Faith Based Investing

Will You Pass God’s Test with Flying Colors?

In college, I used to do well on exams with the exception of final exams.  Why?  It had to do with my lousy study techniques.  They worked great on a few weeks worth of material, but not so well on the lessons of the whole semester.  I had a great ability to cram material, memorize it, and spit it back out on an exam. My problem was retaining the material for long periods of time.   I would do very well when there was a short-term exam but had difficulty when there was a substantial amount of material to “memorize”.

With God, we cannot cram for tests. We need to build a solid process on incorporating Him into our lives.  Since finances are one of the most talked about topics in the New Testament, we can be assured that God tests us with money.   When we are faithful in little things, he provides more.   If we are foolish with our money, He may not choose to bless us further in that area.   Being obedient toward God with our money is much more important than seeking the world’s riches.

In the area of finances, God tests our obedience to Him.  Will we obey His Word, no matter what the cost?   Are we willing to make sacrifices to honor Him?  Will we follow Him even if the world says otherwise?   There are times where God will test us with money to see where our priorities are.  Will you pass the test?

Numbers 22:17-18:
because I will reward you handsomely and do whatever you say. Come and put a curse on these people for me. But Balaam answered them, “Even if Balak gave me his palace filled with silver and gold, I could not do anything great or small to go beyond the command of the LORD my God.

What areas of your financial life do you feel are being tested?

What are some ways that you can become more obedient?

Name a time where you felt God was really challenging you:

Free Dinner Seminar - No Sales Pressure,  RSVP Now!

Jay says, “Buyer beware, dinner may cost you $20,000 or more”

How many times do you receive an invitation in the mail to a free dinner meal at a nice restaurant compliments of some financial services company? They have enticing language:

* Attractive Returns, No Stock Market Risk
* Eliminate Taxes on Your Social Security
* Guarantee Your Retirement Income
* Protect Your Assets

Sounds exciting!  You get a free meal out of it and can even bring friends. What a deal!   What could possibly go wrong in this situation?

It’s usually not the presentation or the food.   It usually happens in the free consultation that comes from the seminar.  Like the time share presentations – nothing is FREE.   There is a product to be sold… and you may be the victim.

How you become a victim, you may ask.  It comes in the form of a product sale.  In most cases it is likely to be an annuity of some sort (fixed or index) sold not by a fully (securities and insurance) licensed professional, but rather a simple one-size-fits-all insurance annuity salesperson who doesn’t even understand the stock market, mutual funds, or investment advisory accounts.  This person may be a one trick pony that has a one size fits all solution for your financial situation.

Contemplate this:  A person only needs a simple, basic insurance license and no knowledge, training, or experience to sell you a product.  It happens every day.  I hear horror stories from around the country of people being sold inappropriate and unsuitable investments.

Time and time again I see salespeople who are not fully licensed financial planners selling products with outrageous commissions to unsuspecting seniors and other investors. These annuity products often have high commission rates, and longer surrender periods with high penalty fees.

Many fixed and index annuities offer salespersons commission rate in the neighborhood of  8% to 12% of the money invested! This means, for every $100,000 you invest into this annuity, there is an $8,000 to $12,000 commission being generated.  Now you know how these companies afford to offer FREE dinners!  Maybe they are not so free.

Let’s say you purchase one of these enticing annuities and change your mind a year or two down the road.  How much do you pay to get out of the annuity?  You may pay as much as a 20% surrender penalty to get out of the $100,000 investment you made into one of these annuities. This may mean $20,000 in penalties.  You are left with only $80,000.  I have also seen these “surrender penalty” may take 10 or even 20 YEARS before they are eliminated!

Now, don’t get me wrong.  There are good seminars (notable ones) and often there are honest, caring advisors presenting them.  My point is to know who is delivering the presentation and what they represent.  Always look for an advisor who offers comprehensive financial planning and not just product sales.

Before you accept an invitation to any financial seminar, check out the firm, advisor, and financial approach used by the company hosting the event. Otherwise, you could end up spending $20,000 (or more) for your dinner that night.

Someone asked me the other day why I wrote the book “The Faith-Based Millionaire”, a book designed to help people incorporate their faith into their financial plan.   As I previously mentioned, I believe that God really put it on my heart to write this book and get this message out there.  I see so many Christians make conscious decisions where they work, spend money, and tithe.  We all have values, beliefs, and morals that help us make decisions in these three areas. However, for most,they never use the same set of principles when it comes to investing. The rules get thrown out the window.   Only a small minority get it.  It breaks my heart and I’m sure that of God’s.   

Take for example: I have a dear friend who is an executive for a major Wall Street firm based in Chicago. He is a strong Christian and EXTREMELY active in the pro-life movement (time and money).  He gives tens of thousands of dollars a year to pro-life organizations and does not screen  his personal investment portfolio.   It is almost as if his donations are cancelled out by his investment dollars. Here he is giving money to help end abortion yet his investment dollars are invested in the very same companies performing abortions on demand and furthering the pro-choice movement. 

I am committed and  passionate about helping others learn what values are important in their lives and helping them understand what their investment dollars are supporting.  Ultimately I find great joy helping individuals allign their faith and finances… I  truly believe it is a God thing that lead me to open this dialogue…  I believe He will help me get this message out to the masses.

BREAKING NEWS ALERT Saturday 5/3/08

Californian man accused of investment scam targeting Christians

Federal authorities arrested a California Advisor who is accused of scamming $25 million from mostly Christian investors. The advisor’s alleged investment scheme consisted of

Jon G. Ervin, 61, of Mission Viejo, was arrested Friday on a charge of wire fraud. He later appeared in federal court, where he was ordered held on $1 million bail. Ervin was named Thursday in a criminal complaint filed in federal court. The same day, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission filed lawsuits against Ervin and his company, Safevest LLC, and obtained federal orders freezing their assets.

According to the criminal complaint, Ervin used Safevest to persuade victims to invest in a fake commodity futures trading program. Investors were told Safevest would use no more than 13 percent of their deposit in hundreds of commodity trades a day on the Chicago Mercantile Exchange, with a guarantee of up to 1 percent in returns each day. Investors could check their returns on a password-protected Web site that was run exclusively by Ervin. The program attracted about 550 investors, officials said.

Authorities allege that Ervin didn’t invest any of the money in commodities trading and instead spent $1 million to invest in a Georgia golf course. He also bought a sport utility vehicle and spent lavishly on air travel, gourmet meals and shopping, said Thom Mrozek, spokesman for the U.S. attorney’s office.

Up to 80 percent of investors were churchgoing Christians and many joined the program after being approached by fellow worshippers through a referral system, according to court papers. Those who referred others in their church would receive a 10 percent “referral fee” from the profits of the new members they solicited; pastors were required to make an initial investment of $5,000, while non-pastors had to put down $25,000, according to federal documents.

Jay’s Take:

Always be cautious when investing with any advisor. Make sure to do your homework. Check with the NASD (www.nasd.com) and always use common sense. Whenever there is a guarantee that sounds too good to be true (up to 1% per day) and a high referral fee (10 percent) something is not adding up. Also make sure you clearly understand the investments you are involved in. Commodities are a very complicated investment and only suitable for a limited number of investors. It always breaks my heart when I see individuals being taken advantage of by the small amount of unhonest professionals in the investment industry.

Our finances often reflect our values in life.  If our finances are a mess, there is a good chance the rest of our life is a mess.   Having a relationship with God and having an accountability partner will help you prevail during the good and bad times you may face in your financial life.

Ron had been doing real well with not drinking for eight years.  He and his wife Margaret met at AA and were committed to sobriety.  After a while, Ron decided it was time to stop going to AA meetings. He no longer had the time.  We have this under control, he thought.  One by one, he slowly walked away from all of the support systems he had in place.  He replaced drinking with work.  It consumed him.  He had no friends.  He rarely saw his family.  He isolated himself from the world.

Then the troubles hit.  His wife cheated on him, he lost his job, his daughter was diagnosed with a rare disease.  The perfect financial storm rocked his world.  Ron no longer had anyone to turn to so he looked up his old friend – the bottle.     He continued living at rock bottom for a few years.  It wasn’t until his father passed away unexpectedly that Ron found a new friend, his savior – God that showed him a better way.  Accountability and support could have saved his life from damage.  His silver lining was his eternal salvation.  God can save the weak, depressed, and recluses of the world.  He loves us all and wants a relationship with you!

Ecclesiastes 4:9-10

Two are better than one, because they have a good return for their work:  If one falls down,
his friend can help him up. But pity the man who falls and has no one to help him up!