struggling behind us. Part of our careful planning and budgeting should include cheerfully helping those charities and individuals in need. Jesus emphasizes that becoming generous and merciful is even more important than giving a fixed percentage of our income.

Frankincense, the second gift of the wise men, was used to offer prayers to God. It reminds us to have faith that a power greater than ourselves cares for us. Every person among us needs mercy.

The third virtue, faithfulness, involves a covenant relationship with God to trust ultimately in the spiritual, not the material. If we are not vigilant, the many things we buy with money can become the center of our lives. We can find ourselves literally worshipping material goods.

In his book "Mere Christianity," C.S. Lewis warns, "One of the dangers of having a lot of money is that you may be quite satisfied with the kinds of happiness money can give and so fail to realize your need for God. If everything seems to come simply by signing checks, you may forget that you are at every moment totally dependent on God."

The Old Testament law in Deuteronomy 8:11-18 makes this temptation even clearer: "Be careful that you do not forget the Lord your God. Otherwise, when you eat and are satisfied, when you build fine houses and settle down, and when your herds and flocks grow large and your silver and gold increase and all you have is multiplied, then your heart will become proud and you may say to yourself, 'My power and the strength of my hands have produced this wealth for me.' But remember the Lord your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant."

The opposite of faithfulness is fear. We fear that God has forsaken us or is indifferent to our struggles. But fear can paralyze us. And if we do not take risks, we are unable to live and enjoy fully the life God has given us.

The final gift of the magi was myrrh, a bitter gum used in death and burial. In the Christian tradition, it reminds us that even at Jesus' birth, his death on our behalf is foreshadowed. As the apostle Paul writes in the letter to the Romans (8:32-34), "If God is for us, who is against us? He who did not spare His own Son, but delivered Him over for us all, how will He not also with Him freely give us all things? God is the one who justifies; Christ Jesus is He who died, yes, rather who was raised, who is at the right hand of God, He intercedes for us."

If God is for us, we can trust him, and take courage no matter how dark the future may appear. Look to integrate finances with your spiritual traditions to reflect the best of your values and live life holistically.

Seek to avoid pride, greed and fear is a common mantra in investment management. Jesus substitutes the positive virtues: justice, mercy and faithfulness. Don't think more highly of yourself if you have money. Be generous to those in need and trust that God cares for you. Remember these principles this Christmas season, and you will remember the one whose birth we celebrate.

Good Thoughts on Tithing

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's a piece from Crosswalk that offers several good thoughts on tithing. In particular, it addresses:

1. The most common reasons people cite for NOT tithing: 1) Church leaders have used verses taken out of context. 2) Pastors have abused the teaching of the tithe to manipulate people to give. 3) The practice of a weekly collection is of relatively recent origin. 4) Tithing is a part of a legal system while believers are under grace. 5) Certain televangelists have used the tithe to fund their own extravagant lifestyle.

2. Jesus' teaching that tithing is a fundamental aspect of faith in Mathew 23:23.

3. A comprehensive view of stewardship -- not only money but our time and talents as well.

It's a great piece and I recommend it to both those who believe in tithing and those who don't.

As for me, I've written on the subject of tithing quite a bit including these pieces you may want to check out:

• The Purpose of Tithing

• Tithing Versus Giving Generously

• Tithe versus Offerings, What's the Right View?

• Dave Ramsey's Take on Tithing During Tough Times

• Calculating Your True Gross Pay for Tithing Purposes

• Questions about Tithing

• Tithing – A Plan for Grateful Giving

When Values and Profits Collide

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

This week we have a guest post from Jay Peroni. I realize that the issues of abortion, embryonic stem cell research, and the like are volatile, but the issues brought up in this piece are valid -- namely, are you spending/investing in companies/products that go against your personal beliefs (like an environmentalist buying a Hummer, a teacher investing in a company that outsources public school work, and so on). It's a valid question -- not only for Christians, but for everyone. So if any of the examples put you off, please move past those and concentrate on the thought behind them -- are your beliefs and your financial actions aligned?

Most Americans agree that both principles and values should come before any financial profits. If you, too, agree, then would it not be logical to assume that your investments ought to reflect the principles that you hold important in your daily life? This fundamental concept can be hard to follow in today’s society when it appears that so many of America’s most admired companies put profits before principles. Stories of greed, selfishness, and corruptness fill our TVs, radios, and newspapers and can pollute our perception of corporate America. For every bad story, there are also numerous good ones; you just have to be willing to look for them.

Many corporate leaders are faced with decisions in which values and profit collide. This is why it is valuable for you, the investor, to set your priorities. Let your principles and values guide you in accomplishing this task. To start, ask yourself this important question: Would I abandon my principles in favor of choosing a path of profit? Think long and hard about that very question.
 
Would You Take a Bullet for Your Faith?

Sometimes faith is built on a weak foundation—it is easy to move and quick to fall. Other times it is built on solid ground—unable to be swayed or moved. Where does your faith stand? Is your faith strong enough that you would let nothing detract you? Would you take a bullet for what you believe in? If push came to shove and you were forced to choose between your life and your faith in God, what would you choose?

One story from the Columbine High School tragedy involves Cassie Bernall, a student who was shot to death as she confirmed her belief in God. One Tuesday in April 1999, it was reported that Cassie was sitting in the school library studying when the unthinkable happened. A fellow student armed with a gun entered the library and opened fire on his classmates. He came across Cassie and asked: "Do you believe in God?" "Yes, I believe in God," she said. "Why?" the gunman asked. But he did not wait for an answer. He shot and killed Cassie.
 
Giving up your life for your faith is the ultimate sacrifice. I ask you, "How important is your faith in your financial life?" When it comes to your finances, does your faith in God guide your decision-making process or are you motivated solely by profit potential? Is your faith strong enough that you cling to your principles before analyzing what type of gain you may make? Will you take a strong stance, as Cassie did, and stand strong on your beliefs no matter what the consequences may be? Whether you are new to your faith or have a solid foundation, my goal with this book is to help you make a bigger difference with your money. By getting more, you will have more to give!
 
Shock and Awe: I Own What?

I met Hannah Stephenson in 2005. At the time, Hannah was working for a Catholic university. She had never put much thought into her retirement portfolio or the values it reflected. As she glanced at the list of stocks held in her mutual funds, she recognized a few familiar names. They appeared to be good companies with good products. However, as she progressed farther down the list, some names stood out like a sore thumb (names changed) . . .

• Cuties and Beauties, Incorporated—Producers of pornographic videos and magazines
• Extinction Corporation—Producers of abortion-related products
• We R God & Associates—A company involved in cloning and embryonic stem cell research
• No-Tell Hotels—Engaged in promoting pornographic video distribution  

Beyond the names Hannah recognized, there were probably many others she was unaware of that also violated her moral compass and contradicted the beliefs of her faith. Hannah had made conscious decisions not to support unfavorable companies that did not reflect her values. In spite of these conscious decisions in her consumer life, the end result showed that some of Hannah’s investment purchases had slipped through the cracks in her portfolio. She questioned whether she should be investing in companies she was so strongly opposed to. How could she do this with a clean conscious? If she did profit with her current investments, was it the moral and ethical thing to do?

Where to Draw the Line?

Hannah makes deliberate choices in her life each and every day. Such choices include, but are not limited to: where she works, where she spends her income, what charities and ministries she supports, and where she invests her savings.

• Work: Hannah wouldn’t work at an abortion clinic because she is pro-life.

• Spending: She wouldn’t purchase pornography.

• Giving: She wouldn’t donate money to fund embryonic stem cell research.

• Investing: Hannah did not even consider where she was investing. She unknowingly was investing in a mutual fund that bought the types of companies that were in conflict with her beliefs.

Disturbingly, upon reviewing her statements closely, Hannah found that she was supporting all of these areas with her investment dollars. Even though Hannah strives to support causes she believes in and avoids things she is opposed to, these factors were never considered in her investments. Each year her investment dollars were supporting values that blatantly contradicted her belief system. Bottom line, Hannah felt that she was working against herself.

The Fuel to Feed the Fire

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Jay Peroni.

You may think, I cannot succeed financially; there are too many obstacles. You may not be able to succeed on your own, but with God by your side, anything is possible. He can make things happen that seem impossible. He can open doors that you never thought could be opened. Do you have faith that the Creator of life can supernaturally turn your financial life around? He can make a way for you even when the odds are stacked against you and there appears to be no way. Don’t see God as a small-sized God but rather a God who can help you accomplish anything.
 
Do you know people who are always negative? Even if something good happens to them, they still find something to complain about. You know the type: poor me, nothing good ever happens to me, this is just my luck, etc. It is hard to be blessed when you cannot recognize a blessing when it comes. Turn your negative thoughts into positive responses. Things can always be worse. With God by your side, you can get through whatever you face.
 
Ron was at rock bottom, in his late forties and about to lose everything: his family, his business, and his millions. The 1980s real-estate market downturn left Ron with highly leveraged real estate and wiped out his net worth in an instant. A "paper millionaire" no longer, he now owed more than his properties were worth. To top it off, he was three months behind on his personal residence mortgage payments and about to lose that as well. Here Ron was, bankrupt, a failing marriage, and considering ending his life. It was painful for him to wake up each day. This went on for months, then years. He hung in there, and his family stuck around despite his behavior.
 
Finally, a friend leveled with Ron. "I know you have been down in the dumps and keep focusing on the life you lost, but think about the living you still have left to do. God loves you and can still use you for His good. Focus on the good in your life and forget the bad." His friend then challenged him, "Ron, don’t you think God wants you to do more than you are doing? Don’t you think He has better things in store for you? You need to stop being so negative!"
Ron took the advice to heart and began waking each day with a new mind-set. He concentrated on the good things in his life and worked hard to turn things around. He leaned on God and fought his way out of depression into a life full of hope, promise, and a brighter future. He concentrated on restoring his broken relationships, building back his finances, and honoring God with his attitude.
 
When Ron turned to God, he found joy, a fresh vision, and a new sense of purpose. Life is a precious gift—every second, each breath, and the start of every new day. You may never get another opportunity to do the things that matter most. You may be so busy that life can pass you by. When you realize what’s important, and create a plan to make it happen, you will reap the greatest rewards. Having a plan is important, but you also need to have a personal connection—something that will keep you motivated. There needs to be fuel to light a fire under you.
 
Without knowing what is truly important to you, goals have little meaning. Like the dieter who says, "Yeah, I’d like to lose the love handles," as he eats two more doughnuts, chugs two beers, and watches another episode of Jerry Springer. His motivation is at zero. Now add some meaning to your goals and it’s a different ball game all together. Take, for example, a woman who has a burning desire to lose her post-pregnancy pounds and fit back into her pre-pregnancy wardrobe. She wakes at 6:00 a.m. every morning, does sixty minutes of cardio, and has been keeping track of her calories. Who do you think is more likely to stick with a diet: the Doughnut Dude or the Motivated Mama?

What Truly Matters, Part 3

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Today we have another excerpt from chapter 4 of Money, Purpose, Joy: The Proven Path to Uncommon Financial Success. This is the last post in this series. Enjoy.

Don’t Be a Bystander in the Passion Game 

Some people cry while watching love stories. I cried while watching Walk the Line, the story of Johnny Cash. A number of scenes stirred my heart, but especially the concert Cash performed at Fulsom Prison toward the end of the movie. Just before going on stage, he saw something that reminded him of his brother, who died in an accident when he was very young. That memory kindled something in Cash—perhaps a mix of grief, anger, and maybe even a haunting question about whether he could have done something to prevent his brother’s death. It all poured out on stage. His performance was that of a man living life to the full, unable to hold anything back. The energy he brought to that performance overwhelmed me.

As the credits rolled and the lights came up, I felt embarrassed that my eyes were glistening with tears. But mostly, I was glad to be that moved. Something in me longed to live with the passion I saw before me.

A few weeks later I read this comment about Johnny Cash from the musician Don McLean: “One of the things I loved about him was he was a little frightening when you first heard him.”  Isn’t that great? Isn’t that exactly what it’s like when we see someone bringing all that they have to whatever they’re doing?

Performers don’t have the exclusive rights to passion. If you work at something you believe in, something that makes a difference in the world, something that’s an expression of who you are and what you were put here to do, won’t you do it with passion? Isn’t life far too short to settle for anything less?

Letting Contribution Lead

What contribution do you long to make with your life? When it’s all said and done, what difference will you want to have made? Maybe the off-road adventure you long to pursue is that vocational dream that comes to mind every time life gets quiet enough for you to notice, the one you keep trying to hush because of your financial obligations. What if you began using your money in a way that could make your dream job come true? What if you had enough savings to quit your current job or reduce your hours or go back to school in order to pursue the work you really want to do? Your employer might even pay for your schooling. The vast majority of large employers offer some type of educational assistance, yet fewer than 10 percent of eligible employees take advantage of such programs.  Does your employer offer tuition reimbursement? If so, why aren’t you taking advantage of it?

So what if saving money to pursue the work you were meant to do means vacationing a bit closer to home or wearing last year’s clothes another year? If those sacrifices enabled you to pursue more meaningful work, wouldn’t they be worth it? The ads promise that the seaside resort and this year’s fashions will make your life so much more exciting, but the truth is, doing what it takes to pursue more meaningful work will be the route to a far more satisfying adventure.

It’s all too easy to use money in a way that moves you further away from your longing to make a difference—further and further away from home. It’s all too easy to take on financial obligations that rob you of the flexibility to accept a job for less pay, even if that’s the one that resonates with your heart. So as you contemplate each of your many financial choices, ask yourself how your choices are likely to impact your ability to pursue the work you were meant to do. (If you are married, be sure to do this in partnership with your spouse.)

For example:

• How would remodeling the kitchen—along with the monthly payments on the home equity loan you plan to use to pay for it—impact your ability to pursue the work you long to do? Might it just chain you to your cubicle for the next five years?

• Would taking a promotion that’s been offered to you be the wisest choice or could the extra hours required by the job kill any chance of going back to school or of doing the volunteer work you want to do?

• Do you really need two cars, or would the ability to build a sabbatical fund make the inconveniences of living with just one worth the effort?

To be sure, these are not easy choices. It is not inherently wrong to opt for the new kitchen, the promotion, or the dual-car household. But if those choices diminish your ability to live a life of meaning and joy, are they really worth it? It’s important to at least consider such questions.

Our Greatest True Desire

As we have seen, two elements of what truly matters in life are having meaningful relationships and making a meaningful contribution. Both are part of our design; they’re part of who we are. When we make financial choices that strengthen our relationships and help us make a difference with our lives, we’re on the path toward home.

But within each of us is a third longing. In fact, it is the most important one, for when we understand this true desire, we see once and for all that we were never meant to settle for life as Consumers; we were meant to be so much more.

What to Remember

1. Two of our most important true desires are the desire for meaningful relationships and the desire to make a meaningful contribution with our lives.

2. Successful, joyful money management involves making financial choices that support these desires.

3. Such choices look different for different people, but we can stay on track by asking ourselves questions such as: Will buying a home with more space enhance our family relationships or could it hurt them if we stretch our finances too far in buying the home?

What to Do

1. Who are the most important people in your life? Take the time right now to write them down on a piece of paper or in your guidebook, but try to include no more than five. To make it easier, group some together. For example, if you have kids, don’t list each one separately; just write down “my children.” Do the same with your parents and other important groups of people in your life.

2. What contributions do you long to make with your life? Are there causes you’d like to support either with your volunteer time or with your money? What did you once long to do that you have given up on because there are bills to pay? Would you like to switch from full-time work to part-time work so you can spend more time with your children? Capture some of your thoughts on paper. Don’t worry about “how” just yet. We’ll get to that later. For now, just focus on “what.”

3. Now take a look at the list of financial goals you wrote down earlier. How might the pursuit and accomplishment of each goal impact your most valued relationships and your ability to make the difference with your life that you want to make? See if you can identify at least one way that the pursuit and accomplishment of each goal could be helpful and at least one way that it might be a hindrance. Write your answers on a piece of paper or in the guidebook. Are there any changes you’d like to make to your goals list?

What the Word Says

Love others as much as you love yourself. –Matthew 22:39 (CEV)

We are God’s workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do. –Ephesians 2:10

What Truly Matters, Part 2

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Today we have another excerpt from chapter 4 of Money, Purpose, Joy: The Proven Path to Uncommon Financial Success. I'll be running the entire chapter over the next few Sundays. Enjoy.

Letting Relationships Lead

Who are some of the most important people in your life? If you are single, it might be your parents or siblings and your closest friends. If you’re married, your spouse is probably at the top of the list. If you have children, I’m sure they’re on the list as well. Who else? Get a clear picture in your mind of at least five people who are really important to you. Now ask yourself whether your use of money is strengthening these relationships or hindering them in some way. 

It’s all too easy to buy the house we want, even though it requires such a long commute that we have little time to spend with family or friends. It’s just as easy to spend so much on clothing or vacations that we go into debt or try to get by without savings, even if doing so adds stress to our relationships.

That’s why, whether single or married, it’s important to ask how your financial decisions are likely to impact your most significant relationships. For example: 

• Would that cross-country move that comes with a $10,000 raise be in your best interests, or could saying goodbye to your friends be too much to exchange for the higher pay?
• Would a house with more space best serve your family, or would living with more financial margin be a better choice?
• Do you really need to be able to tap the Internet, watch television, and check e-mail with your cell phone, or would the financial breathing space of a less expensive calling plan help you save for vacations with family or friends?

It’s not inherently wrong to relocate with your company, buy a bigger house, or opt for the latest cell phone services. But it’s important to ask and wrestle with such questions, because relationships matter more than we sometimes realize.

So does contribution.

Contribution Matters

In the opening scene from About Schmidt, Warren Schmidt, played by Jack Nicholson, is staring at a clock on the wall of his office, counting down the minutes before his final day at work will be over and his retirement will begin. He has spent his career working as an actuary for an insurance company, where he rose to the position of assistant vice-president. At the end of his last day Schmidt sits in the midst of his boxed belongings, watching the clock, waiting until 5:00 p.m. when the workday and his career will be over.

At a retirement dinner that evening a long-time colleague toasts him, telling Schmidt he should feel “rich” to have devoted his life to something so meaningful. The look on Schmidt’s face says he’s not so sure. He once dreamed of having his own business, but instead chose the security of a steady paycheck.

Shortly after Schmidt’s retirement, his wife dies. The sudden changes—retirement, the loss of his wife of over forty years—leave Schmidt wondering even more about the meaning of his life. “I know we're all pretty small in the big scheme of things,” he writes to Ndugu, a six-year-old Tanzanian orphan he sponsors in response to a television advertisement. “And I suppose the most you can hope for is to make some kind of difference, but what kind of difference have I made? What in the world is better because of me?”

Our culture would have us believe that life is about competition. It tells us that happiness is found in having more than we have now and more than others have. But as Nicholson’s character expresses so well, it’s contribution that we long for, a sense that we are making a difference with our lives. David Myers says that when our work adds purpose to our lives, when we view it as a calling, it adds mightily to the quality of our lives: “Happiness is loving what you do, and knowing it matters.”  Here again, psychology affirms the biblical teaching that we were designed to make a difference, that God “created us for a life of good deeds.”

The Money/Contribution Connection

We can experience a sense of calling in our paid work, our volunteer work, the work of parenting, and more. Martin Seligman, a psychology professor at the University of Pennsylvania, says for some people meaning is found simply in how they view their work. He tells of a hospital orderly who meticulously selected pictures for the walls of a room where a close friend of Seligman’s lay unconscious. The orderly explained, “I’m responsible for the health of all these patients. Take Mr. Miller here. He hasn’t woken up since they brought him in, but when he does, I want to make sure he sees beautiful things right away.”

This orderly viewed his work as integral to the healing of patients. Another orderly might think of his work as menial and meaningless. The first orderly sees his job as a calling; the second sees it as a source of income. The tasks are the same; only the perspective is different.

Other people find meaning in how they use the fruits of their labors. For as long as Michelle can remember, she has cared about the poor. When she was young, she considered a career in social work, but her father talked her into studying business and she became a certified public accountant. Then her brother persuaded her to go to law school, and she became a corporate attorney. It’s never been her dream job, but she excels at it and earns a good living. She has thought about leaving the corporate world to work in the non-profit sector, but she candidly acknowledges feeling fearful of leaving something she knows how to do so well. So, Michelle has found a way to make a meaningful contribution without leaving her day job.

For several years she has invested her skills and money with an organization that serves homeless people in Chicago. Michelle chooses to live a far less expensive lifestyle than many of her colleagues in order to give away a remarkable 35 percent of her income—some of it to her church, much of it to the homeless ministry. Soon the ministry will open a new youth and family center where neighborhood kids will receive after-school tutoring and take part in sports leagues and other programs designed to help them stay out of gangs and finish school. Michelle used her legal skills to help the organization complete a deal with the city of Chicago to purchase land for the center and her donations helped to fund it.

Michelle says that investing her money, time, and talents into the homeless ministry is one of the most rewarding parts of her life. “I know that this ministry is changing people’s lives. People are getting off drugs, getting back on their feet. Volunteers are mentoring kids who’ve never had positive role models in their lives. Being part of this helps me see a greater purpose for my career path.”

While Michelle’s use of her money and her talents enables her to make a meaningful contribution, other people’s use of money prevents them from doing so. For example, a heavy debt load keeps some folks from pursuing the vocation best suited to their gifts and passions because the work doesn’t pay enough to cover the bills they’ve incurred. Others have become so acclimated to their lifestyle that it seems unrealistic to go from full-time work to part-time work in order to pursue their true calling, which could be spending more time with their children.

As Po Bronson points out: “Failure’s hard, but success is far more dangerous. If you’re successful at the wrong thing, the mix of praise and money and opportunity can lock you in forever.”  It’s not easy to make a change, particularly when things are going well—you keep getting promoted, the money is plentiful, the slaps on the back frequent. In many ways, that was my story.

I was working a corporate job with a good salary and plenty of perks. The position enabled me to provide a comfortable life for my family. But I felt a growing sense of unease, a mounting conviction that there was something else I was meant to do. It wasn’t easy to push back from the corporate table, where the food was plentiful. And I took some flak from well-meaning people who questioned the timing of my decision to step down. They wondered whether it would be more responsible to wait until our kids were grown before following my dream to write and teach full-time. But I couldn’t ignore the disconnect between my career and my heart. I felt like I was “living divided,” and I just couldn’t do it any more.

I’m blessed that from the earliest days of our marriage my wife has shared my dream of one day being able to do this work full time. Together, we made decisions designed to help us save enough money for me to be able to walk away from my corporate job. We both worked at the start of our marriage, but we committed to living on one income so that we could give to causes we believe in, save aggressively, and be prepared to have Jude stay home with the children we hoped to have. When we bought our first home, a condo, it was in what realtors optimistically termed an “up and coming” Chicago neighborhood. Basically, that meant three things: there was no Starbucks down the block, the symbols that would often appear overnight on the corner mailbox were not meant to beautify the neighborhood, and we were able to live with plenty of margin. I drove the car I brought into our marriage until it had nearly 200,000 miles on it. Now I drive the car Jude brought into the marriage, and it has 160,000 miles. During my corporate career we could have easily bought a nice luxury car for cash, but the freedom to pursue this work mattered more, so we focused on building savings.

It’s all too easy to lose touch with our longing to make a meaningful contribution. Before you know it, the house payment, the car payment, and the hours you work to pay for it all can make any thought of pursuing more meaningful work seem unrealistic. Or it’s easy to succumb to fear. You think: How will I make it work if I choose a line of work that pays less? Even worse, What if I fail? But consider this: What if you never try? Wouldn’t that be the greater failure? If there’s an ache in your heart to do something else, pay attention to that ache; it’ll motivate you to do what it takes to pursue the work you were meant to do. And that will help you recapture some of the passion you once had.

What Truly Matters, Part 1

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Today we have an excerpt from chapter 4 of Money, Purpose, Joy: The Proven Path to Uncommon Financial Success. I'll be running the entire chapter over the next few Sundays. Enjoy.

Love one another. –John 13:34

Joy can be real only if people look upon their life as a service, and have a definite object in life outside themselves and their personal happiness.  –Leo Tolstoy

More than one hundred years ago, sociologist Georg Simmel observed people’s use of money and concluded that, in many cases, it was leading them away from the sense of meaning and purpose they so desperately wanted. The reason, he felt, is that they simply didn’t know what makes for a meaningful, purposeful life: “The lack of something definite at the centre of the soul impels us to search for momentary satisfaction in ever-new stimulations, sensations and external activities.”

The path toward home will only come into view when we become clear about what truly matters, what really gives our lives meaning, purpose, and joy. As we saw in the last chapter, our culture has strong opinions about this. Researchers in the emerging field of positive psychology have had a lot to say on this topic as well, but their conclusions are quite different than those of our culture. And as we’ll see, the findings from psychology simply echo what the Bible has been teaching for thousands of years, beginning with our desire for meaningful relationships.

Relationships Matter

My parents passed away within twelve months of each other. The last year of my mother’s life and the year that followed, which led to my father’s death, was a time of much stress and sorrow. It was agonizing to see the pain that cancer inflicted on my mother and the debilitating effects of heart disease on my father. Making matters worse for my dad was the deep grief and loneliness he felt following the loss of my mother. They were married for nearly forty-seven years. But that period was also a time of rich moments spent in simple conversation. I will always remember my father telling me in the quiet of a hospital room late one evening how grateful he was that my mom “took a chance” on him and that being married to her was his greatest joy.

Living a little over an hour away from their house, I was able to spend a lot of time with them as their health declined, and it was one of my greatest honors to be at their side when they each drew their final breath. Throughout their illnesses I saw firsthand what I think we all know to be true: when our time here draws to a close, our hearts will not be filled with longings to redecorate the living room or take one more trip to Europe; we’ll simply want to be with the people we love. There’s something about knowing our time is short that helps us clarify what really matters.

Our culture encourages us to love money and what it can buy. Psychologists say if it’s a life of meaning, purpose, and joy we’re after, we’d be better off loving people. Social psychologist David Myers has reviewed hundreds of studies about happiness and concludes that, “Social support—feeling liked, affirmed, and encouraged by intimate friends and family—promotes both health and happiness.” He cites numerous studies showing that people in close relationships cope better with various stresses, including bereavement, job loss, and illness. In one study of 800 college graduates, those who preferred a high income, occupational success, and prestige to having close friends and a close marriage were twice as likely to describe themselves as “fairly” or “very” unhappy.

Of course, the research from psychology only affirms what the Bible teaches. Jesus taught that loving others is second only to loving God in importance.  And the Apostle Paul said, “No matter what I say, what I believe, and what I do, I’m bankrupt without love.”   We were made for relationships. It’s written throughout the pages of Scripture.

The Money/Relationships Connection

What does our true desire for meaningful relationships have to do with money? Quite a bit, for the way we use money can either enhance our relationships or detract from them.

My friend Tom provides a good example of how our use of money can build our relationships. He and his wife, Rachel, committed early in their marriage to live free of debt. Not just credit card debt, but automobile and even mortgage debt as well. They figured the freer they were from debt, the freer they would be to spend time with the children they hoped to have. When Tom and Rachel decided to buy a home, they looked for one that was large enough for the family they desired and affordable enough to pay it off in a short amount of time. They found just the home in a western suburb of Chicago. It had plenty of space and was located near a riverside trail, which appealed to their love of running and biking. It was also reasonably priced, partly because it had no garage. They were willing to make the trade-off: no garage in exchange for a house that, before long, would require no mortgage payments.

Rather than relying on the advice of realtors or mortgage brokers, who would have told them that they could afford a much more expensive home, Tom and Rachel made their decision based on what truly matters—their commitment to family relationships. By living well beneath their means, they paid off their house in just five years. That enabled Tom to reduce his hours at work and be content with the lower pay that came with the deal so he could spend more time at home, which is especially important now that they have five children.

Unfortunately, not every couple is so naturally in synch when it comes to finances, and this can put stress on the marriage relationship. A former co-worker once confided that he and his wife were having frequent arguments about money. They are “not on the same page” financially, he explained. She’d like to do some significant landscaping in their yard, and pay for it by taking out extra money when they refinance their home. He’s not comfortable taking on more debt.

As we talked more about it over lunch, it became clear that this couple did not see money management as a partnership. Although they had a budget, he kept the books, while she wondered why there wasn’t enough for the things she’d like.

I suggested that they begin holding monthly “board of directors” meetings. The purpose for the first couple of meetings would be to pray about, discuss, and develop a financial vision for their family. What is God calling them to do with the resources he has blessed them with? Do they have enough in an emergency fund? Should they plan to help their children pay for college? What do they see themselves doing in their later years? From that vision they can set specific goals, and those goals will make daily financial choices much clearer.

It may be that the decision to invest in making their backyard more inviting fits perfectly with a shared vision to spend more quality family time at home. And maybe they could move toward each other—agreeing to invest in the landscaping, but waiting until they have enough in savings to pay for it without going into debt. Or, they may find that the landscaping project would prevent them from accomplishing a more important goal. If that’s the case, saying no to the landscaping project is likely to become easier since they both agree that the other goal is a higher priority.

Bible and Money Roundup

I've been "collecting" articles on the Bible and Money and have been waiting for a Sunday to share them with you. Here are the pieces along with summary quotes from each:

• Churches are looking at hard times -- With the economy in crisis, congregations around the country are cutting expenses at the very moment many members need help with food, heating bills and gasoline. Some members of the clergy say their fundraising has remained steady despite the economic downturn, but how long that will last is unclear. Some are postponing building plans and delaying new programs just in case.

• Maybe We Should Blame God for the Subprime Mess -- Has the so-called Prosperity gospel turned its followers into some of the most willing participants — and hence, victims — of the current financial crisis? That's what a scholar of the fast-growing brand of Pentecostal Christianity believes. While researching a book on black televangelism, says Jonathan Walton, a religion professor at the University of California at Riverside, he realized that Prosperity's central promise — that God will "make a way" for poor people to enjoy the better things in life — had developed an additional, dangerous expression during the subprime-lending boom. Walton says that this encouraged congregants who got dicey mortgages to believe "God caused the bank to ignore my credit score and blessed me with my first house." The results, he says, "were disastrous, because they pretty much turned parishioners into prey for greedy brokers."

• Would God buy that stock? -- Socially responsible funds have begotten a subset of portfolios based on religious principles. Investors are guided by their beliefs, but how well do those translate into profit?

How You Handle a Little is How You'll Handle a Lot

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

About a month ago, I had a reader leave the following comment to my post titled How the Rich Go Broke:

I believe that if you can manage a small amount of money well you can also manage a large amount of money well. If you can't manage a small amount of money, having more money isn't going to solve your problems. It might just get you in over your head faster.

It made me think of this quote from the Bible:

"Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else's property, who will give you property of your own?" Luke 16:10-12

A couple thoughts on this:

• If you do handle your money right when you have a little, you will eventually have a lot. It's simple math. How can you do this? See my three steps to becoming rich.

• I've heard people say many times, "If I was well-off, I'd give money to help others," "When I'm rich, I'll give," or something similar. This may be true for a person here or there, but it's not true for most people. Having more money simply allows people to do more of what's already in their hearts. If they were really the giving kind, they'd be giving now -- even if it was only a little bit here and now. But if they're spending it all on themselves now, when they get more they'll do the same (spend it all on themselves). This is fine by me -- it's their money -- but they shouldn't fool themselves thinking they'll be generous at some future date when they're not generous now.

What are your thoughts on this issue?

Accountability Partners in Financial Matters

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Mighty Bargain Hunter, one of my favorite personal finance blogs.

I'm on my church's benevolence committee, and as such we hear about people, often within the church, with financial problems.  People get into financial hardship for many reasons: job loss, medical issues, or sometimes by a pattern of living beyond their means.

When we get requests for money from people, they are usually up against a wall and will face fairly severe consequences without the help: their phone or electricity will be shut off, or they might be facing bankruptcy or foreclosure.  At this point in the game it's usually a bit too late to help them with the basics of personal finance to get them out of their current predicament, but after the crisis passes, we try to match the people up with someone who can help to hold them financially accountable.  The goal is to be compassionate and to help in the long run.  It is also a goal not to enable the person to spend themselves into a hole again and again.

The idea of accountability partners draws from addiction recovery like alcohol addiction, gambling addiction, etc.  The "weak" person is paired with someone "strong" and meets with them regularly to check in, have someone to talk with, and have someone to admonish them if they begin to fall into old habits, since the "strong" partner presumably has financial discipline and is not tempted by over-consumption or abuse of credit.

Of course, it's not necessary to wait until getting into trouble to have someone to help you stay on track!  Though it's certainly wise to get help if you're in trouble, it's wiser to get help when you sense that things are going downhill:  the checkbook balance has been decreasing for a few months, "gotcha" fees from your checking account are beginning to happen, or money is starting to disappear and you don't know where it's going.

Where can you find someone to help you remain accountable?  Well, church is a good place.  Work may be another option, or a civic organization that you participate in.  The person should be someone that you trust to delve into your finances and someone who manages money well themselves.

What if you're approached by someone who wants you to help them remain accountable with their finances?  The person probably didn't come to you out of the blue.  They either know you're good with your money, or someone told them you're good with your money.  This doesn't happen by accident.  God has probably gifted you with wisdom, and you're applying it to your finances.  By bringing this person to you, God is offering the opportunity for you to exercise your gift (Romans 12:6-8).

Faith-Based Investing: Do Faith and Money Mix?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Jay Peroni.

In the book of Mark, this question is posed: "What does it profit a man to gain the whole world, and forfeit his soul?" (8:36 nasb). Through the effort to find solutions to address the issues that go along with this question, faith-based investing was born. This movement seeks to align a person's faith, moral beliefs, and ultimately God's Word with the investment community.

There are now millions of religious investors attempting to align their morals and values with their investment portfolios. Religious concerns have long been a factor in the investment process because investors have wanted to avoid companies that contradict their belief system. This began with social screens such as alcohol and tobacco and has migrated to moral issues such as pornography and abortion.

There has also been a recent movement for investors to reassess their financial priorities in light of the corporate and mutual fund scandals that have surfaced over the last ten years. People are looking for more meaning in their lives and ultimately to make a more positive difference with their investments. This has led to the desire and ability to screen for more social and moral issues.

The rise in the number of faith-based mutual funds and money managers has opened the door to new avenues of investing. There also has been a surge in the level of sophistication in research available to advisors, money managers, and individual investors. As a result of this movement and awareness, millions now have the opportunity to put their money where their values are.

The appropriate starting point for any investment should include having a noble purpose as well as developing a process to maximize moral integrity. It is not just whether you should compare the harm of investing in one company vs. another company. It is more about trying to avoid the "blood money" that results when you invest in companies that are not in line with your beliefs. If you participate through your investment dollars in things you do not agree with, you are still enabling that activity. More important, when you send money into a mutual fund that invests in things that are objectionable to you, your moral integrity has been compromised.

The limitations of your knowledge should not blind you to the fact that there is a moral responsibility when you invest. If you look the other way when others are doing wrong, you are still morally responsible. So how do you invest in a manner that reflects your morals and values? This will be discussed at length throughout the book.

The first part of the process is to determine what is truly important to you. Is God a top priority in your life? Are you looking for balance and consistency? Doesn't it make sense to include your faith in all areas of your life - finances included?

Do You Really Want to Change Your Financial Future?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Jay Peroni.

When Charlie met Frank at a bowling league in November 1998, they hit it off instantly and became the best of friends. Charlie had always been a hard worker, sometimes working two or three jobs as a plumber and an electrician. He made a good living, but never seemed to save enough to get him closer to financial freedom. Now in his fifties, Charlie had the expectation that he would always have to work to make ends meet.

Frank, on the other hand, was a lifetime firefighter. Though he never had an income over $80,000 a year, he saved every month and socked away enough money to have financial freedom at the age of sixty. His idea of retirement was the ability to work by choice not requirement. Now that he has "retired," Frank is actually busier than ever-volunteering at a soup kitchen, helping with the children's ministry at his church, and helping lower-income fami¬lies complete home repairs they could never afford on their own.

Though ten years separate Frank and Charlie, they have a ton in common and spend many hours a month together fishing, hiking, going to ball games, and bowling. Charlie could not grasp how Frank was able to live so well in retirement. He often joked that he would never be able to retire and could never imagine the financial freedom that Frank has.

As long as you cannot imagine it, your dream will never come true. Self-defeating thoughts and self-imposed ceilings limit your financial progress. Your thoughts and attitudes will determine your success. If you have no strength to overcome this mind-set, you will fail to reach the potential God intended for your life. It is not a lack of resources or a shortage of talent that prevents you from achieving wealth; it is the barrier that resides inside your mind. Your thoughts can keep you from living the financial life God has prepared for you. You will never change your financial future until you change your thinking. Do you think God will want to provide you with new, exciting, and fresh ideas if you continue having negative thoughts and a bad attitude?

Envisioning your dreams coming true is a huge key to your success. Have you ever seen the movie Rudy?1 It is based on the true story of Daniel "Rudy" Ruettiger. He grew up in a mill town and dreamed of playing football at the University of Notre Dame, for his dad's favorite team. The obstacles facing Rudy were tremendous, to say the least. A few barriers included Rudy's poor grades and lack of money to attend Notre Dame, insufficient talent to play football, and not having the physical size (Rudy was 5' 7" and weighed 165 pounds) to play football for the Fighting Irish. Instead of chasing his dreams, Rudy takes a job at the local steel mill and settles for mediocrity until his best friend, Pete, is killed in an explosion at the mill.

It is then Rudy decides to make his dreams of attending Notre Dame and playing college football for the Fighting Irish a reality. He is ridiculed by friends and family for his idea and is even rejected by Notre Dame. He could have let bygones be bygones, but instead goes to a small junior college, hoping to qualify for a transfer to the university.

During his final semester of eligibility for transfer, he is granted admission to Notre Dame. After walking onto football practice tryouts, Rudy convinces the coach to give him a spot on the football practice team, where Rudy exhibits more drive and desire than some of his big-name varsity teammates.

Ultimately, it is this drive and determination that get Rudy to fully realize his dream-playing in a game. In the final game of the season, the coach is persuaded to insert Rudy (after all the players and later the fans chant, "Rudy . . . Rudy . . . Rudy . . ."). Rudy gets in the game and sacks the opposing quarterback to end the game. Rudy is then carried off the field by his teammates and becomes the last Notre Dame player to have such a distinction.

Tapping into God's Supernatural Assistance

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Jay Peroni.

Do you believe just because you are a Christian and have a need, God will always intervene supernaturally? If so, this is an incorrect assumption.  Look at the world around us.  Many Christians are in need and go without help every day.  There is a line between what you can do on your own and what God can help you with.

After obeying God's principles and reaching the end of your abilities, God provides supernatural assistance apart from anything you could ever do on your own.  Even when we defy God's Word, He is a loving and graceful God that still intervenes as an act of mercy.  We should not expect this, but know that He is always there.

Are you struggling financially?   Are you finding it difficult to make ends meet in this troubled economy?  Have no fear, rely on God's strength.  His supernatural power can take you places you would never reach on your own.

Supernatural is that which occurs beyond what is natural.  This phenomenon is above natural laws and beyond verifiable measures.   This occurs once we have maximized natural laws - our abilities.  Many Christians pray for financial miracles, but instead should be praying for God to provide opportunities.   Miracles are not necessary in order to achieve natural success.  This form of success comes when you apply God's principles to your finances.   The supernatural is only necessary when you are limited in your natural abilities.  You can do more than you are currently doing.  Don't use God as a crutch, use Him to propel and maximize your strengths and help you overcome your weaknesses.

Remember when Jesus was faced with a dilemma of how to feed five thousand people with five loaves and two fish?  God supernaturally multiplies the loaves and the fish so that not only is everyone fed, but food is left over.  God intervenes when needed.   Is there anything in your financial life where you have done the best you can but your best is not enough and you want God to step in and perform a miracle for you?  This is a good time to trust Him for supernatural assistance.   How do you tap into God's supernatural assistance when it comes to your finances? 

The keys to tapping into God's supernatural assistance are:

1. Maximize your natural ability - Do all that you know to do.  Seek wise counsel when you get stuck.  If you lack knowledge, find someone who has experience and knowledge.  Do the best you can and trust God for what you cannot do.  Need financial help?  Seek a faith-based financial planner.  Go to www.kingdomadvisors.org or www.nacfc.com to find a qualified advisor.  Read The Faith-Based Millionaire.   Learn all you can about finances so you can become a wiser steward.
2. Live a life that glorifies God - How can you expect God to supernaturally assist you when your life contradicts His principles?
3. Obey God's instructions on giving - If you are not tithing and generous with money how do you expect God to show you mercy or bless you?
4. Pray and seek Him always - There are certain walls we hit that cannot be moved without a commitment to prayer and seeking God.  Prayer enables you to release everything to God and tap into His power.  He is able to help you beyond human comprehension.  Seeking Him and communicating with Him is essential.

Are you in need of a financial miracle?  Whatever your circumstances or situation, ensure that you are actively incorporating these four areas into your financial life.   Do all you can, seek wise counsel, and trust God for supernatural assistance to aid you in realizing the goals you trust Him with.

The Economic Earthquake of 2008; Implications, Vulnerabilities and Aftershocks

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

The following is a guest post from Chuck Bentley, CEO of Crown Financial Ministries. I've been a supporter of Crown for many years and can say that this ministry is the real deal. It helps families in financial difficulties get back on the right track by providing solid financial advice and accountability. If you're looking for a good charity to support, this is certainly a worthy ministry and one needed by so many people in these tough economic times.

In 1991, our late cofounder Larry Burkett wrote The Coming Economic Earthquake, warning of the dangers of the ever-growing appetite for debt by our society and federal government alike. Although a best seller and helpful to many who heeded his advice, he received harsh criticism for his failure to peg the event to a date certain. Many dismissed his work as “too simplistic” and unsubstantiated by economic models. Others painted him as a “doom and gloomer,” especially in light of the robust economic growth of the 90s. Larry remained humble towards his critics, stating he was not attempting to be a prophet but was only making Christians aware of their need to apply God’s Word. He said that even if the events he outlined in his book did not occur, the reader would be better off for following the advice that God gave for our benefit. 

Interestingly, Larry also warned in his 1998 best seller Business by the Book that 2008 could be a “horrendous year” for the economy as the baby boomers began to retire.1 At that time, he had no awareness of the toxic shock that would be brought about by the massive run-up of household debt through sub-prime mortgage loans.

The simple advice about borrowing that Larry referenced was based upon Proverbs 22:7, “Just as the rich rule the poor, so the borrower is servant to the lender.”  God’s Word has certainly proved to be true. Our recent economic woes have shouted loudly that biblical principles apply to individuals, families, Wall Street firms, and even governments.

Following a reduction of lending standards for the qualification of a home mortgage, millions of borrowers took on debt obligations they simply could not afford. These mortgages were packaged and sold throughout a massive, global network. A bubble of non-sustainable housing prices was created. This set the stage for some of the unthinkable events we have witnessed. Foreclosures escalated in 2006, 2007, and 2008, triggering a real economic earthquake, a financial tsunami, and a breathtaking, wild roller coaster ride as global financial stability teetered on the edge of a meltdown.

Here are the milestones of the most significant financial crisis the United States has faced since the Great Depression:

• March 16 - Bear Stearns, founded in 1923 and one of the world’s largest brokerage firms, collapsed.2

• July 11 - FDIC takes over mortgage lender IndyMac. FDIC will seek buyer. It may become the most expensive bank collapse ever.3

• September 7 - “The US government today announced the biggest financial bailout in the country’s history as it took troubled mortgage giants Freddie Mac and Fannie Mae into temporary public ownership to save them from collapse.”4

• September 14 - Merrill Lynch CEO John Thain, seeing the writing on the wall, arranges the sale of his company, founded in 1914, to Bank of America.5

• September 15 - Founded in 1850, and one of Wall Street’s most prestigious firms, Lehman Brothers, collapses and files for bankruptcy.6

• September 16 - “In a move that would have been unthinkable before the credit crisis began, the Fed arranges to lend $85 billion to AIG, the world’s largest insurance firm, in exchange for a 79.9% equity stake."7

• September 17 - The New York Times reports that Washington Mutual, the nation’s largest thrift, has put itself up for sale. The Dow plunges 449 points.8

• September 18 - U.S. government begins action on the hugest bailout of all, committing hundreds of billions of taxpayer dollars to buy troubled mortgage assets from beleaguered financial institutions. As word of the evolving plan spreads, stocks rally. The Dow closes up 410 points.9

• September 19 - Senate Banking Committee Chairman Chris Dodd says the United States may be “days away from a complete meltdown of our financial system, with all the implications here at home and around the globe.”10

• September 19 - Mr. Paulson [U.S. Treasury Secretary] announced plans to introduce new laws to buy hundreds of billions of dollars of bad debt from banks, debts he said were “clogging up” the financial system. “To restore confidence in our markets and our financial institutions, so they can fuel continued growth and prosperity, we must address the underlying problem,” he added. Reports said Mr. Paulson was looking into setting up something akin to the Resolution Trust Corp (RTC), which was formed after savings and loans banks collapsed in the 1980s. The RTC took over most of the smaller banks in the US at a cost of $400 billion - about $1 trillion in today's money - and then tried to sell off their assets. The cost of such a bailout would probably be higher this time, with bad mortgage debt believed to be around $2 trillion.11

The Markets Rally

Bloomberg reported on September 19th: “The U.S. stock market posted the steepest two-day rally since the aftermath of the 1987 crash as government efforts to bolster banks helped the Standard & Poor’s 500 Index rebound from its biggest losses in seven years.

“Government plans to purge banks of bad assets and curb bets on share declines sparked a 24 percent rally in lenders and brokerages in the final two trading sessions and left stocks little changed for the week.

“ ‘It's been a roller coaster, and the investors would like to get off the ride if they could,’ said Bruce McCain, the Cleveland-based chief investment strategist at Key Private Bank, which oversees about $30 billion. ‘Lehman may be gone, Merrill may be gone, but the government has taken a basic step to solve the crisis by being a buyer of last resort. That offers the hope we really will put this part of the crisis behind us.’ ”12

Postponing the Pain

BBC Business Editor Robert Peston said, “We can't afford to have a short-term fix and then in three or four years have an even bigger bubble explode.” He said that the taxpayer funded bailout “represents a massive humiliation for Wall Street and will severely dent the ability of the US to export its way of doing business to the rest of the world. But an even bigger risk could be a loss of confidence in the American government's balance sheet.

“This could ultimately undermine the dollar, push up inflation even more and raise the cost of servicing debt for the US authorities,” BBC’s business editor explained.13

The Real Earthquake Larry Warned About

The aftershocks of these historic events will soon follow. The world as we know it has changed. Europeans are mocking the American financial system and already, some Chinese are calling for a financial system that is “not dependent upon the United States.”14

“The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States’ financial oversight and supervision,” writes the commentator, Shi Jianxun.

“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”15

This level of uncertainty in the global marketplace gives rise to opportunities for new leadership. As economic philosophies and world order are being reevaluated, we should be watchful for the rise of any power that claims to hold the keys to peace and prosperity.

Echoing in our ears are those warnings from Larry that no one is exempt from the consequences of violating God’s principles. That point has been made painfully clear to the individuals and families who have lost their homes as well as the shocking loss of billions of dollars by the collapse of some of the oldest and most respected financial service firms in the world. 

We must now pray that our governing leaders can see that the U.S. federal, state, and local governments are also subject to biblical financial principles. They must manage the massive collective public debt (that we now each own) with care and prudence to move us back towards economic stability just as each of us must also do with our personal finances.

Failure to heed the principles God has plainly established for our own good will destroy the good faith and credit of the United States government. Should that day come, the consequences will be dire. Our entire economy will collapse with sudden speed, bringing mind-numbing consequences to world order. To avoid the pain, we can print more money, bringing on devastating hyperinflation, or seek to be bailed out by foreign governments and become subjected to slavery to our lenders, many of whom are not our allies. 

That is the economic earthquake that Larry warned about, and the events of this year, while extraordinary, may look mild in comparison if foreign sources decide to call our notes due. As you can see in the chart, we are now spiraling towards our highest levels of federal debt to GDP since WWII and now ranking among nations with much weaker economies.

As Joel Belz of World Magazine ominously wrote in January 2008, “Even now, the overdue Burkett prediction of an economic earthquake may or may not come true. But individuals, families, businesses, churches, and other organizations that put an emphasis during 2008 on reducing their debt rather than extending it will be wonderfully stronger for the effort. That bigger house, that snazzier car, that more exotic vacation—if it has to be put on a credit card or a second mortgage—then Larry Burkett's counsel is as timely as if you heard him say it again on the radio this morning.

“If the only thing that stimulates our national economy is the piling up of even more individual and corporate debt, then it’s not just Larry Burkett’s wisdom that we’re ignoring. It’s the age-old wisdom of the Bible itself. For such a society, in such a case, the experts won’t be emphasizing that the Burkett schedule was off by 10 or 12 years. They’ll be complaining instead that his term ‘earthquake’ was way too mild.”16

Going forward, we will provide a regular update with our views of this fragile and rapidly changing crisis. We want you to be informed of the vulnerabilities we face and support you to respond with faith, wisdom, and true hope in God’s loving care. It is time to be sober-minded and seek the wisdom of our God who can deliver us. 

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Sources
1 Burkett, L. (1998) Business by the Book (p. 173). Nelson Business Press. 

2 Sorkin, A. and Thomas, L. (March 16, 2008) JPMorgan Acts to Buy Ailing Bear Stearns at Huge Discount. The New York Times.

3 Clifford, C. and Isidore, C. (July 11, 2008). Regulators seize troubled IndyMac. CNNMoney.com.

4 Seager, A. (September 7, 2008). US mortgage giants Freddie Mac and Fannie Mae taken into public ownership. Guardian.co.uk.

5 Mintz, P. (September 19, 2008). Seven Days That Shook Wall Street. Businessweek.com.

6 The New York Times (September 24, 2008). Lehman Brothers Holdings Inc.

7 Mintz, P. (September 19, 2008). Seven Days That Shook Wall Street. Businessweek.com.

8 Stempel, J. and Davies, M. (September 17, 2008). Washington Mutual is for sale: sources. Reuters.com.

9 Mintz, P. (September 19, 2008). Seven Days That Shook Wall Street. Businessweek.com
 
10 Herszenhorn, D. (September 19, 2008) Congressional Leaders Stunned by Warnings. The New York Times. 

11 BBC News (September 19, 2008) Shares surge on US bail-out plan.

12 Martin, E. (September 20, 2008) U.S. Stocks Rise After Government Action Eases Banking Concerns. Bloomberg.com.

13 BBC News (September 19, 2008) Shares surge on US bail-out plan. 

14 Reuters.com (September 17, 2008) China paper urges new currency order after "financial tsunami". 

15 Rotella, S. and Stobart, J. (September 20, 2008) Europeans on left and right ridicule U.S. money meltdown. Los Angeles Times. 

16 Belz, J. (January 26, 2008). Shadow of Larry Burkett. Worldmag.com.

The Get to Give Manifesto: Why Having More is a Good Thing!

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why. This week we have a guest post from Jay Peroni.

Many people "give" to "get".  They choose to give money so they will be blessed.  This is backwards thinking and God sees through false intentions.  We as God's people should seek to "get" in order to "give".  Having a financial plan based on the proper intentions of your heart can allow you to pursue both God and wealth.  As long as He is your top priority and you are seeking wealth to be more generous, you can pursue Him and wealth.  It all begins with an assessment of your heart.

Your heart reveals who you are.  It reveals your desires, your motivation, and ultimately who you become. Matthew 6:21 says "For where your treasure is, there will your heart be also".  So I ask you what is YOUR treasure and where is YOUR heart?  How do you view money and how important is money to you?

Now you may be like many and say money does not matter to you.  You may even say that money is the root of all evil or that it's hard for the rich to enter heaven so you do not pursue wealth.  It's not your thing... You may even think that your money struggles and challenges are your sacrifice for God.  Often many people falsely identify riches as evil because of the Rich Young Ruler in Matthew Chapter 19. 

When you break God's Word down and look at God's most basic interest in you, he wants to know the intentions of your heart.  Your heart reveals how you view money. Are you in love with God or money?   It is "the love of money" that is the root of all evil, not the money itself.  Money is neither good nor evil.  It can be used for both good and evil purposes.  Most people I have observed who say money is not important, act otherwise. The words speak, but the actions speak louder.

A person who struggles with money is often a slave to money.  Many who say money is not important focus and desire money more than those who have abundance.  This is because those struggling are often up to their eyeballs in debt, are less likely to be able to "afford" to tithe, and choose jobs rather than callings to "pay the bills".  In other words, they let money control their choices - what they can and cannot afford to buy, whether they can or cannot give and where they work.   

This can be as dangerous as the person "in love" with money.  It can have the same power over you.  The Rich Young Ruler needed to get rid of his riches because the riches were first in his life - above God.  If you place God above riches, there is no reason to view money as evil.  In fact, it can be used for His purposes.

If you instead choose to have power over money, you can use money as a tool to advance God's kingdom - support ministries, build churches, save lives and souls for God's glory.  How you think about money and your relationship with money reflects your true intentions.  How you earn money and what you do is what matters most.  A desire to be wealthy so you can be more generous is not wrong.  However, a desire to be wealthy so you can be self indulgent is wrong.

I wrote The Faith-Based Millionaire to help people "get" more so they could "give" more. The "Get to Give Manifesto" involves Seven Commitments:

1. Commit to tithing (10 percent of your income and financial gains) and commit to offerings (additional gifts above your tithe).
2. Commit to having a larger vision of how you can help advance God's kingdom - your specific calling and how God can use your time, talents, and treasure.
3. Commit to change your perspective of wealth - it is a tool that is used to do more of God's work.
4. As a Christ follower - Commit to take more risks! Stop being so cautious all the time; stop seeking safety! God wants you to lay it on the line.
5. Commit to increase your assets so you have more to give.
6. Commit to become better educated about your finances - choose sound investments that complement your faith.
7. Commit to seek wise counsel - a team of professionals that share your faith.

Poverty does not spread the Gospel, it spreads hopelessness and despair.  It costs money to fund ministries, build churches, print tracts, and feed bodies and souls.  You can win at the money game and experience financial freedom that will fully allow God to use your time, talents, and treasure!  Learn how to truly "master" your money rather than being "enslaved" by it.  This is a choice - which path will you choose?

Is It Ok for a Church to Accept Credit Card Donations?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

A couple weeks ago I asked if your church would accept a gift won from a lottery. One commenter left another compelling question in response:

I like your point that money is amoral (that is, neither immoral nor moral). However, the source of the money isn't necessarily amoral. I think it took a lot of strength and guts for the pastor to say, "No." It reminds me that I've heard of some churches accepting credit card tithes. Ouch. What's your take on that?

Personally, I don't have any problem with a church accepting credit card donations. Just like money is amoral, so are credit cards -- they are neither good nor bad in and of themselves. It's how they're used that matters.

As most of you know, I use credit cards quite frequently and I use them to