Faith Based Investing

Like
a Hamster Stuck on a Wheel

Have you ever seen a hamster
running on a wheel inside a cage? Hamster wheels allow rodents to run even when
their space is confined. They keep running and running and make no progress.
Yes, they get exercise, but they do not travel any distance. For many, their
finances are like the hamster on the wheel. They keep chugging along, spinning their
wheels, and making little to no progress. Why is this?

Many are programmed to live
life by the rules of the world. Often I see people base their spending rules on
how much income they make. The more they make, the more they spend. The true
reality of wealth creation is that how much you earn has very little to do with
your ability to build wealth. How much you spend is far more critical.

Many falsely believe that the
key to getting out of their financial holes is to add more income. Why, then,
do people who add more income still live paycheck to paycheck? Why do most
lottery winners end up dead broke even after winning millions? If income was
the solution, why couldn’t everyone just find better jobs to make more money?
The reality is that unless there is a change in spending habits, these people will
remain trapped on the same financial wheel–spinning but going nowhere. You must
change your rules.

Change
the Rules

If you do not like the results,
change the rules. Following the same rules that got you in trouble in the first
place will only produce the same end result. Without a change, you are doomed
to repeat past mistakes. Look at things in a new way. Follow these rules and
you may find financial freedom is closer than you think. (Please note that the
following allocations would apply to those who have already paid down
substantial debt; otherwise, the percentage allocated to recreation could be
dramatically reduced and the remainder used to pay down debt.)

The rules are:

• Pay God first: 10 percent
  toward giving
• Pay yourself second: 10
  percent into long-term savings
• Pay for necessities: 60
  percent into a checking type account
• Pay for recreation: 10
  percent into your fun account
• Pay for freedom 10 percent
  into a financial freedom account

Though learning to live on 60
percent of your salary is a tough feat for anyone, it should be your ultimate
goal. If you control what you spend, you will find a way to live within your
means. Reduced spending may also allow you to give more than 10% and save more
for the future. If you have a burning passion to change, you will. Otherwise,
you will be afraid. Don’t let fear get the best of you. Fear may be present,
but work to overcome your fears. If you are willing to do only what is easy,
life will be hard. But if you’re willing to do what’s hard, life will be easy.
Training your own mind is the most important skill you could ever own in terms of
both happiness and success. You should recondition your mind with the knowledge
that spending keeps you trapped in a world of limited financial progress. It
impacts your ability to give and save more.

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Take
a Personal Moral Inventory to Assess Your Values and Beliefs

Psalm
139:23-24 gives us a starting point: “Search me, O God, and know my heart; test
me and know my anxious thoughts. See if there is any offensive way in me, and
lead me in the way everlasting” (niv).
There are many “hot buttons” when it comes to your life. A hot button is an
issue or cause that ignites a strong emotional response.

These
are issues that are close and dear to your heart and induce strong positive or
negative emotions. These hot buttons usually dictate the clothes you wear, the
car you drive, where you live, the charities you support, and many other facets
of your life. When you examine your life, think about the areas I have listed
at the end of this chapter. This list does not contain every possible hot
button, but is rather a starting point for you to think about what’s important
to you. Over the last decade of helping individuals make financial decisions,
these have been the most prevalent areas of concern. I have found that many of
these areas are not Democrat vs. Republican or godly vs. ungodly debates.

There
are common areas in which most humans agree and other areas in which many agree
to disagree.

Here
are a few questions to ask yourself to help get you started:

• What
  in my life is extremely important to me?
• What
  has been keeping me from concentrating on the most important things?
• What
  areas do I feel passionate about?
• What
  types of companies (if any) would I not want to support financially?
• What
  types of companies (if any) would I be excited to support financially?
• If
  I could solve any world problem, what would it be?

The
answers to the above questions will give you insight into your own personal
moral inventory. When you think about issues and/or causes that are most
important in your life and what they truly mean to you, you begin to grasp what
you are willing to do in order to make changes. You are able to determine what
is and what is not worth sacrificing. Stand
up for what you believe in and make an effort to uncover what values your
investment dollars are supporting.

This article was written by Jay Peroni, CFP®,
renowned financial advisor, and author of The Faith-Based Millionaire and The Faith-Based Investor. He is
considered an expert authority on the subject of “Faith-Based
Investing”.
Jay is also the founder of FaithBasedInvestor.com, a
faith-based investing newsletter and a firm
dedicated to faith-based financial planning and money management.

Should Men and Women Have Different Financial Strategies?

The reality is most Americans may be underprepared for their financial futures. Taking control of your financial future may be even more important for women than it is for men. Here are four reasons women need to invest and save actively.

1. The earnings gap

Even today, men tend to earn more than women. In 2008 a survey of retirement savings trends conducted by Hewitt Associates, a global human resources consulting firm, found that the women who worked earned an average of $57,000 annually, compared to $84,000 for men. The average male employee in the study therefore had the chance to defer greater amounts of salary into a company retirement plan, while the average salary of the surveyed female employees sometimes wasn’t high enough to trigger a company match.

2. Time out of the workplace

If a woman relies on a company retirement plan to accumulate retirement savings, taking time away from the workplace to care for children (or family members with special needs) can amount to a financial setback. A male employee may contribute to a 401(k) plan year after year for 20 or 30 years or more, and his contribution levels may increase along with his salary. If a woman leaves the workplace for a few years (or more), her retirement nest egg still compounds, but the steady salary deferrals to a 401(k) plan cease. When she retires, she may have less of a nest egg than her male counterpart if she just relies on the company retirement plan as her primary retirement savings vehicle. This is a compelling reason for women to build their own investment portfolios, in addition to participating in employer-sponsored retirement plans.

3. Divorced women may suffer further…

Though I am not an advocate of divorce under most circumstances, it is an unfortunate part of our society. Many women find that a “fair and equal” settlement is not an equitable settlement. When the husband earns much more than the wife, all kinds of decisions ride on the stability of the husband’s salary – the neighborhood the couple or family can afford, what school the kids attend, and so on. When that big salary is gone, the woman faces a reduced lifestyle, and may dip into her savings to maintain financial equilibrium.

More importantly, she may not have the earnings potential her husband has. Things can get particularly tough when the wife is a key employee at a business or professional practice her husband started before the marriage. After a divorce, the husband may retain the business and the bulk of the business assets, regardless of the integral role the wife played in growing and running the company. Will she want to work alongside her ex-husband? Uh-uh. So the stable job she had is a memory, and a career change and a move may be next.

This is why financial planning is so important for many women. Women need strategies after a divorce, help with investment portfolios and financial plan personalized for their new needs and goals. This will better enable them to (re)build wealth.

4. Women outlive men

The Labor Department estimates that almost 90% of women will outlive their husbands and spend a portion of their retirements managing their own finances. A woman who retires alone may face a very long retirement: if you leave work at 62, it may last 20 years or longer, with only about 30% of your income coming from Social Security. (That’s if Social Security is still around.)

The Hewitt Associates study estimated that women’s retirements will average 22 years, compared to 19 years for men. Factoring in projected increases in healthcare costs, it concluded that women need to save 2% more than men annually over 30 years to maintain their standard of living when they retire. If a woman earning $57,000 contributes 4% to her company retirement plan annually over 30 years instead of 2% (that’s $95 more a month), the study estimates that she’ll have an extra $81,000 at her retirement date.

Take control of your finances

The best antidote to worrying about the financial future is trusting God and turning fear over to Him. Next is planning for your future. God cannot bless steps you never take. Investing to build wealth apart from work is a great move. If you want to invest conservatively, you can find strong investment choices with the potential to outpace inflation.

What do you think? With all of the above issues, women can have it much tougher than men. Should men and women have different financial strategies? I look forward to a dialogue with you about saving and investing.

See it Here:

http://www.christianpf.com/financial-advice-for-women-men/

Solomon once wrote, “Where there is no guidance the people fall, But in abundance of counselors there is victory.” (Proverbs 11:14 NASB) In the world of investing, there is no shortage of people willing to give you advice.  From mutual fund offerings to investment advisors to insurance salesman, everyone wants to get in the game of advice.  But could this advice be detrimental to your faith and wallet?

The other day I read a puzzling report about how mutual fund inflows were the highest in nearly two years.  Strategic Insight, a firm specializing in mutual fund consulting reported that over $136 billion flowed into stock and bond funds during the 2^nd quarter of 2009.   The money going back into the market isn’t the troubling part; it’s the amount going into mutual funds, especially retail mutual funds. Retail mutual funds tend to have layers of hidden fees.

To read more go here:  http://www.crosswalk.com/finances/11607064/

CLEARING UP THE HEALTH CARE DEBATE

Who would fund the reforms? Would there really be a “death list”?

Sorting out the possibilities, facts and misconceptions.

The town hall debates over health care reform have ignited Americans like few recent issues. Discourses have become shouting matches. Away from the noise, here is a roundup of where things currently stand.

Who would pay for all this? Over the next 10 years, the federal government will need (by President Obama’s estimation) $950 billion to fund its health care programs. As planned, roughly a third of the money will be raised through increased revenues (i.e., limiting tax deductions for the wealthiest Americans) and two-thirds of it is supposed to come from reallocations of taxpayer money the federal government is already scheduled to receive. A coalition of pharmaceutical industry CEOs met with the President in July and have since pledged $80 billion in cost savings over the coming decade to help pay for the reform.

Would Medicare be cut? Republicans and Democrats disagree. “Nobody is talking about trying to change Medicare benefits,” President Obama stated during a July AARP teleconference. “What we want to do is to eliminate some of the waste that is being paid for out of the Medicare trust fund.” The non-partisan Congressional Budget Office figures that the House of Representatives version of the bill would trim Medicare spending by $500 billion across the next decade with no impact on Medicare benefits. AARP claims that “none of the health care reform proposals being considered by Congress would cut Medicare benefits or increase your out-of-pocket costs for Medicare services.” However, in an August 15 Republican Party radio address, Sen. Orrin Hatch contended that “hundreds of billions of dollars” will be cut from Medicare and used to “expand a financially-strapped Medicaid program and create another government-run plan.”

Would this run up the deficit further? The Congressional Budget Office says yes. It forecasts that President Obama’s reforms would add $239 billion to the federal deficit. Few on Capitol Hill think the reform effort could pay for itself.

Would health care be rationed? That’s what ex-Alaska Governor Sarah Palin contended in a Facebook post. The potential Republican presidential candidate stated that the reforms would lead to a system that would “refuse to allocate medical resources to the elderly, the infirm, and the disabled who have less economic potential.” Democrats and other supporters of the reforms counter her claim by saying that the current health care system already features “rationed” care dictated by health insurance company bureaucrats.

Would there really be “death panels”? Earlier this month, Palin contended that the President’s health care reform proposals included “death panels” that would decide if seriously ill patients would live or die. In the eyes of many legislators, Palin was wildly misinterpreting a provision in the health care reform bill that would allow doctors to offer voluntary consultations about living wills, hospice care, health care directives and pain medication to patients and loved ones facing end-of-life decisions. (If the reforms pass, Medicare would pay physicians to provide this consulting.) The Senate Finance Committee has dropped this idea from its version of the proposed legislation; it remains in the House version.

Would the government (and taxpayer dollars) pay for abortions? It is uncertain. In one variant of the health care reform bill, abortions would have to be available via at least one insurance plan; however, Democrats say any abortions would be paid through patient premiums.

Would undocumented immigrants get free health care? On the CBS Evening News, Sen. Ben Cardin (D-MD) was heard stating, “Illegal aliens will not be in this bill, period, the end.” As currently written, the legislation states that only those lawfully present in the United States can qualify for health coverage. Yet what if one family member is in America legally, but others aren’t? Could his or her relatives become eligible? Republicans say that the proposed legislation offers no way to effectively stop undocumented immigrants from applying for health care benefits.

The debate rages on. Politically, the health care reform effort seems poised to end up being the story of the year – and the contention and negotiation will certainly last into fall. Stay tuned.

A quiet revolution has taken place over the past 30 years in corporate America. Driven by such groups as the pro-gay Human Rights Campaign and the pro-abortion Planned Parenthood, large corporations such as JP Morgan Chase and Bank of America have become major funders of liberal social action. And since 1973’s Roe v. Wade decision, more and more healthcare companies are directly involved in the abortion industry.

My frequent WORLD co-writer Howard “Rusty” Leonard, whose investment firm Stewardship Partners is one leader in the field of Biblically Responsible Investing (BRI), estimates that 20 percent to 30 percent of large-cap companies engage in activities that evangelicals would find objectionable.

Read More Below

Here is a great article on faith-based investing:

http://www.worldmag.com/articles/15786