Faith Based Investing

Have you ever heard of McElligot’s Pool?

If not, I’m not surprised. McElligot’s Pool is a lesser known Dr. Seuss book. The story opens with a farmer laughing at Marco, a young boy who is fishing in a tiny, unpromising pool. McElligot’s Pool, according to the farmer is nothing but a hole where people dispose of their junk. Then the farmer launches into all the reasons why the boy will not be able to catch any fish.

The remainder of the book looks at Marco’s optimistic response to the farmer’s skepticism. Instead of walking away in defeat, Marco wonders if maybe the hole is deeper than others think? What if the pond goes under the town into the sea? What could he catch? He sees endless possibilities when others see junk. Marco concludes, “Oh, the sea is so full of a number of fish, If a fellow is patient, he might get his wish! And that’s why I think That I’m not such a fool When I sit here and fish In McElligot’s Pool!”

What does this have to do with me?
Well it depends on what you want out of your life…What do you seek in your relationship with God? What do you desire in your relationship with others? What values do you hold most dearly? What dreams and goals do you have with money?

The most difficult part getting what you want, is knowing what you want! Do you find yourself like the farmer in McElligot’s pool always skeptical, always doubtful? Or are you like Marco, willing to dream of endless possibilities?

If you do not have a clear vision of where you want to go, how in the world will you ever know if you’re heading in the right direction? That is why I spend so much time talking about the magic formula:
Purpose + Passion = Performance. It’s much easier to be successful reaching your dreams and goals when you dedicate your energy to something deeply meaningful to you. Without the clarity of purpose or the passion to succeed, you will almost always be defeated by challenges and struggles. If it isn’t worth the battle, you will give up.

Do you really know what you want?
You may be following someone else’s dream or doing what you think is “the right thing to do”. It is often easy to confuse what you really want with what you should want. Once you figure out what you truly want, challenge yourself:

What are you willing to do to make it happen?
How bad do you want it?
Are you willing to persevere to succeed?
Will you commit time, energy, and money to reach your goals?

If you cannot truly imagine yourself doing whatever it takes to make it happen, maybe your doubts and skepticism are enough to do you in. Most fail because they simply give up. The prize wasn’t worth the effort. But for those of us willing to dream big, to keep believing, to keep marching on, we can tell ourselves: “If I wait long enough, if I’m patient and cool,/ Who knows what I’ll catch in McElligot’s pool?”

MONEY & HAPPINESS – Do they go hand in hand?

Does money actually buy a degree of happiness? In this recessionary holiday season, it is worth thinking about the effect money has on our lives. What role does money play in our happiness? Is that role overrated?

Most psychologists and sociologists will tell you that our happiness comes largely from social interaction. But studies indicate that there is a direct correlation between wealth and a kind of mental health.

As Pearl Bailey immortally quipped, “Honey, I been poor, and I been rich. And let me tell you, rich is better.” Having a well-paying job, being successful at what you do – these are definite cornerstones of self-esteem and contribute to happiness.

So is Warren Buffett happier than we are? The math is not quite that simple. American wealth grew remarkably in the late 20^th century, but surveys found that Americans on average weren’t any happier than they’d been decades before.

A 2002 study by psychologists Edward Diener, Ph.D., and David Myers, Ph.D. documented greater happiness among residents of wealthy countries versus poor countries. But they found that once individuals in both types of nations gained the money to pay for basic creature comforts, happiness did not markedly increase along with wealth thereafter. A second 2002 survey by psychologist Tim Kasser, Ph.D., showed lower personal well-being in individuals who “bought into” messages of materialism and consumerism.¹

Does spending money make people happy? It depends on the purpose. Perhaps you’ve heard of the “hedonic treadmill” theory, an economic theory which holds that the middle-class and the affluent exhaust themselves and diminish their happiness through endless pursuit of the latest material goods. Americans are proudly competitive, and can’t help but measure their wealth in relation to their friends and neighbors. We have to have more than the next guy.

Does spending money on others make people happy? Yes, according to the results of a study published in March in Science Magazine. Researchers took a sample of 600 Americans. They instructed 46 to spend a $5 or $20 bill on a particular day. Some were told to spend the money on others, and the study found that they were happier at the end of the day than the ones who spent the money on themselves. The study also tracked 16 workers who got profit-sharing bonuses, and observed that employees who gave a majority of their bonus to others ended up happier than those who spent it on themselves. In fact, the main forecaster of happiness was not the size of the bonus, but how it was spent. The Science study also discovered that spending more money on gifts and charity correlated with increased happiness.²

Are we ultimately only as happy as we want to be? Perhaps. Researchers now increasingly feel that people have a genetic “baseline” or “set point” of happiness, and deviations from this norm are temporary. In other words, how the stock market does doesn’t rattle our basic level of happiness. Even life-altering tragedies or seeming miracles don’t ultimately budge us much from the norm. (Studies of the brain indicate that people with more activity in their left prefrontal cortexes seem to be happier than some others.)

Recently, University of Virginia psychology professor Jonathan Haidt wrote a classically-rooted book called The Happiness Hypothesis. Haidt observed that within a year of their life-changing experiences, “lottery winners and paraplegics, have both, on average, returned most of the way to their baseline levels of happiness.” He feels that happiness can grow from “vital engagement” with other people and one’s passions, and from a spiritual and moral “coherence” in yourself and your life.³

How about some Gross Domestic Happiness (GDH)? No joke: since 1972, the government of Bhutan has dedicated itself to boosting GDH, Gross Domestic Happiness, via a platform of equitable and sustainable economic growth, cultural preservation in the face of the West, good government, and environmentalism.⁴ Other nations have studied Bhutan’s example; in fact, conferences have been held on the concept in Bhutan, Mongolia and the Netherlands.

Citations.

¹ psychologymatters.org/happiness.html [3/26/04]

² tierneylab.blogs.nytimes.com/2008/03/20/yes-money-can-buy-happiness/ [3/20/08]

³ happinesshypothesis.com/chapters.html [10/1/05]

⁴ nytimes.com/2005/10/04/science/04happ.html?pagewanted=all [10/4/04]

YOUR ANNUAL FINANCIAL TO-DO LIST

Things you can do before and for the New Year.

The end of the year is a good time to review your personal finances. This is a time to refocus your wealth-building efforts. What are your financial, business or life priorities for 2009?

Dust off your financial goals and take a good look at them. Have they changed? Do they read more like wishes, or are they specific objectives? Try to specify the goals you want to accomplish, and a timeframe. Think about the consistent investing, saving or budgeting methods you could use to realize them.

Max out your IRA contribution at the start of 2009. If you can do it, do it early. The sooner you make your contribution, the more interest those assets will earn. (According to IRS Notice 2008-102, released on October 22, the 2009 individual IRA contribution levels will remain at $5,000 per person.¹) Also, don’t forget that you can still make an IRA contribution for the 2008 tax year through April 15, 2009.

Before 2008 ends … think about making charitable contributions. If you make them this year, you can claim deductions on your 2008 tax return. Also, see if you can prepay next year’s property taxes this year; if your lender receives that payment before December 31, that’s also a 2008 deduction you can take.

Are you marrying next year, or do you know someone who is? The top of 2009 is a good time to review (and possibly change) your beneficiaries to your 401(k) or 403(b) account, your IRA, your insurance policy and other assets. You may want to change beneficiaries in your will. It is also wise to take a look at your insurance coverage to determine if you will be underinsured, to identify any coverage gaps, and to cancel duplicate policies. If your last name is changing, you will need a new Social Security card. Lastly, assess your debts and the merits of your existing financial plans.

Are you returning from active duty? If so, go ahead and check the status of your credit, and the state of any tax and legal proceedings that might have been preempted by your orders. Review the status of your employee health insurance, and revoke any power of attorney you may have granted to another person.

Don’t delay – get it done. Talk with a qualified financial or tax professional today, so you can focus on being healthy and wealthy in the New Year.

Don’t forget - to download The Faith-Based Millionaire at www.jayperoni.com for FREE until December 31, 2008.

It has been said “Fear makes the wolf bigger than he is.” Are you letting fear get the best of you? Sometimes when we struggle with money (of a lack thereof), the struggle is often not really about money. Your success or failure with money is a result. Your health is a result of your diet and exercise. Your relationship with God is a result of your prayer life and time reading His Word. And your wealth is a result of your actions or inactions when it comes to money.

Money problems rarely happen overnight. Most problems, I have found, in dealing with thousands of people over the years, deal with financial roadblocks. Fear is by far the number one roadblock for many. Often I see others allow fear to block their wealth potential because they try to avoid some form of pain. Ironically while trying to avoid pain, they often find more persistent problems that never seem to fade.

What are you afraid of? For you, it could be the fear of failure; you may not be able to stomach losses; you may have trouble giving up control; or maybe you fear embarrassment or inadequacy. Like kryptonite to Superman, fear takes away your power and abilities to create wealth. How can you create value for others, how can you grow closer to God, how can you pursue financial freedom when you lack the courage to overcome your fears? The power of the mind can be dangerous with fear, but unstoppable with faith and hope.

When you allow fear to imprison you, it becomes wasted potential. Yet, when you overcome fear, you open the windows of opportunity. What are you doing in your financial life to allow God to truly unleash His supernatural powers? Are you walking by faith or do you still have the training wheels on? The best blessings typically come when you set aside fear and follow Him daily!

Take a moment to evaluate any possible financial roadblocks in your life. What is holding you back:
* Is it your job?
* Your business?
* Your investment decisions?
* Your past mistakes?

What first comes to your mind? What is your biggest fear? Now, consider if your fears are limiting your success. They also may be holding you back from the blessings God seeks to give you. I’d love to hear your thoughts…

Strive to Surround Yourself with Positive People

Are there people in your life who bring you down?  You know the ones who always have to rain on your parade.  It could be negative comments, a bad attitude, or a lack of confidence in you.  They are the ones always saying your ideas will fail because…

Some people thrive on others misery.  They become “crap magnets”  attracting others to share in their difficulty. The “poor me, pity parties” do nothing to build you up.   These same people don’t want others to be successful or fulfilled.  It would cramp their style.  When they don’t feel good about their own lives, why would they be happy that you’re happy? 

So what do you do about it?

Try a little distance.  Whether it is a co-worker, friend, relative, or another associate, the best solution is often to distance yourself from their negativity.  Instead, spend more time surrounding yourself with inspiring, supportive, and positive people.   How many positive people are in your life?

Most faith-based millionaires choose to surround themselves with like-minded individuals who challenge them, who help them raise their game, and those who are willing to share good ideas.   That was one of the reasons I started the Faith-Based Millionaires in the Making Group on 48days.net.   Here is an environment where you can share financial successes and failures, where you can ask questions and associate with hundreds of like-minded individuals who are on the path toward financial freedom. 

Who You Be-Friend is Who You Become
My Mom once told me to be careful of who you become friends with.  This helped me immensely growing up.  It still holds true today!  You can often tell the character of a person by their five closest friends.   Who are you hanging out with? Who you choose to interact with can have a huge impact on your life, finances, spirituality, and even your health. If someone is bringing you down, you create a lose-lose scenario by hanging around with that person.  You lose by allowing that person to dampen your attitude and often there is very little you can do to bring the other person “up”.

One word of caution is if this person is your spouse.  If they are unsupportive, what are you doing to build them up; to help them achieve their dreams and goals?  Are you positively supporting them?  Often, the treatment we receive is that which we give.   Also realize, people can change over time.   The power of God can change a person’s heart. Just because you need distance today doesn’t mean you will always need distance.  Misery does love company, but so do success and happiness!

Take a moment to think about those who bring you down.   Also think about who really makes you feel special, those who cheer for your success, and those who encourage you.  Make a conscious effort to spend more time with positive people and less time with the negative. Mark Twain said it best: “Keep away from people who try to belittle your ambitions.  Small people always do that, but the really great make you feel that you, too, can become great.”

In the past year, I have dedicated much time helping thousands discover the magic formula: 

Purpose + Passion = Performance. 

It is no secret: one of the most important ingredients of living a prosperous life is knowing that what you do every day brings value to others.  When money is not the motivating factor, but the desire to serve others is first, ironically the money often follows.  Yet when we put money first and serving others second, it never seems to work out the way we expected.  This is no coincidence. 

As 2008 comes to a close and you evaluate your financial progress (or lack thereof) and as you examine your business success (or failure), honestly ask yourself these three questions:

1. In my business and personal life, where do I focus more of my time and energy: on creating value for myself or on creating value for others?

2. What are my top priorities in my life? (I.e. God, Family, Friends, Customers, etc).  Do my checkbook and calendar reflect these priorities?

3. For 2009, what are some ways that I can add more value and happiness into the lives of others, and consequently bring more into my own?

I have found in my personal life, when I chased the almighty dollar and neglected to put others first, my success was temporary and unfulfilling.  I made millions of dollars yet had no satisfaction.   Then a few years ago, when I truly committed to put others’ needs ahead of mine, I became blessed beyond any monetary reward.   God works that way!  He chooses to bless us in many ways.  Though we may or may not lack financial resources, in Christ, we are rich beyond this world.   What can you do in 2009 to bless those God places in your life?  Think long and hard.  Step out of your comfort zone and get ready to prosper in 2009.  Less self and more help and you will be blessed beyond belief!

“It is one of the most beautiful compensations of life, that no man can sincerely try to help another without helping himself.”
~Ralph Waldo Emerson

Is our government addicted to the act of rewarding bad behavior?

Let’s see: Bad decisons…you’re bailed out! Mismanagement…who cares? You’re bailed out. Greed/deception…bailed out! Can’t sell cars…you’re bailed out! The list now reads: Bear Sterns, IndyMac, Fannie Mae, Freddie Mac, Citibank, AIG, Ford, Crysler, and GM, Who’s next? Last I looked, the line looked a little shorter at Starbucks.

Is this the new America? What happened to the risk in business? What happened to free markets? You know those patches they use to cure addictions? I sure wish there was a bailout patch! Capitalism is survival of the fittest. If you cannot manage a company, keep up with the competition, deliver high quality products and services, you deserve to go out of business – plain and simple? So we thought…

Then along comes the federal government bailouts. Hundreds and hundreds of billions of dollars coming back to you and me: the taxpayers. Citing imminent danger to the national economy, President Bush ordered an emergency bailout of the U.S. auto industry today, offering $17.4 billion in rescue loans and demanding tough concessions from the deeply troubled carmakers and their workers. Granting loans for failed businesses was not what Congress intended when it passed the $700 billion plan to rescue financial institutions. If we think the government is capable of bailing everyone out of every financial mess that may occur then we are fools. That’s how much of the world is viewing us now – especially those nations who wish to see our demise.

We have saved the irresponsible, fattened the greedy, and delayed the inevitable. Now is the time to acknowledge and accept that each of us is solely responsible for our own future. Not the government! Not our company! Now is the time to devise a plan and put it into action. Develop a financial plan based on what you can control: your income, spending, saving, and investing.

Those who follow a faith-based financial plan have an opportune time to prosper!
Seize the day and plan for your future. Don’t wait any longer. With God by your side, you can accomplish anything. Don’t settle for mediocrity, expect the supernatural! Unsure of how to include God in your financial plan, read The Faith-Based Millionaire for FREE during the month of December.

I’d love to hear your thoughts on the bailouts…