Faith Based Investing

Are you a slave to money?

A person who struggles with money is often a slave to money. Many who say money is not important focus and desire money more than those who have abundance. This is because those struggling are often up to their eyeballs in debt, are less likely to be able to ―afford to tithe, and choose jobs rather than callings to ―pay the bills.  In other words, they let money control their choices—what they can and cannot afford to buy, whether they can or cannot give, and where they work.

This can be as dangerous as the person ―in love with money. It can have the same power over you. The rich young ruler needed to get rid of his riches because the riches were first in his life—above God. If you place God above riches, there is no reason to view money as evil. In fact, it can be used for His purposes.

If you instead choose to have power over money, you can use money as a tool to advance God’s kingdom by supporting ministries and helping to build churches, thereby saving lives and souls for God’s glory. How you think about money and your relationship with money reflect your true intentions. How you earn money and what you do are what matters most. A desire to be wealthy so you can be more generous is not wrong. However, a desire to be wealthy so you can be self-indulgent is wrong.

In 2008, I wrote The Faith-Based Millionaire to help people ―get more so they could ―give more. The “Get to Give Manifesto” I talked about involved seven commitments:

1. Commit to tithing (10 percent of your income and financial gains) and commit to offerings (additional gifts above your tithe).
2. Commit to having a larger vision of how you can help advance God’s kingdom—your specific calling and how God can use your time, talents, and treasure.
3. Commit to changing your perspective of wealth—it is a tool that is used to do more of God’s work.
4. As a Christ follower, commit to taking more risks! Stop being so cautious all the time; stop seeking safety! God wants you to lay it on the line.
5. Commit to increasing your assets so you have more to give.
6. Commit to becoming better educated about your finances—choose sound investments that complement your faith.
7. Commit to seeking wise counsel from a team of professionals who share your faith.

Poverty does not spread the gospel; it spreads hopelessness and despair. It costs money to fund ministries, build churches, print tracts, and feed bodies and souls. You can win at the money game and experience financial freedom that will allow God to fully use your time, talents, and treasure! Learn how to truly ―master your money rather than being ―enslaved by it. This is a choice—which path will you choose?

Giving advances God’s creation
Every financial plan should have the flexibility to allow you to give to any organization or charity you wish to support without putting a strain on your monthly finances. This should be a top priority in any faith-based plan. The first investments should be in God’s kingdom. By this I mean building churches, helping ministries, and supporting local church-funded charities. Many people do not implement giving in their monthly budget, financial plan, or investments.

Although it’s commendable to give what you can, when you can, this is not the motto of a faith-based financial plan. One piece of advice I often give young Christian couples is this: ―God does not want a tip, He wants your whole heart and for you to show Him that He is number one in your life.‖ Money is like seeds to a farmer. Each dollar can be planted to produce more and more dollars. The same can be said about your income. Don’t save and spend all of it; rather, give some back to God, and reap what you sow.    What are your thoughts?

As we celebrate Memorial Day, I’m reminded of a quote by Arthur Ashe:

“True heroism is remarkably sober, very undramatic.
It is not the urge to surpass all others at whatever cost,
but the urge to serve others at whatever cost.”

This Memorial Day, through all the sunshine gatherings and family affairs, let us not forget the meaning of this important day of remembrance. Let us take a moment to honor those who have served us well and fought for an ideal – a great purpose.

“It takes a hero to be one of those men who goes into battle.”
~ Norman Schwarzkopf

Let us remember and honor our heroes.

Happy Memorial Day!

Is the bull dead?

Sooner or later, a bull market experiences a correction: a decline of at least 10% from a peak. We’ve now seen the first correction in the present bull market: the Dow went below 10,000 on May 25 (and rebounded). When a correction occurs, there is the chance that it portends something greater – that is, the eventual end of a bull. With so much talk over the last year about a potential “double-dip” recession (shades of the 1970s), a 1,000-point Dow reversal naturally makes people wonder what the future holds.

The mood still seems bullish. We have a debt situation in Greece, Portugal, Italy and Spain that could potentially leave U.S. and European banks vulnerable. We also watched the euro slide in May, which left U.S. markets dealing with a stronger dollar (a development that harshly impacted dollar-denominated commodities like gold and oil). However, bulls remind us that we are seeing a definite U.S. economic recovery.

As Bill Smead, CIO of Smead Capital Management, told CNBC: “While everyone’s worried about [Europe], things are improving significantly for U.S. consumers. American corporations are the most flush with cash they’ve been for 25 to 30 years and profit margins are excellent.” Art Hogan, chief market strategist at Jefferies & Co., also weighed in on that cable channel, cautioning CNBC that the euro’s May struggles were being “misinterpreted as a barometer for an economic slowdown.”

Routine pullback?

Respected Hong Kong-based wealth manager Puru Saxena called May’s correction “a routine pullback” and told CNBC that in his opinion, the current bull market will go on into 2012. He sees the Federal Reserve increasing the money supply if U.S. stocks correct more severely. “Money printing is going to keep this rally going for at least another couple of years until such time when the market forces the central banks to raises interest rates,’ he commented.

If the bulls run past the current anxiety and run for another couple of years or more, “the first year will win the prize by far when it comes to magnitude of returns,” thinks Bob Doll, chief equity strategist at BlackRock. Doll sees the European debt crisis as an “aftershock” from the “major financial earthquake” of 2008, and he thinks additional rude awakenings could occur during this bull run.

Tobias Levkovich, chief U.S. equity strategist at Citi Investment Research, reminded USA TODAY that “normally, economic recoveries last a couple of years” or longer, which promotes relative longevity of bull markets. As the economy recovers, so do earnings – and great earnings translate to good times on Wall Street.

But is this just a cyclical bull in a secular bear? That’s another thought. Some market-watchers think this is all the current bull market represents. They point to the mid-1970s, a time which also saw a struggling U.S. economy and major ascents and descents in the Dow. They reference the 1930s, when the market underwent similar gyrations. In DJIA history, cyclical bulls within secular bears have averaged 22.5 months, with an average gain of better than 60%.

We have seen increased volatility, and the restlessness may hang around for a while. At SmartMoney.com, Hennion & Walsh CIO Kevin Mahn shared his view that “we’re going to see a series of starts and stops throughout 2010. The market clearly doesn’t have a direction right now because of all the political and macroeconomic uncertainty.” Tom Samuels, Palatir Fund’s portfolio manager, feels that “May is about the market shifting its focus from the economic recovery story to a debt-driven reality, which is not so rosy a picture.” He sees a bear market ahead if the sovereign debt crisis lingers.

How about a little history?

To wrap up, a little history. While the past is no indication of the future when it comes to stock market performance, we can draw encouragement from it. In June, the current bull market will head into its fifteenth month, so it is not exactly long in the tooth. According to InvesTech Research, all mature bull markets since 1947 have lasted at least 24 months and averaged four years in duration.

Money without purpose is just money

Money with a purpose can be used to change the world. It feeds the poor, builds shelters, and changes lives and souls for the kingdom of God. Money with a godly purpose can be revolutionary. If you desire money solely for material things, you will never be content. Many of the happiest and most successful people in the world have found their purpose in life. They know exactly what money can do to help their families and help others. If you had more money what would you do with it? Who would you help? What would your days, weeks, and months look like?

When you live out your life’s purpose, live with passion, it will lead to a prosperous life!  This was proven by Srully Blotnick.  In 1960, he began a study of 1,500 people representing a cross section of middle-class America. Throughout the twenty-year study, they lost almost a third of participants due to deaths, moves, or other factors. Of the 1,057 that remained, 83 had become millionaires. When Mr. Blotnick’s team interviewed participants at the beginning of the study, the most widely shared impression they found was that “great wealth can come to you only as a result of doing things you don’t want to do.” They also noted that from the start, most participants assumed that chance would play a decisive role in determining who became wealthy.
They found that the 83 successful people shared five characteristics: they were persistent, they were patient, they were willing to handle both the “nobler and the pettier” aspects of their job, they had an increasingly noncompetitive attitude towards the people with whom they worked, and their investment activities—aside from their main career—consumed a minimum of their time and attention.
Blotnick admitted, “We originally expected the people in our sample to become wealthy by taking the money they earned at work and investing it wisely, in such things as stocks, bonds, and real estate . . . we thought there’d be no way for [them] to become rich unless they used their surplus income to generate more income . . . It didn’t work out that way. . . . More often than not they made little or no money investing.”

In short, what the study unveiled was that the main source of wealth for the successful participants was that they found something they loved to do and they did it well. “In case after case,” wrote Blotnick, “they did increasingly well occupationally, while their pursuit of investment profits proved to be largely a waste of time. In the long run, it was their work which made them rich.” Blotnick concluded that investing in yourself, what you do, and with whom you do it are the most important determining factors of wealth.

Source: Getting Rich Your Own Way, Srully Blotnick (Jove, 1982).

How will you use your wealth?

Unless you can envision how you will use money to better the lives of others, no amount of money will fill you up. It is only Christ’s love that fills the void in your life. As you grow closer to Him, He will help you find your purpose—your unique calling.

Matt Bell is a friend of mine. In his book, Money, Purpose, Joy, Matt shares his story. You can read about Matt at www.mattaboutmoney.com. Early in his life Matt thought he had found his purpose. Out of the blue he inherited $60,000 from an uncle. He knew he wanted to do something noble with the money and decided to start a business.

He looked at what he was passionate about and ended up developing a golf newsletter. He played some of the best courses in the world and wrote about them. The only problem was he had a very limited subscriber base and wasn’t making any money. This continued for years until Matt had not only burned through his inheritance, he’d racked up $20,000 in credit card debt.

With this experience under his belt, Matt sought to study how money works and how to develop financial purpose. Matt recalls, ―A person who can turn a $60,000 blessing into a $20,000 debt has a lot to learn about money. This fueled me to want to learn about wise ways to use money for a better purpose. With his newfound learning, Matt worked his way into the corporate world and quickly made his way up the ladder. A high-paying corporate job was not his purpose, however; he knew he wanted to be able to write and speak full-time.

What are you doing to live out the magic formula?  I’d love to hear you share your story! Comment below.

Over the past 15 years as a financial advisor, I have seen  four habits that constantly trip people up financially.  Many of these mistakes are avoidable.  Being aware of past mistakes, looking at your current behaviors, and making changes is critical to your success.  Take a look at these behaviors and see if any of these describe you:

BAD HABIT #1: Discontentment

“Content makes poor men rich; discontentment makes rich men poor.” – Benjamin Franklin

This is by far one of the worst habits.  Buying more than you can afford and endless spending destroy wealth in a heartbeat.  It doesn’t matter how much you make, if you spend more than you make, you’ll go broke!

Instead:

• Analyze your needs versus wants
• What you think about you become!  Solomon said it best: “For as he thinks in his heart, so is he.” (Proverbs 23:7)
• Are you preparing your finances to be blessed?
• God talks a lot about being faithful with small things before He will bless you with more
• Likewise, He cannot bless steps you never take

BAD HABIT #2: No Budget/ No Plan

Far too many people “wing” and “fly by the seat of their pants”.  What about you?  Do you have a plan or better yet are you following it?

• In Matthew 25, the master gave each servant something to manage according to their ability.  Those who were faithful were rewarded with more.  The servant who buried his talent in the ground was considered lazy and gave his talent to the one more obedient.
• People who lack money often fail to handle the basics (set up a budget, spend less than you make, save for a rainy day, and planning for the future).
• Look at our Federal government.  You can’t spend more than you make. Our government chooses to spend more than it makes and is making up the difference with debt (borrowing from U.S. citizens and companies, and other national governments, etc.).

BAD HABIT #3: Failure to understand basic economics

Far too many people are financially illiterate.  They fail to understand the stock market, basic economics, and budgeting to name a few.   This leads to heartache and an empty bank account.

• What about our economy?  Our economy was built on a house of cards – a mirage.  With easy credit and ability to use our homes as a piggy bank.  Now the debt is catching up with America.  How will you get back on course?
• We will go through more economic ups and downs.  How you respond to the ups and downs is most important.

BAD HABIT #4: Too much debt

This is a hard lesson learned.  You can delay payments, pay interest only, refinance, etc but eventually the bills become due and will you be able to keep up? Borrowing too much will impose on your future.

• Over-consumption leads to debt (spending from credit cards, loans, etc.).
• You get deeper into debt the longer you spend more than you make.  The longer you spend more than you make the more debt becomes a habit, and habits (especially lifestyle habits) are hard to break.

These four habits will surely get you off track.  Do any of these habits trip you up? I’d love to hear your story…

What can we learn from Shrek?

I saw the new Shrek movie tonight (two thumbs way up by the way) and must admit I was pleasantly surprised with the wholesome, family friendly message. I won’t spoil the whole movie for you, but the core theme is about appreciating what you already have…

So many times we take for granted all the blessings in our life: The spouse we come home to everyday, the children we take care of day in and day out, where we live, etc etc.  We can wish we had it better but the truth remains we all have a lot to be thankful for.

If you are blessed to live in America, chances are you have so much more than most people in this world – running water, meals every day, clothes, shelter, and access to medical assistance when you need it.  Many people are shocked when they look at their salary and compare it  to world standards. Go to www.globalrichlist.com and see how you compare…

You are are already blessed beyond belief!

We are so blessed yet we often complain and want better. I agree that we shouldn’t be complacent but we should find contentment in our lives.  Financially most of us have more than we need!  Our wants…well that may be another story, but as the Rollings Stones once said “You can’t always get what you want”

I know for me personally I sometimes take for granted my beautiful wife, I sometimes get frustrated by my children,  I sometimes get discouraged in my career but I am always thankful for each day the Lord blesses me with. I remember a story that has stuck with me for years:  “there once was a man who complained about not having shoes until he met a man without feet”. You see, we can look at our lives and think we have it bad but you don’t need to look too far to realize no matter how bad you may think things are, it could always be worst!