Faith Based Investing

Oh Kermit, the Wise One!

Kermit the Frog once said “It’s not easy being green!” Today he would say “it’s not easy being green unless it’s economically convenient.” Many are passionate about the environment when there is something to gain: savings, feeling better, better gas mileage, etc. Yet when push comes to shove their passion really isn’t the environment, it’s another type of green – money!

Now don’t hear me wrong. Yes, there are those who really are passionate about the environment – the tree huggers! I’m not talking about this crowd. I’m talking about those who claim to be passionate about something, yet only take action when it’s convenient or there is something to gain.

From Waiting List to Overstocked

Now that gas prices have come down, hybrids are a tough sell these days. The LA Times reports, “Last month, only 15,144 hybrids sold nationwide, down almost two-thirds from April, when the segment’s sales peaked and gas averaged $3.57 a gallon. That’s far larger than the drop in industry sales for the period and scarcely a better showing than January, when hybrid sales were at their lowest since early 2005.”

Should this be the case? Where’s the passion? Was it really just about the money? Just a year ago, buying a hybrid car was just about the coolest thing a hippie out in California could do. Isn’t it funny how economics change people’s commitment to their most heart-felt causes? With gasoline prices down, unemployment high, hybrid cars are going out of style faster than the moonwalk dance. Here’s the funny part: manufacturers are still cranking out new hybrid models. No wonder, the big three are on the verge of bankruptcy! Here’s the supply curve, here’s the demand curve. Any questions?

How Serious Are you About Your Cause?
Is your faith strong or weak? What moral and social issues are important to you? Do you let money get in the way of doing what you’re passionate about? If you truly stand for what you believe, you are willing to fight, no matter what the cost. We can learn quite a bit from William Wilberforce (1759-1833). Have you seen the movie Amazing Grace?

William was a British politician, a philanthropist, and a leader of the movement to abolish the slave trade. In 1785 he underwent a conversion experience and became an evangelical Christian, which resulted in major changes to his lifestyle and a lifelong concern for reform. He persevered for his cause until the very day he died. He never gave up. He fought on. Failure after failure, he pressed on. He knew deep within his heart, that the cause was bigger than he.

Just as Wilberforce had clear convictions of his values, are you willing to stand for what you believe in? It is easy to blend in with the crowd and let life pass you by. It is easy to say nothing and do nothing. It takes courage, strength, and perseverance to stand for what is right, especially when the world stands against you. Many Americans know what they value yet do nothing about it. Many allow cultural influences to shape life decisions rather than turning to God’s Word. If we all stand for what we believe in, we can make a difference. One by one, we can change the world.

Everyone’s Favorite Radio Station: WII-FM: What’s in it for me?

I say change the channel!
Too often, those around us make decisions based on their own selfish motivations. Why do you think the world is in such a financial mess? Greed, deceit, and selfishness are at the center of this economic collapse. The mantra becomes, “if I don’t see a personal benefit, why do it?” Those who live only to please themselves perish and die alone!

Want Happiness? Seek to Help Others
The easiest, surest path to long lasting happiness is found in actively caring about and doing something for those around you: for your family, your church, your community, and the world. With so many challenges facing society, there is no shortage of needs. The old saying that “if you’re not a part of the solution, then you’re part of the problem” has some truth to it. God has designed you with special and unique qualities that can be used to make this world a better place–one day at a time.

I believe Albert Einstein said it best: “The world is not dangerous because of those who do harm but because of those who look at it without doing anything.”

With that in mind:

1. How can you better help others around you? What’s holding you back? What would need to happen for you to take action?

2. What is one thing I could do today to make someone else’s burden lighter, or bring a genuine smile to someone’s face? Can I commit to doing this today?

What is most important to you?

What are the things you value most in life? What motivates you? What principles are a part of your decisions? What are you trying to accomplish in life? These are just a few of the questions you will discover in the Proud to Own Process.

It is very easy to get caught up in the grind of everyday life. We do not stop to smell the roses. We are so busy yet we often miss some of the most important things in life. It is those who take the time, realize what’s important, and create a plan to make it happen, that will with reap the greatest rewards.

Unless you discover what’s really important in life, than it is very difficult to make progress toward living your ideal life. Without knowing what is truly important to you, goals have little meaning. When there is no meaning, you have very little motivation to accomplish your goals.

What’s Your Vision?

In order to create the vision, you will need to uncover exactly what excites you. The Proud to Own Process involves a self accessment in critical areas of your life. By examing yourself and what makes you tick, you can then look around you at all of the opportunities that are right in front of your face. If you find companies you are familiar with and have first hand knowledge about, it becomes more personal and exciting to track progress. How do you find these types of companies? You can find potential companies using the 4 P’s.

The 4 P’s:

What do I love to do? – Passion

What am I good at? – Purpose

Where do I spend my money? – Purchases

Where do I earn my money? – Profession

4 P’s = Proud to Own

When we look at buying companies, they should be companies that we are proud to own. In order to do this, we must make it personal. To be personal, we must understand exactly what the company does, what types of products or services it produces, what type of management team they have, and what the company’s mission and value statements are just to name a few.

When you look at buying a company, don’t you want it to be something that you are proud to own. This is a starting point when looking at where to put your money. What we invest in is our way of voting our values. Just like our purchasing decisions, we validate or avoid companies that align or violate our moral compass. By buying or investing in companies, we endorse that company. If we do not do our homework, we may be inadvertently supporting companies that blatantly violate our value system.

The key is to become aware. What are you moral hot buttons (abortion, pornography, embryonic stem cell research, homosexuality)?  What about social hot buttons (tobacco, alcohol, gambling, the environment, etc)? There may be one or more of those hot buttons that are extremely important to you. Now, if that is the case, the companies you own should not violate those hot buttons.  Instead, they should line up with your faith, morals, and belief system.

This does not mean that by lining your faith with your investments that those investments will not fail financially. Instead you should look for companies that are both morally and financially sound.  This involves:

1) Avoiding negative companies: ones who violate your hot button(s)

2)  Supporting positive companies: investing in companies that you are proud to own

3) Companies with strong financials and strong profit potential

Principles are extremely important, but don’t forget about evaluating a company from a financial standpoint to get a better handle on its investment potential. This is such a critical point many people miss.  Principles should always come first, but don’t skip the rest of the homework;)

If you don’t stand for the principles of the company you are buying, is any profit worth the price? Instead find companies that are  profitable and stay true to your faith!  There is a great responsibility that comes with investing. Investing is one of the most morally charged things that we can do as individuals. If we are privileged enough to be able to invest, shouldn’t we make sure that we are doing the best that we can to maximize the money that God has blessed us with? At the same time, shouldn’t we make sure that we are not profiting at the expense of others misfortunes?

This Week on The Jay Peroni Show:

“How to Find Investments You are Proud to Own” – Interview with Finny Kuruvilla, Portfolio Manager of the Eventide Gilead Mutual Fund

Here is the Morningstar Report on the fund

Here is a link to the Eventide Funds

To hear the interview CLICK HERE

How to Find Investments You are Proud to Own

Interview with Finny Kuruvilla, Portfolio Manager of the Eventide Gilead Mutual Fund

Here is the Morningstar Report on the fund

Here is a link to the Eventide Funds

To hear the interview CLICK HERE

But Why Daddy?

I met a guy the other day and he longed so much for financial freedom. It sounded like a noble goal: to have his finances in order so he would be free to go and do whatever he wanted whenever he wanted. Yet, when I asked him to expand, that was when the trouble began… He found that when he has free time now, he wasn’t very productive with that time. More free time would only allow him more time to be unproductive. Without having a concrete vision and plan of what his dreams and goals are, freedom became a pipe dream – empty and shallow with no true purpose behind it.

Who do you think is more likely to succed financially:the man who wants freedom so he has more time

or the man who wants freedom so he can:

* go on mission trips
* help out the local soup kitchen
* teach courses at the local church
* Start his dream business

You see so many of us have dreams and goals but do not go deep enough. Why do you want financial freedom? Why is that important? What would that truly allow for you?

Here is an exercise that works well for many to drill down and get to the core of who you are. Keep asking yourself “why”? Like the little child who keeps saying, “but why Daddy?”, this exercise can help you get to the root of your true motivations or set you on a journey to find more meaning. Why do you want to achieve this, why would that be important, keep asking why, why, why….until you get to the true and motivating factor – the core of your passion!

Henry Ford made so much sense when he said, “If money is your hope for independence, you will never have it. The only real security that a man can have in this world is a reserve of knowledge, experience and ability.” Money represents security for a lot of people. The logic is if we have enough money, then we will be secure. However, the truth is money isn’t the source of security.

Security comes in your relationship with Christ, in your abilities, and your God-given talents! Whenever we gain a sense of security outside of God, it becomes a recipe for failure. You can never become bullet proof!
When you believe that an abritary amount of money your bank account shields you from trouble, you are only deceived. No one knows what the future brings. Today is temporary. Your health, the economy, the stock market, interest rates, natural disasters and accidents can change in a moment’s notice. Yet, God is a rock – never changing!

Confidence in the wrong places
So many people place confidence in the bank, in other people, or in the government thinking they can provide them with real security! Those same people are also usually the first ones to blame others:

“But…I didn’t know the market was going to turn like that”
“But…I thought my insurance covered things like this,”
“But…I didn’t know that social security wasn’t going to be enough to cover my bills.”
“But…I thought my company would take care of me…”

People say things like this to imply their mess isn’t their fault, they’re not where they want to be, and someone else should take the blame of their problems. No one is responsible to take care of you but YOU. That can be a frightening thought for some, but it is the truth.

Understanding this truth is the first step on the road to true financial freedom. You are the only one with the responsibility and the power to change anything in your life. How bad do you want to change? Are you willing to do what it takes? Are you willing to take personal responsibility?

Ask yourself :
* Do I sometimes put responsibility on others to take care of my problems? In what ways?

* Do I ever ignore my problems, hoping that they’ll somehow go away on their own?

* What’s the worst thing that could happen if I am responsible for my own life?

* What the best thing that could happen if I am responsible for my own life?

Three Plans for Your Financial Future

Here is a link to the article  CLICK HERE

or the direct link is: http://www.christianpf.com/how-to-plan-for-your-financial-future/

Principles Meet Profits: A Match Made in Heaven

The Two Go Hand in Hand
Profit without principles is ill-gained profit. Principles without sound financials often lead to weak profits. However,
principles with sound financials will help you maximize profits. The two go hand in hand. You should consider both your principles and the financial feasibility of the investment.

If you are privileged enough to be able to invest, shouldn’t you make sure that you are doing the best you can to maximize your money? At the same time, shouldn’t you make sure you are not profiting at the expense of others’
misfortunes?

I am not here to dictate to you what you should or should not invest in. My personal goal is to be pleasing to God and to maximize the wealth He has entrusted to me in a fashion that I believe will please Him. Your beliefs and your plan may be similar or immensely different from mine. My purpose is to challenge you and open your mind to an area you probably have not spent much time thinking about: where you invest!

Revelations
The revelations that I’ve had in my financial life did not come to me overnight. In fact, it took approximately two years for me to become fully aware, to truly embrace and wrap my hands around exactly what I needed to do. The first problem was conviction. I had a lot of questions and concerns that I needed to wrestle with. The second turning point came as a result of more tools becoming readily accessible.

There were quite a few hurdles to cross before I was able to take what was important to me and implement it in an easy and understandable fashion. It is one thing to want to do something; it is another to be able to do it. Those were my two challenges. Now, with advancements in technology and research, I have no excuses. And my eyes are open. I really have only two choices: take the time to understand what I own or pretend that it really doesn’t matter. For me, the choice is clear. As you learn more about faith-based investing and work through the many issues, please feel free to send me any questions! My hope is that the choice to incorporate your faith into your investment portfolio will be a clear choice for you.

Need more help figuring it out?
Read The Faith-Based Millionaire at www.jayperoni.com (foreword by the infamous Dan Miller)

I wrote this story several months ago and it never made its way into The Faith-Based Investor, my latest project. I’d love to hear your thoughts on the story:

“The Faithful Manager” by Jay Peroni, CFP (c) 2009
A Modern Take on The Parable of the Talents

The Calling
After his Sunday sermon at Calvary Christian Church, Dr. Thomas had a on his soul. He had felt this many times before as God led him to various callings. This was no different. He heard a faint voice, “It is time. Your work here is complete.” This seemingly came from nowhere yet he knew deep down that God was calling him away…again!

Dr. Thomas had done pretty well for himself. As a Pastor, teacher, and author for nearly thirty years, he was wealthy in many ways. He just had celebrated his forty-year wedding anniversary; he had four children, twelve grandchildren, two paid for homes, a clean bill of health, and nearly a million dollars in the bank. At age 65, he had been living a life of true financial freedom for years. He was able to donate all of his salary back to the church and live off of his investments. He even was donating book royalties to some of his deepest and dearest ministries. He always had a great ability to provide monetarily, but infrequently had the freedom to provide his time and expertise beyond his church’s walls.

Dr. Thomas and his wife Marjorie, for years, had longed to go on a long mission trip to a poverty stricken nation. They dreamed of living a life of simplicity with an ability to love, care for, and build up others. Because of their financial freedom and God’s timing, now it had become the time to leave the country and head on their mission to Africa.

Financial Freedom is Now!
The Thomas’s set aside enough money for living and helping in Africa, but needed someone to watch over their nest egg while they were away for the next decade. Because Dr. Thomas had invested his money in various businesses over the years, he never established an account with a financial professional before. He didn’t want to hand his money over to a stranger. He needed someone he could trust. He thought long and hard about who he knew that handled money. Dr. Thomas knew three people in his congregation who gave financial advice for a living.

First there was David Noble, an advisor who incorporated biblical principles in his practice. David was on the finance committee at the church, ran a non-profit debt management ministry program for hurting families, and owned a company called His Wealth Management. Over the years, several members of the congregation had praised David’s integrity, honesty, and wise approach. He helped quite a few members of the church with budgeting, investing, and gifting more back to God’s work.

Next, there was Max Taylor, a deacon at the church and a long-time friend of Dr. Thomas. He and Max golfed together twice a week, shared bible study together, and visited with each others’ families frequently. He trusted Max like a true brother. Max had been a Christian most of his adult life and ran a local three-generational financial planning office in town. Max and his brother Tom, along with their three sons and a grandson ran and operated Taylor Wealth Management, LLC.

Lastly, there was Harry Tucker was also a good friend of Dr. Thomas. He ran an insurance agency in town that specialized in conservative strategies for many local seniors. Tucker insurance handled estate planning, life insurance, long-term care, and fixed annuities.

As a pastor, the choice of who to entrust his life savings was difficult. Should he let one person handle it all? Or maybe split it up? Dr. Thomas and Marjorie went back and forth with who should handle their family’s finances. They finally made a decision to meet with all three financial advisors.

After meeting with each advisor and gaining suggestions, Dr & Mrs. Thomas decided to split their assets up as follows:

To David Noble, they entrusted $500,000.
To Max Taylor, they entrusted $200,000.
To Harry Tucker, they entrusted $100,000.

A Decade Away
For the next ten years Dr. Thomas and his wife wrote frequently to their friends in America, yet never had much opportunity to call or speak to their advisors. A decade went by and Dr. Thomas and his wife returned as planned. After getting back into America, Dr. Thomas and his wife needed to get their finances back in order. They arranged meetings with each of their three advisors.

First, they met with David. David had invested the Thomas portfolio in a portfolio of stocks and bonds. The portfolio was now worth over $1,000,000. It had more than doubled since the Thomas’s left. David explained, “Not only was I able to more than double the money you entrusted to me, I invested the money according to your faith, values, and beliefs. I made sure you did not own any investments that you would not be proud to own. I purposely avoided companies involved in social issues important to you like tobacco, alcohol, and gambling. I also avoided investing in companies that violated moral issues important to you like abortion, pornography, stem cell research, cloning, and companies promoting homosexuality.” The Thomas’s were very proud and honored by David’s job as a faithful manager!

Next, they met with Max. Max was very happy to report that he doubled their money using mutual funds that invested in stocks and bonds. “I turned your $200,000 into well over $400,000. I invested in things that would maximize your profits.” Now the Thomas’s were quite pleased with the returns Max had achieved for them. However upon further reflection, they found that through their mutual fund investments they owned tobacco companies, companies engaged in stem cell research, companies distributing pornography, and some of the world’s leading pro-abortion companies. The Thomas’s were saddened by their friend’s lack of awareness when it came to matching their investments with their values.

Lastly, they met with Harry Tucker. Harry was happy to report that he tucked
their investments into something safe and secure. Harry said, “I didn’t want your principal fluctuating while you were gone. The stock market goes up and down, you know. There’s way too much risk.” I have turned your $100,000 into $130,000 over the last 10 years. You didn’t lose a thing at any point during the past 10 years.” The Thomas’s were also saddened as Harry had invested their money so conservatively that it had not even kept up with inflation and taxes. Though their investments gained $30,000 in value on paper, when they accounted for taxes and inflation, they were disappointed to find out they lost money.

Now what if there was a fourth money manager?
What if there were a money manager who knew the Thomas’s values? On moral and social issues, he understood exactly where the Thomas’s stood. There was no doubt in the manager’s mind what would please or upset Dr. Thomas and his wife…yet he chose to look the other way. He knew that he had the ability to uphold the Thomas’s values yet he knowingly chose to not do anything about it. How would that make them feel? Betrayed? Or, maybe angry? At the very least the Thomas’s would question the heart of this manager. Did he care about my wishes or that of his own? I believe God is asking that very same question to you: Do you care about His will or do you choose what makes you happy instead. God indeed wants us to multiply His money, but He wants us to do it in a fashion that incorporates biblical principles.

This modern day version of the “Parable of the Talents” was written to help you view your finances in a new, exciting, and unique manner. Hopefully some of these questions will challenge your thinking the way it challenged me. The words I have written were inspired because it took much time for me to truly understand
the moral responsibility that comes with handling the affairs of our God. As an individual, you make investment choices every day. You choose how you invest (spend) your time; you choose how you invest (use) your talents, and certainly how you invest (save, spend, lend, or donate) your money. But is your money really yours? Who are you really managing your money for? If God were directly investing his money, would He care more about the returns or the source of the profits? This book will examine your heart and motivation with money. “Because where your treasure is your heart lies also.” Step by step we will examine how money choices can affect your ability to be a faithful manager with the time, talent, and treasure God has put you in charge of.

Think about this:
*Each day has 1,440 minutes: How do you use your time?
*You possess certain abilities and unique gifts that God has given to you: How do you use these gifts?
*God has entrusted you with ability to earn money: How do you spend, give, and invest the money he has provided you?

Without examining your priorities and who you are as a person, it is difficult to change course. Things may be going well for you, you may be one paycheck away from disaster, or you may be in the middle of a financial storm. Wherever you are in your financial life, there is hope that you can grow closer to God and manage money in a way that pleases Him.

The Examination
Self analysis is often uncomfortable, but sometimes we need discomfort in order to grow. In The Faith-Based Investor, I help people like you examine their beliefs, values, and morals. I take a hard look at our culture and help you navigate a course that will allow you to achieve the gains that you seek with your family’s finances without sacrificing your faith in the process.

Setting the stimulus package aside, what can the average American do?
While President Obama’s stimulus plan may or may not aid the U.S. economy in future months, some economists are seeing notable potential in the private sector. There are little things we may do, in unison as Americans, that could help heal regional and local economies.

1. Start up a business.
Nothing huge, perhaps, but a cottage industry outpost of your own: a way to make some extra money, or a new way to capitalize on a new opportunity. Where do you learn to start a business? From a mentor, friend or parent. From free or low-cost workshops held in your community. Don’t discount the relevant information you might find online or at the library. If you think you have a good idea in mind, why not act on it and do your part to stimulate the economy?

2. Spend your dollars locally.
Frequent local stores, and remember that this goes beyond mere retail shopping. If you have a need – if you need a service provider, or a vendor – hire a local business that needs the work. Your Chamber of Commerce, your local newspaper and the local chapter of the Better Business Bureau can alert you to worthy local businesses you may not have known about.

3. Don’t cut back unnecessarily; just spend your dollars wisely.
Set a budget and try to abide by it. Go out and do what you love to do, but keep moderation in mind – do it a little less frequently, or a little less expensively.

4. Buy American.
This is the time to do it. Why turn away from the American worker and business owner now? Look at labels and look online for U.S.-based firms.

5. Invest.
Some companies have held up well in the recession, and shares of many other companies are priced quite low right now – so why not take advantage of the opportunities?

6. Give More
Now is the time to trust God more not less. Yet given is down significantly. Churches, ministries, and local non-profits are hurting. Often they are the ones that provide all kinds of assitance to the poor, homeless, and those out of work.

7. Finally, stay positive.
A recession is temporary by definition. At some point, perhaps sooner than we all think, the economy will take a turn for the better. If you need help coping with the recession, by all means ask for it – people want to help you. Surround yourself with positive people and seek to sharpen your personal skills. If you bring a good attitude, deliver a valuable service or product, you are better positioned to ride out the storm!