Faith Based Investing

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Many keep talking about another Great Depression. In fact, books on the Great Depression are selling faster than the latest Harry Potter book. Many want to learn more about this troubled period in US history because the media commentaries keep making a comparison between the Great Depression and 2008. How realistic is this comparison? Let’s look at statistics for starters!

Here are some key statistics below that show the stark contrast between the Great Depression and 2008:

GNP ($ Billion) (Size of Economy) Great Depression: 104 versus 2008: 14,408

GDP Growth Great Depression: -25% versus 2008: 0%

Unemployment Rate–High Great Depression: 25% versus 2008: 7%

Export Growth Great Depression: -66% versus 2008: 15%

Consumer Price Index Great Depression: -27% versus 2008: 4%

Government Support Great Depression: Very Little versus 2008: Significant

Global Coordination Great Depression: None versus 2008: Extensive

Source: Federal Reserve, Bureau of Labor Statistics & NBER

In 1929, during the Depression, the US was similar to today’s version of an emerging market country: smaller economy, no FDIC insurance, no government safety nets, no such thing as social security or unemployment benefits. On top of that, the US government had no experience presenting remedies for a financial crisis. Because the government did not act swiftly in 1929 and then created policies that further compounded the Depression problems, the Great Depression became a much larger problem. Today, there are many more hats in the ring ready to take swift action if necessary.

A normal reaction is to allow fear to get the best of you. As I always say faith and fear are foes. They are perfect opposites. Franklin Roosevelt said it best, “All we have to fear, is fear itself”. When we place our trust in God above world markets, above worldly possessions, and above our personal desires, we allow Him to take control of our situation and guide us to wise and prudent decisions. Seek Him in good and troubled times, and He will never leave your side!

Where Do I send My Check?
His Website read: “in an era of faceless organizations … Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner’s name is on the door.” It went on to say “Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark.” Sounds good, where do I send my money?

Wait…this was the day after authorities foiled the largest Ponzi scheme ever uncovered. Bernard Madoff, Investigators say, stole over 50 billion dollars from unsuspecting victims over the last 5 decades. Madoff apparently kept the loss a secret even from his two sons and other family members who work at the firm until he spilled his guts on Dec. 9th. “It’s all just one big lie,” he told his family. He confided he had blown the money in what was “basically, a giant Ponzi scheme.” A ponzi scheme, for those unfamiliar, is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones.

If It Seems Too Good to Be True…
How could thousands of investors place their trust in one man? Did anyone see it coming? The sad thing is many knew something was wrong, yet said nothing. Henry Blodget, investment giant said, “I knew he was cheating. That’s why I invested with him.” Greg Newton, who specializes in covering hedge fund shenanigans, digs up a 2001 report on Madoff’s fund. The report, entitled “Madoff tops charts; skeptics ask how, wonders: “What is striking to most observers is not so much the annual returns… but the ability to provide such smooth returns with so little volatility.” We may now know how that feat was possible.

Many suspected wrong doing, yet hundreds of investors kept giving him millions even billions of dollars to invest. Many of the investors were institutions, some religious. Billions of dollars are now gone with little recourse. What is the moral of the story? Don’t put too much faith in the abilities of an advisor, in a firm, in an institution, in a mutual fund, or any one company. When you hand money over to someone else to manage, many times you have no idea where that money is going or where it’s being investing. Is it supporting your values and faith? How well do you really know the person or people handling your money? I don’t say this to scare you, but rather to get you thinking about responsibility.

Our Responsibility
God blesses his people in many ways. He gives us each a responsibility to handle money. Should we hand over money to strangers? The better we handle resources, the more He provides… Even though Christians are better equipped to handle money when they follow biblical principles, many fail to incorporate these principles into their financial plan. One principle is seeking wise counsel. This means you fully understand what you are investing in and who you are hiring to handle your money.

When we see advisors swindle money from investors, it makes us lose confidence and trust. Keep in mind, these stories of deception are isolated incidences. There are thousands of honest, moral, and ethical financial advisors who are helping their clients reach their goals. In chapter 3 of The Faith-Based Millionaire, I talk about how to find a competent, qualified financial advisor. (For a limited time you can download the whole book for free at www.jayperoni.com through Dec 31 2008).

Understand advisors are only human. They make mistakes from time to time, but most truly put their client’s interests first. We serve a God who never breaks promises and never fails. You have to do your part. God cannot bless investments you never make. Seek wisdom and guidance from a qualified team of advisors. Your team should start with an advisor, attorney, and CPA. Seek advice, but fully understand the advice before acting on it, and fully know the person who is giving the advice. Most of all, seek advisors who share your faith, values, and beliefs.

Daniel was a wage slave–chained to his desk fourteen hours a day. But even working those grueling hours, Daniel knew he needed to bring in more income. His family was nearly starving, and not just for food. His wife and kids needed him to be more engaged in their lives. Daniel said, “I knew I needed a change; otherwise, my family was going to give up on me.” So he came up with an idea. Why work for someone else when he had enough contacts to start a business on his own?

Daniel began with the vision of changing his life. He found his purpose, which was to better support and be available to his family; he found his passion, which was creating websites to help ministries expand globally; and ultimately he was able to launch a web design business. Because he executed each step with precision, he is now making more money, working less hours, and loving the new life he created. The key to Daniel’s success lay in his development of a vision for change in his life. I talk about this in my upcoming book The Faith-Based Investor.

Three components of a vision include:
Purpose + Passion = Performance

Here are a few questions to get you started:

Purpose:
• What is it that you want to accomplish?
• Why do you want to accomplish this?
• What are you good at that comes natural to you?
• Do you eel led by God to accomplish something?

Passion:
• What drives your action?
• What cause are you willing to fight for?

Performance:
• How will you take action to achieve your goal?
• How will you measure
success?

Join the Faith-Based Revolution!
I’d love to hear how God is working in your business or finances. Share with others as well in the Faith-Based Millionaires in the Making group, the most popular group on 48days.net! This is the premier group for faith-based entrepreneurs, business owners, investors, and everyone who realizes their faith impacts their finances. Come learn, grow, and share! Simply go to www.48days.net, register, and join the Faith-Based Millionaires in the Making group to join hundreds of people just like you!

Habits that Hurt

If you have a bad habit, how do you break it?  The first step is always recognizing you have a problem.  Once you have done this, you need to replace your old behaviors with new ones.  It is estimated that if you do something for 21 days straight, it becomes a habit.   What habits do you need to break?

Often I meet people who want to grow closer to God through their finances.  They want to be more pleasing to God with their money yet they often take advice from worldly sources rather than God’s Word.

Most of us have everything we need:  food, clothing, and shelter.  It’s usually not our needs that get us in trouble.  It’s our wants: a nicer house, a nicer car, electronics, entertainment, more and more stuff… It’s not easy to fight off consumeritis when you are being infected with TV, radio, magazine, newspaper, internet, and other advertisements telling you to enjoy the latest and greatest of what life has to offer. 

BAD HABIT #1: Allowing discontentment to get the best of you. 
Ben Franklin once said “Contentment makes poor men rich; discontentment makes rich men poor.”  Isn’t that the truth?   What you allow to enter your mind is within your control.  Things do not equal happiness.  Happiness is found in a relationship with God.  By Allowing Him to help you determine your spending priorities, it will help keep your consumer appetite in check.  Like in the Parable of the Talents, those who are faithful in the little things will be given more…

Here are three habits that break the bank:

BAD HABIT #2: No Financial Plan
In the Parable of the Talents (Matthew 25), the master gave the servants an amount according to their abilities to handle money.  The one servant who did not manage money wisely had to give his share to the most faithful because of his laziness.  When we fail to have financial plan, it is difficult to manage money wisely.  I often find those without a financial plan often abuse debt. 

Look at the US economy.  Do you think it is a coincidence our system is in trouble after making foolish decisions?  Poor planning on the part of our government has lead to the misuse of debt.  In fact, the US government spends more than it makes, and uses debt to make up the difference(borrowing from U.S. citizens and companies, and other national governments, etc.). 

BAD HABIT #3: The misuse of Debt
Uncle Sam taught us well.  When we spend more than we make, we often make  up the difference with debt (spending from credit cards, loans, etc.).   The longer the trend continues, the deeper in debt you become.

Bad Habits Are Tough to Break
Breaking habits require you to make changes to your behaviors.  Change is oten uncomfortable, but it is the only way. You cannot keep doing the same things expecting different results.  If you want to manage your finances in ways pleasing to God, you will need to identify and change some of your financial habits. 

The path toward change begins in God’s Word. The Bible contains over 2,000 verses dealing with practical ways to approach earning, saving, spending, investing, and giving of money.  Biblical principles are needed today!  Wherever you are on your financial journey, you can change direction if change is needed.   Young or old, rich or poor, we can always become a better steward with the blessings God bestoys upon us.

Let me know your thoughts…

If you could have more money, would it solve your problems?

The Endless Cycle
I remember when I was younger. I wanted a car so bad. It represented freedom! When you’re a teenager, a car often becomes the fast route to freedom. One cheviot, you need money to buy a car. Wait!… I need a job to earn money. But wait…I need a car to get to work. You see the endless problem? For me, it was an endless cycle until a solution was found. I found mine in a pair of roller blades. I would roller blade back and forth to work – 10 miles each way until I earned enough money to buy and pay for my first car. There may have been an easier way, but for me, having my first car was a reward for my hard work.

Money is an endless cycle for many of us. The more you make, the more choices you have. The more you make, the more, most people spend. You can take a couple making $50,000 or less who have become millionaires through hard work and there are couples making over $500,000 a year that have not accumulated a dime. The problem lies in the behaviors and habits of the individual. Are you developing your skills and habits so that when you become a millionaire, you’ll know how to be a better steward? Take the time now to learn. Share and associate with positive like-minded individuals.

That’s why I set up the Faith-Based Millionaires in the Making group on 48days.net. If you’re not a part of this group, consider this your invitation. We’d love to have you join the group so we can all learn, grow, and share together!  Go to: http://www.48days.net/group/faithbasedmillionairesinthemaking and sign up today.  

This is the premier group for faith-based entrepreneurs, business owners, investors, and everyone who realizes their faith impacts their finances.

The character James Bond is good at what he does because of his ability to assume secret identities and disguise himself in ways to deceive his enemies.  His tricks, deceptions, and hidden life are a key to success.  As with Jason Bourne from the Bourne Identity series and Ethan Hunt in the Mission Impossible series, living a secret double agent life appears exciting, adventurous, and fun.   However, as a secret agent, danger is always around the corner.  

Of the hundreds of people I have counseled over the years, I have seen a great deal of people live a double life.   They are one person at home and church and another in the work place.  Often, they purposely live a double life to fit in, get ahead, achieve success, avoid conflict, or to avoid isolation.   We are called to be salt and light to the world…not blend in!

I will be the first to admit I was as guilty as the next guy until I found my true calling. I used to look at work as a means to an end.  I used to look at work merely as a way to pay the bills.  I always knew I wanted to be a part of the financial world, but never looked at how to incorporate my faith into what I do.  For years, I gave worldly advice rather than spiritual guidance.  Though I helped hundreds of people over the years, my biggest mistake was not using my abilities to have a greater eternal impact.  

After several years of providing worldly financial advice and studying finance with some of the best Wall St. firms, I felt empty inside.  There was something missing.  It was like finishing a 1,000 piece puzzle and only having 999 pieces.  That one last piece is the most important.  Not having God in my business, in my job, was the greatest mistake I could have ever made.  Though he continued to bless me, there was a huge opportunity that I was missing and the void in my heart confirmed His longing for me to do something “much bigger” than I was doing.

I have found a way to bring true glory to God by taking my financial expertise and training and combining God’s wisdom contained in the scriptures.  Here I can advance His kingdom through my counsel.  Not everyone is called to do faith-based work, but we are all called to glorify God in everything that we do – our careers included.

Do you live a secret life?  Do you allow God to be a part of your work?  Many forget that even small tasks or unpleasant work can be holy work with the correct heart and proper intentions.   Think of the worst job in the world.   There are TV shows that highlight some of worst jobs in the world.  Picture:  shoveling manure, swimming in radioactive materials, or changing adult diapers.  This work still can be pure and holy if the work is done with a pure heart and the intent is to bring glory to God.  If we took the attitude that God was in the room with us each moment we worked and He was watching over our shoulders, we could really begin to see that there are ways to please God no matter how dire the circumstances.  Ordinary people can become extraordinary when they let God get involved.  It is when we allow God to be a big part of our everyday lives, we truly achieve significance.