Faith Based Investing

A lot of people really enjoy cakes.  Me, however, I have always been a pie guy – apple, blueberry, lemon meringue, coconut pie.  You name it, if it’s in a pie, I’ll eat it- within reason, of course.  Karen, my wife, on the other hand,isn’t a huge fan of pies, but loves cake.  A good cake has some key ingredients.   If you look at most cake recipes:   Two of the main ingredients include eggs and flour.   You can attempt to substitute these ingredients, but in most cases you sacrifice the taste.    With money management, if you miss two of the main ingredients, it can be much more of a disaster.  This week we’ll look at two important ingredients to be successful with money.

The first key ingredient in any relationship is honesty.  Proverbs 21:6 makes this quite clear: “A fortune made by a lying tongue is a fleeting vapor and a deadly snare”. If we are dishonest in our business practices, our financial matters, work life, and other ways we acquire wealth, you may still hold the treasures but you risk it all being washed away.  Matthew 16:26 helps us sort that out:  “What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul?”

When Dave came to see me, the look on his face told the whole story.  He looked like he had the wind knocked right out of him.  “Jay, I should have listened to you”.  Years ago when you gave me advice, I never listened, now this”.  Dave’s financial advisor, Brad had attempted to hang himself after it was discovered he had stolen tens of million dollars from his clients.  Dave, who had most of his life savings with Dave, awoke to the news that he would probably never see much, if any of that money again.   Lives were set in chaos because of the greed and lack of honesty that Brad took in his business. Like a house of cards, the whole thing came crashing down.  Brad also lost everything: his wife, his radio station, his mansions, cars, and his freedom.  He is now in prison for at least 20 years. Was it worth it?  No amount of money is worth it when it comes at a price.

We need to be honest in all of our financial dealings: in our businesses, in the workplace, and in our financial transactions.   Honest profits make good profits.   Make it a top priority to be honest with your fellow workers, your customers, and those you interact with on business and personal matters.

What are some areas of your financial life where you were not completely honesty?

What effect did this lack of honesty have on those involved? On you?

How could you have done things differently?

It doesn’t Matter if you’re on the right track; if you’re sitting still you get run over – Will Rogers

Perhaps the recent stock market fluctuations are unsettling you. It’s a stressful time for the economy and Wall Street, and you may be concerned about your portfolio, given what’s going on with oil prices, the real estate market, and rising unemployment figures. It may be a good time to review how your assets are invested.

I remember when I was eight years old and looked at the enormous roller coaster at a local amusement park. It seemed way too scary for me. After all, people were screaming like crazy the whole ride. I couldn’t do it. Just then an older friend grabbed me by the arm and dragged me into the line. I tried my hardest to get away, but there was no stopping him. “You will love it,” he demanded. Finally came our turn to ride to our deaths. We got on and my heart was beating in my throat. Tell Mom I love her, I thought. The ride took off like a bolt of lightning, and the next two and a half minutes turned into complete enjoyment. My response was the exact opposite of what I had expected. Sometimes people are fearful at first of things that appear difficult, but when they truly experience them, they find there was a blessing in disguise.

It is sometimes this way with the stock market. What appears to be a roller-coaster ride, the ups and downs of the market, scares people away or out of the market. I once met with a guy named Gary. He was so nervous, he often lost sleep and became physically sick. He would watch CNBC and stock market news and panic. If you ever have been seasick, the best advice is to look at the horizon; it helps you forget about the moving sensation. However, if you focus on the waves, you become more sick. When you allow your faith to become shallow and weak, you often do not look to God, and it is very easy to become nervous and have anxiety. The day-to-day news reports will surely make you sick if you are always focused on the here and now. The apostle Paul says in Philippians 4:6: “Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God” (niv).

The next time the stock market or your financial picture looks grim, give over your nervousness or anxiety to God. He will provide you the comfort and strength to overcome your fears. Trust in Him, and the scariest roller-coaster ride will become the ride of your life.

God says to not be anxious:

Do not be anxious about anything, but in prayer and petition, with thanksgiving, present your requests to God. (Philippians 4:6)

What areas of your financial life cause you anxiety?

How do you respond to the ups and downs of your financial journey?

Describe your prayer life in relation to your financial circumstances:

God whispers to us in our pleasures, speaks in our conscience, but shouts in our pains: it is His megaphone to rouse a deaf world. –C.S. Lewis

If you suffer, thank God! — it is a sure sign that you are alive. –Elbert Hubbard

How often do we seem to be between a rock and a hard place?  We seemed to be pinned against the wall.  All hope is lost.  You are overdrawn on the checking account.  The credit cards are maxed.  It is a struggle to make ends meet. Or you are about to retire and the stock market collapsed, delaying your plans for years.  Any number of financial circumstances can appear to be a disaster.  There seems to be a growing sense of doubt.   However, there is always light at the end of the tunnel.  There is always hope in Christ.  He can help you no matter where you are.  You just need to let go and place your trust in Him.

Paul always had a dream of being a dentist. The thought of helping people maintain, repair, and protect their teeth, seemed like a noble and rewarding path.  He did research, talked to people he knew in the profession, searched for schools, then made his careful calculated decision to pursue dental school – a minimum 8 year commitment.  He knew the cost of school was going to be incredible – deep into six figures, but the starting salary and future income potential would take care of itself.

As much research and homework as he did, Paul could not prepare himself for the incredible letdown that was ahead.  In his third year of dental school, he wanted to quit.  He did not like his school, his professors, or even the material he was learning.  The process, procedure, and life applications became dull and meaningless to him. He lost focus on his early dreams as he found they had no substance.  What really drove him into the profession?  He searched and searched and found the answer was money and the approval of his dad.  This was his dad’s dream, not his.

After a lengthy discussion with his dad who drove over 500 miles to personally consult with Paul, it was demanded that he finish what he started.  So, Paul reluctantly, continued school.  The desire and will to drop out of school continued year after year.  He finally finished his dental program and entered the “real world” knowing he was in a profession that he not only disliked, he actually despised.

His great financial dilemma suddenly appeared:   with over $300,000 of school loans and payments resembling a large mortgage payment, Paul need a high paying job.  The only solution he had was to work in the dental field for enough time to pay the loans off.  He estimated it would take approximately 8-10 years.  With this in mind, he loathed work.  It was like a prison cell.   He would often become physically sick over his new life.

But little did he know his dream job was right around the corner.  Paul ended up building up his practice and selling it a full fives years before he estimated.  He created a financial plan, worked hard in his business, set up a practice in an ideal location, and leaned on God.  All the while, he kept his dream of  owning a bed and breakfast alive.  After paying off his student loans, Paul’s business netted him almost a million dollars – not bad for a job he despised.  This was just enough to start his dream business as a bed and breakfast owner.  Today Paul owns several bed and breakfasts throughout New England.  In his time of weakness, Paul found new hope, strength and inspiration through his relationship with Christ.  The Lord does provide!

Where is your financial dilemma?

How have you overcome past financial dilemmas?

What changes could you make to improve your situation today?

Passage Deuteronomy 4:30:
When you are in tribulation and all these things come upon you, in the latter days you will turn to the Lord your God and be obedient to His voice.

“A fool and his money are soon parted.”   –  Thomas Tusser

“He who represents himself has a fool for a client and an idiot for a lawyer.”

- Old Legal Saying

It is wise to use your gifts to the best of your ability. It also makes sense to seek help when your abilities are limited. Take me, for example. I have discovered what I am good at and what requires professional assistance. Household improvements and repairs are not my strong suit. I learned very early on that this is an area that requires help immediately. After several “experiences” of making bigger problems out of small routine repairs, it has become quite obvious this is an area where I lack gifts. I can make a mountain out of a molehill! Simple tasks for most people turn into a big mess for me. Believe me, it is not fun paying someone to not only fix the original problem, but also the new problems I have created. Sometimes, even when you have the expertise, knowledge, or skills, it is still important to have a sounding board to bounce ideas off of and receive wise counsel from.

A prospective client Bill is a middle-aged CFO with more than twenty-five years of financial experience, an MBA from a good school, and decades of investment experience. The thorn in his side was his investment portfolio! Despite the schooling and book knowledge, Bill’s portfolio was a mess and nearly impossible to keep track of. Like the weeds that took over the garden, Bill left his portfolio untamed. Bill had “overdiversified” his holdings. He owned hundreds of stocks, mutual funds, and bonds. Tracking, analyzing, and monitoring all of his positions would make a full-time job. Bill thought he knew what he was doing, but his results confirmed otherwise. Bill should have sought wise counsel.

The biggest mistakes, most investors make is a lack of understanding risk.  Most investors who handle their own portfolios are either too conservative or too aggressive.  Very rarely do they have the right mix.   The average do-it yourself investor experiences returns significantly lower than the markets and falls way short of the returns achieved by financial professionals.   A recent study showed that an average investor can trail an index by as much as 8% per year!

What areas of your finances could you turn over to a professional?

Would God be proud of the way you are handling your portfolio?

What other areas of your life could you use wise counsel?

Passage Proverbs 15:22:

Plans fail for lack of counsel, but with many advisers they succeed.

Commit to Change!

Every moment of our lives we are either growing or dying…” – Robert Cooper

Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” – Benjamin Franklin

God calls us to a life of commitment to Him.  Our finances reveal our commitments in life.  Where we spend, invest, and give our money reveals our priorities in life.   As we grow in our faith, we should long to have our finances line up with God’s word.  This means that we need to make a commitment to Him to make changes in our lives.  Over the next year we will look at various ways to combine our faith and finances.  Your journey begins today.  Make a commitment to God that you will seek to learn His ways.

Janice came to see me frustrated and upset. She was tired of the long hours, unfulfilling work, and lack of passion for what she did.  As a telephone worker for nearly thirty years she had enough.  She couldn’t take it anymore.  When the company offered her a voluntary early retirement package, she thought it was an answer to prayer.  However her lifestyle of living beyond her means had overtaken any chance of accepting this package.

In order to prepare her for a future package and as a requirement to become a client of mine, I made Janice sign a commitment that she would change her habits and open her mind to learn new strategies to improve her financial situation.  She needed to make changes and commitments in order to have any chance of ever retiring.  The commitment was her first step in the right direction.

The definition of insanity is doing the same thing over and over and expecting different results.  If you do not commit to change, you will not learn and get past your mistakes.  Turn to God today and ask for the strength and discipline to seek change.  Make a commitment today and stick with the plan.

Psalm 37:4-6:

⁴ Delight yourself in the LORD
and he will give you the desires of your heart.

⁵ Commit your way to the LORD;
trust in him and he will do this:

⁶ He will make your righteousness shine like the dawn,
the justice of your cause like the noonday sun

In what areas is change needed?

What are your biggest financial obstacles today?

What are some steps you can take to change your situation?

Content makes poor men rich; discontentment makes rich men poor.
-  Benjamin Franklin

Many confuse contentment with complacency. If you are complacent you are willing to stay in a bad situation and suffer and accept so with a positive attitude.  If you are content you are at the center of Gods will and are willing to go where he takes you.  A happy life certainly involves contentment.  How content are you?

With all of the advertisers deliberately trying to create dissatisfaction in our lives.  Whenever we turn on the TVs, radios, or read the newspaper or magazines we see campaigns in action to disturb your way of life.  Many advertisements purposely try to create perceived problems so that you need their product to solve this “new” problem. Here is the greatest version of our product; it will make the other one obsolete.  You need a new car, a new outfit, a new life.  Advertisements try to prevent you from being content.

It is the same way with our financial situation.  Dave came into my office and wanted to pull out his entire retirement nest egg and send it overseas.  He was not content in the amount of money he had saved for retirement.  He only had ten years left and need to “pour fuel, to the fire”.  His answer was to take substantial risk to expedite his portfolio.  He recently had received an online advertisement to send his funds overseas for a high, guaranteed rate of return.  If it looks too good to be true, it is.  This internet fraud was not only after Dave, but had bilked over $12,000,000 form unsuspecting investors.  Always check with a financial advisor you trust before making a big move and never send money outside of the country will out having a professional do due diligence for you.

Passage Hebrews 13:5:
⁵Keep your lives free from the love of money and be content with what you have, because God has said,
“Never will I leave you;
never will I forsake you.”

What areas do you need help finding contentment?

Do you find yourself needing the latest and greatest new items?

Do you make impulsive spending decisions?

WELCOME TO MY NEW BLOG!

Matthew 6:24 says:

“No one can serve two masters. For you will hate one and love the other; you will be devoted to one and despise the other. You cannot serve both God and money”.

Since I have discovered the financial principles set forth in God’s word, I have seen His truth confirmed time and time again.  He is a faithful God that sticks with us no matter where we are in life.  In the good and the bad, in the times of rich and poor, he meets us wherever we are.  There is a huge need and desire for us to be closer with our God.  Yet we are often separated form Him because of our mistakes with money.

The importance of planning, seeking God’s word, prayer, and how to apply God’s word to your financial situation cannot be overemphasized.  I am confident you can improve your financial situation if it need be or continue to prosper if you continue to seek His wisdom.  This blog aims to bring you closer to God through key verse, inspiring stories and quotes, and practical ways to implement His words into your finances.  If you open your heart, you will discover where faith and finances collide.  Get ready to chart your course and navigate the journey God has set for you.  Enjoy God’s love as you learn from the process contained in this bi-weekly blog.